Witness and senators debate H.454 foundation formula, equity and implementation risks

Alan Gilbert, a former chair of the Worcester School Board and past president of the Vermont School Boards Association, urged the Senate committee to preserve the equity mechanisms in H.454 while warning that the plan will fail unless the Legislature keeps the foundation amount in line with inflation.

Gilbert told the committee that his town of Worcester illustrated the problem the bill is intended to fix: in 1995 the largest taxpayer in town was the telephone company, and nearly half the town was state forest land exempt from property taxes, leaving the district with a “minuscule property tax base.” He said those conditions made it extremely difficult to pass a modest bond for classrooms and student services.

“The plancan work if, and this is the big if, the legislature pointed towards the responsibility of keeping the foundation amount in line with inflation,” Gilbert said. “If it can’t, we’re going to be back where we were in 1997.”

Why it matters: H.454 would move major aspects of school finance to the state, creating a statewide education fund and a guaranteed per-pupil foundation amount. Gilbert and some senators framed the bill as a structural shift in how school spending and capital needs are decided and funded — with implications for local budget votes, bond approvals and school consolidation decisions.

Committee discussion focused on equity, the risk that a future Legislature could underfund the foundation, and how the bill limits local spending above the foundation. Gilbert described the excess-spending provision in the House proposal as a brake on unequal local spending, saying towns could spend only about 10% above the foundation amount without meeting state-set capacity tests and voter approval.

Gilbert referenced the Brigham litigation and Vermont Supreme Court decisions that established constitutional obligations for equitable education funding. He said the purpose of a foundation formula is to ensure a guaranteed minimum per-pupil amount so the state can meet the court-ordered equity standard.

Several senators asked whether H.454 differs from earlier formulas and whether allowing limited local supplemental spending would pass the Brigham equity test. Gilbert said the crucial difference between 1990s-era remedies and the current proposal is that H.454 would rely on statewide revenue collection and redistribution rather than leaving most funding responsibility to individual towns.

On consolidation and reconfiguration, Gilbert said he had deliberately not included detailed reconfiguration proposals in his testimony because financing is the more immediate problem. He recommended focusing first on establishing a stable funding structure and addressing reconfiguration in subsequent sessions, noting that closing or consolidating schools raises intense local resistance and personal conflicts for locally elected school boards.

Committee members also raised process questions: the chair indicated the committee will draft a bill reflecting the discussion and aims to have a version ready for public release and committee markup by May 2, with implementation of a foundation formula tentatively targeted for fiscal year 2028 in committee planning discussions.

The testimony and discussion made a recurring point: a foundation formula redistributes wealth across districts, but its success depends on the Legislature maintaining funding levels and on clear transition resources for construction and consolidation costs.

The hearing included no formal committee vote on H.454. Committee members directed staff to draft language for committee consideration and to circulate the bill publicly when it is ready.