Vermont Legislature SmartTranscripts:

[Emilie Kornheiser (Chair)]: Thanks, everyone. It's 10:20. We're beginning our work, or finishing, or whatever, continuing our work here, talking about yield bill, what goes into it,

[Emilie Kornheiser (Chair)]: who's spending money on what. And we have the agency of education joining us to give an update. This is really more of a level set about where districts are spending their money. As the session continues on, we'll invite the finance team back in for regular updates on what this year's budgets are looking like. But appreciate you all joining us. Thanks. I'll start. So for

[Kelly Murphy (Education Finance Director, Vermont Agency of Education)]: the record Oh, and we have

[Emilie Kornheiser (Chair)]: new people, you can introduce them. And tell

[Emilie Kornheiser (Chair)]: us about you. And we're so glad that you're here.

[Jill Dixon Campbell (Deputy Secretary of Education and Chief of Operations, Vermont Agency of Education)]: Yes. I'm sorry. I'm a little distracted, and I missed out on my hospitality opportunity. Really glad to have you here. So I will introduce our new team. We are really excited to share some of the changes we've made within the agencies so that we can be even more responsive to your needs. So for the record, Jill Dixon Campbell, Deputy Secretary of Education and also Chief of Operations. That's part of our agency's reorganization, which I'm happy to answer any questions about. And I'm joined here today by Ted Gates and Kelly Murphy. Kelly is our new Ed Finance Director, and Ted is our Senior Fiscal Analyst. So as part of our reorganization, one of the areas that we really identified as a priority was building out our education finance team within the agency. It's been a very slim one person show for a really long time. And so Teddy and Kelly will actually be sharing what that new team looks like and that new org structure. And we've already kicked off the Forward Ledge session, really close collaboration with our fiscal office and really being able to expand that support and conversation with our district, particularly our business managers who are always fantastic partners. So to that end, I will speak very little. I'm going let them speak. And then if there's more for you, why we're changing policy, that's what I'm here for. But I will let them introduce themselves.

[Kelly Murphy (Education Finance Director, Vermont Agency of Education)]: So I'm just going to just say, thanks for having me. As Deputy Secretary indicated, I'm Kelly Murphy. I'm the new Education Finance Director. And just a little bit about myself. So prior to this role, was the acting city manager here in Mount Pleaer. Before that, I was the assistant city manager and then I was the finance director. I do have a little bit of experience with the state. I was a budget analyst with finance management for a while. And so I'm super excited to be back on the state side, especially at a critical time. And so you can see here on the slide that this is our team. So we built it out. We don't have a pool of analysts that I'm really excited about leading. And Ted is really going to kind of get into some detail and overview of the things we're at right now. I'm going hand it over to Ted,

[Emilie Kornheiser (Chair)]: so you can take it from here.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Okay, for the record, Ted Gates, senior fiscal analyst for the Agency of Education. I've been with the agency for about five and a half years. I was originally hired to help with the implementation of eFinance, the statewide finance software that we were rolling out that didn't quite come to completion, if you know that story.

[Emilie Kornheiser (Chair)]: We try not to talk about it, actually.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: So when that ended, I was reassigned. Now I'm more on the finance side and have been collecting school finance data for a number of years, now I'm also adding on to that list of responsibilities modeling for Christianity. Happy to be here. Thank you for having us. So jumping right in.

[Emilie Kornheiser (Chair)]: And if I can ask your organizer, as folks ask questions, if you wouldn't mind introducing yourselves to the team. I'm so sorry. Let's all introduce ourselves. I've met you all. I'm Emilie Kornheiser. I'm the chair from Brattleboro.

[Unidentified Committee Member]: Bill Canfield, vice chair from Fairhaven.

[Bridget Burkhardt (Clerk)]: Bridget Burkhardt from South Burlington. Carol Ode from Burlington. Rebecca

[Emilie Kornheiser (Chair)]: Holcombe from Dollar Ridge, Stratford, Sharon, and Thutford.

[Unidentified Committee Member]: Mark Higley from Lowell, and I represent the Williams Memorial District, eight towns of Townsend and Morton's team.

[James Masland (Member)]: Jim Masland, and I share a district with Rebecca.

[Emilie Kornheiser (Chair)]: I'm Carolyn Branagan, and I represent the towns of Georgia and Fairfax up in Franklin County. I'm Woodman Page, good boy.

[Charles Kimbell (Ranking Member)]: Charlie Kimbell from Woodstock, representative Woodstock writing in Plymouth. Our city town manager is no longer trying

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: to apply to the zen.

[Unidentified Committee Member]: What a lot of earned on that bridge.

[Emilie Kornheiser (Chair)]: And Representative Waszazak, who's usually in that empty chair, represents Berry City. Not supposed to ever just say Berry. You have to say Berry City or Berry Town. And I think you've all met Sorscheiser, our incredible committee assistant.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Thank you, Glenn. You are, as you mentioned, you're expecting data from us as the session goes on. So this is an outline of our timetable for collecting and bringing that data to you for the FY27 school spending. So the first piece of data that we collected was for the December 1 letter, And that is strictly just a preliminary, very informal estimate of percentage growth per district. We had a response rate of about 65, 70% of the districts, which represented about 80% of the spending. So it was a pretty robust response rate. Then the state average growth rate from that informal survey was an estimated 5.8% growth. I was wondering how accurate that may be going forward when we actually get to the FY27 budgets. So And I looked back at the estimate for FY twenty twenty six, that estimate for the initial collection was 5.71%, and the actual ad spending growth rate actually turned out to be 5.73. So at least in that particular year, it was very close. Maybe that was a coincidence, maybe that gives you an idea of how close we might be. We've looked back

