Vermont Legislature SmartTranscripts:

[Rep. Peter Conlon (Chair)]: And you're live. Welcome to House Education on January 23. Have just a brief meeting this morning before we head to the floor for a bill introduction, and this would be bill h six ninety eight introduced by a group of representatives. And we it's a 29 page bill, so we probably ought to just get started. Floor is yours, legislative council.

[Beth St. James (Office of Legislative Counsel)]: Thank you, Beth St. James, Office of Legislative Counsel. John Gray, Legislative So in the interest of time, let me share my screen. I think what would be most helpful is to read the statement of purpose, and then we can dive in for a more thorough walkthrough at your direction. And then that should leave time for the sponsor to have enough time. So this bill so we're gonna so this is H six ninety eight as introduced. We're gonna be on the first page, line 13, statement of purpose. We rarely do this, but I think this is effective for this bill. So this bill proposes to update various education policies in Act 73. The first thing it does is it removes the amendment to section eight twenty three of Title XVI that would allow a receiving school to charge a sending school an additional fee for high school students. So it keeps what Act 73 did for the calculation of tuition as the base plus weights. But if you'll remember from Act 73, there was the provision that a receiving high school could charge up to 5% of the base for high school students. This bill proposes to remove that option, but keep the base plus weights concept. This bill proposes to remove all references to class size minimums. So it takes it out. Class size minimums no longer repeals them out of Title 16, although we're not really repealing because that hasn't taken effect yet. And it removes reference to them from section eight twenty eight, the schools that are approved to receive tuition section. So independent schools would need to follow everything else that titles or that Act 73 required of them, except the concept of class size minimums is removed entirely by this bill. And then it reverts any unused portion of the appropriation made to the school district voting award working group to the general fund upon passage. So there was a $200,000 appropriation to ledge counsel for the voting award working group, some backdoor negotiations going on there. There would need to be an MOU for the Secretary of State's office to use that, yada yada yada. To the extent that anything has not been touched in that appropriation, it would revert back to the general fund when this bill passes.

[Unidentified Committee Member]: And I'll

[Beth St. James (Office of Legislative Counsel)]: turn it over to John.

[John Gray (Office of Legislative Counsel)]: So my sections in this, while large in impact, are quite easy to describe. So the bill also proposes to update the foundation formula in I-seventy three to add a secondary student weight. You You'll can see a bunch of text in the bill related to this. It's going to look like a bigger change than it is because we're repealing the Act 73 student weighting provisions and then recreating Section forty ten of Title 16 for that people weighting. All that it's doing is adding in a secondary student weight of, I think it's 0.125 for those in grades nine through 12. And then second or finally, the bill proposes to remove the amendments to Vermont's property tax classification system added by Act 73. So that creation of the new non homestead, non residential, and the move away from just homestead, non homestead, we'd have differentiated categories within non homestead. This bill proposes to remove those updates to property the tax classification system. In other words, it leaves you with the existing property tax classifications that you have today, and you're going to see a bunch of texts associated with this. Again, a lot of it's just little changes that we have to make to impose the state of Asian Property Tax Rate. You'll recall the table with statutory factors. That has to be updated with the removal of the property tax classification updates from maximum three.

[Beth St. James (Office of Legislative Counsel)]: There any particular sections you want to look at the actual language of?

[Rep. Peter Conlon (Chair)]: I think that you basically have covered what we need for the moment, and if you just wouldn't mind hanging out, and there may be questions that come up. Absolutely. And we'll welcome Representative Pelvis to join us. Good morning.

[Rep. Marty Feltus]: Good morning.

[Rep. Peter Conlon (Chair)]: Sorry we don't have a bigger crowd here for you, but That's okay. People are paying attention.

