Vermont Legislature SmartTranscripts:

[Peter Conlon (Chair)]: This is House Education, Wednesday, March 11. Gonna spend a little bit of time refamiliarizing ourselves with foundation formula concepts, and then really talk a little bit more in-depth as to how those translate to the map that we've been looking at and how it might for any future map we take up. I think the best course of action might be to sort of do a rapid fire through the overall presentation that you have and then move it to questions and we can move into some of the modeling that's been done. If that works okay for you.

[Julie (Office of Legislative Counsel)]: Yeah, sounds great.

[Peter Conlon (Chair)]: Okay.

[Ezra Holden (Joint Fiscal Office)]: Alright. For the record, Ezra Holden, joint fiscal office.

[Julie (Office of Legislative Counsel)]: I'm Julie Eric Jana Brown.

[Ezra Holden (Joint Fiscal Office)]: And is it okay if I share the screen? Yes.

[Julie (Office of Legislative Counsel)]: Well, we're just pulling that up, I guess I'll just say we put together these slides to serve as a review. If it's too detailed, let us know. We can come back out of the weeds, or deeper in the

[Erin Brady (Ranking Member)]: weeds where we're most comfortable. All

[Ezra Holden (Joint Fiscal Office)]: right, so as Pierre mentioned, we are going to do an overview of the ACCEPT Indeed three d as Enacted foundation formula and then move on towards the materials that were provided by us this morning. Just as a reminder, joint fiscal office, nonpartisan legislative office, we're here to provide you with information and to not make policy recommendations. So first, just want to go ahead and do a quick refresher of foundation formulas in general. So and then we get this control bar all the way out of my Okay. So just as a reminder, long term weighted average daily membership, that is a term that you will see quite often in this presentation. You'll also see the term long term average daily membership. So the abbreviation LTWADM and LTADM are ones you're familiar with. And so that is the student count that, in a foundation formula, drives the funding to a district. So that is a long term ADM membership, so the students of the district and any pupil weights that they have. Those two combined are how it gets the long term weighted PDM. Some pupil weight abbreviations that you should also be familiar with are FPO, federal poverty level, which stands for our students experiencing economic disadvantage. We also have EL, which are the English learner students. So those are important to keep in mind. Also keep in mind that at 73, the weights are additive. So if a student is a FPL student and an EL student, you would add those two on top of each other. Right. So broadly, the foundation formula will apply a base and weights, which are typically based on the student's characteristics, such as FPL, EL, etcetera. And so the student characteristics to a student population to determine the funding that a school or district would receive. So with Act 73, we're talking about the funding that the district would receive. And so that calculation would be the base times the long term weighted average daily membership of the district. And that's how you calculate the educational opportunity payment or EOP. There are also support grants for small and sparse schools that would be added on top of this if a school qualifies.

[Peter Conlon (Chair)]: Alright.

[Ezra Holden (Joint Fiscal Office)]: So now we've looked at foundation formula briefly. Overview broadly of foundation formulas, we'll now move to the 73 foundation formula. So just wanna highlight that under Act 73, we have a base amount of 15,033 per long term ADM. So that is the long term membership of a pupil without any pupil weights. Act 73 also allows for students to receive weights based on any demographic characteristics, such as FPL or EL, and those weights are based on the Colby and Baker memo released in April 2025. And so among other things, these weights would replace the special education census block grant and replace them with tiered weights based on disability category. Act 73 also would replace the small school grant excuse me, the small school weight and the sparse school weight with school support grants instead. And you can see here a table going into more details of the different weights.

[Julie (Office of Legislative Counsel)]: Can we take questions as usual?

[Peter Conlon (Chair)]: Please, no, jump in.

[Julie (Office of Legislative Counsel)]: Okay. I'm just wondering if you could give me a better idea of the difference between the small school and sparsity weights versus the grants. It's that it's

[Erin Brady (Ranking Member)]: not based on number of kids.

