Committee Discusses Letting School Districts Accept Less Than Full Foundation Funding; Seeks More Modeling on Tax Impacts

Members of the Education Finance Committee discussed whether some Vermont school districts should be allowed to accept less than 100% of the foundation (often referred to in the meeting as EOP) and the tax and budget consequences of that change.

“I just wanted to really, sort of affirm the need for us, have people be better off on the other side of this. Right?” Speaker 3, Staff member, said as the group opened the finance discussion. The committee regarded that principle—districts and taxpayers should be no worse off under any new system—as central to considering changes.

Committee members spent the meeting weighing an idea floated in the Senate that would let a district’s electorate and school board choose to accept a lower share of the foundation formula—examples discussed in the meeting included accepting 90% or 92% rather than the full percentage—and to set a correspondingly lower homestead tax rate for that district. Speaker 1, Committee member, described the concept: “If your voters choose to take 90%, then our district homestead tax rate would be 90% of the statewide.”

Members and staff repeatedly cautioned that the tax-rate mechanics are complicated. Speaker 3, Staff member, noted preliminary Joint Fiscal Office (JFO) analysis that in many cases “the foregone revenue would be,…