Vermont School Funding System Works

Last Updated: January 27, 2012

This article appeared in the January 2012 Rural Policy Matters.

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Vermont’s school funding system is among the most unusual in the nation (see Vermont’s Most Unusual, Most Equitable School Funding System in a Nutshell). It was adopted with lightning speed in 1997, within four months of a Vermont Supreme Court decision (Brigham v. State of Vermont) finding the old system unconstitutional because it tied local school funding to local property wealth, resulting in unequal educational opportunities.

The Equal Educational Opportunity Act, far better known as Act 60 (and now as Act 68 due to amendments passed in 2005) required wealthy towns to share resources with poorer towns, left spending decisions in the hands of local school boards, and effectively converted school property taxes into a flat income tax.

The resistance of the wealthier towns was ferocious, and it was a leading issue in the state for at least eight years. Last year, the Vermont Legislature again asked for a professional review of the law to determine whether it was accomplishing what it was intended to accomplish. The Legislature hired Lawrence O. Picus and Associates, a well-known school finance consulting firm, to conduct the study. Their preliminary findings have been released.

Picus found that the “Vermont school funding system is working well and meeting the goals established in Acts 60 and 68.” Among the specific findings:

  • Vermont has among the highest levels of per pupil spending in the United States;
  • The system is equitable. There is virtually no relationship between wealth (measured either by property or income) and educational spending levels;
  • Differences from district to district in per pupil spending is well within widely accepted benchmarks;
  • Provisions that limit school property taxes to a percentage of household income have had only a small impact on spending levels and have not led to large disparities in spending;
  • Vermont’s student performance is among the best in the nation and about the same as other New England states.

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Read more from the January 2012 Rural Policy Matters.