Vermont Legislature SmartTranscripts:

[Rep. Peter Conlon (Chair)]: It's the h four fifty four conference on May 30, a little before noon or whatever time it is, 11:30, came back together. I think we're going to walk through the second half with you, or how do you want to do this? I guess we could go ahead.

[Rep. Emily Long (Member)]: Yeah, first, I'd like to say that I somehow blocked my pen again, I wonder if I could have

[Rep. Chris Taylor (Vice Chair)]: that pen in front of

[Rep. Emily Long (Member)]: you, Chris. Or this one right here. Thank you. And if I could just have that box for the remainder of the conference, that would be great. Thank you. So we walked through sort of the ed finance policy pieces of this yesterday. And as I slept on it, I just wanted to really affirm the need for us to have people be better off on the other side of this. That feels like a core value that I'm carrying into this committee, that taxpayers are better off on the other side of this. And that's

[Rep. Peter Conlon (Chair)]: I know you are also thinking students. Know you

[Rep. Emily Long (Member)]: Yes, absolutely students. Yes. But when we're thinking about the second half of the bill, and then I think the education policy side, very much students are better off. And I just wanna make sure, and it's very important that we do all the pieces at once because it's interrelated. But sort of, for me, go no goes on the tax stuff is really that taxpayers are better off on the other side of this. Right? And I think that's true for all of us, but I just wanted to state that at the outset. So we walked through all of it yesterday. So I think it's up to you. Do you have questions? Are there more we could have for you? Do you have

[Rep. Chris Taylor (Vice Chair)]: thoughts you want to share?

[Rep. Peter Conlon (Chair)]: No, I think we raised a couple of issues that have to get thought through. We have she lost the start date when things get put in motion. We have the issue of for a number of members, the issue of being able to spend something less than 100% if they're running an efficient district. Talk about the need for the high school weight. Scott, a couple of Anything else to add to that?

[Rep. Scott Beck]: I think, yeah, the CTE weight, I think. I think also the Maybe you know, we can just try to unlock something that maybe, you know, throws in some some other things that we can unlock. We can agree on a date of implementation of the foundation, I know that the governor wanted '28, and this was, I think, it's at like '30. Is there another year that we can agree on?

[Rep. Emily Long (Member)]: I think that's a great question. I sort of walked in this morning being ready to talk about the fiscal side and not talk about the calendar yet. So I wonder if we could imagine that however it moves, everything would need to move and we can adjust the effect.

[Rep. Chris Taylor (Vice Chair)]: Okay.

[Rep. Emily Long (Member)]: I will say that I think staff is very carefully not including effective dates in three drafts of this right Okay.

[Rep. Peter Conlon (Chair)]: Because that would be

[Rep. Emily Long (Member)]: a waste of their energy. Can I ask you a question about the less than 100%? I understand why you would want districts that are effective and efficient and delivering quality services to students and having good outcomes to be able to spend less than 100% of the foundation formula. I it's a new idea to me. I sort of heard that it was floated in the Senate maybe last week, but it's a new idea to me. And I can't fathom how that would actually work. Do you have an idea for how it would work?

[Rep. Scott Beck]: Yeah. Well, I mean, it would just you know, it it would be up to the electorate of the the district to determine I think every district out there wants to provide an excellent education. I think they definitely have criteria that flows out of AOE, things that they have to provide. And I think we're probably gonna see some changes to that over the next couple of years. Mhmm. And then I see it as their school the board school board would tell the voters, you know, we think in order to provide the education that you want us to provide, that we need to spend this much money and ask for a 100% of the EOP. Other districts might be we need to ask for the 100%, and we also need to do a little bit of supplemental spending. And then some districts other districts would be we think we can do this for 90% or 92% or whatever that they think they can you know, if they feel like, hey. We can do everything we do, provide the excellent education that our voters expect, satisfy all the requirements from AOE, and that they would have the ability to, you know, basically make a plus or minus decision

[Rep. Emily Long (Member)]: So we spent really an embarrassing amount of time in Ways and Means calling it supplemental district. Can someone just turn it

[Rep. Chris Taylor (Vice Chair)]: off on the telephone?

