In 1995, plaintiff students, taxpayers, and school districts filed Brigham v. State, 692 A.2d 384 (1997), an “equity” suit claiming that the state’s education finance system violated the equal protection and education clauses of the Vermont Constitution. The state supreme court agreed, stating that “we are simply unable to fathom a legitimate governmental purpose to justify the gross inequities in educational opportunities . . . .” Also, the court’s expansive discussion of the importance of education to prepare students for political participation in democratic self-government established a significant “adequacy” benchmark for the level of educational opportunities necessary for students at the turn of this century.
Within four months of the court decision, the legislature passed and the governor signed Act 60, which substantially equalized funding across the state by replacing local property taxes with a statewide property tax and requiring an “equalized yield” for any local taxes above the statewide level. For most Vermonters, Act 60 decreased their property taxes and increased the funds available for their local schools. Residents of the wealthy ski towns (“Gold Towns”), however, experienced an increase in tax rates and a decrease in revenues for their schools, which had been spending much more than those in most districts.
A backlash against Act 60 from the Gold Towns created considerable controversy. But all parties declared a win-win resolution in 2003 with passage of Act 68, which continued “equalized yield” but allowed the Gold Towns to raise more revenue.
In 2007, the legislature and governor agreed to a mechanism intended to limit education funding increases. Under the law, which is scheduled to go into effect in 2009, proposed funding increases that are greater than inflation plus one percent must be approved by two votes. This means that voters will have to vote separately on whether to increase funding by inflation plus one percent and whether to increase funding by whatever additional percentage is proposed. The rule will only apply to districts that already spend more than the state average.
Under current law, the primary mechanism for limiting funding is a financial penalty for districts that decide to spend more than 125 percent of the previous year’s state average per pupil. The penalty requires districts to contribute a dollar to the state’s education fund for every dollar of spending above the 125 percent threshold.
A Reasonably Equal Share: Educational Equity in Vermont by Lorna Jimerson (Rural School and Community Trust February 2001).
Michael A. Rebell and Jeffrey Metzler, Rapid Response, Radical Reform: The Story of School Finance Litigation in Vermont (Campaign for Fiscal Equity, Inc. October 2000).
Last Updated: February 2017