Signature Bills of the 2025 Legislative Session
EDUCATION TRANSFORMATION BILL
H.454 An act relating to transforming Vermont’s education governance, quality, and finance systems (the bill awaits the Governor’s signature).
This bill includes sweeping changes to most every aspect of the State’s k-12 public education system. It was preceded by years of statutory tweaks to improve the existing system and student outcomes while restraining costs. Much of what the bill puts in motion was contemplated when the legislature created the Commission on the Future of Public Education in 2024. But a large education property tax hike of 15% on average in 2024 (with some communities experiencing more than 30%) created a sense of urgency to change things. The Commission in December of 2024 decided not to make recommendations to immediately reduce the costs of education, because they rightly pointed out that you could not affect costs without affecting governance, delivery or funding. The Governor proposed sweeping changes in January of 2025 and the legislature responded by dedicating a significant part of the 2025 legislative session to this initiative which fall into three categories:
Streamline School Governance. The bill proposes to reduce the number of school districts and supervisory unions to achieve scale, reduce expenses, and share resources more effectively between schools. Currently Vermont has 119 school districts and 52 supervisory unions. The bill does not propose a specific number, but with a targeted goal of 4,000 to 8,000 students in each district, it is conceivable to have 10-20 districts instead. The School District Redistricting Task Force is charged with making recommendations by December 2025.
Improve Delivery of Education. Some classes are too small to provide a dynamic learning environment for kids. The legislation includes minimum class sizes to improve that environment, and also to address the low student:staff ratio that makes education so expensive, striving to reach a balance. It is the intent to keep elementary education as close as possible, while leveraging regional schools for junior high and high school, where diversity and critical mass are achieved. Delivery also means improving the condition of schools, and the bill establishes a State Aid for School Construction program that has been missing since 2007.
Establish a Sustainable Funding Source. The bill proposes to move to a Foundation Formula, where the State decides how much money is allocated to school districts based on the characteristics of the students and a thorough analysis of what it costs to educate students to meet State standards. This approach is used in most states today as a way to equitably distribute resources to schools. The bill also gives districts the ability to raise additional money if approved by voters. Also included is substantial work to ensure that the education property tax is administered fairly by strengthening the property assessment process, establishing new property tax classifications to include second homes, and replacing the complex Property Tax Credit with a simpler Homestead Exemption.
The details in the bill are considerable, and require additional work over the next three years to make it reality. Much is not yet determined because it requires further study and analysis. In 2026, the legislature and the State Board of Education have to make decisions on the following:
Enact new, larger school district boundaries.
Enact updates to career and technical education governance and funding.
Begin process to create voting wards within each new school district.
Establish an appropriate weight for Pre-K students, and determine the right funding sources for Pre-K programs depending on where that education is delivered.
Decide if a weight for secondary students is warranted.
Determine what schools qualify as “small by necessity” or “sparse by necessity”
Establish a uniform school calendar and graduation requirements.
Verify the elements of the foundation formula, including the base amount and weights for sparsity, special education, career and technical education.
Staff the Agency of Education appropriately, including those dedicated to the transition and those working on establishing a school construction program.
Look for more details in the coming weeks and months as many aspects of this legislation take effect.
HOUSING DEVELOPMENT
Act 69. An act relating to housing and housing development. (S.127) Allocates money for lower and middle income Vermonters to access financing for house purchases and rentals, and grants for landlords bringing units up to code. Provides financial assistance to people living in mobile homes. Protects immigrant population from housing discrimination. Creates the Community and Housing Infrastructure Program (CHIP) that funds the construction of necessary infrastructure to support new housing developments through tax increment financing. CHIP requires a Housing Development Agreement between a developer and a municipality and has to demonstrate that the development would not have occurred without CHIP. There are extra incentives and exceptions for developments with 15% of the units determined to be “affordable.” The estimated need for new housing units in Vermont is 7,500 per year, with current construction on a pace of 2,500 per year. CHIP can play an important part of the solution by providing a much needed financial tool to help pay for high infrastructure costs.
THE MONEY BILLS
The Big Bill: Act 27. An act relating to making appropriations for the support of the government (H.493) The FY 2026 budget of $9.1 Billion is 4% higher than the current budget and builds in reserves for anticipated federal budget cuts. Of the $9.1 Billion, 27% comes from the State’s General Fund, 35% from Federal Funds, 27% is in the Education Fund, 4% from the Transportation Fund, and 8% in all other resources. The budget addresses many of the ongoing challenges Vermont faces, including the end of COVID-related federal funding, human services caseload and utilization pressures, and stabilizing property tax growth. All statutorily required reserves are filled, all pension obligations are met, and essential investments in housing, workforce, economic development, human services, and education are made. Within general fund, the Vermont Housing and Conservation Board (VHCB) is fully funded at the statutory level of $36.9 million for the first time in a long time.
