Funded: State Policy Analysis

A Detailed Look at Each State's Funding Policies

Below, see summaries of the state’s education funding policy in each issue area. Click the Expand icon next to any summary to see more detail, if available, about that state’s policy regarding that issue area. Click the Citation icon
next to any summary to see the sources of the information regarding that issue area.
Funding Basics
Formula Type

Vermont has a primarily student-based funding formula. It assigns a cost to the education of a student with no special needs or services, called a base amount. It then accounts for the additional cost of educating specific categories of students both through program-specific allocations and by applying multipliers to the base amount to generate supplemental funding for certain students.

The categories of students generating supplemental funding in Vermont are students in certain grade levels, low-income students, and English language learners. Services for students with disabilities and students in sparsely populated districts are funded through program-specific allocations.

Vt. Stat. Ann. tit. 16, § 2961
Vt. Stat. Ann. tit. 16, § 4010
Vt. Stat. Ann. tit. 16, § 2963–§ 2963a
Base Amount

Vermont has a fixed base funding amount per student. For FY2015, the per-student base amount was $9,285.

This means that an average student with no special needs or disadvantages would be funded at that level.

This amount is derived through regular increases of the 2005 base amount of $6,800, in increments based on the New England Economic Project Cumulative Price Index.

Expected Local Share

Vermont does not expect districts to contribute revenue to their public schools. Instead, education in the state is supported through a statewide education property tax, which was set at a rate of $9.80 for every thousand dollars of property wealth. However, school districts are permitted to impose taxes to generate supplemental education revenue.

The rate of the statewide education tax is adjusted for households with income below $90,000; for those households, the tax is the lower of the property tax or 1.84% of household income in districts funding education at the amount calculated by the state to be necessary to educate their students, and a proportionally higher percentage of household income as the district's education funding rises above the necessary amount. Households with incomes under $47,000 are not taxed at a higher rate when their districts increase spending.

Once the state calculates the total amount of funding necessary to educate students within a district, it provides that amount in the form of state education aid.  However, if a district wishes to spend more than 125% of the amount calculated by the state to be necessary, the amount by which the district’s revenues exceed that threshold is deducted from the district’s state aid and redirected to aid other districts.

Picus, L.O. (2014, January 7). Funding Vermont’s Schools for the Future: A Discussion Paper. Retrieved June 1, 2016.
Vermont Department of Taxes. (2016). Education Tax Rate FAQs. Retrieved June 1, 2016.
Student Characteristics
Grade Level

Vermont provides a greater amount of funding for students in secondary grades only.  It does so applying a multiplier of 1.13 to the base per-pupil amount for students in these grades.

Students in elementary grades are funded at the base amount.

Vt. Stat. Ann. tit. 9A, § 4010
English Language Learner

Vermont provides increased funding for English language learners. It does so by applying a multiplier of 1.2 to the base per-pupil amount for these students.

Vt. Stat. Ann. tit. 16, § 4010
Student Poverty

Vermont provides increased funding for students from low-income households. It does so by applying a multiplier of 1.25 to the base per-pupil amount for these students.

Students aged 6-17 are eligible for this supplemental funding if they qualify for free or reduced-price lunch (FRL) under the National School Lunch Program.

The state also applies this multiplier to the base amount for non-FRL-eligible students whose primary language is not English.  This supplemental funding is therefore provided for all FRL-eligible students, as well non-FRL-eligible students whose primary language is not English. Because Vermont also has a separate supplemental funding allocation for students who are English-language learners (ELL), all ELL students in Vermont are automatically weighted for both FRL eligibility  and English-language learner status.

Vt. Stat. Ann. tit. 16, § 4010
Special Education

Vermont funds special education using a hybrid system incorporating resource-based allocations and partial reimbursements.

Each school district receives a grant based on salary costs: the state provides an amount equal to 60% of the district’s special education units (that is, the teachers to which a district is entitled based on a ratio of 9.75 special education teachers per 1,000 enrolled students) for the previous year times its average special education teacher salary for that year, plus the average special education administrator salary in the state for the previous year, prorated based on a statutory formula. School districts also receive partial reimbursements for all special education expenditures not covered by federal aid; the reimbursement rate is set annually by the state in an effort to produce an outcome in which the total non-federal cost of special education in the state is shouldered 60% by the state and 40% by localities.

Extraordinary costs (those over $50,000 for any one child) are reimbursed at a rate of 90%. Programs operated by the Vermont Center for the Deaf and Hard of Hearing are reimbursed at 80%. There is also 100% reimbursement for education of state-placed students, including those with out-of-state placements.

Vt. Stat. Ann. tit. 16, § 2950– § 2963a

Vermont does not provide additional resources for gifted and talented students.

Career and Technical Education

Vermont does not provide specific funding for career and technical education programs.

Community Characteristics
District Poverty

Vermont does not provide increased funding based on the concentration of students from low-income households in a particular district.

Sparsity and/or Small Size

Vermont provides increased funding for very small districts by distributing a per-student grant of at most $2,500 per student. The precise amount of the grant is calculated through a formula that considers the district’s enrollment. The state also provides assistance to districts facing high transportation costs due to geographic dispersion.

School districts with fewer than 100 students total and an average of at most 20 students per grade are eligible for small-district funding. The amount of the per-student grant varies depending on the district’s enrollment. Support for extraordinary transportation costs in geographically sparse districts is provided upon application by the district, and is subject to the availability of funds, which were capped in statute at $250,000 statewide in FY1997 and have been increased since then only for inflation.

Vt. Stat. Ann. tit. 16, § 4015–§ 4016