Senate amendments to H.454 change sparsity test, add phased move to educational opportunity payment

Members of the Ways & Means committee on the Senate side reviewed the Senate proposal to amend H.454, the bill that would restructure Vermont’s K‑12 education funding. The discussion covered the foundation formula base amount, changes to sparsity and small‑school support grants, and a five‑year phase‑in to an educational opportunity payment (EOP).

John Bray, Legislative Council staff, said the proposal preserves the base amount in the foundation formula and the core pupil weights. “The base amount is 15,033,” Bray said, and he described the EOP definition and the role of statutory weights for special education, English learners and career‑technical education.

The Senate amendment changes how sparsity is measured. Under existing law and the House‑passed bill, sparsity was assessed at the school‑district level. The Senate amendment assesses sparsity at the ZIP‑code level: a “sparse area” is a ZIP code whose population density is fewer than 55 persons per square mile on the July 1 determination date. A “sparse school” is a school located within such a ZIP code. The legislation retains the same per‑pupil support figure for sparse schools: $19.54 multiplied by the two‑year average enrollment for each sparse school.

Committee members and staff noted practical and data questions about the ZIP‑code approach. Julia Richter of the Joint Fiscal Office told members the Vermont Center for Geographic Information (VCGI) director indicated the ZIP‑code construct is defined by postal delivery points and that VCGI could not immediately calculate sparsity by ZIP code without further work. Representatives asked whether town or census geography might provide a more reliable measure.

The bill sets a five‑year transition to the EOP. Under the Senate amendment, each district’s transition gap is the difference between a district’s FY 2028 education spending and the district’s calculated EOP; each year the district’s gap would be reduced by 20 percent until the district reaches its EOP in fiscal 2034 (the legislation lists FY 2034 as the target). Committee members pressed staff on whether the transition gap should be recalculated annually or fixed at the start of the phase‑in; staff explained the approach in the Senate language recalculates elements annually to reduce forecasting error but that the mechanism carries tradeoffs between predictability and accuracy.

Members also discussed how small‑school support and the “small by necessity” designation would interact with the sparsity grant, and whether a school could receive a small‑school grant but not a sparse‑school grant depending on the state‑board determinations and ZIP‑code sparsity mapping. Staff emphasized that the state board would still determine whether a school is “small by necessity” for the separate small‑school support grant.

The Senate amendment also tasks the Joint Fiscal Office to contract for a cost‑factor foundation study to recommend tiered weights (including for career‑technical education), and to evaluate geographic measures for sparsity; that contract and report were discussed separately.

Why it matters: the amendments change who qualifies for sparsity aid and how quickly districts move to the new EOP funding model. Staff flagged analytic and implementation work needed to translate ZIP‑code sparsity into actionable grant allocations, and committee members repeatedly noted uncertainty about district consolidation and boundary changes that would affect eligibility and fiscal outcomes.

The committee did not adopt final language in this meeting; members voted later in the session to recommend sending H.454 to a committee of conference so negotiators from both chambers can resolve differences.