Vermont school budgets face pressure as health costs rise

Vermonters headed to the polls on Town Meeting Day will weigh decisions affecting school district budgets and, in some places, whether smaller elementary schools will remain open. The Associated Press reports that school leaders say their budgets are being pressured by rising health benefits, inflation, and federal funding uncertainties—factors that have already contributed to staff and spending cuts in recent budget cycles.

The pressure is visible in individual district figures and in statewide trends, with health insurance costs emerging as a central driver of how much districts can afford to spend on staffing and programs. In the Champlain Valley School District, superintendent Adam Bunting told education lawmakers that health care costs have grown by 40% over the past five years. He said the district’s budget is “just below” level service and includes a 2.7% budget increase, while still “assuming increased risk on the operations side” by limiting the increase, according to an email Bunting sent to lawmakers. Bunting said about 15% of the district’s $107 million budget is dedicated to health care benefits for faculty and staff, and he pointed to two prior cycles in which district officials cut 82 staff positions and reduced the budget by $9 million.

Bunting’s remarks came as lawmakers and voters focus on property taxes and education reform, including an education overhaul set in motion by last year’s Act 73. The AP reported that education property taxes have risen more than 40% over the last five years, and that in 2024 voters struck down close to a third of school district budgets in a tax revolt—prompting ongoing legislative efforts to reduce the cost of public education. Against that backdrop, school leaders say health insurance increases and other cost growth are leaving districts with limited room to keep staffing and programming at prior levels.

Statewide, Chelsea Myers, executive director of the Vermont Superintendents Association, said this year’s roughly 7% increase in statewide health insurance costs is adding to district budget burdens. Myers said those hikes followed increases of 12% and 16% during the two previous budget cycles, and she said, “The fact that we’re celebrating a 7% increase is a sign of the times.” Another shift is the growing share of district budgets tied to health benefits: the AP reported that in 2018, health benefits made up less than 10% of Vermont school budgets, while now they account for 15% and could reach 20% in the future.

Superintendents and school officials said they are trying to manage the financial pressure without abandoning their core programs. Sue Ceglowski, executive director of the Vermont School Boards Association, said districts aim to maintain their programs while facing a “difficult year” in which they are “really scrutinizing their budgets” to ensure that spending stays at a level “taxpayers can support.” Jay Nichols, executive director of the Vermont Principals’ Association, said districts have little control over some of the increases that come even when the goal is simply to keep existing services.

The AP also reported that federal funding uncertainty is complicating district planning, particularly for costs tied to teacher training and afterschool programming. Bob Thibault, superintendent of the Windham Central Supervisory Union, said member districts are “trying to budget responsibly by not anticipating” federal funds for those programs, rather than building budgets around amounts that may not materialize. School leaders said other economic factors—such as labor costs, contracted raises, and general inflation—are forcing districts to consolidate operations and, in some cases, close smaller schools.

In this budget season, some Vermont districts have already moved to consolidate schools, and additional votes are planned. The AP reported that in the fall, the Taconic and Green Regional School District voted to close elementary schools in Sunderland and Danby, and that in February the Washington Central Unified Union School District unsuccessfully sought voter approval to close schools in Calais and Worcester. Next week, residents in the Marlboro School District—part of Windham Central Supervisory Union—will vote on whether to close Marlboro Elementary School, which the AP reported serves about 50 students and is projected to continue facing enrollment declines.

Other votes focus on whether closures should become permanent. The AP reported that in February, students from the Ripton Elementary School moved to the Salisbury Community School, and that Addison Central School District voters will next week decide whether to shutter Ripton Elementary permanently. Addison Central Superintendent Wendy Baker said her district’s consolidation efforts are aimed less at cutting costs directly and more at maintaining quality educational programming; she argued, however, that the district’s cost pressures are likely to persist even after reorganization. She said savings from transferring students out of Ripton Elementary and other reorganization efforts have not produced sustained relief, and that if the district rolled the budget into the next fiscal year, it would still need a 6% budget increase to match health insurance hikes and contracted raises.

In comments quoted by the AP, Baker said, “We are in a place where inflation for school district costs is running at sometimes double the inflation rate,” and she said, “That is the problem. We cannot consolidate our way out of that.”