Vermont education groups press Ways & Means for predictable, equitable funding as foundation formula debated

Good morning. I'm Sue Szyglowski, Executive Director for the Vermont School Boards Association. Thank you very much for the opportunity to testify this morning, she told the House Ways & Means Committee as she opened testimony on an education funding redesign.

The Vermont School Boards Association and the advocacy group Public Assets told the committee that the state should move cautiously toward a foundation funding model for schools and align any tax changes to measures of ability to pay and predictable, timely data reporting.

The Nut Graf: Sue Szyglowski and Steph Huey said a new “education opportunity payment” or foundation amount should be set on a baseline that reflects current district needs, include a reliable annual inflator, and be accompanied by data, modeling and a multi-year transition so districts and taxpayers can adjust. They urged rules ensuring private schools that receive public tuition meet the same accountability standards as public districts and pressed the Legislature to address major cost drivers — notably school employee health care and expanding mental-health services — before locking in a new funding structure.

Szyglowski said the Vermont School Boards Association supports the Vermont Superintendents Association’s timeline and framework for “incremental change” in the education system and asked the committee to ensure the base funding amount remains “adequate, stable, and predictable.” She noted the inflator in the draft bill but warned that a simple inflation adjustment may not keep pace with faster-growing costs such as health insurance and tuition.

Public Assets Executive Director Steph Huey focused on who pays school taxes and how to make support more progressive. “Income is the best measure we have of ability to pay,” Huey said, and argued that primary residence value is an increasingly poor proxy for household ability to pay.

Huey’s analysis, presented to the committee, estimated that households paying school taxes based on property include a smaller share of households by count but hold a much larger share of statewide income — she cited roughly one-third of households accounting for about two-thirds of aggregate income in the sample she described (about $13,000,000,000 of household income for the highest-earning group). She urged the committee to require yearly tax-department reporting of aggregate statistics — homestead taxes paid, total adjusted gross income of filers, and related town- and district-level aggregates — to track who pays and how tax changes affect equity.

Both witnesses warned against unintended consequences from a foundation model that sets a base amount with optional spending above the base. Huey and Szyglowski said wealthy or better-resourced districts are likely to spend above a foundation base, creating a floor/ceiling dynamic that can widen disparities unless the Legislature carefully designs transition rules and accountability.

On cost drivers, Szyglowski singled out school employee health benefits as a pressing issue. She said collectively bargained arrangements have created employer obligations that are consuming a growing share of district budgets — rising in recent years from under 10% of budgets to about 15% and projected to reach roughly 20% — and recommended revisiting statewide bargaining for healthcare to control those costs.

Discussion vs. decision: Witnesses provided recommendations and analysis; the committee did not take formal votes during this testimony. Several committee members asked follow-up questions about specific provisions such as a proposed homestead exemption and phase-ins; witnesses said they would supply written testimony and additional modeling for the committee’s review.

Ending: Witnesses asked for more and earlier district-level modeling and for a clear timeline from the Agency of Education so boards can incorporate any new “education opportunity payment” into their budget calendar. They urged targeted buy-downs or tax-relief measures aimed at low- and moderate-income households if the Legislature seeks near-term affordability relief rather than fully shifting to an income-based tax this year.