Vermont Legislature SmartTranscripts:

[Peter Conlon (Chair)]: Welcome to House Education. This is 01/28/2026. We are now gonna hear a presentation on Bill H seven fifty by its sponsor and then with Legis Council. Without further ado, welcome to House Education.

[Rep. Charlie Kimbell]: Thank you, Mr. Chairperson, Chairman. My name is Charlie Kimble. I'm a representative from Woodstock, Vermont, Woodstock, Reading and Plymouth. We're excited to be with you and members of the committee. Today, I'm introducing H750, something that my school district, I hope, is glad that I am presenting as I have been in discussions with them for a couple of years. I'm probably overprepared with the amount of information that I've been studying and trying to retain, So I'll try to get it out in as short a time frame as possible. So this is H750, and it is the purpose is to exclude capital construction costs from the definition of education spending for purposes of calculating excess spending and also to deem as having good cause to commence construction before final approval under the state aid for construction program. Really, this bill recognizes both the current state we're in and the future state we are going to be in. And I say that to really recognize that we are not yet under a foundation formula, and the excess spending threshold is very much alive and well. And currently, the excess spending threshold includes any kind of payments on bonds incurred in order to pay for school construction. And what that has done for many schools is to prevent them from moving forward with a much needed construction project to either improve the facility, the health renovation of that facility, because they were going to then pay two times for whatever was over the excess spending threshold, which is $16,470 And so that has really caused many projects to be delayed. So that is one part. And it is with that that I'm coming to you saying that there are school districts that really would like to move forward and need to move forward. We have, I think, an inventory of, what, dollars 6,000,000,000 worth of improvements that are on the docket that are not moving forward. And we're in this limbo period because the foundation formula isn't there yet. And the state aid for school construction, even though it's called for in Act 73, we don't yet have the funding source and the payments are not yet solidified as to where those payments would go. So a little bit about the excess spending threshold. The first I really know of its existence with Act 68 in 2003, when it was really put in place to be a governor against excess spending by school districts as a governor against that newfound money they had from Act 60. And at that point in time, even then, principal and interest on capital construction, when it was deemed necessary, was not included in the calculation of education spending for the purposes of excess spending calculations. And that remained in place. There were a number of amendments to that particular part of statute, 2009 through 2016, as to what was included and what was exempt from those calculations. But then as you recall, in 2022, excess spending threshold was really suspended from that point until 2029 because of what was happening with COVID and all the dollars being spent then. That was rescinded in 2024. And what's interesting is it followed a report from the Joint Fiscal Office at the time, and I share this because I think it's very interesting. And this date, if I may, Mr. Chair, 02/17/2023, a report that had been requested to say, how can we contain education spending? And the report came with seven suggestions. One, adjust staffing ratios. You may be familiar with some of these concepts. Two, encourage or mandate more mergers. Consolidate Okay? Administrative services, reinstitute or adjust the excess spending threshold, implementing education spending caps, strengthen the connection between budget votes and tax bills, or restructure education spending decisions to a statewide level. So I think in the last year, we spent a lot of time discussing every single one of these things. But the thing that did change in 2024 was to reinstitute the excess spending threshold. It was also the year in which a school bond for Mountain View School District of $99,000,000 to build a new school was defeated. And that school district where I went to school and so did my three children and my wife, the same year they started actually looking at the school condition in 2016. This has been an incredibly thorough process, but a very expensive school, granted, with $99,000,000 and a bond request. That school district is coming before the voters in March, again, for now a $111,000,000 bond to look to build a new school. Is it necessary? Absolutely. I mean, there are sewage pipes that are backing up in the locker rooms during basketball games into the kitchen area. They've had to they finally also passed a new bond, or it's coming to the voters, to replace the heating system that was installed in 1958. Even with that, the building is still not going to meet ADA standards. It is still in really bad shape. It is not conducive to a current learning environment. All the reasons why we want to encourage schools to actually rebuild and replace. They are not unaware of the limbo in which we find ourselves. And that the timing is odd. That here we have a school which serves kids from 20 different communities, but it is not a big school. So they're right on the cusp of is this one of those designated schools? They really feel like they can be a hub school and that they can service a larger number of kids at their facility because, one, they're doing it already, and two, geographically, they're located in a good area to draw from a very wide geographical area. So besides that point, so they're going back to the voters with $111,000,000 bond. Part of it is predicated on the idea of decoupling bond payments from the calculation of excess spending. So that's one of the reasons why I'm sponsoring this. The co sponsors of this bill, Mike Markot from Newport or Coventry, and Esme Paul from Hartford, also face similar challenges with their facilities, whether it's PCBs or other reasons to make improvements to their schools. So that's first. One of the calculations that the business manager at the Mountain View School District provided me was that if there was still the inclusion of principal and bond or bond payments and the excess spend and the per pupil spending, then the property tax on a home value to $400,000 down the road would cost $4,000 more for the average property owner in Woodstock than it is today, or if it was not included. So if there's a real dollar and cents thing for them to make the necessary repairs that they have to make to their facility and a penalty really for doing so and taking care of their kids. So that's the first part. The second part is to look at state aid for school construction. And that is to try to make eligible for future state aid for school construction, as long as the school follows the principles contained in Act 73, and also can comply with what the State Board of Education or the Agency of Education would then deem necessary or appropriate to be eligible for state aid. And if I may, quote from Acts 73,

