SmartTranscript of HMW and HEd - 2025-06-16 - 9:00AM

[Chair Emilie Kornheiser]: Okay, folks. We are calling our joint hearing this morning to to order. This is a joint hearing of the House Ways and Means Committee and the House Education Committee for legislative council to provide provide us with a walk through of the, conference committee report of eighty four fifty four. These documents are printed in front of us. For those who would like to see it electronically, they are posted on both the website of house education and house ways and means. I apologize for being late. Somebody just asked me if that was supposed to be a power move. The fact is is on Friday, I had the job of gaveling in our token session. And when I banged the gavel down, I broke the base that the gavel hits. So I I took it home, glued it, brought it back, and then left it in my car, and then had to go back out and go through all the process there. Anyway, so we are ready to begin. For those of you from ledge council who are gonna join us at the front, I think due to time constraints, we'll go through the entire bill, and then the committee members can ask questions at the end. [17 seconds of silence] [St. James]: Good morning. That's St. James, office of legislative council. I think what would be most effective and efficient is if we walk through the side by side. How does that sound? Oh, great. Okay. So just to do a little level setting, this is a side by side. On the left is the as h four fifty four as passed by the house, and on the right is the report of the Committee of Conference on h four fifty four. Highlighting is meant to represent differences between the two bills. For those of you who don't see me testify often, I am horrible at highlighting. I will point out places where it should have been highlighted or the highlighting was erroneous, but it should be accurate as we can get it. I am going to summarize unless I hear a specific direction from the chairs to go into more detail. So the first section in both versions remains finding intention plan. The findings remain the same in both versions. The highlighting is just representing a chain as a sub a technical change I made to where the full citation for the Brigham case should appear in the, finding. Subsection b, again, remains intent and plan, but there are some substantive changes here. So in the house pass version, in subdivision b two, the language reads that it's further the intent of the general assembly in the twenty twenty six session, and then there's a list or a plan for what you all hope to accomplish in the twenty twenty six session. The general, flow of things remains the same on both versions, but the dates are different. So in the house passed version, you all hope to enact larger school district boundaries that would be effective July one twenty twenty seven, and the report of the committee of conference that year has been moved up to July one twenty twenty six. Language related to career and technical education remains the same with the exception of subdivision four. The words fully fund are inserted in front of career and technical education, so enact student centered updates to fully fund CTE, in the report of the committee of conference. And then also in the report of the committee of conference, CTE funding would be for available funds and it wouldn't exceed current spending levels is the intent in the report of the committee of conference. And here's a prime example of language I should have highlighted. Establish an appropriate way for pre kindergarten students. This is new language in the report of the committee of conference on the right hand side. Subdivision six there. Establish an appropriate way for pre k students as well as enact changes to the publicly funded pre k program that ensure costs are borne by the appropriate funding source depending on the age of the student and the pre k education provider. Again, this is all in the intent section for what you hope to accomplish next year. Still in the intent section, but moving but moving out of what you hope to accomplish next year and just broader intent, subdivision or sub yeah. Subdivision b remains the same, but in the house passed version, you had a goal of new initial school board member elections happening in March twenty twenty eight. The report of the committee of conference has that special election occurring in November twenty twenty seven. In subsection d, the house passed version has new school districts being operational, which means for soft look at the education of their resident students. On July one twenty twenty nine, in the, report of the committee of conference, that date has been moved up to July one twenty twenty eight. Subdivision three, I am just going I'm not going to, walk through this. This is, again, intent language that was added in the report of the committee. A conference, to ensure that the imposition of new statewide education tax rate contemplated by this act does not result in an increase of education property tax bills relative to Vermont's current education funding system for municipalities across Vermont. The General Assembly intends to mitigate or reduce property tax bills for Vermonters by among other things. And then everything after that on page four is essentially a summary of what is happening in this bill. Moving on to section two, the Commission on the Future of Public Education. Both the House passed version and the report on the Committee of Conference substantially, cuts back what the committee or the, Commission on the Future of Public Education is responsible for. The first big difference here is that the House passed version of the con the Commission on the Future of Public Education created a subcommittee to look at to make recommendations to you all for, new school district boundaries. The report so you can see here, we're adjusting the membership on the left hand side there, and then here are all the members for the subcommittee and the house cast version. The report of the committee of conference removes that subcommittee and therefore removes all of these extra members that would make up the subcommittee. And in section three, you'll see that the com the, report on the committee of conference creates a standalone group to do what the subcommittee is going to do. Both versions, again, substantially curtail what the commission is responsible for. The house passed version kept a lot of the same language and policy considerations, I'm on page ten, regarding making recommendations for