Vermont Legislature SmartTranscripts:

[Rebecca Holcombe (Member)]: I'm looking for In where?

[John (Legislative Counsel – Education Finance)]: Indulate. It matters.

[Carolyn Branagan (Member)]: We are. I'm like, in

[Rebecca Holcombe (Member)]: a way, obviously, in a room.

[Emilie Kornheiser (Chair)]: It's still Wednesday. And we are continuing our way through act 73.

[Carolyn Branagan (Member)]: Are they okay? Yeah. I don't know what happened.

[Emilie Kornheiser (Chair)]: Okay. So we're gonna go through more sections of the bill with Ron Rutland. Welcome. Happy New Year.

[Kirby King (Legislative Counsel)]: Happy New

[John (Legislative Counsel – Education Finance)]: Year. Hello, everyone. Hello, Ron Rutland. I know that I could use a haircut, but here I am. See if this pops up.

[Kirby King (Legislative Counsel)]: I know, isn't it beautiful? Woah. Is that smooth? My haircut doesn't match.

[James Masland (Member)]: Here it

[John (Legislative Counsel – Education Finance)]: comes. Here

[Emilie Kornheiser (Chair)]: Here it we comes. Go. So Okay. The ante there, team.

[Carol Ode (Member)]: Never stand any of my pet lovers.

[John (Legislative Counsel – Education Finance)]: Okay. I'm sorry. I'm sorry.

[Emilie Kornheiser (Chair)]: I'm get some fade in.

[John (Legislative Counsel – Education Finance)]: Okay. Alright. So where are we? I presume you just heard from Beth. I frankly wasn't listening in, but I'm sure that looks great. We're at section 34.

[Emilie Kornheiser (Chair)]: Here we are.

[John (Legislative Counsel – Education Finance)]: And just situating within the statutes, we're gonna start with we're in title 16, so we're dealing with your state funding of public education chapter, and then we'll jump a little bit later into your education property taxes piece. So these are the first sets of sections primarily in title 16. So you're gonna have the creation of your foundation formula, that's your base amount and weights. We've got some cleanup to a couple of places. We have updates to the ed fund to reflect new revenue streams, and then the creation of that supplemental district spending reserve, and then a few reports coming in, and then finally some transitionary measures. So, Beth talked about this, but your effective dates broadly, you can think of the foundation formula rollout as contingently effective 07/01/2028. The non 07/01/2028 dates you see up here are reports are effective on passage, of course, to go ahead and start that work. And then there's a piece related to delaying the first meeting of the Ed Fund Advisory Committee, which was also effective on passage. This is your contingency language. So just note that there's two pieces to this. So 07/01/2028, and it's provided that new school districts have assumed responsibility for the education of all resident students and that you've received the foundation formula report under 45 a, which I'll come to, and given the general assembly an opportunity to enact legislation. So, I'm gonna keep doing this thing with a table throughout.

[Carol Ode (Member)]: Yeah, go

[John (Legislative Counsel – Education Finance)]: for In part, I'm showing the table throughout because I wanna jump by topic rather than sequentially within the act. I'll try to largely follow the section ordering of the act, but because some sections group together more naturally, I'll keep coming back to this table just so you can see what we've done and what we'll do next. So first is core foundation formula, creation of your base and weights educational opportunity payment, that's sections thirty four and thirty five. In section 34, we create your base amount of 15,033 per pupil. It is inflation adjusted. We also create the educational opportunity payment, your EOP. And just for folks out there, the way that you determine that is you take your base amount, that 15,033, and you multiply it by your district's weighted long term membership. And that gets you a figure that reflects the cost of educating the students within the district, that's your EOP. We also, in section 34, repealed and updated the current education funding concepts. Frankly, we use education spending as the concept that's been repealed because we're switching to this EOP. Section 35, I don't have the numbers up here. If you're interested, I can flip to the act to show you, but just high level. Section 35 is your amendments to the pupil waiting section. And basically what you're left with is a grade level weight for free K. There's no other grade level weight provided. Give a slight update to the economic disadvantage weight. In existing law, there is an EL and English language learner weight, but that's been built out refined for different categories based on proficiency level and formal education level. I've also added special education weights that are distinguished by disability cost, and those are replacing your census block grant. And then finally, repealing the small school and sparsity weights, as you'll recall, and we'll come to this shortly, there are support grants in place of those weights.

[Emilie Kornheiser (Chair)]: So the grade level weight for pre kindergarten is something that we're gonna start work on this week. The E, and then the special education weights. There's a report that I think isn't due until next.

[John (Legislative Counsel – Education Finance)]: The end of this year.

[Emilie Kornheiser (Chair)]: The end of this year.

[John (Legislative Counsel – Education Finance)]: Exactly.

[Emilie Kornheiser (Chair)]: So it wouldn't be acting on until next year to look at if the particular special education weights distinguished by disability costs is the best way to do special education weights. In terms of me continuing to flag very obvious next steps. And then the small school sparsity weight, we're going to hear from the board of ed about their recommendations on that next week, probably.

[John (Legislative Counsel – Education Finance)]: And so that report that the chair references, that's exactly the report in the contingent effective date. It's also gonna contain that report suggestions on potential different geographic measures for sparsity. So, something you could look at as well. Next, we'll jump to those support grants. So we've got section 37 adds support grants for both small schools and spar schools. You can see the dollar figures up here, but what's worth noting is the eligibility conditions. These are slightly different than an existing law. So a small school must have less than 100 pupils in two year average enrollment. And then what's important here, an annual determination, by the state board to be small by necessity under standards established in section 8B. I think the state board came out with some standards, the expectation is that AOE would actually do the annual determination. But two pieces, you have an objective criterion, right, less than a 100 pupils into your average enrollment, and then also a required annual determination that you are small by necessity. So not just a numerical check, are you small by necessity? Similar setup for the SPARS schools, you must be in a city, town or incorporated village. That's the geographic measure that may be updated. You may recall last year we talked about ZIP code or other alternative measures. So there may be more to come on that, but for now, x 73 has city, town, or incorporated village with less than 55 persons per square mile residing within the land area, and again, an annual determination of state board to be sparse by necessity.

[Carolyn Branagan (Member)]: Representatives. Yeah, thank you, handful.

[John (Legislative Counsel – Education Finance)]: Are small and sparse additive? You can receive both grants. You can receive both, thank you. But there's nothing, they're not inherently locked. You could receive one, you could receive the other, you could receive both. Thank you.

[Emilie Kornheiser (Chair)]: Which is different than current law.

[Bridget Burkhardt (Clerk)]: Could you just remind me, 100 pupils, is that bodies or average or weighted?

[John (Legislative Counsel – Education Finance)]: That's actual bodies. Two year average enrollment is not a weighted count.

[Rebecca Holcombe (Member)]: Thinking of a school I know where this would actually incentivize them to become a smaller school, is there any kind of transition threshold, or is this just a hard clip?

[John (Legislative Counsel – Education Finance)]: It's just a hard clip. It may be dependent on what the standards for small minus SD or sparse minus SD are. I'm not sure if they've thought about the incentive effects.

