Vermont Legislature SmartTranscripts:

[Sen. Ann Cummings (Chair, Senate Finance Committee)]: Maybe what?

[Rep. Peter Conlon (Chair, House Education Committee)]: Okay, conference committee on H4504. We're back after a relatively brief break.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: And I'm sorry.

[Rep. Peter Conlon (Chair, House Education Committee)]: Yeah. Okay, so when we started our last session and you all said, we didn't mean to disrupt the proposal, It gave three of us the impression that you were backing off of everything, not a small portion of it. We now are very clear on that, and we have discussed the challenge of much of what you have proposed of the of the broad nature of the proposal, the fact that none of us have had a chance to vet it with people, We simply do not believe there's a way to move forward with that in any other way than to say, we understand that it is an issue and we fully agree that it needs to be studied. And if we want to work together on language that says that it's the intent to study this, we can do that.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Representative Taylor, you were talking about this earlier, and you've been a little I don't know if you want to expound on it, but if there's ways we can make other things contingent on us studying and solving it to some degree to give I think we all understand that a study can sometimes just be a study, and sometimes a study is actually solving a problem.

[Rep. Chris Taylor (Vice Chair, House Education Committee)]: Then I can give it more teeth at the end. So if we can come up with something that's agreeable to all of us to have that in language as a compromise.

[Rep. Peter Conlon (Chair, House Education Committee)]: I would I don't think you're probably surprised by that. I think that the I feel confident you recognize the amount of sort of vetting what would need to go on and the understanding of its implications that really should be taking place before passing this amount of change. I hope you realize that, that concern it brings to us. Go ahead.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: And I would say sort of very explicitly on the underspending proposal, ways we can talk about how that would be studying, that would be integrated into all of the different transition work that's happening in here, right? There are maybe five different pieces that we're doing from looking at what variable tax rates would look like. We have the transition. We have homestead tax rate changes, which are you know, sea change, right? All of those things all lining up with each other and already in the bill is an agreement that we will make sure that we come back before any of this is effective to really look at all that math together when it's closer to the date, because it's really hard to do it for a couple of years out. And so ways we can do that and make the action contingent on that actually happening, we're very happy to do that. On the need for-

[Rep. Peter Conlon (Chair, House Education Committee)]: Yeah. So the proposal to just say that independent schools can continue to charge tuition during this time, you know, to hear sort of two stories at the same time. One, about the importance of independent schools providing a service that doesn't exist in these areas that don't operate. I've fully supported the fact that they are part of our educational system and folks from your arena have made that very clear that they feel the same way. Yet, we are asking a lot of our educational system in this process. And to say, you know, well, one part of this doesn't have to worry about it is difficult to say to to to sort of fathom. I under I I understand what you were saying previously. I guess what I would say at at this point, I don't really have a a counter to your proposal. I'm just gonna sort of let it sit for the moment, and that maybe probably it would be best for us to move on to a topic where maybe we can find a little bit more common ground. So I guess I would suggest we turn our attention to the property tax class ifications and the deal.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: And I think just sort of right before we do that, I just wanna I think the issue of CTE is really important. I know that there are various ways of solving it. None of them are available to us right now at all. And I think many of us have spent I've spent the last four plus years seven. I think my very first session was working on CTE. So I've spent the last few years working on CTE and there's the constant churn of the system we have now, the money incentivizes the program, the program incentivizing the money, which goes first, etcetera, etcetera. I think we've had broad agreement this year that you need to design education policy before you design education funding. So when we're working and I think it's really important to account for those costs in the overall system. And so want to find a way similar to what I'm work I think I hope we can do with special education is say that these costs will be covered by the current system, by the system as proposed. And we are going to figure out the possibility, but we will do it in a way that doesn't cost the overall system more money. And so to just make sure that we are accounting for all of those things going into the future. As we make the huge policy decisions about how that's delivered And whether that's a very mixed model or consistent model, I think it's for a future legislature.

[Rep. Peter Conlon (Chair, House Education Committee)]: And I fully support that we need to take a good comprehensive look at current technical education and how it's delivered and how it's funded. I don't think anybody's trying to say we need these programs can be shortchanged and these programs can't.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Yeah. Are there

[Rep. Peter Conlon (Chair, House Education Committee)]: any questions or do you all have questions, responses? I think also in here was starting the foundation FY '29. Do you accept that?

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: I think if we're gonna move all the I think if we're gonna move a date, we have to move all the dates.

[Rep. Peter Conlon (Chair, House Education Committee)]: We'll we'll save that, see how we how we move along here.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Okay. So I'm not sure what else much I have more I have to say about this. But if we are concerned about Vermonters' ability to pay their property taxes, folks who are older Vermonters on a fixed income living in their homes, middle class families trying to make it work, Vermont's taxpayers. A lot of that's going to be addressed in the changes in the homestead property tax system. And that's a very, very important part of this work. Right? And I really appreciate how we've come to agreement on that. And we're working on all those transition pieces together. And I think that's great. We're gonna still need We're gonna need more levers. Right? We always need more levers, especially given, I think, maybe some of the instability in sales tax in the future, possibly, right? We've talked about sort of the third party in this room. I don't think we've talked, maybe because it's too terrifying, about the federal landscape and how it's going to affect all of this, right?

[Rep. Peter Conlon (Chair, House Education Committee)]: That thought has crossed our mind.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Of course. It might be too much.

