Scott Signs School Funding Bill

By Jim Sabasoto
THE RUTLAND HERALD
A bill aimed at overhauling the state’s education funding formula crossed the finish line this week.

On Monday, Gov. Phil Scott signed S.287, which will update per-pupil weights in the formula the state uses to calculate how much money is allocated to individual K-12 public school districts.

Currently in Vermont, school budgets are developed at the local level by school boards and approved by voters. Funding, however, comes from the state’s nearly $2 billion education fund, which is funded in part by property taxes.

Those local tax rates are determined by spending per equalized pupil. A higher equalized per-pupil count means lower tax rates for a district.

To calculate per-pupil spending, the state applies a weighted formula that reflects the resources a district needs to educate students based on certain characteristics, including students living in rural areas, students from low-income backgrounds, students with different learning needs and students for whom English is not their primary language.

Yet a 2019 report commissioned by the Legislature found the existing formula to be “outdated,” with weights having “weak ties, if any, with evidence describing differences in the costs for educating students with disparate needs or operating schools in different contexts.”

Last summer, a joint legislative task force used that study’s findings to help it develop a plan for updating the state’s funding formula. The task force ultimately presented two pathways.

The first was to simply update per-pupil weights as proposed in the 2019 study.

The second option proposed a so-called “cost equity” or “cost adjustment” model that would count students in each demographic category and assign a dollar amount to them, effectively sending education dollars directly to districts.

The final bill ultimately followed the first path; however, the House Ways and Means Committee briefly considered the cost adjustment plan before abandoning it as result of public pushback.

“We really heard very strongly from the field that it was too much change,” said Rep. Emilie Kornheiser, D-Brattleboro, vice chair of the House Ways and Means Committee and co-chair of the legislative task force.

The adjusted weights will begin to be implemented in fiscal year 2025. The bill requires the Agency of Education and Joint Fiscal Office to review the formula every five years and recommend any potential adjustments.

The legislation also shifts how English language learning (ELL) students are calculated by increasing their weight in the formula, as well as providing separate annual categorical aid grants of up to $50,000 to districts with a small number of ELL students.

And while the new funding formula will potentially see significant swings in tax rates in communities across the state, the bill caps rate increases at 5% for communities that will to see a reduction in their tax capacity due to the new weights.

“We really want to minimize disruption as much as possible and 5% is really a normal change year to year for a district, regardless of state action,” said Kornheiser.

In a letter to lawmakers upon signing the bill, Scott acknowledged “deep inequity persists” in the state’s education funding system.

“Despite the best efforts and sincere intentions of policymakers, there are unequal opportunities and outcomes for students from historically marginalized backgrounds, and based on socioeconomic status, school size and region,” he wrote. “Giving all students an equal chance at success has been a priority of mine since coming to office. And while the current per pupil weighting formula is out of date, it is just one symptom of an unequal system of education, with increasing costs and decreasing opportunities, that requires fundamental reform.”

Scott, however, did raise concerns, noting the bill did not guarantee equity.

“These new weights give certain schools the ability to spend more, but this bill does not require investment of these additional resources directly in students. Nor does new spending capacity mean there will be better outcomes,” he stated.

He also cautioned that education costs may continue to rise as consequence of the new formula, as well as other new policies, like universal school meals and polychlorinated biphenyl remediation, literacy reform and facilities repair.

“I urge the Legislature to work with my team, alongside our schools, to address cost containment and transparency to moderate the tax burden of the education funding system in the coming years,” he wrote.

The Coalition for Vermont Student Equity (CVTSE) — a group representing nearly 30 school districts around the state — praised the governor’s signing of S.287 Tuesday, calling it a correction that was “long overdue.”

“For over 25 years now, English language learners, small schools, low-income and rural school districts have been severely underfunded,” the coalition’s board of directors said in a press release. “It has resulted in an entire generation of learners not having the educational resources they need to keep up with their peers in other parts of the state. It also resulted in financially struggling communities being forced to pay incredibly high education property tax rates in order to fund school budgets that still didn’t fully address the needs of all students.”

Marc Schauber, executive director of CVTSE, said the group appreciated the work that lawmakers and advocates put into passing the bill.

He said the coalition will continue to be engaged and follow the implementation of the new formula.

Schauber acknowledged that it will take time to see the legislation’s impact on the education system.

“This isn’t going to be something that’s going to make a huge difference overnight. It’s going to take districts time to make up for 25 years of insufficient funding,” he said. “So we’re confident that this is going to make a big difference but in no way do we believe that it’s going to be — in the first year of implementation — that everything’s going to be perfect all of a sudden,” he said.

jim.sabataso @rutlandherald.com