[Emilie Kornheiser (Chair)]: They do. That'll be a great conversation when we

[Carol Ode (Member)]: tackle that. As

[John (Legislative Counsel – Education Finance)]: you might expect, we have to do a bunch of repeals for existing ed concepts to create the foundation formula. Just noting these repeals here, some of these are technical. You'll see at the bottom census grant, that's removed because you now have your special education weights. You see the English learner services categorical AAPs. Again, we built out that English learner's weight. This one will be super quick. Just a couple of cleanup changes in these sections. So sections thirty six and forty make conforming changes to pick up references to EOP and the supplemental district spending. Section 39 removes some archaic language from the enactment of the stabilization reserve that just references the act in which it was enacted, so it's purely cleanup. And I hinted at this earlier, but section 45 c delays the first meeting of the Ed Fund advisory committee. It's originally scheduled to meet, over this past summer, and that's been delayed a year to this summer.

[Emilie Kornheiser (Chair)]: And the Ed Fund advisory committee was created in '24.

[John (Legislative Counsel – Education Finance)]: Yeah. Before me, the Ed Fund Advisory Committee. And we have an update later to some of the directives to pick up the changes that happened in the foundation form. And also, I think they look as well at the onset exemption or some impacts from the onset exemption. So next, there's just a couple of changes that happen to happen in Title 16 with the creation of the supplemental spending. You may recall that the supplemental district spending is actually done in title 32, part of the property tax system, but you need to pick up those revenues in the ed fund. You need to change the budget vote to be preserved. So section 38 just changes the ed fund to pick up those revenues. The way to think about it is you get all of the revenues from the supplemental district spending tax that flow to the ed fund, and then separately, a reserve is created within the ed fund that picks up the recapture, which I'll talk about in more detail later. One of the big things in act 73 is section 41 changes the way that school budget votes. So the the school budget is no longer a vote on the entirety of your budget for your school district. You're gonna have your EOP that you receive, so the budget that you're voting on is just on spending that is supplemental to that, your supplemental district spending, and that would be the spending that you do above your educational computing payment. The budget would show that proposed supplemental district spending. And then one of the functions of the system is that you could do a mathematical exercise to show the actual supplemental district spending tax rate that would have to be imposed to raise those funds. It's a little bit different than the current structure where there's more ambiguity around what your actual property tax implications are gonna be. This tells you that it's an electric spending tax rate. And then section 43 creates that reserve that I talked about. It's where the recapture is stored. The recapture is the excess funds that are raised through the imposition of the supplemental district spending tax. Those can be used for two purposes. One is if there have been any miscalculations in getting in those supplemental district spending, You could offset any miscalculations there. And then potentially more substantively, you could decrease following year statewide education property tax rates with any remaining recapture. And depending on the school district configuration, could be sizable, could be not. So ways to be safe. Few reports in these sections. From AOE, the transportation reimbursement grant reports, so guidelines for minimum transportation to be provided and covered. JFO reporting on inflationary measures and funding for pre k and early care. And then the big report, the section 45A report, which is that piece of the contingency for the effective dates, tasks JFO with contracting contractors to recommend by the end of this year updates to the foundation formula to move away from special education weights to reliance on special education services to consider, to update any other weights as empirically necessary, examine suitable sparsity measures, costs of secondary students, and whether a weight would be warranted, and account for CTE within the formula. So, broad expanse here. And, while the directives for the foundation formula sound sort of specific, you can think of it as quite broad because they end up examining all of the weights to determine if they're imperfectly necessary that could be touching the entirety of the foundation formula. So that's expected end of this year and would be part of that review that the general assembly would go through in meeting that contingency for rollout of the formula.

[Emilie Kornheiser (Chair)]: I believe the JFO is just finishing up that contract now.

[Bridget Burkhardt (Clerk)]: Don't They are fair awarding it.

[Emilie Kornheiser (Chair)]: No awarding it. But I don't think they are done. Does anyone I feel like there's been way fewer questions, and it might just be that John is

[John (Legislative Counsel – Education Finance)]: But explicitly

[Emilie Kornheiser (Chair)]: is everyone's good so far? Okay. Yeah. Represent Masland.

[James Masland (Member)]: Yeah. This is pretty straightforward stuff. So I

[Kirby King (Legislative Counsel)]: I love that.

[Carolyn Branagan (Member)]: Fully owned. Okay. Thanks

[John (Legislative Counsel – Education Finance)]: so much, Thank you.

[Carolyn Branagan (Member)]: Represent Branagan. And he did say he was going back over it in detail, so that's

[Emilie Kornheiser (Chair)]: Okay. Maybe your suggestions or whatever. Okay. Cool. I think it's just the incredible formatting. Thank you. The table is perfect. That's what

[John (Legislative Counsel – Education Finance)]: I wanted to hear. Really I didn't know if it was effective, but this is great.

[Bridget Burkhardt (Clerk)]: Yes? I wonder, we have nothing, just wanna make sure, that there's nothing in the foundation formula to pay for school construction, new school construction whatsoever, and nothing contemplated in there except for creating the special fund elsewhere in the bill, but the legislature just has to allocate money to it.

[John (Legislative Counsel – Education Finance)]: I think that is a fair statement, yeah.

[Carolyn Branagan (Member)]: It's a worry. I sense you're worried.

[Kirby King (Legislative Counsel)]: Yeah, yeah, absolutely.

[John (Legislative Counsel – Education Finance)]: Lastly, in these sections, we can talk about the transition. In the first years of your rollout, we're gonna be switching from local budgets, locally varying homestead rates onto a new fixed EOP that's just a function of the student count that you have and the weights that accompany them. So your transitionary period for fiscal years '29 through '32, gonna move off of that spending and onto the EOP. The way that this is done, just in simple math, you identify the gap between your district's f y twenty five ad spending and what the f y twenty nine EOP would be. So for your school district, that would be base 15,033 times your weighted long term memberships. You determine what that difference is, and then basically you prorate that gap over those years so that you transition each year. If your school district is below what your EOP will be in FY '29, you're incrementally moved upward to what your EOP will be, so that by FY '33, you would be fully transitioned onto the EOP. And then if you're a school district that currently spends above what your EOP would be in FY '29, you're incrementally moved down over these years.

[Carol Ode (Member)]: I have a question. If a school district were to make certain choices with money that it's more money than it's going to be getting, say they were really only spending 11 and now they have 15 to spend. And we don't have school construction formula ready yet, so that they can't say, oh no, let's plan with these two other schools, build something or build on us, because we don't know what help we're gonna get. And so, they have more money to spend, and they make decisions that actually don't get them to, they can spend more, but their school's class size is still going to be too small and they've got years before it has to be really large enough to get to where we're trying to attain to, a little bit large class sizes. Would it be a constitutional issue if we were to release less of the foundation formula to those school districts until they were trying to meet whatever educational goals were being set?

[John (Legislative Counsel – Education Finance)]: Yeah, so I don't know the answer to that. I think the premise of your question is that the EOP is miscalculated for them, is the way that I

[Carol Ode (Member)]: No, it's actually not, that's not it. It's that if we are, when we passed act 60, suddenly schools had more money to spend, a lot of them, some had less money. Some of them were spending more than the block grant, it was $5,000 I think at the time, but some people were spending 2,500 per student. So all of a sudden they had 2,500 more per student to spend and because there was really no help for them to try to figure out how they might spend that money, it was spent in ways that didn't necessarily make learning outcomes for students better, just put more money into what they So, were already if we want to avoid that happening this time, I'm wondering if we can not release so much money, not just a phase in, but a phase in that's linked to obtaining educational goals.

