Conferees debate Senate proposal to let districts vote percentage of new school foundation amount

Members of the conference committee on education reviewed a Senate conferee proposal May 30 that would change Vermont’s school funding structure by establishing a new “foundation amount,” allowing each school district’s voters to set an “approved percentage” of that amount, and shifting how tuition and special-education costs follow students.

“This is the senate conferee’s, proposal to the education, policy sections,” said Sean, legislative counsel for the Senate conferees, as he opened a line‑by‑line presentation of changes drawn against House Draft 4.1. The draft would use a new base amount — $14,541 as reflected in the Senate Finance inputs — multiplied by district weighted membership to calculate a foundation amount, and then multiply that by a locally chosen “approved percentage” to produce the district’s Educational Opportunity Payment (EOP).

Why it matters: the change would move a portion of control over school revenue levels from a single statewide calculation into the hands of local voters, potentially lowering or preserving local property tax liabilities depending on each district’s choice. Committee members and staff repeatedly flagged uncertain interactions with existing special-education funding, ballot timing, and how nonoperating (tuitioning) districts would be treated.

Key elements of the draft and committee discussion

- Approved percentage and EOP: The proposal would let each operating district’s voters select an approved percentage of its foundation amount; the conferee draft shows an approved‑percentage range intended to be between 90% and 100% in steady state, with a phased transition beginning in fiscal 2029. Under the draft, a district’s EOP equals its foundation amount multiplied by the approved percentage. As the legislative counsel summarized, the approved percentage “gives you that, say, 90% of your — in the house proposal that would be called the EOP.”

- Transition schedule: The draft ties the program start to fiscal year 2029 and contains a transition floor in the first years of the rollout. In the first year the minimum approved percentage shown in the draft could be 85%, increasing by 1 percentage point annually until reaching the 90% floor by fiscal 2034. Committee members noted the timeline and that the draft’s effective dates differ from prior proposals.

- Ballot and voting mechanics: Under the draft, most operating districts would present voters with a ballot asking for the approved percentage of the foundation amount for the coming fiscal year. The legislative counsel said the ballot would present the percentage and an explanatory estimate of the resulting homestead property tax rate. The committee asked whether nonoperating (fully tuitioning) districts would vote; counsel said nonoperating districts would generally be prorated and would not necessarily run the same vote, which prompted sustained questioning about defaults and consent to taxation.

- Default/fallback rates and uncertainty: Multiple members pressed for clarity about the fallback if a district fails to pass the ballot. Counsel noted a transition fallback and that districts that cannot pass a percent would receive a minimum percentage until they pass a vote; committee members described the current draft language as confusing on whether a nonoperating district automatically receives 90% or 100% of the payment without a ballot. Several speakers asked for the default rule to be spelled out more plainly in the bill text.

- Weights, base and CTE/high‑school adjustments: The conferee draft adopts a changed base and a set of student weights drawn from the Senate Finance inputs. The draft adds a high‑school weight (0.1) and a career‑technical education (CTE) weight (described in the draft as 1.0 for qualifying participation). Counsel said the base and weights were calibrated so the formula fits within current statewide education spending assumptions; committee members sought more detail on the underlying calculations and evidence supporting specific weight values. One legislator asked, “why do you think there’s gonna be a CTE weight?” and counsel replied the weight was reflected in finance models and earlier recommendations.

- Supplemental district spending cap: The draft retains a cap concept for local supplemental district spending expressed as a share of an “unweighted foundation amount.” The draft phases the cap down: an initial transition cap at 10% in the first year of rollout, decreasing by 1 percentage point annually to reach 5% by fiscal 2034.

- Special education and census block grants: The draft removes the House proposal’s repeal of census block grants and leaves special‑education costs primarily within EOP calculations; staff and members noted districts that currently cover special‑education spending outside grants may experience differing budgetary effects and flagged the need for clear guidance on where costs legally obligated under IEPs will be paid.

- School closure and tuitioning language: The Senate conferee draft would permit a district that closes a public school in a geographically isolated area (as defined by the State Board of Education) or that is adjacent “as of 07/01/2025” to a district that already tuitions the same grades to tuition its affected resident students. Counsel said the July 1, 2025 cutoff was intended to prevent a “domino effect” of towns successively closing schools to trigger tuitioning under the new rule; members discussed examples (Danville, Walden, St. Johnsbury) while asking for more precise statutory cross‑references and local examples.

- Independent schools and Education Quality Standards (EQS): The draft would remove “an independent school meeting education quality standards” as an eligible site for public tuition in certain circumstances and would require that at least 25% of an approved independent school’s Vermont resident enrollment be publicly funded students to qualify. Counsel said the change would narrow mechanisms independent schools could use to receive public tuition, and the committee asked how many independent schools currently meet EQS (counsel said two statewide), and whether those schools would still qualify under other criteria.

What committee members asked for next

Committee members repeatedly requested clearer drafting and additional background: explicit fallback/default rules for districts that do not pass the ballot; the precise mechanics tying approved percentage votes to homestead and nonhomestead tax rates; the data and methodology behind the base and CTE weight; clearer language on how special‑education obligations are funded under the new construct; and confirmation of the ballot timing (the draft mentions a possible special election in March or April 2027 to “back into getting this thing up and running” and a July effective date for new districts).

No final vote or formal committee action was taken on the floor draft during the session. Several members asked staff to reconcile numbers with the Joint Fiscal Office (JFO) and the Agency of Education (AOE), and legislative counsel and staff noted further negotiations and drafting fixes are expected before any text is filed for final consideration.

Ending

The committee recessed at the conclusion of the presentation with direction to continue technical work: staff were asked to reconcile the fiscal math with JFO and AOE, clarify default and ballot rules for nonoperating districts, and provide plain‑language examples mapping percent votes to estimated homestead tax rates. The conferee draft remains a working document; the committee will return to these sections in later meetings as drafts are revised and fiscal impacts are quantified.