what changes need to be made to AOE, what changes need to be made to the state board, what should be a function of local control and state control. And the report on the committee of conference removes all of that language and replaces it with brand new language starting on the very bottom of page ten. The Commission's recommendations to you all need to include necessary updates to the roles and responsibilities of school district boards and the electorate, including amendments to sixteen BSA five sixty two and five sixty three. Those sections are the roles and responsibilities of the electorate and school district boards. Going to page twelve, the next topic that the commission is required to make recommendations on is a process for community served by a school to have a voice in decisions regarding school closures and recommendations for what that process shall entail. We're gonna scroll back up, a little bit to page ten. There was language in the house passed version that is very similar. At the very bottom of page ten, that read including whether whether there should be a process for community served by an elementary school to have a voice. So the commission's language is what is the process, not whether. And it's not limited to elementary schools. It is, just school. And then the last, topic that the, commission shall make recommendations to you all on is a process for monitoring implementation of that this act in a manner that is transparent and public facing. The commission is still able to consider additional topics that they may deem relevant to their work. Their final report to you all is still due on December first twenty twenty five. And then in the house passed version, everything that appears in green starting at page fifteen is the school district boundary subcommittee. That language has been removed in the report of the committee of conference. And we're gonna focus on section three, the school district redistricting task force. This is very much a combination of concepts and language from both the house passed version and the senate passed version. The report of the com committee of conference. Again, I didn't wanna highlight all of this in yellow, so the section is is highlighted in yellow. But this is all new. As you can see, there's no corresponding language on the on the house task side. Membership of the school district redistricting task force will be five non legislative members. The membership of the five non legislative members and the appointment authority is the same as what passed the house for the comp the, subcommittee. So two members appointed by the speaker, two members appointed by the committee of committees, one member appointed by the governor. All of those five non legislative members need to be some combination of retired or former superintendents, school board members, or school business office. And then there are six legislative members, three from the house, three from the senate. They can't be from the same political party nor from the same school district. Powers and duties. In consultation with the commission of the Future of Public Education, the task force shall study and consider different configurations for school district consolidation and propose not more than three options for new school district boundaries. At least one boundary proposal recommendation shall consider the use of supervisory unions and supervisory districts, allow for the continuation of a tuition system, provides continued access to independent schools that observe geographic areas that do not operate public schools for the grades served by those schools, and to the extent practical, not separate geographic areas that contain non operating school districts as those districts existed on July one, twenty twenty five. Everything thereafter is what the task force needs to consider in recommending these boundaries to you all. This is truly a combination of the language that the house passed and the language that the senate passed. In the interest of time, I'm just gonna skip over reading all of it. The task force is required to work closely with the Commission on Future of Public Education for Public Engagement. The task force will have the administrative, technical, and legal assistance of the Agency of Administration, the Agency of Digital Services, the Vermont Center for Geographic Information, and the Department of Taxes. And they are allowed to hire one or more independent contractors to provide the services the task force deems necessary. The deliverables to you all remain, again, very much the same as what both the senate and the house passed, a report and maps by December first twenty twenty five. So the report needs to contain essentially an explanation of how they arrived at their boundary proposals, and then they need to include maps, with with those boundaries along with, on page twenty one, the information listed here, the average daily membership, locations of schools, etcetera. This language is largely taken from the house passed version. They are this task force is set to begin on or before August first. They're going to select co chairs from amongst their members, one a member of the house, one a member of the senate. And then there is compensation and per diem, appropriations. So fifty thousand to the agency of administration for the hiring of one or more facilitation consultants, one hundred thousand to the agency of digital services to cover costs associated with supporting the task force and if necessary for the purposes of hiring consultants, ten thousand to the agency of administration for per diem for non legislative members and ten thousand to the general assembly for per diem for legislative members. Section four remains the same as passed by the house, the school district voting board task force, or I'm sorry, in the report of the committee on conference, we're calling it a working group. In the House passed version, it was called the task force, but its charge in membership remains the same. This group is responsible for getting together this summer and fall, trying to track the work of the task force that we just walked through, and start to work on creating voting award recommendations based on the principles followed by the legislative apportionment board to achieve voting districts within each school district that are compact, continuous, and drawn to achieve substantially equal weighting of votes that meet the requirements of applicable state and federal law. They are set to begin in October of twenty twenty