Vermont Spends More, But Has Little to Show

Published June 1, 2006

Rising real estate values and declining enrollments since 2000 have escalated rural Vermont’s per-pupil spending with little to show for the expense, according to an analysis released in April.

In three years, Vermont’s average public school student received a 27.8 percent funding increase, as the state climbed past Alaska and New England neighbors Rhode Island, Massachusetts, and Connecticut in the national rankings of per-pupil spending. New data from the U.S. Census Bureau show that for the 2003-04 school year, the Green Mountain State ranked fourth in the nation in per-pupil expenditures on K-12 public schools, spending $11,128 per child.

Only New Jersey, New York, and the District of Columbia–among the most densely populated areas of the United States–spent more. Vermont has no major urban centers–and is in fact the only state in the union without a city of 50,000 or more people.

Student Achievement Stagnant

“Our education spending as a share of income is 35 percent above the national average,” editors Art Woolf and Richard Heaps wrote in the April 2006 Vermont Economy Newsletter. “If our per-pupil spending in 2004 was just equal to the national average, Vermont taxpayers would have saved $315 million.”

According to the National Assessment of Educational Progress (NAEP) test, the state’s students haven’t greatly improved in reading since 2002 or math since 2000, despite the increased spending.

Woolf, an associate professor of economics at the University of Vermont, has found a flat or declining trend in the state’s NAEP reading test scores, and modest gains in math. “We don’t get a lot for our overspending,” he said.

Education Coffers Overflowing

In 1997, the Vermont legislature followed a judicial directive to equalize funding among its school districts by replacing local property taxes with a statewide property tax for education. A rapid rise in real estate assessments since 2000 has generated large revenue increases to fund public schools.

The state’s spending on public education operating expenses grew from $716 million in 1997 to $927 million in 2001, and to more than $1.1 billion in 2004. More than 60 percent of the revenue for the state’s Education Fund comes from the statewide property tax.

At press time, the Vermont legislature was debating different proposals to reduce the base tax rates for both residential and nonresidential property. Previous tax rate reductions have been less significant than the rising real estate values that have fueled growing Education Fund revenue.

Fewer Students, More Teachers

The funds in Vermont’s expanding education treasury largely have been used to hire more teachers, even as the system enrolls fewer students.

National Center for Education Statistics data show that in 1997 Vermont’s classrooms had 7,751 teachers and 106,341 students. In 2004 the state employed 1,000 additional teachers to instruct 7,000 fewer students. The state’s student-to-teacher ratio of 11.7 is the smallest in the nation.

William Talbott, chief financial officer of the Vermont Department of Education, said the ratio is driven by “local decisions” in the state’s 290 school districts.

“In many of our small schools, a 10 percent reduction in enrollment may only mean the loss of six to 10 students spread across several grades,” Talbott said. “Therefore, such losses do not generally result in reductions in the number of staff.”

According to the National Education Association, Vermont’s national ranking in average public school teacher salary has remained static in recent years. Between 1996-97 and 2004-05, Vermont’s ranking dropped slightly, from 21st to 22nd in the nation, while the average teacher’s base earnings rose from $37,200 to $44,535 in nominal dollars (not adjusted for inflation).

Different Opinions

Both proponents and opponents of the state’s increased education funding make their case for how well Vermont is using the added dollars by pointing to the bottom line: test scores.

The New England Common Assessment Program scores highlighted on the Vermont Department of Education Web site show a greater percentage of the state’s students achieving proficiency in math and reading than the NAEP tests show. The state’s NAEP scores are consistently above the national average. Talbott said greater accountability measures justify the increased spending on personnel.

“Vermont always does well nationally on test scores, but to do even better means more work must be done to help students in the subgroups,” Talbott said. “This generally means more intensive services, which many times are staff dependent.”

Woolf’s analysis of NAEP scores compared Vermont’s scores unfavorably with the national average for white students: The state’s population is 98 percent white. Vermont students have outgained their peers in fourth-grade math scores but have just kept pace relative to the national average on all other available NAEP results.

“We’ve always spent 20 to 25 percent more than the national average,” Woolf said. “There’s no statistical or quantitative way of showing we get anything for it.”

Ben DeGrow ([email protected]) is a policy analyst for the Independence Institute, a free market think tank in Golden, Colorado, and author of the recent publication, “Counting the Cash for K-12: The Facts about Per-Pupil Spending in Colorado,” available online at