[Emilie Kornheiser (Chair)]: a few times to past years, and it's unremarkable. They

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: know something we don't. So, the next data collection that we do in our calendar is the long term weighted ADM collection, which we are just now finishing. I we're I can speak with confidence that I think we're going to be finished with that this week with the sign offs. We have all of the data collected. We're getting the sign offs, and so I think we're just about there. Then we roll into our preliminary budget collection from the districts. I'm hoping to release that survey this week. And then the due date for that survey is mid February. So between say next week and mid February, we'll have rolling submissions for those budgets. And those are gonna be the line item detailed budget data. So we can dig into that and see what sorts of areas where they're spending money. And then the final budget collection comes after the voters vote for the budgets and passed the thirty day voting period, which would be May 5. So that's our calendar for data collections and presenting that data to you. In terms of the long term weighted in process that we've been working on for the last couple of months, that's primarily student enrollment and demographic information that we collect from the districts through their student information systems or SIS systems. That happens in October through November. From that data, we calculate each student's average daily membership, it's called, or ABM. And that's a function of their enrollment status. There's a couple of different status codes and then their entry and exit dates. So there's like that twenty day period in the first couple of months of school where we count the number of kids that are enrolled during that period. So if they're enrolled for that whole twenty day period, they count as one ADM. The collection of that data, like any data collection, is highly dependent upon the data integrity within those data systems. There could be all kinds of issues that we have to work through with those districts related to new data managers, not knowing the processes or issues with the systems being able to pull the data correctly, or it was assuming that it was configured correctly in the system to begin with, there could be communication issues between the SYS system and when the data gets up to our data management and analysis division, DMAD, that's the folks in the area to collect that data. And there's a whole system in between, it's called a data standard, which is called EdFi. And that's a fairly new thing, but it's used around the country. So we use EdFi to extract the data out of the system and then get it up to the agency that they think. So there's plenty of opportunities for hurdles and issues and things that we need to work through, and it's new on our end. So we have experienced some issues when we've worked through them as they've come, and we've shared that process with the superintendent and the business managers and the data managers so that they are all aware of the particular issues. We worked very closely. We had people working full time with the districts on those issues that have come up. At this stage, are not any systemic issues we've collected with data. And I think that it's pretty clean at this point.

[Unidentified Committee Member]: Ed Fi is just a data extraction tool that's targeting the database that you're building up and putting in nice spreadsheets and reports.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: They have to get their data to a point where it meets the standard and then can go get extracted or pushed into that Edvardi's system. And then the AOE pulls it from the Edvardi's server.

[Emilie Kornheiser (Chair)]: I'd like to have a conversation about free and reduced lunch status. Impacts on direct certification is really incredibly exciting. The work that we've done in the last few years is sea change. And in the new federal environment, I think we all have concerns about what will happen to direct certification data. And so we'd love to have a conversation about how we can plan for that and how the universal income form is rolling out and perhaps might help with that. I don't know if you want have that conversation now or if we should schedule

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: another time for that. I've got the expert on Yeah, do

[Emilie Kornheiser (Chair)]: have to tee it up, but I think the person who knows this inside and out is Rosie Krueger. She'll Okay, we will schedule another time for that. Yeah, so I think we can tee up some of the themes that we're seeing in terms of the household interim form and some of the process improvements that still need to happen in districts. But we did also see the de cert process has been fantastic that it does create some vulnerability for us. Okay. Represent Burkhardt?

[Bridget Burkhardt (Clerk)]: I just have a question about what's changed in this data collection process this year versus last year? Because I know there were some districts last year that felt like they never really got to a clear LTW ADM. Literally had to go to voters with an asterisk. This is what we think our people's cost is, but we're not quite sure that the LTW ADM is correct. What's your level of confidence this year? What has changed in the process with districts this year?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: I was not the person that did the long term weighted ADM last year, so I can't really speak to that. I know that there have been massive improvements. I think EdFi, I want to say EdFi was used last year, but it was brand new, if it was even used. I'm not sure, but it was in the process this year. So this year is the first real year that we have under our belt where we've had experience with the EdFi process. There were some hiccups. I think at this point in time, we can look backwards and say that it worked. And in terms of degree of confidence, I think that I personally, and I think I speak for the BMI crew that it's north of 90%, if you wanna quantify it. We feel very comfortable with the data this year.

