Vermont Legislature SmartTranscripts:

[Rep. Peter Conlon (Chair)]: Okay, we are live at this House of Education on 03/19/2026. The committee continues its discussion on bringing districts together to explore bigger larger districts in some way, shape or forms. We have some testimony today that takes a look at some of the numbers among sort of a potential merger to just get a sense of like, okay, on the ground, what does some of this stuff mean? So anyway, I'm gonna turn it over to our speaker and his presentation. Whenever you're ready, Ryan to introduce yourself and floor is yours.

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: Okay. Hi, everyone. Good afternoon, members of the House Education Committee. For the record, my name is Ryan Harity, and I am the superintendent of the Lemoyle South Supervisory Union, representing the towns of Elmore, Morristown and Stowe. I also serve as a trustee for the Winooski Valley region, and I am speaking today on behalf of the Vermont Superintendents Association. Thank you for the opportunity to testify and for your work on behalf of Vermont's children and communities. I was asked to describe the short term costs associated with district mergers, and to provide some nuance and context for your consideration. My testimony is grounded in the timelines and expectations in Act 73, and in financial data from the supervisory unions I will reference today. I want to be transparent that these figures rely on several reasonable assumptions, and that fully understanding the financial implications of a large scale governance shift would require much more detailed modeling. For example, in estimating the cost of leveling up salaries, I used the average teacher salaries. In reality, longevity and step placement will affect the actual cost, and each employee would need to be placed on the appropriate step to determine a precise figure. In addition, collective bargaining agreements contain other provisions with financial implications, such as paid holidays, parental leave, continuing education reimbursement, and coverage teachers. I was not able to fully quantify that in the time available. So the core issue is what drives merger costs? For today's purposes, I will focus on the tentative financial impact of merging the three supervisory unions served by the Green Mountain Tech and Career Center. This is Lemoyle South, Lemoyle North, and Orleans Southwest. They're the three areas that I'm most familiar with and the areas I was able to get data in a As you know, employee salaries and benefits account for nearly 80% of most district budgets, so changes in compensation will drive much of the short term cost of consolidation. The most immediate and significant fiscal impact will come from aligning salaries and benefits across newly merged districts. Act 73 lays out a transition schedule in which new district boundaries would take effect on 07/01/2026, and new districts would assume full responsibility for students on 07/01/2028. That two year window is not cost neutral. It would require a transitional administrative structure, a superintendent, finance director, special education director, curriculum director, and various additional administrative and legal supports to do the work of merger implementation while the existing districts continue to operate. It is estimated to have an impact of at least $1,000,000 over a two year period. It should also be noted that the foundation formula modeling shared with the House recently indicated that a joint Lemoyle South and Lemoyle North school district would see a loss of 4% in the overall funding from the foundation formula. Most likely, this would need to be made up with supplemental spending, which may add additional transitional costs.

[Rep. Peter Conlon (Chair)]: I just wanna pause right there and throw in some very necessary caveats. That modeling did not include decisions on special education, CTE, and many other things. It has the weights in it? Yeah, was based on the unweighted Okay. Anyway. Thank

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: you for that context. So first, I'd just like to take a look at the negotiated agreements between the three supervisory unions. We know pay equity is important, and educators deserve fair and competitive compensation. This is also complex when taking into account cost of living adjustments and other benefits. Creating true pay equity across districts takes careful planning and research. Based on data collected yesterday from the three supervisory unions, the current picture for teachers is as follows. What you'll notice immediately is that there's some pretty, significant pay differences between the three supervisory unions. Where the Memorial South is a benchmark, the average teacher salary is around $80,000. You'll see Lemoyle North is around 68,000, and Orleans Southwest is closer to $60,000. So again, using that average teacher salary, this equates to about $5,500,000 in leveling up costs.

[Rep. Peter Conlon (Chair)]: And you're leveling fully up to the highest salary schedule of the three collective bargaining agreements?

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: Yes, sir. Yep.

[Rep. Peter Conlon (Chair)]: Great. Representative Quimby has a question.

[Rep. Beth Quimby (Member)]: Question, math question. Because as you'd mentioned before, it's a little more complex maybe because of years of service and where people are on the step. So this is just the overall average taking nothing else into consideration, right?