five. Obviously, their work will be dependent on where the task force is and their work, but they do not cease to exist until June thirtieth twenty twenty six. So if you if the task force makes recommendations to the general assembly and you all get underway in January, this voting board working group should be looking to the General Assembly and focusing their work on what the General Assembly is focusing on, should that align. A secretary of state, is providing the, and the agency of digital services, VCGI, is providing assistance. The secretary of state is going to be the chair, and then there are appropriations, added here. There were no appropriations in the house passed version. The appropriations here are fifteen thousand for per diem and compensation and two hundred thousand, the office of legislative counsel for the contracting and software resources necessary to create school district voting awards. Anyone who's gone through legislative reapportionment knows you need a mapping specialist and some specialized software, and that's the appropriation to cover that. This piece of scale intent language in section five of the report of the commission on future I'm sorry. On the, report of the committee of conference remains the same. Section six in the report of the committee of conference is class size minimums. These are different. The house passed version had class size minimums for k for kindergarten at twelve, for one through four at fifteen, and for five through twelve at eighteen. The report on the committee of conference excludes kindergarten from class size minimums. First grade classes have a class size minimum of ten. Grades two through five have a class size minimum of twelve. Six through eight, fifteen. And nine through twelve, eighteen. And then you can see kindergarten here listed in the type of courses that are excluded from class size minimums. Everything else remains the same. There's a waiver process, but there is one substantive difference here. If the the secretary determines that the school is not meeting class size minimums, I'm on page twenty six. The House passed version had the secretary making a determination if class size minimums were not being met over the course of two consecutive years and required the secretary to recommend the state board take action. The report of the conference committee has the secretary taking action if class size minimums are not met over three consecutive school years, and it's a may. The secretary may recommend that the state board take action, not [John Gray]: a shall. Yep. [St. James]: Section seven, failure to comply with education quality standards. This section remains unchanged from the house patch version. It basically says if the state board in, a response to a school not following education quality standards, thinks that there's some amount of consolidation that should be required if that consolidation would result in school construction costs in excess of the applicable district's capital reserve account. Consolidation is off the table as an option for the state board to order. Basically, until there is a state aid for school construction program up and running, the state board can't be ordering consolidation as a response to failure to comply with school with the education quality standards. Section eight in the report of the Committee and Conference State Board of Education rules report, I'm on page twenty nine, remains largely unchanged. It requires the agency or the state board to update rules, the, two thousand series education quality standards to ensure that they those rules comply with class size minimums that we just walked through to adopt standards for statewide graduation requirements. The term proficiency based as a modifier for graduation requirements has been removed in the report of the committee of conference version. The state board's required to update the independent school rules for, following class size minimums and report back to you all with a determination of what it means to be small by necessity, and that was passed by the house. And then in the report of the committee of conference, we add an additional requirement that the state board proposed standards for sparse by necessity. The school size intent, this is a piece of intent language passed by the house. It does not appear in the report of the committee of conference. Section nine as passed or as recommended in the report of the committee of conference aligns to section twenty one of the house passed version. The it requires the agency to make recommendations to the state board regarding statewide graduation requirements similar to the section we just walked through. The modifier proficiency basis removed from the report of the committee or the commission. Sorry. I'm never I'm not gonna get this right today. It's fine. The report. I'm just gonna call it the report. Great. Statewide school calendar. This agency is still required to make, to publish a statewide calendar and then make various report backs to you all in, December of this year. All remain the same. Section ten in the report corresponds to section twenty six, if passed by the house, remains the same, requiring the State Board of Education to essentially do a thumb set review of their rule, drop with a plan for updating them or recommendations to rules that are no longer necessary, and a, appropriation of two hundred thousand dollars to do that work. Prohibition on school closure and transition to paying tuition, which would have prohibited a school district from closing a school and then providing tuition. Instead, it would have required designation has been removed from the report. School construction, we're gonna skip fast now through a bunch of sections. School construction remains the same with a couple small changes, and I will point them out. All of this language that I'm scrolling through, I'm already on page thirty eight, remains the same. The special funds, I'm on page thirty eight. Section sixteen in the report corresponds to section thirteen in the house pass version. The only difference here is what the special fund is made up of. The house pass version had amounts deposited in this fund from the supplemental district spending reserve. In the report, that language has been removed because amounts amounts from the supplemental district spending reserve are now used for a different purpose, and John will get to that in his sections. And then in section seventeen, on page forty two, this is the award of construction aid. The actual