[Emilie Kornheiser (Chair)]: Carol, the question I would ask you I'm sorry, Representative Ode, ask you about this, and I don't know if we need to get this deep into this for this initial walkthrough, is are we also going to be enforcing those same pursuit of education goals for districts that are already spending that much? It's sort of a question of fairness there. I think that's a good question to keep on thinking about. But I want us to really focus on what is here rather than what we wanna change, just because I think it's really important for us to understand what actually is in the law that we pass before we start tinkering with it.

[Carol Ode (Member)]: That's additional question. So I'm thinking that if this is about adequacy, and if this amount is an adequate amount to educate students, and if we fail to fully fund an adequacy amount, then is it actionable in court? And if it is, then I'm not sure we can do anything other than to fund full ELPP to a district, regardless of how they intend to spend

[Carolyn Branagan (Member)]: the money.

[Emilie Kornheiser (Chair)]: Yeah, think there's also really, there's lots of national research on whether you should fund more when someone's not meeting educational quality standards to help them get to educational quality standards versus penalize them, right? It's a big national debate. I could say more up here, but Representative Holcombe?

[Rebecca Holcombe (Member)]: I was just gonna say, I'm the only part of this conversation because I think we need to talk about what improves learning and that's ed policy, but I think you should put that question to them, which is if you get more money, what is it useful? And I would just like to respectfully point out that some of the biggest achievement gaps in

[Carolyn Branagan (Member)]: the state are in some of

[Carol Ode (Member)]: the funding local districts.

[Rebecca Holcombe (Member)]: And so the way the federal government handles that is categorical grants, because it's not about this low funding, low high poverty district not knowing what they're doing, it's then we just systematically pay attention to why their kids are getting a good chance. Like some of the districts that we think of as amazing districts, and the task force that I'm doing says that the independence folks is the same thing, they have single biggest achievement caps, with the exception of that. And it's just, the question is whether you're actually doing what it takes to help kids learn better, and that's not our question.

[James Masland (Member)]: Perfect.

[Carol Ode (Member)]: Can we go back a

[John (Legislative Counsel – Education Finance)]: second? Yes.

[Emilie Kornheiser (Chair)]: Does everyone see the mechanism that's here?

[James Masland (Member)]: Okay, great.

[John (Legislative Counsel – Education Finance)]: So just high level summary of all the sections we've gone through thus far. Create a foundation formula, base amount 15,033 per pupil, data grade weights, that's pre k, special education, economic disadvantage, English language learner. You've created the educational opportunity payment to school districts based on their weighted long term membership. To replace some of the repealed weights, you have supplementary support grants for small schools and smart schools, and then now your budget vote is exclusive to your supplemental district spending, and it displays the required supplemental district spending tax rate to produce those funds, which may result in recapture, which we'll talk about shortly. Got more tables for you, but now we're jumping to section 46. So this is jumping into education property tax changes.

[Bridget Burkhardt (Clerk)]: Jump, before you jump on, all of the stuff regarding the foundation formula, all of those are contingent upon formation of new districts. If we don't have new districts, foundation formula is not going to take effect. Correct?

[John (Legislative Counsel – Education Finance)]: You're correct that the way Act 73 is written, the contingency for the effective date is two pieces. You have that report you received, but the second is that the new school districts contemplated by the act have assumed responsibility for education of students. So if you don't have those new school districts, you don't have that contingency.

[Rebecca Holcombe (Member)]: Yes. And I just think I think this is a this is a policy choice. What Vermont is choosing to do is treat poverty through schools, and the data we saw suggests that we spend about 2,000 more dollars for care and support services than our neighboring states, so that's a policy choice. We've decided as a state, the way to treat poverty for kids isn't education.

[Emilie Kornheiser (Chair)]: Back to you, John.

[John (Legislative Counsel – Education Finance)]: So jumping to education property tax changes, moving out of title 16, we're gonna be in title 32 now. New table. So high level, this is the creation of your supplemental district spending. It's the imposition of your new statewide education tax rate in place of the locally varying homestead rates. Got some transitionary measures, updates to the December 1 letter to reflect the new formula, and then a new proposed homestead exemption, repealing that property tax credit, and then a report on the homestead.

[Emilie Kornheiser (Chair)]: And reminder to folks that Julia and Esther are gonna come in all morning tomorrow and essentially run through the whole bill from their perspective, we'll get graphic number y representation of all the words that Johns could talk about.

[John (Legislative Counsel – Education Finance)]: So just like our last table, most of these are continually effective, in the same way that the foundation formal rollout is. The one exception you see on the left, 07/01/2027, that's your December 1 letter. If you think about it to have that FY '29 rollout, you need the December 1 letter recommendation in place before the f y twenty rollout. So that's why you have a 07/01/2027, effective date for that, and then your report is, of course, effective on passage. Just showing the contingency again, but we just talked about this, so I'm not gonna belabor it. First, we're gonna start with probably the most complicated part of all the sections I'll cover. So, this is your supplemental district spending, your set of definitions. I'll just say left side of the table is kind of the intuitive way to think about it. And then right column is continuing to go through the definition, but talks a bit more about the math that actually produces it. So, this replaces the current funding formula language with new definitions for supplemental district spending. That's your spending that the voters of the district may approve above their EOP up to a cap of 5% of the district's unweighted foundation amount. So this is an unweighted count on which that cap is determined. Also, just note, we'll come to it shortly, but there's gonna be a transitionary measure for the cap as well. So it goes from 10% down to 5% over, basically a ten year period. So supplemental district spending that's above EOP, it's voted locally, it's raised locally up to a cap of 5% of that unweighted foundation amount. And note that it's imposed, you know, formally across districts. I don't mean to say that everyone's paying a tax, but it's that everyone will pay a tax in the same way to raise the same amount of funds if you do elect to vote for supplemental district spending. To raise that supplemental district spending, a district must impose the rate that would be required to raise those funds in the lowest taxing capacity district. That's the most intuitive way to think about the way that you're raising these funds. That's the equalization measure that's enacted in act 73. It is raised entirely locally. And the way that it works is we've benchmarked the rates to the school district with the lowest taxing capacity district, and that is your district anticipated to have the lowest brand list for long term membership in the upcoming fiscal year. Intuitively, the way to think about that is who has the least property wealth available per student on which to raise funds. That's your lowest taxing capacity district. And the way that this is put into action is through the supplemental district spending yield, which is unlike the current yields you're familiar with. And all this does is it identifies how much could you raise effectively at a 1% rate, that $1 per $100 of equalized education property value. How much could you raise at that rate in your lowest taxing capacity district?

[Emilie Kornheiser (Chair)]: And one question I just wanna put into the ether, and I don't think we can have a conversation about it today, is if portion I'm getting regular questions about what if some portions of this bill get enacted and other portions of the act don't get enacted. And so if we don't have new districts and all the rest of the legislation moves forward, how low would that benchmark be? Because my guess is the lowest taxing capacity district would be much lower than it would be under new districts. And so that's just an interesting question for us to be moving. Forward. An interesting to me question to be moving forward with.

