Vermont Legislature SmartTranscripts:

[Jana Brown (Clerk)]: We're live.

[Peter Conlon (Chair)]: Okay. We are live. This conference committee on page four fifty four on June 12. I know everybody's been working. And we started a little bit late this morning just to do a little more work on some language with legislative council. So we have it just to get the things started. We have passed out or had They can pass out language that does two things, two separate concepts. One is to add language. We talked about this a little bit yesterday on intent language. In the first sentence, I suppose, in some ways, the key sentence. It's for the intent of the general assembly to ensure the imposition of the new statewide education tax rate contemplated by this act does not result in an increase in education property tax bills relative to Vermont's current education funding system for municipalities across Vermont. And then just a little bit of the ways in which that will come to pass. So I'm not gonna read the whole thing.

[Kate McCann (Member)]: Can we have a brief moment

[Jana Brown (Clerk)]: of silence while we read it? Yeah. Yeah.

[Kate McCann (Member)]: Is this entirely it's new and not replacing?

[Peter Conlon (Chair)]: I think it's all new. Okay. Else in yellow was saying? Okay.

[Kate McCann (Member)]: It's not replacing not striking on the upwards parts of this fairly endless needle.

[Peter Conlon (Chair)]: Okay. Great. Thank you.

[Emily Long (Member)]: So this is additional, not

[Peter Conlon (Chair)]: Yes. Okay. Thanks.

[Emily Long (Member)]: We're good to

[Jana Brown (Clerk)]: I'm I'm good

[Kate McCann (Member)]: to talk about the next section. Yeah.

[Peter Conlon (Chair)]: Thank you. So the next section, has to be with tuition. And we had the discussion yesterday, about tuition. We started off, you know, at one point, we were talking about weights, then we're talking about So what we are coming back with, is the notion that receiving schools, be they public or independent, that chart can charge tuition of up to a 110% of the base amount. And then if it's a CTE, comprehensive CTE, that is an school because the public CTEs, there's no change under what's being proposed. The only change would be for the independent CTEs. And this is just to ensure that they can charge up to 120% total, 10% for the high school weight and 10% for the CTE weight. And so, one of the beauties of this is that it's got no statewide impact. It's only impact within the district where the So, that's the proposal.

[Emily Long (Member)]: The the point one why I guess that over another number? The point one that you have selected as for both CTE and grades nine through 12. They're probably both downward.

[Peter Conlon (Chair)]: If the, you know, the level of tuition right now is to would indicate a 12.5% differential for high school. We just went with a point one. That's what we had done from the start, just figured it's close enough, little bit low, close enough. And I think, Scott, what you probably Yeah,

[Scott Beck]: I mean, we've looked at what a In the bill at one time, it was an FTE, CTE weight of one. Mathematically, that came out to about a point one four. So just round it down to point one. It's fine. We can make it work with that.

[Kate McCann (Member)]: In this construct, how does the district consent to it? Like, what's the legal mechanism for a district to consent to that

[Scott Beck]: The price. The district wouldn't consent. The receiving school, public or independent school, would notify the district of what amount up to 10% of the base that they're they're, assigning. So they might say they don't need any. They might say it's fine. They might say we need 2%, 8%, you know, whatever. They would they they would be the ones they would assign the amount.

[Kate McCann (Member)]: I've been thinking about where there are other places in law that government doesn't consent or even set the price that they're willing to pay. You know, like Medicaid, there are specific rates that are set for hospitals, even though hospitals have a longstanding, you know, integrated relationship with their community. And I'm wondering if you have I'm just, like, trying to find any other parallels to the law to, like, hang my hat on as I think through this stuff. And I'm

[Peter Conlon (Chair)]: In a way, you can hang it on a 110% because the only difference here you could just say a 110%, Chaupe, except it's giving the option for the independent schools who work with their communities and have for two hundred years to do less if that's what's needed to make the system work. Otherwise, you could just say a 110%.

[Kate McCann (Member)]: And in a nonoperating district if

[Peter Conlon (Chair)]: Are you are you speaking of

[Scott Beck]: a district that doesn't operate any public schools? Yeah.

