Vermont Legislature SmartTranscripts:

[Doug (unidentified committee member)]: You're live.

[Rep. Peter Conlon, Chair, House Education Committee]: Welcome to a joint hearing on Tuesday, 02/24/2026 with the House Human Services Committee and the House Education Committee. We are hearing a report of a long awaited, participated report from the Joint Fiscal Office on current pre K and both public and private funding and sort of how it all fits in both education funding and childcare funding. And we have folks from JFO here today to walk us through their report, which looking forward to. Thank you. Welcome, and the floor is yours.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Great. Thank you for having us. For the record, I'm Emily Byrne, deputy fiscal officer for the legislative joint fiscal office.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: I'm Ted Barnett. I'm a senior fiscal analyst at the joint fiscal office.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: And Ted and I, along with an incredible amount of staff at JFO, it seems like basically we looped everybody into working on this report this fall and into the winter. Worked on this pre K report that you guys for in Act 73. So we're gonna walk through generally what the report says, walk through the program specifically. I think before we jump into this, we have a PowerPoint that I'll pull up, but this is complicated. There's lots of programs that sort of layer on top of each other and they overlap in certain spaces and not in others, which makes understanding it complicated. Part of the reason why we had several people from the Joint Fiscal Office involved in writing the report was just to get different perspectives because there are critical complicated things. For like, I'm a parent of small children. So I've experienced it from a parent perspective. I used to work at the agency of education. So to the extent to remember all those education things, Ted has experience with a parent child center before he came to JFO. So we had sort of a lot of our own experience and knowledge and spent a lot of time having conversations about, but what about this situation? So we had our own challenges trying to figure out stuff even from our own experience and research that we had done. So that is all to say it's complicated. We're going to start very high level Chairs, if you want to have people ask questions either at the end of the beginning or game for whatever.

[Rep. Peter Conlon, Chair, House Education Committee]: We can do a good high level overview before anybody interrupts for questions.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: With that, we'll jump right in. I know we've got a fair number of slides, but we will jump right in. So this is to give an overview of the early care and learning system and also the definite What we found is definitions are really important in this space. Right. Universal Pre K is different from childcare, which is different from a preschooler, which is different from early care and learning and which age groups overlap and what entity of state government has jurisdiction over which sort of slice of the pie you're talking about matters. So we sort of titled this early care and learning to give us the sort of biggest, broadest strokes of covering kids. Primarily, we focused on in this report, PRAC 73, the children who are three, four and five who are not yet in kindergarten. And this is our just JFO or nonpartisan legislative office. We put this in all of our stuff, just a reminder of who we are and what we're doing here. Had something I want to mention. Oh, and I would also mention too. So we'll talk about this again, but it doesn't hurt to say it multiple times. We're not experts in the outcomes of the current early childcare system. So the report that we wrote, the analysis that we've done, what we're gonna talk about today is really like the mechanics, how it works and sort of the academic exercise, if you will, around how people may behave based on the existing programs that we have and how they overlap with each other. We are not going to talk about our kids better off or sort of what the outcomes are. That's really a conversation to have with folks from the Department for Children and Families, the agency of education and other folks who work in that space. So just wanted to put that out there that we're not the experts on outcomes, or is this working or not? This is purely like, policies have you put in place and how

[Unidentified legislator (likely Chair, House Human Services Committee)]: do they

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: function? So initially we'll go over the early care and learning programs that we talk about specifically here in the report. We'll go through the report itself specifically charged Joint Fiscal Office to look at incentives. So how people react to the policies that exist and the financial incentives that are out there the current system. And we broke that into three major groups, parents and families, public schools and private providers. And then we'll talk about the options that we outlined in the report. And these are just three options that JFO kind of came up with and some takeaways for you to think about next steps as you do your work. So the language, this is the specific language that's in Act 73, the intent around pre K. The open question, I think around pre kindergarten in the space of education transformation is what should the weight be in the education funding formula for pre kindergarten? And as a starting point to talk about that, this is the language for the report and just highlighting the specific piece that we're reviewing the financial incentives that exist in the early care and learning system. We'll say this again multiple times, but I'll just call it out right now. We did not get into the other incentives that exist in the world that are not financial that would drive an entity to do other things. There are community incentives or there are lots of other reasons why private childcare center or a school district where parents will make a decision about how to interact with the system. But we are just talking about financial in this report and in this presentation.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: And as money people, that makes sense.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Yes, definitely. So we'll start with high level overview of the existing early care and learning programs in Vermont. And before we jump into that, actually, this is listed two maps that we found in our research. This was put out by the National Institute for Early Education Research. One of the things that I think makes Vermont's early care and learning system unique is the service to three year olds. So you'll notice on the left hand side is a map that shows the pre K programs available that are publicly funded in all the states. Green meaning there's access. It's hard to read because it's small, but access to 60 to over 70% of children in that age cohort. And then on the right is the three year old map and only green state in this. So we've got about over seventy five percent of four year olds are enrolled in a universal pre K program and fifty eight percent of three year olds are enrolled in universal pre K. And this was as of 2024. So those numbers are maybe different now, but that's the most recent. So the early care and learning system that we have in Vermont, we focused on three programs that support youngest Vermonters and their families, the Head Start program, which is a federal program, the Child Care Financial Assistance program, and the Universal Pre Kindergarten program. We did not, I should also couch, we did not get into specifically special education services for this age group, children's integrated services. Are there other ones? I'm sure there's other ones that I'm forgetting, but these are the three that we focused on in terms of early care and learning for this age group. And so these three programs are highly interconnected and changes to one of them are going to impact the other systems. It's very much like a childcare, child services ecosystem, if you will. So the Head Start program is a federal program. It's a comprehensive early childhood development program designed to promote school readiness for children and low income families. It serves zero to five, as well as pregnant women and their families. And it's really meant to serve not just the kids, but sort of more holistic with the family. It's not just childcare. The head start programs require that states provide an or the programs themselves provide a non federal match to draw down federal funds for those programs. In a lot of instances, found the Head Start programs in Vermont are utilizing other existing state programs that Vermont has, including the Children's Financial Assistance Program and Universal Pre K as their non federal match. So then we have the childcare assistance program. So it's a state program that helps families afford childcare through subsidy payments based on a family's income and the number of children in the family. It's not just for early education providers. I think that's an important thing to point out. It's three, four and five year olds get this, but it's a zero to 13 and up to 17 if a child has disability. So it helps parents pay for after school care, summer care, and infant and toddler care in addition to their preschool age. And it utilizes both a mix of state and federal funding. So the most of the funding currently for the Child Care Financial Assistance Program comes from the Child Care Contribution Special Fund, which is funded through the payroll tax that was passed by the General Assembly in 2023, along with some federal funds. There's some global commitment funds for children that qualify. And then there's general fund, that supports the CCFAP program. So this is just a quick example of eligibility for CCFAP for an example, that's, family of four, this is the income table as of last March 2025. So families up to 575% of federal poverty can qualify for a state subsidy. As of March, a family of four at 575% of the federal poverty level would have had an annual income of 185, about $185,000 a year. The federal poverty level itself is tied to the number of the size of your family. So there are tables for each family size going from three to six, and then anyone over six. And so if a family was at the 575% of federal poverty, And they were, this table shows based on what your level of federal poverty, where your income lies in the federal poverty scale, how much your weekly share or your weekly out of pocket cost is for the childcare financial assistance program. So if there was a family that was sort of at the top of this income scale at 575% of federal poverty, they would be required to pay $425 per week for childcare or about $22,000 a year out of pocket.

