Leichliter: Beyond local control, rising health care costs are driving school budgets

December 16, 2025  |  By Mike Leichliter

As Vermonters enter another difficult school budget season, it is important to ground our conversations in the realities of being a small, rural state. Vermont’s scale shapes nearly every public service, including education. While it can be tempting to believe that creating much larger school districts will significantly reduce costs, that approach does not address many of the underlying pressures driving school spending across the state.

The Act 73 Redistricting Task Force, like the Commission on the Future of Public Education in Vermont on which I served last year, reviewed statewide education spending earlier this year. Much of the criticism directed at this work focused on the conclusion that creating larger districts would not meaningfully lower costs for public schools. What received far less attention, in my view, was one of the most important findings: Vermont as a whole has the highest health care costs in the nation. Those costs flow directly into school budgets through the Vermont Education Health Initiative, over which local school boards have no authority.

The scale of these premiums is striking. According to data from the Vermont School Boards Association, the total annual premium for the most common school healthcare plan in Fiscal Year 2018 was $17,394. By Fiscal Year 2026, the premium for the same health care plan had risen to $40,909. At the current rate of growth, VSBA projects that this same plan will cost $63,928 in Fiscal Year 2030 and $71,472 in Fiscal Year 2031. These increases illustrate how rapidly health care costs are consuming school resources in Vermont, over which local districts have no control.

Health insurance premiums are set at the state level, not locally. When they rise faster than revenues, districts must reduce staffing and services or make other difficult programmatic choices. This is not mismanagement. It is simple arithmetic.

For perspective, I spent most of my career in Lancaster, Pennsylvania, including 13 years as superintendent of a district serving about 6,000 students, a scale similar to what Act 73 envisions for Vermont in the future. Despite having roughly three times as many employees as Harwood, that district’s total health insurance bill was comparable to what we now pay in my Vermont school district. That contrast illustrates the impact of Vermont’s health insurance environment on public schools and highlights the limits of scale as a cost-control strategy. Vermont already has a statewide health insurance system for schools, yet that approach has not yielded cost savings.

As Yale professor Zack Cooper recently wrote in The New York Times, rising health care spending nationwide is “bankrupting families and shredding jobs for low- and middle-income workers.” 

Vermont is experiencing its own version of that affordability challenge. Until the underlying cost of health care is addressed, school budgets will continue to be squeezed not because of local decisions, but because some of the largest cost drivers sit entirely outside local control.

Our students and towns deserve a funding conversation from state leaders that begins with these facts and reflects the realities of a small, rural state. Until cost drivers beyond the reach of local districts are addressed, communities will continue to face reductions in student programs simply to make the numbers work. Larger districts alone will not solve these challenges. 

This is not a local failure. It is a statewide challenge that requires honest and difficult conversations.

Michael Leichliter, Ed.D. is the superintendent of the Harwood Unified Union School District and served as the Vermont Superintendents Association representative to the Commission on the Future of Public Education in Vermont during the 2024-2025 school year.