award itself remains unchanged just passed by the house, but language was added here, that reads that the, awards are subject to an annual appropriation for the purposes of this program. Again, section eighteen remains the same. Section nineteen remains the same. Twenty remains the same. Section twenty one, on page forty three. This is tuition to approve school. This is the section that dictates which schools a school district is allowed to pay tuition to. This language is a combination of language passed by the house and passed by the senate. So public schools in Vermont are still allowed to tuition. And if it's an approved independent school, it needs to be located in Vermont, needs to be currently approved, and needs to be located within a supervisory district that does not operate a public school for summer all grades or a supervisory union of one or more member school districts that does not operate a school for summer all grades has to have had at least twenty five percent of its total student enrollment composed of students attending on a district funded basis and that needs to comply with class size minimums. The language highlighted at the very top of page forty four came from the, senate proposal of amendment as did the twenty five percent, and the corresponding school year. Everything else remains the same as the house passed version. The tuition transition language remains the same. Essentially, students, can graduate from their school if they're currently enrolled in a school that would not qualify for public tuition under the amendments that we just walked through. Section twenty three in the report is a combination of language, intent language from the house class versions from sections twenty and twenty three, but there's it's collapsing them into one section. I'm sorry. Section twenty and twenty two. Section twenty four remains the same. This is an amendment to the State Board of Education appointment process. The governor currently appoints all ten members. This change would have the senate and the house appointing each one member. So the governor would appoint eight members. That includes the two student members. Section twenty five is the transition for the that new appointment process, and section twenty six is the conforming amendment. The governor retains removal authority over all state board appointments regard or seats regardless of who made the appointment, but the original appointing authority would fill a vacancy created by a removal. Section twenty seven, tuition. This is how tuition is calculated. So we walked through who's eligible for tuition. Now we're walking through who is how that tuition would be calculated. And this section has two separate contingencies, effective contingencies for for two sets of subsections. So subsection a, I'm on page forty eight, remains the same as past both the house and senate. Essentially, tuition in your future state would be the base and the weights following a student. That would be the amount of tuition a student is bringing with them to a receiving school. That remains the same in subsection a. The report adds a subsection b. So in addition to the tuition amount calculated in subsection a, which is the base and the weights, a receiving school may charge an additional fee in the amount of five percent of the base. So not weights, just the base, for each student attending the receiving school in grades nine through twelve if the following conditions are met. The receiving school has to receive approval from the State Board of Education to charge the additional fee And the electorate of each school district with at least one student attending the receiving school has approved supplemental district spending for the purpose of this additional fee and in an amount sufficient to cover the additional fee. And for the purposes of this subsection, a receiving school would not include an approved independent school functioning as a CTE center. Subsection c indicates that a school that elects to charge an additional fee because it is promissory, not mandatory, is required to charge the same fee to each school district that cannot charge different school districts different fees. So if it charges four percent, it needs to charge four percent across the board. Subsection d says, notwithstanding subsections a, b, and c or any other provision of law to the contrary, the district shall pay the full tuition charge at students attending an approved independent school in Vermont functioning as an approved area, career, and technical center. That is actually current law. So subsections a, base and weights follow the student. And d, if you are an approved independent school functioning as an area CTE center, a and d would take effect contingently on July one twenty twenty eight if new school districts are operational. You have received what we're calling the forty five a report, and John will walk through that. And you have been given an opportunity to enact updates to the funding formula based on the forty five a report, which is a report back to you on updates to the foundation formula. Subsections b and c are also contingently effective on July one twenty twenty eight, but their contingencies are different. B and c, which are about the additional fee for high school students, are contingently effective on July one twenty twenty eight if your school districts are the new school districts are operational, if the forty five a report contains evidence that it costs more to educate a high school student, And if the general assembly fails to enact secondary student weights, that's when b and c would take effect. Conforming repeals related tuition remain the same and section twenty eight a in the report is brand new. It is requiring the state board to adopt the rules on or before July one twenty twenty seven to govern that additional fee approval process. And those rules need to require that the school to demonstrate an additional fee is necessary to educate the specific students the fee is being applied to and that the fee will be used to educate such students and not used to shift costs elsewhere within the applicable school's budget. Section twenty nine and thirty in the house passed version were related to all adult education funding. They do not appear in the report. That language traveled in the budget and passed. It's a little different than how it appears in the house passed version, but the general concept is long now. State sections twenty nine. There is highlighting there. I'll come back to