[Unidentified legislator (likely Chair, House Human Services Committee)]: Emily? Yep. I think this is my understanding that, so in particular for families at that higher income or middle income level, or for anybody, actually, who has a co pay, that co pay is on the first child, but any child after that is free of charge. Correct. Yes. I'm not sure that everybody would know that.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Yes. And that was a change that happened in Act 76. Yes. That the out of pocket cost is it doesn't matter how many kids you have. It's sort of capped at that amount based on your income. So, and then the third program that we talked about is the universal pre kindergarten program. So this requires that all school districts provide access to publicly funded pre kindergarten education to families that can secure a slot in a pre qualified program. So that's an important thing to call out specifically. So either the parent has to enroll at their public school if the public school provides a program, or the parent can choose to enroll at a different pre qualified provider that is qualified to provide universal pre K. If the parent can't find a space, then there's no universal pre K funding for that family. So universal pre K in Vermont is a minimum of ten hours per week for thirty five weeks a year. And it's for three, four and five year olds not yet enrolled in kindergarten. And so the universal pre K program can be provided by a qualified public or private program. So it can be in public schools or at a childcare center or at a family based family childcare. Family childcare. Childcare. Thank you. As long as they're qualified. And so if a district itself does not offer a pre K program, or if the parent chooses to enroll in a different qualified program, either at a public school that's not their district or at a private provider, the district must pay the statewide universal pre K tuition rate to that selected program. That payment that is paid, the tuition payment is part of the district's education spending. And if the district itself operates a public program in house, then those costs are part of the district's education spending itself.

[Unidentified legislator (likely Chair, House Human Services Committee)]: And there isn't When we were taking testimony in Act 76, we saw wide discrepancies in number of hours of UPK available to families. In some public school districts, they were providing whatever you want to call, full day, full week, and then others, none. And so, I just want to be sure that my understanding be accurate that so let's just say a school district is providing more than the ten hours a week, they include that in their education spending, and that's all part of the calculation of the cost of education, right? Yes. Okay. There's no like cap on the costs for ten hours a week. It can be for whatever the school district is providing.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Yes. Yep, that's correct. Think, and we'll probably say this more than once in this, but what we found was that if you know about one public schools pre K program, you know about one public schools pre K program. Are Yeah, it's different in every district in terms of how What's provided and how much it costs. So that's universal pre K. So it's important to point out that like head so head start, we talked about uses both universal pre K and CCFAP as their local match in many instances. And this is true of other programs as well. So qualified programs, that operate a universal pre K program can receive universal pre K funds from school districts, as well as childcare financial assistance program to support the remaining cost of care. And school districts that operate full day programs, we found that in some instances may actually receive childcare financial assistance funds to help offset the additional costs of the program. So they have their universal pre K spending to cover ten hours of whatever they provide. But then if the public school chooses to offer more, some public schools, not all, it was some of the business managers we talked to have become licensed by CDD for the remaining part of their program and then are drawing down CCFAP funds in order to help reduce their education spending. And again, it's different in every district, how they're doing that or whether or not they are at all. So, and then just for high level perspective, how many kids we're talking about. So we've looked and for those who are in education and I'm sure in human services, like data collection and counting is not always, we're not always counting the same groups the same ways. So just to disclaim that, but just as a high level overview. So if we look at the census in Vermont in 2024, there are about eleven thousand three and four year old kids in Vermont. The census doesn't tell us anything about the five year olds that aren't yet enrolled in kindergarten. So we can't include them in that number. And then the average daily membership in fiscal year twenty twenty five for the agency of education for the three, four and five year olds not enrolled in kindergarten was about 7,500 kids. CCFAP enrollment for that same age group. So the three, four and five year olds was 4,700 kids. I talked about definitions earlier, but when we talk about preschool age kids, that's kids that are 36 or older until they matriculate into kindergarten. And head start enrollment was 1,200, almost twelve fifty in 2024 for the office of head start. And I should clarify that, like, they're these they're not. They're not distinct, They're only 11,000 and three and four year olds. Some of them 7,000 are enrolled in UPK. Some of them are also enrolled in CC fab and some of them may also be enrolled in head start.

[Unidentified legislator (likely Chair, House Human Services Committee)]: It's not unduplicated. The 11,013 is unduplicated, but the rest of it below is not. Correct. So,

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: this, again, is just the language from the report, just a reminder. So we're gonna start talking about the report itself and the incentives that we discuss in the report and some of the things that we found, related to financial incentives. This is a funny when you have financial people put together graphics, this is what you get. Before we move

[Doug (unidentified committee member)]: on to that section, if I get back on slide 13, the second bullet point about school districts operating full day program and CCFAP. Any additional insights you can share on how that works? Because they're building a school budget long before they know the student population and who's receiving what level of CCFAP.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: How might that work?

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Yeah, I think like when you build any budget, right? Like you have to make some assumptions about the demographics of the population that you've got and who may be coming in. I think that's a school districts have to make assumptions if they're going to operate a pre K program that they're actually going to fill all of the seats in that Pre K program unlike with any grade. Right? So that's a, I think a challenge in budgeting generally, and then have to make assumptions about whether or not. And I think there are some school districts that receive CCFAP to help offset costs. And depending on how they operate, I believe there are some that will also ask for parental contributions if they're not eligible for CCFAP. There is

[Unidentified legislator (likely Chair, House Human Services Committee)]: I think that's one of the requirements, actually, if you're going to utilize CC FAP. You have to invoice all parents. Just to add to that question, just went out of my head. Oh, well, school districts do child finding. You see these things on front porch form and stuff or in the paper asking people to, at that certain age, to check-in with your school district. So they have some sense.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: And the other thing I might add to the pieces, a lot of school districts are also contracting with childcare providers to provide services in their schools. And I would say the number of school districts that are receiving CCFAP are relatively small compared to the ones who are probably running, contracting with private providers.

[Doug (unidentified committee member)]: They're talking about contracting. Did you say within their own school, not not the provide providers across the community?

