JFO: House-passed H.454 would raise statewide education funding about 2% but shift dollars across districts

On April 17, 2025, Julie Victor of the Joint Fiscal Office told the Senate Education Committee that the House-passed H.454 foundation formula — including the Education Opportunity Payment (EOP), a sparsity grant and a small-school grant — would increase the aggregate statewide funding set against FY25 education spending by about 2 percent, but would redistribute funding unevenly across districts and regional configurations.

Victor, presenting a slide deck the office posted to the committee page, said the JFO used FY25 data as the baseline: statewide “education spending” for comparison (defined as a district’s total budget minus offsetting revenues) was roughly $1,900,000,000 and Vermont’s long-term average daily membership (LT ADM) was about 83,400. She said the house version sets a base per-weighted-pupil amount of $15,033 and applies additive pupil weights to produce each district’s EOP.

The analysis covered multiple district boundary scenarios. Using the current-law set of roughly 119 operating school districts, JFO estimated 68 districts would see an increase in funding under H.454 while 53 would see a decrease. Aggregating districts into the Vermont School Boards Association (VSBA) 11 regions or into alternative consolidation proposals produced different distributions, though JFO reported the statewide total still rose about 2 percent in the models it ran.

Victor emphasized caveats. The modelling used FY25 counts and a flat English-learner (EL) weight because the tiered EL data are suppressed for small counts; JFO is working with the Agency of Education (AOE) on a data-share agreement to run the tiered EL and special-education weights. She also noted that district boundary choices materially alter which districts qualify for sparsity or small-school grants and therefore materially change winners and losers under the formula.

On grant definitions, JFO said the sparsity grant in H.454 applies to districts with population density below 55 people per square mile and would be calculated by multiplying public-school enrollment by the sparsity cost adjustment. The small-school grant depends on a State Board definition of “small by necessity,” which the bill leaves to the State Board to define; JFO modeled small-school eligibility using the current-law small-school weight (a proxy) and warned that the final State Board definition could change outcomes.

Victor summarized several concrete results from the FY25-based models: under current-law districts, 64 districts would see an estimated absolute per-pupil difference of less than $2,500; Champlain Valley is the largest single district grouping in the data, at about 4.9% of the state’s pupils; and under a five-region consolidation proposal JFO modeled, three regions would see estimated increases while two would see decreases, with sparsity support largely concentrated in the Northeast region in that scenario.

She cautioned against direct state-to-state comparisons of the base amount because other states use different mixes of state and local funding; Vermont’s education fund structure and the composition of weights both matter. Victor also urged listeners to treat these as preliminary estimates: demographic change, inflation, future boundary changes and the yet-to-be-modeled tiered EL and special-education weights will alter outcomes if and when they occur.

A recurring exchange in committee questions concerned the EL data suppression and timing: Victor said JFO needs an MOU with the AOE to access non-suppressed tiered EL counts so it can model the tiered EL weights. She also repeated JFO’s nonpartisan role in producing technical fiscal estimates: "JFO, we're nonpartisan, unbiased fiscal analysis," Victor said.

The committee did not take a formal vote on H.454 during the session. Members asked JFO for follow-up modeling (including the administration’s alternative proposal and models that include tiered EL and special-education weights once data access is granted) and for district-level extracts showing the projected change for specific districts under the House-passed numbers.

The presentation and Q&A highlighted the policy point several times during the meeting: consolidating districts into larger entities reduces visibility of local swings in per-pupil funding (smoothing effects), but it does not eliminate the underlying distributional effects unless policy rules are added to guarantee funds follow particular student groups within a larger district. Victor told the committee that nothing in H.454, as passed by the House, changes school-board duties or how larger districts must allocate funds internally; if the legislature wants to ensure dollars targeted to EL or low-income students flow to the schools those students attend inside a larger district, explicit statutory language would be required.

If the committee requests it, JFO said it can provide more granular district-level tables and run apples-to-apples comparisons with the administration’s proposal once the necessary data-sharing agreements are in place. Ending the discussion, committee members noted the models' consistent theme: the choice of district boundaries and the policy choices embedded in weights and base amounts are the primary levers shaping who wins and who loses under a foundation formula.