School Finance Reform and School Quality: Lessons from Vermont

Abstract

In June of 1997, the elected leaders of Vermont enacted the Equal Educational Opportunity Act (Act 60) in response to a state supreme court decision in Brigham v. State. Act 60 could provide a unique opportunity to determine if dramatic school finance reforms like those enacted in Vermont generate greater equality in measured student performance. This paper represents an attempt to document the changes in the distributions of spending and of student performance that have occurred in the post-Act 60 period. This paper begins with an overview of the institutional structure of educational finance and provision in Vermont. One purpose of this overview is to make the argument that the Vermont case is particularly interesting because there have not been dramatic demographics changes that could obscure the impact of finance reforms. With this context established, I then use a panel of Vermont school districts that spans the pre- and post-Act 60 period to examine the extent to which there has been convergence across school districts in per pupil expenditures and in student performance. Spending has clearly converged; a definitive answer on the extent of convergence in student performance must wait until more years of data are available.