Bleary-eyed lawmakers left the Statehouse shortly before midnight Friday 鈥� but not with a deal on the education bill that鈥檚 dominated the 2025 legislative session.
Marathon talks over a potentially historic reform package failed to yield a compromise, and Vermont lawmakers postponed adjournment until mid-June to give negotiators more time to work.
Democratic House and Senate leaders say they remain committed to getting to yes, including with Republican Gov. Phil Scott. But with tempers flaring as tense negotiations stretched into their 15th hour, House Speaker Jill Krowinski and Senate President Pro Tempore Phil Baruth decided to call it a night.
鈥淎fter many, many conversations and meetings today, (we) determined that the bill needed more time," Krowinski said. 鈥淚 think giving folks space to take a deep breath, get some rest and come back at it with some more conversations, some more compromises and more modeling will get us there to the finish line.鈥�
Baruth announced at 11 p.m. on the Senate floor that negotiators would be back at the table at 9:30 a.m. the following morning and have a deal to vote on that afternoon. He left the building immediately after. Just minutes later, Krowinski announced an entirely different plan to her chamber: lawmakers would return to vote on a deal June 16, she said, and negotiators would work out a deal in the interim. Senate officials later said that their chamber would follow the House's timeline.
Lack of understanding between the chambers over when they would even return to talk spotlighted long-standing tensions that boiled over Friday. On the issue of education specifically, House Majority Leader Lori Houghton said her chamber has found a more productive partnership with Scott than with Democratic leaders in the Senate.
鈥淚 think the conversation with the governor and the House has been very good. I think we鈥檝e tried to come to the table,鈥� she said. 鈥淚 think, personally, the issue is between the House and the Senate more than the House and the governor.鈥�
There has been a general consensus among legislative leaders and Scott all year that Vermont should move to a foundation formula, whereby the state, not local voters, would decide the bulk of school spending. And those same parties agree that schools and districts need to consolidate to varying degrees. But that big-picture understanding has translated into little accord on most details of importance.
The three parties have settled some of their differences. After initially insisting that lawmakers redraw school district lines this year, for example, the Senate and the governor eventually agreed to let a special redistricting panel take the summer to propose new maps. And the House and Senate had also come to agreement on class-size minimums. But these details were relatively low-hanging fruit.
They had not yet agreed on what foundation formula they should use to disburse more than $2 billion in education funding. They had not yet agreed on whether they should create new property tax classifications, which would pave the way for a second home tax. And they had not yet agreed on issues surrounding public funding of private schools.
The governor, Republican lawmakers, and some moderate Senate Democrats have been adamantly opposed to the House鈥檚 foundation formula, which preliminary modeling suggested could cost a little more than is currently spent 鈥� at least at the outset. Scott and Republicans made clear that, whatever formula lawmakers landed on, it could not spend more than the existing system.
House negotiators have sought to assure Republicans that their formula could honor that redline. But legislative number crunchers are still at work on modeling that might convince the administration and its allies in the legislature.
Months into deliberations 鈥� and mere weeks out from when they were supposed to adjourn 鈥� lawmakers also collectively realized that their reform bill had one big problem: it might raise taxes in the communities that are most averse to them.
That鈥檚 because a foundation formula would establish near-uniform education spending 鈥� and therefore near-uniform tax rates. Under the current local-control system, school districts are taxed based on their spending per-pupil. Unless overall spending decreases substantially, a foundation formula would then likely create large tax spikes in communities that currently spend below the state average. (High-spending towns, on the other hand, would see tax decreases.)
To soften the blow, Senate negotiators proposed allowing school districts to spend up to 10% less than the foundation formula calls for, and receive a commensurate tax break for that lower spending. But their House counterparts worried that this eleventh-hour proposal hadn鈥檛 been properly vetted and risked creating shortfalls in the state鈥檚 education fund.
Pitched negotiations over generational reform in Vermont鈥檚 education system reflect a new partisan dynamic in Montpelier that has, according to Scott, forced Democratic lawmakers to heed his calls for fiscal restraint.
