Phil Dodd
MONTPELIER — Starting this fall, five local school districts will form a merger committee and begin discussing whether a merger of some or all of the districts should be put to voters on Town Meeting Day, 2028. Two of those districts — Montpelier Roxbury (MRPS) and Washington Central — will be the focus of this article.
Merger discussions are mandatory under Vermont’s new education law, Act 170. The law suggested 20 groupings of Vermont’s 100-plus school districts form merger committees, although the law says the final groupings could be changed by the facilitators who will be hired by the Vermont Learning Collaborative to manage each committee.
Five local districts are included in Group 20: MRPS, Washington Central (which operates U-32 Middle and High School in East Montpelier), Barre, Harwood, and Paine Mountain. Districts assigned to other groups can ask to participate in another committee, so, for example, Twinfield could theoretically ask to join the Group 20 merger discussions.
The impacts of the significant changes required in Act 170 (and 2025’s Act 73) vary from district to district and will likely affect each district’s desire to merge or not merge. In any case, the final decision will be up to the voters of each district.
A New Formula
A big change under the education reform bill is the creation of a new school finance formula known as a foundation formula, a system used in most other states that sends the same amount of per pupil funding — or “educational opportunity payments” in the new law — to each school district.
These payments will be adjusted to account for potentially higher costs associated with differing demographic and district circumstances, such as students for whom English is a second language. The new formula and changes to the current adjustments (called “weights”) are set to kick in starting July 2029.
The foundation formula is a sharp departure from the current system, in which local districts choose their own spending level. How districts are affected by the new law will be determined in part by whether their current spending is above or below the foundation level, i.e., whether they are “winners” or “losers” under the foundation formula.
Act 73 specifies a base foundation payment of $15,033 per pupil, adjusted for inflation annually. It is too soon to know what the actual foundation formula amount will be when it begins three years from now, but a study is due by Dec. 1 that will examine the formula in detail.
Districts could spend more than the foundation amount through a tax mechanism called “supplemental district spending,” although it will be a limited and expensive option. The amount that can be raised this way is capped and declines over time and will require most districts to pay a portion of any additional tax to the state.
In addition to promoting mergers and implementing the foundation formula, the legislature has taken additional steps to rein in school spending. Another bill passed this year, H. 949, gradually reduces the spending level at which the excess spending penalty kicks in from 118% of the statewide average per-pupil cost this year, to 112.5% in fiscal year 2032. When the penalty applies, towns are taxed at double the rate on each dollar above that threshold.
Montpelier Roxbury Public Schools and Washington Central have talked about mergers on and off for years and were the subject of a recent informal merger study that focused on governance. The two districts have high schools in Montpelier and East Montpelier about four miles apart. While this article focuses on the financial impacts of education reform on these two districts and implications of a merger, we will take a look at the other three Group 20 districts in our Sept. 23 issue.
Two High Schools, Two Districts
The financial situation of the two neighboring districts, and the impacts of the new laws, are quite different. Washington Central is facing greater challenges and will be more adversely impacted by several aspects of the new law.
The Montpelier Roxbury district should be less impacted, but it faces a major risk that could be addressed by a merger: its high school was flooded in 2023 and could be again. A merger with Washington Central would likely involve moving Montpelier High School school students to nearby U-32, high on Gallison Hill.
This spring, Washington Central had to cut its budget and some positions for the next school year in order to keep under the existing excess spending penalty; the declining penalty cap will cause more problems in the near future. Former Superintendent Steven Dellinger-Pate said earlier this year that the district may need to cut between $2 million and $3 million in the next budget season to avoid that penalty.
In contrast, MRPS is not likely to be affected by the excess spending provisions of the bill, according to MRPS Superintendent Libby Bonesteel.
“It’s not something we’ve ever faced, and the preliminary modeling I have received shows that it would not affect MRPS,” she said
Declining Student Numbers
At the heart of Washington Central’s challenges is that the number of students in the district is declining quickly. That matters because the state will be sending districts funding based on the number of students, and because smaller classes and schools are more expensive to operate.
From Oct. 1, 2018 to Oct. 1, 2024, Washington Central lost 7.9% of its students, almost double the state average. Montpelier Roxbury lost 2.5% of its students over the same time period. According to projections by the New England School Development Council, Washington Central’s K–12 student count will decline another 16.3% over the next 10 years.
The council estimated MRPS’s K–12 student enrollment will drop by 12% over the same time period, although that could change if Montpelier’s plans for new housing pan out and provide opportunities for more young families to move into the district.
Act 73, the reform bill passed a year ago, set a minimum size for classrooms starting this fall. The statutory minimum is 10 students for first grade; 12 students for grades two through five; 15 students for grades six through eight; and 18 students for grades nine and above. If a district has not met the minimum sizes over the course of three consecutive years, the Education Secretary “may recommend an action to the State Board of Education,” Act 73 states.
These numbers could be an issue at some of Washington Central’s small elementary schools with declining student counts. The district has already experienced turmoil over whether to close its small schools in Calais and Worcester. The two towns voted to keep those schools open earlier this year, but an Aug. 11 district vote changed the district’s articles so that closure decisions can in the future be made by the entire district.
Montpelier Roxbury’s Bonesteel said of the class minimums: “I am not concerned about the class size numbers. We are well above them in grades 1 to 8. We hover around 18 for core content at Montpelier High School each year.”
The foundation funding scheme will also be a challenge for districts like Washington Central that currently spend more than average per student.
The exact impacts are not yet known, but an earlier study provides clues.
When school finance reform was discussed in May 2025, the Legislature’s Joint Fiscal Office calculated the change in funding that districts would see when a foundation formula was implemented. It was based on one of the legislative scenarios considered by the Senate Education Committee at that time.
That analysis showed MRPS receiving a 3.2% decrease in its education payment from the state with the foundation formula. Washington Central would see a significant 13% decline in the amount of money sent to the district by the state, the analysis found; a more challenging impact that would mean the district would need further cuts, although there will be a transition period to the new funding amount for high-spending districts like Washington Central.
In sum, on the financial side the two districts will be weighing the wisdom of a merger in light of student numbers, the excess spending penalty, the foundation formula, and projected tax impacts.
Looking beyond financial and tax issues, school building conditions, busing distances, and educational opportunities will likely be discussed. Creating a combined high school would have educational benefits for students from both high schools because there could be more courses offered.
Currently, for example, Montpelier High School offers Latin, which is not offered at U-32. But U-32 offers AP French and AP chemistry, courses not available at MHS. On the other hand, some athletes would have a harder time getting onto varsity sports teams at a combined, larger school.
A merger could also provide administrative savings, with potentially fewer staff members and superintendents needed to manage a larger district, especially one that combines several existing districts.
In any event, it appears the five Group 20 school districts in central Vermont will have plenty to think about when merger discussions start in the next few weeks.
