The Vermont Senate passed an education reform bill Tuesday that will not force school districts to consolidate after negotiating a compromise with Republican Gov. Phil Scott that likely averts an impasse brewing over the past several weeks.

The latest version of the legislation, H.955, is the product of a deal brokered by Democratic legislative leaders and Scott’s team last week. Scott, a proponent of forced district mergers, seemed amenable to dropping that request in exchange for accelerating the voluntary merger process and the state’s transition to a new education funding formula.

Vermonters don’t want Montpelier telling them what to do, Sen. Seth Bongartz, D-Bennington, told his colleagues on the Senate floor Tuesday morning. They instead want to take on the challenge of changing the state’s education system themselves.

“Much of H.955 is about creating an atmosphere, a structure, that helps communities make their own tough decisions,” he said.

The legislation — the most closely watched of the year — outlines a complex process to facilitate voluntary school district mergers. That process would begin this fall, when delegates from neighboring districts would meet to start hashing out potential consolidation plans. Those groups would have more than a year to make recommendations, with residents voting on consolidated districts at Town Meeting Day 2028.

Lawmakers hope future school districts will have at least 2,000 students, and the bill describes a special process to facilitate mergers for “orphaned” districts with fewer than 750 students. But H.955 does not force districts to merge; instead, it encourages them to do so with state oversight and incentives for school construction aid.

The Senate voted 27-2 to pass the bill, with Sens. Steve Heffernan, R-Addison, and Russ Ingalls, R-Essex, voting against.

In explaining the bill to his colleagues, Bongartz, chair of the Senate Education Committee, said he hears a question repeatedly from Vermonters: Why are we spending so much money and getting suboptimal results? The future charted by H.955, with “budgeting predictability, greater scale and opportunity for more specialized services,” will help address cost and student performance, he said.

The compromise version of H.955 would have the state adopt a new education funding model in July 2029, a year earlier than in an earlier version of the bill. That model, called a foundation formula, is used in most states nationwide. It provides school districts with funding based on the number of students they have and how expensive those students are to teach. In that way, the state retains significant authority over school district spending rather than letting districts control that process as they do now.

After about two hours of walking through the bill and its latest changes, little debate occurred on the Senate floor Tuesday.

Only Ingalls explained his opposition to H.955, saying it didn’t move fast enough and didn’t do enough to address spending.

“Our excellence in education has fallen like a rock,” he said.

Using the rule workarounds often employed at the end of the legislative session, the Senate expedited passage of the bill, sending it to the House for immediate consideration.

The House voted Tuesday afternoon to recommend a joint House and Senate conference committee to hash out final changes to the bill. As of Tuesday evening, it was unclear when that conference committee would meet for the first time — and even less clear when it would finish up its work.

Pivoting to voluntary rather than consolidated mergers was a significant concession by Scott, who had repeatedly said he’d veto any education legislation that didn’t include the policy. But lawmakers, some of whom had unsuccessfully tried to advance plans for forced mergers, said neither their colleagues nor Vermonters would support the idea.

Tuesday, Amanda Wheeler, a spokesperson for Scott, wrote in an email, “The Senate version of H.955 has made significant progress from the version passed by the House which is encouraging.”

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