Vermont Legislature SmartTranscripts:

[Robin Scheu (Chair)]: Good afternoon. This is the House Appropriations Committee. It is Thursday, 01/29/2026. It's 01:05PM, and we are continuing our review of FY27 budget information.

[Kate Slocum (CFO, Agency of Digital Services)]: We have with us Secretary and CFO of

[Robin Scheu (Chair)]: the Agency of Digital Services to talk with us. And just want to also welcome Representative Scott Campbell. I don't know why I want to say Johnson all the time. Campbell from the Committee on Digital Services and IT, Energy and Digital Services. I'm going

[Unidentified Committee Member]: to melt today.

[Robin Scheu (Chair)]: Anyway, you are our liaison, and Marty is

[Kate Slocum (CFO, Agency of Digital Services)]: the one that has this budget too. So anyway, that's where we are. So if you want to introduce yourselves and take it away, thank you. For the record, Denise Rascous. I am the agency secretary for digital services and the CIO. And I am Kate Slocum, the chief financial officer for the agency for chief justice. Great. Welcome. So I know we had an opportunity last week to come in and provide you with an overview snapshot of what we talked about last year and some of the things that we've done. And now we are going to go through this year's budget request for FY 'twenty seven. Regina, can we take this slide? Sure. Perfect. I do believe that this is a recap, we can gloss over this if you would like, but this really aligns to the understanding of where you're going to see the changes through the budget, because this does look different this year than it has in years past, because we are moving through that evolution of change, focusing on those four key strategic areas of user experience, standards, predictability, and simplifying to reduce complexity. And those four bubbles that you're seeing is around, we've made changes in our leadership structure, our organizational structure. We have built a service based budgeting model here that you're going to see today. We have portfolio alignments that you're not going to see articulated in the budget asks specifically, but you'll start seeing more detail about that as we get into 'twenty seven, if this is the budget that's approved. We've done the portfolio alignment based on organizational structure first, not budget. And then the services creation, which is also mapped into one component of the budget that is considered to be core enterprise services.

[Robin Scheu (Chair)]: Core? Core enterprise. Core services. So I definitely may have some questions about those things that may be too early right now. But be forewarned. A few questions around.

[Unidentified Committee Member]: That sounds great. That sounds great. We're excited for those questions.

[Kate Slocum (CFO, Agency of Digital Services)]: So this next slide, think the committee is pretty familiar with. We try to share this every year. It's our overview. One of our dashboards we'd to share that gives a snapshot of the agency over the last year, it shows things like our total budget ask. So this year, we are asking for $96,500,000 in total to support the agency. But it also shows our breakdown of funds. We have more in-depth funds set to support our agency now. You'll see that there's a few new of funds on the list. Previously, we were primarily funded under the Information Technology Fund, which which is an internal service fund. Now we have a couple new internal service funds that will be supporting our budget. And that really we'll get into that a little bit later. But that really is to help define the areas of recovery. And the intent is to offer more transparency into what's going into ePolar services. The goal there in that is that we will come in here and talk about budget. That's only a third of the activity. So we've got a budget expenditure and recovery when you're dealing with an internal service fund or an internal service agency. And so we want to make sure that as we build budget modeling, that it matches our expenditures and consumption of IT right down to the ability to do full recovery on that, which is where I think that we have compartmentalized them in the past. Now we're really trying to bridge a gap between all of them.

[Robin Scheu (Chair)]: Okay. And I think that's where some of my questions are going to last. Yes. Perfect. Get through the overview then. Another

[Kate Slocum (CFO, Agency of Digital Services)]: item I want to highlight on this chart is the savings. Annually, we report on our savings to date. So in the nine years that our agency has in existence, we have saved the state now over $50,000,000 It's either in direct savings or cost avoidance from our efforts of working with agencies around their IT needs. Can you Is that on here somewhere? Bottom right. 56.6.

[Robin Scheu (Chair)]: Can you adjust it? Oh, there it is. Okay.

[Kate Slocum (CFO, Agency of Digital Services)]: Last week, we had a different number. And I just want to make sure that we addressed that before. Yeah, so when we first had put this out, this is in our annual report. And we had reported about $2,500,000 less of that number. We did some last minute reviews, and we realized that we had forgotten about some of the savings that had been identified through the modernization funded project of network modernization. We've been able to bring on a vendor for infrastructure services, and we've identified $2,500,000 in savings in one year alone as a result of

[Michael Nigro (Member)]: that procurement. So how do

[Kate Slocum (CFO, Agency of Digital Services)]: you know the savings? Savings compared to what? I don't Compared to spend in the past for similar Okay, Yep, for that service in the past. Reducing expenses kind of thing. Reducing expenses, reducing contracts. We have found that we have contracts of duplicate services that if we are, let's say, 20% consumed on 120% consumed on another, that's not cost effective for the state. So if we minimize down to one contract instead of two, we spend half as much and force consumption to be greater than a 20%. So we're not getting the return in that space. And so we've done that both incrementally and intentionally across what we would see as core enterprise services. We've not tackled that yet in the field services space. So when you're contracting, do you have a good pool of applicants for those?

[Michael Nigro (Member)]: Is there a good depth to that pool? We

[Kate Slocum (CFO, Agency of Digital Services)]: have a pretty robust contracting process. Not only do we post public leave, but we reach out to vendors that we know are operating this space, those that we have worked with before, but those that we haven't worked with that we know are operating maybe for another state or for a municipality. And we have some diversity in that space. Over the last year, Kate's been working on building up what we're calling management in her business office so that we can make sure we've got diversity both in the Vermont businesses that we can work with, as well as national or global businesses that specialize in particular areas because we are supporting statewide. Great. Awesome. Move on to the next slide. So again, some highlights. And I'll let Denise speak to some of them. But when we talk about the budget, we, like I had just gone over, we are looking at $50,000,000 savings overall from 2017 to 2025 for the years that we've been tracking. And just the last calendar year, it was $5,000,000 savings that we have been able to validate. We're to talk about the high lateness.

[Robin Scheu (Chair)]: Yeah, pardon me for this is not

[Kate Slocum (CFO, Agency of Digital Services)]: my area, but Mike, you

[Robin Scheu (Chair)]: go ahead and then I'll ask the question.

[John Kascenska (Member)]: Looking at your list of successes,

[Michael Nigro (Member)]: IHS CDDIS. It

[Kate Slocum (CFO, Agency of Digital Services)]: is part of a two phased child development division services. So it's their systems that they're running internally. We're already in phase two, but the completion of phase one was a success there.

[John Kascenska (Member)]: In general, AHS has been using a pretty old system. Where are we with that?

[Kate Slocum (CFO, Agency of Digital Services)]: In the SSO, I love acronyms. I'm still learning them, which is why I looked at her when I was like making sure I don't say the wrong words for the letters, but SSMIS, I think you're talking about, which is the child welfare system. Is that what you're talking about?

[John Kascenska (Member)]: I'm talking about the whole of

[Kate Slocum (CFO, Agency of Digital Services)]: There's a lot of

[Michael Nigro (Member)]: systems in

[Kate Slocum (CFO, Agency of Digital Services)]: HHS. And

[Andrew Stein (COO, Vermont Department of Taxes)]: it's all old.

[Kate Slocum (CFO, Agency of Digital Services)]: A lot of it is old. Some of it is not. And some of the old stuff works really well, and some of the old stuff does not work really well. So from a technical standpoint, we have some significant focus on the child welfare system, and that is in the final stages of contract, let's say, review negotiations. And that project will kick off imminently, which is one of the most critical systems right now. But there are a lot.

[Michael Nigro (Member)]: Could you give us an example of something that you've

[Kate Slocum (CFO, Agency of Digital Services)]: done that has contributed to the $5,000,000 to saving? Just to give us an idea of where some of those savings may have come from. Sure. But the beauty in the annual report is we actually list all of that so that you can see the cumulative list. What it isn't going to show is on the networking side where we were able to find that savings on both hardware of network infrastructure as well as some of the circuitry that we did in the consolidation of circuits. But some of the other savings was Some of the savings are around better license management, so identifying where our need for instance are for some of our enterprise products and letting go of that stuff. There's been we stood up an ACCD in the last year, and that presented with automated call distribution center systems. Oh, ACD. ACD, I'm sorry, not ACCD. ACD.

[Michael Nigro (Member)]: And

[Kate Slocum (CFO, Agency of Digital Services)]: that moved more towards true consumption based rather than the old model, which was licensing based.

[Michael Nigro (Member)]: There's personnel time. Reduced now. Production of the personnel time. Yep.

[Robin Scheu (Chair)]: Thank you. So last year, I don't know if this is the right place or not, so forgive me, but we're talking about savings and all that sort of thing. Last year, we gave you $7,000,000 in the budget and then another $8,000,000 that the contingent that you were able to use because we had enough money to do that. The $15,000,000 that had been originally asked for with regard to the SLA and the eighteen month delay and bill back, you got it. Yes. So I'm wondering, have you spent all that money? Where do you stand on that whole project? Or maybe you're talking about that later, but We are going

[Kate Slocum (CFO, Agency of Digital Services)]: to talk about it later. We're going to go to slide seven. Yeah, so in slide seven, we're to see in '26, that first bar represents what we are now calling CES, Core Enterprise Services. In the past, it was the ADS allocation. We're in these colors. So blue So the yellow is the $15,000,000 above the blue. So blue was allocation as '26 the $15,000,000 was the yellow. And if you recall, so SLA is the charge charge in the future fiscal for consumption in the current fiscal. So it's the credit card model, I'd like to call it, the deficit spend model. And if we were to move what would be fundamental foundational services that everybody's getting charged, but they're getting charged in a future fiscal year, they would in that transition year be charged twice. And so that was avoiding that charge. And so where that was applied to. And you can see that that investment at the 15 actually netted the results that we were looking for. So you see some of the demand went down. And then you're seeing some of the overall ADS budget went down. So that's a component to explain some of the budget reduction. There's other things, but the yellow represents that one time 15. And so that got us a little bit more leveled to where core enterprise services would need to be as a foundational allocation that's a lot more appropriate of what core services are for 12,000 users and all the agencies and departments across government. So I've

[Robin Scheu (Chair)]: heard you use core enterprise services, and I think I've heard you use allocation. Are those the same thing? Yes.