[Sen. Ann Cummings (Chair, Senate Finance Committee)]: Have deal with them tonight. Yes. And

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: so if we are going to be planning for that future, if we are going to be able to have the policy tools that we need in order to be flexible and ensure that our education system is fully funded in a way that Vermont property taxpayers are able to have stable property taxes, we're going to need to add more policy tools to that toolbox. And in order to set up a system where we can tax second homes differently from rental apartments, differently from businesses and farms. We need to start that process now. It is a big project for the tax department. I have full faith they can handle it. They're unbelievably capable people. But if we don't start that now, it's not gonna be ready for when and if we need it. It's not a switch that we can turn on. And I think many of us have been trying to turn that switch on for a couple of years and keep on hitting the wall, the administrative wall. And so if we want to, if we're going to ever want to do this in the future, we need to start the policy now, or we won't be able to do it in the future. And so the decision about whether or not to tax another category more is a decision for a future legislature if it's needed. But the ability to do it is what's in our hands now. And we are closing off that possibility for the future if we do not turn that lever on that. And so when I think about having this policy, this whole package be responsive and be preparing us, I think we would be doing Vermonters a disservice and future legislature as a disservice if we were not preparing ourselves for that. I know that most people think of this in the context of taxing second homes, which certainly is a very attractive to many Vermonters. It also enables us to lower property taxes on apartment rentals or rental properties, which is something that's also a major policy goal of this body. If we're talking about doing a land value tax ever, which is a proposal that keeps on coming back, That is also, this gives us the tools to do that. It is not about raising new revenue necessarily. It's about making sure that our property taxes are able to be nuanced and responsive in the face of all this other stuff. Because if we want to keep property taxes stable for homeowners and landlords, we can only do that if we create other sort of valves turn on and off. And so that's why this is in here. That's why it's sort of an intrinsic part of this proposal.

[Sen. Ann Cummings (Chair, Senate Finance Committee)]: We did we share all those goals.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: I know that. We've been talking about for years.

[Sen. Ann Cummings (Chair, Senate Finance Committee)]: Yes. And I think it's just how we went about it. I mean, you had the pill for two and a half months. We had it for two weeks. If that, you know, with floor time cutting into it. Mhmm. We have half a day. And we just didn't get the time to even start about feeling comfortable making the divisions now and doing the definitions. We know there's a lot on what do you do with something that has a store downstairs, an apartment upstairs, and I live in the room behind my store.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: The

[Sen. Ann Cummings (Chair, Senate Finance Committee)]: multiuse kinds of things. The text our idea was we sent it to the tax department and said, fill it out. And they came in and did pretty interesting thing on just the challenge they're having on defining the property transfer tax with what is a year round house. And if we define it wrong, and if so many inches of insulation, we might quite be removed.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: And Rebecca came in and told us

[Sen. Ann Cummings (Chair, Senate Finance Committee)]: about that. Yeah. Yes. You know? And so we sent it to them saying, you get it defined so that when we do it, because we just we didn't have time to to take testimony or look at being that specific. So we just said, come back to us. Tell us what's doable and, you know, an estimate so we know how many second homes we have. So we know what the revenue potential is.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Absolutely. So with all due respect to the tax department, we've asked them to study it a bunch of times, and they have not come back with very satisfying studies. Well, they And so, and I There was no debate. Yes. All with all due respect to the tax department. Yes. And so I wonder, and we cannot actually find out how much it would raise or how many they are until we actually put the classifications in law. So it's a multi step process. We need the classifications in law. They need definitions. The definitions can go before we can define them, set the classifications, and then clarify those definitions. But then they need to be in law for a little while before we can actually do all that counting and math. That's one of the reasons we need this long timeline. And then we could consider setting rates if we wanted to. And so what I would like to understand a little better is there's a way that we could set the classifications in law now, give them the time to clarify, and maybe some of those definitions we could set contingent on further study or something like that, but really become much closer to putting it in law, given the fact that we've asked them to study it a few times and we have not gotten something very satisfactory about. The other piece I'd like to address is that mixed use question. Our committee spent a lot of time circling on that kept on coming back to the fact that we actually do handle that already in current law. We already have many, many properties that are both homestead and non homestead. And we manage, the tax department manages that. And so I don't want to call it a red herring because I've gotten myself spun up in knots about it. But it's, I think, a very, very solvable problem because we've already solved it in current law. And so I wonder if you'd be open to figuring out a way we can set those definitions more contingent while moving a little bit more firmly forward with this proposal. Okay, thank you. Okay, I can work on that. I wanted to check with you before I had anyone work with that language.

[Rep. Peter Conlon (Chair, House Education Committee)]: Yeah, I'm not sure what that means. When you took the Yeah. But it's part and come back to you on that, because that's

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Okay.

[Rep. Peter Conlon (Chair, House Education Committee)]: It's got its issues with parts of it. Yep.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Are there other pieces that we could come back to here?

[Rep. Peter Conlon (Chair, House Education Committee)]: I think this may be a good time for the staff to have data then.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Okay.

[Rep. Peter Conlon (Chair, House Education Committee)]: And so, I guess we would

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: Okay, great.

[Rep. Peter Conlon (Chair, House Education Committee)]: We would ask that in your considerations and in your thinking that you please consider a lot of this stuff that is new, wasn't in our proposals, is somewhat vast and undeaded and not easy to explain in the next few hours as to how we can address that, but in a way that is serious, and as you said, with a little more teeth about making sure it's forcible study that will result in steps forward.

[Rep. Emilie Kornheiser (Chair, House Ways & Means Committee)]: I think it's sort of the eleventh hour with all of our colleagues in the building waiting on us. I think this is a great time to add a lot of contingent language in here as a path to finding an agreement. And so I'm happy to work on some of that. Would love if you could bring some of that and discuss that amongst ourselves. Okay. Cool. Top agenda, let's regroup.

[Rep. Peter Conlon (Chair, House Education Committee)]: Seven seven.

[Sen. Ann Cummings (Chair, Senate Finance Committee)]: Seven