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: With an outside private provider.

[Rep. Peter Conlon, Chair, House Education Committee]: Within the building.

[Unidentified legislator (likely Chair, House Human Services Committee)]: Within In the building. Building space. Mhmm. Yeah.

[Rep. Peter Conlon, Chair, House Education Committee]: Doug, I'm gonna get some clarification on this from, ledge counsel because it was always my understanding that within the school day, which, of course, we haven't defined what the school day is, that you can't charge if you're a public school for services. So maybe after the ten hours of Pre K, something kicks in and what you're really providing is child care. Right. And

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: I think the folks that we've talked to, there's first two hours of the day are UK program and then the remainder are the childcare program. Right? It's similar to after school. Right? School ends at this time and then the services provided are after school services. See where we work. Oh, yeah, my funny graphic that when you get the money people to make this. But this is the like, right, we've got schools, providers, and parents, and then a bunch of adorable four year olds with balloons. Anyway, so before we jump into the incentives, just want to like put some things on the table in terms of what the discussion that we're about to have is and what it isn't, right? So the incentives we're going to talk about aren't exhaustive. Right? They're the ones that we flagged and identified. And there's probably things that we didn't think about. Even though half of JFO was involved in thinking about this over the summer, we probably missed some things. And the incentive that we talk about may cause people to do something, but it's probably not the only thing that people are thinking about when they're trying to decide how they're going to interact with the system. And there's no way to know if the incentives that we talk about are what's actually driving people to do things, right? From an academic perspective, we can assume that if A plus B, then people will do C, But at the end of the day, people may not do that. And we have no way of knowing if that's how people actually behave. It's sort of that hypothetical level. And there are a lot of Vermont, and we've just looked at the number of kids that are enrolled. There are lot of kids enrolled and are utilizing these programs. And it's important for you all to really understand the outcomes of those systems. Again, I mentioned this before, but we're not the experts on the outcomes And sort of how people have been impacted by the changes in CCFAP, right? Those have only really been in existence for slightly over a year, the new increased reimbursement rates and the changes in how things are calculated. So there's still a lot there or to look at what the educational outcomes are for kids who have been through a UPK program and who hasn't. Additionally, like these are both general incentives and sort of academic. Act 73 told us to talk about the financial incentives in early care and learning. There are incentives that aren't financial, and we'll keep saying this throughout. And just to note, we didn't look at the special education population specifically. There's other things to think about when thinking about the EEE program and kids with special education or children who are identified as needing special education services who are three, four, five, not enrolled in kindergarten. So in families and early care and learning providers, they're working together, I think is important to point out. Right, it's not just childcare providers. It's not just school districts. Everybody's sort of in the community is trying to figure out what works and figuring out how to set the cost of care that works for people. And I think generally schools and private providers want to meet the needs of their community and families. And so a lot of what we talk about is theoretical, right? It's things that happen at the margins of policymaking. And that's not unique to the early care and learning system. This happens in a lot of public policy places, right? Where there are, we talk about the benefits cliff or off, right? Like people are going to behave differently if they approach that margin and, oh, should I enroll in that program if it's going to impact me this way or that? But there are probably, there are a lot of families who are interacting with these systems without approaching those areas of having to make these decisions. So, just wanted to name that, that these probably aren't happening to a lot of people. They probably exist given the system that we have. So yeah, with that, I'm going to turn it over to Ted and let him talk about financial incentives for parents and families.

[Unidentified legislator (likely Chair, House Human Services Committee)]: You can try. Fantastic.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: Okay. I'm not for full transparency, if I keep talking and things don't move, I don't often do animation. So, this is

[Doug (unidentified committee member)]: a whole new adventure for me.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: Okay. When families are determining how to interact with the system, as we've been talking about with incentives, right, folks are thinking about all sorts of factors. These can include things like supporting their children's healthy development and learning. My brother just became a parent times two, and he's really trying to figure out these types of things for family, right? Folks are also thinking through how their income and the normal children in their family are impacting what they're eligible for within the CCFAP program. They're also comparing that to the tuition of their local childcare providers and whether that childcare provider is actually feasible for them to get to work in the morning. Yes, the number of kids that are in the family, the number of hours for care. So, we'll spend some time talking about CC FAT certificates, right? And whether they're part time versus full time versus extended care, and how that creates some interesting incentives for folks. The need that the family has for specific types of services and whether a provider offers those types of services or would be a great fit for their child. And then ultimately personal preferences. Folks, when they're looking at providers, some are looking for a more nature based work because they're looking at bugs and trees and whatnot, and some folks are looking for a different environment. So yes, it comes down to how that provider matches the family's needs. The incentives. So this is where we're going to outline one of the places where we start to see something that resembles incentives at the margin. So, the incentive to enroll in CCFAP depends ultimately on what the estimated weekly family share is for the family under CCFAP compared to the market rate tuition for a provider. So, for example, in this first bullet, if that CCFAP family share is $375 per week, and they're looking at centers that are charging less than $375 per week, it's not worth them worth it for them in that context to enroll in CCPATH. They would have to fill out more paperwork, and if the center is not willing to to meet them where they are, they would have to theoretically spend more money out of pocket. Though we will note that in part of this matching and how providers are working with families, providers don't have to collect that full family share. And so they have an incentive on the other end to put together a financial package for families, maybe decrease the amount they would collect to the family share to match the market tuition. The family says, great, I'll roll in the CCFAP, and it kind of helps everyone out. Hours are another consideration, as I hinted at earlier. I mentioned that there are three different certificates that a family can earn depending on their service needs. And so, the part time certificate is for one to twenty five hours of care. Full time is twenty five to fifty hours, and then extended care is for fifty plus. And so, the amount of CCFAP subsidy a family receives is dependent on the number of hours they're eligible for. So, yes, when a family goes to just CDD and they outline their service need, and CDD will say, yes, you are eligible for a part time certificate, and that gets them less money than if they were eligible for a full time certificate. And this is where an extra complication for the Pre K program comes in. The amount of hours that are in the UPK program, so our ten hours per week, that reduces the number of hours the family needs for purposes of CCFAB eligibility. I think, yes, we go into it on the next slide. So, if the family, let's say they qualify for thirty four hours, they qualify for thirty hours. If they're enrolled in UPK as well, that reduces by ten hours and would change the type of certificate that they're getting. The subsidy for the family is reduced. So great, it says us in words. Can I

[Unidentified legislator (likely Chair, House Human Services Committee)]: ask a question? Yes. So does CDD take into consideration the varying hours of pre K, or do they just make a standard ten hour deduction? So in some school districts that are providing pre K for, I'll just use the term, full day, full week, and family applies for CCFAS, are they just deducting ten hours or are they deducting thirty five hours?