[Peter Conlon (Chair)]: Okay. Okay.

[Kate McCann (Member)]: So in a district that doesn't operate any public schools, let's say, the way the new districts line up, we wind up with a couple let's Northshire District that doesn't operate any schools. And in that construct, the supplemental district, we're sort of fifteen years out from the transition. The supplemental district spending cap is at 5%, how would that district be able to pay The 10%. Or 2020%, yes, or 20%.

[Scott Beck]: I mean, I think that's the receiving schools are going to have to work with their districts just like they always have. I mean, there's always a maximum amount that a district can pay or the voters will approve, and they they work with their districts to set a rate that that works for those districts. So the

[Peter Conlon (Chair)]: thing about this is is the way it's always worked.

[Kate McCann (Member)]: I know. But every every nothing else in the bill is the way it's always worked. Everything else in the bill is a great new way to work. Right? So we're like, I'm so I'm trying to be like, okay. Everything everything else is capped. What's a worst case scenario? Are we preparing for that? What happens if a district can't raise enough money under law to pay for this fee that's being set by a private provider?

[Scott Beck]: Well, I I think it all fits. Because remember, in that nonoperating district, probably, you know, just 30%, only 30% of their students are nine through 12. Okay. Right? So they're not we're not talking about their whole student body. We're only talking about this nine through 12 population, which is 30% up to 10%, which is They've three got supplemental of five. So I think the math will all work out in there. Now, if they had all high school students, that would be a little different, but we don't really have any districts that are We won't have any districts that are just in school student.

[Kate McCann (Member)]: So in that scenario where it's not operating and it's elementary schools, would the elementary schools, the private elementary schools then be agreeing to take less than the base amount in order to compensate?

[Scott Beck]: No, this provision would only be for the nine through 12 population. So your pre K through eight population would be base in weights and

[Kate McCann (Member)]: But then where does the extra money come from?

[Scott Beck]: Oh, well, basically comes from the same as in a fully operating district where the, you know, there's a decision made within the district to steer more money to secondary or CTE. In this case, the same thing would happen. The district would steer a little bit more money to secondary or CTE. And then it either it's either a dollar that, either take that dollar out of their operating budget or they ask for supplemental spending to cover it, which is really no different than it works right now. Right now, any receiving school when they ask for a dollar from a sending district, that dollar either comes out of their budget or it comes out of a taxpayer's pocket. It's no really no different than it would be right now.

[Kate McCann (Member)]: I'm not I'm not sure you're understanding my question.

[Peter Conlon (Chair)]: I think it really comes down to whether you believe it costs more to run a high school or you don't. But So I

[Kate McCann (Member)]: think the question No, that's my question. Like, it's really totally mechanical. So if it's a fully non operating district, the non operating elementary schools are charging the base weight tuition as we've sort of set. Right? Yep. And the money's following the student. And then the high school in the non operating district is charging an extra 20%. Where does that money come from? You should have high go to school because you won't be able to shift it in the nonoperating district.

[Scott Beck]: It would I mean, unless they have grant funds to cover that whatever cost they have, then they would they would probably if if there's extra monies there, they would have to go to supplemental.

[Kate McCann (Member)]: But the if the supplemental is set at 5%, like, would it be

[Emily Long (Member)]: Or if the voters vote no on supplemental too.

[Scott Beck]: Well, they that could happen now. A district could vote no on a budget. It now, and as part of the process of trying to get to a budget where the voters would vote yes, there would probably be conversations with receiving schools. If they're a totally nonoperating district, they would have those conversations.

[Kate McCann (Member)]: That's what happened. Imagine the independent elementary schools would then be charging less than the base and the weights as part of that partnership?

[Scott Beck]: No. That's not the way the bill's constructed right now.

[Kate McCann (Member)]: I know. Feel like I need a diagram, but I don't.

[Emily Long (Member)]: Do you foresee it? I guess I don't see anything in the bill, so the answer to this is probably no. No. But any kind of oversight to check to see if that additional charge is justified?