[Kate Slocum (CFO, Agency of Digital Services)]: Okay. But allocation is what we used to call it, now we're calling it core enterprise services. It is still an allocation based model. But this is why in 'twenty seven, you're seeing the light blue on top, because in our budget this year, we, for the first time, show general fund. So there is a $9,000,000 general fund recommendation to cover a quarter of the cost. It's just under a quarter of cost of what core enterprise services is or allocation. So that reduces the per user rate to the agencies as we work through the transition to this new model. So I think what I'm hearing is you need general fund because you aren't recovering your costs from the agencies. No. I think there's a recommendation from finance management as far as how the costs were spread across the 14 categories. So this is something I think finance and management could probably speak to, but ABS has never held general fund.

[Robin Scheu (Chair)]: Yeah, this is a big deal for us. That's almost $1,000,000 of general fund that we've never put into ADS. But what it sounds like, though, is that you're not charging enough to fully recover your costs if you need general fund.

[Kate Slocum (CFO, Agency of Digital Services)]: 100%. In a chargeback model, that is inherently the problem with a chargeback model. And we're charging back over 92% of the IT services prior to the FY27 year. And so not all of those services can be recovered, which is why I was saying we can't decouple budget from expenditure to recovery. So we, on slide nine, actually showed a great breakout of where the funding sources. So what finance management did, this is where I'd rather than speak to the details of the numbers, so we can see what happens in other agencies' business offices. So if money is allocated or spending authority is allocated to other agencies or anything, have ADS has zero visibility into that. We don't know where the funding source is coming from. But what they did was they looked at what we were charging. I mean, we've spent two years pulling the data and numbers on this. And they looked at, out of all of these areas, general fund is already paying for this, but then you use special funds and you use revenue or you'll use federal dollars to pay for some of it too, depending on who the agency is. So in order for them to make it clean across the board, they took what they were able to show as already existing general fund that exists within the agencies, and then they pulled it under an ADS funding source instead. So you should see that, I'm assuming, that $9,000,000 reduction in

[Robin Scheu (Chair)]: So you're looking across It was a shift. It should be a net neutral. Yes. Except 100%. So net neutral within the fund itself? Yes. Okay, I will ask them that question. It sounds like we may need to get them in here. So what would happen if you just raised the rate? Great question.

[Kate Slocum (CFO, Agency of Digital Services)]: So the rate is only tied to timesheet billing. So that's only one of the recovery models. And I ran an analysis, just food for thought, what if we did this, right? Looking backwards, which is hindsight's always 2020. The rates in 2017 were set at $84 and $80 If you looked at the rates and increased the rates at the percentage that the budget was increasing year over year, we would be at 114 and $119 today, giving you back $70,000 to general fund this year. The rates weren't touched. I wasn't here. I can't speak to why. But it is something that every year we have discussed that this is needed. This is needed because realistically going into FY '26, we show a $7,000,000 deficit because the cost of timesheet billing is one number. Our ability to recover is a difference of $7,000,000 We can't recover for what the true cost of those resources are.

[Robin Scheu (Chair)]: Because you're not charging rates that are higher

[Unidentified Committee Member]: than you.

[Kate Slocum (CFO, Agency of Digital Services)]: Because we don't have the ability to through the rates.

[Robin Scheu (Chair)]: That's only one thing. Ultimately,

[Kate Slocum (CFO, Agency of Digital Services)]: it's a decision from finance and management as to whether or not rates and there's a lot that falls into that. They have to look at the availability of funding for other offices around permitting or federal awards that are available. So it's certainly not something that's taken lightly. But we can recommend, and the decision comes from somebody.

[Robin Scheu (Chair)]: But you don't have to make the decision. Right. Okay. Wayne? So I'll look at this graph. Now, blue bars, what are the So

[Kate Slocum (CFO, Agency of Digital Services)]: the blue bar over time is allocation. And that's the word that we use. So that's been pretty flat since The US was created.

[Michael Nigro (Member)]: So the allocation was flat and your demand and your budget just kept going up. So you got $10,000,000 the yellow, and your demand and your budget decreased. But we don't know the magnitude of it. Is that a significant magnitude of decrease? And I'm assuming that demand

[Robin Scheu (Chair)]: time, people's time, or is that That's some of it.

[Michael Nigro (Member)]: That is budget, time. I

[Kate Slocum (CFO, Agency of Digital Services)]: think we're jumping around the slides, which is good because So then

[Robin Scheu (Chair)]: I would go back to

[Kate Slocum (CFO, Agency of Digital Services)]: slide six. And so demand is made up of three categories. SLA is one of those categories, and that is basically the things that foundational platforms and solutions that we offer that everybody can be a consumer in. So hardware and software. Hardware, software. There is resources built into that cost, but not from a timesheet billing necessarily. So it's just really the cost of the resource and the capacity. So SLA plus is every individual agency's consumption of those services beyond what we're saying is baseline. So if somebody says, that's great that you've got two fiber lines coming into our office building for redundancy, but we don't want double redundancy. We want triple we're going to charge them for the triple, and that'll show up in SLA. Timesheet is the other third of that. So that's both for project based time on IT projects, or it is the embedded teams. So that's the old kind of that old embedded model.

[Michael Nigro (Member)]: So that decrease in demand demand is represented by time, less time that's required from the staff, or is demand also use of the system?

[Kate Slocum (CFO, Agency of Digital Services)]: A little bit of both. So we took the resources that were redundant in field. So if somebody was doing desktop support or help desk services only for one agency, but we've already said, no, no, no, that's IT foundations, that's core enterprise services, we moved those resources over core because now they can support everybody. And they're not just supporting one. And the agencies that said, Nope, nope, nope, we want our dedicated support, they are still gonna show up in timesheet billing.

[Michael Nigro (Member)]: Those buyers represent like on the budget, proportional to your total budget? Yes.

[Robin Scheu (Chair)]: Thanks. John?

[John Kascenska (Member)]: The reason for not wanting that to be more centralized is because of

[Kate Slocum (CFO, Agency of Digital Services)]: This is how we always do things. To It's how it always was done. And so as we start centralizing the services and start looking at quality and equitable service for everybody, this is why we've done that, is everybody needs to have these services because it was creating some significant have and have nots, and it was delaying supportability, and we need to be able to manage to where that is and fix that. And that's what we've done.

[John Kascenska (Member)]: That's better.

[Kate Slocum (CFO, Agency of Digital Services)]: It is better. Yeah. Yes. And you'll actually hear people say, Well, when are you going to make the change? Oh, we made it in July. That's always We didn't charge for it, right? That's what the $15 was.

[Robin Scheu (Chair)]: So, jumping around again, if we could go back a page. This is good.

[Kate Slocum (CFO, Agency of Digital Services)]: This is totally how I operate. Jumping is perfect.

[Robin Scheu (Chair)]: Okay. Get me back to hardest thing. The ERP thing has showed up every year in budget adjustment or the budget, and we noticed it wasn't in budget. And in fact, you weren't in budget adjustment this year.

[Michael Nigro (Member)]: No, I wasn't.

[Robin Scheu (Chair)]: Don't know. Why did that happen? And then Telestuffies. So how come you weren't in budget adjustment?

[Kate Slocum (CFO, Agency of Digital Services)]: I don't know. I think that's a good question for finance management. And so interestingly enough, as we uncovered all of the terms that we use for everything, the existing system that Finance and Management and Department of Human Resources uses for Vision and BTHR, they call ERP. That's already an existing team. So what we're asking right now when we see ERP coming up is, is this the old one or is this the project that's the IT mod project? And so there is a distinction between the two because those are two separate efforts, initiatives, systems, and it is confusing.

[Robin Scheu (Chair)]: But isn't this a new This is

[Kate Slocum (CFO, Agency of Digital Services)]: the new one.

[Robin Scheu (Chair)]: Well, and the thing is that we allocated this money.

[Kate Slocum (CFO, Agency of Digital Services)]: So, Martha, you might have been There's two allocations.

[Robin Scheu (Chair)]: There's $18,000,000

[Kate Slocum (CFO, Agency of Digital Services)]: There's one that is There's $12,800,000 that was directly appropriated to agency administration with general funds. You might have remembered it was originally ARPA and then was general fund. So actually, a number of these projects had a first round appropriation that was directly appropriate to those agencies. And then this funding is to pick up in later phases. And we are actually if you look at the ERP project, we're at the cusp of switching over to this funding source. So we'll start seeing expenditures consumed with this appropriation.

[Robin Scheu (Chair)]: But this appropriation we did a few years ago.

[Kate Slocum (CFO, Agency of Digital Services)]: Yes. It's just

[Robin Scheu (Chair)]: been sitting there being carried forward?

[Kate Slocum (CFO, Agency of Digital Services)]: We went live with the project last year, about this time last year. And so we've been on track consuming from the AOA appropriation first. Right, okay. So this one was appropriated as part of the finance effort specifically, but it's a very complex project. The IT consultant from JFO has been very plugged in on this. It's showing in all of those status reports and updates, but we are about at the point where we're cutting over to the next half of the funding.

[Unidentified Committee Member]: You weren't here when Harvey Mrowick was in

[Robin Scheu (Chair)]: your Right, I missed that.

[Unidentified Committee Member]: Finance and management and he discussed how they have completed the first portion of this and on his budget it

[Robin Scheu (Chair)]: was 1,800,000.0.

[Unidentified Committee Member]: The budgeting portion of the ERP and how the new budget forms are different and how it all flows through and he remarked that it was much easier to use and they were able to get onto it and get onto it in time and was on time, on budget and it's delivering the results they want. But it's the very first part of the big ERP that we talked about. As other things get implemented, then this finance or the budgeting part will get integrated with finance and with HR and those kinds of things. And so they will gain the benefits. Right now it's great, but it doesn't really bring all those other features in yet, but it will. But that was the first part of that big project.

[Robin Scheu (Chair)]: So the money was set aside well before it actually needed to be used.

[Kate Slocum (CFO, Agency of Digital Services)]: I think it's been used.

[Robin Scheu (Chair)]: Well, 11.8, you have nothing. Correct.

[Kate Slocum (CFO, Agency of Digital Services)]: That's the other half of that. That

[Robin Scheu (Chair)]: we did, what was that, a couple years ago? Go ahead.