it. Twenty nine, thirty, and thirty one in the report remain largely unchanged from the house passed version. This is requiring the agency of education to report back to you on the state of special education delivery and funding and costs associated with special education. There's one addition in the report of the committee of conference in section twenty nine, and that is a requirement that the report back to you all include recommendations for reducing the growth and extraordinary special education reimbursement costs, which shall include recommended legislative language to accomplish any such recommendations. The strategic plan requirement remains the same and the position appropriate created and the appropriation along with it to assist the agency in creation and implementation of the three year strategic plan remains the same. Section thirty two and thirty three do not appear in the House passed version. They did I'm on page fifty eight. They did appear in the Senate passed version, and they remain largely unchanged other than updating the amounts of money to correspond to different appropriations throughout this bill as passed the House. So two million eight hundred and sixty five thousand is appropriated from the general fund to AOE in fiscal year twenty twenty six to support education transformation. Two hundred thousand dollars of that is to support school boards transitioning to new governance models. Five hundred sixty two thousand five hundred is for the positions established in section thirty three that we're gonna walk through next. And two million one hundred two thousand five hundred is for contracted services to support school districts with the enumerated, topic. Section thirty three creates, five permanent I'm sorry. Limited service classified positions taken from the position pool within a pool within AOE. And you can read the titles of those positions themselves and that is all of the education policy section. Thank you. Thank you. Oh, John's already in the rain. Look at those. [John Gray]: Hello? John Gray. Office of elected council. Okay. Screen share. [19 seconds of silence] So shifting gears, we're jumping into the education finance sections, and we're starting with section thirty four. This is your title sixteen state funding of public education sections. No changes proposed in the conference committee report here, but this is this is just the section that sets out your base amount. That's your fifteen thousand thirty three per pupil, and it sets out the definition for your EOP, your educational opportunity payment, which is that aggregate figure that tracks the base at least for this rate of long term membership. Section thirty five is your waiting section, and there are a few changes that have been posed here. So the first that you're gonna see is child with a disability is the definition that we use to talk about special education weights. And while these look wildly different, the they aren't as different as they look. The real change that you see in the conference committee report is that the special education weight is not gonna be made available at the pre k level, and that's what the change on the right side is doing. Any child eligible to receive special education who's enrolled in any of k group twelve. So pre k would be excluded from the special education weight under this proposal. You'll recall that this section is divided into kinda multiple tasks that have have to happen. So one is that people's counts have to be tallied up within particular categories, and then weights are applied to peoples within those categories. So the change you see here is not indicative of weighting happening for all grade levels. This is just ensuring that counts happen for the grade levels. It's not applying weights to those. Some stylistic changes that you see highlighted here that to who, no substance of change. But let's jump down to the actual weighting, and I'm gonna talk about the weights that you do have here, including those for which there's conformity. So the first change that you see here is that a pre k weight is applied in the conference committee report, and that's that negative zero point five four figure. So what current law is, so this is a lesser figure for students enrolled in pre k. And I think the intention or the thinking here is that you're gonna look to updates to pre k next year. You're gonna see some, reader assistance type changes calling out what the actual weights are. So economic disadvantage weight, it's a non substantive change, but hopefully easing the reading of this section. So you have your same economic disadvantage weight as past the house. You have the same distinguished EL proficiency weight. So based on their English language proficiency level, you have the same EL newcomer slight weights, and you have the same special education weights as past the house. So the pre k weight is the sole update substantive update to the actual weights themselves. We do have another update in the recalibration section. So this is a subsection of the waiting section that says to every five years, recalibrate the inputs to the foundation formula, which are your base plus weights. Obviously, you had inflationary factors as well. And the update that you have here is that, the comms committee report calls out you need the advice and consultation of a professional judgment panel convened by the agency of education when doing this recalibration. Section thirty six, I'm gonna hop quickly through these. This is just your education payments. This is picking up the new ed finance concepts and striking old concepts. No change in the conference committee report. Section thirty seven, you're gonna recall these support grants, which are provided to small schools and sparse school. The change that you see here is that as past the house, we had small schools and we had grants that were going to sparse school districts. So the determination sparsely was being made at the school district level. The concept that you see in the conference committee report is trying to get at a particular a a tighter geographic area so that the location in which the school is actually situated is sparse itself. So you're picking up sparse schools. So those are schools that are contained within sparse areas, which is a city, town, or incorporated village where you have this fewer than fifty five persons per, land area, the geographic boundaries. And then a sparse school similar to the small school concept where you have both a check on a substantive