[John (Legislative Counsel – Education Finance)]: Yeah, one of the most live parts of figuring out the equalization measures from last year was what the school district configuration would be. If you have existing school districts, that band between your lowest and highest is gonna be substantially larger than if you had, say, a five proposed school districts that consolidate a lot of pieces. So, the equalization measures will likely need to be reexamined depending on school district configurations. The end result of applying the supplemental district spending tax is that because you're taxing everyone at the rate that would have to be used in the lowest capacity district to produce those funds, every other district is gonna produce extra funds. If you're a district that's close to the lowest taxing capacity district in available property wealth per pupil, you might just produce a little bit of extra funding. But if you're a substantially wealthier district and you apply that same rate, you're gonna produce extra funds, and that's what we call the recapture. So that's your excess revenue, and as we talked about before, that flows first into the Ed Fund, and then is reserved after payout of the supplemental district spending funds. It's reserved within the supplemental district spending reserve, where it can be used to lower following year property tax rates. That is the most complicated thing in the whole.

[Emilie Kornheiser (Chair)]: We spent a lot of time on that. And I was not very touched after it left us in the Grand Scape of Life.

[James Masland (Member)]: This is a piece where we originally talked about possibly some of that money could go towards the construction fund. Yes.

[Carol Ode (Member)]: Taxi fee.

[Emilie Kornheiser (Chair)]: It's also the one where we did some of our best diagram work.

[John (Legislative Counsel – Education Finance)]: You guys came up with a three word title for football. That's my view.

[Carolyn Branagan (Member)]: And the district, what does the education property district look like? Is that what we have now?

[Kirby King (Legislative Counsel)]: I'm sorry.

[Carolyn Branagan (Member)]: The district that we're taxing.

[John (Legislative Counsel – Education Finance)]: Oh, it's just, yeah, we have the current school district configuration that we have, so it's the same as that currently. But if you change, depending on what the legislature does, if you change your school district boundaries, then that would track that. It would be a decision that's made locally because those funds are raised locally. So whatever the bounds of the district are, that's the bounds within which that tax are administered.

[Carolyn Branagan (Member)]: Okay, thank you. And recapture, John, I'm sorry, tell me what that is again.

[John (Legislative Counsel – Education Finance)]: Yeah, so that's when you apply that supplemental district spending tax, if you are any district other than the lowest taxing capacity district, because you're applying the rate that would be required in that district, raises some extra funds. So the wealthier you are effectively, the more extra funds you raise. You're applying a rate that is higher than necessary to raise just the funds that you're trying to raise based on your property tax base, but it's set at the rate that is required in the lowest taxing capacity district. And so because you have more property wealth available, but you're applying the same rate that would be applied there, it makes extra funds available, and that's your recapture.

[Carolyn Branagan (Member)]: And then we're sending that somewhere.

[John (Legislative Counsel – Education Finance)]: It goes first to the Ed Fund, and then it's reserved within a reserve in the Ed Fund where it can be used to lower following year property taxes or correct for any miscalculations that happen. I love this transition because it's so simple. I don't even have to explain anything. You can just see that, the cap, that 5% cap, there's a rollout period for that. So for the first five years, you have a 10% cap, and then you drop down by 1% the cap each year so that in FY 2038, you finally have the statutory cap of 5%. But in those early years, there would be a 10% cap available for the supplemental district spending, and this is just part of the easing mechanism for getting folks onto the foundation. So to implement all of these changes, we have section 47, we're touching, remending section 5,402. This is your core education property tax liability. This is what currently houses the imposition of the education property tax rate, your homestead and non homestead tax rates. What's happening in the bill is that you're replacing your existing property tax mechanism, which currently fully funds locally voted school budgets, accounting for that variation through varying homestead rates. And it's replacing that with a statewide education tax. That rate is what everyone's paying across the state. Of course, you still have the CLA and the statewide adjustment, so it's not as if everyone's gonna see the exact number on the bill.

[Emilie Kornheiser (Chair)]: But CLA changes should be a lot less as we implement more regular reappraisals from the state.

[Kirby King (Legislative Counsel)]: That sounds wonderful.

[Carolyn Branagan (Member)]: Doesn't it?

[Emilie Kornheiser (Chair)]: Thanks for believing in it, John.

[John (Legislative Counsel – Education Finance)]: That's something that has strong feelings that I won't state about the statewide adjustment. I like that. So replacing locally varying homestead rates for the statewide education tax, note that you would still be adjusting that tax. You may recall that table that had that list the different tax classifications. You'd adjust by a statutory factor for each different property tax classification instead of an act 73, and Kirby will talk about this. You've got homestead, nonhomestead, nonresidential, and nonhomestead residential. Currently, you just have statutory factors of one, so effectively, have one statewide education tax. But the way to think about it is these are levers you can pull depending on the statutory factors that you use. You can assign different liabilities to different kinds of properties. So I think you'll be receiving recommendations if you haven't already what those statutory factors would be. Lastly, you have to actually impose the local supplemental district spending tax, it's done in much the same way that the statewide is, but it's raised entirely locally, you still have that application of CLA and statewide adjustment. Section 48 is your December 1 letter updates, your court for appealing the recommendations for the existing yields. You no longer need to have a locally varying homestead rate. And it's a task, the commissioner of tax with recommending its statewide education property tax rate. Just to think about in relationship to the current structure, when you receive the December 1 letter now, you're anticipating the budgets that are gonna be passed, right, and you're trying to come up with a yield that will actually fully fund all the local decisions that are made. It's different in the future structure for the foundation formula because the funds that need to be raised are a function of base times weighted long term membership. So it's a bit more mathematical, but there would still be questions lingering what are other revenues that are coming into the Ed Fund and the like, but it's gonna look a little different than existing December 1 letter. And I think that's the hope was that it might be less uncertainty around what what arrives in that letter.

[Emilie Kornheiser (Chair)]: So I can't remember the intent language because intent language. But can you sort of remind me, clarify for me how much I remember conversations about that as we're setting the statewide education tax, the money from the supplemental district spending, and the new second home tax, and a few other things would all be used to bring the statewide education tax as low as the lowest existing property tax. I how much I remember recall what was made in there.

[John (Legislative Counsel – Education Finance)]: So I think we have It may even be beyond intent language. I definitely recall this language. It may relate to The report? I think in one of the Department of Tax reports, we asked for consideration or you guys asked for consideration of statutory factors or other determinations that ensure that the creation of new features here don't fall on the statewide education property tax rate. So trying to account for the the new structures and not increasing folks' home subtext. So that language definitely made it in. I'm not sure what section, it might be in our report. The other thing that will come in your December 1 letter is the supplemental district spending yield.

