Reexamining Vermont’s Unique Education Funding Yield Model: A Call for Structural Reform

Recent remarks by Ben Kinsley of that organization underscored a critical fact: Vermont remains the only state operating under a “yield” model for public education funding. This framework, rooted in Act 60 of 1997, was designed to equalize educational opportunity. Nearly three decades later, the evidence of its long-term effects on costs and outcomes warrants sober legislative review.

What Is the Yield Model?

Under Vermont’s system, school districts (or their communities) vote on local budgets. Those spending decisions are then equalized statewide through the Education Fund. The Legislature annually sets a “property yield”—the amount of per-pupil spending that a $1.00 homestead property tax rate is calculated to generate. An income yield operates similarly for income-sensitized taxpayers. In practical terms, two towns that choose identical per-pupil spending levels face the same homestead tax rate, regardless of differences in local property wealth. Excess spending above certain thresholds can trigger tax penalties, and the system pools resources so that property-wealthy communities effectively subsidize others.

This guaranteed-yield approach is distinct from the foundation or formula-based systems used in the other 49 states. Act 60, formally the Equal Educational Opportunity Act, was enacted in response to the Vermont Supreme Court’s Brigham decision. It was signed into law on June 26, 1997, by Governor Howard Dean and phased into effect thereafter. Subsequent legislation (Acts 68, 130, and others) refined the model, but the core yield mechanism has remained.

Cost Trajectory Since Inception

The data shows a clear and sustained rise in education spending. In the period around full implementation (late 1990s–early 2000s), Vermont’s per-pupil expenditure was near or modestly above the national average—approximately $7,000 in FY 2000. By FY 2010–11 it had climbed to roughly $17,000 (ranking among the top three states). In recent years the figure has reached $27,000–$28,700, placing Vermont second only to New York and approximately 69 percent above the national average of about $17,000. Total spending has continued to grow even as student enrollment has declined by more than 25 percent since the early 2000s.

The accompanying chart illustrates the divergence:

(Approximate trend lines based on NEA Rankings & Estimates and Vermont Agency of Education data; actual annual figures vary by source and definition of “per pupil.”)

Vermont’s student-teacher ratios remain among the lowest in the nation (near 10:1 versus a national average near 15:1), contributing to higher personnel costs even as teacher salaries themselves are not outliers. Healthcare and administrative expenses within school budgets have also risen sharply.

Outcomes and Comparative Performance

While early post-Act 60 years saw Vermont students ranking well above national averages on the National Assessment of Educational Progress (NAEP), recent results show performance at or below the national average on most Grade 4 and Grade 8 reading and mathematics measures. Long-term relative decline has been documented, particularly in reading. High and rising costs have not produced correspondingly high or improving student outcomes relative to peer states or the nation.

Broader Fiscal Accountability Concerns

Beyond the education finance formula itself, questions of accountability in state spending deserve attention. Portions of the state budget support nonprofit and non-governmental organizations. Sound public policy requires that such recipients demonstrate measurable performance, undergo regular audits where appropriate, and maintain required tax filings. Where organizations fail to meet basic transparency or performance standards, continued funding should be reevaluated. Taxpayers reasonably expect that public dollars produce verifiable results.

Path Forward

Vermont is unique in its yield-based education funding model. That uniqueness has produced equity in tax effort across communities—an important achievement of Act 60. It has also coincided with the nation’s highest (or near-highest) per-pupil costs and student performance that no longer leads the nation. Recent legislative efforts, including movement toward a foundation-style formula under Act 73, signal recognition that structural change is needed.

If electied, I will bear the responsibility to remove the yield model as it does not serve Vermonters well, to insist on rigorous performance data, and to ensure that every dollar—whether directed to schools or to external organizations supplementing the educational system—is subject to clear accountability. The goal remains the same as in 1997: high-quality education delivered efficiently and equitably. The tools and incentives we use to achieve it must evolve with the evidence.

I welcome continued dialogue with colleagues, educators, and citizens as we work through these issues in the coming session.