How High is Vermont's Education Spending?

In 2022 Vermont state and local governments collected $5.3 billion in taxes. About 44% of that was spent educating Vermonters from pre-kindergarten to high school. That makes education the single largest user of all the taxes collected by Vermont governments.

According to the U.S. Department of Education, in school year 2020-21 (the most recent year for which we have data), Vermont spent $24,050 per student. (All data discussed below come from the U.S. Department of Education’s Digest of Education Statistics.) Only New York spent more, and only three other states, Connecticut, Massachusetts, and New Jersey, spent more than $20,000 per student. The national average spending was $14,295 and Utah ranked last at $9,014 per student.

As of school year 2020-21 Vermont spent 77% more than the U.S. average. In the early 1970s, Vermont’s spending was below the national average, but our spending has exceeded the national average ever since the early 1980s. Spending as a share of the U.S. average fell in the early 1990s when Vermont experienced a much more severe recession than did the U.S.

Since the turn of the 21^st century Vermont’s per pupil spending has outpaced the U.S. average by wider and wider amounts each year, except for 2017. The number of students in Vermont schools has declined by more than 20% over the same period. Nationally, student counts are up by 5%—another indication of how different Vermont’s demographics are from the U.S.

Why has Vermont’s spending increased so much? It’s not just due to falling student enrollments. Since 2000, total pre-K to 12 spending, adjusted for inflation, has risen by 47%, even more than the 40% increase nationally. So even though the number of students in Vermont has fallen, and the number nationally has risen, Vermont’s total spending has grown faster than the nation’s.

The primary reason for this is staffing levels. The number of Vermont students has been falling since the late 1990s. But the number of teachers kept increasing from the late 1990s until 2005 and today there are the same number of teachers in Vermont schools as there were in the late 1990s.

The change in non-teaching staff is even more dramatic. In the late 1990s there were about 15,700 non-teaching staff employed in Vermont schools. Today that number has grown by more than 20%, to 19,000.

Vermont has a ratio of 10.5 students for each teacher, the lowest in the nation. The national average is almost 50% higher, at 15.4 students per teacher. Our student to non-teaching staff ratio is 7.7, nearly half the U.S. level of 14.5 students per non-teaching staff.

When we combine teaching and non-teaching staff, Vermont schools employ one person for every 4.6 students compared to 7.6 students per employee nationally.

Clearly, Vermont’s high education costs are in large part attributable to our large numbers of teaching and non-teaching staff.

Our rising level of per pupil spending, both in absolute terms and relative to other states, began in the late 1990s. Not coincidentally, in 1997 the Vermont Supreme Court decided, in the Brigham case, that Vermont’s then-school aid formula violated the Vermont Constitution. (It is somewhat ironic that the funding program the Court found unconstitutional was a foundation funding formula, the same type of formula Governor Scott has proposed in his new education reform plan.)

The legislature responded by passing Act 60 in 1997, which dramatically changed the way education was financed and how education property taxes were calculated. Although Act 60 has been changed slightly over the past three decades, its essentials remain.

Act 60 created a significant wedge between what voters decided to spend on their local schools and the way most homeowners paid for the taxes to finance those spending decisions. Basically, the legislature made spending more on education less costly for a majority of homeowners in the state. And, not surprisingly, when something is put on sale, people buy more of it. Act 60 explains the significant runup in education spending, even in the face of declining enrollments.

We now spend, to repeat, 77% more than the national average, and more than 48 other states, to educate each Vermont student.

If we want to reduce property taxes, we have two choices: We can raise other taxes to replace property taxes, or we can reduce our spending to a level closer to national or regional norms.

If we choose the latter, we again have two choices: We can either reduce education employee compensation levels or reduce the number of employees in our system.

And the latter can be accomplished in two ways. One is using a centralized approach, like the plan Governor Scott has recommended. The second is to make the education finance system more transparent and make taxpayers pay for their voting decisions.

What do we get for our high spending? I’ll look at Vermont student outcomes in a future post.