The Vermont legislature passed Act 60, The Equal Education al Opportunity Act, in June 1997, following a February state Supreme Court ruling in a class-action suit that Vermont’s method of paying for education was inequitable and unconstitutional.
Under a system dating back to the 19th century, school funding in Vermont was provided by local property taxes. The wealthiest towns were spending nearly$12,000 per year on each K-12 student while enjoying a tax rate of 30 cents per $100 of the assessed value of a house (i.e., $300 per year ona $100, 000 house). Poorer towns spent only about $ 5,800 per pupil, while levying a tax of about $2,000 per year on a $100,000 home. Thus, towns with expensive homes and large businesses had the lowest tax rates, while rural towns with modest homes had to levy very high taxes to raise enough money to run their schools.
Inrestructuring its school finance system, Vermont was following the lead of many other states. Since 1971, all but five states have been sued over educational equity.
Act 60 accomplishes its goal of educational equity by replacing dozens of widely varying local school tax rates with a single statewide property tax. All Vermont homeowners must now pay $1.10 per $100 of their assessed property value. ($1,100 on a $100,000 home.) About half of the state’s communities will pay less in property taxes under Act 60, and half will pay more by the time Act 60 takes full effect in 2001, according to state officials. In addition, the gasoline tax was raised by 4 cents a gallon to fund education.
The revenues from the statewide property and gasoline taxes are distributed by the state as inflation-adjusted block grants to each school district, in the amount of $5,010 per student.
This amount is somewhat less than the $6,480 per pupil Vermont towns were spending before the enactment of the law. Communities can choose to impose further taxes to increase their per-pupil expenditure, but those that do must donate a percentage of the taxes to the state for the benefit of poorer towns.
Has Act 60 restored equity? In its year 2000 “report card” on the nation’s public schools (entitled Quality Counts), Education Week gives Vermont low marks for equity. It remains to be seen whether the new law, once it is fully phased in, will remedy this situation. What is remarkable about the Vermont law, however, is that it is the only such law to implement a green tax shift–taxing gasoline and putting the money towards education.
- Full Text of Act 60: The Equal Educational Opportunity Act of the law
- Act 60 Factsheet
- Equal Educational Opportunity Act (Act 60): Measuring Equity Report 2001 – by the Vermont Department of Education, May 2001. This report, the first EEOA evaluation required under law, lays the groundwork for measuring outcomes in the years ahead.