COMMENTARY: Harwood’s FY27 budget incentive to spend
February 11, 2026 | By Steven Martin
Having spent some time trying to understand the Frankenstein school budget and funding system that Vermont’s Legislature has crafted (which makes following the facts nearly impossible), I will attempt to reason through some issues.
Today, I offer my thinking on district-level spending approval coupled with state-level funding. I will attempt a layman’s analogy.
Years ago, I hunted rabbits with friends in northern Vermont every winter Saturday. Dad had an old van, and he would pick up five or six of us on Saturday morning to make the 90-minute drive north to hunt rabbits. We would stop in Morrisville at the Charlmont Restaurant for breakfast.
One Saturday, we had five regulars plus a guest with us, a local friend of ours who wanted to join us that day, call him “Bob.” When we got to the restaurant and were seated, we began to order. Several regulars had ordered hearty breakfasts when the waitress came to Bob, who said, “I had a little breakfast at home, so I'll just have coffee and toast.”
Dad spoke up: “Have just toast if you want, but we aren't messing around with separate checks. When the bill comes, we are dividing it equally.” Guess what? Bob may not have been hungry, but quickly decided he would have sausage, eggs and home fries with his coffee and toast.
That is how the funding part of school budgets works. Every school puts in their “order” (locally approved budget). The state totals them all up, applies their magic formulas, and then determines what taxes each town owes to pay for what everybody requested.
Town property taxes for education depend not just on what your town “orders” (approved budget) but also what all the other schools “order” (their budgets).
Like my hunting example, your taxes are set by what everybody orders (the combined approved budgets). Unless everyone bears down to control their budgets, heavy spending districts make out better.
The system actually incentivizes each town to spend more (up to a point), because in a vacuum, all the other towns chip in to pay part of it. But your town also chips in to pay for part of their spending decisions. When all towns continue to spend, it drives the total up, and only escalates all costs, thus all property taxes.
An unbelievably complex system has been created, in part, with the intention of asking property-rich towns to help property-poor towns assure all kids get a good education. But frugal towns are punished while spendthrifts are rewarded. This system cannot possibly work as intended unless the intention is to spend more. Perhaps our legislators could not foresee this result, but I bet people who work in the real world could have – if the system were remotely understandable.
I have attended numerous school board meetings of the Harwood Unified Union School District in recent years. More than once, board members have lamented that they wished they knew what other districts were doing because they didn’t want to try to save money in our budget if other schools were going to spend more. This year, my understanding is that the HUUSD school board directed the administration to develop several scenarios while assuring the most expensive option did not exceed the state excess spending threshold (thus triggering a penalty). And my understanding is that the budget requested is the highest of the alternatives presented (just slightly under that threshold).
The incentive to spend is strong. If all districts stay just under the penalty cap, the total of budgets and property taxes will go up to the highest point allowable without state-imposed penalties.
The incentive to be frugal is weak. For this to be most effective, all districts need to be as frugal as possible. Every district that is frugal works toward the intended result (controlled spending with a good education). Thus, the difficult choice that no one wants to face.
Do we just all assume everyone else is going on a shopping spree and join them? Or do we (hopefully, along with other districts) tell our school board and the legislature that we are sick of this? Do we again reject school budgets to force school boards and administrations to find ways to lower costs, and the legislature to scrap our broken education delivery and funding system, and create something rational, understandable, and affordable?
IMHO, the last tax revolt message has worn off. We’ve had lots of talk, excuses, and finger-pointing, but no action in two years. The Harwood budget increase requested is 5.44% -- twice the CPI of 2.7%. My desire is to: 1) reduce the budget, and 2) send Montpelier another taxogram. Therefore, I am a solid NO on the budget.
Steven Martin is retired and lives in Waterbury.