Act 60, known as "The Equal Educational Opportunity Act", was a Vermont law enacted in June 1997 by the Vermont legislature intended to achieve a fair balance of educational spending across school districts, independent of the degree of prosperity within each district. The law was in response to a Vermont Supreme Court decision in the Brigham vs. State of Vermont case, wherein the court ruled that Vermont’s then existing educational funding system was unconstitutional, because it allowed students in towns with higher total property values to receive a higher level of education funding per pupil than students in towns with lower property values. Act 60 was followed by Acts 68 and 130, which addressed some imbalances caused by Act 60.
State-wide education funding
In most local jurisdictions outside of Vermont, public school funding is determined within a school district by the following steps: 1. The school expenditure budget is set and non-tax income from grants and other sources is identified. 2. The difference between expected expenditures and non-tax income determines the amount to be raised by taxes. 3. Where taxes are raised by property tax, property values across a jurisdiction are assessed and each qualified property contributes to the total funds to be raised in property taxes in proportion to that property's fraction of the total property value of the jurisdiction. In jurisdictions where the total value of property is large, compared with the funding to be raised, both the total taxes and the tax rate per unit of value are small compared to jurisdictions with a high level of funding to be raised and a small property value base. This is the basis for the education funding inequity addressed by the Vermont Supreme Court in Brigham vs. State of Vermont.
Determination of funding required
To address the funding inequities among school districts, Act 60 and its amendments, Acts 68 and 130, established a system to pool the state's educational budgetary requirements from across jurisdictions and pay for them, in part, with pooled property taxes from across those same jurisdictions.
The provisions of Act 68 determine an individual district’s education spending as that part of an expenditure budget without a specific funding source. It includes: Special education costs not covered by federal aid and the state categorical grant Transportation costs not covered by the state categorical aid Tuition owed by the district General payroll and operation costs that do not have specific funding sources.
Education spending is that part of an expenditure budget without a specific funding source. Pre-Kindergarten through twelfth-grade education funding may be calculated for school districts according to: Budget adopted by school district (town, city, union, incorporated) + Deficit from prior year (if any) = Total District Budgeted Expenditures Then: Total District Budgeted Expenditures – (State categorical grants, federal revenues, tuition revenues, interest income, etc.) = Education Spending
Raising the required funds
According to a handbook example explaining the matter, the amount needed in the education fund in Fiscal Year (FY) 2012 to pay for grants and education spending was about $1.353 billion, which required revenues for the education fund from the following sources:
These sources left a $364-million gap in school funding for FY 2012 to be raised through property taxes on homesteads in Vermont.
Homestead property tax
Each year, the Vermont legislature sets a base amount that a school district will be expected to spend per pupil. Homestead property tax calculations are based on the amount per pupil that the district must raise over the base amount to fund its budget. In each school district, the property tax liability is established by the following method: The district's school board determines its educational spending level, described above. The educational spending level, divided by the "equalized pupil count" determines the district’s education spending per equalized pupil. The "equalized pupil" count, which assigns weights for different types of pupils, is designed to reflect the per capita spending in the district. The percentage increase of the district's per pupil spending over the state’s base education spending per pupil determines the percentage increase in property taxes over the level that would be required to fund the base homestead tax rate.
In principle, this method assures that all districts that have the same education spending per equalized pupil will have the same homestead tax rate. In order to achieve this principle, all properties in the state would have to be assessed in an equivalent manner.