[Emilie Kornheiser (Chair)]: And I think part of what we can talk about, and this is part of our larger change in how we do our data collections at the agency and how the process has changed with districts. So I think as a general statement, we can all say with a very strong degree of confidence, everyone wants to get long term wage ABS correct. In our current system, it's high stakes information. In a future foundation formula system, it's even higher stakes. So we need to ensure that the data that's coming from our districts is high quality validated data. And in particular, diagnose the places within the district processes where they need additional support and training. So we have data managers that are critical, but they rely on the data that's input by registrars, who are often admins in offices who are juggling 85 different things, and maybe they don't have the high degree of training that they need. So we're diagnosing all the way down to root causes within the districts. But one thing that we have changed, and we changed it midstream last December, because we were identifying that the process itself was not yielding high quality data. So the way that it used to be done is that we have it, it's the fall data collection, it's called the DC06. And data managers would submit the data to our data management team. And they would say when they did it, This is our good, clean data. And then that data would be handed off to the finance team, and they would generate the long term weighted ADM and send it to business managers. And the way that process tended to work is that it was at that moment that issues with the data were identified, because all of a sudden that data spits out a number that's going to impact budgets and business managers would be saying, wait a minute, where did 120 kids go? And so that would then cause this iterative process that would drag out. You'd end up with 12 versions of long term weighted again. That was not unusual. Equalized people, same thing. We would have six to 10 versions every single year. This year, what we've done with all of our data collections is that we start with really clear deadlines for when data needs to be submitted, themed, validated, and we have an initial sign off that's done by data managers and superintendents. So it's saying, this is our high quality data. What we did this year, and Ted created this, is he created a calculator tool that allowed the data as it was coming in to be generating their long term rated ABM. And we said, we need the business managers to be looking at this as that's coming in. So you're identifying issues in November and December as opposed to mid January. And so that has really helped with that iterative process of identifying where the issues are. Are they happening with the district? Is there something happening with EdFi? Is it a SIS vendor issue where they haven't quoted something correctly? Getting to the point where we then send out a certification. We built that certification with our districts to make sure that what they were signing off on, felt comfortable. So the data managers and the superintendents sign off on the ADM data, the inputs. Then once that happens, then Ted generates a final certification for the long term ADM that's signed off on by business managers and superintendents. So there's one, one version of long term weighted ADM that is based on data that's been validated, proven certified. So that's why you're hearing a much higher degree of confidence and just not this continuous iterative process of this high stakes information going out as they're trying to adjust their budgets and communicate with families and their communities. So we've made some, I think, really substantial improvements here. Rebecca? I really appreciate the effort to get out of it.

[Kelly Murphy (Education Finance Director, Vermont Agency of Education)]: One of the weird things

[Rebecca Holcombe (Member)]: about being in an interstate district is you actually get to see how two different states handle the same function. And New Hampshire actually rolled out an edify. And I wonder if it makes sense when the dust settles to do a postmortem of this rollout. Theirs was seamless. This one is still causing acute stress and anxiety in our area. Simply, they cannot seem to get the right numbers reported. So I just wonder if we maybe bring someone with ADS with you and see if there's a way to learn from that process, because you will have other tech implementations. And I feel like there has to be a better way. Representative Russell?

[James Masland (Member)]: Just as an anecdote, there are times I live on the Connecticut River, Belittle what happens over in New Hampshire, but there are times, absolutely, that they do things better than we do, and we should learn from them. Child custody is one, for example, but it's a different subject. So much so. And for now, thank you.

[Emilie Kornheiser (Chair)]: Yeah, absolutely. We're always looking to make these process improvements. And particularly as we even contemplate conversations around statewide information systems, statewide finance systems, which was a report we were asked to give, know the lessons learned from eFinance, and then our districts know the lessons from e finance. So I think everyone has really strong clarity on how we need to do these processes in the future if we want to make these more state level moves. There's a real advantage in just having one student information system. We have three. I appreciate that. That goes down a place where sometimes we never emerge. So the

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: demand group collects the data from the data managers. Then day by day, I grab that data, the ed finance team grabs that data, then we do our long term weighted ABM calculations. And then as Jill said, we actually do share that iteratively with the data managers on a day by day basis so they can make sure that when we finally get our data, that it looks like what they were expecting. So just as a review, the long term weighted ADM process uses the different grade levels as weights, train reduced lunch counts or direct certification counts for the weights, English language learners, district sparsity or population densities, and then small schools. Then also added on to the two year average is early college phantoms, we call them. It's a statutory formula for having students get counted in the state place students also get counted in the two year average. That's a review of the weighting.

[Unidentified Committee Member]: I don't want to assume I know what early college phantoms are. Yeah, took

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: me a while to think about it and see if I understand what the math does, but it's basically, more than, did I say it right, if more than 5% of your twelfth graders are attending early college, then you can count each student above that 5%.

[Unidentified Committee Member]: Say that again? If

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: your district has 112 graders and eight of them are attending early college, you get to count three of them. Get to count three

[Emilie Kornheiser (Chair)]: Because they're own students. Otherwise, have to unenroll, and you lose the count.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: So you don't get every early college student, but you get something over 5% of your twelfth graders.

[Emilie Kornheiser (Chair)]: And I actually thought that we had done away with mental students a few years ago, and so I'm excited to hear that they're back.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: That one took me a few minutes looking at Brad's map on

[Emilie Kornheiser (Chair)]: the spreadsheet to figure out what Brad's spreadsheets are a spreadsheet. You can write those spreadsheets. Whatever the question was. Can you go back a slide?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Yeah, thanks.

[Kelly Murphy (Education Finance Director, Vermont Agency of Education)]: I don't

[Emilie Kornheiser (Chair)]: know where it was. You're have to go back. We are taking testimony on the Board of Education's work on city and small pools next week, I think. So just for the committee.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Okay. And again, just to review what the actual steps were that we shared with superintendents in terms of the long term weighted ADM population, so that we felt like they were fully on board and that there was full transparency into what the process was in the calendar, this was the bullet points that we sent them more than once on how the process worked and the timelines and what was expected at the districts. So it was fairly thorough. And again, just to recap, the first two boxes, the district send in their DC06 fall ADM student data, And then the second two boxes, the Fed Finance team takes that data and calculates the long term weighted ADM and gets the superintendent's certifications or signatures on that. This slide is old. It was from last week, but it's just a status update of where we are. And like I said, think we have two supervisor unions that have not yet signed off. So we're I I expect good luck, we'll have them all signed off this week. Moving on to conversations around school spending, specifically FY27 preliminary budgets, and I'll emphasize preliminary. From the data that we collected from them for the December 1 model, we looked at their stated growth rates in ed spending. And so that's the blue line. The blue line is scaled off of the left vertical axis. So the ed spending increases range from a low of about 1% to a little bit north of 14% for the outliers. If they did not respond to the survey, we just applied the state average growth rate of 5.8% to them. So that's why you see that long string of a straight line in the middle. Those are the people that did not respond to the survey. We're assuming that their growth might be 5.8%, but of course, we have no idea what the growth rate might be. Rebecca, why don't some of these districts respond when you paying the defense? My guess to that would be A, it's just too early and too preliminary and they don't know. B, they, for whatever reason, just didn't feel like responding. Potentially, some people might feel uncomfortable putting a number in front of the community without being able to back it up since it's so preliminary. So there could be some sensitivity there, but I couldn't tell you why.