[Rep. Marty Feltus]: Got some important people here. Great. Some of the all important people. I'm Marty Feltys from Linden, Caledonia three, and I was the sponsor of this bill. Basically, are two items in here I want to accomplish. One of them was not mentioned, which is just the very end of my contention is that we need to go to the foundation formula. I like that. I think there need to be some amendments to the foundation formula, and one of those is adding in a secondary school weight and also eliminating the class size minimums, although that's not part of the formula. It is part of the discussion. But I think we need to do that irrespective of what happens to the districting discussion, the consolidation of districts. So at the end of the bill, there's a change in the effective dates of certain things. So my intent was that whether we change school districts or not, I think the foundation formula is a very good way to go forward with with funding of our school systems. And I believe that because it would provide a predictable amount of money from the state of what we need to come up with in order to fund education. It would provide a predictable amount for each district, whatever the size of the district is, they would have a predictable amount of money to work with. And there would therefore be a predictable tax amount available for all taxpayers. So I think you would avoid a lot of the volatility. I think you would I understand that the foundation formula, the characteristics of the foundation formula may change between now and 2028 because JFO is hiring another consultant to take a look at all of that, and that's part of Act 73 to come back with another report of what those factors ought to be. And I understand that could happen, I don't object to that. But my point is that I believe we need to have a predictable way to calculate education expenses. And if we agree on what those factors are, whether they're the ones that we already have or whether new ones we come up with, you calculate the number of students and what those students' characteristics are, and you have a total amount that we know the state needs to raise. And likewise, each district knows I've got $50,000,000 here to work with or 100,000,000 or whatever it is based upon their student population, and they work to that budget. Therefore, they may figure class size minimums are important or they're not, depending upon their characteristics. They may decide there are some of the supplemental programs that they do they want to continue to do or they want to discontinue. May decide there are some administrative functions that they don't need, that they can change those. They may decide, you know, teacher numbers. They they can decide any number of things within their $50,000,000 pot or whatever it is, as long as they're meeting the education quality standards. They may decide, I want to cooperate with the district next door and do some cooperative purchasing or bus contracts or things like that, But they have a fixed amount of money to work with and they figure out what they need to do to serve their particular students. So that's the reason I think that the foundation formula is very effective. And I think we need to do that no matter what we do with the consolidation of districts. As you know, by now, it's tied to the fact that we need to have the districts consolidated before the foundation formula goes into effect. So I'm saying disconnect those two points. Just let whatever happens with consolidation, and I know that's a very big topic, let that play out however we decide to play it out. But let's institute the foundation formula anyway. And I know the foundation formula can change between now and I also as part of that, I I did add in the high school weight. As you know, in the discussions we had last year, the the discussion was we don't need an extra weight for secondary. And I know in the bill, part of this new study is to determine whether we do need it or not. I just think it was helpful to actually put it in as one of the factors. Somebody later can change the number I put in. They can make it greater or less or put a zero on it. But I think it needs to be one of those benchmarks that needs to be checked. And the reason I picked 12.5% is because that's the number that shows up on the allowable tuition report that the agency of education does every year when they look at the ad average tuition when when school districts need to spend send students to another district for either elementary or secondary students, there's an allowable rate that they can charge. And the average across the state for in this last year for elementary students was 20,000 something or other. The average for our secondary students was 23,000. It's a 12% difference. I think that's a reasonable amount to use as a basis to put into this bill. The next study may come up with a different number, but I think that's a good foundation to start with. So that's where the 12.5% came from. The other half of my bill,

[Rep. Peter Conlon (Chair)]: or it's

[Rep. Marty Feltus]: not probably pay twice, it's the other half of the bill, is the idea of repealing the new creation of a non homestead residential tax class. And it's just very simple. I don't agree that's fair. I don't understand how we can feel that a non homestead residential property bears any greater responsibility for our education expenses than a commercial property or industrial property or open land or anything that's in the non homestead category. Now those properties, non homestead residential, pay property tax. They pay it as a non homestead. And, yes, they're contributing to our education system and they need to. Education is probably good. But I don't see that there's any justification whatsoever for separating that group out so that you can put a higher tax on that group. I just don't think that group bears any greater responsibility for our education system than we, the residents, do and everyone else. So I just I just don't think that's fair. And I opposed it when it was in ways and means last year. They did direct PVR to do a study of how they would implement that kind of a change. And there's a report that came out from PVR outlining eight steps that they would have to go through in order to make that change. A lot of administrative things, a lot of that is burden back on the local listers because they're gonna have to classify each piece of property and make sure how it fits. And then there's the question of how you how you verify that, how you do the compliance, how do you how do you double check to make sure, you know, just a lot of work. They didn't give an estimate of how much money it would take to do that, but my guess is it would be $400,000, a million dollars, I don't know, a lot of work within PVR to make that change. And it just didn't seem to me that well, my basic contention is it's not fair to have that classification anyway, period. If you do it, it's still gonna cost an awful lot of money to do that. So that's that's my concern. So those are the really the only two items I was trying to accomplish with this bill. Just number one, say, let's go to the foundation formula whether we do consolidation of districts or not. And the purpose being that we would have a fixed amount that could be calculated what the state needs to spend in order for education so we can figure out where to come up with that money and that each district would also have a fixed amount. But it would be based upon their number of students and their characteristics. And so then we are sure that we still are offering equal opportunity to all of the students because we have considered their characteristics and have decided, whatever the language in the bill says, the amount for amount for an adequate education, I believe, is what was studied in the bill. So that's that's just my concern, that we need to do that anyway. Whether we do consolidation, and then I would prefer to have a marker in there for secondary education, and then I would prefer to just simply eliminate that other tax classification. It's a fair thing.