The Transportation Bill (T-Bill) Act 43. An act relating to the fiscal year 2026 Transportation Program and miscellaneous changes to laws related to transportation. Revenues in the Transportation Fund continue to decline from current levels of $833 million, largely due to decreases in gas and diesel tax revenues as a result of better fuel efficiency of internal combustion engine vehicles and the continued increase in the adoption of electric and plug-in electric vehicles. At the same time, costs in the Agency of Transportation are rising because of increases in construction costs, employee compensation and employee-healthcare costs.
Ends the transfer of $20 million from T-Fund to State Police, moving it to the General Fund.
Establishes a funding formula to support municipal highway and bridge maintenance.
Funds the design and implementation of a mileage-based-user-fee (mbuf) for EV users.
Commissions a study to determine the ability of AOT to assess/prioritize the maintenance of town roads/highways to reduce burden on Towns.
Funds coordination of a volunteer-driver program for Medicaid patients.
The Capital Bill: Act 33 An act relating to capital construction and State bonding (H. 494)
The $127 million Capital Bill funds infrastructure investments in projects such as wastewater and water systems and State office buildings, dry hydrant systems in rural towns, and facility and upgrades at UVM and the Vermont State University campuses. .
The Yield Bill: Act 24. An act relating to setting the homestead property tax yields and the nonhomestead property tax rate. (H491) The annual “yield” bill sets the property tax rates to meet the needs of the Education Fund after all other sources have been applied. The $2.4 Billion Education Fund is the total of all locally approved school budgets across the State. After applying all of the other revenues dedicated to the Education Fund (Sales Tax, Lottery Revenues, % of Rooms and Meals Tax, % of Purchase and Use Tax), the legislature determines the relative tax rates for homestead and non-homestead. This year the legislature agreed with the Governor to provide short-term property tax relief by using $77 million in surplus funds from the General Fund and another $41 million in surplus funds from the Education Fund to reduce the amount to be raised by property taxes. This lowered the average projected property tax increase to 1.1% for the FY26. The legislature and the Governor both acknowledge that this is a bridge until the new funding structure and any cost savings can be realized in the education transformation bill.
THE MONEY PIECES OF THE EDUCATION TRANSFORMATION BILL (H.454)
Creates a Foundation Formula to fund schools – Starting in FY ‘29, the state will provide each school district with an Education Opportunity Payment (EOP) calculated by multiplying the number of students in the district by a “base” payment of approximately $15,000. “Weights” will be given to students who are economically disadvantaged, English Language Learners, or receiving special education services. Additional grants will be given to schools that are “small by necessity” or “sparse by necessity.” The base and weights reflect the current expense load of Vermont’s education system and will be adjusted as other education policies are implemented to make the system more efficient. The foundation formula will stabilize education spending, provide more predictability for taxpayers and school districts, and direct more resources to schools that have previously been underfunded.
Supplemental District Spending – Districts are allowed to raise funds above the EOP subject to a district wide vote. The supplemental district spending is capped at 5% over the EOP when fully implemented, and includes a recapture provision for districts with higher grandlist values that will be used to lower overall property taxes.
Property Tax Classification – Creates three tax classifications for property vs the current number of two: homestead residential, non-homestead residential, and non-homestead non-residential. This will enable the state to level set tax rates for all classifications. Anticipated that secon
Statewide Reappraisals – Creates 12 regional assessment districts and a 6 year reappraisal schedule to better reflect the current market value of properties across the state, and reduce the volatility of and reliance on the common level of appraisal (CLA). Creates a working group of listers and assessors, the tax department and appraisal firms to determine how a state-administered system may work. This is a continuation of studies and considerations to address the complex work of property assessments, shortage of municipal staff, and keep the grand list current and fair.
Homestead Property Tax Exemptions – Replaces the current “Property Tax Credit” for property owners filing a Homestead Declaration with an easier to understand, easier to administer system with updated property values. The bill exempts a percentage of the first $425,000 in property value, adjusted for income. The exemption phases out for tax filers with household income over $115,000, but it is likely it will increase to $175,000 to be consistent with other tax credit programs.
