Vermont
HISTORICAL BACKGROUND
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.
RECENT EVENTS
Seeking a declaration that Vermont’s education property tax and funding system is unconstitutional as well as injunctive action, the town of Whitingham, together with parent and taxpayer plaintiffs, filed a lawsuit against the state in Windham Superior Court on October 27, 2017. The essence of its claim is that the state finance system is largely based on per-student allocations that do not take into account the educational opportunities that the dollars can buy in a small school district.
Vermont’s state education finance system was substantially revised after the state Supreme Court declared the prior system unconstitutional in its 1997 decision in Brigham v. State, 692 A.2d 384. Under the current system, budgets are funded by the State, which collects property taxes at rates it sets to cover a portion of the cost. If a school district spends more than an annually designated amount above the statewide average district education spending per equalized pupil in fiscal year 2015, its homestead property tax rate increases twice as fast on spending above that threshold. The Whitingham plaintiffs claim that this provision unfairly affects small rural districts like theirs that need to spend more per capita to provide basic educational services than larger districts with economies of scale.
The Vermont Supreme Court, in a decision issued on March 20, 2022, affirmed the Civil Court’s summary judgment dismissal of the State’s motion for summary judgment in Whitingham v. State, concluding that plaintiffs had failed to demonstrate that the alleged inequities were caused by the statutes in question or that the education property taxation system lacked a rational basis.
The Court held that the only evidence presented by plaintiffs in support of this argument was that their school district, which spends more per pupil than most schools in Vermont, offers fewer courses than the largest high school in the state. The fact that the district’s relatively small high school offers fewer courses and sports may simply reflect a lack of interest or an insufficient number of students to justify offering them. The evidence connecting the alleged shortcomings of the…school to the way the State currently funds public education is simply too tenuous to support plaintiffs’ claim.