[Peter Conlon (Chair)]: just a

[Rep. Charlie Kimbell]: minute, it's quite over prepared, that a new school about excessive energy use. The act actually lists many of the reasons why construction aid could be made available for new school construction projects. This is page 46 of H450 four at the time. Let's see. For preliminary approval when regional education opportunity needs are met for economic efficiencies, suitability in the existing school building to continue to meet educational needs, statewide education initiatives. Secretary may improve application if threatens the health or safety of students or employees. Even that, just for that particular school, makes sense. And it does for other facilities as well. So that's the idea. And I recognize that right now, we're still looking at the State Aid for School Construction Advisory Board and what they've suggested, what the Agency of Education is doing and setting up their new system, the four people that they've recommended to staff a new State Aid for School Construction division. And what I'm encouraged by is when I found the school construction handbook, I think that's what it's called, from a 2000 version. And the 2025 version is remarkably similar. It is not much different in content or format. So AOE has done this before. And I don't think it's really going to take that much time to set up rules or set up some of their procedures, because they've been in this business before. My particular school district had already received preliminary approval as to the eligibility of expenses that would not be subject to the excess spending threshold before that was then taken away. So they already got that far down the road with the Agency of Education. And that was great for them. But now it's a different game. So that's why I'm proposing this bill.

[Peter Conlon (Chair)]: Remind me, you have had a bond vote already, or you just been waiting? Has there been a bond vote once?

[Rep. Charlie Kimbell]: We did have a bond vote that went down to defeat. It wasn't a huge margin of defeat. It was a couple of particular towns, one in particular, that was able to garner enough people to say, no, we don't need this. So it was unsuccessful at that time. There's a huge push from our community to actually bring this to a bond vote in March. So, yeah, they're pushing forward with it really hard.

[Peter Conlon (Chair)]: How many kids attend Woodstock?

[Rep. Charlie Kimbell]: I think I was looking at the numbers. Hang on a second. And I think it's about 600. I mean, the school building is really built So there's actual pupils as opposed to Hundreds of them. Right. Yeah. Right. Yes. That

[Peter Conlon (Chair)]: is bodies. That's bodies. Not bodies. The school

[Rep. Charlie Kimbell]: district itself, Mountain Views, is 1,001 students, and it's been that for the past three years as of the October 1 date, which you calculate. Yeah. And could it be bigger? Yes. So we receive a lot of tuition students, and we've had a lot of tuition students decide to go elsewhere. Not because of the education, but because of the condition of the facility.