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: I am going to speak so, yes, this is primarily a consideration within the private system. My guidance would be, and I can check-in with CDD to confirm, but it would be the ten hours of UPK because that's considered the ten hour the UPK program is for ten hours a week. And if the public school is offering more than that, that's considered chalk and that gets into a different bin of hours. But yes, probably speaking, CDD is considering UPK to be ten hours per week reducing that off the families.

[Unidentified legislator (likely Chair, House Human Services Committee)]: So they only have the ten hours a week, even if a school district is providing more than ten hours.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: Because my understanding is that those additional hours would be considered childcare. Not part of

[Unidentified legislator (likely Chair, House Human Services Committee)]: They're not.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: They're not all that. And I think without knowing what every public school is doing.

[Unidentified legislator (likely Chair, House Human Services Committee)]: Right? They're all different.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: They're all different. I'm trying to think of a scenario where a public school would provide more than ten hours of pre K and also work to get childcare financial assistance.

[Unidentified legislator (likely Chair, House Human Services Committee)]: I'm not saying that they do. I'm just trying to figure out for individual families. So if a family was requesting extended care, so the fifty hours, and they got thirty or thirty five hours of pre K, then if the school is only deducting, I mean, if CDD is only deducting ten hours, and I'm just going to use Winooski as an example, because that's the one that I'm most familiar with. They have quote unquote full time pre K. That's not a joint funding with CCFAP is my understanding. I'm understanding it to be all education fund. So it wouldn't make sense to me that CDD would only deduct ten hours if a family was needing 50, that they would deduct thirty hours or thirty five.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: I think Do you

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: want to go one? I can give it a shot. Then, in that case, since the child care financial assistance program isn't involved in the program, CDD wouldn't be part of that hours calculation.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Well, I think when the parent goes to say, applying for fifty hours, I'm getting thirty five hours from my public school, then I think CDD would say, okay, so you need an additional fifteen.

[Unidentified legislator (likely Chair, House Human Services Committee)]: What I'm trying say.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: That's a part time certificate. Ten hours that

[Unidentified legislator (likely Chair, House Human Services Committee)]: they deduct or fifteen minutes based upon what's at that local school district.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: They're looking at what the circumstances of that family are and how many hours are needed from that family. So, you're getting care from somewhere else, which it could be, you have one parent that's staying at home, right? And that parent can cover, CBD is going to take that into consideration when they're determining what certificate that family qualifies for. So, I think it would work the same way where they're looking sort of at the full, scope of care that that child they're applying for and that the child is receiving and then determining how many hours CCFAP would fund accordingly. Yeah. And I think, yeah, to just drive this Ted's point home, right? So the incentive that plays out here, right, is that if the family enrolls in UPK and then CDD says, okay, well, you're getting ten hours from here and they reduce the number of hours that you need and it drops you into the part time bucket, that changes your out of how much CDD will pay your childcare provider. And that can it may be worth the family not enrolling in universal pre K so that they maintain a full time certificate. It's really at that margins. It's really depending on how many hours they determine that family qualifies for. But it can impact how much money you'll get from childcare financial assistance if you're enrolled in universal pre K and how they interact with each other.

[Unidentified legislator (likely Chair, House Human Services Committee)]: Yeah, that's what the last one is.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: And so as a recap of the financial incentives for families, families are considering a lot when they are interacting with the system. They for folks who earn up to 575% of the federal poverty line, they can qualify for the state CCFAP subsidy. Families are looking at their out of pocket costs and how those compare to the CCFAP family share. They would be charged based on income if the childcare provider wouldn't work with them. And the CCFAP benefit that folks receive is based on the number of hours of service needs a family has, and that CDD accounts for UPK in those calculations.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: So next, we're going talk about school districts and financial incentives for UPK. So as we talked about earlier, school districts are required to offer the universal pre K program to parents that can secure a slot at the pre qualified program, can be provided in house by the district or by paying the UPK tuition to a private provider or a pre qualified, I should say, a pre qualified program elsewhere. So it can be a private provider or it can be a school district that's not the child's home school district. And parents ultimately get to decide where their children are going to receive their universal pre K. Under Act 73, there are going to be different financial incentives around providing universal pre K for school districts. It may be that under the way that act 73 is currently constructed districts may be incentivized to only provide tuition for universal Pre K versus other districts may have incentives to operate programs locally and receive students from surrounding districts. So from this fiscal standpoint, different districts have different incentives around how to do this. So, who currently pays for Pre K? Ultimately, the cost of universal pre K is borne by the education fund through district budgets. If a child's enrolled in a universal pre K program in a public school, the cost to operate the program as part of the district's budget. If the child enrolled at a UPK program at another provider, either another public school or a private provider, the child's home district sends a fixed amount to cover the ten hours for thirty five weeks of the year to the provider where that parent has put that the child is enrolled at. So in 2025, 2026, that tuition rate was almost $4,000 And, yeah, that's part of the education spending. So just a real quick because we only have half. Half of y'all are on the education committee and the other half aren't, just to make sure that these terms are in here in case you need to refer back to them and just to remind people what they are. Long term weighted average daily membership is the district's two year average student membership after applying all the student weights. Under the current system, the long term weighted average daily membership is used to determine tax capacity. It does not translate to an actual payment to anybody. It's just to drive tax capacity. The difference in act 73 is that long term weighted average daily membership is going to determine the district's education opportunity payment. So there will be a direct exchange of dollars and not the taxing capacity calculation. So in tax capacity weights, I will talk about this a little bit, but so under current law and including pre K, again, just keep saying this, it doesn't correspond to an actual funding amount. Drives the calculation of tax rates and then can increase or decrease the taxing capacity of a district accordingly. Essentially, all else is held equal and increase in a district's taxing capacity will lower its homestead property tax rate. So just to put those things out there, they play into sort of how the weights plan. So under current law and in the current iteration of Act 73, the pre K weight is negative 0.54. So for each student enrolled in a district utilizing universal pre K, regardless of where they attend, so if they are in a public program or if their funds are traveling to the pre qualified provider where they're receiving universal pre K, the district receives an additional 0.46 in their long term weighted average daily membership count. We should also note that a universal pre K student can receive other weights. So they can receive economic disadvantage weights and they can receive the English language learner weights. I'll note one thing that we found in talking with school districts is it doesn't sound not all school districts are necessarily collecting this information for all of the students in pre K. So if, you know, if they're tuitioned out or even if they're internal, they're not necessarily collecting all this information for these kids. So, and I think the negative weight, right, reflects that it's only a ten hour program. It's not the full day Pre K. So currently the financial impact of universal Pre K varies by district. Districts have to make different decisions on how they're going to provide universal pre K and how that impacts overall education spending. I've said this like six times, so I'm going say it again. So, the current system, right? It's driving their taxing capacity, does not directly correspond to funding amounts. I think in conversations that we've had, there was a tendency to take, oh, well, if average for people spending is this, you multiply it by the weight, and that's how much money the school district gets. Those in the education side of things know that that's not how it works, right? Like it drives their taxing capacity, which changes per pupil spending for that individual district.