[Michael Nigro (Member)]: Just make sure everybody knows. It was appropriate probably like two years ago, but we actually didn't get approval for the funds until a year.

[Robin Scheu (Chair)]: It had to be approved by the right time.

[Andrew Stein (COO, Vermont Department of Taxes)]: Right, yes. So we didn't

[Michael Nigro (Member)]: actually get it until about a year.

[Kate Slocum (CFO, Agency of Digital Services)]: We got approval.

[Michael Nigro (Member)]: It was

[Andrew Stein (COO, Vermont Department of Taxes)]: like December 25.

[Robin Scheu (Chair)]: Okay, but it was set aside this time.

[Unidentified Committee Member]: But before you actually implement the program, you need to go through all of this to make sure you know what you want and that sort of thing do your business process to make sure what we want the program to do. And as Hardy described, it's a configuration process as opposed to a customization process. So you have to spend time doing that. Yes. Before you get the money. Right.

[Kate Slocum (CFO, Agency of Digital Services)]: We want to make sure we have the money before we go out to RFPs or sign any contracts.

[Michael Nigro (Member)]: Just as a point of reference, they had a name for new system of replacing vision. What was the name? Workday. Workday. Just a point of reference that you remember Workday is the replacement for the vision system, right?

[Robin Scheu (Chair)]: Right. And then there's adaptive planning or something.

[Kate Slocum (CFO, Agency of Digital Services)]: So they have to have a module within Workday. That's Right. The budgeting So we had Vantage, which was an independent standalone product. And we have VTHR, which is its own standalone system, but the same publisher as Vision. Okay. They're just two separate systems. And now we've got one that talks to each other, or is supposed to talk to each other in all of those different areas for everybody to automate a lot of what we spend a lot of time on spreadsheets with today.

[Robin Scheu (Chair)]: Yeah, my

[Unidentified Committee Member]: understanding, having watched this for a while, is that when I first got here before that, we had a lot of, I think I mentioned this the last time you were here, we had a lot of digital things that just sort of went. It didn't work. We had DMV, we had judiciary, Health Connect. We had all kinds of things that everybody was trying to customize it. The state's too small to customize anything anyway. But the point was that all of these things now are taking the time and it takes a couple of years of the plan. It takes a couple of years for the actual implementation, you have to do a little bit at a time and see how that works, then you have

[Robin Scheu (Chair)]: the next thing and you'll

[Unidentified Committee Member]: see how that works. And that's the way we really should do IT and ERPs. Because ERPs are pretty quick

[Robin Scheu (Chair)]: design for what it's going look like in five years is what you need in five years is different than what you need.

[Unidentified Committee Member]: Yeah, and you don't want to buy, you don't want to customize. Configure. It's on the cloud. And the issue also is that we have an ERP. Is this going to improve the ERP stuff that we talked about for Medicaid that was like thirty years old, ten years ago? Or is

[Kate Slocum (CFO, Agency of Digital Services)]: that a whole other different ERP? There are components to the federal fund model that will be built into this. So any of the foundational finance operations that government is responsible for will have that in there. But with the volume of activity happening over AHS, there are systems that are implementing right now that are resolving some

[Unidentified Committee Member]: of those issues. Right. So it's not necessarily part of the CRP will be a workday product. It will be

[Kate Slocum (CFO, Agency of Digital Services)]: An adjacent or connected system. Complimentary. Yes. But as far as the federal fund reconciliation or the federal fund reporting, the Workday system will be able to accommodate and account for that for everything that they have going on. So if there's a new federal program that comes forward, they will see that represented under the Workday system from a budget and expenditure standpoint and a recovery. But any of that service activity that has to be done by AHS to whoever the providers are or the systems, that will all happen outside of Workday. Okay, thank you. So

[Robin Scheu (Chair)]: the rest of these, we've seen some of them. So is the DMV project actually done now? Done.

[Kate Slocum (CFO, Agency of Digital Services)]: It's a long time,

[Robin Scheu (Chair)]: right? A couple of years.

[Kate Slocum (CFO, Agency of Digital Services)]: It was a very successful project. Couple of years, two commissioners, and it went very successful. And everybody's so hesitant to say that because we're waiting for the ball

[Robin Scheu (Chair)]: to drop, What's

[Kate Slocum (CFO, Agency of Digital Services)]: going But to happen it actually, had a great partner, we had a really great project team, and it's gone well. And there's been a lot of community feedback from Vermonters. And this isn't a set it and forget it system either. So right at Go Live, they were already looking at how do we, now that we've got both modules working, how do we make sure that things are working together and that we really are showing a level of efficiency for Vermonters to be able to get their vehicles registered and their licenses to them quicker. So I would definitely call this a success now. It's on our list of successes. It be my less successful registration story another time.

[Robin Scheu (Chair)]: In December. Yes. In December. I ended up having to send a check. I know. I had to find a check.

[Kate Slocum (CFO, Agency of Digital Services)]: Chess, I would have to go to them.

[Michael Nigro (Member)]: They're a piece

[Robin Scheu (Chair)]: of paper.

[Kate Slocum (CFO, Agency of Digital Services)]: Can talk about that offline, I'd be interested to hear. Yeah, it was kind of odd, because it looked really great otherwise. The good news is that the data is consistent. The work within all of the branches has been really streamlined. They're able to see things that they weren't able to see before in the old system. And nothing is ever without challenges. But from an IT standpoint, it is doing exactly what the business asked it to do

[Robin Scheu (Chair)]: and more. That's great. That's the way they all

[Kate Slocum (CFO, Agency of Digital Services)]: should be, right? We hope for that.

[Unidentified Committee Member]: We plan for that. Okay.

[Robin Scheu (Chair)]: Where do you want to go from here? We sort of jumped all around on you, but

[Kate Slocum (CFO, Agency of Digital Services)]: That's Okay. Yeah. So I think we should go to slide six and spend a little bit more time on this. So our budget has gone through some, as Steve already alluded to, some major changes. In the past, we had one appropriation. We had only a few funds that supported our budget. Now we need be enrolling to on the services we're providing, we have two appropriations. One is specific for the core services that we spoke to, the core enterprise services, so things like desktop, network services, cybersecurity services. There's a list of categories at the end of the slide deck that says exactly what they are and what their purpose is. Those are all housed under one appropriation. And the major fund under that is the Communications and Information Technology Fund, which we have always had. Now we have another appropriation that speaks to the demand side of our budget. And within that appropriation, there are three new internal service funds. There's one that speaks specifically to items that have been found in the SLA in previous years, so things like private cloud consumption, certain enterprise application licensing, the automated call distribution. Those are services that are available to all, but only some choose to consume it or have a need for it. So we bill it back based on their consumption. Then we have the second ISF, which is specific for timesheet services. This is where we were talking about that rate that's been around for going on ten years now. These are for ADS services where we have to assign staff to maybe a project or to support the operations in a certain system. We formally call the lobby staff embedded staff, but we call them field staff and professional services staff. And then our last one is bespoke. So I've talked about bespoke in this committee before. We're calling it customized services now. And really, what that is is when we need to procure hardware on behalf of an agency or some type of unique software, that falls into the bespoke area. And these would also be projects that would not show up in the IT mod funds, ones that would typically not have one time appropriation under general funds, so anything that would be in the federal funded space or other special funds that don't align.

[Michael Nigro (Member)]: So if I wanted to radio tech track gear with the GPS transmitters and have it automatically transmitted and added into a system, that's the kind of thing that would be one of the specialized jobs.

[Robin Scheu (Chair)]: Because the tax department isn't going to track gear.

[Kate Slocum (CFO, Agency of Digital Services)]: So,

[Unidentified Committee Member]: I think it's important to ask Kate to explain that we now have three more internal service funds, And this was all indicated by finance and management, how they should operate this. So, there's three more internal service funds, and agencies will be billed based upon what they use of those three. They will go into those internal service funds. But this core enterprise services is for everybody. And those services then are calculated by the user, personal user. ADS has so many or ANR has so many users and AG has so many users. By headcount then. Well,

[Robin Scheu (Chair)]: it's by user as a second. It's not user. Similar. Right. So

[Kate Slocum (CFO, Agency of Digital Services)]: we actually looked at it as domain users, so we wanted to make sure that we were using active user accounts so that that kind of equates to how you would provide those services and where those different touch points would be. So every active user would call the help desk, every active user would try to log on, so security would be able to see that. And so it was looking at it more from active domain users.

[Unidentified Committee Member]: So the advantage, as I understand it, based on the problems that you were uncovering before is that you can calculate ahead of time, you know how many users you have and so you can tell A and R your charge for enterprise services that's going to be a certain amount of money and they can build that into their budget for that year, not have to worry about it. So we're going to see, I think in budgets from various agencies, this for enterprise service on their budget will be higher than it had been before. But these other three areas will be much lower. And I think you figured out overall, it should come in about the same, but it will be divided up.

[Robin Scheu (Chair)]: Right, and the other, the second, the demand stuff will be variable depending upon if they're doing a special project or they have used timesheet stuff and all

[Unidentified Committee Member]: of that. And will those numbers be a year behind

[Robin Scheu (Chair)]: or forecast?

[Kate Slocum (CFO, Agency of Digital Services)]: So the one area where we still are going to see lag is in the SLA. That's still twelve months in arrears. It is something that we are looking at how we can change that. But for 'twenty seven, it is going to be 80, a number that's reflective of the past twelve months. But because we moved over to CIT, dropping that SLA number as dramatically as we did reduced the risk of the broader deficit spend. And so that's where coming into 'twenty seven, we're going to put some big focus on the timesheet billing, and we'd like to see the same model applied, which is service based cost, because security on top of a brand new modern platform is not a negotiable item. You must have security. And so if they didn't budget for it today, we can't recover for it because we're charging them time sheet. Tomorrow, it should be billed as the total cost of the service, but it should also behoove them, them being our partners and state government, but the agencies to say, well, we've built this system and wouldn't it be nice if we had other agencies using it? So now that reduced the total cost for that agency, but it also allows us to reduce the overhead, reduce the risk of yet another system standing up that would have been reused across the board. And that's also why we built the portfolio model too. So we've created some adjacency. Interestingly enough, AGO was one of the first offices to initiate that discussion with us with one of their tools for legal

[Robin Scheu (Chair)]: document capture. I'm going to turn

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: it to

[Robin Scheu (Chair)]: John. The SLA, you said you're still twelve months behind on that. So are people's SLA charges going to be up for a while while they're paying back paying stuff and paying current things? That was what those fifteen million

[Kate Slocum (CFO, Agency of Digital Services)]: dollars was to cover. For anything that wouldn't be considered CES, they'll still see an SLA, but we're not carrying forward any CES stuff in SLA today. They consume more, then they're gonna be charged more.