[James Masland (Member)]: And

[John (Legislative Counsel – Education Finance)]: unlike the existing yields, which again would be dependent on budgets that hadn't yet been passed, the supplemental district spending yield is a bit more mathematical. If you can just identify your lowest taxing capacity district and you ask what they could raise at a $1 rate per $100 to equalize education property value, That will tell you what your supplemental district spending yield is. So, again, hopefully, greater certainty in the district letter. And then sections forty nine and fifty just make some conforming changes to make sure that we're referencing the statewide education tax rate as opposed to differentiating when we don't need to between the non homestead and homestead that will naturally be adjusted by the statutory factors for the different property tax classifications. We also have a transition for the homestead rate that folks are gonna see. So that's over fiscal years '29 through '32. It's much the same structure as the transition you've seen previously for your EOPs. You determine the gap. So what is your f y twenty nine statewide homestead rate? Again, that's the rate that's going out to everyone. You're no longer in a locally varying homestead rate structure. So take that FY '29 rate and then determine the difference between that and the district's FY '28 homestead rate. So what is that gap? And then we create a yearly adjustment to the statewide homestead rate that's prorated across those five years. So incrementally moving folks whose homestead rate in FY '28 was above the statewide homestead rate downward, and similarly, folks whose homestead rate was below the statewide homestead rate in FY '29, they will be incrementally moved upward to that FY '29 homestead rate. It is worth noting that these are the gap is a fixed gap. It's not determined on a yearly basis. Right? It's that f y twenty nine, and f y twenty eight, which means you are making an adjustment that's sort of a a best guess as to what's gonna be happening across the following years, but the idea is to kinda have a smooth transition. Switching gears a little bit, we have our property tax credit repeal and the creation of the homestead exemption, so your new income sensitivity measures. Section 52, which is a huge section because it's amendments to a whole chapter, it repeals the property tax credit and creates that new homestead property tax exemption. Just important to note conceptually the difference between a credit and exemption. This actually reduces the amount of house site value that is subject to education taxes. So unlike the existing structure where you pay your taxes on the full value of the property and then receive a credit against those taxes, this actually reduces the tax liability that you have. Only a certain percentage of the house site value would be subject to education taxes. Much like the property tax credit but with different figures, you have new income sensitivity measures, and this goes up to households with not more than a $115,000 in household income. It is worth noting that unlike the existing structure where you can't just look at the statute and see where the benefits cut off because that's a function of where the income yield and property yield meet each other, and those are based on determinations made when you set the yields. In this structure, you can actually see where the benefit cutoff is. Right? The homestead exception is only available for households with not more than a 115,000 in household income, and it provides a range of household exemptions. The lower your income, the higher the exemption you receive. So if you're in the bottom bracket, which is 0 to 25,000 in household income, you would get 95% homestead exemption against the first 425,000 in house site value. And if you're at the top end of that, so you make a 114,000, you would get a 10% homestead exemption against that value.

[Carolyn Branagan (Member)]: Yeah. Purpose of Mitch?

[Kirby King (Legislative Counsel)]: I'm just curious, with the new homestead exemptions, I'm assuming that you'd have to file just like the old

[John (Legislative Counsel – Education Finance)]: You still need to make a homestead declaration. Yeah, that whole structure will continue to persist. There's still homestead rate, there's still the declaration, and then that would go into your homestead exemption.

[Emilie Kornheiser (Chair)]: We are receiving some they're gonna change the forms, and we're gonna that's part of one of our conversations this year with the tax department. Speaking

[John (Legislative Counsel – Education Finance)]: of which, the section 53 report is tasking the Department of Tax reporting by the end of this year on a potential alternative exemption structure. Included in that would be updates to the forms, but also an analysis of the implications of moving fee income sensitive measures that could recognize households of up to a $175,000 in household income. Of course, the more exemption that you extend, you still gotta make up the fund somewhere. So that's always the balancing act that folks are trying to strike.

[Emilie Kornheiser (Chair)]: Yeah. Just sort of a reminder, think one of the big reasons we stopped at the cutoff we stopped at is because we really don't have very good data over that spot, because we've never collected that data before because the benefit wasn't available. Representative Ode.

[Carol Ode (Member)]: So I'm wondering if the report will also include how this impacts each county.

[Emilie Kornheiser (Chair)]: Is that in the

[John (Legislative Counsel – Education Finance)]: I don't think there's anything that specific. I can check and see. I mean, I can jump to it right now if you want to look at section 53.

[Emilie Kornheiser (Chair)]: Or you could ask the tax department when they come in just if they could include that as a request, even though it's not in the statute. They have a whole more year to work on that report.

[John (Legislative Counsel – Education Finance)]: And then just so I don't miss it, section 51, we just codify the statutory purpose of exceptions. Pretty intuitive here. Decrease property tax liability for households with low and moderate household income. And then end with a whimper again, just conforming changes to update references to the property tax credit and then updating your directives to the Ed Fund advisory committee to address those updates for the foundation formula rollout and the homestead exemption. And that's really it. So the section we just went through, the education property tax changes, you're replacing locally varying homestead rates with statewide education tax that would be adjusted for tax classification, Kirby will talk about in more detail, impose that supplemental interest spending tax to raise funds locally voted with equalization measures included, which produces recapture. You're appealing property tax credit, and you've created a homestead exemption with new income sensitivity measures. And just so you guys know, I don't know if everyone realizes this, we do have axe summaries. So if you want to click on this link, there's a two page, very dense thing that says all the things we just I

[Emilie Kornheiser (Chair)]: have it already separately on the page for today.

[John (Legislative Counsel – Education Finance)]: That's perfect.

[Emilie Kornheiser (Chair)]: I'd love a hot link. Thank you. Another

[John (Legislative Counsel – Education Finance)]: I I gotta have the

[Carol Ode (Member)]: You really had a good time.

[John (Legislative Counsel – Education Finance)]: How much time

[Emilie Kornheiser (Chair)]: are you gonna answer on the outside?

[Carol Ode (Member)]: Representative Higley, did you? Well Oh, okay. Okay, cool. Thank you.

[Emilie Kornheiser (Chair)]: Onwards to Kirby.

[James Masland (Member)]: Well,

[Kirby King (Legislative Counsel)]: just like John, I need a haircut. Unlike John, I don't have a fancy haircut.

[Emilie Kornheiser (Chair)]: It wasn't a complaint, was just making sure we had the things.

[Kirby King (Legislative Counsel)]: Yeah, We only have about 12 pages. We'll just go over two major areas. So hopefully we won't need fancy PowerPoint.

[James Masland (Member)]: So what we are going

[Kirby King (Legislative Counsel)]: to go over are the tax classification system that are set up under PACS 73, which essentially comes down to creating one new tax classification to potentially be taxed at a different rate, as John mentioned. And then there is a regional assessment district, so let's not forget the RADS, and we keep talking about those as well. Don't know if I said this, but Kirby King Legislative Council. Property classifications. As a quick reminder, there was some language in here at the beginning of this that was from DCGI. They wanted to change how parcels are defined for the brand list related to mapping, so that's what the language that's on the screen there is related to that. It's not related to the rest of the stuff we will be talking about. And then section 61 of Act 73 proposes a new statutory section, 4152A. Setting up property tax classifications starting in 2028. I assume Beth talked about the contingent effective dates earlier, so this is also part of those contingent effective dates. And I am, since this is the end of the Act, he can take a look at the effective dates as well, while we're in here. So for our purposes, the crucial part for tax applications is this non homestead residential classification, which is new. It is carved out of what we think of as non homestead now. It's taking the residential properties out of that. The idea was to get at second homes and short term rentals and then leaving long term rentals to be taxed like non homestead, non residential, which is this category is essentially what you mostly think of as non homestead right now. Crucial thing to be aware of right now is the definition for non homestead residential. The conversations that are going to be had about tax classifications in session are going to come out of this. A lot of it, The definition that's in there right now is that non homestead residential means a parcel or portion of a parcel for which a homestead was not declared, and that has a residential property. And after a lot of different versions of this last session, what you landed on, what the General Assembly landed on was, as defined by the Commissioner by rule, so as to leave a lot of this definition up to the Department of Taxes as it's currently written.