[Unidentified legislator (likely Chair, House Human Services Committee)]: So is the amount of tuition payment that's paid, if they're not getting it from that school district directly, is that just considered an education expense? Yep.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: So, based on what's going on locally and local education spending and how much it would cost to operate a program internally versus outside of the school, right? Those financial incentives are going to vary in every school district. This is different compared to Act 73 where it is going to correspond to an actual educational opportunity payment. And the weights do have a direct, relationship to funding. So if Act 73 goes into effect as outlined, the district's long term weighted average daily membership will be used to determine the educational opportunity payment. And as currently written, it's at that negative 0.54. So the count of those pre K students would correspond to a proration of the educational opportunity payment accordingly. So that, in FY $20.25 dollars, translates to about $7,000 per pre K student if the weights stay as they are. In fiscal year twenty five, the pre K tuition rate was $3,800 I should just call this. If you go earlier in the slide, the tuition rate was slightly higher. The reason why there's two different numbers is because act 73 was based all on FY 2025 numbers and assumptions. The Pre K tuition earlier is the F is the current year spending. So we wanted to make sure that is by statute inflated by NEPA index, the sort of the inflator that's typically used in the education space that's inflated. From the, if we're going to compare apples to apples in act 73, we've to use the FY '25 numbers. So based on fiscal twenty five, the universal pre K tuition was the 3,884 amount. And so assuming no changes that in effect would leave about $3,000, in funding, The difference between what the school district would get paid and what the, UPK tuition rate is. And then any additional weights that that student would receive would be on top of that. We don't have it specifically noted here, but I think it's important to talk about that. The universal pre K program does not come with zero administrative expense for school districts or for private providers. Frankly, to the extent that school districts have to manage wherever any of the parents have decided to send their kids and whatever the local program costs. And that's not without I think school districts have had to hire staff to cover the implementation of UPPA. So there's some part of that payment to the school districts or the amount that school districts receive for universal pre K covers both the tuition costs, but then also just the administration of the program itself.

[Rep. Peter Conlon, Chair, House Education Committee]: And just to clarify, right now under Act 73, do not have an assigned well, I guess we haven't set we we the the idea is that we will create a new week depending on what policies we implement for universal pre kindergarten. Yeah.

[Unidentified legislator (likely Chair, House Human Services Committee)]: Go ahead, Doug.

[Doug (unidentified committee member)]: And so that 6,915 is whether the school district is providing service in the school or they're paying a provider. Correct. And what they pay to the provider, private provider is the $38.84. Correct.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: And blind to, at least as it currently is laid out in current law, blind to whether or not the school district provides only ten hours in house or if it provides a full day, thirty five hour a week program. It treats everybody the same current. So I just talked about this. So with those remaining UPK funds, assuming no other changes are made, if it stays as is, the district will have different incentives on what it's going to offer. So a district could be incentivized to only tuition its universal pre K kids. They would send the tuition payment to the private providers or to the other school districts, and then that remaining educational opportunity payment could be used, administer the program and then for whatever else. And the opposite may be some districts may have incentives to offer in house programs, especially if they can receive pupils from other school districts, that revenue would be offsetting revenue in terms of calculating education spending and costs for the school district.

[Unidentified legislator (likely Chair, House Human Services Committee)]: And it's my understanding that the way the UPK law is written right now, there's no requirement nobody's responsible for actually assuring that there is UPK available in every school district, whether it be public or private.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Correct. There is that why we sort of keep including the, if the parents can find a slot. Right. That's the important thing, that there is no guarantee to anybody gets universal pre K. If you can That's

[Unidentified legislator (likely Chair, House Human Services Committee)]: why I hate calling universal because it's not universal. Yeah.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: So yes, there's no requirement that if I show up and want my kid to go to whatever program, that they get a spot. So it's important to also mention that aside from the funding piece, there's lots of other decisions that school that go into the school district's calculator to offer in terms of a program, right? Both actual capacity in the building, ability to hire teachers, and all of the other logistics associated with offering pre K. How does it work in your budget is one thing, but there's also other community needs and other pieces. And yeah, whether or not you actually have the space to offer a program is probably one of the major drivers and whether or not a school district actually has programs for pre K. So, yeah, as I mentioned, so there's lots of non financial incentives for school districts when they're thinking about providing universal Pre K. They may be in an area that doesn't have private providers and the school district you know, wants to provide this service for its community and the local voters have decided that this is an important thing for the public school to provide. There may be a need for an additional services within the community. So school districts generally have the staff available to provide special education services, for example. So it may, it may make sense to offer an in house universal Pre K program to ensure that children who need additional services can receive those services. And again, I mentioned this before, but they may also, they may not offer it because they don't have the space to do it. It depends on each district. And you all know every district and community is different And the decisions about how they're going to offer pre K, we have seen is different across the state. So yeah, and they have to think about what works best in their communities, right? Can other providers meet the needs of the community so that parents can go to work and so that kids are getting what they need and are ready for kindergarten? But in that, they've got to think about how that interacts with pupil counts, the cost of running the program and what that does to their tax rates and education spending, and whether or not they can use it as a revenue generating mechanism, by becoming qualified for childcare financial assistance, being able to provide the program and bringing in other revenue, or getting kids from other districts to attend their program. We're working with private providers. I think Ted mentioned that earlier. Found there are instances where there are nonprofits operating after UPK programs in school districts. There are financial relationships there. So, as I said, 47 times now, there are different programs in each. And this is just a couple of examples that we pulled up, right? So St. Johnsbury, for example, offers a public pre K program that's all day for four year olds. Parents can send their four year olds to that program, or they can opt to go anywhere else. That parent choice hasn't changed. But they have a full day program for four year olds, but not for three year olds. So three year olds can go to get received tuition to go to other places. Only four year olds can go to pre K at the public school. Rutland City doesn't operate a program and all three and four year olds in the Rutland City School District go to other providers that aren't the school district. Versus Bennington and Rutland, they operate different things in different schools and different districts within the supervisory union. So, and one of the things that makes this challenging and why doing a lot of deep analysis on this is that we don't currently have statewide data on the pre K programs that are offered by school districts. So other than reaching out to every single one of them and gathering that data, which I believe the grant that Building Bright Futures just received this may be on their list of to dos, but as of right now, we don't have statewide data on what pre K programs are offered in individual public schools. So with that, Ted will talk about incentives for private providers.