[Peter Conlon (Chair)]: Nothing to be able to suggest that. This will result in, I believe, for both the independent high schools the independent high schools with a CTE is less money than now. And I think they are running very efficient operations now. And I just the problem here is that they can't run on they have to get paid. Mhmm. They have to get paid what it actually costs to run high school. And under the current without this, that that's not happening. So this is an attempt to, within the district, just the way that happens now, maintain maintain the ability for the independent high schools to survive.

[Jana Brown (Clerk)]: Yeah, this is in lieu of setting a weight. Yeah.

[Scott Beck]: It's not just independent. I mean, it's receiving schools. I mean, there are a number, just in my area, a number of public receiving schools that receive public high school students that are charging far more than what the independent schools are charging. So there's, you know, there's a a loss for them, an even bigger loss, actually, on a student basis than what the independent schools are looking at.

[Kate McCann (Member)]: Well, I think in significantly larger districts, that would that that entire scenario somewhat goes out the window. But I I appreciate that. I I the mechanical questions about it are exactly the same in that scenario. The

[Jana Brown (Clerk)]: the concern is once we ratchet down to being able to do 5% above the base. Mhmm. But if your if your entire high school is being sent somewhere else and they're charging 10% above the base, where does the extra 5% come from? Yeah.

[Kate McCann (Member)]: Do you have any other questions about this?

[Emily Long (Member)]: Well, guess, you know, the I'm still believer that CTE is next year issue because the independent schools like St. Jay and LI that run CTE centers are not the only ones with big questions about how it's funded. And I think that, you know, that is it's complicated because we've got so many different systems of delivering CTE between independently standing CTEs and those that are parts of high schools and those that are part of comprehensive independent schools. I'd rather see, frankly, a comprehensive solution to how we're gonna fund CTE adequately. I would as well.

[Scott Beck]: But however, right now, the way this bill is drafted and with current law, there is a mechanism for public CTEs to get paid through a tuition setting mechanism. There is not for independent school CTEs, and that's all we're looking for. It's a mechanism for those schools to know that they're gonna have the resources to provide CTE services for their kids, which public CTEs have. And we're not trying to

[Kate McCann (Member)]: What is the public DTE mechanism in the bill? Because I don't

[Scott Beck]: Well, there's nothing in the bill, which is it's current law. They have a tuition setting mechanism with SBE so that they have the resources they need to run those CTE centers. There is traditionally, up until this point, the two independent CTEs have received those resources through tuition setting. If we're going to take away their tuition setting and not provide a mechanism for the resources for CTEs to get to those schools, they're in a situation where there are no resources to run that CTE. This would provide those resources. Not true

[Peter Conlon (Chair)]: to the public.

[Kate McCann (Member)]: I think it's crucially important that we figure out how CTE centers get paid for CTE services. There's nothing thus far in this process that has even begun to try to comprehend that.

[Scott Beck]: That is true. Including

[Kate McCann (Member)]: how to finance them.

[Scott Beck]: But the way that the independent CTs are financed has been removed. And that's not true for the public. And I'm not trying to

[Peter Conlon (Chair)]: remove the public CTs.

[Scott Beck]: I'm just saying that absent a statewide plan that says how we're gonna have CT

[Kate McCann (Member)]: This is a safety valve.

[Scott Beck]: This is yeah. This is this would ensure that if nothing happens, that those kids that take CTs at those two schools would still have the resources they need for CTE. I would welcome a statewide solution.

[Peter Conlon (Chair)]: And the doctor just doesn't, in any way, make it harder for the statewide solution next year or the year after. There's nothing here that makes it harder.

[Kate McCann (Member)]: I mean, I I think it cements some vested interests, but that's we'll have enough vested interests regardless.

[Peter Conlon (Chair)]: But the vested interest getting paid to fund CTE. Yeah. That's a that's a vested interest. Well, you know, okay. I

[Kate McCann (Member)]: I think we understood the problem you were trying to solve and worked on a little bit of language ourselves that thank you. Yeah. That'd be great. To just try to be more explicit about where we saw some of the solutions already coming from. Thank you.