Establishes a 5 year transition when the Foundation Formula kicks in. Some low-spending districts will receive more money than they receive now, some high-spending districts will receive less money. The bill creates a 5 year transition from existing spending levels to new spending levels, by reducing the difference by 20% in each of those five years.
OTHER MONEY BILLS PASSED BY HOUSE WAYS & MEANS - Because I serve on Ways and Means, these bills are the ones with which I was most involved.
Income Tax Credits – S. 51 An act relating to Vermont income tax exclusions and tax credits. The expansion of 5 existing tax credit/tax exemption programs benefits low income Vermonters, families with children, retirees and veterans. In total they are estimated to forego $13.5 million in income tax revenue per year.
Earned Income Tax Credit (EITC) – expands the Vermont EITC for individuals without children from 38% of the federal EITC to 100% so folks who are working can receive more of their money back at tax time.
Child Tax Credit – raises the age limit for children who create a tax credit for their families from 5 to 6 years old. This tax credit is the most powerful piece of legislation to reduce childhood poverty passed in the last 25 years.
Expansion of Social Security income limits – the income limits for taxpayers who are eligible to receive an income tax exemption on their social security income are raised from $50,000 to $55,000 (with a phase out up to $65,000) for individuals and from $65,000 to $70,000 (with a phase out up to $80,000) for joint filers. The vast majority of older Vermonter pay no taxes on their hard earned social security under this proposal.
Expansion of Civil Service Retirement System (CSRS) income limits – the income limits for taxpayers who are eligible to exempt the first $10,000 of their CSRS income from income tax are raised from $50,000 to $55,000 (with a phase out up to $65,000) for individuals and from $65,000 to $70,000 (with a phase out up to $80,000) for joint filers.
Military Pension and Survivor Benefits Exemption – Military retirees and their survivors with income of $125,000 or less will be able to exempt their military pension and survivor benefits from income tax. For income above $125,000, the exemption phases out until at $175,000 of income, the benefits are no longer exempt. Military retirees will no longer have to choose between taking their military pension exemption or their social security exemption but can exempt both as long as they qualify under the income limitations.
Veterans Tax Credit – Veterans with income of $25,000 or less will be eligible for a $250 refundable credit, meaning that even if they do not have a tax liability, they are eligible for the credit. The credit phases out up to an income limit of $30,000. When too many veterans are experiencing homelessness or living in poverty in Vermont, this is one small step towards honoring their service, too.
Increased the municipal retention of Local Option Taxes: (Part of H. 397) An act relating to miscellaneous amendments to the statutes governing emergency management and flood response.) The State’s share was reduced from 30% to 25% of the revenues generated from local options taxes (LOT) because there is sufficient money at 25% to fully fund the PILOT (Payment in Lieu of Taxes) program that pays municipalities an equivalent to a municipal property tax bill for tax-exempt, state-owned properties.
Created the Municipal Grand List Stabilization Program (in the Big Bill) to use part of the existing surplus in the PILOT fund to help municipalities bridge the loss of municipal property taxes due to the flood devastation and subsequent buyout of properties by FEMA or the State.
HEALTH CARE BILLS
H.13 (Act 14) An act relating to Medicaid payment rates for home- and community-based service providers and designated and specialized service agencies. Allows for these essential workers to receive regular rate reviews for compensation.
S.36 – An act relating to the delivery and payment of certain services provided the Agency of Human Services, services for persons who are incapacitated, and Human Services Board proceedings The bill cuts red tape so Medicaid recipients with substance use and mental health conditions can receive care for as long as is their provider deems medically necessary—eliminating confusion over a supposed 14-day treatment limit. The bill allows law enforcement to continue to lodge individuals who are inebriated in public for 24 hours with the Department of Corrections when no Public Inebriate Program bed is available and ER care isn’t appropriate, while tasking the Agency of Human Services to find alternative solutions over the next two years.
H. 35 An act relating to unmerging the individual and small group health 12 insurance markets unmerges the individual and small group markets that purchase insurance on the Affordable Care Act exchange. The individual market currently receives federal subsidies to reduce premiums for Vermonters. Unfortunately, these are expected to expire at the end of the year. The small group market will have lower premiums as a result of this bill.
Act 15. An act relating to increasing the monetary thresholds for certificates of need (H.96) significantly increases the dollar threshold that would trigger the requirement for obtaining a certificate of need for a healthcare facility developing new projects from the Green Mountain Care Board (GMCB). This will allow for a less expensive and onerous process and with lower costs being passed on to Vermonters.