[Kate McCann (Member)]: It's just a flat So

[Ezra Holden (Joint Fiscal Office)]: I have some more information on the next slide that is maybe helpful. And then if you still have a question, we can revisit. All right. Here we have the Act 73 Small School and Spar School Support brands. So under Act 73, the small school support grant has two criteria. First is that the average enrollment over two years is fewer than 100 pupils at that school. And the second is that it is considered a small by necessity school, which is currently pending definition. And I will note that this grant applies to the school's membership rather than the membership of the district. And so that would be about $3,157 per qualifying pupil at that school. And next, we have the Sparse School Support Grant. And so this is, again, based on two criteria under Act 73. So first, it is a school within a city, town, or village with a population of fewer than 55 people per square mile. And also, it needs to be deemed sparse by necessity. Again, that's a definition that is currently undefined. And so the qualifying students at that school would receive excuse me, for every student at the qualifying school, you would receive $19.54 dollars One difference in the sparse school grant versus a weight is that we're looking at sparsity at the town, city, village rather than at the district level.

[Julie (Office of Legislative Counsel)]: And I think one other piece to keep in mind when thinking about the provision of a grant versus a weight, under current law, we have those small and sparse weights. And we have other weighting categories as well. Because those are tax capacity weights and they're not weights in a foundation formula, it's not an apples to apples comparison to look at what weights we have in current law versus what weights would be used in the foundation formula because current law is adjusting taxes and tax capacity. As Ezra mentioned, the foundation formula is adjusting funding directly going to schools. So these amounts, while they're grants, so it's a different fiscal mechanism. So too, if you're looking at the calculation of the education opportunity payment, each one of those weights included in the calculation of the EOP is also associated with a funding amount. It's just not a separate grant. It's all built into the EOP.

[Peter Conlon (Chair)]: Erin, then Rob.

[Julie (Office of Legislative Counsel)]: Are these two additive? Yes.

[Erin Brady (Ranking Member)]: You have one or you could

[Peter Conlon (Chair)]: have both.

[Robert Hunter (Member)]: I'm confused by sparse by necessity. I guess that's not necessarily that's, I think, probably a question for us in the creation of it. I understand, obviously, details matter, small by necessity. But sparse by necessity feel confusing to me.

[Peter Conlon (Chair)]: I think it's sparse. Just sparse. Right. Like you're Right.

[Julie (Office of Legislative Counsel)]: It it absolutely is a policy choice. There is a sparsity weight that exists in current law of the tax capacity weight. And the determination of that sparsity as an additional funding category or tax capacity weighting category stems from the original research done by doctors Colby and Baker, and then again in the memo, which identified that there was a significant additional cost difference associated with the provision of education to students in geographic sparse areas. So it could be a coffee of scale, which, of course, is also related to small school. It could be additional transportation costs, pieces like that.

[Peter Conlon (Chair)]: What do you want about

[Ezra Holden (Joint Fiscal Office)]: the same question? Well, I had

[Unidentified Committee Member]: the same question, but I think it's just you wouldn't be sparse by necessity, just dysfunctional. You'd be small by necessity because your school's got the moon docks.

[Peter Conlon (Chair)]: Actually, that's suffocate sparse. Yeah, right. So you're gonna to get sarcophagus. Right, but I mean,

[Unidentified Committee Member]: but it's the words by necessity, sparse, I think it's

[Ezra Holden (Joint Fiscal Office)]: just sparse, sparsely populated or something.

[Unidentified Committee Member]: I think that was what you were saying, right? It's

[Peter Conlon (Chair)]: just something.

[Robert Hunter (Member)]: Yes, and then I guess I'm trying to understand that. So the small school support grant applies to just the kids in that school, regardless of what district construct we have to vet. The sparse school support grant would be by the town of residence.

[Julie (Office of Legislative Counsel)]: It would be by the students in that sparse town. Under current law, the sparsity weight is based off of the entire district. So if you had a district that fell into the categories of x number of people per square mile, then regardless of if that's Say there was a city in the middle of that sparse district, the students in that city would too receive a scarcity wave. This was a policy decision to narrow the definition of sparsity to the students that are in a school that is deemed sparse. Is deemed sparse based off of these two criteria. And are these grants

[Robert Hunter (Member)]: to independent schools as well? Or is this only to public schools? How does that piece of it work? Because right now, they're weighted, regardless of which system they currently get, right? I'd like

[Julie (Office of Legislative Counsel)]: to phone a friend in March.