[Unidentified legislator (likely Chair, House Human Services Committee)]: So AOE is not able to provide any they don't collect data on pre K?

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: They collect a lot of data on pre K. They don't collect information on the specific programs at individual schools and school districts.

[Unidentified legislator (likely Chair, House Human Services Committee)]: What's that mean?

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Meaning they know, like, they have a lot of information about kids enrolled in universal pre kindergarten and like the long term weighted ADM stuff. So, know the number of kids, just not where they're receiving service?

[Rep. Peter Conlon, Chair, House Education Committee]: Or for how many hours a week. Or for

[Unidentified legislator (likely Chair, House Human Services Committee)]: how many hours, yeah. Because I think we've seen from Building Bright Futures information about the breakout between public and private.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: But they can't tell. We did not get the data, or data doesn't exist, to say, Montpelier Roxbury has however many kids in universal pre K. How many of them are tuition and how many of them are in? There's no statewide information on that. And then how many hours are each of those kids receiving? Interesting.

[Unidentified legislator (likely Chair, House Human Services Committee)]: You're a private practice.

[Doug (unidentified committee member)]: I am.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: So the main piece that private providers are thinking about is how and not to be super straightforward about it and think about it in revenue, but different ages of kids generate different amounts of revenue in each classroom. So, they're also thinking about UPK payments and how family demographics impact whether the UPK payment goes to them or whether it reduces the family's weekly family share. And then they're also thinking about how much that UPK payment compares to the overall cost of running the Universal Precanic Garden program because it requires certain teacher criteria, certain You're doing surveys, you're doing family engagement events. So yeah, those are the three we're going to talk about in this section. If you want to reflect as we've reflected nearly everywhere else, that these do not reflect the full set of incentives based by providers. But yeah, we will go into different revenue per classroom. So, at licensed centers, different ages have different staffing requirements. So, within infant classrooms, the staffing ratio is one teacher to every four students, and the maximum classroom size is eight. For toddlers, that is one to five. For maximum classroom size of 10. And then for preschoolers, it's one to 10 for a maximum classroom size of 20. So, if you're just looking at gross revenue at the full time CCFAP rate for those children, you'll see that even though the infant weekly rate is higher than it is for preschool, it doesn't compensate for the fact that you can have more children in a preschool classroom than you can in an infant classroom. And the difference is pretty substantial, right? If you just take the number, this is we're talking gross revenue here. 20 kids who are earning $349 per week, the total revenue for that classroom is over $450,000 But on the infant side, when you have eight children in that class and they're receiving a CCFAP rate of $471 that translates to a little more than $170,000 So this is absolutely something centers are thinking about and trying to figure out how they can meet the needs of the community and the kids that are in that community, but also making their business model viable.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: And are

[Unidentified legislator (likely Chair, House Human Services Committee)]: these ratios in DCF rules? Because in Act 73, that number 20 is less than that.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: I will have to, yep, that's my understanding, but I may have, yeah, I'll check into it.

[Unidentified legislator (likely Chair, House Human Services Committee)]: I'm just, if we're thinking about how it impacts overall, I don't remember what the exact number was, but I remember the good older kids had, didn't they have a different number?

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: I thought we eliminated everything between class size and

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: middle

[Unidentified legislator (likely Chair, House Human Services Committee)]: grade Under kindergarten. Kindergarten, eliminated. There used to be in a draft, but I thought that changed in the context. Okay, and they were minimums, not maximums. Minimums, right.

[Rep. Peter Conlon, Chair, House Education Committee]: Thank you.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: Yep, and here's the point. Although you're receiving different weekly reimbursement rates through CCFAC for different ages of students, they don't compensate for the fact that you have more students in differently aged classrooms. So when you add the expense side, this is from the 2025 cost modeling report that was done by First Children's Finance. This is contracted by DCF. And it shows that at licensed centers at a small center, and then centered probably right for infants, When you use their cost model to calculate the full set of expenses associated with those classrooms and compare it with the CCFAB subsidy, that amount is negative. We'll note that it doesn't necessarily mean at every center they're taking a loss on infant students. This is just saying when you plug these factors into the cost model used by DCF, this is the output you get. For toddlers, centers under this cost model are roughly breaking even, but for preschool students, right, there's potentially some additional revenue that can be through to those students. And so when building their business model, centers are thinking about their the classrooms they have and how they can support different classrooms. And I will note that the difference between what's happening at licensed centers versus family childcare homes is because different ages of students can be served by the same staff in family care homes, so their business model looks different. The second piece is talking about how UPK payments benefit a program differently depending on family demographics. I'm going to animate, whoops. I'm not used to animation. Went a little too fast. So if, and so a whole bunch of ifs here, there's some assumptions in this model, right, because as we're talking about the CCFAP certificates, you could have different CCFAP certificates. There can be a different number of kids in a family. So, we're looking at this picture for a family that has a CCFAP certificate for full time care. There's one child in the family. So, in this example, if 100% of the family's care is provided through CCFAP, so they have a family share of $0, The center is receiving the state rate, so the $439 per week, and they're also receiving when for the thirty five weeks there is universal pre K, they're also receiving the UPK payment. However, if you're looking at a family that has a family share of over $125 The provider is only receiving the state rate, but those family costs are reduced. So, the UPK payment is getting applied to the family share in that case. And so, tables walk through the math of those calculations. On the left hand, it's a table that's showing the family share of $0, right, the $4.39. You're adding, this was done for the most recent statewide rate. So, converting the statewide rate to a weekly payment for thirty five weeks is about $114 And so, 114 plus $4.39 is $553 per child per week for the thirty five weeks that you have Universal Pre K payments. But in the second example that we're presenting, if the family has, let's say, a family share of $300 that $114 reduces the family's $300 family share by $114 So, the family is only paying $186 for the thirty five weeks of UPK. And so they're receiving, in total, dollars 114 from UPK, dollars 186 from the family, and then $139 for the difference between the family's family share and the statewide rate. And I must also final caveat is that this is happening in provider that blends their UPK hours. If they were to separate, they call them out. They could calculate their tuition differently, but we're not gonna go into those weeds. I'm gonna keep two examples and keep it straightforward.

[Rep. Peter Conlon, Chair, House Education Committee]: I wanna make sure I'm understanding this correctly. On the left side of what you're saying here, a program with a blended a blended program, they're collecting both CC fab and EPK, even though the two probably operate seamlessly within the school day.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: And this is a case, this is also saying that the amount of hours that the program operates still qualifies them for a full time certificate. So it's above, you know, they're operating forty hours per week. You're subtracting the ten hours of UPK. That leaves thirty hours, and so that still counts as a full time CCFAB certificate. But yes.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: And just to reiterate, in this instance, the only time that this would happen is if a family share is $0 So they're lower income families. Family As share increases, the center will reduce the family payment if they receive UPK.