[Rep. Emily Long (Member)]: Thanks. Naming it supplemental district spending, but would it like you're sort of conceptualizing it as sort of like supplemental district underspending or something like that.

[Rep. Scott Beck]: I think it would just be they agree to accept some percentage of the EOP. I mean, if you do supplemental spending, you're accepting a 100% of the EOP. Right? Then you're just on top. Mhmm. If you're if you're not above a 100%, you would just say, we would like to accept

[Rep. Chris Taylor (Vice Chair)]: And we would

[Rep. Peter Conlon (Chair)]: 95%.

[Rep. Emily Long (Member)]: And you would vote to do that?

[Rep. Scott Beck]: Yeah. And they would receive a a light percentage decrease. So if they if they spend 90% of the EOP, then their their state tax, their their district tax rate would be 90% of the statewide homeless debt tax rate.

[Rep. Emily Long (Member)]: So the supplemental district spending tax rate increase is not 10% more. Right? It's set up differently than that. And so are you imagining it would mirror on both sides? Or are imagining maybe different systems, whether you're spending more or spending more?

[Rep. Scott Beck]: I think above, I think you're spending 10% more of the base. If you're not taking the full EOP, which is a weight structure, you'd be saying we're gonna take, you know, 90% of the base and wait. That's how much money we're gonna take. We're not gonna take a 100% of the base and wait. We're gonna take 90%. Mhmm. And if we choose if our voters choose to take 90%, then our our our district homestead tax rate would be 90% of the statewide. It's a light percentage.

[Rep. Emily Long (Member)]: So how would that work with the so we have the statewide grand list that is so we've got the tax rates for the whole state based on the statewide grand list in order to raise a sufficient money at the same tax rate. If you take 10% off one district's tax rate, that wouldn't necessarily equal 10% less spending because you have Right? You have different brand lists.

[Rep. Scott Beck]: Yeah, no. And that's, I think, is actually a deterrent to a district to spend less. JFO has done some preliminary analysis. They may not be ready to speak to it today. But that actually, you know, in in almost all cases, if a district said, we wanna spend 10% less, and we want the 10% lesser tax rate then the amount of money that they're foregoing is greater than the tax savings that they're achieving. So does Is that true for every district? I don't know if I'd be able to say But every if if in other words, it was it was looked at if everybody did this, what would this mean? And it would mean that the the the foregone revenue would be, I think, far greater than the tax savings.

[Rep. Emily Long (Member)]: Well, if everyone's in it, of course, it would work.

[Rep. Peter Conlon (Chair)]: I think what Scott's talking about is, you know the districts that are lower spenders now. Yeah. Those would be if you did the analysis.

[Rep. Emily Long (Member)]: But it could be a district. I mean, it could be a district that's out. I don't know if

[Rep. Chris Taylor (Vice Chair)]: we could account for that.

[Rep. Emily Long (Member)]: I'm not arguing it, I'm really just I think this works for the eleventh hour.

[Rep. Chris Taylor (Vice Chair)]: The problem that we're trying to deal with is, right now, if we put in the weights, we've got towns that would be forced to spend significantly less per student, and everybody is still saying, well, in my town, I mean, we've already made painful cuts, and then we've got towns that, generally, they're financially poor account, who are not spending what the numbers say they should spend. Some of those probably are doing a really good job. And I think, you know, until we get to the final districts and delay that, but there is a decent chance that when we get to the end, that some of these financially poor accounts, the people don't have the money. How are we going to deal with that? And I think we're saying, well, if your homestead exemption is such, but the combination of looking at that sheet and saying, my town's gonna see a 30% increase in its tax rate if if we went today.

[Rep. Emily Long (Member)]: Mhmm. No. I I understand the I understand.

[Rep. Chris Taylor (Vice Chair)]: I don't know. I think we may be dealing with a problem before it is a problem, but it is a present problem Mhmm. With caucuses on both sides. I Abs

[Rep. Emily Long (Member)]: I mean, I really do understand the problem you're solving trying to solve, and I think it's an interesting solution to it. I really am just trying to figure out how to make it actionable. Could, you know, I appreciate the idea that the agency of education would sort of validate that they're providing, you know, quality services, etcetera. And I appreciate the idea of sort of paralleling percentages up and down. I think that makes sense. I just the tax rate discounts are confusing to me. That's all.