[James Masland (Member)]: Jumping ahead

[Kirby King (Legislative Counsel)]: momentarily to section 61. Act 73 have the Department of Taxes issue a report on implementation of this, and that report was due already and it exists.

[Emilie Kornheiser (Chair)]: And everyone's received that, and they are coming in next week. Is that right, Georgia?

[Kirby King (Legislative Counsel)]: Next Tuesday afternoon.

[Emilie Kornheiser (Chair)]: Great, thanks.

[Kirby King (Legislative Counsel)]: Yep, a great discussion next Tuesday afternoon. That report is about 44 pages. Without the appendix part of it, it's about 26 pages, so it's not as long as it seems. But a lot of wonderful information in there, a lot of great points and things to think about. So that's a yet to come conversation to have.

[Emilie Kornheiser (Chair)]: And it really is like an implementation plan with decision points embedded in it that we can work through.

[Kirby King (Legislative Counsel)]: Going to the chair's question from before about the language relating to versions of the rate factors for the different classifications.

[Emilie Kornheiser (Chair)]: I want to be clear. My question was about intent around making sure that property taxes are not gonna go up for districts that are spending very low now. And so the idea would be that everyone's property homestead taxes would sort of drop to the lowest level of the state.

[Kirby King (Legislative Counsel)]: So what their report does, and it has some great sections, similar, I'm not sure exactly capturing what you're saying, but Act 73 had them included a report to recommend sets of tax rate multipliers. One set recommended that would ensure any new revenue derived from the non homestead residential classification would cover the cost of the ed fund of the property tax exemption, the homestead property tax exemption, in other words, the new version of the PTC. And another set that would ensure that any new revenue derived from the non homestead residential classification would mitigate forecasted property tax increases on homestead payers. So they have done that in the report. Spoiler. I think it's pretty interesting. Obviously there is going be lot of caveats with that, because we don't know exactly what this is implemented, what the landscape is going to be, we don't know. So they did the best they could, it looked like, based off of what we know now. So great conversation for next Tuesday afternoon. Returning back to where I was, there's a lot of administrative and technical parts to this, but the gist of this entire Tax Lawification System section is to set up the non homestead residential classification. And then there is a transition section in 61A Act, this is effective for 01/01/2027, and this would be to have federal tax basically get the ball rolling on setting up new classifications next year. So what this means to you in part is that this puts a little bit of urgency on making sure that this is all set and ready to go this session. Because they're supposed to start transitioning next year. I already talked about the report that we have and the conversation that we'll be able to have about that later.

[Carol Ode (Member)]: This seems like a

[Emilie Kornheiser (Chair)]: good moment to plug that there is a timeline that's also uploaded that some of these, there are so many different parts in the bill. And even just this tiny part actually does take all these years to implement with necessary changes each year. So that's just there, if that helps people.

[Kirby King (Legislative Counsel)]: Yeah. So relating to this as far as the transition, which I did skim over that a little bit, if you just think about transitioning to this new system means you're not going to have any established data in the first year, so there needs to be some work done to get that off the ground. Section 61 C. I

[Carol Ode (Member)]: just have a quick question. So

[Rebecca Holcombe (Member)]: the new property tax classification, is all that work contingent on new districts?

[Kirby King (Legislative Counsel)]: It is under those contingencies. And I was going show you when we get the effective dates, I'll show you the language.

[Carol Ode (Member)]: I guess I don't understand why it would be, wouldn't you try to move toward new classifications regardless.

[Emilie Kornheiser (Chair)]: Well, we're moving forward with new classifications. I mean, we're moving forward when they wrote the report, they're following statute. There are two pieces. One is just like, frankly, sometimes feels past because you put a lot of things in together. And then the other that is sort of less transactional is that we had a number of conversations in committee. And I think more conversations happened in the Senate and maybe in the Committee of Conference. It's all a little bit of a blur at this point. Maybe for everyone, yes. Kirby, blur?

[Kirby King (Legislative Counsel)]: Blur, but also conversation, yes.

[Carol Ode (Member)]: Yeah, cool.

[John (Legislative Counsel – Education Finance)]: Thank you.

[Emilie Kornheiser (Chair)]: About the idea that with the foundation formula implementation and district implementation and new tax category implementation, if they didn't all happen in the exact same year, you'd have, like, rapid swings in property taxes year over year that might take a long time to settle out. And that would be especially in the aftermath of I don't wanna use the word aftermath. In the time after 01/1927 implementation, that just seems maybe it should just But if it all happened on the same time, then we could really meet policy goals of lowering homestead rates and stabilizing homestead rates.

[Carol Ode (Member)]: Another question. Yeah. Probably not for right now.

[Emilie Kornheiser (Chair)]: Okay, then let's ask it later and go back to Kirby.

[James Masland (Member)]: Okay.

[Kirby King (Legislative Counsel)]: So there's the contingency that's in the effective dates. Obstacations was unique in a way of having two contingencies. So this part of Act 73 is also not only contingent on setting up the new school districts, but contingent on, so 61 C and D go together. Jumped ahead here. So D makes this contingent on setting the tax rate multipliers before 07/01/2028. So just so you are aware.

[Emilie Kornheiser (Chair)]: Can you explain the multipliers a little bit more before you Sure.

[Kirby King (Legislative Counsel)]: These are technically in John's sections, but under the not trying to find the box or anything. I am just pointing that out, actually. You are not going to see it here. That in the antinatal science sections, where under current law, statute where it sets up the homestead rate and the non homestead rate, that language has been changed in Act 73 to have factors for each classification. And under Act 73, those factors currently are set at one point zero, as in they're all the same. But those factors can be changed to increase the amount that one class of property pays compared with others.

[Emilie Kornheiser (Chair)]: And so in a year over an ongoing basis, we would just set one rate every year, and then all of the

[John (Legislative Counsel – Education Finance)]: That's exactly right. It's shut up

[Kirby King (Legislative Counsel)]: so that you can set one rate, but knowing that, just we'll use as an example, the non homestead residential has a higher factor, so they're paying a higher share using your one rate.

[Emilie Kornheiser (Chair)]: And we could set the multiplier once and then not touch it for a while.

[Kirby King (Legislative Counsel)]: That's the intention and the way that it's set up. It doesn't have to be revisited, unless you want to. So there is this perspective repeal that is in addition to the contingent effective date. In order to ensure successful implementation of education finance reform, in the absence of legislative action on our report 07/01/2028, that creates a new tax rate multiplier to be used in tax classification system, subdivision F10 is the effective date, is repealed. So classifications get repealed unless you set multipliers before 07/01/2028. And that's in addition to it being repealed don't follow the contingency language that we're going to look at.

