Joint committees hear national best practices on K-12 foundation formulas; experts urge evidence-based base and phased transition

Members of the House Ways & Means Committee and the House Education Committee held a joint hearing to gather expert advice on designing a K-12 foundation funding formula that would replace Vermont’s current system and inform related governance proposals. Education Commission of the States (ECS) staff, nonprofit policy experts and national researchers outlined national trends, technical tradeoffs and implementation steps but offered no specific legislative prescriptions.

The hearing opened with Joel Moore, director of state relations at the Education Commission of the States, who said ECS serves as a nonpartisan clearinghouse on state education policy and would provide materials from its 50-state comparisons. "We will never tell you what is the best approach for you and your state," Moore said, adding ECS’s role is to summarize how other states handle similar tradeoffs.

Chris Duncombe, a policy staffer with ECS, gave a national overview of K–12 funding models and recent changes. "The reason we've seen this transition towards student-based models is because it offers transparency, equity and greater local flexibility," Duncombe said, describing three common designs: student-based (used by 35 states and D.C.), resource- or input-based (about nine states) and hybrid systems (four states). He cited recent statewide transitions in Tennessee (Tennessee Investment in Student Achievement), Colorado and Mississippi as examples of states centralizing funding into a primary formula and consolidating numerous categorical grants into a single foundation allocation.

Duncombe described the core design choices for a student-based foundation: (1) the base funding amount (a guaranteed dollar per student), (2) whether the base is fixed or variable by grade or district size, (3) weights that multiply the base to direct extra dollars for students with identified needs, and (4) reporting and oversight to retain transparency after funds leave the state. He also highlighted that states differ on whether they count enrollment or attendance and on how they allocate high-cost special education services (some use reimbursement streams for exceptional costs).

Rebecca Sebelia, founder of Ed Fund and a longtime school finance practitioner, placed the policy conversation in a historical and equity framework. She reviewed key legal milestones (San Antonio v. Rodriguez, Milliken v. Bradley and Serrano v. Priest) that shifted school finance litigation to states and explained the evolution from equalizing revenue to an adequacy focus. "When the foundation formula operates in the right way, when resources are targeted to students who are low income, ELL or special education in a meaningful way, we see measurable increases in achievement," Sebelia said, summarizing research from California and Tennessee showing positive effects when formulas are well designed and weighted.

Tammy Colton, principal researcher at the American Institutes for Research (AIR), moved from policy overview to technical design and implementation. Colton described five core design questions: how to set a cost-based base funding amount, which student- or district-level weights to include, how to count students, how to account for efficiencies if districts consolidate, and how to allocate funds within larger districts to prevent intra-district inequities.

Colton presented a working technical projection based on Vermont data through 2018 projected forward (noted as requiring confirmation with updated data). Her model produced a projected foundation base of approximately $15,503 per weighted pupil for the projected year and recommended example weights built from the same underlying analysis: an economic-disadvantage weight equivalent to 1.75 (that is, economically disadvantaged students count as 1.75 pupils), an overall English learner (ELL) factor near 2.33, and a secondary (high-school) weight of about 1.25. Colton also showed a leveled ELL approach (higher weights for the most intensive language-need levels and lower weights for students nearer proficiency) and recommended that special-education funding move from a pure census block grant toward multiple weights or a multi-part system that better aligns funding to student need and avoids perverse incentives.

Committee members and experts discussed counting rules (single-year vs. multi-year averages, inclusion of pre-K and CTE students), local revenue treatment (how states typically deduct an expected local contribution from formula need), special-education approaches (reimbursement vs. multiple weights and high-cost pools), and the political and operational implications of any transition.

On implementation, all expert witnesses emphasized a phased approach. Colton urged that projected efficiency gains from district consolidation be explicitly enumerated, costed and phased into the base over a clear timeline so schools are not left underfunded while anticipated savings are still materializing. "The risk is if you assume efficiencies will appear immediately, then you may penalize schools before savings have actually occurred," she said.

Several lawmakers asked how intra-district equity would be preserved if funds flow to larger, consolidated districts or when dollars follow students to different school models. Experts described two common state responses: (1) require or incentivize a share of funding to be allocated to schools using a weighted student allocation at the school level, or (2) define a uniform set of central vs. school-level services with transparent charts of accounts so central deductions and school allocations are comparable across districts. Speakers cautioned that school-level accountability and uniform accounting are necessary if funding is intended to follow students to specific schools or program types.

No votes or formal actions were taken at the hearing. Committee members asked for follow-up materials and technical assistance; witnesses offered ECS and AIR resources, and Colton and others agreed to provide further data and methodological support on request.

The hearing provided lawmakers a technical foundation for future deliberations: states moving to student-based foundation formulas face crucial choices about how to derive an evidence-based base, how to select and scale weights for different student needs, and how to phase any transition to avoid shortfalls. Witnesses repeatedly recommended transparent, evidence-linked costing studies, multi-year phasing tied to verifiable efficiency gains, and stronger school-level reporting to preserve the policy intent when a formula consolidates previously categorical funding.

Looking ahead, the committees signaled they will continue to seek detailed cost studies, consider multiple costing methodologies (professional-judgment panels, evidence-based models, and education cost functions), and request updated Vermont-specific data before advancing legislative proposals. "If there's one takeaway, it is: do not penalize children in the transition; be deliberate and transparent," Colton said.