[Peter Conlon (Chair)]: And

[Kate McCann (Member)]: so towards that question of whether or not it costs more to educate secondary students, it feels like conversation has narrowed somewhat to a matter of faith. Just wanted to add more definition to how we want to study that in order to meet some of your concerns. And so that's on page three. And then also wanted to point out, if you go to the very end of this, the effective dates on page eight,

[Jana Brown (Clerk)]: subsection

[Kate McCann (Member)]: F. And this was existing in the bill, but it certainly I don't know if I certainly haven't read the effective dates very carefully in a little while. So I just wanted to bring your re bring your attention to it. There's a contingent language here that essentially none of this happens. The foundational formula doesn't happen at all unless and until we receive these comprehensive recommendations and are able to act on them. And so I just wanted to make sure that you knew that that was Yep. There. Okay. Great. And then the second piece that we just wanted to share with you is after a bunch of conversations with you all and with the tax department, to narrow the property tax classifications So that was So that we're left with a homestead residential, a non homestead residential, and then a non homestead nonresidential. The nonhomestead, nonresidential is essentially like all of what was commercial before and all those rental property before into one category. That's sort of what's been calling it. Shouldn't you just call that everything else? So that's what that is. So to make it much more easy to administer and to address some of existing concerns about whether or not commercial properties might experience some access from this. So to be more explicit about the goals that In your

[Jana Brown (Clerk)]: study, right, page three. Yeah. It says whether it costs more to educate a secondary student than an elementary student or not, and if so, in the appropriate ways. And then but it doesn't the issue that we've been talking about is not all secondary students. But if if you don't run a full district and all you run is a secondary school

[Emily Long (Member)]: Mhmm.

[Kate McCann (Member)]: Is Does that cost more?

[Jana Brown (Clerk)]: Does that cost more? Is there a difference?

[Emily Long (Member)]: But it but it wasn't about it was really about the cost of educating secondary students and more the ability about being able to shift funding upward from the lower grades that you had raised something. So we had the same conversation, went around in a circle, and came back to, we're talking about the cost of educating a secondary Yeah. So I'll say

[Peter Conlon (Chair)]: that studying is gonna help. We we cannot go back to our districts and say, you know, taking away your ability to get paid, but don't worry. Future legislature is gonna fix it. That's we can't do that. We there's no in our minds, can debate this or not. No question, it costs at least 10% more to run high school. And if study after study shows that we can later come to some agreement, fine, but in the meantime, we've got to have the safety valve in there, to use that terminology, for the schools to get paid for the cost of our high schools, and a very, very efficient high school, I will add. Okay. So that's just a I don't know how to get around that. We have to come out. We've got to get

[Kate McCann (Member)]: I was struggling to get around it myself, because we had studies that said it didn't. APA's work, Professor Colby's team's work, said it didn't. And so we were trying to If we think about hospital rate setting studies or anything, as a legislator, I feel at a loss if I'm not following the math that's put before me by the team. And so I I'm just trying to find my way towards that. I really do understand where you're coming from. I'm just

[Peter Conlon (Chair)]: Yeah.

[Kate McCann (Member)]: Struggling to get where you are.

[Peter Conlon (Chair)]: I mean, the APA required, in order for that to be effective, required big, large districts in an entirely different construct. And the weights that came from the cost basis model, which just haven't been peer reviewed, it's one person's work.

[Kate McCann (Member)]: You can see the

[Peter Conlon (Chair)]: same thing about the APA. But we know what it costs to run high schools. And the actual cost of 12.5 percent is pretty compelling.

[Kate McCann (Member)]: Did you wanna say something?

[Emily Long (Member)]: All right, well, I mean, we are not surprisingly at a challenging point here. You've reached a sort of there's no way, and we have been moving and trying to address these concerns. Probably the best thing we do now is each take what we have here and spend some time, and then maybe should have a goal

[Scott Beck]: of

[Emily Long (Member)]: reconvening

[Jana Brown (Clerk)]: at