[James Masland (Member)]: Could you again explain, think in simple terms, means that the non homestead residential rate is going be higher than the other two, just based on a bunch of other things that came in the tax department's report. But you had talked about factors being different, but the rate being the same. Explain that a little bit more. Sure, for

[Kirby King (Legislative Counsel)]: one thing, I don't want to seem like I'm suggesting that any class gets taxed differently than any other. So it's a hypothetical when I say that. Because right now, as it's written, are all the same factors. That said, explain how the factors work again, is, let's say you have a rate of a dollar, but one of these classes has a rate of two point zero and the other two have a factor of two point zero and the other two have a factor of one point zero. Well, point zero is twice as much, so that rate would be multiplied by that factor and it would be the same as doubling the rate.

[James Masland (Member)]: Yeah, thank you. That's in simple terms, what you're doing. And I think it was actually two in the tax department, three in tax department, one, one point three nine, and two example. Is that A possibility?

[Kirby King (Legislative Counsel)]: Yeah, and that's a good place to look because they explain their different versions of factors.

[Emilie Kornheiser (Chair)]: And JFO can run through some more scenarios for this tomorrow, and then the tax department can run through more on next week.

[Kirby King (Legislative Counsel)]: 61 c is just an intent section saying that you intend to revisit the classification system as you go. That seems quaint at this point. I think that was a political negotiation

[Carolyn Branagan (Member)]: at some

[Kirby King (Legislative Counsel)]: point, but I guess you can deem that you've done that now. This conversation backfires

[John (Legislative Counsel – Education Finance)]: You

[Kirby King (Legislative Counsel)]: are right now reevaluating acclaim multipliers. Okay, so that's it for classifications. I say that's it, but of course, there's going be some good conversations about that, and we have the tax reform report. Moving on from there is the Regional Assessment Districts. A reminder, And also, I want put this into context and say that, assessment districts and doing mastery appraisals, that's what this is about, is property valuation, in which our education tax system relies on that property valuation being done and being done well. That said, these sections probably least directly relate to everything else in Act 73 than the other stuff you're talking about. So just so that you're aware, and it even has its own timeline, because it's unlike what we were talking about before, about certain parts of this relying on other parts in order for it to work together. The timeline for this is 01/01/2029. It's slightly after the other stuff. So while it does indirectly relate, it's not as central, Just so that you can know that.

[Emilie Kornheiser (Chair)]: And the tech department has a report on this as well that they will come

[James Masland (Member)]: in on.

[Kirby King (Legislative Counsel)]: And last I checked, which was twenty minutes ago, I've not seen they publish that report yet. But it's also not due yet.

[Emilie Kornheiser (Chair)]: I think that might have also been one of the reports that I said, it could be a slide deck. The last week, I don't remember.

[Kirby King (Legislative Counsel)]: A week, about a week. I can confirm that report, and we'll look at it I think here, that there's a stakeholder working group, and they met, it looked like four times in the summer and fall. Regional assessment districts. As a refresher, the language here transitioned Vermont from having, or potentially transitions Vermont from having a system where every municipality is in charge of its own reassessment, that's mass reappraisal of all the properties in that municipality, to moving toward more or less a county system. The assessment districts as written here are based off of counties, except that Franklin and Grand Isle are together and Essex and Orleans are together. It's a transition that takes place incrementally over to 2029 and at the end of it, the idea would be that these districts would go more or less two at a time every year to every county reassessed every six years.

[Emilie Kornheiser (Chair)]: Representative Ode?

[Carol Ode (Member)]: Thank you. Was there, I think I asked this question before, so I can't remember. Those counties, in some counties, there are so many more parcels than in others, did you take that into account?

[Kirby King (Legislative Counsel)]: Yes, that's why we love those smaller ones together.

[Carol Ode (Member)]: Yeah, smaller ones, but

[Carolyn Branagan (Member)]: are they like

[Carol Ode (Member)]: a thousand parcels in those two?

[Kirby King (Legislative Counsel)]: From what I remember from last year, the regional assessment districts will be roughly equal except for Chittenden County, which just has a lot more.

[Carol Ode (Member)]: And will there be more resources to complete that, or will they be giving more time, or is it better to separate into two areas so that you can do them then? Think these

[Emilie Kornheiser (Chair)]: are all great questions to ask the tax department about when they come in with their order.

[Kirby King (Legislative Counsel)]: Sure. I would just say that they're pooling their resources, so they're already spending resources to do MAP re appraisals,

[Carol Ode (Member)]: now town.

[Kirby King (Legislative Counsel)]: Every town is already, so St. Chittenden County, where there's more parcels, they're already paying for getting those repairs. Now they'll just be pulled together. After this report comes out in about a week from PBR, they'll come in and they'll do a follow-up and they'll walk you through everything that they're thinking about.

[Carolyn Branagan (Member)]: Yeah. They're already paying for it. You mean the state is already paying for it? Because the money goes to the community, the community puts in the bank or does something with it. Don't pay for anything. The state

[Kirby King (Legislative Counsel)]: pays for some.

[Emilie Kornheiser (Chair)]: The LCT would say the state does not pay enough.

[Bridget Burkhardt (Clerk)]: And if

[James Masland (Member)]: I can, going forward, like you say, we can talk to the town about this, but some towns aren't doing a reappraisal for ten, twelve years. Every six years, is going

[John (Legislative Counsel – Education Finance)]: to be a large amount of

[James Masland (Member)]: money needed going forward to work.

[Carolyn Branagan (Member)]: Okay, that's a good point. I know towns, I'm in Franklin County, some of those towns haven't been raised in fifteen years.

[Kirby King (Legislative Counsel)]: I think that's why you did this, To try to get every municipality reappraised more regularly.

[Emilie Kornheiser (Chair)]: I just want to We already passed and the law is already being enacted and implemented that every district, every town needs to reappraise on a very regular, much more often cycle. So that need for those resources is already enacted, moving forward, towns are doing it. This is to try to make it more efficient and effective when they do do that. I think there's differences of opinion at the table about whether or not it will be more efficient and effective, but the actual need for every six years is already fully finished law and happening. And districts are towns are very much moving forward with it. This is so

[Carolyn Branagan (Member)]: important to pay, obviously, for this new plan. Are are we expecting the reappraisal people to come in? The director Yep. Just saying right Jill. Jill. Yeah. She's coming in shortly.

[Emilie Kornheiser (Chair)]: Yeah, when they finish the report, we'll have them come in and talk about the report. They've been doing a lot of work on it.

[Kirby King (Legislative Counsel)]: There testimony last year as this was passing three committees. I recall there being discussion that hopefully these changes under Hex 73 will save money. Instance, when it comes to contracting for certain things, having several municipalities together means that they can save money.

[Emilie Kornheiser (Chair)]: Representative, what's that?

[John (Legislative Counsel – Education Finance)]: I want to honor Kirby Stafford and focus on legislative language, but the other piece that was important for that conversation was to assist those very small towns who are having trouble, who want to do their reassessment, but are trouble finding the support to do that because folks won't take, some firms won't take the jobs for these small towns because it's just not worth their time.

