Agency of Education presents proposed funding formula; lawmakers press for school-by-school transition details

The Vermont Agency of Education presented a proposed education funding formula at a joint hearing of the House Ways and Means and House Education committees on Jan. 31, 2025, saying the plan is intended to fund a broader “education transformation” that pairs funding changes with governance and education‑quality reforms.

"We have produced the report that we'll walk through today that explains, in detail the funding formula that is being proposed," said Zoe Saunders, secretary of education, at the start of the hearing.

The proposal sets a statewide foundation base, adds student‑characteristic weights and scale adjustments, maintains several categorical payments, and anticipates the creation of five large districts. Agency and consultant presenters said the model is intended to be more transparent and to deliver comparable resources to students with the same needs regardless of where they live.

Justin Silverstein, a consultant with APA, summarized the plan’s structure: "In everything in green is that the proposed foundation funding. So a base amount ... weights for economically disadvantaged, EL students, CTE students ... and then adjustments for district sparsity and size." He added that the formula is tied to a governance vision that would include five districts and new central offices.

Nut graf: Why this matters

Agency presenters said the formula would reallocate how the state funds K‑12 education, folding some programs into a larger foundation, increasing some targeted funding (for example for English learners and CTE), and keeping specific categoricals (notably special education and transportation) at higher funding levels. Committee members repeatedly pressed officials for concrete, school‑level comparisons, transition timelines and implementation details.

What’s in the proposal

- Base and weights: The consultants described a per‑pupil foundation base and a set of weights. The presenters referred to a base amount in the report and the modeling that produces per‑pupil totals when weights are added. The team used an evidence‑based model as the starting point and then adjusted it for Vermont priorities.

- Key weights and adjustments: The proposal models an economically disadvantaged weight of about 0.75 and an English‑learner weight of about 1.5. The school size adjustment uses a smooth curve for schools under 450 students; sparsity adjustments remain. Presenters said preschool funding (referred to in the transcript as EEE) was left as in the existing system (a negative factor of about 0.54 in their calculations for certain preschool counts) and that preschool policy work remains under active development.

- Career and technical education: The consultants proposed concentrating CTE funding through a regional CTE BOCES. They estimated median current spending at about $25,000 per CTE FTE; the formula would route roughly $8,000 as an on‑behalf payment to a regional CTE provider and about $17,000 from the CTE weight, together approximating the $25,000 level.

- Categoricals: Special education and transportation would remain separate categorical payments rather than being fully rolled into the foundation. Presenters estimated roughly $70 million in additional funding would be required to fully fund special education costs that local budgets currently cover; transportation reimbursement would move from 50% toward full reimbursement in the modeling.

- Overall dollar figures presented: The consultants' slides and report show the modeled foundation and weights generating approximately $1.668 billion in foundation funding in their scenario. They also reported that, on a like‑for‑like comparison with FY2025 appropriations and the current portfolio of schools, the model would produce a roughly $180–$184 million difference (a reduction in the total compared with current aggregate appropriations as modeled for the future governance construct). Presenters emphasized those numbers reflect the proposed five‑district governance structure and the portfolio assumptions used for modeling.

- Teacher pay and program investments: The model includes an average salary increase of about $5,000 per teacher in the base funding as modeled. Presenters also said the proposed base and weights would fund additional mental‑health and student supports and flexible pathways as part of the core (rather than as small, temporary grants), reflecting stakeholder input from an agency "listen and learn" process.

How governance fits: five districts and transition assumptions

The proposal assumes a future governance structure of five much larger districts, with one example (Champlain Valley) modeled at more than 34,000 students and a Northeast region of roughly 10,000. Presenters said creating larger districts is expected to reduce administrative overhead per pupil, allow staffing and purchasing efficiencies, and reduce variation in property wealth per pupil across regions.

Amanda Brown, an APA consultant, said comparing the current 52 supervisory unions and school districts with the proposed five districts shows reduced variation in wealth per pupil and larger administrative scale in the proposed model.

Questions from lawmakers and outstanding implementation issues

Lawmakers repeatedly pressed presenters for specifics about how the state would move from the current system to the modeled future state. Common concerns included: where the modeled savings would come from in practice; how small, geographically isolated or politically resistant schools would be handled; district‑level tax impacts; the timeline and concrete staging of district consolidation; and the operational implications for food service, transportation, custodial staff, paraeducators and extracurricular programs.

Several legislators asked for school‑by‑school impact analyses, district‑by‑district tax simulations and a clearer transition plan. Presenters said they would provide additional detail in a forthcoming governance report and in follow‑up materials:

- The Agency of Education said it will provide a governance report the following week that will address central offices, roles for school boards and school advisory councils, and operational questions about the five‑district model.

- The agency said it will deploy a short data collection to validate class‑size and course enrollment data, and that it will supply school‑level impact information requested by legislators (including school meals impacts tied to the governor’s proposed shift away from universal school meals).

Direct quotes from the hearing

"We have produced the report that we'll walk through today that explains, in detail the funding formula that is being proposed," Secretary Zoe Saunders said to open the presentation.

"We believe that this new funding system will be more transparent, understandable, and predictable," Justin Silverstein said, describing the stated goals for families, schools and taxpayers.

"Vermont would have a base that's one of the highest bases in the country," Amanda Brown said when comparing the modeled base and weights with other states' formulas.

What presenters would not say (and what remains unresolved)

There were no formal votes at the hearing. Agency officials and consultants repeatedly emphasized that the modeling assumes a multi‑year transition and that some costs of maintaining the current portfolio of schools were included in the initial years of the model. But lawmakers pressed for more granular answers on these points:

- Specific, verifiable lists of where the modeled savings will come from (for example, precise counts of central‑office reductions, staffing shifts, or program consolidations) were not provided at the hearing; presenters said the forthcoming governance materials and follow‑up modeling would flesh those items out.

- Questions about whether and how districts could continue to raise funds locally above the state foundation, and how local tax rates might change district by district, were referred to follow‑up modeling by the tax department and the agency.

- The plan’s treatment of school meals drew intensive questions. Presenters said the governor’s budget moves away from universal school meals toward a means‑tested approach and that the agency would provide school‑level impacts on students and schools.

Next steps

Presenters told the committees they will return with a governance report and additional school‑level and district‑level modeling. The agency said it is creating targeted data collections (class size and course enrollment validation) and will work with the tax department and other partners to produce the district comparisons and tax impact simulations lawmakers requested.

No formal legislative action or binding decisions were taken at the Jan. 31 hearing; the session functioned as a policy briefing and question-and‑answer period.

Ending

Committee members signaled they will require more detailed analysis before endorsing any changes that would alter funding streams or governance. Agency officials said they hear that request and will supply additional documentation, school‑level impact analyses and governance details in the next round of briefings.