[Peter Conlon (Chair)]: Save that question. Write it down. Okay,

[Julie (Office of Legislative Counsel)]: so that was the quick review of the foundation formula. We get to move forward? Yes. Okay, so supplemental district spending. This is also contingently effective, also created in Act 73. And this is that provision where school districts have the option to ask voters to approve what is called supplemental district spending. Those are voter approved funds that are in addition to the foundation formula amount, the EOP and the grants that Ezra just spoke about, and other categorical aid. So upon approval from the voters in that school district, a district would be permitted to have supplemental district spending of up to, this is a cap, 5% of its long term membership. So that's its unweighted student count multiplied by the base amount of the same fiscal year. So that's that fifteen thirty three adjusted by inflation. There is a transition provision. So in the first years of the foundation formula, it starts at a higher cap and then it phases down over time to this statutory cap of 5%. This is the tax mechanism. We won't go into much detail unless that's helpful. But essentially, way I'm seeing the chair shake his head. Do want me to skip past the slide?

[Peter Conlon (Chair)]: No, you just want to go into detail.

[Julie (Office of Legislative Counsel)]: Okay. So the way that supplemental district spending is raised is through a local property tax that is still equalized across the state. So essentially, all school districts will be able to raise the same amount on the same tax rate regardless of their property wealth. And the way that this works is essentially, the state looks at all of the school districts and the grand list per pupil in each of the school districts and looks at how much could be raised in that school district if that has the least property wealth per pupil and says that's what everybody can keep on our tax rate. The remainder is recaptured by the state and flows to a supplemental district spending reserve. And this gets into that piece, which I know is included in the district builder, which is looking at that grand list per pupil of districts. So the wider the range of the grand list per pupil of the districts using this tax mechanism, the more funds are going to be recaptured of the richer property districts and flow to this reserve. And Act 73 directs that the amount in the supplemental district spending reserve is then used in the following year to uniformly lower property tax rates.

[Peter Conlon (Chair)]: I mean, I just conceptually, if every school district had the exact same brand list, there would be no reserve created, because everybody would have the exact same capacity.

[Beth Quimby (Member)]: Yep. Also, if there's only recapture if school districts opt have supplement, to vote on supplement, which they may

[Erin Brady (Ranking Member)]: That's right.

[Beth Quimby (Member)]: Say, we're not going to do that because of all of our brand lists.

[Julie (Office of Legislative Counsel)]: Yes, both points. I would say the other piece that I think is important to keep in mind too is that unlike in the current system where one school district's increased spending has a ripple impact into all other property tax rates, In this mechanism, the supplemental district spending tax that is localized solely to the districts that are choosing to have and voters approve the supplemental district spending.

[Peter Conlon (Chair)]: It

[Emily Long (Member)]: Do that. Assuming

[Erin Brady (Ranking Member)]: the impact of that in terms of what property taxpayers are paying is

[Julie (Office of Legislative Counsel)]: greater in districts with higher grand less values. You're paying more to get access to supplemental spending. I would say it depends on how you look at the impact. In communities that have higher property values, yes, the property bills will be bigger, of course, because it's a bigger base at the same rate as being up to. It's a question of, is the amount what should be compared? And this is a policy choice. Is it the amount paid, the overall bill, or is it the equalized tax rate? That policy choice has already been made, is one way you need to make? Everything that we've walked through to this point have been included in Act 73. So this equalization mechanism that we talked about, this is all in Act 73 and is contingently effective. Of course, you could make a decision to change it, but it would be amending Act 73 as passed.

[Ezra Holden (Joint Fiscal Office)]: All right, so as Julie mentioned, we've been talking through Act 73 as enacted, and now want to pivot a little bit to talking about the Act 73 foundation formula and the modeling that was done as if it were implemented in fiscal year twenty twenty six. So this speaks to

[Peter Conlon (Chair)]: the other document that we have, which was modeling as if it just as as as we said, fiscal year twenty twenty six for the district boundaries that were on our draft map.

[Ezra Holden (Joint Fiscal Office)]: So if act 73 were to be implemented in fiscal year twenty twenty six, the base and support grants would be increased to account for inflation. You'll recall that the act 73 as enacted number, those were the dollar amounts for fiscal year 2025. So now we are one fiscal year in the future, so we would have to adjust for inflation. In act 73, that is done by using the NIPA price deflator. So after adjusting for NIPA, the fiscal year twenty twenty six base amount would be about 15,456 per a district's long term average daily membership. And I think it's important to note here that the pupil weights themselves are not adjusted by inflation. So, yeah, so you'll recall that your EOP, if you're a district, is determined by your long term weighted ADM, which is the long term your membership of kids in your district plus any pupil weights that those kids bring with them. And then that summed up figure is then multiplied by the base. So the weights themselves don't change, but all else equal, since the base is increasing, your EOP would therefore be increasing. Also, the school support grants are updated by NIFA for fiscal year twenty six. So that sparse school support grant would now be about $2,009 for eligible student, and the FY 'twenty six Small School Support Grant would be about $3,246 per eligible people.

