Meetings
Transcript: Select text below to play or share a clip
[Emilie Kornheiser (Chair)]: Good afternoon. It's Tuesday, February 10. And today, we are going to hear a school budgets update, have a conversation with Julia about the yield bill, and then dive back into our testimony on the Regional Assessment District. Hoping this week to really start narrowing our work a little bit and start returning to the text classifications language and the regional assessment district language with enough regularity that we can come close to finishing them, maybe even finish them so that next week, we can take testimony from stakeholders for the pieces that are missing and to make any needed changes there. Other highlights of the week is we're starting to get more bills from other committees. And so we're going to sprinkle those in. We're gonna finish our special education testimony that we did not last week. And we had a few requests from stakeholder groups for testimony, the Coalition for Disability Rights and the Vermont Network Against Domestic and Sexual Violence. And so we're taking some testimony from both of those groups this week as well and diving back into the budget. So that's the big With that, let's hear about our school budgets and how they're coming in. Kelly and Teddy, if want join us, thank you.
[Kelly Murphy (Education Finance Director, Agency of Education)]: If I record for the record, Kelly Murphy, Education Finance Director, and I've got Teddy Bates with me, the senior fiscal analyst.
[Emilie Kornheiser (Chair)]: Do you need electricity?
[Teddy Bates (Senior Fiscal Analyst, Agency of Education)]: No, I do not. So I can just share my screen right from here. Never mind.
[Emilie Kornheiser (Chair)]: Okay, cool.
[Representative Carolyn Branagan (Member)]: We're all good. I'm going
[Kelly Murphy (Education Finance Director, Agency of Education)]: go ahead and share my screen and just show what we have. Thank you.
[Emilie Kornheiser (Chair)]: So again, we're sort of moving towards the yield bill slowly, getting updates on how school budget numbers are coming in, and then we'll look at
[Teddy Bates (Senior Fiscal Analyst, Agency of Education)]: Okay. All right, all success.
[Kelly Murphy (Education Finance Director, Agency of Education)]: Yes. Okay, perfect. Thank you. So what I'm going do is just go through the memo that's posted online. The good news is that we are making steady progress in getting the district budgets in. So the last time we were in, we had about 29 or so. We're now up to 80, which is great, of the 119 that we anticipate receiving. So that brings us, at this point in time, we've got about 67% of the budgets in, which is great. The deadline for these submissions is February 15. And so once we reach that deadline, then we should hopefully have a full reporting for you at that point. I'd like to just point your attention here to what this represents of the whole. We are still building the FY27 file. So this will come in comparing to FY27 numbers once that file is filled. But for today's purposes, we are comparing to FY26. So these responses that we have in the 80 responses are representative of 69.9% of the long term weighted ADM and 69.3% of the education spending. So they're pretty close. And then just in terms of where we find ourselves, if we were just using the December 1 projection as a point of reference, we were anticipating a 5.8% increase at that time. And based on what we're seeing in those budgets that have come in, we're at about 4.1%. And so the last time we were in, we did indicate that it
[Julie Rutland (Joint Fiscal Office)]: would be about 3.5.
[Representative Rebecca Holcombe (Member)]: So you can see that that's kind of shrinking and we're coming closer to the 5.8. So it's still preliminary. This is still a good sign, but there's probably still more adjustment to be had. And so then getting into the tables here,
[Kelly Murphy (Education Finance Director, Agency of Education)]: you can kind of see where the budgeted expenditures offsetting revenues and education spending are coming in based on what people have prepared for us. And so there is a 3.1% change in education or budgeted expenditures. The offsetting revenues are down at 2.2%. And then the education spending, which we referenced above this at 4.1%. And then this last table here we put together, I added a line from the last time we were in to just show where we were projecting overall education spending to be. And so you can see this highlight here is where we're projecting to be. We took the 40 or so budgets that have not reported yet and grew them by the 4.1% average and came up with this projection. So you can see that there would be a change over fiscal year twenty six. So where we were projecting.
[Representative Carolyn Branagan (Member)]: Sorry about that.
[Kelly Murphy (Education Finance Director, Agency of Education)]: Okay. So you can see what the change is here. That's what I prepared for today. Any questions?
