Committee advances bill to upgrade school funding formula

A Vermont Senate committee voted Wednesday to advance a bill to overhaul the state’s school funding formula, a move that lawmakers hope will put an end to decades of inequalities in K-12 education across the state. 

The bill, which advanced out of the Senate Finance Committee after a unanimous vote, would update the funding formula’s “pupil weights,” mathematical tools intended to make the funding system fairer. 

It also would implement a grant system for some districts with few students learning English — a compromise over one of the thorniest questions about the system. 

The bill would “(move) us toward a funding system that is more equitable for all students,” said Sen. Ruth Hardy, D-Addison, a member of the Finance Committee and the task force that examined the issue last year. “And also really, really centering the fact that we need to evaluate whether or not these changes actually lead to equity.”

Under Vermont’s school funding formula, local tax rates are based not on a district’s total spending, but on its spending per pupil. 

But the formula acknowledges that some students — English language learners and students in poverty or rural settings, for example — cost more to educate. 

Students in those categories are assigned a “pupil weight,” meaning they count for more when tax rates are calculated. 

Districts with a greater weight — rural districts, or districts with a high number of English language learners (ELL) or low-income students — have greater tax capacity, meaning that they can spend more on students without raising the local tax rate. 

But in 2019, a landmark University of Vermont study found that the existing pupil weights were essentially conjured out of thin air. The weights had no bearing on the actual costs of educating those students, researchers found, and were not large enough to allow districts to fund adequate education. 

On Wednesday, the Senate Finance Committee voted unanimously to advance the bill, which members hope will fix that. 

The as-yet-unnamed bill would replace the current weights with new, upgraded weights that would give "underweighted" districts more tax capacity. 

If school funding across the state’s school districts did not change from current amounts, the shift in tax capacity means that “some towns’ tax rates would increase, while other towns’ tax rates would decrease,” according to an analysis by the state’s Joint Fiscal Office. 

“In other words, assuming all education spending remains constant, towns that would have fewer equalized pupils with the new weights than they had from the prior weights would have higher tax rates; towns that would have more equalized pupils with the new weights than they had with prior weights would have lower tax rates,” the analysis says.  

The new weights are derived from a report released by a task force of lawmakers that met last year to discuss the question. 

The bill also addresses concerns over the ELL funding system. 

In districts with only a handful of English learners, officials feared that simply updating the weights would not free up enough tax capacity to ensure adequate services for those students.

But districts with many ELL students feared that shifting to a purely grant-funded program — a proposal that emerged from the task force last year — would sell them short. 

As a compromise, the bill would establish a categorical aid program tailored toward districts with small numbers of ELL students. Districts with one to five ELL students would receive a $25,000 grant per school year, while districts with six to 25 ELL students would get $50,000.  

“The idea there is that would give them enough capacity to be able to hire at least a part-time teacher to support the education of those students,” said Hardy, the bill’s primary author. “Because the weight alone for that low number of students would not provide them sufficient taxing capacity.”

Vermont’s Agency of Education would receive six new staff positions to help administer the new funding system, which would be implemented in fiscal year 2024.  

The bill also would create the Education Fund Advisory Committee, which would review the funding system and release annual recommendations. The committee would be made up of state officials and “members of the public with expertise in education financing.”

The bill received high marks from Marc Schauber, the executive director of the Coalition for Vermont Student Equity, a group of districts that has lobbied for the pupil weights to be updated. 

“We really want to thank Senate Education and Senate Finance for putting this bill together,” Schauber said, referring to two Senate committees that have contributed to the proposed legislation. “And moving forward with what's best for the districts in our state.”

The legislation must now move through the Senate Rules Committee and the Appropriations Committee before it reaches the floor.