[Rep. Scott Beck]: Yeah. I I think the way you would see it play out is that, you know, you have your December '1 letter comes out. There's a statewide homestead tax rate. And then there's kind of a decision point there. You know, we could either make that tax rate dependent on 100% EOP Mhmm. And then, you know, it's set. And then if districts and there's there's a there's also a you know, and then if districts spent less, then we could If you take a percent off that, what that would do, probably, creates a surplus in the fund for the next year. Or the other ways you could try to the same thing we do now. You query these school districts in the fall. They tell you what they're gonna spend. You try to zero that number in right there. And then depending on what actually plays out in the winter and spring, just like it does right now, the number may go up or down. Certainly locking in that rate would be a more conservative approach, would almost really guarantee a surplus for the

[Rep. Emily Long (Member)]: I will say in the existing bill, in both all the versions that we've looked at, that rate and the supplemental spend rate are locked in the year before. So districts can do their budgeting based on advanced knowledge of that. And so I think that if we were going to do a supplemental under an underspend rate, that would need to also be locked in the year before. I think it's one of the many areas of the bill before us where things work the math works significantly better with larger districts. Right? Like, think that our total spend with the foundation formula and the weights is lower with larger districts when we model that. And anything related to grand list equity, whether the ups and downs would work differently around speed, work better with larger districts. And if I am you know, I think some of the options on the maps in front of us next year, if we're looking at 40 districts, I think what you're proposing could get really messy in terms of what a 10% discount on a tax rate would mean in different areas of the state, in terms of their ability to contribute enough to the Ed Fund. But I haven't seen a model, so I don't know. That's just my instinct.

[Rep. Peter Conlon (Chair)]: But

[Rep. Scott Beck]: I think there is a problem with when we solve it.

[Rep. Chris Taylor (Vice Chair)]: Yeah. Yeah. Appreciate that.

[Rep. Emily Long (Member)]: Don't see a path for this. More detail would help me think about it more. Because really, I'm just getting lost in how to do it and not whether or not it's a good idea right now. So if you could show me how to do it, I could think more about whether or not we think it's a good idea. And I don't know if that's formal language or In

[Rep. Chris Taylor (Vice Chair)]: the middle, as we're looking at it Mhmm. Somewhere in here, there is supplemental spending above. Mhmm. Do we still have any excess revenue generated going into the school construction fund because originally, we had in listed finance had talked about that money to flow back in to the bottom line and be used to lower tax rates, which might I

[Rep. Emily Long (Member)]: think both versions of the bill have it. The first year that it's in there, it's used to make sure that the overs and unders and fill out well, and we can have stable tax rates year over year. And then the second year it waterfalls into the school construction fund because in all the conversations we had for the first half of the session, one of the biggest red flags for everyone was how can we do education transformation without school construction? No one was ready to tackle that. And so it was at least a nod to the idea of funding school construction. I think it makes sense. There's a lot to be said for it going to the bottom line. And one of the challenges with it going to the bottom line is when different amounts go to the bottom line in different years, we wind up with wilds ups and downs. I think we've ridden some of those.

[Unidentified legislator/staffer]: Go ahead, I would say, school construction would not rely on an unreliable funding source.

[Rep. Chris Taylor (Vice Chair)]: Yes, and I know third party at this table has concerns. Pluggeds have been sent about guaranteeing or putting state money, especially at this point, in to school construction. I think part of it is that we are still all thinking in terms of our present schools, which will not be the construct. No. And we won't know until we have the time to map those new districts to be able to know what the impact will be on the low economy schools map. Mhmm. But there is a good chance that some of them could see a significant tax rate increase, whether we want to let them spend less than what we say they need to spend. The question is, how do we deal with those challenges? 100%. Yeah. We

[Unidentified legislator/staffer]: have in all of the well, everyone will say that. We have a proposal from us that includes your phase in of tax rates and phase in of spending as well as our proposal for the homestead exemption, you know, as we saw on the blue and white chart, would help offset some of that.