[Emilie Kornheiser (Chair)]: The districts that are not reporting yet, do you have a sense of if they, in past years, have been higher in gross, lower gross?
[Kelly Murphy (Education Finance Director, Agency of Education)]: Where do you
[Representative Rebecca Holcombe (Member)]: stack up? But I can certainly look at that.
[Representative Bridget Burkhardt (Clerk)]: Do we know what's driving the decrease in offsetting revenues? Is that folks having spent reserves last year that they don't have this year? Or is that federal money that's lower?
[Representative Carolyn Branagan (Member)]: I don't know, but I'm happy
[Kelly Murphy (Education Finance Director, Agency of Education)]: to bring that back, too.
[Representative Rebecca Holcombe (Member)]: Anyone else? Thanks for coming in. We'll be back.
[Emilie Kornheiser (Chair)]: Appreciate it. We're pretty close to deadlines, yeah? Are.
[Kelly Murphy (Education Finance Director, Agency of Education)]: So I do anticipate the next reporting will be more robust in terms of having most of the districts in and then also being able to maybe do a deeper dive into some of the specifics. Thank you. Really appreciate it. Thanks.
[Emilie Kornheiser (Chair)]: Julia, do you want to join us for a moment? Yes. So I didn't ask Julia to prepare much more in the way of new outlooks. She has a I don't remember if you No, great. Okay. We sort of were walking down a hypothetical path. And then I was like, I feel like at this point, this feels like spaghetti and not policy. So pulled back. But I'm wondering, is it helpful for people to look at what we looked at last week to just keep on bringing the policy choices to mind so that everyone has a chance to be thinking them through regularly. Jen Branagan, I saw you asked your constituents' thoughts on it in the weekend. And that was fun to read. Oh, really? Yeah.
[Representative Carolyn Branagan (Member)]: I'm glad you approved. Yeah. Really interesting. I'm Friend of my life, right?
[Representative Rebecca Holcombe (Member)]: Mhmm. We are in my life too. In your real life. Yeah. What
[Emilie Kornheiser (Chair)]: I'm starting As I am thinking about this when we're not sitting here, I'm starting to think more about what is the I think sometimes these conversations have been framed as, are we going to provide relief, or are we going to create a cliff? As very dichotomous decisions to some degree. And so I'm trying to think about what a three year ramp looks like. Or hill, whatever metaphor we wanna use. So, anyway, that's, like, sort of where my head is. I don't know if it's helpful for everyone to look at the Outlook again.
[Representative Charles Kimbell (Ranking Member)]: Yes.
[Emilie Kornheiser (Chair)]: Thanks, Charlie.
[Representative Rebecca Holcombe (Member)]: Good
[Julie Rutland (Joint Fiscal Office)]: afternoon. I'm Julie Rutland with the Joint Fiscal Office. So the Chair's point, the materials that are posted on the committee page under my name are the same materials that we looked at last week. So this is the education plan outlook that we looked at last week. As a note, this does not reflect the budget information that you just heard from Kelly from AOE about. Typically, as school budgets, as more data is collected with school budgets, we'll be inputting that number. At this point, it still is a little low based off of some of the outstanding districts. So dependent on where we are next week, I may come in with an updated Ed Fund outlook reflecting that new budget information. Madam Chair, do you want me to just briefly walk through what each of the columns represent? No, thank you. Sure. So this is what we looked at last week. We are starting here with the first column. This is FY26. This is the preliminary FY26 estimates, and that includes the assumptions of the BAA. Then here in column B, we have the December 1 letter assumptions using the updated data. You'll recall last week, I came in with updated data in the underlying modeling of grand list assumptions and data, as well as the updated long term weighted pupil count now that the agency has finalized those counts.
[Emilie Kornheiser (Chair)]: Julia, someone always asks me this question, so I'm going ask you this question. So we get monthly revenue updates. Will you update with the monthly revenue updates? No. Thank you for clarifying.