[Ted Barnett, Senior Fiscal Analyst, Joint Fiscal Office (JFO)]: And the final piece is this isn't necessarily doesn't speak to a flaw in the system. I know Janet has testified to and there might be reasons where a center receives more money to serve families who are at lower income scales. And so this may be, you know, this is not necessarily a flaw in the system. The second piece is or third piece at this point is so, talking through for a center, order to become a pre qualified UPK program, you have to hire a teacher who has a early childhood education or early childhood special education endorsement from AOE. You have to conduct periodic surveys of student progress on their kindergarten readiness. You have to hold family engagement events. And so, yeah, there are a whole host of things you have to do. It's in addition to being a childcare provider in order to do universal pre K. The first bullet there of hiring a teacher with qualifications from AOE, It is a challenge. It is a challenge, I've heard, for both private writers and in public schools. Finding enough staff to do UPK is certainly a challenge in the system. There are a lot of provisionally licensed folks. So there are many private providers and maybe even public schools who just simply aren't able to do UPK because of that constraint. There are also This bullet really speaks to me from my past life. There's additional staff capacity to manage surveys, billing, coordinating with school districts or supervisory unions, invoicing, etcetera. So, any sort of provider has to have that capacity in order to want to do a UPK program. And so, for centers, if they're not seeing, right, if they may not either the relative value of the payment is incentivizing to participate or yeah, they just simply decide it's not worth the additional costs or they aren't able

[Rep. Peter Conlon, Chair, House Education Committee]: to do them. Are there any numbers that show that this many centers dropped EPK because of all of these challenges? Do we have any data on that at all?

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: I think that's a good question for DCF potentially. I think of the things that's challenging is the changes for child care financial assistance program only went into effect in October 2024. 2025?

[Unidentified legislator (likely Chair, House Human Services Committee)]: Yeah. 2025 was the first full year, yeah.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Yeah, 2025. So there's

[Rep. Peter Conlon, Chair, House Education Committee]: People figuring it out.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: People are figuring it out, right? Like it is a significant change in what providers are reimbursed. And so it may The relative value, if you will, of universal pre K has changed since CCFAP. So there may be over time, you may see a change as you're also at these challenges. And from the financial perspective, is it worth it anymore?

[Doug (unidentified committee member)]: Is my understanding correct with respect to the hiring of a teacher with the early childhood education or special ed in Georgetown is one needs to be hired. You have three preschool classrooms, one teacher's devices, correct?

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: That's correct. And I think that's one of the differences between universal pre K in a public school versus at a private provider that the public schools have to have a licensed teacher in every classroom, whereas the private provider has to have a licensed childcare teacher on staff to your point for multiple classrooms. And I think if it's a family care home, they just have to have a relationship a contractual relationship with a licensed teacher.

[Doug (unidentified committee member)]: But with the current difficulties of hiring that even in a center that may have multiple classrooms, one teacher, any changes in requirements for teachers if they match public school would be increasingly difficult for private providers.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: And I think one of the things that I know has been talked about a lot is also in terms of the hiring space is what in the Act 76 debate and conversations is that childcare providers often can't provide associated benefits. So if you're trying to find a licensed teacher who's looking at going into the public school where they'll receive healthcare and a pension and all of those sorts of things versus a child care center where those things may not be available. There is market tension there associated with just the realities of the current system. And it's a revenue differential. Yes. Okay. So now we'll talk about some of the options that are in the JFO report and then questions, I think. So more disclaimers, right? So one of the things for you all to think about as you're considering, now, Act 73 asked to reexamine the Pre K weight and sort of what should be done with this cohort as part of education transformation. It was just thinking about what the goals are of the early care and learning system in Vermont. And what does the general assembly want to prioritize going forward? Is it in this space, it's thinking about workforce development and support. I can't remember where we were when we brought this bullet up, but somebody asked the question, right? Are you talking about workforce development for parents? Are you talking about workforce development for the teachers in the space and the childcare workforce? Right? Both are fair and important questions in early care and learning. Where does kindergarten readiness fall into the goals early care and learning systems? Increasing participation in the public school system, changing expenses in the education fund, or other things. What are we trying to achieve with changes to the universal kindergarten system? And we had to approach providing options without knowing what the goals are. So we have three options, but they are sort of JFO being like, you could do this, but we don't actually know what you're trying to achieve. So it may not actually align with what your ultimate policy goals are, but here's the thing you could do. So, in terms of what options are, right, you could focus primarily on the weight and make limited changes to align universal pre K with the foundation formula. You could continue to operate the system as it exists, sort of largely unaltered until education transformation really kicks in and then figure out how pre kindergarten education fits into the new state of public education in the future. Or you could go completely 180 and take a more comprehensive approach, evaluate the programs and the funding streams, more in-depth and, think more about how comprehensive changes would work in this greater education transformation system or anywhere in between. Those are the sort of general options. So the things that JFO outlines specifically in our report, sort of some of the things that we flagged as things to consider. So one of the options is to adopt more of like a money follows the student type policy, similar to the tuition policy you see at independent schools, right? Right now there's just a flat tuition rate, but it could be that if a child has at the full education opportunity payment would follow the child to wherever they receive universal pre K, and then you could make a determination on whether or not any additional weights associated with that child would travel with that child. You could prorate the UPK weights depending on what's being provided at a public school in terms of how long term ADM is calculated. That would probably be pretty administratively complicated, but the weight could flex depending on what the individual public school district is provided and then tie the amount of funding that flows to that school district accordingly. There's also the option to change how you count universal pre K when calculating CCFAP reimbursement. And that would right now there's that if you're on the cusp of that ten hours and you just opt not to enroll because it will change how much you receive from CCFAP, You could change how that calculation is done. And that's one of the things that, you know, it's complicated thing in the system to the extent UPK is a dollar amount that's flowing, whereas the CCFAP calculation is based on hours. And how do you reconcile those two things where the calculations are really done? They're looking at two different things. Those are the three. I don't want to call them wild and crazy options that JFO put out, but those are the three things that we came up with, but they really like, you know, it's everywhere in between are things that the general assembly could consider. And just high level takeaways, I'm happy to take questions, but just everything's interconnected in this space. And it may be hard to make changes in one aspect without impact, having a waterfall down the system. I think we talked only a little bit about Head Start, right? To the extent Head Start is a federal program that the state doesn't really control, but to the extent those programs are operating based on what exists for CCAP and UPK, it's important to make sure when you consider policy changes that the impact of those head start programs are thought about and whether or not it's gonna impact what the local match is for those programs. And similarly changing the number of hours of universal pre K right now it's 10 for thirty five hours a week. That could be a different number. It may impact the benefits in CCFAP, right? If the universal pre K goes to 15, then you change that certificate that people in CCFAP may qualify for. And sort of what's the interaction between those two things if there's no change to the way that those hours are counted when calculating CCFAP certificates. Just to call this out again, there's limited data in this space. I think there's a lot more work to do in terms of collecting information. So it's hard to do analysis in terms of what's the impact on the education fund if X, because we don't really know what individual school districts are spending on Pre K. We have some data, but we can't parse out how much of this is tuition and how much of it is not. And we don't know how many hours each one is providing. So, it's hard to do that analysis. And I think it's important to pull out just to go back to that very first slide we show. I think the universal pre K program and childcare financial assistance in terms of what's going on around the country. A lot of kids have access to universal pre K in Vermont, and parents have increased access to subsidies to help make childcare affordable. And that's just an important thing to keep in context. We think when thinking about what the next policy steps are in the early care and learning space. That's all we have. Do you have any questions? It's a lot of information. And we were in ways of means like four times, I think, talking about this stuff. So happy to like And we have some members here. Hopefully they're not more confused, but I'm concerned. But yeah, if you have questions now, we're happy to answer questions now or whatever works.