[Rep. Emily Long (Member)]: And we can look at I guess I would say just

[Unidentified legislator/staffer]: I I would definitely I I don't think any of us here are against this concept that you have brought up, but it's somewhat perplexed as to the details of how it works in there. Well, it's one

[Rep. Peter Conlon (Chair)]: one we're glad to hear you're okay to it. Yeah. So one one thing you could do is rather than to phase in the way we have it set up now, go 85, 86, 87, 88, 90. You could just use that as the phase in. You could do it down the other side until you get to that.

[Rep. Emily Long (Member)]: I actually have no idea what

[Rep. Chris Taylor (Vice Chair)]: you're talking about.

[Rep. Peter Conlon (Chair)]: Than Well, the 20%, it would just do first year, you can spend 85%. Second year, you have to spend 86%. Third year, you have to spend 87%.

[Rep. Chris Taylor (Vice Chair)]: For fifteen years? Well, to get to 90%.

[Rep. Peter Conlon (Chair)]: Takes the five It's the same five years, it's just a different way to get there.

[Rep. Scott Beck]: Something simpler. Yeah. Because it's just

[Rep. Emily Long (Member)]: Off the cuff, I think the sort of that the default would be 100 and then Yeah. Law, and then the other two would be Yeah. And I hear what you're saying.

[Rep. Chris Taylor (Vice Chair)]: That's an interesting idea. It's just simple.

[Rep. Emily Long (Member)]: Yeah. The so I'd just love if you all could bring more details on that. That would be really helpful. And I hear what you're saying about the CTE weight and the high school weight. As you know, it's not in either proposal, and research doesn't tend to back up the need for it. And I hear where you're coming from, so I'm just gonna set that aside for now and keep on thinking about how to make the math work.

[Rep. Scott Beck]: But the data does.

[Rep. Emily Long (Member)]: I don't know how to say that. I'm wondering about the other sections of the finance portion. I hear you making your offering additions to the finance portion. And I'm wondering if that means that you're accepting all the other finance portions that we offered, if those additions are there, or if you haven't had a chance to look at them yet.

[Rep. Peter Conlon (Chair)]: I think it's more of the things that have to get added. Things

[Rep. Emily Long (Member)]: that have to get added. Added.

[Rep. Chris Taylor (Vice Chair)]: Yeah. Okay.

[Rep. Scott Beck]: I think we'd like the language that you put into this sparsity that sent it. But I think the language that you put in there is what's better than what was meant

[Rep. Peter Conlon (Chair)]: for sure.

[Unidentified legislator/staffer]: Thank you. I've done it

[Rep. Peter Conlon (Chair)]: with your language. Well, you guys made it better.

[Rep. Scott Beck]: Or Manor said it.

[Rep. Peter Conlon (Chair)]: Or John made it better. Don't know who made it better.

[Rep. Emily Long (Member)]: Everyone in the whole room worked on that sentence. And so I hear changes you would want to make to supplemental district spending. That's her end. We'll think about that with further details that you offer. I have no idea what page you want. Thank you.

[Rep. Peter Conlon (Chair)]: I we can take that. I'd like to put you in the supplemental, Okay. I

[Rep. Emily Long (Member)]: On the homestead exemption, do you have

[Rep. Scott Beck]: So this is the House proposal that's in here right now, right?

[Rep. Chris Taylor (Vice Chair)]: Yeah. Haven't gone over

[Rep. Emily Long (Member)]: that yet.

[Rep. Peter Conlon (Chair)]: What page are we on?

[Rep. Emily Long (Member)]: It's such a good question.

[Rep. Chris Taylor (Vice Chair)]: It's one that didn't get highlighted, so we missed it last week.

[Rep. Emily Long (Member)]: I think it starts around 109 ish. Section or page?

[Rep. Peter Conlon (Chair)]: Page. Yep. Oh, here we are. It's one ten. Yes. Man, this is your truth.

[Rep. Scott Beck]: Sorry. Can't say this is your truth.

[Rep. Peter Conlon (Chair)]: One zero nine.