[Julie Rutland (Joint Fiscal Office)]: Just like your colleagues downstairs in house appropriations are building their budget based off of the consensus revenue forecast, the yield modeling follows the same process. We update the non property tax revenue source lines, so that's lines three through nine, only twice a year. And that's in July with the eboard revenue forecast, and then again in January with the January forecast. The only exception there that I will note is if there are policy decisions made to any of those non property revenue sources that would impact the amount of non property revenue coming into the education fund, compared to current law, then we would update that. So for instance, if there were to be the decision to decrease the amount of purchase and use tax to the education fund, we would see the downgrade in the outlook. Just like if there were to be a one time general fund transfer, that's new revenue or new one time revenue coming into that fund, that too is reflected.
[Emilie Kornheiser (Chair)]: Do you wanna go back to that? Sure.
[Representative Carolyn Branagan (Member)]: Did you have something written in the book, or?
[Representative Rebecca Holcombe (Member)]: I wasn't sure, actually. I was
[Representative Bridget Burkhardt (Clerk)]: planning to go through all the columns again. Had one specific column that I think might end.
[Emilie Kornheiser (Chair)]: Let's just jump to whatever column you wanna jump to. Forgive me if this
[Representative Bridget Burkhardt (Clerk)]: was asked last week. My question was-
[Emilie Kornheiser (Chair)]: We're doing it every week just in case. If it is asked, you can ask it again.
[Representative Bridget Burkhardt (Clerk)]: Yeah, because I think it was late last week. The property tax credit column, if we were to apply it to the property tax credit, what were the mechanics of applying all of that money to the property tax credit? Was it basically doubling what someone's property tax credit would be? Was it expanding who was eligible? How were the
[Representative Rebecca Holcombe (Member)]: mechanics done in the modeling that you did?
[Julie Rutland (Joint Fiscal Office)]: Great question. So this is referring to column F to catch everybody up. This is where we are using the entirety of the assumed $104,900,000 of one time general fund to increase the property tax credit. The way that it's done is by increasing anybody who will receive a property tax credit or is estimated to receive a property tax credit in FY twenty seven, increasing their property tax credit by 78%. The reason that it is done that way is because we can't expand the universe of who's going to receive a property tax credit in FY27. And that's because we don't have the data for the households which you may be interested in expanding the property tax credit to. You'll recall that the property tax credit is on a lag due to the reporting of income and the Homestead Declaration Form. So really, all that I and all that JFO have been able to think up, and tax, and former iterations of this committee have been able to think up, are changes to the property tax credits that folks are already eligible for. This was done a couple of years ago. There was a one time increase to the property tax credit. I think it was around 13%, which corresponded with the average bill increase.
[Representative Rebecca Holcombe (Member)]: That's helpful. Thank you.
[Julie Rutland (Joint Fiscal Office)]: And one more piece. The reason it's 78% is because I literally applied all $104,900,000 to increasing the property tax credit. And we really can only do the modeling as a uniform increase. So that's where the 78 came from.
[Representative Rebecca Holcombe (Member)]: SPEAKER Representative Waszazak, can barely
[Representative Carolyn Branagan (Member)]: SPEAKER Can you just remind me
[Representative Edward "Teddy" Waszazak (Member)]: what the cutoff for the property tax credit eligibility?
[Julie Rutland (Joint Fiscal Office)]: For qualifying point or the maximum credit? Both. Okay, so I want to make sure that John is agreeing with what I'm saying.
[Emilie Kornheiser (Chair)]: I told you that. I'm listening.
[Julie Rutland (Joint Fiscal Office)]: The maximum credit is 5,600 for the property tax credit?
[Kirby Keane (Legislative Counsel)]: That's right, yep.
[Julie Rutland (Joint Fiscal Office)]: Okay, thank you. And in terms of the eligibility cutoffs, the income cutoff is 90,000. So below 90,000, it's applied to the first 400,000 of equalized house site value. Above 90,000, it's applied to the first 225,000 of equalized house site value. There's a couple caveats. At some point, it is always cheaper to pay on property than it is to pay on income. And that changes every year based off of the growth in incomes and properties, as well as the setting of the homestead and income yield. And so the tax I don't know it off the top of my head, but tax has a table on website of the consensus breakeven point that we calculate each year. The other piece too is at 47,000 of household income and below, that's where households qualify for the circuit breaker or the super circuit breaker. And that's essentially dependent on which group you fit into. You can only pay a certain percentage of your income towards property tax. And that is in the form of credit.