[Julie (Office of Legislative Counsel)]: So I think I'll just briefly interject here. And I know that Ezra is about to talk about this. Obviously, the foundation formula didn't come into place in fiscal year twenty twenty six. And we heard the request of need for modeling, need for numbers. And so this is sort of using the policy decisions that have been made thus far and using the best and most recent available data, which is FY '26. What can we show you? And so that's sort of what we're laying out here and talking about how things would be implemented at FY '26. Obviously, we're in the middle of it, but that's why we're walking through all of these pieces. And I know that the last time I was in here, we spoke a lot about the challenges of modeling, and we recognize the need to see numbers. So this is trying to get as close as anyone can get at this point.

[Ezra Holden (Joint Fiscal Office)]: Yeah. So I think that's the next segue into the ACT 73 modeling considerations. So there are many considerations that went into this and that we would like to highlight. So first of all, have some data considerations. So the JFO modeling was made using some incomplete and suppressed data, and that's due to the nature of Vermont as a state. When you have small population groups, once it gets below a certain number of students, below 11, we have to have that data suppressed. So for example, the EL weight was modeled using a flat 1.39 rather than the tiered weights that are in Act 73. Likewise, the special education weights, which are also based on disability categories, those we did not include in the EOP at all because of that debt suppression. Also, think it's worth pointing out that the AOE enrollment data that we have currently been able to access for our sparse and small school calculations does not include pre K enrollment. At this point, we cannot determine what impact this data would have, but we assume that there would be some impacts. Also, under act 73, pre k enrollment is not excluded from smaller sparse support grants. So we assume that it would need to be accounted for when determining the support grants.

[Julie (Office of Legislative Counsel)]: And to that end, too, and I know that this is one of the places where Edgar's going, pre K hasn't been fully decided yet. It's one of those big outstanding questions. So this is an example of, based off of policy choices that are still to be made regarding pre K and a number of other pieces that haven't been made yet, this is one place, there are others, this is one place where decisions around pre K may impact the fiscal picture of Act 73 and how much school districts would or would not receive.

[Ezra Holden (Joint Fiscal Office)]: So in addition to some data considerations, there also are some modeling caveats that we will raise as well. So there are significant assumptions that went into this modeling, and so you should interpret the results with some caution. Change to any one of those assumptions would change the result of the modeling. So we've mentioned this already. It uses fiscal year twenty twenty six data and reflects estimates if Act 73 were to have been implemented during fiscal year twenty six. Also, on your printouts, you'll see that we have fiscal year twenty twenty six education spending as approximate, and that's because in the House map proposal, there are a couple of current law districts which were split between proposed districts. And so to try and assign the dollars of those split districts, we chose to use the estimated share of the long term weighted ADM of those current districts and then assigned it to the town. So I think Montpelier Roxbury is one of the districts that split, so we tried to assign okay. Montpelier had this share of the long term weighted ADM under current law, so we will assign them a similar share of that current district's budget. So just keep that in mind when you're comparing the current education spending of f y twenty six. That's why it's listed as approximate. Also, this modeling does not include the transitional supplemental district spending that Julia spoke about. You'll recall that with supplemental district spending, a district could vote to spend above their foundation formula amount, And there is a transition period in fiscal year 'twenty nine through 'thirty three where they can spend up to 10% above. So that is not reflected in the printouts, just the 5% statutory figure that they transitioned to in fiscal year twenty fifty eight. And finally, you'll note towards the bottom of the printout that there are interstate districts, interstate one, interstate two. This was done for informational purposes. They're left on the sign in the House of Map policy, but to just account for their current spending and long term membership, we've labeled that there, but that's just for informational purposes. And there are also outstanding policy questions within this modeling. So sparsity and small school grants are included in the estimates on your handout. However, the definition, sparse by necessity, is outstanding, and having a definition is critical for finding the analysis. Similarly, the term small by necessity is also undefined. For our analysis, we tried to have a proxy definition for that small by necessity, and that is by using the measure of sparsity. So fewer than 55 people per square mile at either the town, city, or village where the school's located. So the measure we're using for sparsity. We tried to use that as our proxy for what is small by necessity. A different definition of small by necessity will be important for refining this analysis. And also the decisions around other policy questions, which we have on the next slide, are important for this as well. So presuming that all else policy wise is held equal and we're not attempting to predict any changes at the state or local policy level, some of the big items that are outstanding for policy decisions are CTE, pre K, school construction, and other categorical aid or funding decisions.