[Rep. Emily Long (Member)]: So this is an action,

[Rep. Chris Taylor (Vice Chair)]: but don't have a 100. You can.

[Rep. Emily Long (Member)]: Oh, It's like you've

[Rep. Peter Conlon (Chair)]: got the you've got the old one.

[Rep. Chris Taylor (Vice Chair)]: That's the old one.

[Rep. Scott Beck]: Yeah. You've got the old one.

[Rep. Chris Taylor (Vice Chair)]: Alright. That will go get my other one. So my looking at 4.1 over that? Committee. Okay.

[Rep. Emily Long (Member)]: I'm in Section 51. How's it this?

[Rep. Peter Conlon (Chair)]: If you can focus on the device, I'd like it, but which is not it?

[Rep. Emily Long (Member)]: So this is the house pass version, except we used the We actually used So the house passed version did not have a cap. We added a cap to this. It was actually lower than the cap that you all had, which was actually just because Julia hadn't modeled the higher cap yet with our construct, would be very happy to meet. I think that the numbers might work better with your cap in using your cap. I think sort of preliminary numbers look like the cost of that is lower than the cost that we talked about earlier. And so the cap is helpful in that way. Again, no one's kicked out of the program. It's just it sort of maximizes the benefits. It's I don't want to be a broken record, but I think it's crucially important that Vermonters aren't paying more in property taxes on the other side of this. And the other thing that I would add is if a lot of this work and a lot of its programmatic work on the part of agency verification really happens over the next number of years, including through our consolidation, then all the tax rates would go down.

[Rep. Peter Conlon (Chair)]: You remind me, Emily, in this proposal, what

[Rep. Scott Beck]: is tied to it? What is or is not tied to an inflator in this proposal?

[Rep. Emily Long (Member)]: Everything's tied to an inflator.

[Rep. Scott Beck]: So the 400,000 and the

[Rep. Emily Long (Member)]: I think so. Different brackets? Yes. Yeah. Okay. I feel like that was one of the greatest mistakes that was made thirty years ago. And I feel committed to adding inflators to almost everything, everywhere. The other piece that is in here is a request to the Department of Taxes to study moving up to 175, because the fact that we stopped at 110 is really just because we didn't have the ability, we didn't have the numbers to go up to really look at that. But I think folks, general consensus seems to be around the building these days. That one seventy five is sort of when you brought in most regular folks, household if we're talking about households. We're talking about So our what?

[Rep. Peter Conlon (Chair)]: Talking about a study.

[Rep. Emily Long (Member)]: When we're just talking about studying it, but we really wanna understand that to make sure that we're bringing in middle class families. And our other tax credits tend to go up to 175.

[Rep. Chris Taylor (Vice Chair)]: They do. Mean, Anne and

[Rep. Emily Long (Member)]: I have been spending time in other conference for many times.

[Rep. Peter Conlon (Chair)]: Oh, okay. Oh, Okay, now I know. What's that?

[Rep. Scott Beck]: Well, I think also in here, there's also a I mean, understanding is in here there is enough leeway. Jake and Rebecca were here

[Rep. Peter Conlon (Chair)]: the other day for tags that they feel like they need to

[Rep. Scott Beck]: do some more work to really fine tune this. And I think what's in here allows for that work to continue.

[Rep. Emily Long (Member)]: Yeah, we have a lot of years for fine tuning. And we tried to be really explicit about that in the study. I think that's true across the board with this bill, but I very much have appreciated all the work that JFO and TACS have done together to fine tune the original proposal to bring you this.

[Rep. Peter Conlon (Chair)]: I think we can probably go with what's in here on that subject.

[Rep. Emily Long (Member)]: Does going up to the great. Does the slightly higher cap of $4.25 that you all had in your original proposal work, This one has 400.

[Rep. Peter Conlon (Chair)]: You put it in at $4.25?

[Rep. Emily Long (Member)]: I put it in at 400 here, but it was something of an accident, and your original proposal had $4.25.

[Rep. Chris Taylor (Vice Chair)]: Either one. Either one? Okay. $4.25.