[Emilie Kornheiser (Chair)]: I think that's it. We're going to have a number of districts in and we'll hear from the superintendents and the school boards. And that's a great question to ask them because it really does get to some of what some of our decision making. Are you about to answer that? So let's just wait and see why they don't.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Multiple reasons, perhaps. So again, this was preliminary, I heard from at least one district that they estimated high and that after having some deliberations with their school boards, their numbers are lower. And that's some of the districts on that super high end that said that to me. So again, this is preliminary, so we don't need to put their feet to the five, these numbers.

[Emilie Kornheiser (Chair)]: Have you ever analyzed the WANES to see what are common characteristics of people who are at the left or the right on your little spreadsheet?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Not really, although I did I did have some conversations with some folks about the high end, and I would say that the answer is gonna depend district to district, of course. But later on in this slide, we're gonna be looking at some feedback on cross drivers, and the responses that they gave to me for why their district was that high are embedded in that list of contracts. So we'll see that a little bit later.

[Emilie Kornheiser (Chair)]: And we are going to take testimony representative Holcombe from some districts at both the high and the low end, so we can ask them about what's anomalous about their experiences.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: And this is a percent increase. So imagine if you had a really small district with small numbers, you can easily have a 50% not maybe about 50%, but you could easily have a high percentage increase because it's a small numbers problem. So there's some of that going on with the data on the right hand side.

[Unidentified Committee Member]: When I first saw the slide, I thought it was over time and a trend, and I had all sorts of questions ready for you

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: about the trends. So before I skip to the next slide, I'm realizing that I didn't cover everything. So just to be clear, so the blue line is the percentage growth in ad spending. So then we were curious, well, let's apply some, let's look at those district characteristics one by one to figure out if there's some sort of explanatory behavior based on the particulars of those districts. So the green line is the district size represented by their total ad spending. So the green line is total ad spending and that's measured on the right hand axis in millions of dollars. There's not a real strong trend that stands out here. It could be that some of the larger I mean, it does look like some of the larger districts are on the left hand side, implying that maybe a larger percentage of our larger districts had smaller growth rates. And perhaps some of the districts on the high end that had high growth rates might be smaller and medium sized districts, for whatever that's for.

[Emilie Kornheiser (Chair)]: Yeah, that's a good too. What would that look like if you took spending on healthcare out of this? Let's wait until we get to some of their analysis of that spending. I just think it's hard to evaluate this. There's a third dimension to this, which is the weighting, which isn't here as well.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: We're getting into that. Yeah, it's coming. Hope you had breakfast.

[Unidentified participant]: Oh yeah, I was. Okay,

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: the previous slide, were looking at growth in total ad spending. Now we're looking at ad spending for the long term weighted ADM. So FY27 preliminary, again, is the blue line, and it's sorted by the smallest spending first pupil to the highest on the right hand side for FY '20 Yeah. The orange line is FY '26, same data for comparison. It's been per long term weighted again. So one year to the next. So it's a little bit lower. So obviously there was increases from '26 to '27. And again, the green line represents district size. So looking at low spending per pupil on the left to high spending per pupil on the right, again, the green line represents district size. So is there a trend? Not really.

[Emilie Kornheiser (Chair)]: What are your axes again?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Sorry, the left hand axis is the spending per pupil per long term weighted eating, and the right hand axis measures the green line, which is district size.

[Unidentified participant]: The

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: x axis.

[Emilie Kornheiser (Chair)]: What's the x axis, k2?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: The x axis, so since the school districts are sorted by spending per pupil size amounts, The horizontal axis is strictly just a number line. If I wanted to, I could put the district name in there, but you'd never be able to read it. So I just put one through 119.

[Emilie Kornheiser (Chair)]: Just a few days ago, went back to presentations from four years ago in here. And so the more you can label axes, the better. And people look at this from the field and it's

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: I've heard that message.

[Emilie Kornheiser (Chair)]: You. Some of the other

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: two slides, had the time to do that. There's probably some last week when I did And so thank you for that comment. Do you still have it?

[Emilie Kornheiser (Chair)]: Yeah, this is an observation. We've received some feedback from the people who authored the weighting study, and to the extent our weights may not capture reality, this will be a light shift. Yes. I'm just gonna pass. Rebecca Holcombe heard that you are concerned about the current law weights. We will look at it. Yes.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: So I should mention, or just say out loud. So the blue line or the orange line, the low spending districts per students, weighted students is right around 9 or $10,000 per student. And on the high end, we're looking at closer to over $18,000 per student, per weighted student. So that's a twofold increase. So there's quite a bit of variation in there. It was more. Good thing. The red line represents the excess spending threshold for FY twenty seven. Julie said it's roughly 16,500. So, it does look like, looking at the blue line for FY27, that there's quite a number of districts that are over the excess spending threshold. However, this is before we take into account, we exclude the spending on principal and interest payments for those months. So, after we take out those exclusions, it won't be so many. And in fact, we did a quick little brief poll at the Vermont Association of Business Officials to visit managers meetings last week. And it looks like we're only looking at four or five districts that predict that they might be over. And we did hear

[Emilie Kornheiser (Chair)]: You were the last year.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Would like to say it's last year, so it's pretty close. It's a small number. But we did hear anecdotally that those districts are working with their boards they don't want to be over the threshold if they don't have to be. So it is an effective measure.

