This commentary is by Flor Diaz Smith, president of the Vermont School Boards Association.
Now that legislators have returned to Montpelier and are back in session, Act 73, the state’s sweeping education reform law, is once again taking center stage.
Much of the public debate so far has focused on school district mergers, consolidation and governance. Those questions matter. But amid the focus on how schools are organized, we risk overlooking what is driving education costs in the first place.
One of the largest and fastest-growing pressures on school budgets is employee health care, and no amount of redistricting will make that cost disappear.
For most Vermont families, when household expenses rise sharply year after year, the first instinct is not to sell the house or merge households with neighbors.
Families start by looking closely at their budget to understand which costs are growing fastest. When a single bill begins to crowd out groceries, child care, car repairs or savings for the future, it demands attention.
Vermont’s public education system is facing the same challenge. According to the Public Assets Institute, health insurance costs are growing more than twice as fast as overall education spending.
That rapid growth is crowding out resources for classrooms and student support services, while placing increasing pressure on property taxpayers across the state. Health care costs are on pace to consume roughly 20% of school budgets based on a projected five-year average increase in health care costs.
These increases show up in very real ways for communities. Rising health care costs translate directly into higher property taxes, fewer dollars for classrooms and educational programs and growing inequities between districts.
Over the past decade, education spending in Vermont has increased by roughly 40%, even as student enrollment has declined by more than 20%. Much of that growth is driven by health care costs.
Recent analysis by the School District Redistricting Task Force reinforces this reality. It identified health care as one of the largest cost drivers in Vermont’s education system and found no evidence that changes in district size alone would meaningfully reduce those costs.
The good news is that there is a practical and balanced path forward.
Currently, public school employee health care benefits are established through a single statewide agreement that leaves local school boards with little leverage or flexibility, even though boards are responsible for balancing budgets and responding to taxpayers.
The Vermont School Boards Association (VSBA) has proposed targeted reforms, including adjustments to plan design options, revisions to arbitration rules and expanding the negotiating parties.
These changes would be more consistent with how health care benefits are negotiated for most other Vermont workers.
The goal of these reforms is to bend the cost curve before health care expenses overwhelm school budgets. That requires acknowledging a hard truth: rising health care costs affect both employers and employees.
VSBA’s proposals would rebalance the negotiation process so that school employees and local boards have a fair voice in determining benefits and costs, similar to what most other Vermont workers already experience. It may include a more thoughtful look at plan design, cost sharing and other tools that help control growth over time.
We believe that everyone deserves access to quality, affordable health care. This proposal is not about taking away health care or asking any single group to shoulder the burden alone.
Moving forward, we need to take a hard, honest look at how benefits are structured and paid for as costs rise. We are all in this together, and this challenge affects everyone in the system, from teachers and support staff to administrators, school boards and taxpayers.
What we are doing now is not working. By approaching the problem with shared responsibility and transparency, Vermont can preserve strong benefits while creating a system that provides long-term stability and is fair to the communities that support it.
If Vermonters want public education to be sustainable, lawmakers cannot afford to ignore the impact of health care costs on school budgets.
Health care is an education issue, a taxpayer issue and an equity issue. It must be front and center in this year’s debate.