[Peter Conlon (Chair)]: Yeah, and I would add to that list, special ed, which is not specifically called out because you called it out earlier, but I think it was still a major policy question whether special ed is funded to end up in a grant or in a wait. We've heard a lot of conversation about that. But since we go to the modeling that you'll see, recall that it does not include special

[Julie (Office of Legislative Counsel)]: And before we move off of this slide, I think it's helpful to put an exclamation mark next to this slide in terms of what is and what isn't included. We to do some sort of comparison because that's what's been needed. That's what's been requested. And it's not necessarily an apples to apples comparison. To the extent that it's an apples to apples comparison or an apples to oranges or an apples to grapefruits depends on all of the choices that you all still need to make. So dependent on how CTE is going to be determined, that will impact how the columns and the funding levels of each district shake out. It could be an apples to apples if you decide to not give any additional funding to CTE in no way. Or if you decide to add additional funding to CTE on top of the education opportunity payment, then that would be factored in once that decision is funded.

[Ezra Holden (Joint Fiscal Office)]: So I think the high level takeaway for these last several slides is that when you think about all the caveats, considerations, outstanding policy questions, you should view this as a preliminary analysis, not something that is set in stone and not something that's definitive, just an estimate of x-seventy three based on these criteria of brainwaters. And so that's time for questions.

[Peter Conlon (Chair)]: Everybody feel like you have a good understanding, at least for the time being? Yes. Okay. All right, so why don't we walk through some of the modeling and I guess I would say don't be afraid to remind us of the caveats of iterations that you

[Julie (Office of Legislative Counsel)]: It Marty, go is the printout that shows off the complete page. It looks like this. Do you want us to share it on a screen, or do you want us to talk big picture about what

[Peter Conlon (Chair)]: Probably talk big picture, only we can't see.

[Kate McCann (Member)]: Before

[Peter Conlon (Chair)]: you start, Rep Brady is the one who requested the modeling. Do you want to set it in context here?

[Erin Brady (Ranking Member)]: I'm not really other than I guess I continue to be concerned that I don't fully understand the nexus between policy decisions and map work in our committee and the foundation formula and a concern about a bit of the sequencing that these decisions or the impact of the foundation formula is likely very consequential for much of the field. Since we haven't been talking about those so much in this committee, I was trying to understand much better what a future state might look like and whether some of my concerns were potentially borne out in modeling to the extent that we can do it. And in my own strong desire to fully understand what does the foundation formula mean for our

[Kate McCann (Member)]: state.

[Peter Conlon (Chair)]: I might just add that as we look at this, there there are two sides to the equation here. You're gonna see, I think, some impacts that are that are concerning, but I would just remind us all that those also relate to lower property taxes, which is a concern we don't talk about much in here, but it's not there for our land.

[Emily Long (Member)]: Ask a silly question. So

[Erin Brady (Ranking Member)]: when we're doing this comparison,

[Beth Quimby (Member)]: special education funding is not included at all in the modeled number, but it is included in their previous number.

[Peter Conlon (Chair)]: Do you want to go ahead and do your big picture talk?

[Emily Long (Member)]: Yeah, that's a picture one, but I'm just trying to

[Beth Quimby (Member)]: differences and that could be a lot. It's very important,

[Peter Conlon (Chair)]: but it's part of this.

[Julie (Office of Legislative Counsel)]: Very important. We'll definitely come back The to answer is kind of. Kind of. Okay. And we can explain that more, but maybe first Ezra can walk through high level just what you're looking at in each of these columns.

[Ezra Holden (Joint Fiscal Office)]: Yeah. Just to orient everyone, I've put at the top for reader assistance column letters. So in column A, we have the new district column based on the House Ed map proposal. Column b lists the counties that AOE has assigned the current law districts to. Column c is the current law districts that are being wrapped up into the House Ed math proposal. So column D is the estimated aggregate.

[Peter Conlon (Chair)]: Remember, we

[Ezra Holden (Joint Fiscal Office)]: talked about that's estimated aggregate education spending based on those current law districts.

[Julie (Office of Legislative Counsel)]: You want to remind me what education spending means?

