HUUSD Board to lawmakers: Don’t count debt, health insurance in per-pupil costs

Editor’s Note: The Harwood Unified Union School District School Board recently sent the following letter to the Vermont state legislators representing the Harwood district communities as well as to the legislative education and finance committees.

Dear Senators and Representatives,

As members of the Harwood Unified Union School Board, we are writing to share an urgent concern regarding current legislative discussions about statewide spending caps and structural changes to Vermont’s education system.

Local boards are being asked to control costs, consolidate where appropriate, maintain safe facilities, and meet growing student needs. We take those responsibilities seriously. However, the current funding structure places districts in an untenable position by including unavoidable costs such as debt service and rapidly rising health care expenses in per-pupil spending calculations tied to excess spending penalties.

School construction aid has not been meaningfully restored since 2007, leaving districts to shoulder an increasing share of capital expenses. When districts seek voter approval to repair aging roofs, replace failing HVAC systems, or address safety and security upgrades, the resulting bond payments are incorporated into operating budgets and counted toward per-pupil spending thresholds. Similarly, health care costs, negotiated at the state level, continue to rise at rates well beyond local control. These two cost drivers alone can push a district toward financial penalties, even when school boards exercise fiscal restraint and make difficult reductions.

For example, Harwood Unified Union School District’s proposed education spending for FY27 is calculated at $16,228.78 per weighted pupil, which is $241.22 below the projected excess spending threshold. If the district were to issue a $30 million bond to address deferred maintenance or consolidation construction over a 20-year term, the annual payment of $2.41 million would raise the weighted cost per pupil to $17,146.86, exceeding the excess spending threshold by $677.86. Local debt service costs, therefore, directly contribute to per-pupil totals and can trigger “excess spending” penalties if not decoupled.

At the same time, health care costs continue to rise beyond local control. Health benefits for public school employees in Vermont now exceed $300 million annually, with districts experiencing increases of roughly 16% in FY25, 12% in FY26, and 7.3% in FY27. These costs have grown from under 10% of school budgets before statewide bargaining to about 15% today, and could approach 20% if current trends continue.

Together, these structural cost pressures -- capital debt service embedded in operating budgets and climbing health care expenditures -- can drive per-pupil spending higher, even when boards exercise fiscal discipline and make difficult reductions in programming and staffing.

If Vermont is serious about stabilizing and strengthening public education, we respectfully urge the Legislature to immediately decouple debt service and health care costs from per pupil spending calculations. Districts should not be penalized for maintaining safe facilities or providing health coverage required by collective bargaining agreements shaped at the state level.

We also urge you to develop a concrete, actionable plan to reinstate a meaningful state partnership in school construction funding. Without it, consolidation discussions lack practical feasibility, and long term planning becomes nearly impossible.

Our request is straightforward. Remove unavoidable debt and health care costs from the excess spending formula and restore a credible state role in school construction funding. These changes would allow districts like ours to act responsibly without being trapped by structural penalties beyond our control.

We appreciate your service and welcome continued dialogue as you consider these issues.

Sincerely,

The Harwood Unified Union School Board