Act 55. An act relating to the 340B prescription drug pricing program (H.266) caps prices on prescription drugs supplied by “340b” pharmacies at hospitals in Vermont at 130% of the average sales price as determined by Medicare for 2026. Vermont has the highest charges in the country on these drugs, at 600% over the average sales price to commercial insurers.
Act 50. An act relating to certification of community-based perinatal doulas and Medicaid coverage for doula services (S.53) requires that Vermont Medicaid payments be extended to doula services through the prenatal, birthing and postnatal period. This support reduces preterm births, low birth weight and postpartum depression leading to healthier families and lower costs.
Act 9. An act relating to preventing workplace violence in hospitals (H.259) requires hospitals to implement a security plan for preventing workplace violence. From June 2023 through December 2024, 6 hospitals reported 89 total incidents with injury to staff.
Act 62. An act relating to modifying the regulatory duties of the Green Mountain Care Board (S.63) allows the Green Mountain Care Board to operate more efficiently.
Act 49. An act relating to Green Mountain Care Board authority to adjust a hospital’s reimbursement rates and to appoint a hospital observer (H.482) gives GMCB the authority to intervene if there appears to be a material misrepresentation of budget submission and appoint a neutral hospital observer to address the issue.
Act 68. An act relating to health care payment and delivery system reform (S.126) is intended to lower healthcare costs through a number of initiatives: gives GMCB the authority to use “reference based pricing” to set rates for similar procedures at different hospitals, allows GMCB to review rates of hospital NETWORKS, create transparency for state agencies to set contracts between providers and payers, creates a statewide health resource plan, forms a primary care committee with real authority to develop the plan, and holds AHS accountable for the work and timeline required in ACT 167 around hospital sustainability.
ALL OTHER BILLS PASSED INTO LAW
Act 38. An act relating to increasing the size of solar net metering projects that qualify for expedited registration (S.50) increases the size of backyard solar projects that qualify for expedited registration from 15kW to 25kW.
Act 65. An act relating to economic and workforce development. (S.122) addresses a variety of economic and workforce development programs, including:
Financial support for business technical assistance and outreach by the Vermont Professionals of Color Network, Vermont Small Business Development Center, and the VT Sustainable Jobs Fund.
Business recruitment and relations through the International Business Office focused on Canada, and establishing a framework for creating an Ireland Trade Commission.
Exploring the feasibility of a Convention Center and Performing Arts center in the state
Defines the roles and duties of the Commissioner of Labor and the Executive Director of the Office of Workforce Development with regards to workforce development and education.
Act 4. An act relating to increasing the minimum age for delinquency proceedings. (H.2) addresses some of the issues in our juvenile justice system and how it handles the supervision, care, and rehabilitation of juveniles accused of criminal acts. These changes recognize that children are fundamentally different from adults and will help to move their cases into family court and out of the overburdened criminal court.
Act 46. An act relating to civil orders of protection. (H.222) revises Vermont’s civil protection order statutes (restraining orders) to provide better relief to victims of domestic violence, sexual violence, and stalking.
Act 12. An act relating to after-hours access to orders against sexual assault (S.9)This act allows a person to obtain an emergency protection order against sexual assault outside of regular court hours in the same manner that emergency domestic violence orders are obtained and directs the Court Administrator to establish procedures for obtaining such orders on nights, weekends, and holidays.
Act 31. An act relating to confirmatory adoptions and standby guardianships. (H.98)
Through standby guardianships, allows immigrant parents to identify trusted adults who can step in as temporary guardians if the parent is detained or deported. The confirmatory adoption provision provides a clear and expedited process for Vermonters who became parents through the use of assisted reproduction technology (who are already parents under state law) to obtain a court order stating so. This provides a necessary level of protection for families who may travel to destinations that do not recognize the legal parenthood of all LGBTQ parents and others.
No. 28. An act relating to authorization to enter into certain immigration agreements. (S.44) Vermont law currently allows an exception to the Governor’s sole authority to enter into certain types of agreements with federal Immigrations and Customs Enforcement (ICE) if there is a declaration of a state or national emergency. S.44 eliminates this exception, and keeps the Governor as the sole authority in Vermont to enter into these ICE delegation-of-authority agreements. This will keep the State accountable to Vermonters regarding how our law enforcement interacts and cooperates with ICE.
Act 8. An act relating to expanding the scope of hate-motivated crimes. (H.118) Expands the scope of who can be considered a victim of a hate crime.