[Rep. Peter Conlon (Chair)]: Thank thank you very much. Very well, presenter. There is something here. What about the defunding of the ward working group?

[Rep. Marty Feltus]: Oh, only because if we don't do the consolidations, they're gonna not gonna have to have the new voting boards appear to me, and that if whatever we don't spend simply needs to get reverted back, which would probably happen anyway, frankly.

[Rep. Peter Conlon (Chair)]: Yes. I guess I'm wondering, this basically by defunding the ward working group, which I agree with you. I think if they didn't use their money, the money would revert back. But this is basically saying, we're not gonna do more drawing.

[Rep. Marty Feltus]: Oh, I didn't think so. I thought it was reverting whatever was not used.

[Rep. Peter Conlon (Chair)]: Yes. I guess my concern would be that should we come up with newer, larger districts that don't have any money, how are we going to move to newer, larger districts?

[Rep. Marty Feltus]: Okay. Well, maybe I misunderstood or maybe I

[Rep. Peter Conlon (Chair)]: I really just wanna make sure that understood your motivation.

[Rep. Marty Feltus]: I'm not trying to defund that. I was just assuming that that may not happen, and if it does not happen, then obviously we don't need to spend the money and it should Thank go

[Rep. Peter Conlon (Chair)]: you. I guess I sort of look at the other sponsors of the bill with you. Many of them had concerns that they live in areas where they spend, they're on the very much the low end of the per pupil spending, and that the foundation formula would actually fund their schools at a significantly higher level than they are today, which would also increase their property taxes. I understand that. And that the second home tax is really there to raise the funds to help those who are affected by that. It's not like this district's gonna get this amount of money. It's obviously on an individual Vermont or basis. But as we put together Act 73, the idea with the second home tax was that the vast majority of Vermonters would come out at the end of this better off than they were going into it. And so I think of the people, I think this is definitely a concern of folks way up in the Northeast Kingdom, that while funding our schools at a higher rate, our taxes are going to go up. And the second home tax for me was about those homeowners most impacted by that being able to to through the property tax rebate, the revamp rebate, homestead exemption program. Mhmm.

[Rep. Marty Feltus]: I understand, yes, many of the small communities up in my part of the state were concerned about the fact that they currently spend less than other schools, and therefore the foundation formula would give them more money.

[Rep. Peter Conlon (Chair)]: Just the home tax to me would be removing the sort of tool to help those homeowners most affected by increases in property taxes.

[Rep. Marty Feltus]: That's true. That's true. However, I think many of those folks also feel that it's not fair to the second homeowners don't bear any more responsibility for educating my children than the store down the street that will eventually benefit because, you know, they're in they're in the general community. It's just a fairness of of I don't think it's fair to tax those people at a higher rate. And the persons I spoke with that that I think you're referring to in the smaller towns would agree with that concept as well. I think what they are hoping and and I would be hoping is that if indeed we go to the foundation formula and it turns out that there is a dramatic difference between what districts are currently spending and what the foundation formula would bring them on net or cost them higher taxes, That perhaps the Ways and Means Committee could come up with some kind of a transition mechanism that would move that through. Just as we have on the, I think, the supplemental district spending, there's a transition mechanism on that as well.

[Rep. Peter Conlon (Chair)]: There is there is a transition mechanism on the foundation for the five year Right. You're facing. Right. So it it would still increase taxes in those areas that currently don't spend at the foundation formula level.

[Rep. Marty Feltus]: That's true. I think some of those communities also recognize that maybe they should be spending more.

[Rep. Peter Conlon (Chair)]: Property taxpayers may not agree with that.

[Rep. Marty Feltus]: There are property taxpayers that are our representatives as well. I understand your concern. Yeah.

[Rep. Peter Conlon (Chair)]: I represent the law.

