Senate Finance hears updated analysis recommending $15,030.33 per‑student foundation; discusses weights for poverty, English learners and special education

At a Senate Finance Committee meeting, Tammy Colby, principal researcher at the American Institutes for Research and research associate professor at the University of Vermont, briefed members on updated estimates for a student‑based “foundation” funding formula and recommended a base (foundation) amount of $15,030.33 in fiscal‑year‑2025 dollars.

Colby told the committee that a foundation—or student‑based—formula would reverse the current process in which districts set budgets first and the state then pays. Instead, she said, the state would “define its financial obligation upfront in terms of a foundation amount and some adjustments” and allocate funds on a per‑student basis so “dollars follow students.” She described the approach as more transparent and stable than the current system.

The memo to lawmakers included cost estimates and suggested cost adjustments (weights). Using the updated data through 2023–24 and inflation‑adjusting to 2024–25 dollars, Colby reported the following figures drawn from her modeling: a base spending amount of $15,030.33; a per‑pupil figure for students identified as economically disadvantaged of about $15,334; and a per‑pupil figure for English learners of about $20,826. Based on those dollar amounts and the chosen base, she said the corresponding weights would be roughly 1.02 for economically disadvantaged students and 1.39 for English learners. She also reported a school‑enrollment cost adjustment for schools under 100 students of $3,157 and a population‑density adjustment (for areas with fewer than 55 persons per square mile) of $19.54 in the underlying dollar estimates.

Why it matters: foundation formulas set a single, predictable state obligation for educating a student on average and then add calibrated adjustments for student needs or school context. Committee members pressed Colby on which services belong in the base—she said the base should cover operating costs for a typical general education program, including educator compensation, instructional materials, academic and nonacademic enrichment, student support services (for example counseling and school nursing), transportation and food services as part of operating expenses, and district/school administration, but not capital or debt service. “What a foundation formula does is it’s talking about the per‑student amount for operating the school every year,” she said.

Special education and English learners: Colby described three methodological approaches commonly used to set bases and weights—professional judgment panels, evidence‑based models, and education cost‑function statistical models—and said AIR used an education cost‑function approach paired with updated data. For special education, she referenced two major cost studies—the national Special Education Expenditure study and the Ohio Special Education Cost Study—and noted states often incorporate special education cost adjustments as single or multiple weights or as tiered categorical programs. Colby gave statewide counts by cost tier from Vermont’s 2022–23 federal child count: 39% of students with disabilities in low‑cost categories, 50% in medium‑cost categories and 11% in high‑cost categories. She told senators that when Vermont spending per IEP is compared to national benchmarks, the state spends roughly $120 million to $150 million more than the national average by disability category, a figure she said reflects differences in service delivery rather than the accuracy of the benchmarks alone.

On English learners, Colby described a separate 2024 study that combined professional judgment panels with evidence‑based costing and recommended tiered weights tied to WIDA proficiency levels. She said those tiered weights would range approximately from 2.11 down to 0.12 depending on proficiency and that services for newcomers (students with limited literacy in their home language) could add roughly $6,000 per student for the initial period of services. Colby noted that annual federal testing and proficiency tracking make proficiency tiers administratively feasible.

Other topics committee members raised: Colby said capital and debt service should generally remain outside the operating base and be handled as a separate construction program; she recommended using the U.S. Bureau of Labor Statistics’ Employment Cost Index (ECI) or a similarly personnel‑focused index to update the base for inflation because roughly 80% of school spending is staff compensation. She also said universal school meals and other categorical programs could be included in the base only if lawmakers consider them required for adequacy and are prepared to fund the state share even if federal support changes. Career and technical education (CTE) was not modeled in Colby’s analysis and, she said, would require a separate base because program costs differ substantially across CTE offerings. On tuition students, Colby noted that the formula’s base must be applied uniformly to students; allowing towns to pay higher tuition amounts raises policy choices about who pays the delta and whether local differences produce unequal educational opportunities.

Colby emphasized the distinction between equalizing approaches (tax‑capacity–based models) and a foundation model where weights generate new dollars on top of a base. She recommended updating bases and weights regularly—typically every three to four years—and pairing cost‑function estimates with practitioner panels to help districts understand how added resources should be used.

The committee did not take formal action on the foundation formula during the briefing; members asked Colby to return for follow‑up questions and to provide materials and appendices referenced in her presentation.