[Emilie Kornheiser (Chair)]: And when we have towns that have not been appraised regularly or accurately or differently from town to town across the whole state, and we have a statewide property tax and a statewide grand list, it creates enormous inequities that other towns and taxpayers are paying for. Yeah. Do you have more things?

[Kirby King (Legislative Counsel)]: A few more things. Great. So we already talked about the report that's due January 15. So that is section 64 of Act 73. When you receive this report, you can expect to have sections of the report that address the authority or authorities who will contract for and conduct reappraisals. This goes to what role should the state have, if any. The authority or authorities who will hear and decide property valuation appeals, again, one to three should the state be involved in that. Amendment necessary to enforce statute to the change from an April 1 to January 1 grant list assessment date, because that's wrapped up in this as well, is moving from having April 1 be the grant list date to you think January 1, in theory, moving to January 1 gives you more time to do some of the other things that we do in education spending. Fourth, any other recommended revisions to achieve our regionalized free appraisal system. Sections 65 through 69 were miscellaneous tax provisions. Would the chair elect me to remind you what those were?

[Emilie Kornheiser (Chair)]: Does anyone need those? That was just as a reminder, those were things that were in our miscellaneous tax bill that we put into this bill because they needed to be somewhere. They have nothing to do with, like, the spirit of Act 73. Did they

[Carolyn Branagan (Member)]: get passed into law? -Yep. -Okay.

[Emilie Kornheiser (Chair)]: -Too late now. I mean this whole thing got passed into law.

[Kirby King (Legislative Counsel)]: So I said I would show you the continuing effective date language, so that's subsection F of the effective date section. So I am going to read this just so you are aware of the actual wording. The following sections shall take effect on 07/01/2028, provided, this is the contingency, that the new school districts contemplated by this Act have assumed responsibility for the education of all resident students and that the expert tasked with developing a cost factor foundation formula has provided to the General Assembly the report pursuant to Section 45A to provide the General Assembly an opportunity to enact legislation in consideration of the report. And these are mostly things that Beth and John covered. Tuition repeals, transition to cost factor formula, educational opportunity payment transition, the new property tax credit system using the homestead exemption, property tax cost savings is part of this too. I don't see any other questions. I think that's I'll leave you with Paul.

[Emilie Kornheiser (Chair)]: Thank you, Kirby. So same question I had after Beth's section. I think I've flagged the pieces that we're going to hear more testimony on. Setting the multipliers is not something that happens this year. We need to create new We need to finish the guidance, finish the forms. They need to require that the forms go out. They need to receive the forms back so we know what the base is. And then we would set the multipliers. So that's all future legislature. Is there anything else that folks flag that I didn't flag? Okay.

[Carolyn Branagan (Member)]: Yes. Is there any way,

[Rebecca Holcombe (Member)]: and I know this has been done in the past, but we're shifting where Cliffs fall, and not just here, we're shifting in other bills, other committees, And it used to be that when you looked at the data in migration out migration results, we're going to be sixty and one hundred, we've extended benefits. But we're also hearing about this, especially in the context of childcare subsidies, because the prices have written and certain people no longer subsidized at all, childcare is actually getting more expensive, particularly for the working professionals, and I'm looking at this and that's where it's going to hit as well. Have we mapped where those cliffs sit and what the cumulative impact of those cliffs?

[Emilie Kornheiser (Chair)]: So you've asked this question a bunch of times, and it's a fantastic question. And it's a really important thing for us to do because we did map all those cliffs six years ago, maybe. The staff person who did that is not a JFO anymore. And we've changed almost everything since then. It does need to be wrapped. JFO is actively working on sort of what it would look like, what it would cost, all those things in order to do that again. We also have a ten year tax study. Did everyone know that? Yes. I think I knew and I forgot. But it's time for the ten year tax study again. And so they're going to be working on that and also looking for resources to finish that. And so those two things together actually makes a lot of sense, because so much of our tax policy shapes those cliffs. So I think one thing we're going need to do is when the budget comes through our committee, is making sure that we're prioritizing that as part of JFO's budget for the year.

[Rebecca Holcombe (Member)]: I wonder, I mean, obviously, we can't ask committees to model this, but even if people just lag, could we do a grand list of where the cliffs are, just so people can be mindful if we just keep hitting the same.

[Emilie Kornheiser (Chair)]: I don't know if we want to call it a grand list.

[Rebecca Holcombe (Member)]: A grand big list? A massive list. Unfortunately, grabbed Representative Page from healthcare, but I know that there is a clip in healthcare. If you earn $100 more, it's an $11,000 budget. It's cumulative. The burden is crushing. And

[Emilie Kornheiser (Chair)]: I will, at some point early last session, I asked the whole of Ledge Council to flag any place of statute that we offered any sort of financial benefits to veterans. And they could do, if they're all doing it simultaneously, it's less of a lift. So that's something that we can

[Rebecca Holcombe (Member)]: ask them to do too. And the reason I'm asking is, I'm thinking about why I'm hearing much. And a lot of it is the people we're hitting are the households with two working people. They're often professionals, and they're often in the health care industry, for example. Well, in your district, yes. Yeah, and that's part of the shortage too. And so I think paradoxically, we could actually be driving costs up. So, no, absolutely.

[Carol Ode (Member)]: I'm Brandon, fifteen months.

[James Masland (Member)]: So, with the current six year rolling reappraisals, where can I find the information as to how much more that might come out of the general fund?

[Carol Ode (Member)]: I think that's a great question

[Emilie Kornheiser (Chair)]: for the tax department when they come in, or you should ask them in advance. Thanks. Jill

[Carol Ode (Member)]: at PBR.

[Emilie Kornheiser (Chair)]: Okay. With that, no one else has anything?

[James Masland (Member)]: I think

[Bridget Burkhardt (Clerk)]: as we look at this, the things that are contingent upon the school districts, if we wanna look at things that we wanna have implemented, even if the school districts don't get implemented, love to have that discussion at some point.

[James Masland (Member)]: Okay. Good question. Yeah. Sounds

[Emilie Kornheiser (Chair)]: good. We'll schedule that one so people can think about it in advance.

[Rebecca Holcombe (Member)]: Sources. I could send the sources to send to the committee. Found the best excellent list of all the reports of any of it. It was posted. Oh, you did post that? Yeah. Very good. Thank you.

[Emilie Kornheiser (Chair)]: And Julia also has a slightly different list of all the reports that I think she'll share tomorrow.

[Carol Ode (Member)]: Talking about future meetings, did you think, Emilie, that they would have, that JFO would have that big list, whatever, ready really soon? What big list? The list of cutoffs for help of people and who's being impacted.

[Emilie Kornheiser (Chair)]: No. So I think we can I can ask Legge Council unofficially to start assembling that big list, But the actual analysis will take just months and months? And it's something that JFO would need budget for.

[Rebecca Holcombe (Member)]: I'm not asking for don't realize that, very respectful. But it would be interesting to see if we're seeing a preponderance at

[Carol Ode (Member)]: the same level, because that would

[Emilie Kornheiser (Chair)]: be more of a play. Absolutely. Okay, I'm gonna wrap us up. We are back here at one. If folks could be back promptly, that would be cool. We're gonna do our first run on the December first letter and the yield bill, and then we are going to the state of the state. So it'll be fairly condensed. It's really just going be a first pass, then we're going to go