Vermont education leaders outline trade-offs in House-backed foundation formula, seek transition funding

Montpelier — State education officials and nonpartisan fiscal analysts told the Senate Education Committee on April 23 that a House-passed foundation formula (H.454) would shift how Vermont funds public schools and will require careful decisions about timing, district scale and transition supports.

The Agency of Education summarized points of agreement with the administration’s proposal — a student-centered, evidence-based funding approach that moves to weighted per-pupil payments — and identified key differences in timeline, included services and how districts are defined. Julie Richter of the Joint Fiscal Office said the mechanics of the change are significant: “These weights are used to determine district taxing capacity under current law. They’re not used to calculate the amount of funding the school district receives,” she said, describing the difference between current law and a foundation-allocation model.

Committee members heard JFO demographic analysis showing long-term average daily membership of roughly 82,400 students in fiscal year 2025 and a preview of the pupil weights and how they reallocate shares of statewide weighted enrollment by region. Agency officials told the committee they had requested $4,000,000 in transition funding and five permanent positions to support district consolidation, rulemaking, data systems and hands-on implementation support.

Why it matters: The proposed foundation formula would change funding from an annual tax-capacity calculation to a base dollar multiplied by weighted pupil counts. That change shifts the locus of resource allocation: weights and the base amount would directly determine dollars districts receive rather than only adjusting local tax rates. The House version of H.454 references a base amount and a set of weights derived from an April 3 memo by researchers Colby and Baker; the bill as presented ties implementation to governance changes and to a contingent effective date.

Key points from the hearing

Consensus and differences - Agency officials said there is broad agreement on goals: a student-focused, student-based funding formula that advances equity, expands access to specialized supports (mental-health clinicians, behavior interventionists) and increases access to career-and-technical education (CTE) and preschool. “Both of the proposals are putting forward a student focused and a student based funding formula,” an agency presenter told the committee. - Major differences cited were timing (the House plan phases changes over five years and contemplates an initial cost-based ramp with a later move to an evidence-based foundation), the scope of included services (the administration emphasized preschool and CTE expansion more explicitly) and the governance approach for determining new districts.

How the formulas differ - Under current law, statutory pupil weights adjust a district’s weighted pupil count for the purpose of calculating homestead property tax rates; they do not directly determine state allocation amounts. Under a foundation formula, weights multiply a base dollar amount so that they directly allocate state education funding. - JFO presented the mechanics used in H.454 as passed by the House: a statutory base amount (the House-passed bill and supporting memo cite an illustrative base of $15,033) multiplied by weighted pupil counts that include poverty, English-learner tiers, sparsity and other factors. The House bill as presented also includes special-education weights and repeals a prior census block grant; CTE and prekindergarten policy work was put on a separate timeline with reports due back to the Legislature.

Regional and district impacts - JFO ran the weighting model by Vermont School Boards Association (VSBA) regions to illustrate how the House weights change each region’s share of weighted enrollment. Some regions gain a larger share of the weighted count than their raw student count suggests; others decline. Committee members and analysts noted the presentation used regions as proxies because district boundaries under the House governance plan are contingent on later work. - Committee members asked for district-level modelling under current district lines and under anticipated district reconfigurations to better understand winners and losers and to inform committee choices about weights, the base amount and transition protections.

Implementation, timeline and resources - Agency officials said transformation is “truly transformative” and requested recurring resources and one-time capacity-building dollars. The agency’s FY26 request includes $4,000,000 and five permanent positions to support strategic budgeting, on-the-ground academic coaching, board transition work, data and dashboard development, and other implementation tasks. - The House-passed bill links financing changes to governance changes; the bill as drafted would become effective July 1, 2029, contingent on new school districts being operational. CTE and pre-K reports are due to the Legislature before the next session so any final policy on those programs would be considered in follow-up legislation.

Questions and concerns raised - Committee members pressed for clarity on the rationale for specific weights (for example, sparsity and small-school weights); analysts noted those categories derive from earlier cost-factor studies and recommended reviewing the 2019 pupil-weight factors report and the Colby & Baker memo that underpins H.454’s numerical proposals. - Officials warned that a multi-year transition raises an urgency issue: districts facing cuts in the interim may make decisions (including possible school closures) before new resources or reorganizations arrive. The agency asked the committee for concrete policy objectives so the administration can target its analytic and implementation support.

Next steps - JFO and the agency will continue modelling. Committee members asked JFO to provide district-level impact analysis under existing district lines as well as under likely reorganized districts before final legislative action. - Agency staff said they will meet with JFO to review modeling assumptions and expected to return with further analysis and implementation roadmaps; no formal votes or policy decisions were finalized at the April 23 hearing.

The committee recessed with the expectation of further hearings and modeling; members signaled the need to pair financing choices (weights and base) with governance and quality standards to avoid unintended disruption to students and to help districts manage the transition.