The Rural School and Community Trust (Rural Trust) is a national nonprofit organization dedicated to improving student learning and enhancing community life in rural areas of the United States. Its seeks to do this by strengthening relationships between rural schools and communities and engaging students in community-based work. The Rural Trust was founded in 1995 as the Annenberg Rural Challenge. Today it works with more than 700 rural schools in 35 states.

The Rural Trust's program includes a capacity-building program and a policy-program. The capacity-building program encourages rural schools to design and implement place-based learning initiatives. Place-based pedagogy is rooted in a belief that when school curriculum incorporates the history, culture, ecology and economy of local communities, both communities and schools are strengthened in significant and sustainable ways.

In Vermont, the Vermont Rural Partnership (VRP) is one of the Rural Trust sponsored initiatives. The partnership, founded in 1996, has grown to include 16 small schools and communities. The goals of the partnership mirror those of the Rural Trust. The partnership works together to strengthen schools and communities by building relationships, using the community as a resource and serving community needs. More information is available from Margaret MacLean, the principal of Peacham School, a VRP site.

The Rural Trust policy program has similar goals as the capacity-building program. This program seeks to inform the general public, policy-makers and rural schools and communities about public policies that benefit or hurt rural schools and their communities. As part of its advocacy efforts, the policy program works to engage rural citizens in becoming more effective in public deliberations. The Rural Trust policy program sponsors research, advocacy efforts, and publications designed to help rural communities be informed and act on policy issues affecting them.

There are presently four major issues that the policy program is focused on: standards and assessment, educational equity, school facilities and school governance. This research study is under the umbrella of the policy program as part of its ongoing investigation and work on understanding issues surrounding financial equity.

For many rural schools across America, the lack of equitable and adequate financial resources has been a significant barrier to excellent rural education. The Rural Trust believes that part of the strength and richness of rural America is rooted in the ability of rural communities to maintain local traditions, local control and local culture. The Rural Trust believes, however, that equity and local decision-making need not be mutually exclusive. This balance, however, is not easily implemented. The ability of any one state to achieve a workable financing model that balances local discretion and equitable state financing will benefit rural schools in other states.

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Our research efforts included several phases as outlined below.

Identification of appropriate research questions. One initial task of this study was the identification of which research questions to ask. Our primary research parameters were quite broad. We knew we were interested in equity and the impact of Act 60 in this regard. This meant that we needed to define what we mean by "equity."

"Equity" is often used colloquially and with a range of meanings. For purposes of this study, we went back to the original Supreme Court case (the Brigham decision) and to the legislation, Act 60, to see how the term had been used. Thus, our first task involved a careful dissection of both the Brigham decision and the legislation. The equity goals of Act 60 and the Brigham decision then became the basis for this research.

Data collection and analysis. The data came from state sources, either from the Department of Education, the Joint Fiscal Office or the Tax Department. Our goal was to locate and use the most accurate data available. In several cases we had a choice of what numbers to use. For example, different ways of calculating school district spending have been used over the years. We chose to use data that would be comparable over time and comparable across districts.

Statistical analysis. We contracted with a highly qualified independent statistician (Deb Brighton) to run the analyses for this study. Given the complex nature of the variables, we chose to run statistics that indicate relationships (correlation coefficients) rather than tests that determine causality. We asked the statistician to display the results in graph format for ease of presentation. We also consulted with her about interpreting the results.

Independent feedback. We asked two respected knowledgeable individuals to act as an advisory committee to review this report and give critical input. We requested feedback to ascertain that our report was as impartial, accurate, comprehensible and informative as possible. We anticipated a wide variety of audiences and wanted the report to be scientifically rigorous, but also readily understandable for the general public.

The following people served in this capacity:

Marc Hull--Educational consultant, former Commissioner of Education for the state of Vermont

Sally Sugarman--Professor of Childhood Studies at Bennington College, former chair of the State Board of Education

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This study defines academic achievement as the percent of students meeting or exceeding the standards on the New Standards Reference s (NSRE). The specific indicator used in the analysis was the average of the percentage of students meeting or exceeding the standards across seven subtests. Our analysis was limited to the fourth grade results.