[Michael Nigro (Member)]: Okay,

[Robin Scheu (Chair)]: great. Thank you. John?

[John Kascenska (Member)]: So your last example, if an agency's built something, is that built internally with your support or contracted out or a mix?

[Kate Slocum (CFO, Agency of Digital Services)]: It could be a mix.

[John Kascenska (Member)]: Could be a mix. Let me give an example. Just quick one.

[Kate Slocum (CFO, Agency of Digital Services)]: So there, well, so the, I don't, I'm not a big fan of saying the names of vendors

[Unidentified Committee Member]: or products,

[Robin Scheu (Chair)]: because I don't

[Kate Slocum (CFO, Agency of Digital Services)]: want to endorse them by any means, but there is a legal case management platform and document management platform that the attorney general's office was using, and they were using it just for themselves. But given that it's a cloud service, it is built as a high priority of scale capacity based tool. So the more that you consume, the less cost it is per storage, per user, for whatever. So they owned the contract, meaning that all of the appropriations and the costs go under their business office. They don't And have a mechanism to charge back agencies for IT services. So at renewal time, they worked with us to negotiate what would it take for ADS to take over this contract, because state attorneys and sheriffs is looking to use this. And if we're all using the same contract vehicle and even same platform, it makes a lot of sense. And it reduces the cost of the AGO, reduces the incoming costs for the state's attorneys and sheriff's office. And then overall, it flattens the cost for taxpayers. So that's one of the examples there. If we're not the contract owner at ADS, there is no ability to build back. And so that's the other consideration that we're reviewing right now when it comes to the total IT landscape right now.

[Andrew Stein (COO, Vermont Department of Taxes)]: Thank you.

[Michael Nigro (Member)]: We used the word portfolio, for example, so you've got a system, say, that one agency is using, essentially they have multiple portfolios and they're all using the same software, they can't see each other's stuff.

[Kate Slocum (CFO, Agency of Digital Services)]: Not always.

[Michael Nigro (Member)]: You can use the same system so you don't have to build another system. Correct. That's you're heading for.

[Kate Slocum (CFO, Agency of Digital Services)]: Correct. Productivity suite, our email platform, 365, that is an example of that. Unless you intentionally share it, no one can see your stuff, and we're all in the same environment.

[Robin Scheu (Chair)]: Let's keep going where we can.

[Kate Slocum (CFO, Agency of Digital Services)]: John, can we go back to seven? It didn't really get to finish this slide. So this shows the evolution of APS's budget dating back to fiscal year 'twenty two. I could have gone back further, but it just made the chart. Yeah, that's fine. And this shows our shift in 'twenty six from our previous model that we were living under and then the successes that we're seeing in 'twenty seven as a result of that shift. You do see that there is an overall down in the ADS budget. We moved from $137,000,000 to $96,000,000 in our assets year. Some of that has to do with the changes of CES, but also some of it has to do with a

[Robin Scheu (Chair)]: lot of

[Kate Slocum (CFO, Agency of Digital Services)]: the bespoke activities will not live in the ADS budget any longer. And those will be living in the agencies where their direct appropriation resides. And so that's

[Robin Scheu (Chair)]: a philosophical shift? Or

[Kate Slocum (CFO, Agency of Digital Services)]: why is it like that now so I think that's a fantastic question for finance and management I've

[Robin Scheu (Chair)]: got a list now he's mentioned that yesterday no didn't talk about that

[Michael Nigro (Member)]: So will the agency be contracting for that work?

[Kate Slocum (CFO, Agency of Digital Services)]: We will be contracting for the work, but the agencies will be paying the bill for that work.

[Robin Scheu (Chair)]: So they have something they need, you do the contract, they pay the bills. How do you know they've paid the bills if you have the contract? Not sure yet. Good. Okay, this doesn't sound fully baked quite yet, and which services are going to the agencies? How do I describe it if I want

[Kate Slocum (CFO, Agency of Digital Services)]: to ask finance and management? It would be projects, and it would be custom services is how we consider So you need agency specific systems whether or not it be at a project level or at a maintenance and operations level.

[Michael Nigro (Member)]: So you would work with people at the agency to build the RFP? To get what they actually wanted, everything would pay for.

[Robin Scheu (Chair)]: Okay, that sounds like another big deal. General fund, go ahead Jeff.

[John Kascenska (Member)]: So there has to be some kind of timeframe for that. Because he knows they need acts, whatever that might be, you take care of the contract and you don't work out there, and someone's gonna be in their budget for payback. So it's probably a little squirrely for the first year going that direction, but.

[Kate Slocum (CFO, Agency of Digital Services)]: I think there's gonna be a lot that needs to be worked out before, So

[John Kascenska (Member)]: would we see you in BAA for that? Suggesting it go that way, but it might be.

[Unidentified Committee Member]: It's a possibility. I'm really excited for the

[Kate Slocum (CFO, Agency of Digital Services)]: new ERP system for when it goes live. Availability of that reporting will be inherently part of the monetization effort that that system is going to provide the

[Robin Scheu (Chair)]: state. Yeah,

[Unidentified Committee Member]: it sounds like there would be a transfer. And it could happen any time during the year. If you have a contract, then they do their project, and then they transfer you transfer the money. I'm not sure how the

[Kate Slocum (CFO, Agency of Digital Services)]: way that originally the app appropriated, but it would go to whoever has to pay it. So our understanding is that the agencies will have the appropriation in their budget

[Unidentified Committee Member]: They will at end the of the contract, then finalize the contract, which will obviously have a number. Yep. And then they would go and they pay the bill. They would pay the bill.

[Kate Slocum (CFO, Agency of Digital Services)]: We would oversee the would oversee the work. Work, any We connection with the business. We want to make sure that they are in lockstep with us. And when invoices come through, they will go directly to the business.

[Unidentified Committee Member]: So you're a consultant then, obviously. You specialize things.

[Kate Slocum (CFO, Agency of Digital Services)]: Guess that's one way to put it.

[Michael Nigro (Member)]: They do an interagency transfer to your North bill.

[Kate Slocum (CFO, Agency of Digital Services)]: No, there will be no transfer funds. No, no.

[Unidentified Committee Member]: This is by the agency's appropriation of May 5 bill.

[Kate Slocum (CFO, Agency of Digital Services)]: I think Commissioner Gresham was anticipating the opportunity to come in and describe this.

[Robin Scheu (Chair)]: Good. We will give him that opportunity.

[Unidentified Committee Member]: I might.

[Robin Scheu (Chair)]: I joined. You might let him know. Sure Bob will be on soon. He's expecting to Theoretically,

[Unidentified Committee Member]: this should all be easier after the workday. ERP.

[Kate Slocum (CFO, Agency of Digital Services)]: I think with a new finance system, it can be built in a way as what we just described, which is finance visibility and transparency, regardless of what business office it sits in, that that would be my expectation, yes.

[Robin Scheu (Chair)]: Okay. I'm just sorry, my head is jumping around the edge. When we looked at the projects, one of the ones I don't think was on there

[Kate Slocum (CFO, Agency of Digital Services)]: was BT Buys. Was one of your projects? That was somebody else's. It's a project. We narrowed the funding for that. That list that I showed you was part of the modernization project. So '55 started well before that.

[Robin Scheu (Chair)]: Oh, you did? Okay. That's been a little challenging. So we can

[Kate Slocum (CFO, Agency of Digital Services)]: chat with Eoille about that. Yes. The IP Mod Fund is a specific appropriation fund, I think was putting that together during COVID. It

[Unidentified Committee Member]: it. It's the idea that if periodically we look at money, general fund for some kind of time, into it, that you would build up a pool to use from. But apparently it has not been funded, personally bundled very much.

[Kate Slocum (CFO, Agency of Digital Services)]: It is built for success, I would say. The projects that we've had in there have had great success oversight visibility. You have a committee in Senate, a committee in House overlooking it, and you have the joint Information Technology Committee as well that meets out of session. And you have JFO, who has Lisa Gobin today, who also is involved in reviewing each one of those projects throughout the course of the project life cycle. So projects in the IT Mod Fund have a lot of direct oversight across all of our organizations. And there is, because it's been around for a little while, there is a little bit of interest sitting in there. But we don't have any net new projects that would align yet to a recommendation for the use of those funds,

[Robin Scheu (Chair)]: but it is accumulating interest. I know we're running over time. I appreciate you guys are okay for right now. A couple more minutes? In an hour. I think we'll be fine. All right, so thank you. I want to go back to budget, because there isn't a lot of budget numbers. We don't have a lot

[Kate Slocum (CFO, Agency of Digital Services)]: of budget numbers here. But I see what your budget request was for FY '26 is $96,500,000 Is there a request for '27? '26 was 137,000,000. Yes. Well, says '80 as FY 2026 budget request on page That chart didn't get updated. That should say '25. Nobody has seen that, and we have presented to

[Michael Nigro (Member)]: three committees.

[Kate Slocum (CFO, Agency of Digital Services)]: Thank you for finding it. But we didn't manually update that. So,

[Robin Scheu (Chair)]: thank you. So that should say 2027?

[Kate Slocum (CFO, Agency of Digital Services)]: Yes, '27. Where Yes. Can we find any sort of comparison from '26 to '27? Can send I can send you the link that we provided for this.

[John Kascenska (Member)]: Okay.

[Robin Scheu (Chair)]: Yes, I think that'll be good.

[Kate Slocum (CFO, Agency of Digital Services)]: Happy to do that.

[Robin Scheu (Chair)]: We don't want to not see any numbers. We just want to see more than the ups are down.

[Kate Slocum (CFO, Agency of Digital Services)]: And I think we've spent a lot of time talking about what was and what is, which is why on slide seven, we were showing that visual graph so that you could see that demand versus allocation piece, where the changes are happening and what's led up to that point, which as you start looking at those numbers, being able to look at it from those buckets. Because what you'll also see when on page three yours doesn't move that way on the snapshot dashboard is that we had four funds that were associated under that budget request number, and now we have eight. So it is definitely Yes. It's definitely a difference between the two. Right. And I don't know what professional resourcing means. That's the timesheet. So calling out timesheet explicitly as its own fund area.

