Gov. Phil Scott signs bill intended to make Vermont’s school funding system fairer

By Peter D’Auria/VTDigger

Vermont Gov. Phil Scott signed a bill Monday, May 23 to upgrade Vermont’s education funding formula, capping a legislative effort to make the system fairer.

“Giving all students an equal chance at success has been a priority
of mine since coming to office,” Scott wrote Monday, May 23, in a letter to lawmakers announcing his signature. “And, while the current (funding) formula is out of date, it is just one symptom of an unequal system of education, with increasing costs and decreasing opportunities, that requires fundamental reform.”

Vermont’s current education funding system recognizes that it costs more to educate some groups of students — those who live in rural areas or who are learning English, for example.

When dollars from the state’s nearly $2 billion education fund are doled out to school districts, the formula treats those students differently. The goal is to allow rural, diverse or low-income school districts to receive more money without saddling residents with big tax hikes.

But a landmark 2019 study conducted by researchers at the University of Vermont and Rutgers University found that those provisions in the formula were insufficient. The system had been shortchanging rural, low- income and English-learning students for years, researchers found.

During the past legislative session, the Legislature passed a bill to upgrade that formula with the goal of directing more tax dollars toward districts with the highest needs.

Among the law’s provisions is a separate funding system for districts with small numbers of students learning English that might otherwise struggle to sustain these services. That system will direct annual grants of either $25,000 or $50,000 to districts that have only a few English language learners enrolled.

Every five years, state officials will be required to review the new formula and make recommendations for changes. The new formula will start phasing in during fiscal year 2025.

In his letter to lawmakers, Scott did raise concerns with what he saw as shortcomings of the bill.

The upgraded system will give “certain schools the ability to spend more, but this bill does not require investment of these additional resources directly in students,” Scott wrote.

“Nor does new spending capacity mean there will be better outcomes,” Scott added.

He urged the Legislature to revisit the issue in the next session “to address cost containment and transparency to moderate the tax burden of the education funding system in the coming years.”