check. You know, know, small school has fewer than hundred pupils, but it also has this state board determination that it beats small by necessity. We have a similar structure for sparse schools. So the sparse school needs to be located in one of those sparse areas, but it also needs to be determined by the state board to be sparse by necessity, which you'll recall back getting in the section talking about the state board rules. Some just some conforming changes in the actual call out for the grant. Those grants are being provided to the school district, but they're being provided for each sparse school within that school district. So conforming changes from the from the, discussion agreement this time. Section thirty eight, no change to this section. This is just picking up the supplemental because you're spending revenues in the, edge fund itself. And when I get to the reserve, I'm gonna talk about one change that does happen in terms of the path of the money. Section thirty nine is just cleanup changes to the, budget stabilization reserve. No changes there. Section forty, similarly, aligning the same payment schedule as it exists in current law for the new EOP concept and no change proposed in the conference committee report. Section forty one is the vote that is taken. You'll recall there's no change proposed in the report of the conference committee, but just to call out what's happening here, the EOP is set based on a mathematical formula, but if a school district is voting supplemental strict spending, this is what their their ballot would look at look like. This and this budget would include what the tax rate would need to be to raise those extra funds locally. Section forty two does have some substantive changes proposed, and there's actually something I should have put at the beginning of my section, which is you're gonna notice the highlighting for the effective dates. In the as passed by house timeline, the foundation formula rollout happened fiscal year thirty, so that was starting July one twenty twenty nine. What you're seeing proposed in this is a fiscal year twenty twenty nine rollout, so one year faster. That would start July one twenty twenty eight. Section forty two does have a few updates to this is your conforming reveals for moving to the foundation formula along with you'll recall that in adding the special education weights, subsection c here had repealed the census block grant, but what you see additionally here is the appeals of separate categorical aid for English language learners. Now that you have that tiered EL weights, that's being pulled back. So you can think of that as a conforming change, not so much of huge stuff instead of change from a past the house. And similarly, the merger supports for merged districts, this section wouldn't operate at the point that you had the foundation formula because the school differ districts referenced wouldn't be in effect, so you don't need to call out those partnership or grants. Section forty three of your supplemental district spending reserve, Beth, foreshadowed this, and I also mentioned that the ed fund had some changes resulting from this. So this reserve is situated within the ed fund, and the idea is that it captures any extra funds. It recaptures any extra funds raised locally through the supplemental district stem. In the house passed versions, those would water fall at the end of the year into a school construction aid special fund and what the post years, they would no longer go that path. Instead, they would be unreserved at the end of the year, so they would go up to the ed fund. And in the following year, they would be made available to that year's statewide education property tax rate. We'll see some changes in title thirty two related to this as well. Sections forty four and forty five are reports. No changes here. AOE transportation reimbursement and JFO inflationary measures of pre k. Section forty five a, Beth also foreshadowed this. This is, some of the contingencies in John receipt of this report and the allowance for the opportunity for the general assembly to pass legislation into consideration of this report. So this is a general report on the foundation formula. JFO's contracting with folks with expertise in Vermont's education funding system to recommend updates to foundation formula here to move from special ed weights based on disability categories, which is what we've seen above, to reliance on the provision of special ed services, and to update any others deemed to be empirically necessary for an adequate and equitable education, taking into account the new consolidated school districts. The contractors would additionally make recommendations regarding suitable geographic measures for determining sparsity. We talked about city, town, incorporated village, but to consider what the right measure should be, whether it costs more to educate a secondary student, and if so, an appropriate weight. And you'll recall some of the contingencies that Beth talked about in the tuitioning section would be tied to these pieces, and then how to account for the provision of CTE within the foundation formula. Those would be submitted to committees of jurisdiction December one twenty twenty six, and the sum of four hundred thousand is appropriate to JFO to hire. And this is gonna be here one or more contractors. So ensuring that the the number here that's included is high enough that you can choose among among contractors. And substantively, at the end, the contractors would be required to train JFO and a AOE on those methodologies. Recall the recalibration subsection of the waiting section. You need to know what the methodologies are to be able to recalibrate those on a regular basis to pick up any changes that have happened. Section forty five b that's proposed in the company report, this is a transitionary measure or your EOP. And, basically, across the first five years of the transition, it's moving school districts from their f y twenty five ad spend as adjusted for inflation to the EOP in increments of twenty percent, basically, whatever the gap between that head spin and the EOP would be. So gradually moving folks to their EOP. The piece that I would note here that folks may not have seen, in the past, because I think this concept has been discussed, is subsection b is dealing with a tuition transition, and this is just ensuring that the tuition measures, which make money follow the student right, they pick up the a base as adjusted for that adjusted EOP. So because