Vermont lawmakers are nearing agreement on an education financing overhaul that could dramatically shift the way money is distributed to public schools.
From housing and broadband to workforce and pensions, the Vermont Legislature has been working on some of the biggest government spending initiatives the state has ever seen.
One of the most consequential bills of 2022, however, doesn’t include much in the way of new spending.
Instead, it would change the formula used to determine how much local education tax rates generate for school budgets.
Addison County Sen. Ruth Hardy said the existing formula effectively shortchanges schools with high concentrations of students that cost more to educate.
“And so the (new) formula … distributes taxing capacity across the state so that towns and school districts have the ability to draw from our shared education fund the amount of revenue they need to educate students of all different kinds,” Hardy said.
This legislation derives in large part from a 2019 study conducted by researchers at the University of Vermont and Rutgers University, which found that Vermont’s funding system doesn’t adequately account for the fact that some categories of students cost more to educate.
"A community’s educational obligations might be more expensive in one community than in another, and those expenses are outside the control of that district.”Brattleboro Rep. Emilie Kornheiser
In order for a child from poverty to hit the same academic goals as a student who isn’t from poverty, for instance, a school has to spend, on average, twice as much money, according to the study.
English language learners, children in rural areas and students in small schools also require more education resources to achieve equivalent academic outcomes.
Some Vermont school districts, however, have higher proportions of higher-cost students than other districts do.
“The proportion of students in those demographic categories varies from community to community,” Brattleboro Rep. Emilie Kornheiser said. “And so a community’s educational obligations might be more expensive in one community than in another, and those expenses are outside the control of that district.”
Researchers found that Vermont’s funding system doesn’t fully acknowledge those expenses. And during a debate on the House floor last week, Dover Rep. Laura Sibilia told colleagues that flaws in the financing system have contributed to inequities across school district lines.
“Facilities were under-maintained. High-quality instructors and administrators were lost to districts that could pay them more. Arts and extracurriculars which can be life changing for students in poverty were cut or disappeared,” Sibilia said. “Morale was impacted in these districts and the students were hurt by it all.”
The legislation attempts to rectify the system by changing the way Vermont counts its students.
A student from poverty, for example, would count as two students. An English language learner, meanwhile, would become the equivalent of 2.5 students.
When these new “pupil weights” are inserted into Vermont’s school funding formula, it has the effect of changing the way the $1.7 billion statewide education funds gets meted out to school districts.
In low-income communities with high percentages of children from poverty, or in districts like Winooski with lots of English language learners, the same local tax rate would generate significantly more dollars for local schools.
Conversely, districts in more affluent communities would need to increase local tax rates in order to maintain the same level of spending.
“I don’t want to hedge about how disruptive this will be for all of our communities,” Kornheiser said.
According to projections by legislative analysts, some districts would have to raise local tax rates by 25% percent in order to keep school budgets level.
Despite those impacts, opposition to the plan has been muted.
A coalition of nearly 30 school districts, which includes both winners and losers under the new weighting system, has spent the past year urging lawmakers to move forward with the plan.
Leaders at the Vermont Superintendents Association told lawmakers that the proposal has consensus support in their organization, even though many of their districts would lose taxing capacity.
“And regardless of the impact on people’s individual systems… education leaders across the state are looking and saying, ‘This is a moral issue,’” Springfield School District Superintendent Zach McLaughlin told lawmakers earlier this year.
How would this bill affect your district? You can find out by clicking here.
Even supporters of the legislation, however, have concerns.
Libby Bonesteel, superintendent of Montpelier Roxbury Public Schools, said she’s worried that the new funding formula could prolong the viability of small schools that might otherwise merge with larger institutions out of financial necessity.
“The extremely small, multi-age class sizes with a wide range of learning needs may not be sustainable from a staffing perspective, or in thinking about what’s best for learners,” she told lawmakers.
And in districts that decide to raise local tax rates to offset diminished taxing capacity, Bonesteel said the higher cost of living could exacerbate economic disparities.
“We are concerned that the long-term impact may be that community such as ours that could support a significantly higher budget… may further segregate our communities because of high property taxes and a high statewide education fund need,” she said.
A spokesperson for Gov. Phil Scott said the governor appreciates lawmakers’ attempt to “provide more equitable educational opportunities to students in our rural districts and English language learners.”
However, Scott is worried that proposed changes to the funding system will lead to an increase in overall education costs.
Others are worried the bill would have the opposite effect. While the goal of the legislation is to boost resources to districts that need more of them, local school boards and voters could instead decide to keep spending levels flat, and reduce local tax rates.
Kornheiser said the legislation includes an oversight mechanism that will assess how districts alter spending behavior in response to the changes.
For districts that would lose taxing capacity, the legislation includes a five-year phase-in period to ease the transition into the new weighting framework.
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