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: Yep, this is, you know, takes definitely some general assumptions, and to get an accurate number you really would have to do. Teachers can lay and place them on the scale.

[Rep. Beth Quimby (Member)]: Okay, thank you.

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: But really, when you look at this, in other words, equalizing teacher salaries to Lemoyle South level across the three supervisory unions is estimated to cost approximately $5,500,000 in additional annual expenditures. And similar discrepancies exist among support staff. For example, the average hourly rate for a support staff member in the Memorial North is $28.85 while in the Memorial South, it's $24.93 As staff from multiple districts come under a single governance structure, it's reasonable to expect that other staff, including administrative assistance, maintenance, food service, and technology personnel, would also see upward adjustments in pay to achieve internal equity across a new district. So none of that has been included in this number. These increases in wages and salaries also have long term implications for the pension system. Because pension benefits are based in part on an employee's highest earning years, raising salaries now increases the state's long term pension liabilities in a way that is not confined to the short transitional period.

[Rep. Peter Conlon (Chair)]: I'm gonna ask you to please say that one more time. We have not even thought about pensions, sorry, I need to repeat Yeah,

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: pensions are something that's not discussed frequently when thinking about leveling up contracts. But when you're calculating educators pension benefit, it's based on their top five earning years. So when you level up teacher salaries, ultimately you're gonna have a long term pension liability that will be a significant impact for taxpayers down the road.

[Rep. Peter Conlon (Chair)]: I don't know how far down that really wanna go. Think the point is made in.

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: And then looking at additional transitional costs, so again, the two year transition is not

[Rep. Peter Conlon (Chair)]: cut. Ryan, if you don't mind, I'm sorry, I'm gonna interrupt. It's fair to say that the assumptions that you're giving us also assume equal staffing levels. In other words, if a merger leads to fewer employees, that neutralizes some of these costs.

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: Yes, agreed. However, if you have fewer employees, will have less people paying into the pension system. So there is another unintended consequence of reducing your overall FTEs.

[Rep. Peter Conlon (Chair)]: Pensions?

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: It's not something people often think about, as part of the sprint teams last year, there was someone on that committee that worked for the state pension system and had significant concerns about the long term implications of FTEs on the pension system, leveling salaries and also potentially looking at reducing FTEs as a long term cost saving strategy. So I do think it's worth exploring more. Regarding additional transition costs, so the two year transition is not cost neutral. This work includes merging and bargaining contracts, designing coherent new budgets, aligning curriculum and instructional systems, integrating student information and financial systems, and ensuring compliance with numerous federal and state requirements such as title grants, continuous improvement plans, and special education mandates. Because this transitional team would be layered on top of the current governance structures, we estimate that the added cost for two years of transitional administration could be upwards of a million dollars for each new district. In short, while there may be long term goals associated with consolidation, the near fiscal reality is that aligning salaries and benefits and funding the transition work will create substantial front loaded costs. My goal today is not to argue for or against consolidation, but to ensure that as you deliberate, the short term costs are visible and fully considered alongside any projected long term benefits. As Vermont considers reform, two key questions should consistently be at the center of our conversations. Will this improve the quality of education for our children? And will this stabilize property taxes? At this moment, it is unclear that creating large scale force mergers would achieve either of these goals. So as my colleague Sherry Sousa discussed earlier today, CESAs are a targeted alternative. The redistricting task force recommended the formation of CESAs, and I believe that recommendation deserves serious attention. Unlike full district consolidation, CESAs would focus specifically on two cost drivers that place significant financial pressure on district budgets, special education and transportation. Between the three supervisory unions served in the Green Mountain Tech region, there are currently 29 students out placed into independent specialized schools at costs that can easily exceed 200,000 per student. As noted in the recent AOE special education report, over the past six years, extraordinary costs have accounted for nearly half of the growth in total special education spending. CESAs have the potential to reduce those costs significantly, and more importantly, to bring specialized programs closer to home, and deliver services to children more quickly than the current system allows. This approach is realistic, timely, and directly targeted at the costs that matter most. I respectfully urge the committee to examine it alongside any consolidation proposal. I thank you again for your time and for your commitment to Vermont students and communities.