you're getting different EOPs in those first five years, ensuring that the base that's captured in your tuition measures would reflect that adjusted EOP. That's what subsection b is doing. Section forty five c, really simple. This is just delaying the ad fund advisory committee first first meeting to July fifteen of twenty twenty six. Okay. Section forty six, we're actually jumping to title forty two. So this is the implementation of supplemental district spending in the imposition of your tax rates. Again, same timeline we're talking about that f y twenty nine rollout. I do wanna call out the highlighting you see in these sections where there's struct language. This is just cleanup on our side. There's some definitions that aren't yet effective, so making sure we reference the definitions that will be effective at the time of the foundation formula rollout. So none of those that you see highlighted there are anything to worry about. That's all gonna be struck language. The substantive changes you start to see on page eighty. So the first is maintaining existing loss statewide adjustment. We were published from last year, but just making sure that we maintain that concept moving forward so that it reduces the fluctuating effects of the CLA on folks' tax rates. The real change that you see here is for this new concept of adjusted equalized education property tax grand list. This matters because when we talk about the equalization measures for the supplemental district spending, we we'd have to look at the taxing capacity of all the school district to identify the school district with the lowest taxing capacity. And when we do that, we need to make sure that the actual grand list you look at is reflective of the taxing capacity, the the property tax base that's actually available. And so the adjusted grand list is, accounting for the homestead exemption. So it's just capturing the proposed homestead exemption later in the bill. Okay. The definition of supplemental district spending, you'll recall that this has a cap in the s pass by the house. That cap was ten percent of a district's EOP, and what you see in the report conference committee is five percent of the product the base amount on the school district's long term membership. You could think EOP is based on weighted, and what we post here is a five percent cap, but it's reflective of an unweighted aggregate student count amount. So a a five percent cap on supplemental district spending, but we're gonna come to some transitionary measures related to that. And just note that the supplemental strategic spending yield picks up that statement. So section forty six a, I know that there would be a transitionary measure for the cap as well. So in the first ten years of the law of the foundation formula, that five percent cap would actually be a different figure in your first five years. So until school districts are fully transitioned to their new EOP in f y thirty three, you would have a ten percent cap, and then gradually that would be moved down so that in fiscal year twenty thirty eight, you would be at that five percent statutory figure. Section forty seven is the imposition of this, taxes to raise these funds. First is the setting of the state of tax rate, and accounting for the reserve, provides for buying down taxes in following year. So that's the highlighted numbers that you see here, and then a default tax rate that wasn't present in the house passed version. So the default tax rate, if in general, something failed to pass the tax rate, would be a hundred ten percent of the preceding fiscal years, say, by an education tax rate, but the idea that you would be forced to take action and actually actually pass the statewide education tax rate. Note that for the classifications that are set out here, Kirby will speak to these, the non homestead apartment has been deleted, and then conforming changes for the statewide adjustment and picking up existing law references to the secretary of education rather than updating permission of taxes. I'm just gonna go real quick now because these are a lot of conforming changes throughout these sections. Section forty eight is your December one letter picking up the statewide adjustment there, so performing technical changes and picking up your adjusted equalized grand list. We talked about that definition just now in your December one letter, so ensuring that we're capturing actual taxing capacity. Section forty eight is a tax rate transition. So these are measures that are included to ensure the tax rates don't jump up for school districts. So similar to the EOP transit, we're identifying a gap between your pre foundation formula rollout, homestead tax rate, and what the homestead tax rate would be in the first year of the foundation formula rollout, taking that gap, dividing it into five, and then applying set adjustments to the homestead tax rate across the first five years or four years of the foundation formula rollout in accordance with that gap. Conforming changes in forty nine fifty and fifty one unchanged. We're jumping to the homestead exemption creation and appeal to PTC. You're gonna see what looks like dramatic changes here, but they are not so dramatic. It is just a change in stylistic presentation, and I'm on page nine zero five. So what are the actual differences between these two? The stylistic difference you see is that the house's proposed homestead exemption has been presented in the form of a table now, so that's why it looks wildly different. But the actual substance of change is one, that a cap on the health site value against which a homestead extension is made available is included here. That wasn't in the as passed by the house version. So a a capital hundred twenty five thousand dollars in house site value, And then one tweak to the income brackets for which the homestead extension is made available. There have been a twenty five thousand to forty seven k figure and a forty seven k to five thousand, so it produced this really small income bracket that's been changed here. Twenty five to forty k, forty k to fifty k. Super quickly through the remainder, I think there's no remaining changes throughout the homestead exemption sections. We can jump all the way down to page one zero six, and what we're seeing here is a report back from the Department of Taxes, December fifteen of twenty twenty six, that would set out an alternative onset extension structure in the event that the one that's proposed here, could be improved. That would minimize