House Ways and Means reviews proposed foundation formula, EOPs, sparsity and small‑school grants

House Ways and Means members spent the morning reviewing staff modeling of a proposed shift to a foundation funding formula that would calculate district Education Opportunity Payments (EOPs) and a set of sparsity and small‑school grants.

Julie Richter, who identified herself as from the joint Trisco office, presented the committee’s FY25 modeling and said the figures in the draft were calculated from Professor Colby and Dr. Baker’s memo. “So again, I’m nonpartisan. No policy recommendations, unbiased,” Richter told the panel as she walked through slides showing how the EOP and supplemental grants would be computed.

The analysis uses a base per‑pupil amount of $15,033. Richter described the EOP as that base multiplied by a district’s long‑term weighted average daily membership (ADM), with additional weights applied for students experiencing economic disadvantage and for English learners. She told members she had not included special education weights or tiered English‑learner weights because the necessary pupil‑level data were not available for her FY25 run.

Why this matters: the committee is considering whether to move from the current funding approach toward a foundation model that would reallocate state education dollars based on estimated costs per pupil and student needs rather than current tax‑capacity adjustments.

How the supplements would work in the draft - Sparsity: A district would be eligible for a sparsity grant if it has fewer than 55 people per square mile (Richter said she calculated sparsity using VSBA region boundaries and Vermont GIS). Richter said the sparsity payment in the modeling is the district’s long‑term ADM multiplied by the sparsity cost adjustment identified in the memo. - Small‑school grant: Under the draft, a small‑school grant would apply only for schools operating within a district that qualifies as sparse. Richter said a school qualifies as a “small school” if it enrolls fewer than 100 pupils; pupils enrolled in those schools are multiplied by a small‑school cost adjustment (Richter used the existing small‑school enrollment data for FY25 to estimate payments). She gave a worked example: a sparse district operating a single small school of 50 students would receive a small‑school payment of 50 multiplied by the cost adjustment.

Richter said her FY25 modeling yielded an estimated total of roughly $1.88–$1.90 billion in EOPs plus the modeled sparsity and small‑school grants, compared with about $1.88 billion noted elsewhere for FY25 education payments; she also noted other education spending (transportation, CTE, special‑education block grants) totals roughly $500 million and is not included in the EOP column. Richter cautioned that the FY25 numbers are preliminary, reflect current district boundaries and counts, and will change with any redistricting or rulemaking about eligibility.

Data limitations, weights and comparators Richter said the modeling relied on the cost adjustments and weights summarized in the Colby/Baker memo; where the memo provided a single English‑learner weight she used that figure for her run but noted that she did not have tiered EL or special‑education weights available. Committee members asked about the single EL weight Richter used; she referenced the memo’s summary table (a single EL weight of about 1.39 in the memo) and said she used the single‑weight assumption for the FY25 illustrative run.

Committee reaction and policy context Several representatives voiced concerns and questions. Representative Burkhart and others asked why some regions (for example, Chittenden and Addison as reported from the modeling) would see decreases under the proposed formula; Richter and other members explained the cost‑factor regression reallocates dollars based on current spending and demographics and, as a result, some regions modeled as currently spending more relative to the factors in the regression may see reduced allocations while other regions increase.

Representative Holcomb urged members to view the foundation formula as a way to “put some stability into the system” and described it as a starting point for further governance and cost studies. Multiple members raised the interaction with Act 127 (the current transition/glide‑path mechanism), asking how the glide‑path interplay would work as districts continue to experience tax‑capacity changes through the transition period; Richter and other staff reminded the committee that Act 127’s transition mechanics remain in effect for districts as written and that the draft includes language tying an implementation date to new district configurations, with members noting the bill’s current language contemplates an FY27 start tied to the first budgets of newly configured districts.

Legislative and operational uncertainties Several committee members pressed staff on next steps and dependencies. Richter repeated that the VSBA region boundaries, final rule definitions for “geographically necessary” small schools, district configurations and the availability of tiered EL and special‑education pupil counts would materially affect any final allocations. Members also discussed the difference between a “cost‑factor” approach based on current spending patterns (the Colby/Baker regression) and an evidence‑based “bottom‑up” foundation model that would cost out services under a prescribed service delivery model; multiple speakers said the committee must decide whether to pursue a cost‑factor foundation now and then work toward an evidence‑based model over time.

What did not happen No formal votes or motions were taken during the session covered by the transcript. Members paused for lunch and scheduled follow‑up work in the afternoon.

Ending The committee recessed for lunch after agreeing to continue the foundation formula discussion in the afternoon; staff will provide additional materials, including the Colby/Baker memo referenced in the presentation and any requested breakout detail on the components used to reach the $15,033 base.