[Emilie Kornheiser (Chair)]: Oh, green is 26 and blue is 27, yes? Orange is 26 and green is green. On the the

[Unidentified participant]: The top. The

[Emilie Kornheiser (Chair)]: top one is blue, and that's 27. And then the spiky one is green and 26.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: 26.

[Emilie Kornheiser (Chair)]: Yeah. Okay.

[Unidentified participant]: Great. But District's not sound.

[Emilie Kornheiser (Chair)]: But it's spend, and the horizontal is the small districts are on the left and the big districts are on the right in terms of student count?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: In terms of spending per student.

[Emilie Kornheiser (Chair)]: Okay, so high spenders are on the right, and that tells you how big the district is. Vertical is how big the district is, horizontal is.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: The green line tells you how big the district is, is best on the way. So a picture paints a thousand words, in this stage, maybe this picture paints a million words. You should have seen some of the other graphs that I picked or anything. We had to take lines out.

[Emilie Kornheiser (Chair)]: I actually just had a color differentiation problem, so I think it's just my eyes and not you.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: So again, one of the messages, the spending per pupil, it looks like a straight line, it just goes up, but within that line, because it ranges all the way from 10,000 to 18,000, there's a lot of variation between districts. You already know that, but that's a takeaway. So, we're trying to look at possible explanatory factors for some of that variation. So, this slide, the size of the district does not appear to have a strong correlation with spending per pupil. Are you sure? Well, I didn't put a trend line on this graph, I could have, but the green line, there could be a slight upward trend, so there could be a correlation, but I wouldn't say that it's statistically significant or super strong.

[Unidentified Committee Member]: They just look a little smaller on

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: the left. Do you remember

[Unidentified participant]: when we talked about the clouds? I've felt what?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: I've looked at

[Unidentified Committee Member]: life from both sides. I

[Kelly Murphy (Education Finance Director, Vermont Agency of Education)]: think it was

[Emilie Kornheiser (Chair)]: last was that last year? Julia came in and talked about correlation and causation for quite a while, and then we talked about we all see patterns in clouds and dangers of such things.

[Unidentified participant]: So

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: now, you made the point that a lot of laypeople and board members and stakeholders don't have a firm grasp of spending for long term weighted ADM. What does that mean? It's complicated, people get confused. So, the orange line is the same orange line as before. It's the spending per weighted ADM for FY '26, And the green line is the more intuitive measure of spending per ADM, unweighted students, or just plain old spending per student per kid. Obviously the green line, so the data is sorted by spending per weighted ADM. So the orange line looks nice and smooth because I sorted the data that way. Green line starts to bounce around a little bit because each district has its own student demographic profiles. And so each district is gonna have a different set of weights applied to it. However, if you put the trend line on the green data, you can see that the trend line matches the orange line. It's got the same slope. If you look at the spending range, it goes from around $20,000 spending per pupil to $30,000 So that's a pretty sizable range. So again, there's variation. So one of the questions that this graph potentially tries to answer is, is the weighting responsible for causing some of the variation, low spenders to high spenders? And the answer is not really, because the trend line in green data is pretty much the same slope as the orange line. So if you start out as a low spender per student, not incorporating weighting, and then you do the weighting, you're still a low spender, and high spenders are still high spenders for the most part. There could be exceptions. There are exceptions, but on average, low spenders are low spenders, whether you're looking at per student or per weighted student.

[Emilie Kornheiser (Chair)]: And we talked about this a bit last year, that our weights are taxing capacity, and then folks make local budget decisions. And so that's just a fundamentally different way of, if you have a foundation's formula where you have weights, the weights generate the budget. They generate the allocation that every district is going to get. In Vermont, first we have weights that are not applied to any particular base, right? And then all of the funding decisions are local decisions. So rather than the weights starting to flatten it out or even have our higher property districts spending more for people, is which what we would sort of hope to see with rates. What we actually have is that local districts make local decisions. And what we know is that our higher poverty communities tend to spend less per student for a whole variety of reasons. So the theory of action's taxing capacity is that it would allow those communities to not feel as much tax impact and spend more per pupil. We're not seeing that borne out in the data. We have, it's long term weighted ABM's a fairly new thing, but we have several years of data now to show them. Towards our previous conversations about correlation and causation and how much people want to find these numbers, you come in the near future, if you're drawing trend lines, as much as you can tell us some of the background statistical analysis of that, that's helpful. Do you have a question, Representative Holcombe, or are you? Fact that some communities choose to spend more on education, some communities choose lower tax rates, that is a very well documented, longstanding phenomenon. I would just like to, that's a separate conversation. Some people may choose to pay lower taxes so they can do things for their, Like pay their rent. I just think we need to talk about this because And it goes back to Representative Page's question, which is where is the most effective way to deliver services? The assumption of this, there's a lot that needs to be unpacked. Just curious, I would really like to keep the foundation for a mental conversation out because you have a full button to the embedded assumptions. And I think we need to just understand them. Think you agree. We are not gonna talk about do describe how it functions in other states? I'm gonna jump in. Rebecca? Agreed, we will not talk about the foundation formula, are just talking about the yield bill here, and what spending is like under current law.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Any more questions on this slide? No. Okay, so we're looking at possible We're kind of going through a list of possible usual suspects that might be explanatory factors to explain the variation between high spending district and low spending districts. So we looked at district size, we looked at the weighting, none of those were super, super strong indicators or explanatory factors. This one looks at special ed, specifically rates of IEP students, which is the black squiggly line at the bottom. So the average special ed percentage per district is somewhere around 20%. So there is a trend line in that black data and it's pretty much just horizontal. So the horizontal trend line tells us that there's really no correlation between special ed rates within the districts and their spending per pupil. Their ed spending per pupil.