There are several caveats to this analysis. The following is a brief discussion outlining potential limitations of the analysis.

First, we know that using an average of percentages is not the same as the absolute or scaled scores on assessment tests. Thus our definition of academic achievement uses a surrogate construct for actual academic achievement. We believe that though the indicator is in some ways crude, that it does provide a valid snapshot of students' performance. Also, the use of percentage of students meeting or exceeding the standards is a commonly used convention, both in Vermont and nationally for assessing academic achievement. We also realize that Vermont has been using the NSRE for only three years and that this is hardly enough time to establish trends.

In addition, national assessment research suggests that up to 70% of the variance of test results in criteria-referenced exams may be due to "cohort effects." Particular groups of children may do very well one year. The next year, an entirely different set of children take the exam. Comparison from year-to-year therefore needs to be done very cautiously. In this study, we felt, however, that probable cohort effects would be minimized by including the entire state in the population. Some cohorts in some schools most probably inflate the data, while other cohorts may deflate the data.

Another factor that may influence achievement results is the particular form of the NSRE taken. In 1998, students took Form C of the NSRE. In 1999 and 2000, Form D was used.

Another caveat is not evident in this study, but may become important in future years. Educators have recognized a phenomenon known as an "implementation dip" when beginning a new system of assessment. Researchers have found that the results of the first few years of implementing a new assessment typically show significant improvement. These encouraging advances, however, are frequently followed by a "dip" in the gains. If this occurs with the NSRE in Vermont, then the improvement noted from 1998 to 2000 may not be sustained in the next few years. Educators predict that after several years the effects of the "implementation dip" will level off.

And lastly, student academic performance is the result of accumulated experience for each student. Students' test results in 4th grade do not merely reflect the learning experiences in 4th grade, but also include learning from preschool, kindergarten, 1st, 2nd and 3rd grades. Thus, improvement from the provision of additional resources or instructional strategy for one or two years may not show up in changes in assessment results, at least for a while.

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Other Act 60 research areas. This research study focused on the three primary equity goals of Act 60 (student resource equity, tax burden equity and equity of student academic achievement). We recognize that additional areas of Act 60 are not covered in this research.

There are other financial implications of Act 60 not included here. For example, Act 60 has dramatically raised taxes for some people. We also know that second-home owners and businesses do not benefit from the income sensitivity provisions. We realize that other state taxes have increased to help fund Vermont's public schools. A complete evaluation of Act 60 would also include these areas.

A thorough evaluation of Act 60 would also investigate the impact of specific quality components. For example, Act 60 contains requirements for needs-based professional development, action planning, uniform data collection, increased accountability by the commissioner of education, and annual public reporting of school progress.

We chose not to research these issues in order to focus on the principal goals called for by the Brigham decision and included in Act 60. Both documents are fundamentally focused on improving equity for students--and ultimately we decided to ask research questions that reflect this primary goal.

Academic achievement analysis. As discussed in Appendix C, we are aware of the complexity of issues surrounding the appropriate use of achievement data. We recommend, therefore, that the state continue to research academic achievement using a variety of parameters.

For example, our academic achievement indicator averaged the percent of students meeting or exceeding the standards across seven subtests. Some educators have suggested that a more appropriate indicator might be the scaled scores on the NSRE, rather than percent of students achieving the standards.

The most rigorous analysis, however, will be longitudinal. At this point there are only three years of assessment data available. Only two of these years utilize the same test form. Thus we recommend that longitudinal student achievement analysis continue to be a priority of the state over the next several years.

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Property wealth of towns:
Defined as the equalized property value of each town. This is the total appraised value of all properties in each town after being adjusted (equalized) for "fair market" value. This equalization adjustment is determined annually by the Property Valuation Division of the Tax Department. The property wealth value was divided by the equalized pupil count.

Equalized pupil count:
Defined in Vermont statute 16 V.S.A. section 4001(3) and determined by the Department of Education. The actual number of students is adjusted to reflect grade level, poverty and number of students for whom English is not the primary language. It is calculated as the long-term weighted average daily membership (ADM), multiplied by the ratio of the statewide long-term ADM to the statewide long-term weighted ADM.

