Vermont’s new education reform law, Act 73, sets in motion a multi-year effort to restructure how the state funds and governs its public schools. During a live conversation on Dec. 2, 2025, I sat down with VTDigger education reporter Corey McDonald to hear him break down the new law and answer re ader questions about what it all means. Below is the full recording of our conversation and a summary of ten key points Vermonters should know.  Watch the full recording Ten key takeaways 1. Why did lawmakers pass Act 73? Vermont has been grappling with several long-term trends: The state consistently ranks among the highest spenders per pupil in the nation. Student enrollment has declined over the last two to three decades. Property taxes have increased more than 40% in the past five years. These pressures led to widespread concern about the sustainability of the current system. After one-third of school budgets failed to pass in 2024 and following shifts in the political landscape, lawmakers pursued broad reform. 2. What does Act 73 aim to change? Act 73 lays out a multi-year plan to reexamine how Vermont funds and organizes its public school system. It creates several committees and task forces to study areas including school construction, transportation and special education services. A central goal of Act 73 is to move Vermont toward a foundation formula, the funding model used by most states. Under this formula, the state would set a base funding amount per student and adjust for students requiring more support. This would shift significant decision-making authority from local districts to the state. 3. Why does the law require school district consolidation? Vermont currently has 52 supervisory unions and supervisory districts and 119 individual school districts. Act 73 states that implementing a foundation formula will require substantial consolidation. Lawmakers are tasked with reducing the total number of districts to 10–25. The state’s redistricting task force recommended moving toward regional service entities and made a recommendation against forced mergers, but the Legislature is not obligated to adopt the task force’s recommendations. 4. Will consolidation actually save money? Evidence is limited. The governor’s administration estimates that switching to the foundation formula could save around $180 million annually, but only if districts are consolidated. A 2024 study of the 2015 reform law, Act 46, found limited savings from previous district mergers. The redistricting task force has said that they found little to no evidence for or against the claim that consolidation itself saves money. 5. What changes have already gone into effect? One significant change is the tightening of eligibility for independent schools receiving public tuition. Independent schools must now meet two tests: Be located in a district without public schools for some or all grades as of July 2024 Have had at least 25% publicly funded students in the 2023–24 year. Only 18 independent schools currently meet these requirements. But students already enrolled may continue receiving public tuition through graduation. 6. How are school districts responding to the law so far? While the implementation timeline spans several years, the uncertainty has prompted some districts to take action on their own including: Considering changes to grade configurations, including possible closures. Reviewing the viability of their elementary schools as they plan for long-term enrollment and governance changes. Exploring voluntary partnerships to prepare for possible structural changes. These steps are not mandated by Act 73 but reflect efforts by some school administrators and communities to prepare for potential future requirements. 7. What will happen to small, rural schools? Act 73 acknowledges that some schools are “small or sparse by necessity” and signals lawmakers intend to preserve some of them. What qualifies a school for that protection is still being defined. Research shows school closures often harm community cohesion and local economies, a concern weighing heavily on rural towns. 8. How does the law address special education needs? A state report recently found that special education needs in Vermont are rising, and many districts lack the necessary staffing or specialized resources to meet those needs. Act 73 requires the Agency of Education and the State Advisory Panel on Special Education to create a three-year statewide strategic plan for delivering services. That report is scheduled to be released this month. 9. Does the law address health care costs? In short, no. Employee salaries and health insurance make up the largest portion of district budgets, and health care costs continue to increase each year. Act 73 does not include any measures directly aimed at addressing this cost driver. 10. What decisions do lawmakers need to make next? The upcoming legislative session will determine whether Act 73 proceeds as envisioned. Act 73 hinges on drawing up new school district maps, and new governance configurations. If the Legislature cannot reach agreement during the 2026 session, it could significantly undermine the law. At minimum, implementation would be delayed beyond the timeline envisioned when the law passed. Even so, there is broad recognition among lawmakers that the current system is under strain and that some form of change is needed. Ongoing increases in property tax estimates are likely to heighten the pressure for action as the session unfolds. Stay informed as the legislative session unfolds To follow developments on Act 73 and other Statehouse issues, sign up for Final Reading, our essential newsletter that makes sense of what’s happening in the Vermont Statehouse. Delivered Tuesday – Friday evenings during the legislative session. Email Δ Read the story on VTDigger here: Act 73 explained: 10 things to know about Vermont’s education reform law. ...read more read less