[Emilie Kornheiser (Chair)]: Yes. I just have a really hard time with this because when we're talking about our average being 20% identification, we are way above the national average. This is a system wide, this is a statewide failure. And this something that needs to be addressed at the state level because it may not, I mean, for example, the way we reimburse extraordinary expenses penalizes districts for doing the less expensive thing and rewards them for spending more money financially. And so there is a lot of work that needs to happen here that has nothing to do with kids. And I'm worried about this being said because we are not doing what we need to do by these kids at the state level. And I don't want something to be said that special ed doesn't matter because we've got some issues here. Absolutely. And we're gonna take comprehensive testimony on special education spending and look at the reports that AOE has given.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: To be clear, in no way am I implying that special ed rates don't affect spending. I'm saying they don't affect, in this graph, it does not affect, it appears to affect the variation in spending from low district taxes.

[Emilie Kornheiser (Chair)]: That's the difference. Can you me a little bit about what it looks like to find correlations when you have two different axes going there? Sort of an unusual thing for me to see.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Well, each dot on the horizontal axis, whether it's the IEP data or the spending per pupil data, it's the same district. So, if there was a correlation between their overall spending for people and their special ed rates, you would expect to see the slope of the line either be upwards, which would indicate a positive correlation or negative, which would minus indicate a negative correlation. Does that make sense?

[Emilie Kornheiser (Chair)]: Yeah, are you trying to understand that visually or are you also running

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: statistical analysis We or didn't do any statistical analysis, strictly anecdotal, I. E. Visual.

[Unidentified Committee Member]: Dotted line is just a trend line across them, but you've got district number 110, which is up above the 16,000 per long term weighted ADM, and that's their 50% of their students are on IEPs, am I understanding that correctly? Yes. That spike?

[Emilie Kornheiser (Chair)]: So another way we could try to understand the correlation here would be to put ed spending on one.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Yes, like a scatterplot kind of thing.

[Emilie Kornheiser (Chair)]: As I already alluded to, I remember charts from five years ago, and that's a lot of personally my policy making is built around how all of these different charts work together to understand the picture of the state. I'm sure there are people in this committee who do that too, and people in the committee who very much don't do that. So the information that we gather from these really matters to both our understanding of the big picture and how we

[James Masland (Member)]: Thank you. So

[Emilie Kornheiser (Chair)]: you had asked us to think about, are there things that are, what might some of the things be that are driving spending? And so I think what we're finding is that there is no really clear smoking gun across the system. So size, there's beginning maybe of some trend line there. I think with our special education spending, we see a lot of variability and we have to dig into every district to understand what those specific driving factors are. And we've done that in some of our recent reporting. We talked about the weighting and what we might expect to see versus what we're seeing. And there's a lot more to dig into there. So what we're not seeing is very clear trends. And I almost would have been able to say that from the beginning because the decisions are local decisions. And so I think this is super helpful to see an attempt at finding correlation and not finding any. And I'm sorry, did not look ahead in your presentation. I actually usually do that before I ask questions. I think we're also just wondering what people are spending the money on. I imagine that's better in the presentation. Great. Cool. Yeah. And also, I just want to signal that we're actually doing some work with business managers to start to even, I don't want to say complicate, because it's already complicated, but we nuance this further, right? To some of the things that representative Holcombe is pointing to is like, what are the programmatic offerings? What are the student outcomes? What are the things that we can start to add additional nuance, so it's not always We want to find those sweet spots between spending and outcomes. Outcomes, right? It's not groundbreaking to say that when you spend more per people, you would expect to see higher outcomes in more affluent communities, right? Like that's not a groundbreaking statement about education education setting. So we're really going to be working with business managers and actually with the SBA as well to start to think about what are some of those other measures that we might start to triangulate and give you all more nuanced and hopefully impactful information for policy and decision making. So that work is underway.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: So this is the last graph in this series, and this one plots, again, the same FY26 head spending for a weighted student, the orange line, with free and reduced lunch rates by district. So this one does have some anecdotal observational correlation. It looks like many of the districts that have higher rates of free and reduced lunch are on the left hand side, corresponding to lower spending per pupil. And then conversely, on the right hand side, districts with lower poverty rates are spending more on a pure per pupil weighted basis.

[Emilie Kornheiser (Chair)]: I think there's also some anomalies in this that It's make it where I think there's a lot of information to be gleaned as well.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Yeah, and there's obviously a lot of squiggly on the purple line, the trend line is clearly pointing slightly down, so it's on average, again, 119 districts. So key takeaways, maybe just to sum it up, the variation between high and low spending toward long term weighted at the end of that strongly correlate, strongly correlate with district size variation, not strongly correlate with IEP rates. And there's a link here to the AOE's recent current state of special ed delivery. It has more information around special ed. Spending per weighted ADM does correlate with spending per non weighted ADM, which we looked at, which as Jill alluded to, that even with the weighting, there's still variation. The weighting does not level the training field in terms of And then finally, the variation between high and low spending for long term weighted AM does show some anecdotal correlation with frame reduced lunch rates, as with this stock. Somebody who spoke earlier stole our thunder in terms of talking about excess spending. As was mentioned, it excludes the principal and interest payments for bonds before July 1, 118% of FY 2025. FY 2026, six districts were over the threshold. There's the amounts for the districts from last week of this year. And again, we won't know excess funding for FY 2027 until we start to collect their Until the budgets are voted on. Thank you, Joy, for So looking at cost drivers in the data that we collect in November for the December 1 letter, there's an open area on the survey tool where districts can either select or self enter box driver ideas. So the usual suspects included salaries and health insurance. Speaking with business managers, they wanted to emphasize that during negotiations, they have limited ability to control salaries. So that was partly out of their control. Health insurance, same thing. They can't control what the health insurance premiums are.