[Ezra Holden (Joint Fiscal Office)]: Yeah, so education spending are the expenditures at a district less the offsetting revenues that a district receives.

[Julie (Office of Legislative Counsel)]: So that's essentially saying, what is the school district's total budget minus all of those funds it's getting from the federal government minus all of the categorical aid like special ed, the special ed grants that they get, universal meals supplement, flexible pathways, those kinds of pieces, those are the offsetting revenues that Ezra was talking about. And the remainder is that technical term we use in a finance education spending.

[Ezra Holden (Joint Fiscal Office)]: Yep, exactly. So column E is the estimated aggregate of the total long term ADM. So that's without any weights of the new districts. And so column f would be the estimated aggregate educational opportunity payment or EOP. That's when you take the long term weighted membership of the new district and multiply it against the base for fiscal year '26. And then columns g is the supplemental district spending that we referred to. Oh, and I should know that column f also contains the small and sparse school grants. So your foundation formula and the grants are all within column f. So column g is the estimated maximum supplemental district spending that this proposed district could spend at that 5% cap that's in statute. This is not the 10% transition figure or any of the other transition figures. Column h is the estimated difference between the EOP under act 73 and aggregate ad spending. So for column h, you can think about that as a difference between columns d and f. Mhmm. And then finally, column I is the percentage change between those two between column f and d. So for example, just looking at new district number one, if you look across to column h, see a negative 12,164,000. So that would be the difference between columns d and f. So and then that the percentage of that would be in column I.

[Kate McCann (Member)]: With that- Sorry, just a really quick question. So estimated maximum supplemental district spending is there just for us to see what that number looks like,

[Julie (Office of Legislative Counsel)]: but it's not taken into account in H, right? Correct. Okay. Yes. And so that shows how much could a district put up, what would be the maximum amount of supplemental district spending that a district could put to its voters and its voters would have, If it's approved, that's how much they could have. If I may, just one other big picture caveat before getting into the weeds. There's also transition mechanisms that are included in Act 73 of phasing from education spending to education opportunity payment over a few years. That's not included here. So this does not include that phase in transition. And I also, I know we just, you're very patient as we walk through all of the caveats. And I want to remind folks that for instance, I think CTE is a really helpful example of how that is one decision that would impact some of these differences, so to speak. So we know currently education spending includes CTE in current law. School districts pay tuition for their CTE students. That's built into their budget, and that's included in education spending. So we see that being included, be it that tuition districts are paying in CTE tuition. That's included in column D. That's the

[Erin Brady (Ranking Member)]: education spending under current law. In column F,

[Julie (Office of Legislative Counsel)]: maybe it includes CTE, maybe it doesn't. We don't know because the CTE decision hasn't been made yet. And so dependent on how that decision shakes out, dependent on how school construction funding shakes out, the other pieces I know you know, that could, dependent on how that policy decision is made, could impact column F, which then would impact columns H and I. Can I ask a

[Erin Brady (Ranking Member)]: clarifying question on Brown's question there? So column G, the supplemental, that's based on the final 5% that we're getting to, not the phased in? Yes.

[Julie (Office of Legislative Counsel)]: But Quimby, was your question answered with special ed or do you want to dive into more detail? I think it's just because

[Beth Quimby (Member)]: we see a lot of swings here when you look at the percentages down the side, but there's a lot of outstanding questions, as you say, that would really change, could change that quite a bit. Special ed, I thought it was off the top of the head, but CTE. So we're not comparing out.

[Erin Brady (Ranking Member)]: So when someone says, Oh

[Beth Quimby (Member)]: my gosh, we're dropping 17%. Well, maybe, maybe not. We're going up 17%. Maybe, maybe not. This is a lot of outstanding questions.

[Julie (Office of Legislative Counsel)]: Yeah, I think that Just

[Beth Quimby (Member)]: really taking that with a grain

[Julie (Office of Legislative Counsel)]: of salt for this very, very preliminary estimate. Yes. I really appreciate that. And I too will say that this is what's been included so far. So, if no more funding decisions were to be

[Erin Brady (Ranking Member)]: made, this

[Julie (Office of Legislative Counsel)]: is what the funding picture would look like.

[Beth Quimby (Member)]: And it doesn't include the phase ins, which is an important thing to keep to those that are high spenders and low spenders. There's a transition mechanism that's done for the people to see that.