[Unidentified Committee Member]: Just quick, middle middle.

[Peter Conlon (Chair)]: Yes. It's seven through 12. Seven through 12. Thank you.

[Rep. Charlie Kimbell]: Yep. The new part of the school was built in 1968.

[Unidentified Committee Member]: So students are coming from where, General?

[Rep. Charlie Kimbell]: All over the place. So I was lucky enough to attend when the school had the Senate Education Committee there for a day, and they had a group of students sitting around a circle to talk about their experience. Two were from Wethersfield. One was from Bethel, applied through an interschool exchange. They don't have school choice. One from the town of Rutland. So they're coming from Ludlow as well. Pittsfield, Killing there are seven schools in the district anyway, but they're pulling from students from all over. I'd say probably from about a 40 mile radius for some of them. So right next door to us is Heartland, Vermont, which is definitely a sending town, and they send students all over the place, as you know. So that could be another source of students if we look at trying to improve our facility and make it more welcoming.

[Unidentified Committee Member]: There's one more question. How far are you from the nearest seven twelve or nine twelve high school?

[Rep. Charlie Kimbell]: Well, our school board has been in discussions with both the school boards at Hartford and in Windsor about how they can work together and cooperatively. Now Mountain Views, as you've heard from Sherry Souza, our superintendent, forming the first BOCES in the state of Vermont around special education services, and that could be expanded. So they recognized already the ability to work together. Hartford is a challenged facility right now in terms of some of the PCBs that they found in their building. So they have to look hard and fast. So how far are we from them by the crow?

[Unidentified Committee Member]: The crow doesn't matter, don't you?

[Rep. Charlie Kimbell]: The crow don't fly. We're approximately 15 miles, I think, from Hartford. And Hartford is the closest. Windsor is probably 20 to 25 miles. We are lucky enough, both Windsor and Hartford are located on the Connecticut River. So in terms of pulling from a radius, the radius kind of stops when you look at the river right there. There are bigger communities than is Woodstock, but it's also tough for somebody from Killington to go to Hartford. So it's one of those weird things. I know you're in the business of drawing maps right now, and considering that. Yeah.

[Unidentified Committee Member]: Where do the kids go back to Tucson?

[Rep. Charlie Kimbell]: That's in Hartford. Right now, it's in Hartford.

[Unidentified Committee Member]: Do you have room for a life expansion?

[Rep. Charlie Kimbell]: There's been a lot of talk about not full tech, but TechLite. So we've had a STEM lab inside of the school, which has been I don't know if it's still going right now, to be honest partnered with an outside firm to bring in some real STEM programming, which is tech light in a sense. I've always thought of it that way. And that's been happening or happened from 2018 through, I'd say, the beginning of the pandemic.

[Unidentified Committee Member]: Well, I know, like at the Central Vermont one, those programs are always maxed out. There's certain programs that max out sooner than others. And so I didn't know if you had room for just maxing out on something.

[Rep. Charlie Kimbell]: Yes.

[Unidentified Committee Member]: Build something that could absorb the rest.

[Rep. Charlie Kimbell]: I don't think in the design of the new facility there is space dedicated just for career and technical education.

[Peter Conlon (Chair)]: You bring up a very interesting point because Hartford's also their tech center is contained. They've got PCD problems. So they have to do sort of launch planning. Fact that I would say that representative Cole's also on this represents that a nearby high school is also struggling with the same issue. I think this really represents kind of the dilemma that we have caused for school districts in that everybody's in a holding pattern waiting for us to make decisions. One of the reasons why we put the excess spending threshold back in was to control costs, and why we included construction costs was to sort of tell everybody to hold your horses until we come up with a larger statewide plan. Woodstock is the poster child for people. We can't wait any longer. That's one of the real challenge and dilemmas here, as is the cost of $111,000,000 for 600 kids. And how do we sort of justify that? How close are you to the excess spending threshold currently? We're over it. You are just in general education process? Yes.