[Emilie Kornheiser (Chair)]: Can I finish my sentence? Yeah, thank you so much. I understand that self reported what's in control and what's out of control. The salary scales might feel a little bit more out

[Unidentified participant]: of control, but the number

[Emilie Kornheiser (Chair)]: of people you hire in your control would impact salaries. Similarly, health insurance costs are related to the number of staff you have. And so I just wanna make sure that we're I know we can't unpack everything.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: That's in the next slide.

[Emilie Kornheiser (Chair)]: Great, okay. Yeah, and one thing that they So we are reporting business managers reported to us, And one thing that they did signal, and I think that you've heard this, the SBA has actually provided testimony on this already this session, is that health insurance and salaries are not part of one collective bargaining conversation. And they have said that that actually reduces their levers in negotiation. So they wanted us to report that to you. We are faithfully trained staff. That is true.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Yes. All right. I won't read through the list, but it's a longer list. So in terms of what districts are spending money on, apologies, this is FY24, but it's not largely different than what we would see for FY25 or 'twenty six or 'twenty seven. This is a pie chart. So since we largely are in this building, we're talking about ed spending, I'm not looking at all of the school district spending here. We're not counting federal spending, for example. So we're looking only at the school district's general fund expenditures, which closely aligns with what their ed spending amount is from the state brand. So salaries and benefits account for close to roughly 70% of total spending. Purchased services, whether it's professional or property or other, which includes tuition dollars to therapeutic schools and public and private schools account for the rest. So this is a static view of what they spend their money on. And then looking at over time, how that has changed, we have the same limited general fund expenditures looking at a five year growth period from 2020 to 2025. First column is 2020 spending, then 2025 spending, and then the change from '20 to '25 is the five year change, the dollar amount, and then the percent change. So salaries grew by 39.5% in that five year period. And then some of the other These are by object codes within our Uniform Chartered Accounts, so it's salary and benefits, and then those same purchase services categories, supplies, property, then some debt spending. So salaries might have grown by a smaller amount or at a smaller rate than the other categories. But the very last column is the percent of the total change. Salaries and benefits accounted for roughly, again, 7% of the total increase in ad spend.

[Emilie Kornheiser (Chair)]: Do future slides get into what the Yes, value is for ads

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: I want to create more slides, but I ran of time.

[Emilie Kornheiser (Chair)]: So I think what we could do, and I think I heard a request for this from Rebecca Holcombe and Deb Cody, we can also do So we talked about uniform chart of the maps, right? The object codes are just big blocks that Ted was just speaking to. And the function codes is sort of an additional layer of detail. We always want to caveat that data. It's all about how the districts code it and are they coding it with fidelity. But I think we can come back with some additional breakout in the salary section. Percent of those direct are they coding? Again, are they coding as direct instruction versus student support services versus administration? So Ted is the keeper of our expenditure data, which is fantastic. We should have that view. So I think we've not

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: been And able additionally, we have another survey that we do called the teacher status survey that some of you are probably familiar with. Anecdotally from that survey, over time, it has shown that the total number of teachers, their FTEs, has gone down during that five year period of work for salaries. Total salary amounts have gone up because they get cost of living adjustments and salary increases. But the number of teachers who've gone down, the area that has seen the growth is support services for students. And that's the thing you get at ease and salary sets from home.

[Emilie Kornheiser (Chair)]: And the data you shared with us was 24, just

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Yeah, the pie chart was

[Emilie Kornheiser (Chair)]: 24. Are you able to go any more recent than that?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Yeah, we should be able to produce FY '25 data week or so.

[Emilie Kornheiser (Chair)]: And there was, you have produced analysis by object code maybe two years ago that you said That was up there. I'm sorry, by the next week And

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: there's also more detail within the function code, so you can get health insurance and the other benefits individually. Thank

[Emilie Kornheiser (Chair)]: you. Representative Burkhardt.

[Bridget Burkhardt (Clerk)]: So I understand you can break down salaries a little bit more into support services or teachers. I've seen some of that data that was provided to the task force. I guess what I'm trying to get my brain around is, is there a way to say, this is how much we're spending on special education? So you're saying that special education is not a cost driver because the districts that have higher identification aren't necessarily seeing higher purple spending. But my question is, much is other spending potentially getting squeezed in some of those districts to try to make space for? It's hard to say based on the data that we've seen today, is special education actually a cost driver?

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: I didn't say that it wasn't a cost driver. I said it doesn't seem to explain the variation in cost per pupil. So that's not the same. So it is a cost. It absolutely is a cost driver.

[Bridget Burkhardt (Clerk)]: But my question is really, how do we get at what we're spending on special education, really? Because it feels like we switch from talking about special education quickly to salaries versus benefits versus professional services. And obviously, salaries and benefits, some of that is special education.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: That can be part of the breakdown that we do for sure.