[Rep. Peter Conlon, Chair, House Education Committee]: One of the outcomes of this study that I had hoped for, and maybe you have the information, I remain sort of a fan of bifurcating what is public school and what is, call it childcare, whatever you want, and with this new income stream of the childcare, the CCFAP payroll tax, that it's, I sort of was hoping this is an opportunity to say, okay, now we can just sort of say what goes on in a public school is public school, what goes on in a private center is childcare, and is there enough revenue from the payroll tax if we were to make that sort of change to cover the cost? So in other words, if we said public schools are going to offer four olds go to public school, everything else is childcare, that would remove pre K, UPK dollars from the private sector, which I think when you talk about all the interrelated impacts of things, that's probably a huge one. But is there a possibility of that sort of being made up through the revenue of the childcare tax? I don't know, maybe your analysis didn't go in that far. It didn't.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: We didn't go in that far. I think there and I think it didn't go in that far because it's complicated, and it depends on, like, which policy lever you want to pull. Right? Like, is it three year olds are over here and four year olds are over there? Okay. Well, that's that's one analysis. If four year olds are in the public system, is there is there capacity within the existing public system for their all to actually go to the public system? And if there isn't, would you still maintain parental like, Would parental choice be maintained? Would there be a And how would that play into that system? There was another one that I was thinking of. And the number of hours, right? Like, not knowing what the change Right now, it's the ten hours per week and what the actual impact on the education fund would be if that was changed. If you pull the three year olds out, but you put the four year olds in, like, how does that interact with each other? So those sort of open answering that question, we'd have to make a lot of policy assumptions to answer that. Can

[Rep. Peter Conlon, Chair, House Education Committee]: you talk a little about the, given the program that we have and the CC levels of subsidy that we have, does the childcare fund take in enough revenue to cover what we're already promising?

[Unidentified legislator (likely Chair, House Human Services Committee)]: No, it's $6,500,000 in the whole this year.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Yeah, the governor is up to

[Rep. Peter Conlon, Chair, House Education Committee]: That's an answer that helps. Thank

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: you. Yeah, the FY twenty seven budget has an additional $6,500,000 of general fund going to CDD to cover anticipated childcare financial assistance programs.

[Rep. Peter Conlon, Chair, House Education Committee]: But is that considered that's going to be like the case moving forward?

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Hard to

[Unidentified legislator (likely Chair, House Human Services Committee)]: know. Hard to know.

[Rep. Peter Conlon, Chair, House Education Committee]: We're not adjusting the rate.

[Unidentified legislator (likely Chair, House Human Services Committee)]: Yeah, mean, I think from the information we've seen from DCF, we've seen a very significant jump in the number of households, number of families accessing CCFAP. I mean, it's like, have a large increase. And so that obviously is impacted and it's an entitlement now, which it wasn't when the bill was originally passed, which made a big difference. And I think, I'm kind of thinking back to the slide where you showed the differential in the age groups and the type of family childcare home and the age groups along the way. And the place where there was sufficient revenue to keep the businesses going was in that preschool age. And we already know that that preschool age group offset some of the losses in the infant and toddler side of things. So it is like pushing one button and you have different interactions all the way around for sure. And so we'll have to think really carefully about what buttons that we push and what ones we don't and how we can take a look at this. But I think this has been really helpful. Thank you for all the work that you did on this over the summer. I know that you probably both have a few more gray hairs than you started with and that there's still a lot more to understand. And I think that one of the things that you laid out at the very beginning, and then at the very end again, is what are the objectives we're trying to achieve? In Act 73, six. Sorry, I got confused for a moment. In Act 76, one of the things that we laid out as a policy goal is to really have universal access for all 40 year olds in the system that doesn't exist now. And that's policy that the general assembly adopted that we haven't achieved yet. And so, when we talk about process, that's probably where our committee is going to start. So so people know kind of like, where does this go next? We are taking up and working with ways and means and education to try to craft something. I'm not sure exactly what it's going to be yet, But we'll be taking a bunch of testimony this week. Then when we get back before this is one of those things where I have get done before cross over. So thank you very much.

[Rep. Peter Conlon, Chair, House Education Committee]: Fair to say that one of the challenging questions is we have a weight right now for pre K, it's somewhat arbitrary. And so as we move forward with determining weights and moving towards an education opportunity payment, just what that weight should be if you are a public school offering full day, full week universal pre k, and then how do you ratchet I mean, you just then ratchet it down

[Doug (unidentified committee member)]: over. Random.

[Rep. Peter Conlon, Chair, House Education Committee]: What what that amount is?

[Unidentified legislator (likely Chair, House Human Services Committee)]: Well, I know I know that they don't even have room for pre k. They do a lot of water. So what happens if you increase it more? Like where do kids go? Well, I think that's one of the things that was outlined. Space considerations are part of the issue obviously. Right. So, okay. That's great.

[Rep. Peter Conlon, Chair, House Education Committee]: Any other questions over here? A

[Doug (unidentified committee member)]: clarifying question on the money follows the student. It says it follows them already to the tune of 3,800 some dollars. Is that referencing the full 6,009 and 15 would follow the student?

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Yeah, that was sort of the thought, right? That the full amount that the school if the school district counts the kid, the school district sends the kid then attends somewhere else, does all of that money then go with that child to their private home?

[Unidentified legislator (likely Chair, House Human Services Committee)]: And we have to think about qualifications. So we don't have the same qualifications. And should we have the same qualifications? I think some would argue, yes. I'd probably be one of them.

[Emily Byrne, Deputy Fiscal Officer, Joint Fiscal Office (JFO)]: Yes. All right.