[Rep. Charlie Kimbell]: So that's 16 fourseven, I think we're about $1,000 over.

[Peter Conlon (Chair)]: Do you have a sense of if we went ahead and exempted capital bonds with the rather shocking $4,000 figure you gave us? What would that be if this were not part of the excess spending threshold?

[Rep. Charlie Kimbell]: I do have that. Thank you for asking. Okay, so tax rate calculations with building aid. No, sorry.

[Peter Conlon (Chair)]: Let me get to my other side. Let's see.

[Rep. Charlie Kimbell]: On a $400,000 home, it'd be $15,489 in year 2037. Some some assumptions built in there about the project cost, about the long term weighted average daily membership staying stable, about the budget increasing by three and a half percent annually, the yield increasing by three and a half percent, the penalty threshold increasing every year by two and a half percent. So that's with the inclusion of bond payments and the calculation, the 11,122 without it. And that's using a $400,000 property value, which is not the median property value, but for argument's sake, it's a good example.

[Peter Conlon (Chair)]: How do you slice it?

[Rep. Charlie Kimbell]: Those are very big numbers. And then it's different throughout the districts. I mean, Reading has certainly a lot of large properties, but the average value is is much less. So but I was just using an average as to what might be out there. I think the state would average probably about four thirty five right now. Anybody? Anyone? Let's call it four thirty five. So we could just increase that a little.

[Peter Conlon (Chair)]: Thank you very much. You are the poster child for the dilemma we find ourselves in. While we sit here, your building isn't getting any better.

[Rep. Charlie Kimbell]: No, it's not. Thank you for that. But thank you for the time. I appreciate it.

[Peter Conlon (Chair)]: Do you currently have a bond that you're paying on for any construction that has been done over the years?

[Rep. Charlie Kimbell]: Yes. One was passed before, It was for actually some of the preliminary planning and all that kind of stuff for the school construction. So I think it was a $4,000,000 bond. And that was not subject to the excess spending threshold. Correct. So because it was before 07/01/2024. And then we're this new bond is coming besides the $111,000,000 bond. There's another one to pay for the replacement of that boiler from 1958 and also the pipe system.

[Unidentified Committee Member]: So But but the last ones you're telling talking about haven't passed yet. I'm saying

[Rep. Charlie Kimbell]: That's right. Right, that $4,000,000

[Peter Conlon (Chair)]: one for But you do have construction costs, capital costs that you are now paying?

[Rep. Charlie Kimbell]: We do. It's pretty low. Mean, looking at the report, the report from the State Aid Advisory Board, they're looking at what There are 55 school districts that have, as a percent of the total budget, is actually, compared to other states, pretty low. That's because a lot of people are doing what we're doing, sitting there waiting, figuring when's the right time.

[Peter Conlon (Chair)]: Thank you.

[Rep. Charlie Kimbell]: Thank you.

[Peter Conlon (Chair)]: Hello, welcome. It's only three pages, so you can probably move through this fairly quickly. I think representative Kimball gave us a very good understanding here.