[Robin Scheu (Chair)]: Anything else for these folks? I think

[Unidentified Committee Member]: we should point out your very last sheet indicates the core enterprise services. Yes. So these are

[Kate Slocum (CFO, Agency of Digital Services)]: the 14 categories, what their funding sources, and what we would like able to provide in this session is what the dollar amount is for each one of those funds. We're working with finance management on

[Unidentified Committee Member]: those numbers right now. So those particular ones that show general fund

[Robin Scheu (Chair)]: are carrots, the rest of it, that's where

[Unidentified Committee Member]: the general fund is applied. It's what the $9,000,000 is shown on the very first stage, they show funding sources, and there's 9,000,000. Right,

[Robin Scheu (Chair)]: was covered.

[Unidentified Committee Member]: And this is right,

[Robin Scheu (Chair)]: and the 9,800,000.0 that are being extracted from other agencies and departments.

[Kate Slocum (CFO, Agency of Digital Services)]: That's what we've been told, yes. Okay.

[Robin Scheu (Chair)]: Right. I feel like we're yeah, not your fault. Feel like we're missing a few little pieces of the puzzle right now. So I appreciate that. Yes. Go ahead.

[Michael Nigro (Member)]: So it would be interesting just to see white flashing carbon score required services it's saying that we're counting the demand which you have

[Robin Scheu (Chair)]: like if you took page six and had the three three other ones and had yes where they all come

[Michael Nigro (Member)]: we're all that numbers associated with the color play, it's kind of a red bar on page seven and what parts of these various CES and post consumption professional field resources and customer services. What makes that up that far? In other words Yes.

[Kate Slocum (CFO, Agency of Digital Services)]: You have those numbers. Yep, we can supply that for you. What is CES plus consumption? Those are the foundational services, but agencies that want more than what we have set as a baseline.

[Michael Nigro (Member)]: And it's 640,000.

[Kate Slocum (CFO, Agency of Digital Services)]: Correct. So let's say SharePoint storage. There are some organizations who exceed their capacity of SharePoint storage that are allocated in core enterprise services, and we charge them extra for it. We use SLA as a vehicle for that.

[Michael Nigro (Member)]: Don't we think we should have a basic up and down sheet?

[Robin Scheu (Chair)]: Yeah, or some sort of budget numbers, yes. Think maybe when we give direction to people. Yeah, well we didn't say don't do it, we just said we're not going to spend all our time

[John Kascenska (Member)]: on it.

[Robin Scheu (Chair)]: So yeah, we're all learning. So you're going to send a link to some other budget numbers, That would be great. And then if we have more questions, Marty is your liaison, and it sounds like we'll get finance and management in

[Kate Slocum (CFO, Agency of Digital Services)]: here anyway for some other lengthy questions that we can ask. That's great. Thank you very much. You. Thank you very much.

[Robin Scheu (Chair)]: We're gonna stay alive. Department, if

[Kate Slocum (CFO, Agency of Digital Services)]: you need to take a break, come back, but after this,

[Robin Scheu (Chair)]: then we're gonna be we will have a break before we go to the floor.

[Kate Slocum (CFO, Agency of Digital Services)]: Senator, if you'd like to come up. The chairs are warmed up for you. We

[Andrew Stein (COO, Vermont Department of Taxes)]: should have Rod she's not there, did bring my computer just in case. There. Thank you so much, Rob.

[Michael Nigro (Member)]: You're welcome.

[Andrew Stein (COO, Vermont Department of Taxes)]: From the mothership. The mothership. 133. Pantsy. Rod, do you mind putting it in full screen mode in the bottom right? There's a so much.

[Robin Scheu (Chair)]: All right, we're just doing another little analysis happening. So welcome. Have the tax department with us today.

[Kate Slocum (CFO, Agency of Digital Services)]: And so if you guys want to introduce yourselves, and we have this lovely There's a lot

[Robin Scheu (Chair)]: of red ink that's being used. I wonder if BGS or whoever read all the slides realizes how much red could be a bargain on it.

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: Don't get me started. I'm not a fan of the photo. My name's Bill Schuldice IV, commissioner of the Vermont State Tax Department.

[Robin Scheu (Chair)]: Welcome in. Bill, you have Andrew.

[Andrew Stein (COO, Vermont Department of Taxes)]: Andrew Stein, chief operating officer. Hey, everyone.

[Robin Scheu (Chair)]: You have not been in our committee before, commissioner, as your as the tax commissioner.

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: That's correct. I was in this room about fifty years ago.

[Kate Slocum (CFO, Agency of Digital Services)]: When it was a coat room?

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: Due for that. To be fitted for my cage jacket. Subsequent to that, I was here when it was a coat room. I didn't realize until I was walking over with Andrew that it is now a committee room for these appropriations.

[Robin Scheu (Chair)]: Absolutely. So we'll go around and introduce ourselves,

[Kate Slocum (CFO, Agency of Digital Services)]: because this is your first time in our division.

[Michael Nigro (Member)]: I appreciate that.

[Robin Scheu (Chair)]: Yeah. David Yacovone from Morristown, and I represent Lamoille, Washington District. Good to see you. Good to see

[John Kascenska (Member)]: you soon. Well, John Kascenska from Burke, and I represent the Essex. Hello, Hi,

[Michael Nigro (Member)]: Mike Nigro. I represent Bennington and Townell, and tax department is on my portfolio. Sorry about

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: the confusion with not being earlier. This

[Unidentified Committee Member]: is Tom Stevens from Waterbury. I'm Martha Feltus from Caledonia 3, London.

[Robin Scheu (Chair)]: Robin Scheu from Middlebury. Tiffany Bluemle from Burlington.

[Trevor Squirrell (Clerk)]: Trevor Squirrell, Underhill, and Cheroke.

[Michael Nigro (Member)]: We're in the West, Berkshire, Frank from Richmond, Huggy. Hi. I'm Mike Mrowicki from the Windham Ford District of Putney, Dumberster.

[Michael Mrowicki (Member)]: I hope we can prove to you that the room's being put to better use than Mungerford.

[Robin Scheu (Chair)]: The other chair is Lynn Dickinson, who's from St. Albans Town.

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: I'm going to make just some introductory remarks and then hand it over to Andrew, if that's all right. But I've been the tax commissioner now for about a year. Just missed the opportunity to present the budget a year ago, but it's my pleasure to be here. Some of you may recall that before this, was the CEO of Vermont Teddy Bear, before that I was the CEO of Vermont Country Store, before that I worked for Governor Dean in the agency of e commerce. But one of the things that drew me back to state government was governor Scott asking me to meet with the department and better understand the work they were doing. And quite honestly, the tax department wasn't something that rolled off the end of my tongue as being my next career move. I said to the governor, I hate taxes. And he said, yes, that's why we want you to do that. But what I did was I interviewed with the department and I was looking at really three things. I was looking at the quality department from a personnel perspective, And Andrew was able to provide me with employee satisfaction surveys and hard to believe, but the tax department is like ops on state government.

[Robin Scheu (Chair)]: Your predecessor ran a very good job.

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: And I'm noting I inherited it, I did nothing to create it, I take it. You just had to keep it. Yeah, great honor I came to keep it. But good group of employees who really care about what they're doing and have fun doing it, which was easy to sign up on. The second thing that drew me to the department was, oftentimes you'll inherit a job and you'll find out that technology is out of date and it's just an accident waiting to happen. And as you do know, we're really inextricably linked to the IRS, pulling down that information from the IRS, dealing carefully with taxpayer information, social security numbers, that is nothing that I wanted to take on if it wasn't up to snuff. And really pleased to see that this department's been able to modernize and has a great working relationship with the IRS to be able to do the people's work of processing their tax return. We announced yesterday, twenty sixth, that it was the opening of tax season. What I refer to think of it as tax refund season, I wanna get that money back into taxpayers pockets as fast as I can for those who deserve it, and set up a system for those that have to pay taxes that can do so efficiently and without a lot of consternation. But the third part of the reason I came to the department was it has a strong thought process and care for Vermont becoming affordable and the public policy that underpins that. As we all know, we're working with and dealing with property tax issues that are continuing to rise beyond what people deem to be reasonable. And if you take a look at the billion dollars it costs now more than it did twenty years ago to educate our kids, if you look at the fact there's 15,000 less kids in the system, and if you look at the fact that our scores are declining, that was one of the things that drew me back to state government as I was supposed to be heading to retirement was to help grapple with that significant issue that's facing Vermont. I have one out of my three kids live in Vermont, and everyone talks about interest rates being high. And how that's keeping kids from starting the American dream of having a family and buying a house. The average age of somebody buying a house in the state of Vermont now is 40 years of age, well beyond what it was not that long ago. And I can tell you as my daughter went through process of buying her first home, the thing that left her beyond the reach of being able to afford the home she wanted was the percentage of tax that was needed to be paid to service that mortgage and to own that home. So, if we wanna decrease our population decline, if we wanna make up from up more affordable, dealing with our tax policy, dealing with our property tax issues is something I care deeply about. One of the reasons why I took this job and have the pleasure of working with Andrew to help get us there along with my deputy Rebecca Sameroff, and just a really, really great thoughtful department. So thank you for having me. I apologize for the long windup, but this is something I can't, I deeply about and pretty passionate about as well. Great. Thank you.

[Andrew Stein (COO, Vermont Department of Taxes)]: Thanks, everybody. I also just wanna I wanna take a beat to acknowledge our new commissioner, Bill Schuldice, as well. It's not easy to come in and step into the void that was created when we lost Craig, our former commissioner, who had been with his partner for a long time, who had been in leadership roles for years, was beloved, and we're very grateful to Craig. But Bill, to his credit, came in with a ton of humility, a ton of people smarts as well, and hunger to say, hey, what can we do even better than we're doing now? And I think he's done a great job of supporting the areas where we're already strong. He's put a heavy emphasis on employee engagement. This year, the level of rigor with which we dug into the employee engagement survey and then generated an action plan and reported it back to employees was greater than ever before. And that really built on a foundation that I feel like Kai Sampson, now at DFR, kind of started. Craig really took Craig and our leadership team kind of took to another level. And Bill said, we can we can take this even further. Let me give you some examples of things I've seen throughout my career. And so I I I think I think we're moving in a really positive direction as a department. We started in a great place, and I think we're moving in a better place. There's always areas for improvement, and bringing in an outside perspective has been helpful to bring a fresh set of eyes to things. So wanna wanna thank you, commissioner, for all you've done in your first year.