proper tax impacts for homestead property tax owner property owners and benefit plus. We would just the tax department also include with its proposal recommendations for replacement adjustments and the an analysis of implications of moving to a hundred seventy five k as your highest income against which income system measures are made available. Fifty four, fifty five, fifty six, no updates there, and they're conforming changes anyway. And then section fifty seven is your ad funded by the committee directives. We're just doing conforming changes on the right hand side in the conference committee report to pick up the new foundation formula systems and then the actual changes you see here. How to maintain interdistrict equity. These are gonna be recommendations in the new foundation formula system. Whether weighted foundation formula limits lead to improved outcomes across all populations. And then in the house past versions, we had transitionary future contingent measures for moving to an evidence based system in section fifty eight, fifty nine, and those have been deleted. And with that, I am done. [Chair Emilie Kornheiser]: Thank you, John. [St. James]: Thank you, John. We're gonna go to Kirby, and then all the attorneys act and JFO actually need to go to the then it was having a caucus as well. Kirby, can you make that much larger? [Kirby Keaton]: Yes. I can. Good morning. Kirby Keaton, office of legislative council. I'm gonna go much larger. So I'm picking things up on with section sixty and sixty one. Those are sections relating to the creation of a property pack classification system. As John said, the classification section, and when we get to it, the the changes to reappraisals in the bill in the conference report are being moved up a year. So you should just note that generally. And there's also some contingencies to those taking effect. So section sixteen fifty one, as I mentioned, relates to project size classifications. John mentioned already that the nonhomestead apartment classification is being removed in the report, which leaves the only new category being nonhomestead residential. That is a classification that's meant to get at residential properties that are not being used as homesteads. So second homes, short term rentals, vacant property. So that's a change for the report. The only other thing for those sections is the the contingent effective date. It's set up so that if the general assembly does not act to set up the new system or education finance in the next couple of years, then the classifications won't happen. Next, we have section sixty one a, which is the section on the transition from, like, a setup here for the classifications. So in twenty twenty seven, the Department of Taxes would have to gather some information to set up the system. That was moved up a year from the house version, and also contingency was made for that that it if you don't set up the maps next year for new school districts, then the tax department will not do this setup action for classifications. Next is sixty one b. It's the implementation report for tax classifications. There were there was one subsection added to that. What this subsection does is it has the Department of Taxes consider If you noticed in John's sections, there's little multiplier factors in the applicable statute for when you actually apply a tax rate for reclassification. In the bill right now, that's one point o for everything. Presumably, those modifier those multipliers will be changed in the future so the different cost of property can be taxed differently. And what this does is have the Department of Taxes report back on suggestions for multipliers that would, number one, possibly have that new category of non homestead residential properties cover the cost of the homestead property tax exemption that John walked through. And, alternatively, the department would look at multipliers that would possibly mitigate the forecasted property tax increases on homestead property taxpayers caused by this act. So, basically, just giving the general assembly a couple of options in the future for ways to adjust those multiplier to according to the policy decisions that you want to make in the future. Sixty one c is the it's just the minute template, which about those rate multipliers that the intention is that the entire tax classification system will be reevaluated at the same time. Those multipliers are set later or is or proposed to be set. And there's a perspective repeal of the tax classifications, which I think I already walked through, basically, that if there's not well, no. This is a different one. There's we've got multiple contingencies here. For this one, the tax rate if the tax rate multipliers are not set by July first twenty twenty eight, classifications will not happen. We'll never take it back. The next parts, we start to get into regional property assessment districts and changes to map reports of the future. That was moved up one year to start in twenty twenty nine, and that is all for the transition for that. There's some highlight language here that's which is just for clarity. Moving on to page one seventeen, we're getting into the there's a regional assessment district stakeholder working group that's in both of these, and the and nothing has changed with that. Section sixty five through, I think, ninety or so, and that's passed by the house version where a bunch of conforming changes to, in the future, move Vermont's brand list date from April first to January first. That's the date in which property values go down on the books of of the value as of that date. That move is still expected to happen. There's still a report for the Department of Tactic to come back and make suggestions about conforming language. The senate had taken out adding that to the bill at this point, but my understanding is there's still the expectation that will happen. It's just not in the the reports now. So going through all those conforming changes, we just have miscellaneous provisions, and they have not changed except there was one technical change added at the senate that's in the conference report. It was not in as that's on the health version. It's section sixty nine and it relates to fixing the way that math is worded relating to the statewide adjustment. That's per a lot. And that is it. [St. James]: Thank you, Kirby. [Chair Emilie Kornheiser]: Alright, folks. Given the fact that the bells are ringing, we [John Gray]: will

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