[John Gray, Office of Legislative Counsel]: John Gray, Office of Legislative Counsel, I will screen share. Yeah, the bill itself is I think relatively simple to understand. There's really just two pieces to this. I did want to contextualize a little bit about the difficulty of drafting something in this space that can provide any assurance to any school district. And the basic thing that you're confronting is not knowing a revenue source, not knowing prioritization criteria, not knowing how the program's gonna be administered. What can you tell people? So this bill, instead of attempting to give false assurances to a future state about which we don't know so many things, takes a relatively targeted approach to two things we do know about and says, let's strike away at least these disincentives. It's not trying to say something about the future that we know so little about, it's trying to say just right now, what can we do? The two things are what to do about excess spending and what to do about the way approvals are made under the state aid for school construction program that was contained in Act 73 and goes effective 07/01/2026. So section one is amending your definition of education spending for purposes of excess spending. So on page two, this is what you see down on line 11. As you know, for purposes of calculating excess spending, we have exclusions from education spending, things that don't get picked up. Just to I think you guys already know, but the way excess spending works is you take a portion of your education spending and you double count it. So you get taxed twice on that particular piece. And so by excluding some of your ed spending from the excess spending, you're distributing the cost of raising those funds across the street and not so much raising the liability of the school district with those funds. So what this does is existing exclusion is for all bonds approved by voters prior to 07/01/2024. Those are already excluded from excess spending for purposes of that calculation. And this is saying just exclude voter approved bond payments regardless of date. So this would now extend that exclusion to voter approved bond payments for capital construction post 07/01/2020 or post 06/30/2024. So you would be expanding the category of bond payments that are excluded from excess spending, which would mean you're removing one of the disincentives for folks trying to pass those budgets or pass those bonds because currently when they are thinking about this decision, they have to factor that thought into the tax rates they're going to face, and they will be higher if they're included in excess spending. So that's the first piece, is excluding all voter approved bond payments from that excess spending calculation. The second piece is an amendment to a newly created section from the state aid for school construction program in 1973, and this is a section, I may actually jump to the actual statute so you can see. As you know, the State Aid for School Construction Program as will come effective 07/01/2026, but without an identified revenue source. It has a preliminary approval process. It also has a final approval process. And I just wanted to flag subsections subdivisions five a and five d. Five a says, unless approved by the secretary for good cause in advance of commitment of construction, a school district shall not begin construction before the secretary approves a final application, etcetera. And then subdivision d says a district may begin construction upon receipt of final approval. However, a district shall not be reimbursed for debt incurred due to borrowing of funds in anticipation of aid under the sections. If we take these together, the way that I read this is you're intended to go through this final application process, get your approval, and then you're gonna get your a determined on that basis, you wait to begin construction until afterwards. But there is this line about approved by the secretary for good calls in advance of commencement. So this is what h seven fifty does in its second part, says adds a proviso to that five a and it says, provided that any school district that commences construction before 07/01/2026, which is the date that program is intended to go effective or will go effective. Any school district that commences construction before then shall be deemed to have good cause. Meaning, link those together, you shouldn't get dinged basically for commencing construction in advance of that final approval. That's the effect of the two sections. Excess spending exclusion to take effect on passage, and then that final approval for construction aid would take effect the date that the program was effective. Section doesn't exist until then, technically. But that is the two pieces, excluding all voter approved bond payments for capital construction from excess spending calculation, and then trying to prevent a school district from being deemed to implement construction before final application approval under the program, which of course didn't happen today, the program is not running.

[Peter Conlon (Chair)]: That is the bill. Thank you. Representative Kimball, probably following up on the second half of the bill, that implies that the intention is is that you guys would put a shovel in the ground before 07/01/2026?

[Rep. Charlie Kimbell]: You, mister chair.

[Peter Conlon (Chair)]: I'm

[Rep. Charlie Kimbell]: not sure that they can move that fast,

[Peter Conlon (Chair)]: to be honest.

[Rep. Charlie Kimbell]: But with the notion being things we don't know is if the program can be stood up by 07/01/2026. So I was just looking at that and saying, oh, I'm not sure we're going to be able to meet that anyway from a state standpoint to be able to stand it up by then.

[John Gray, Office of Legislative Counsel]: The other thing to offer in that context is at the point that there is a program existing, you can then submit the final act. It is a question whether it could be approved, but you're at least in a different posture than you are today. You still may have the question whether you can get what you need, but there's at least the literal possibility that you can.

[Peter Conlon (Chair)]: Okay, great. Thank you both very much, and we will adjourn there to the