[Unidentified Committee Member]: Thanks. Know we don't have a lot of time, but first, wanted to say thank you. That was so clear, your perspective. I love the way you walked through it. So I know exactly where you're coming from. But you've said something that makes me very curious because I'm hearing something different in my region and I'm trying to clarify this in my head. The second homeowner, I hear, and this isn't my opinion, I'm sharing what I hear, particularly from my constituents, that our enrollments are declining significantly in my area, I'm assuming in your area too. And part of the reason is folks can no longer find a home in their town to purchase and move there with their families because they're taken up by, they're non residential now, they're second homeowners. And I'm generalizing, but that's something I hear regularly when I have my constituentality with my constituents. I hear you on the taxation fairness thing, but I think there's a lot of people in my region who feel really burdened by the fact that their residential property tax rate is higher than the non residential of the home, and that's included in the homes that nobody was occupying and family before. So I just wondered about your thoughts on that because I really appreciated your thoughts about fairness.

[Rep. Marty Feltus]: Mhmm. Mhmm. Well, it just goes back to the fairness issue to me. I understand that in some communities, the way that has shifted is that, yes, some second homeowners as non homestead end up with the the or they they swap. They don't in my community, but I know they're doing something. But isn't that a function of going back to the school spending because we take the tax rate and then it gets modified by the per people spending. And it appears to me that in most of those areas, the per people spending is high, and that is why it adjusts the tax rate up. I guess I understand. I do understand the issue in terms of the lack of housing availability from that perspective.

[Unidentified Committee Member]: Yeah, just for clarity, it's not only housing availability, but it is what happens, which is a decline in enrollment, which is what creates a higher spending. You know, districts Okay, okay, I can see that. That's my connection there. Thank you, though. I really do appreciate you making me think about it. I mean, frankly,

[Rep. Marty Feltus]: statewide property tax goes only to education. If our statewide property tax went to health, transportation, environment, correction, the public safety, those kinds of things that second homeowners would indeed benefit from, I think that would be a legitimate change. But our statewide property tax goes only to education. And I just simply don't believe that those property owners bear any greater responsibility for that than I do as a resident. I mean, we've already said homeowners don't pay as much as everybody else.

[Rep. Peter Conlon (Chair)]: Thank you. Appreciate that.

[Unidentified Committee Member]: Just for clarification, removing the class size minimums would remove any path to not meeting them and then the corrective actions and then all of that follows, right? Like I would be done. That would be over if you need that too. And my other question is, can we, and I'm not saying we wouldn't do this, but can we choose parts of this and then amend other parts out and say, we do want to pass this part, but not this part?

[Rep. Peter Conlon (Chair)]: We're the house education community, we can do whatever we I

[Rep. Marty Feltus]: hope you do whatever you wanna do. Okay.

[Unidentified Committee Member]: I'm not saying that I'm, like, trying to vote part of it out, just like, yeah. No. No.

[Rep. Marty Feltus]: I I mean, that's what happens with any piece of legislation. Yeah. Okay. You can like parts of it and not like other parts of it. Or modify. I'm gonna

[Rep. Peter Conlon (Chair)]: repeat back to you what I think I've heard regarding the topic of class size minimums and tell me if I'm wrong. That seems that the philosophy behind this bill is just to say, rather than dictating how folks, how schools sort of manage to the money in terms of class size minimums, just let them manage to the money. Right. That's my feeling. Right. Some districts. And if they want to not have larger classes, can or they can if they want it. They don't. If they want

[Unidentified Committee Member]: to if they want a better money. They've not got

[Rep. Marty Feltus]: enough rooms and enough bodies, teachers, to do it, you do it. But if you don't or if or your students, you think it would be better to have them in a larger grouping, you do that too. You just manage to the money, not require you to change class sizes. So how would

[Unidentified Committee Member]: that affect the district size minimums that are in there? Like, there should be 4,000 to 8,000 in the district if we no longer have class size minimums. That would be gone too?

[Rep. Peter Conlon (Chair)]: I mean, if we go to larger districts, and Representative Belta said that this should all happen regardless of whether we go to redistricate But it or that doesn't change anything. All districts are is a different governance.

[Unidentified Committee Member]: Yeah, okay. Right, I guess the reason I'm asking is because, it's so complicated, but if you can have a class of just three students in a school, and then that just becomes the norm, that makes it a lot harder to reach that 4,000 or 8,000 threshold for the district, if we now are allowing all these tiny little schools, doesn't it?

[Rep. Peter Conlon (Chair)]: Well, but the number of kids is the same.

[Unidentified Committee Member]: Right, okay. Except that we would have consolidated them to have bigger classes.

[Rep. Peter Conlon (Chair)]: Whether there's four kids per class at 40, it's still the same Alright, type of

[Rep. Marty Feltus]: if you say so.

[Rep. Peter Conlon (Chair)]: This is how they're distributed within that patient. Anybody, is there any other questions then if not we