Spending per pupil:
Defined here as the "local education spending" (LES) plus donations, as reported to the Department of Education. This measure is not perfect. First, there may be errors in the reporting of donations. Second, there was a change in the state aid for special education and transportation under Act 60. The measure chosen slightly underestimates the increase in total spending between the two years (FY 98 and FY 01) in towns that had a low foundation share under the old system (i.e., towns with high property-wealth per pupil). However, within either year, it is comparable between towns.

Local education spending (LES):
Defined in Vermont statute 16 V.S.A. section 4001 (6) as the amount of the school budget "which is paid for by the general state support grant and from local share property tax revenues. (It) does not include any portion of the school budget paid for by any other sources such as endowments, parental fund raising, federal funds, nongovernmental grants or other state funds such as special education funds under chapter 101" of Title 16.

School property tax:
Defined here as the net school property tax paid on the homestead after accounting for income sensitivity adjustments and rebates. The homestead is a year-round residence and up to two acres, as defined by Vermont statute 32 V.S.A. section 5401 (7). In FY 98, the net school property tax was the school tax rate as applied to the homestead value. For homeowners eligible for the rebate program, the savings have been subtracted from the calculations of their tax. In FY 00, the net school property tax includes adjustments from the income sensitivity, as well as the rebate program.

Household income:
Defined in Vermont statutes 32 V.S.A. section 6061. With some exceptions, this is basically the combined adjusted gross income (AGI) for all persons in a household.

For FY 98, the Tax Department had information on the property taxes paid by homesteads for all homeowners who filled in the appropriate boxes on their income tax return. This data was linked to the AGI of the filer and, if the household applied for the rebate program, the household income. When various options were being analyzed to respond to the Brigham decision, the Joint Fiscal Office estimated household income by using the actual household income if known (predominantly for lower income households) and regression equations to convert AGI to household income for the others. The Joint Fiscal Office analysis of the relationship between household income and school taxes in FY 98 is used in this report.

In FY 00, we used the actual household income figures as reported by those who filed for income sensitivity.

Data used within each year are consistent. There are some differences between FY 98 and FY 00. Some household incomes were estimated in FY 98. Also, FY 98 data includes more high-income filers, while FY 00 generally does not include households with income over $88,000. If more high-income filers were included in the FY 00 data set, we would expect to see the "school property tax as a percent of income" drop slightly in the highest income group.

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The principal investigator of this study is Lorna Jimerson, Ed.D. Lorna is a staff member of the policy program of the Rural School and Community Trust. Questions about this report should be directed to:

Lorna Jimerson
221 Roscoe Rd.
Charlotte, VT 05445
802-425-2497
lorna.jimerson@ruraledu.org

For additional copies of this report, contact:
Christine Damm
Rural School and Community Trust
PO Box 68
Randolph, VT 05060
802-728-5899
802-728-2011 FAX
policy.program@ruraledu.org

For more information about the Rural Trust Policy Program, contact:
Marty Strange
51 South Pleasant Street
Randolph, Vermont 05060
802-728-4383
marty.strange@ruraledu.org

For more information about the Rural Trust contact the national office at:
Rural School and Community Trust
1530 Wilson Blvd., Suite 240
Arlington, VA 22209
(703) 243-1487

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The author would like to thank many individuals that offered their expertise and time to guide these analyses.

Deb Brighton, our statistician, provided professional consultation and thoughtfulness, as well as exceptional technical advice. I thank her for her unrelenting integrity and personal patience with my multiple, frequent requests.

I also very much appreciate the thoughtfulness of the review team, Marc Hull and Sally Sugarman, for critical feedback and constructive suggestions. Their insightful, professional comments have enhanced my understanding of this complex issue.

Many individuals working in several state departments have been very supportive of this effort and responsive to requests for data. The Department of Education, the Joint Fiscal Office and the Tax Department have all provided answers to questions, as well as access to data. I would also like to thank numerous other colleagues who have also provided me with thoughtful input and objective guidance.