Four months in, Vermont’s budget Is balanced—but the real fight might just be delayed: Education Reform standoff

by Dave Soulia, for FYIVT.com

As Vermont lawmakers head toward what was supposed to be a recess, things are getting murkier, not clearer. With most of the FY2026 budget work behind them, there was talk of adjourning, letting everyone regroup, and preparing for the usual cleanup and veto session later in the summer. But now it looks like they may not gavel out at all.

Why? The still-smoldering school funding overhaul bill—H.454 and its Senate counterpart—both in limbo, but very much alive.

The legislature may actually stay in session until something is passed, which means hundreds of thousands of dollars in continued costs for every week they remain in Montpelier—despite the fact that most agree the bills, as written, aren’t ready.

And that’s where the games begin.

The Budget Got Passed—But the Real Battle Is in the Fine Print

Vermont passed a $9.03 billion budget this session. It avoided new broad-based taxes and funded a long list of priorities: housing, healthcare, school transformation, shelter expansions, and tax relief. All tidy on the surface.

But lurking underneath it all is the state’s increasingly unsustainable education finance system—and lawmakers know it.

After a spring of school budget rejections and rising property tax rates, political pressure is mounting. The push to pass something—anything—in the form of an “education reform” bill before adjourning looks less like fiscal policy and more like political cover.

H.454: Not Dead, Just Waiting for the Right Moment to Explode

Despite early speculation that the House’s H.454 had fizzled, it was never dead. It’s been parked, slow-walked, and tweaked behind the scenes—alongside a parallel Senate effort that hasn’t advanced much further.

Now, instead of allowing time for stakeholders to refine the policy over the summer and fall—doing the homework, meeting with communities, and crafting a bill that can stand up under scrutiny—Democrats and Progressives appear poised to push something through quickly, likely triggering a veto.

Why? Because the real price tag of education reform—and the inevitable property tax spike that comes with it—would land right before the November 2026 elections if nothing is done now. And that’s a risk many incumbents seem desperate to avoid.

In short: pass a flawed bill, blame the governor when he vetoes it, and delay the pain until after Election Day.

Who’s Paying for All This?

Let’s talk numbers.

Vermont’s $9.03 billion budget breaks down like this:

• $3.1 billion (34%) from the federal government—mostly Medicaid, infrastructure, and program grants.
• $2.4 billion (27%) from the General Fund—income tax, corporate tax, sales tax.
• $2.4 billion (27%) from the Education Fund—mostly property taxes, with some help from sales tax diversions and lottery revenue.
• The rest? Transportation fund, special funds, and various fees.

That means 1 in 3 dollars Vermont spends comes from D.C. And as pandemic relief dries up, that dependency becomes more dangerous.

Worse, Vermont’s working-age population is shrinking, school enrollments are flat or falling, and property tax pressure is mounting—especially on fixed-income households and middle-class families.

What’s Really Going On?

There’s a clear path here: gavel out, let committees and education leaders do their work, and come back in January with a better bill. But instead, we’re watching what looks like a deliberate stall tactic, meant to delay fiscal fallout until it’s politically safer.

Rather than facing up to the “butcher’s bill” now—admitting what Vermont’s education system really costs and how much taxes will have to rise to sustain it—we’re watching lawmakers maneuver to keep their seats instead of doing what’s best for students, teachers, and taxpayers alike.

The public narrative might sound like reform, but the inside scuttlebutt says otherwise. Many see this as a setup: trigger a veto, paint it as obstruction, and delay the financial reckoning.

The Takeaway

So no, there’s no veto battle yet. But one is being engineered, not avoided. And the longer the Legislature stays in session chasing a headline instead of a solution, the more Vermonters should be asking: Who’s this really for?

Vermont’s education system needs reform, yes. But it also needs honesty, clarity, and a little basic business math. What it doesn’t need is another $250,000 in legislative overtime to pass a bill designed to fail just so politicians can say they tried.

Because if there’s one thing Vermonters can’t afford more of—it’s political theater disguised as progress.