Vermont School Funding: Words To Know
A plain-language glossary
Vermont school funding has its own language. Some of it is legal. Some of it is just habit. None of it is explained to you before someone starts using it at a meeting.
Here are the words, in ABC order. The laws are listed separately at the end, in date order, because they only make sense as a story.
The words
ADM (average daily membership). The official count of students in a district. It is an average across the school year, not a head count on one day. Kids move, so the average is fairer. Almost every funding number starts with ADM.
Agency of Education (AOE). The state office that runs education in Vermont. It collects the data, writes the rules, and pays out of the Education Fund.
CESA (Cooperative Educational Service Area). A regional office created in 2026 to share services across districts. There are seven. Every district has to belong to one. Each must offer special education help, business and back office work, and advice for districts thinking about combining. Nobody says the long version out loud.
CLA (Common Level of Appraisal). A correction the state applies because town property values are out of date. If your town’s values are years behind, the CLA adjusts your tax rate to make up the gap. When home prices climb fast, the CLA pushes your rate up even though your school budget did not change. This is the most confusing line on a Vermont tax bill.
Construction aid. State money toward building or fixing a school. Under the 2026 law, a district that merges can get up to 75 percent covered. A district that does not tops out at 30 percent.
Education Fund. The one state pot that pays for all Vermont schools. Property taxes go in. So does some sales tax, some rooms tax, lottery money, and a few other taxes. Every district gets paid out of it.
Education spending. The number that actually sets your tax rate. Start with everything a district plans to spend, then subtract the money that comes from somewhere other than the statewide school tax — federal grants, categorical state aid, and other non-tax revenue. What is left is education spending. It is smaller than the total budget, and it is the figure the yield and the excess spending threshold are measured against. “Total budget” and “education spending” are different numbers, and this is the one that lands on your bill.
Equalized pupil. The old name for the weighted student count. You will still hear it. See weighted student count.
Excess spending threshold. A line above the state average per student. A district that spends over that line gets taxed a second time on the money above it. The line is set as a percentage of the state average, and that percentage is being lowered each year.
Foundation formula. A new funding system. The state decides what it costs to educate one student for one year, then pays that amount per student, plus extra for students who cost more. Most states already work this way. Vermont voted for it in 2025. It is now set to start in the 2029 to 2030 school year, and only if lawmakers act again first.
Grand list. The total value of all the land and buildings in a town. A big grand list means a town can raise a lot of money at a low tax rate.
Grouping. One of the 20 sets of neighboring districts that the 2026 law suggested as starting points for merger studies. The state’s guides can change them.
Homestead. The house you live in. It gets its own tax rate, and that rate depends on what your district spends.
Income sensitivity. A program that lets most Vermont homeowners pay school tax based on what they earn instead of what their house is worth. It is why two identical houses on the same road can have very different bills. See property tax credit.
Joint Fiscal Office (JFO). The Legislature’s own team of number people. They are not on anybody’s side. When you want a straight estimate of what a bill costs, their fiscal notes are the place to look.
Non-homestead. Everything that is not the house you live in. Second homes, rental buildings, businesses, camps, bare land. The state sets one non-homestead rate for the whole state. It used to be called the non-residential rate.
Per pupil spending. A district’s spending divided by its student count. Watch out here. The number your district prints usually divides by the weighted student count, not by kids in seats. So it will not match the math you do on a napkin, and that is not a trick.
Property tax credit. The money income sensitivity takes off your school tax bill. You claim it on your Vermont tax return. About two thirds of Vermont homeowners get one.
Reappraisal. When a town rechecks the value of all its property. A reappraisal resets the CLA, which changes your tax rate whether or not the school did anything.
Study committee. The group of school board members from neighboring districts that has to study merging and write a report. Created by the 2026 law. Reports are due September 2027.
Supervisory union. A group of school districts that share one superintendent and one central office. Each member district still has its own board and its own budget. A supervisory district is a single district that does that job by itself. Vermont has 52 of the two combined, and about 119 school districts inside them. This is why “my district” and “my supervisory union” are often two different things.
Town Meeting Day. The first Tuesday in March. When Vermonters vote on school budgets. In March 2028, many towns will also vote on whether to merge.
Weighted student count. Counting students who cost more to teach as more than one student. A student learning English, a student from a family in poverty, a high school student, and a student in a tiny remote school all count for more. So a district with 500 kids in seats might count as 700 for funding. A higher count makes spending per student look lower, which lowers the tax rate.
Yield. How much a district can spend per student at a tax rate of exactly one dollar. The Legislature sets it every year. If your district spends double the yield, your rate is about two dollars. Spend more, pay more.
The laws, in order
Brigham, 1997. Not a law. A Vermont Supreme Court ruling. It said funding schools with local property taxes broke the state Constitution, because a child’s education should not depend on how rich her town is. Everything after this is a response to it.
Act 60, 1997. The first answer to Brigham. Created the statewide property tax and the Education Fund. Also created a shared pool that moved money from wealthy towns to poor ones. It worked, and it made a lot of people very angry.
Act 68, 2003. The second answer. Killed the shared pool. Split the tax into homestead and non-homestead rates. Locked in “spend more, pay more,” which is still how your rate works today. Grew income sensitivity.
Act 46, 2015. Pushed towns to merge school districts. Vermont went from over 270 districts down to about 119. Some towns fought it, sued, and lost. Also swapped the old per student dollar amount for the yield.
Act 173, 2018. Changed special education money. Instead of paying districts back for what they spent, the state now hands over one lump based on size and need. Took full effect in 2021.
Act 127, 2022. Fixed the weighted student count using better numbers. Also switched off the excess spending penalty, which was supposed to stay off until 2029.
The 2024 yield bill (H.887). Passed after school tax bills jumped about 13.8 percent. Raised the property tax credit 13 percent for one year. Added sales tax on cloud software and a 3 percent surcharge on vacation rentals, both for schools. Switched the excess spending penalty back on at 118 percent. And started the Commission on the Future of Public Education, which led directly to the next one.
Act 73, 2025. Voted to throw out the yield system and replace it with the foundation formula. Also said Vermont still has too many school districts.
Act 170, 2026. Requires every district to study merging with its neighbors. Reports due September 2027. Voters decide March 2028. Created the seven CESAs. Pushed the foundation formula back to 2029 or 2030.
A note on the numbers
The yield, the non-homestead rate, and the excess spending threshold are reset by the Legislature every single year. Any figure you see quoted is a snapshot of one year.
The 13.8 percent increase, the 13 percent credit bump, the 118 percent threshold, and the new tax figures come from the Joint Fiscal Office fiscal note on H.887, dated May 10, 2024: https://ljfo.vermont.gov/assets/Publications/2023-2024-As-Passed-the-General-Assembly/2288824ad5/GENERAL-376316-v4-Yield_Bill_FN_AsPassedGA.pdf
Act 170 as enacted: https://legislature.vermont.gov/Documents/2026/Docs/ACTS/ACT170/ACT170%20As%20Enacted.pdf