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: Thank you, Andrew. That's a long way of saying the only thing I could do now is screw it

[Kate Slocum (CFO, Agency of Digital Services)]: up. There

[Robin Scheu (Chair)]: you go.

[Andrew Stein (COO, Vermont Department of Taxes)]: Could you please flip to the mission? Thank you. I've presented this slide and our core values numerous times, and since we have limited time, I'm just going to go through this really quickly. But from an alignment perspective, from a connecting the dots perspective, it's really important for our entire department to understand what the mission of this organization is, serve Vermonters by administering our tax laws fairly and efficiently to help taxpayers understand and comply with their state tax obligations. And then we put our main strategic goals in the three main buckets, which is be a model of service oriented tax administration. And I would go a step further and say that we really strive to be a model of service oriented government in general. We work with other departments and agencies around state government to do that. Reduce the tax gap, and and we really do this by emphasizing voluntary compliance. Voluntary compliance is the backbone of Vermont's tax code, the federal tax code. By educating By educating taxpayers, we're able to make extraordinary gains in terms of reducing the tax gap. We do use audits and other forms of collections, various tools to ensure that equity throughout the tax code, but we really put a heavy emphasis on voluntary compliance. And then we wanna have a healthy workplace. We put a heavy emphasis on the health of our employees and the general culture in the workplace. Next, core values. Our four main core values, service, integrity, growth, and community. We have examples here, you look at them. Service, we lean heavily into this one, integrity as well. And sometimes when we're evaluating a service initiative or safeguards initiative that can fall under integrity, those can kind of push and pull a little bit at each other. Sometimes something that's a little more efficient, we might be sacrificing on the integrity front. But sometimes we might say, hey, this this is really important. We need to shore this up and have a slight dip in efficiency somewhere. Sometimes, though, you know, and and we've we've had some some great success on the the tech front. We have opportunities to improve service and improve integrity at the same time. Growth is a value that we're gonna lean heavily into this year. This is an area where our employees have said they think we can do better. We've listened, and you'll see in our budget, it reflects some initiatives in this space and community. We we strive to have a strong community at the department, and everything we really do at the department is in service of the communities of the state of Vermont. Connecting those dots for everyone. Alright, next slide, please. So this is high level pie chart. It's not really pie chart. I forget all these categorization charts now. But to show what our overall budget is, 38,000,000, and this includes our various special funds. And this represents a 2.34% increase from the current fiscal year to next across all funds. 90% of our budget is salaries and benefits in IT. And really, that's the bread and butter of what we do. We try to attract and retain the most talented team that we can, and by pairing them with technology that works, and some technology works better than others, but in general, our core technology is working very, very well. We're able to stand up a range of service initiatives, policies with tight deadlines. Every year we last year, collected over $3,000,000,000 in revenue for the state of Vermont, and we administered hundreds of million dollars in appropriations through our tech stacks. So that's that's the heart of what we do. And then, you know, when we these categories, this is kinda how we view it at the high level. You've got rent and building services. You've got printed printing and postage. You've got internal services. And and I will say our ADS our ADS expenses fall under IT. We don't put them under typical internal services. And then then other, that's a range of things from training to other personal services, etcetera. So what what does our budget get us? I'm I'm gonna give you the current initiatives. This is next realizing this is the f y twenty seven budget, but right now, current initiatives that I think are worth spotlighting, implementing new policies. Every year, this department is asked to implement a suite of new policies and do it with pretty tight turnarounds. Later in the budget book, I'm not gonna spend a ton of time on it, but we do have an update with the range of policies that we were asked to implement last year and the status of those. And every everything there is everything there is either implemented or it's on track. Some of them are multiyear implementations. And, you know, personal income tax credit and exemption updates were a big one for this past year. There were updates to the Vermont child tax credit, earned income tax credit, retirement income exemptions, like the security social security income, civil service retirement, military retirement, and survivor benefit income. We also had a Vermont veteran tax credit, a new refundable tax credit to implement this year. And so that's a lot of development work in our new system. It's a lot of updates to our forums. It's a lot of testing. And to make the tax season go well, which just opened this past week, there's a lot of upfront work that goes into that, a lot of updating instructions, a lot of outreach to various constituencies. And a big initiative for us this next year is gonna be look looking for ways for in in these areas with with you know, if you really look over the past ten years, there's been a pretty extraordinary expansion in terms of credits and exemptions and just general benefits for vulnerable populations in Vermont. And something that commissioner Schuldisch is challenging us on heading into next year that we're gonna we're gonna do a pretty deep dive initiative on is how can we make this easier for people? We do we do a lot on education and outreach, but where can we do even more? And are there areas where we could maybe automate some of this for folks where we could where we we could do some front end validations? And we've done some things

[Michael Nigro (Member)]: like that in the past.

[Andrew Stein (COO, Vermont Department of Taxes)]: We know that opportunities to improve in that space. Then new local option tax downs I put on here because that's that's that's a big thing. Every year now, we're having, like I don't remember how many we had last year. I wanna say six. Somewhere between six and eight, I could get you the exact number. We know that there's seven municipalities that are looking at this for that are that are saying they're gonna vote on it next year that have reported that to us, another seven that are exploring it. And then there's there's even more that have asked for data on this. So this is this is a big area for municipalities who I'm sure you all are very aware are also looking for money for their budgets. Maintain high service levels this tax season. This is a big deal. Personal income tax refunds for the fourth straight year, we issued 95 of timely filed refunds within forty five days by by June 1. That's a that's a really key performance metric for us. After June 1, we have to start paying interest on those. So from a state budget perspective, that's important. But even more important is just from a service level perspective, We wanna get Vermonters the money that they're owed as quickly as possible. We also we can get into some of the some of our other metrics later on, but one one that's not in here is our phone data. We handled over a 115,000 calls in calendar year 2025, and the average call wait time was one minute and five seconds, which we shaved about twenty one seconds off our average call wait time, which was already from talking with other commissioners around the country, is already kind of

[Kate Slocum (CFO, Agency of Digital Services)]: best in class for states. And better than the IRS.

[Andrew Stein (COO, Vermont Department of Taxes)]: Way better than the IRS. Yes. Way better than the IRS. And not to pick on the IRS. They have been defunded for

[Robin Scheu (Chair)]: Well, Tuesday morning at 07:30 is a really good time to get a live person.

[Andrew Stein (COO, Vermont Department of Taxes)]: Oh, that's good to know.

[Robin Scheu (Chair)]: Now everybody's going to call. Monday, now you know you can't have a call.

[Michael Nigro (Member)]: You just gave up a secret. I don't need to call

[Robin Scheu (Chair)]: them anymore. Hope so you can benefit.

[Andrew Stein (COO, Vermont Department of Taxes)]: Another big initiative for us is continuing to modernize the property tax system and current use. Our our current use main current use system just shifted from an older legacy system into our main fee tax system. We've been in the middle, and you might have heard from some towns on this and others, we've been in the middle of a larger property tax IT system transition, which frankly is one of the more bumpy implementations that we've had in a long time at our department. It began in 2020. It's it's still ongoing. Frankly, it's it's it's a very difficult system to implement in large part because our property tax system is not is not the most standard, it's not the most centralized, and it's a tough project. That project is not a super expensive project considering how complex it is, and so we're working to iron that out, and long term, we will continue to figure things out on that front. Complete a new scanning system. When I first came to the tax department in the 2021, we had a scanning system that had fallen off track. We ended up deciding to terminate that contract. We went to hack out the bid. We actually went through two RFP processes. I'm I'm happy to report that that project was just completed, we've gained a ton of new efficiencies from that. That system is way more efficient than our older one, and and we're set up to have support in that space for the long term. Fee tax version upgrade, that's our bread and butter integrated tax system. 35 plus tax types are in that system. It's the it's the same base system that Finland, New Zealand, California, and New York City use. It's called GenTax. It's by this company, Fast Enterprises, that built the DMV system, and that's now building the DOL system as well. And we have an older version of that system, the one that predates the DMV system, and we're we're going to the version that the DOL system is on, which is the most up to date core version. And that's gonna be a big project for our department this year. That's where major modernization and code, the the old code structure is getting updated with a much more modern modern code, c sharp for any of you, you know, coding walks out there. And that's going that's going to help with frankly, younger developers are are learning that in school. It's there's there's a range of functionality that will come up with that as well. As part of that version upgrade, one of the things that I spotlighted when Emily and I chatted with you all last week about the childcare contribution, we'll have the functionality to be able to direct withholding taxpayers to pay the childcare contribution at the same time as withholding, which should hopefully, in a couple of years, alleviate that end of year big end of year fund transfer that we've been grappling with. Emphasis on employee growth this year, create an education and organization development team. We're reclassifying two positions to be able to focus on these types of issues. And we have a suite of needs that employees and directors and others have flagged for us at a leadership level, and we we take this seriously. Growth is a core value of ours. We wanna we wanna support our department's employees in terms of evolving with the economy, evolving with technology. And, frankly, we deal with a lot of complex matters. And when we bring in somebody new who doesn't have as much experience, when after somebody who's been in the game for thirty years has retired, it's helpful to have a training program in place to help bring them up to speed. And then we're also planning to create a cross training and mentorship program this year. We're looking to expand taxpayer feedback and service opportunities as well. I mentioned one of them before. On the feedback front, we're piloting some surveys this year to solicit feedback in terms of our service levels, how we're doing. We're working to complete a new COOP space with ANR and BGS. This is one that I think this committee will like to hear about, which is our department for many, many years had a coop space up in Williston on Hurricane Lane, and we were essentially paying for vacant space that wasn't being used. When the floods impacted our building at 133 State, we did not go to Hurricane Lane. We stood up a cube space up by national life. Coming out of that from what we learned from there, we realized, number one, we don't want to sit on vacant space that isn't being used typically. We don't want taxpayers to have to foot that bill. And the chance that we do need this going all the way up to Williston, moving all of our operations up there really isn't ideal either. So we worked with BGS and the Agency of Natural Resources, really grateful for Secretary Moore and Kim Greenwood, the COO there, for being so open to this. What we're doing, we've actually started already, we're building a secure area in national life that ANR can use. So we're footing the bill for the capital expenses, and we can use carry forward funding for this from last year's budget because we had some surplus funding. And we're going to have a secure space that meets IRS and state safeguard requirements. And ANR can use this space, but in the event of a COOP issue, like floods or a buyer or something along those lines, if we have to pivot out of 01/1933, we'll be able to do that and ANR will shift out of that space, and it'll be ready to go. The the locks and everything can just be turned right on by National Life, and it will meet all of those safeguard requirements. So we're excited about that. And in which case, we're we're signing an MOU. We would then pay the bill for that space if we're using it, then they're not using it. But essentially, there's no vacancy. There's no space just sitting vacant that taxpayers are paying for in the event that we need it. And then advanced tax season review and continuous improvement exercise. I put this on here. After last year's tax season, we created a new continuous improvement exercise to engage with employees around things that they thought went well and things that they thought we could do better. So essentially taking more feedback from employees and turning it into recommendations for our leadership team that then we can take action on.