[Emilie Kornheiser (Chair)]: And I'm gonna schedule specific time on special education because there are multiple reports that came from the agency of education. Some are very comprehensive that we can look at and schedule a time for. It's linked in that report that we produced. Do see all of your hands. Just wait one minute. Okay. Representative Holcombe. I just wonder, I really appreciate your efforts. Is this data that could be made available to JFL, these data underlying

[James Masland (Member)]: Yes, yes.

[Unidentified participant]: That would be very helpful. I'm wondering, looking forward,

[Emilie Kornheiser (Chair)]: What do we know about the way contracts have been settled? So what's coming for increases with that and also what's coming for projected increase in health insurance? That's the capital. That means that the health insurance benefits separate. I

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: think when we get the actual line item detail in the budgets by February, that we'll be able to break that down.

[Emilie Kornheiser (Chair)]: But I meant projections for five years from now, the next five years, because I think that's, for me, that's important.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: That's certainly not something that I've done.

[Emilie Kornheiser (Chair)]: VIHI has done a lot of work to analyze that recently, and I can point you to past testimony about it. Some folks need the sports report to use specialists. I just wanted to be out there for months. In there. Representative Ode, I appreciate that. And we cannot rehash five years' worth of multiple task forces and commissions work in committee here and ever finish anything. Heard. Okay. I'd like to respond. There's a question about federal spending under ESSER. We actually did some analysis on this, and I live those ones. So what we did see is that during COVID, overall, per pupil spending went up and our overall ed spending went up. That's one would anticipate. We received, let's call it roughly half $1,000,000,000 in ESSER funds plus other COVID era funds for education. So what we see is that while overall spending went up, the percent of that spending that was federal dollars increased, not a huge amount. I mean, it was substantial when we're looking at the amount of money. But it went from basically 9% to about 12% at the height of the ESSER funds and the COVID funds, and it's gone back down to about 9%. Can you send past testimony about that? Sure, it's in our state twelve twelve report, so I'll send it. Okay, great. If you can switch off, thank you. And those funds are gone. But they shaped the schools that are still here.

[Unidentified Committee Member]: I was going to ask, the funds are gone, but the underlying infrastructure or the staffing or the program is still That's

[Emilie Kornheiser (Chair)]: how they spent the dollars. Yeah, so you're pointing to something really important. So if they use those COVID dollars, I'll say COVID, but we should answer, to hire permanent staff, they likely still have those staff. If they use them for time bound projects, then those may have ended and they might not still have that liability. So that, I mean, we talked a lot about that fiscal cliff, the FY 2025 fiscal cliff, and we had districts that experienced that for sure. It was just a vast amount of money to push into a small system. In a very short amount of time, I think districts did their very best to use I mean, we actually had a high rate of utilization. We really it was remarkable. We spent almost every penny of that $500,000,000 How they chose to spend it will have those impacts on their current fiscal life.

[Unidentified Committee Member]: The other question I had, when you're looking at the numbers and the percentages, and it was brought up about comparing to other states, I'm sure you're not doing this in a vacuum. You're looking at data from other states to say, oh, it's extraordinarily high or low or that kind of stuff. I don't know if that's anything that you've analyzed and just

[Emilie Kornheiser (Chair)]: I have a note for us to bring some

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: of that back.

[Emilie Kornheiser (Chair)]: So when we're looking at the pie chart, do we look different from other states is something that I can absolutely bring back.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Thank you.

[Emilie Kornheiser (Chair)]: Yeah. Are getting some an important question. We're getting some testimony from the Education Commission on the States. Excellent. I was gonna reach out to Andy anyway. Else have any questions? Yes. Representative Masland.

[James Masland (Member)]: Yes. Thank you. Just a little question on the growth by object code chart. Another purchase, TUIT. Remind me what TUIT is. TUIT's in Acha. That seems simple enough.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: Yeah. Sorry.

[Emilie Kornheiser (Chair)]: And we will say one of the anecdotally, one of the pressures that we did hear from business managers was tuition, and that's writ large. So depending on your district, that might be tuition to a non public school, to a new med school. It might mean tuition to another district, or it might mean tuition to CTE. And that was depending on the district in which CTE they sent to. We did hear that folks were seeing a real increase in tuition costs for CTE in particular areas of the state. So tuition writ large is a pressure, but then you've got to dive into every district in the past. Absolutely. Thank you. Thank you all. Really glad to have you here. Looking forward to much more testimony in

[Kelly Murphy (Education Finance Director, Vermont Agency of Education)]: the future. Thank you.

[Emilie Kornheiser (Chair)]: Thank you. Also, for all the work

[Unidentified participant]: you did during the past class.

[Unidentified Committee Member]: Trying to

[Unidentified participant]: get a lot of inquisition.

[Ted Gates (Senior Fiscal Analyst, Vermont Agency of Education)]: My pleasure.

[Emilie Kornheiser (Chair)]: Folks, despite all of your questions, we are a little ahead of schedule, and we are going to break until after lunch. Awesome.

[Unidentified participant]: Yeah. Let's

[James Masland (Member)]: I need the Zoom.

[Emilie Kornheiser (Chair)]: Do the report. Report? Is that done? I'll send you the study. Would folks rather go through the list of reports now, and then maybe have more time later possibly, or have this guaranteed time now and go through the reports later? Just need something to get that.

[Unidentified Committee Member]: I've got to scoot

[Unidentified participant]: out now. Well, I want you to

[Emilie Kornheiser (Chair)]: read some of those reports, and I don't think we should assign them to you without you. So let's We'll do it later.

[James Masland (Member)]: Okay. Great. A pick.