Scott dipped heavily into his own campaign war chest during the last election cycle to support Republican candidates for the Legislature. The strategy yielded historic results for the Vermont GOP, which picked up 19 seats in the House and six in the Senate, disbanding Democratic supermajorities in both chambers.
鈥淚 don鈥檛 think we鈥檇 be having some of these conversations about education if we were back with a supermajority. I don鈥檛 think we would have taken any of it up,鈥� Scott said this week. 鈥淪ame with housing.鈥�
Divided government has delivered mixed results on Scott鈥檚 key priorities so far. After several days of acrimonious debate, the House and Senate reached a deal on this year鈥檚 housing bill, , shortly after 2 p.m. on Friday. Administration officials indicated that the governor will support the bill, which includes that would leverage the increased tax revenue from new construction to pay back loans for infrastructure like water lines, roads and sidewalks. It鈥檚 a program Scott鈥檚 championed since January.
Other hallmarks of Scott鈥檚 proposed housing package, such as Act 250 permit reform and an overhaul of the appeals process for housing development, fell by the wayside in the waning days of the session.
Democrats, meanwhile, say they鈥檝e forged progress on issues they say Scott has ignored 鈥� namely health care.
鈥淲e have a health care crisis 鈥� And I think we have felt greater urgency than the (Scott) administration has felt,鈥� said Chittenden County Sen. Ginny Lyons, the Democratic chair of the Senate Committee on Health Care. 鈥淭he overwhelming attention to education property taxes really diminished whatever we were feeling about health care 鈥 don鈥檛 know why the administration hasn鈥檛 felt compelled to respond to all the data that is out there.鈥�
Vermont鈥檚 largest private health insurer, BlueCross Blue Shield of Vermont, announced earlier this month that it鈥檚 seeking its fourth consecutive double-digit rate increase for premiums.
Legislation that won final approval on Friday afternoon 鈥� which Scott has indicated he鈥檒l sign 鈥� would cap the markups that University of Vermont Health Network can charge on outpatient infusion drugs.
Network officials say the markups help them compensate for other services for which they鈥檙e under-reimbursed. And they say the more than $40 million annually in revenue they鈥檇 lose annually under the proposal could threaten other critical services.
But Lyons said the legislation will allow BlueCross to lower next year鈥檚 premiums by four percent.
Scott said earlier this month that his administration chose to invest its limited bandwidth this year in education reform, housing, public safety and 鈥渁ffordability.鈥�
鈥淵ou can鈥檛 treat every crisis the same,鈥� Scott said. 鈥淲e can鈥檛 handle all the crises at once.鈥�
It鈥檚 unclear who voters might blame in 2026 if they don鈥檛 think elected officials are sufficiently responding to Vermont鈥檚 most pressing needs. It's also unclear whether, four months into Donald Trump鈥檚 second term as president, issues such as property taxes and housing remain the most salient for Vermont voters.
Scott鈥檚 condemnation of Trump during his first term helped cement the Republican governor鈥檚 enormous popularity among Democratic voters. His criticism of the president has been notably muted since January, and many voters have taken notice.
鈥淵ou are the leader of a state that voted overwhelmingly against Trump and what he stands for. Yet, as the terror and destruction of the Trump administration continue and even accelerate, you remain silent,鈥� 64 voters in Guilford, Vernon and Brattleboro wrote in an open letter to Scott this week.
Trump鈥檚 鈥渂ig, beautiful鈥� budget reconciliation bill, which passed the Republican-controlled U.S. House of Representatives earlier this month, includes cuts to health and nutrition programs that are expected to open up potentially deep holes in Vermont鈥檚 state budget. Vermont鈥檚 Medicaid program, which provides government-funded health insurance to more than 200,000 residents, could see especially sharp reductions
In next year鈥檚 $9 billion state budget, which was approved in early May, lawmakers and the governor set aside about $100 million in anticipated surpluses to compensate for lost federal funding. They have another $300 million in various reserve funds waiting in the wings, though dipping too deeply into those accounts could compromise the state鈥檚 long-term fiscal standing.
Report for America corps member Carly Berlin contributed to this report.