[Rep. Emily Long (Member)]: I'd prefer 420. I think we'd prefer 425. Okay. Thanks. Great. Okay. I'm gonna close that section up with that. Thank you. Regional assessment districts. No one we have no differences between any of this, and that's tax department language. And so all good across the board on regional assessment districts.

[Rep. Peter Conlon (Chair)]: Keep keep keep telling us which section ones you

[Rep. Emily Long (Member)]: need. Thank you. Sorry. Section 62. And? Page one forty two. Okay. Well, wait a minute. We haven't had even the beginning of a conversation about it, but it was Okay. And just for formality's sake, all the miscellaneous tax provisions that we got from various places and that everyone agreed to at the bottom of the they're mostly from the miscellaneous tax bill. We can have Kirby talk through them, you guys need anything. Okay. These are all the same. Yeah. It's the same. They were totally the same between versions. Okay. Thank you.

[Rep. Chris Taylor (Vice Chair)]: And

[Rep. Emily Long (Member)]: so I think that brings sorry, I'm not going from easier to harder instead of going in order. I think the last thing on the finance section is the division of the non homestead classification. Is

[Rep. Peter Conlon (Chair)]: that in the study? Or is

[Unidentified legislator/staffer]: that No,

[Rep. Emily Long (Member)]: that is the House proposal.

[Unidentified legislator/staffer]: Page 99, right And

[Rep. Emily Long (Member)]: we're saying fine. We're saying, please do it and further refine how you're going to do it in the many years we have between implementation.

[Rep. Chris Taylor (Vice Chair)]: We do define them.

[Rep. Emily Long (Member)]: We do define them, but we're also asking them to develop forms and have them come back with I think we're very responsive to the tax department when they ask for changes.

[Rep. Peter Conlon (Chair)]: We are doing a company search.

[Rep. Emily Long (Member)]: This ability to really separate out these categories has been a pretty tough priority for us for a number of years, and we've done a lot of groundwork towards it. And I worry that if we delay it, we're gonna lose it as part of the overall timeline that's in this field.

[Unidentified legislator/staffer]: I would say it's not just caucuses around bodies, but Vermonters have to say, why aren't we separating these out property tax classifications year after year?

[Rep. Emily Long (Member)]: I would say of all I imagine we all get a lot of email. And of the email that I get from throughout the state, which is significantly more than the email I get from my district, this is the top thing that people ask of me.

[Rep. Peter Conlon (Chair)]: It's funny because I don't know. But I I understand that happens between Yeah. Yeah. You're sick at home.

[Rep. Scott Beck]: Well, we will have to

[Rep. Peter Conlon (Chair)]: talk about this one. Great.

[Unidentified legislator/staffer]: And I guess I would also suggest maybe we take a lunch break, and then if you folks could put together some language maybe with the judge counsel on some of the things

[Rep. Scott Beck]: we talked about about Yeah. Understanding that's a work on sending something back to you that looks a lot like what you've given us. Yeah. Mhmm. Yes. Yep.

[Rep. Emily Long (Member)]: But I Okay. So I've heard that we've closed up a bunch of sections. What's still open is the tax classifications and then the supplemental spending and some of the weights, as well as those two sections from yesterday. Okay. Great. Thank you very much. This is all pending.

[Rep. Chris Taylor (Vice Chair)]: Yeah. I haven't run Of course. Giving up our tax homestead exemption system for yours by my people. Mhmm. Felt fairly strongly that they wanted to see it at the lower end. Okay. When

[Rep. Emily Long (Member)]: do you wanna come back?

[Unidentified legislator/staffer]: It'll probably depend on their work with lunch counsel and JFO.

[Rep. Scott Beck]: Let's We all probably want everybody wants to get lunch because I think many of us have missed the last one or two years at least, and we get together with JFO.

[Rep. Chris Taylor (Vice Chair)]: Three? The fact that we're twelve two.

[Rep. Scott Beck]: Should we try for two?

[Rep. Emily Long (Member)]: I think so.

[Rep. Peter Conlon (Chair)]: Let's please.

[Rep. Emily Long (Member)]: Okay. Let's people that will get very upset if we're not

[Rep. Chris Taylor (Vice Chair)]: doing this for three hours.

[Rep. Scott Beck]: Yeah.