[Michael Nigro (Member)]: So that's what's A and R gonna use that for? So part of the what what's what's A and R's use to that space you're talking about?

[Andrew Stein (COO, Vermont Department of Taxes)]: A and R is using it right I wanna say it's I'd I'd defer to them. I I I've been spoken with them about that space in a while. I think Forest and Parks are in there right now. So we're not sharing a a system. It's just a space. It's just a space. And, essentially, if there is we did have to our network there. So if we shift in there, we'll have to plug we'll have to configure some network ports and things like that. But, essentially, with drop ceilings and stuff, you can just have those wires sitting up there and then pull them down. Yes. Yeah. No problem. Okay. Next slide, please. On the ups and downs front, this is just a summary of ups and downs. And those in parentheses are down. Salary and wages are up. Health insurance is up. Retirement is up. Other benefits in workers' comp is down slightly, and I have to look into exactly what that is. Off the top of my head, forget exactly why that's down slightly. Decrease in contractual services that's driven by by two that's that's there's two main drivers of that. One is we're coming off a series of IT project implementations this year. And the VTACS version upgrade that I mentioned before is we have a multiyear appropriation, the end of a multiyear appropriation from the compute our computer modernization fund, which would have been saving that balance for the VTACS version upgrade so that we wouldn't have to come in and ask for, like, a big increase this year. And that that fund has has the money in it to foot the bill for this. And that's going to span two fiscal years, that version upgrade. So what this this is, it's it's a down due to IT implementations being wrapped up, and it's also a down due to excuse me. We're part of the multi state tax commissions joint audit committee. And soon after we joined, California also joined. And California puts a nice big bill for those resources. And so that dropped our annual expense down quite a bit from what we had budgeted.

[Robin Scheu (Chair)]: Anything else they could join? Right.

[Andrew Stein (COO, Vermont Department of Taxes)]: It's a good question. It's a good question. Good working group. There he is.

[Michael Nigro (Member)]: Are there the

[Robin Scheu (Chair)]: eight largest economy in the world?

[Andrew Stein (COO, Vermont Department of Taxes)]: So we're we're great we're we're grateful for them in in that. Increasing accessibility costs. Frankly, we foot we started paying these costs last year. We used some carry forward funds. We've really expanded our accessibility offerings, and all of our envelopes taxpayers have 14 different languages on them now that direct taxpayers with how to access those accessibility resources. I wanna give a big shout out. It was our former communications director who now works with Harvard Harvard Business School, but our current communications director, Kate Canizzo, who is an absolute all star, has really taken this to a whole other level. And she has a background in ADA and accessibility communication, and she's been wonderful on this front. So last year, we spent a bit over $22,000 on interpreters. And in the past, there was no budget line for this. And so with the little bit of wiggle room that we had this year, we added $30,000 there. And I just got a request for to approve some interpretation for a language that's outside of those 14 to help a taxpayer,

[Michael Nigro (Member)]: and we're going to do that.

[Andrew Stein (COO, Vermont Department of Taxes)]: So it's translation and interpretation, but the interpreters, it's a big deal to have a professional interpreter helping somebody on the phone. And increase in education and training contracts, that's in response to, the employee engagement survey and other requests from employees. One thing we're already doing that I can give you an example of where funds like this would go to, Our compliance division is trying out this software called CP Edge, which is like a CPE online platform for auditors and tax professionals to help our auditors and tax collectors come up to speed in some technical areas of their work. And we have some ideas for other things, other projects, but ultimately that that education and organizational development team, they're going to oversee a lot of that work. The increase in service of papers, if I if I could take that off of here, would, but I needed to balance this out so that it it reflected the same as the ups and downs that you have. And some reason, this falls under personal services. But this is just to align, this is various paper services that Yeah. We've been spending over our budget appropriation. I wanna say it's like 7 or 8,000. It went up to like 11,000. We don't spend a ton on paper, but that's just a

[Robin Scheu (Chair)]: lot. Serving people with paper?

[Andrew Stein (COO, Vermont Department of Taxes)]: It is sometimes. Yes. And I actually I have a note as to exactly what service of pay. For process servers or sheriff departments, for certain legal documents like summons, complaints, etcetera. That's what I'm

[Robin Scheu (Chair)]: doing here. Yeah. In fact, you didn't pay your taxes, and after a

[Kate Slocum (CFO, Agency of Digital Services)]: few months yeah. There you go, are you?

[Andrew Stein (COO, Vermont Department of Taxes)]: And then what else do we have up there? Net operating expenses, that includes fee for space, some ADS charges, other internal service funds, education supplies, education and training expenses related to conferences and travel for attending those, general liability insurance, office equipment, those types of things. Next slide, please. And I just like to put in the major category, the ups and downs. It's driven by salaries and benefits that's largely outside of our control. Yeah, really no surprises here except IT's down. Really, IT is one of those things where it can be down one year and it can be up significantly another year, and it all depends on where we are in an implementation cycle. And the department used to receive five to ten year appropriations as part of our computer modernization fund. And frankly, that was extremely helpful during a big build out of technology at our department. We still have lots of IT expenses, but we don't have any of those huge, huge, huge implementations right now. And so several years ago, we shifted that fund to the annual budgeting process. I want say it was about four years ago. And so as a result of that, you are going to see swingers year over year in that I'm

[Robin Scheu (Chair)]: paying attention to the time, because I know you have a hard stop. Let's make sure we get to your different areas, too, and what your goals are for the

[Andrew Stein (COO, Vermont Department of Taxes)]: Sure. In the last twenty minutes, are there areas that you all would like us to focus on?

[Michael Nigro (Member)]: Think

[Robin Scheu (Chair)]: success is great. And also, are there any other you've talked about some new initiatives. Maybe those are the new initiatives because of the tax changes. So maybe we've already reviewed those. Anything else you've decided to cut or significantly change?

[Andrew Stein (COO, Vermont Department of Taxes)]: No, I don't think-

[Robin Scheu (Chair)]: You guys are

[Kate Slocum (CFO, Agency of Digital Services)]: kind of this

[Robin Scheu (Chair)]: pretty steady, running around

[Bill Shouldice IV (Commissioner, Vermont Department of Taxes)]: Madam chair, I'll tell you this. When Andrew got done, he said, I build the budget and then I'll present it to you. I said, Oh, okay, that sounds good. And he brought the budget into me and he said, Okay, this line here, that's set by collective bargaining agreement. This line here is set by business. I said, Andrew, in $38,000,000 how much do I have at my discretion? He said, None.

[Andrew Stein (COO, Vermont Department of Taxes)]: About $300,000 maybe.

[Robin Scheu (Chair)]: So it's good to see. I do like the part where you tell us about the different areas and how you're doing because we talk about our Vermonters paying their fair share of taxes that they're supposed to be paying. What's that budget gap? Yep. How we're gonna rebate? You know, what are you seeing for trends and changes in those kinds of other programs? So I think that's the kind of thing Sure.

[Kate Slocum (CFO, Agency of Digital Services)]: We'd love to hear about.

[Andrew Stein (COO, Vermont Department of Taxes)]: So why don't I the next slide, I'll just be very quick on. Next Maud, can you shift to the next slide after that spotlight on success? Oh, before that. Back one. Back

[Robin Scheu (Chair)]: Back one.

[Andrew Stein (COO, Vermont Department of Taxes)]: So I do oh, nope. One more. Spotlight on success. Thank you. So this is these are our employee engagement scores from this year. And while we did certainly receive scores that we especially in the growth area where we realized we can explore in this space. We also received a lot of very, very positive scores, a lot that we realized, hey. These are strengths that we need to build from. So I put a spotlight on that here because without strong employee engagement, we don't have any of the success in the other metrics that we look at. So moving forward, I'll go quickly through these performance metrics. And then I think our grants would be helpful to look at really quickly. None of them are true grants. That's why I say grants. But that's how they'll function. And you're

[Robin Scheu (Chair)]: yeah, and some of the tax things and the grants, but how the child care contribution thing is going. I know we have stuff about adjustment and what else you're seeing in the way

[Kate Slocum (CFO, Agency of Digital Services)]: of you you have a bunch

[Robin Scheu (Chair)]: of different tax changes and it's maybe too early for half of those things, but

[Andrew Stein (COO, Vermont Department of Taxes)]: just Yeah, so I think childcare contribution, I think the implementation has gone really well. I think JFO nailed that estimate. I I don't know exactly what the discrepancy was between the forecast and the actuals, but the actuals came in almost exactly what what GFO had forecasted. That you you know, that I think it's I think it's gonna be pretty steady, low 80 low 80 in terms of the revenue that you're gonna get from that. As a result of that, we did have to reduce our we have a small we have some positions from that, and we have a small we have, like, a $200,000 reduction, I believe. I can tell you the exact reduction in terms of what we're using that fund for administratively. But so that's a change. Have it somewhere. But it's something like that. I would say, you know what, why don't we go to the grants? Let pull up our budget book, I'll tell you what page that's on. Because I think that's going to get into some of these issues that you're interested in and ties into some of the BAA issues that we talked about. So grants are on they begin on page 61, And that's what the pilot fund and I understand, Chris, you presented already on the pilot fund. Understand We had a great spreadsheet. Yeah? Oh, too kind. And I understand that there's a proposal from this committee to ship the pilot payments from the general fund not the pilot payments, but the reappraisal listing payments from the general fund to the pilot fund this year rather than next year. So I haven't heard any opposition to that, but my my understanding is, you know, the administration, the secretary, commissioner of finance management, they, look at everything on balance when it shifts over to the senate. So but, essentially, that's taking the proposal from the administration and just moving it. Right.