[Peter Conlon (Chair)]: Just to go back to

[Erin Brady (Ranking Member)]: the point that Chair raised. So again, I know this isn't apples to apples, but I think we've I asked for it, and I am pushing this conversation because I think we need to be making these decisions somewhere in the produce department and have some vague idea of what we're putting in the cart.

[Peter Conlon (Chair)]: Eyes wide open. Yeah.

[Erin Brady (Ranking Member)]: It's like you might have. So sure, there's things that are not in here. But say everything stood exactly as it is now, Ms. Talbot's district four is going to lose 4%, that does not necessarily mean that their property taxes are going down 4%. They may be going down, yes, but we aren't modeling actual property tax rates or changes. So the relationship, yes, the amount or the rate you may be losing more spending than you're lowering your property tax rate. Or vice versa.

[Julie (Office of Legislative Counsel)]: I will say that, yes, the percentages won't directly align. Directionality and scale well. We do and we can pull it up, or I can send it to Matt. We did do some preliminary tax rate modeling for the money committees last year. The major challenge with the tax rate modeling is we also have outstanding decisions in the tax space that we didn't talk about today, The big one being, or one of the big ones being the multipliers for the property classifications. The new property classification, that data hasn't been collected yet. So we don't even know the size of that base. So we don't know if there were to be a multiplier of 0.5 or five or somewhere else, how much additional revenue that would or wouldn't pull in. But yes, the communities that are currently higher spenders are going to the way that this is currently drafted and has been modeled, will see a decrease. And there will be a corresponding decrease in their property taxes because as a higher spending district, under current law, you have a higher tax rate.

[Peter Conlon (Chair)]: Is that Long? Oh, sorry. No.

[Emily Long (Member)]: But I think it's worth stating that that is also true today. If we spend less, we have a lower tax rate. I mean, I think it's sort of sounding like, oh, that's a benefit, but we actually get that benefit always. When we spend less, we have a lower profit tax rate. It's a benefit.

[Julie (Office of Legislative Counsel)]: I can't say if it's a benefit or not.

[Emily Long (Member)]: I don't want you to say if it's a benefit or not. But if we're going to be looking at this as an offsetting response, we need to understand that it's a system that we currently live in as well. When we spend less in our current model that we have in education, we can lower our tax rates. It's a different system because it's a statewide system. And it's calculated different. But it stands to reason if we spend less money, we're going to lower the property tax rates. I'm not suggesting it's a goal or not. I'm saying anything more about it. I'm just making that mistake.

[Peter Conlon (Chair)]: I think the challenge with that is based on our statewide system. Are places who have cut spending and seen their property taxes go up.

[Emily Long (Member)]: And I actually mentioned that,

[Peter Conlon (Chair)]: the statewide system.

[Leland Morgan (Member)]: Professor Taylor? Is it fair to say, so when we're looking at these possible estimated decreases in spending or decreases in funding, so we'll just take the top one like the Addison, we have a negative 12%. Doesn't necessarily mean, actually, maybe that's not the best example because I'm talking more like districts. That doesn't necessarily affect each district the same, right? Because you might have gotten put into a larger district with a district that had funded way above another district that they're with now. So let's say, I'll just say like Milton. Milton, if Milton's going in Colchester, just totally hypothetical, Colchester might have had a whole different funding level than what Milton had. So not really affecting Milton as much as it would be affecting Colchester.

[Peter Conlon (Chair)]: Yes. Am I making

[Julie (Office of Legislative Counsel)]: That intuition, I think, is really hitting the nail on the head in terms thinking about the fact that these are these aggregated impacts. So to the extent that your lower spending districts are being merged with your higher spending districts, then one of the districts in that new consolidated district

[Peter Conlon (Chair)]: would

[Julie (Office of Legislative Counsel)]: Let me restart that sentence because they're no longer If you're merging districts, it's no longer Milton and Colchester. It's the Milton Colchester or Colchester Milton. And the intuition is certainly true, where to the extent that you're putting together high spending districts or lower spending districts, the swings either up or down won't be as significant because they'll sort of aggregate or net out with each other. Whereas if you're going to be putting all high spending districts together, all low spending districts together, then you'll see more significant shifts. Yeah, so the intuition is absolutely. I would just

[Peter Conlon (Chair)]: point out, this is one of the challenges with the map that I've put down is because some districts aren't which merging with is not only that sort of balancing effect with tax impact, but it also doesn't necessarily leave you aren't getting any more of a different mix of students with different rates that already exist in that district and nor does it leave that district much room to maneuver in a new reality, because they aren't as large as people are conceived.