Act 57. An act relating to miscellaneous amendments to the statutes governing emergency management and flood response. (H.397) The “flood bill” helps cities and towns prepare for and respond to floods and natural disasters, including funding to purchase flood prone properties and to bridge the impact on the grand list.
No. 51. An act relating to amendments to Vermont’s Open Meeting Law. (S.59) clarifies that site or field visits by a public body do not have to be recorded, and enables municipalities to post notices of meetings in other, nearby municipalities if it does not have sufficient public spaces. Further clarified the procedures and acceptable reasons for entering and exiting executive sessions, as well as expanding the authority of public bodies to develop and enforce rules related to disdorderly conduct that prevents the body from doing its work.
Act No. 58 . An act relating to professions and occupations regulated by the Office of Professional Regulation (H.472), clarifies the process and requirements for licensing certain professions, authorizes the Secretary of State to collect revenues generated from the sale of data and report back to the legislature on it, and creates a position to streamline the licensure of mental health professionals.
No. 56. An act relating to miscellaneous cannabis amendments (H.321) increases enforcement and oversight capacity by the Cannabis Control Board, adjusts fees and licenses to better reflect current market conditions, and strengthens regulation of dangerous products made from hemp because of a legal loophole.
Act 47 An act relating to technical corrections to fish and wildlife statutes (H.231) creates new protections for all native species of amphibians and reptiles, the majority of which are at risk. Designates Labor Day weekend as a free mentored fishing weekend for Vermonters, and adjusts penalties for certain big game violations.
Act 37 An act relating to stormwater management (H. 481) contemplates the creation of regional stormwater utilities in Vermont, and to address the 3-acre stormwater permit regulation.
Act 67. An act relating to miscellaneous agricultural subjects (S.124) adresses the administration of concentrated animal feeding operation”s (CAFO) water quality permit, and shifts the regulation for large farms from the Department of Ag to the Agency of Natural Resources to comply with federal EPA regulations.
Act 54. An act relating to the phaseout of consumer products containing added perfluoroalkyl and polyfluoroalkyl substances (H.238). Building on previous PFAS related legislation, this bill added various consumer products that contain PFAS to the list of those that cannot be sold or manufactured in the State.
Act 66. An act relating to miscellaneous changes to laws related to motor vehicles. (S.123) (Miscellaneous DMV Bill).
Allows renewal of driver’s licenses and ID cards for four years at any time, not just at the renewal date.
Clarifies the rights of municipalities to maintain (or not maintain) Legal Trails.
Commissions a report on the process to determine the taxable value of a used motor vehicle, and the financial impact of vehicle inspections on Vermonters.
Act 59. An act relating to miscellaneous agricultural subjects (H.484)
- amends current statute related to regulation of fertilizers, plant amendments, and soil amendments to conform State law to national standards for beneficial substances.
- increases the annual pesticide product registration fee to pay the costs of a collection program for obsolete and unwanted pesticides.
- requires the Sec. of Agriculture, Food and Markets to recommend funding options to reimburse solid waste management entities for all costs associated with collection and disposal of unwanted or obsolete pesticides.
- relieves the Rutland County Agricultural Society, Inc. (State Fair) from paying a stormwater impact fee or obligation to complete an offset for those reductions it cannot complete to comply with the 3-acre stormwater rule because of site constraints.
- Clarifies the Household Hazardous Waste Producer Responsibility Program: does not include paint products, grants extra time for stewardship organizations to comply, allows ANR to implement the plan if need be and charge the manufacturers for the cost of the program.
- amends the existing extended producer responsibility (EPR) program for architectural paint to expand its scope to include paint products.
Act 34. An act relating to establishing the Vermonters Feeding Vermonters Grant at the Agency of Agriculture, Food and Markets (H.167) establishes a grant program for the Vermont Foodbank to purchase local food to distribute through their distribution channels and to provide subgrants to Vermont Foodbank community partners to buy directly from local farms.
VETOED BY THE GOVERNOR
H. 91 Vermont Homeless Emergency Assistance and Responsive Transition to Housing (VHEARTH) Program. H.91 Vermont Homeless Emergency Assistance and Responsive Transition to Housing Program (VHEARTH) Summary. The bill sought to transition the general assistance program for housing from emergency motel vouchers managed by the Department for Children and Families to a more comprehensive, sustainable program based in communities. It focused on providing more intensive case management support, addressing the unique causes of homelessness for each person, and offering long-term solutions. The Governor vetoed the bill, though his reasons for doing so were addressed in the content of the bill.