Act 170
Vermont's Education Transformation Law
Act 170 of 2026 (formerly H.955) is the governance and implementation law following enactment of the new education funding framework in Act 73 of 2025. It does not immediately redraw school district boundaries or mandate district mergers. Instead, it establishes a statewide structure for regional collaboration, requires every district to participate in a merger exploration process, advances school construction and facilities planning initiatives, and lays the groundwork for future revisions to the foundation formula, transportation funding, and prekindergarten finance.
For education leaders, the most immediate impacts of Act 170 are the creation of Cooperative Educational Service Areas (CESAs), participation in merger committees, new facilities planning opportunities, and a series of studies and reports that will shape future education policy.
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The Act does not immediately require district mergers. Instead, it establishes a multi-year process intended to shape future governance and finance reforms.
Educational leaders should focus on four action areas:
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CESA Formation – Appoint representatives and participate in regional governance discussions.
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Merger Committees – Prepare for participation beginning fall 2026.
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Prekindergarten and Finance Studies – Monitor developments that may affect future district funding.
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Legacy Debt and Construction Aid – Review district eligibility for future debt relief and construction funding programs.
Overall, Act 170 serves as a bridge between Act 73's new funding formula and the State’s longer-term effort to reshape educational governance, service delivery, and capital planning across Vermont.
1. Cooperative Educational Service Areas (CESAs)
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Act 170 replaced the existing BOCES concept with seven statutorily established Cooperative Educational Service Areas (CESAs), assigned every supervisory district/supervisory union to a CESA, and required CESAs to provide at least special education services; business, IT, and administrative services; professional development, transportation, curriculum coordination and development; facilities master planning; and union school district formation consultation and facilitation. Such services will be provided when requested by members and approved by the CESA board. CESAs will also incorporate career technical education considerations into policy goals.
Within 30 days of enactment, each supervisory union must appoint a representative to its CESA board. Within 45 days, the superintendent of the supervisory union with the highest aggregate average daily membership of each CESA shall call a meeting of the directors of the CESA at which each CESA board shall elect a chair and other necessary officers. Since the date of enactment was June 18, 2026, representatives must be appointed no later than Saturday July 18, 2026 and the first meeting must be called no later than Sunday August 2, 2026.
2. Statewide Merger Committee Process
Act 170 requires every school district to participate in a study process examining the advisability of forming larger unified union school districts. These merger studies are mandatory, but the final decision to merge is voluntary. These groups must examine governance, educational opportunity, efficiency, and access to regional middle and high schools and career technical education. Facilitators have the authority to reorganize the membership of the study groups as suggested by the General Assembly.
Timeline
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September 1, 2026: Facilitators hired.
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September 15, 2026: Districts appoint merger committee representatives who must be current school board members.
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October 15, 2026: Initial merger committee meetings.
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2027–2028: Merger analysis and public engagement.
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September 1, 2027: Final merger analysis from each study committee presented to the State Board and the AOE.
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December 1, 2028: Facilitator report to Legislature.
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March 2, 2028: Vote to merge proposed districts.
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July 1, 2028: Boards of new districts begin to operate.
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July 1, 2029: New districts go into effect.
3. School Construction and Facilities Planning
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Act 170 continues the Legislature's work on school construction aid, although it is important to note that the Act does not include a new appropriation to fund a statewide construction aid program. The Act reiterates the significant cost of Vermont's school facility needs, estimated in 2023 at approximately $6 billion. The legislative findings recognize that, under Vermont's current education funding system, decisions regarding school construction are made locally, while the financial impacts are borne by taxpayers statewide. The Act further acknowledges that some communities face challenges in supporting necessary capital improvements due to limited local capacity.
The Act also notes that the foundation formula established under Act 73 did not include a mechanism to support school capital investments. As a result, the General Assembly states its intent to:
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Encourage greater scale and efficiency by prioritizing school construction projects that align with future governance structures.
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Remove disincentives to necessary school construction and renovation projects.
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Recognize the urgency of developing sustainable funding models for school facilities.
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In the short term, increase the State's bonding capacity to help catalyze construction projects.
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In the long term, establish a state aid program that provides support through debt service assistance.
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The Act creates a new construction-related position within the Agency of Education and provides additional funding for the Facilities Master Plan Grant Program.
Act 170 also directs the AOE to develop rules governing school construction aid that advance the policy goals outlined in the Act. These goals include encouraging more efficient governance structures, improving student access to educational opportunities, and addressing health and safety concerns in school facilities.
4. Tuition and Student Fees
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Act 170 creates a prohibition on approved independent schools requiring additional tuition above public tuition amounts. It requires a statewide study of fees charged by public and approved independent schools. It also calls for a report to the Legislature on whether additional guardrails are needed.
5. Prekindergarten Education Funding
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Act 170 directs the Joint Fiscal Office to study how prekindergarten should be incorporated into Vermont's education finance system.
The Act signals a strong likelihood that prekindergarten funding will be revisited during future sessions and may eventually become more fully integrated into the statewide education funding system.
6. Education Finance Oversight
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The Act continues implementation of the Act 73 foundation formula and establishes an ongoing review structure through the Education Fund Advisory Committee. Responsibilities include recommendations regarding:
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Student weights
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Categorical aid
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Education Fund revenues
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Property tax credits
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Reserve levels
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Future refinements to the foundation formula
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The Act requires that future legislative sessions should use forthcoming reports on transportation, prekindergarten, and foundation formula implementation to refine the new funding system.
7. Legacy Debt Aid
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Under Act 170:
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Eligible districts may receive aid equal to 75% of qualifying debt service costs for school construction debt incurred before December 31, 2024.
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Districts identified as bad-faith participants in the merger process may be ineligible to access this aid.
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An appeal process regarding the “bad-faith” designation is established through the Secretary of Education.​​
On November 18, 2025, VSBA released a position paper about Act 73. It includes a set of 12 criteria that the association believes must be met by any proposal for transformation of the state’s public education system.
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Download the VSBA position paper: “Responsible Implementation of Act 73”
Updates
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May 29, 2026: The House and Senate passed the education transformation bill (H.955). The bill will be sent to Governor Scott who is expected to sign it into law. Read this VSBA statement in response to the General Assembly’s passage of the bill.
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February 12, 2026: VSBA Executive Director, Sue Ceglowski and Board President, Flor Diaz Smith testified before the House Education Committee on Chair Conlon's draft redistricting map, draft bills and the VSBA criteria for evaluating Act 73 proposals.
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December 4, 2025: The VSBA Board issued its response to the School District Redistricting Task Force Report.
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December 1, 2025: The School District Redistricting Task Force issued its Report to the General Assembly - A MAP FOR THE FUTURE: The Vermont Regional Education Partnership Model.
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November 20, 2025: At its meeting, the School District Redistricting Task Force met in small groups to workshop the DRAFT Task Force Report to the Legislature. A final version of the document will be posted on the Task Force’s website when it is available.
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November 10, 2025: At its meeting (see highlights), the School District Redistricting Task Force voted to include in its final report to the legislature only one proposal: the Cooperative Education Service Areas (CESA), Strategic Mergers and Regional High Schools proposal (two-page summary | detailed proposal | presentation), which would make mergers and consolidations between school districts voluntary, rather than prescribed by the state. The task force voted not to move forward with the map and proposals for the Career and Technical Education (CTE) Centers. The task force will meet again on November 20.
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October 9, 2025: The VSBA conducted a survey of school board chairs giving them an opportunity provide input to the School District Redistricting Task Force. This report was submitted to the Task Force.
Act 73
VSBA Position Paper and Criteria