[Robin Scheu (Chair)]: Because it's pension related. I

[Michael Nigro (Member)]: hear you.

[Robin Scheu (Chair)]: And it works. The projections that Chris put together for us show that even at the 2017, after fully paying all the

[Kate Slocum (CFO, Agency of Digital Services)]: pilot stuff, it's an 11,000,000 or $12,000,000 balance in the pilot fund. So it's not exactly unlike our other special funds, it's healthy.

[Andrew Stein (COO, Vermont Department of Taxes)]: Yeah. So stay tuned the sec stay tuned for the Secretary of Administration and Finance and Management in terms of their thoughts on that. But, yeah, appreciate you all flagging that. So in terms of pilot this year, in the current year that we're in, it came in under budget. And, you know, this is these are based on estimates. And so it came in I have it somewhere. It's in that spreadsheet that Chris shared with you all. I think it's, like, 11,300,000 that came in this year. Have it right here. Anyways, it's below 12,200,000.0. And so when our analyst was forecasting it for this year, she felt confident that 12,200,000.0 was was good for this year. So if you go to the next slide, it's correctional facilities at 40,000. The slide after that is the homeowner rebate, and that's down from 19,000,000 for the same reason that budget adjustment is down.

[Michael Nigro (Member)]: So you

[Kate Slocum (CFO, Agency of Digital Services)]: kept it down to the low level.

[Andrew Stein (COO, Vermont Department of Taxes)]: Yeah. Well, it was frankly, I knew we had a budget adjustment act request for the renter credit, and I saw this come in for our f y twenty seven budget. And I asked our senior fiscal analyst, very talented guy, if he could update it for this fiscal year, and he thought it would be about the same. So, I mean, is it the methodology that that he uses is a consensus one used with the joint fiscal office? So, again, this is the appropriation to make municipalities whole for the circuit breaker for property tax credits. So those are those families and individuals earning homeowners earning under $47,000 a year in household income that qualify for their local property taxes to be covered by this. Different topic. Okay. As incomes are moving out of this space, because it's not adjusted for inflation, this appropriation is going down. Reappraisal listing payments is the next slide on page 64. Should ring familiar. Yes. And it's pretty level. You've got two per parcel payments in there. You've got $100,000 for Lister Education, and that's based on a statutory provision. And then you have $70,000 for time list assistance for utility valuations. It used to be separate.

[Robin Scheu (Chair)]: Yeah, I remember that being yeah.

[Andrew Stein (COO, Vermont Department of Taxes)]: And we we do have a commercial appraisal and litigation assistance program that's that's paid for out of the local option tax Yeah. Fee fund, and that's about $800,000 between the two administrative resources and the contracts. And that's really coming up to speed now. It's taken a couple of years to design it and get it up to speed and have vendors in place. Do think in the future, we will explore this $70,000 in the utility valuations, getting folded in with that and treating utility and commercial value.

[Robin Scheu (Chair)]: It's kind of it's large and unusual properties. How do you do a college campus?

[Andrew Stein (COO, Vermont Department of Taxes)]: Totally. Yes, a mine. It's highly specialized appraisers. Right.

[Robin Scheu (Chair)]: That would make sense to put that down too.

[Andrew Stein (COO, Vermont Department of Taxes)]: Next slide, we have municipal current use, and this is the general fund money that makes municipalities hold for the current use program.

[Unidentified Committee Member]: That's staying pretty stable.

[Robin Scheu (Chair)]: And this is separate from what gets deducted from the education property tax. Is the total amount around $77,000,000

[Andrew Stein (COO, Vermont Department of Taxes)]: It's over $70,000,000 I don't have the exact amount in front

[Robin Scheu (Chair)]: of So somewhere 77. Anyway, 21 of that gets covered by the general fund for municipalities, and the rest of it in the education, it's a deduction from the education fund, so property taxes elsewhere go up to make up for the current use.

[Andrew Stein (COO, Vermont Department of Taxes)]: If you were to translate it into an exemption, it's around, when we've looked at it in the past, it's like around an 85% exemption.

[Robin Scheu (Chair)]: And I think it's on the Education Fund Outlook now these days, we actually put it in the line for we're deducting the current use I don't think

[Kate Slocum (CFO, Agency of Digital Services)]: so I think it just doesn't show up at all well at one point we actually added the ASA on the fund outlook we

[Robin Scheu (Chair)]: may not it may not be there anymore but there was a

[Kate Slocum (CFO, Agency of Digital Services)]: time last fight, certainly, that we had.

[Unidentified Committee Member]: Okay, I'll check. I thought it just, it doesn't go there,

[Kate Slocum (CFO, Agency of Digital Services)]: so it doesn't show up as Well, yeah. I a think at one point

[Robin Scheu (Chair)]: we tried to make it a little more transparent so people understood that that was

[Kate Slocum (CFO, Agency of Digital Services)]: an effect that has an effect on populations.

[Andrew Stein (COO, Vermont Department of Taxes)]: Yeah, and there's a great overview of current use and the history of the program trends over time and the use values for forested lands versus ag lands and the PBR annual report, which is going to be published, I think it's coming out this week. The next slide, page 66, is the renter. It's in the system as the renter rebate, but it's actually a renter credit. This is going up for the same reasons that we talked about in the Budget Adjustment Act.

[Robin Scheu (Chair)]: So level funded from budget adjustment, think. Absolutely. Oh, no. It's million increase, not a million.

[Andrew Stein (COO, Vermont Department of Taxes)]: Yeah, I think it's up 500,000 from Yeah, it was 1,500,000.0 in the PTA event, because this gets adjusted for inflation as well, so ideally it comes in under that. So those are the main program areas that I wanted to spotlight. We have about eight minutes. Any other questions? I wanted

[Michael Nigro (Member)]: to jump back. I thought I heard you mention VTrans when you're talking about systems.

[Andrew Stein (COO, Vermont Department of Taxes)]: Know they have problems with their purchasing used tax collection stuff. Are you involved at all with helping them? I'm aware of what's going on there. There's a key VMB system, though, that I do know is supported by the same vendor that built our system.

[Michael Nigro (Member)]: Just vendor support, so my head's cross linking.

[Andrew Stein (COO, Vermont Department of Taxes)]: Yeah. Yeah. I just don't. I don't know a deferred AOT entirely. Thanks. That's true. Questions?

[Michael Nigro (Member)]: I'm sorry. You're good? Anything

[Robin Scheu (Chair)]: else you would like us to know?

[Andrew Stein (COO, Vermont Department of Taxes)]: I think we're pretty good. We appreciate this committee's support and certainly appreciate the governor's support and the Commissioner of Finance and Management and Secretary of Administration's support on our budget every year. And we're responsible for administering a lot of policy to help a range of Vermonters. And I think we do it with pretty high levels of service and no doubt there's opportunities for improvement. So if any of see any, please feel free to reach out to me or Commissioner Schuldice, and we'd love to hear about it and see what we can do.

[Kate Slocum (CFO, Agency of Digital Services)]: Great. Well, thanks for all the work

[Robin Scheu (Chair)]: you do, and we can't wait to see how successful you've been.

[Andrew Stein (COO, Vermont Department of Taxes)]: Thank you.

[Robin Scheu (Chair)]: All right, and welcome. When you're into your new I love it. Thanks, everybody. So committee, we are on the floor at 03:30 with budget adjustments and other things. So, we will be on the floor today. Tomorrow is Friday. We will do the floor in the morning. It turns out we're going to have a little amendment to our budget adjustment, which I will mention on

[Kate Slocum (CFO, Agency of Digital Services)]: the floor. Can I explain to you?

[Robin Scheu (Chair)]: Just so you're aware when I say it, you won't go, Oh my god, what's going on?

[Kate Slocum (CFO, Agency of Digital Services)]: I was hopeful this could be just be considered a scrivener's error, that's $45,000 that goes to HIV syringe service programs. It needed to be spread out across the three different organizations. And in original budget that I had, wasn't. It's not like the move on CARES by a And lot of so it is very predictable.

[Robin Scheu (Chair)]: We're just

[Kate Slocum (CFO, Agency of Digital Services)]: spreading it out and we're still 45,000.

[Robin Scheu (Chair)]: Yeah. So there's no but don't I just didn't want you

[Kate Slocum (CFO, Agency of Digital Services)]: to be surprised that we're going to

[Robin Scheu (Chair)]: have this amendment. This apparently I'm has to be under my name so that there we are.

[Kate Slocum (CFO, Agency of Digital Services)]: I don't I don't know that it does.

[Robin Scheu (Chair)]: Maybe because I've been presenting the bill just easier for me to

[Unidentified Committee Member]: have the amendment or something. Oh, so maybe we need

[Kate Slocum (CFO, Agency of Digital Services)]: to vote on the amendment. You want

[Robin Scheu (Chair)]: to at least do a straw

[Kate Slocum (CFO, Agency of Digital Services)]: Is there a way Do we have this electronic one? Brady

[Robin Scheu (Chair)]: gave it to

[Kate Slocum (CFO, Agency of Digital Services)]: me physically. I don't know.

[Robin Scheu (Chair)]: Wait, are we meeting before the floor? We aren't meeting tomorrow morning.

[Kate Slocum (CFO, Agency of Digital Services)]: So

[John Kascenska (Member)]: do we have to do it today or

[Michael Nigro (Member)]: do we need

[Robin Scheu (Chair)]: Well, don't need possession of the bill.

[Kate Slocum (CFO, Agency of Digital Services)]: It can be a floor amendment. But they're going to

[Robin Scheu (Chair)]: ask whether we voted for this or not. I'll tell you what, everybody sit here,

[Andrew Stein (COO, Vermont Department of Taxes)]: we'll

[Robin Scheu (Chair)]: go off live for five minutes.