[Erin Brady (Ranking Member)]: Wait, say that last part again, they aren't as large as that.

[Peter Conlon (Chair)]: I think because they aren't as large as conceived by any of the previous incarnations of districts, whether it be five or 14 counties or 14, So yours is the perfect example or represent throughout your districts are basically wholly of themselves. You can't. No one wants to maneuver to adjust nor are you taking on a population of significantly higher rated students that would help fund more within your school district.

[Erin Brady (Ranking Member)]: So I have to add then that that is the challenge in looking at South Burlington, MMU, even if you put Burlington and Winooski together, my own district, our districts that are large or, you know, by our standards and the things that we had before that we lost them in conference in terms of goals for district sizes, the only thing they can do is reduce there aren't, right now, in those places, schools to close. Only class sizes are well above in most of those cases, Well, well above the minimums in Act 73. Many of them are creeping well above EQS right now. So the only thing you can do is cut. And so there is a level What? There is a strong I am not seeing a clear enough evidence that there isn't a leveling down trajectory on this path. Yeah.

[Peter Conlon (Chair)]: I I would say that's, again, that's one of the flaws with the map, I created relatively small district sizes that left some current districts completely unchanged.

[Erin Brady (Ranking Member)]: But that's also one of the challenges of districting and the different challenges around our state. So, okay, put CVSD and South Burlington together because they're geographically next to each other. Fine. You lose one superintendent. You combine some back office things. There are no schools to close. We're already in trailers in one school in Williston and trailers in one place in South Burlington, and South Burlington high school is crumbling. So unless we want to start merging places that are not contiguous across the state just to lump together different economic scenarios or different places where That's the challenge of this redistricting exercise is that it is not logically the same across parts of the state. And that is not because of anybody's The differences are so different in different regions of the state, and the impact will be very different in different regions of the state consequentially.

[Emily Long (Member)]: Yeah, I don't want to share the opposite direction.

[Erin Brady (Ranking Member)]: There's no point we've already talked about it.

[Emily Long (Member)]: But I will note that the question I asked the secretary when she was sitting in the seat here, I can't remember when she it was one of the times she was saying, I asked so since we Her testimony was that we acknowledge there are going to be districts that will never be able to reach scale because of simple geography. It's not going to happen. So those districts will likely cost I'm paraphrasing what I was interpreting her to say, those districts will likely have to cost more because they have no other options because you can't put a child on a bus for three And and half one so we'll have to offset that with other districts in the state. And her answer to my question was yes. And so that's to your point.

[Erin Brady (Ranking Member)]: Obviously, we all have our own perspective. We all need to be eyes wide open in the process aisle right now. Whatever we're comparing and what we're embarking on. I'm

[Peter Conlon (Chair)]: being embarking on

[Emily Long (Member)]: reality of all aspects of our state.

[Kate McCann (Member)]: Yeah, I mean, it seems like if we sort of accept the map that was introduced here a couple of weeks ago at this point as sort of a reasonable conversation starter, which I think a lot of people agreed that it did. It's really helpful to see if we take that as a starting place, this is basically as far as we come with the foundation formula. I appreciate all the caveats about why the modeling is not perfect, but this is kind of where we are. So if the recipe is incomplete to continue the grocery cart metaphor, I mean, I think we just have to be really realistic about that. There's still a lot of outstanding policy choices and certainly arguments to be made on a lot of different sides about, are we heading in the right direction, the wrong direction? What should we adjust? But I think we have to be pretty realistic about this as far as

[Erin Brady (Ranking Member)]: And so what do we do with that? And if

[Kate McCann (Member)]: that fairly reasonable forecast of what a new district map might look like is what we're looking at. And we find that some of our hopes for how the numbers would sort of follow that construct. I mean, I think based on where you're sitting in this map, you're gonna find that not really painting a picture that you're necessarily comfortable with.

[Peter Conlon (Chair)]: Even the decisions we've made.

[Kate McCann (Member)]: Right. I mean, yes, not to say, yeah, we're in such a tough spot. There's so many outstanding decisions and yet we can't ignore the consequences of what we may be in the process of deciding.

[Peter Conlon (Chair)]: Further questions or comments put out there? Alright, seeing none. Thank you both very much for providing us with some really excellent analysis and information. We're wanting to follow it. Alright, everybody. We need