[Rep. Peter Conlon (Chair)]: Thank you. Ryan, thanks for sort of doing some on the ground, here's what happened if we did this. I will say it occurs to me that this is these are costs that exist whether we sort of go through a voluntary merger process as we did with the act 46 or not, although sort of a self grown discussion can address these things on more absorbable fashion. So I guess, CESAs don't address declining enrollment. CESAs don't address school construction necessarily. And so, I continue, we kept have up with our declining enrollment in the sense that we haven't adjusted for it. And I guess short of merging governance structures so that you have scale and ability to sort of maneuver in what will likely be a world of defunding. I would say that if we did nothing, I'm not sure we can necessarily stop the foundation formula trade. How do we deal with this?

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: Yeah, I commend the legislature for some of the language that was added into Act 73. I think the class size minimums that were put into law, although I disagree with the three grade span because it impacts our Elmore School, which actually is a relatively low spender and high performer, but there were, I think the class size minimums give districts a lot of leverage as far as making good decisions around making some staffing adjustments to account for some of those declining enrollments. I do think that there's policy decisions that could be made that really look at schools individually, and identify schools that are providing a high quality education that are viable, and schools that are not. I don't necessarily think that pushing those decisions to a new larger governance structure is the best way to do that. I think that communities oftentimes will make those decisions when they're in the best interest of the children that they serve. I think what we lack oftentimes in Vermont is transparent and timely data and information that our communities can use to make those decisions. I think it's very hard right now for communities and board members to know even simple things like how much they actually spend per pupil, how much of that money is dedicated to instruction, what their FTE numbers are per school compared to other schools, how their students are performing on academic measures, what their climate survey data looks like. I think those are all things that can be easily remedied that could have a huge impact on our system and help communities make much better decisions about the sustainability of their schools. And so I guess sometimes I really believe in the role of local decision making. When people have that information, I do think they'll make the right choices.

[Rep. Peter Conlon (Chair)]: Looking around the committee for any other questions or comments. Representative Brady?

[Rep. Erin Brady (Ranking Member)]: I don't know that if you're prepared to answer, so if not, don't worry. But given that you're talking a lot about CISOs, I think another piece in the recommendations that came from the Superintendent's Association last week. Again, not new, but kind of reminders, repackaging of things we've been mulling for a long time, was better data collection and information about staffing ratios. So I wonder if you, or if we can at some point in the near future, dive into that a little bit more, how that differs from class size, how that might be useful, how that could be used, that information could potentially be used differently and better than it is now.

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: Yeah, I think right now that data is very hard to access. And so if you're a school board or you're a district leader and you wanna look at benchmarks, so you wanna say how well are we operating? How efficient are we compared to other districts of similar size? It's very hard to make those comparisons because the data is just hard to get. Last year, spent hours and hours trying to get that data and eventually was able to obtain a lot of the FTE data, which there are some really incredible people at the AOE that are doing that work. I think it's getting that data and looking at it and making decisions are all things that leaders wanna be doing, but that data is very hard to obtain.

[Rep. Peter Conlon (Chair)]: Thing Go that ahead, go ahead. I was just gonna say one

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: thing that I found very beneficial when I worked in Massachusetts as a principal down there is that they have a data system that's very timely and informative and creates cohorts. So what it does is it shows if you are in a district that has a size of, let's say 1,500 students and has a certain demographic, they will compare you with 10 other districts of the exact same size. And they will show how those other district perform on different key measures, how much money they spend, what their FTE ratios are. And you can look at that data and it really helps gauge what we would do at times is find districts that were performing very well in one area, and we would go visit those schools and talk to those leaders and get lessons that we could bring back. And I just find it's very hard to get that data for improvement in Vermont. And it's something that I know a lot of leaders struggle with.

[Rep. Peter Conlon (Chair)]: Great. Ryan, thanks for taking the time and putting this together for us, I guess. Is this the one they call the groomer? We go down paths, we find roadblocks, we need the information to figure out what to do with that. So thank you.

[Ryan Heraty (Superintendent, Lamoille South Supervisory Union)]: Thank you for listening and thank you for your work. I know you all have the best intentions in trying to