[Emilie Kornheiser (Chair)]: And that break even point, I think in the public meeting, really most people outside of this room, including our legislative colleagues, is often thought of as a policy decision rather than a mathematical happening. Is there any way we can move with easier policy levers, like the way we're moving knees, that break even point?
[Julie Rutland (Joint Fiscal Office)]: Kind of. Yes, to your point, it is a math exercise. Jay Feldman and I do a lot along algebra, and then agree on where algebra landed. And the way, if you were to want to adjust that upper breakeven point, it would be through the relationship of the homestead yields and the income yields, because those are the typical changes that you're making year over year in the yield bill. If you were to change the thresholds, that also would impact the breakeven point. All of that being said, I think it's important to note or remind the committee of the concept of the squeezing of the balloon, pushing of the balloon. If you lower one household's property tax liability, absent any other changes, someone else's property tax liability needs to increase to make up for the relief you're providing someone. So it's really of how are you shifting the balloon that needs to be filled with just changes to the income statement.
[Kelly Murphy (Education Finance Director, Agency of Education)]: Representative.
[Representative Carolyn Branagan (Member)]: Sorry, I wasn't clearing my throat to get your attention.
[Kelly Murphy (Education Finance Director, Agency of Education)]: The way you had your hand
[Representative Carolyn Branagan (Member)]: up before. Yeah. Okay. Sometimes I understood. It's a very thing like a chart that will show us income sensitivity over time. John, last week, very kindly looked up during committee while we were ranting on and on about the fact that my figure of 3% for a starting point was incorrect. It was 2% and it came up and explained that all to me for the step number one. But now we are twenty five years down the road or more. Anything like a chart that shows how that has changed over time, and especially the decrease in
[Representative Rebecca Holcombe (Member)]: income? Okay,
[Julie Rutland (Joint Fiscal Office)]: I think there's a couple of different ways that we could think about providing more information, I can certainly come back. I think that one number that people often will look at is what percentage of homestead property taxpayers receive a property tax credit. So that has been decreasing over time. That is something we could look at. Another would be what is the overall cost of the property tax credit to the education fund?
[Representative Carolyn Branagan (Member)]: Has that also been decreasing?
[Julie Rutland (Joint Fiscal Office)]: Before commenting on a trend, I'd like to go back and look at the data. It really depends on the relationship of the tax liabilities. If you see that homestead property taxes aren't increasing by as much, the property tax credit doesn't need to increase by as much because it doesn't need to credit the same percentage of the bill. So we could look at that. We could look at the percentage of folks receiving a property tax credit. We could look at the breakeven point, at which point is it always cheaper to pay on property. All of that being said, that helps understand who is eligible for a property tax credit. It doesn't speak to how much those households' liabilities have changed over time. For a number of Vermonters, even if they fit into those buckets of the 90,000 and their house site, that equalized house site values under $400,000 it still is cheaper for them to pay based on property than it is income.
[Representative Carolyn Branagan (Member)]: Well, I appreciate whatever other
[Representative Rebecca Holcombe (Member)]: info you can bring us.
[Representative Carolyn Branagan (Member)]: It's nearly at town meeting time and I know my community, one of my communities anyway, thinks that almost everybody gets income sensitivity and I'm not certain that's true, because we are no longer farming as a basis for our economy. Instead, we are suburban outflow from gin and bananas. We've got a lot of people who commute. Anyway, I could go on and on about that, but whatever info you've got, I'd appreciate.
[Julie Rutland (Joint Fiscal Office)]: Sure. I can certainly follow-up. I will say that Madam Chair, do you want to interject? I Okay. I'll follow-up with that. The other thing I will say is I sent Sourcer the link last week, and I'll send it to her again to share with the committee, which is the tax department. And does publish by town the number of homesteads in that town that receive a property tax credit, the number of homesteads in aggregate, the average credit amount, and a whole slew of other things. You could even look individually at your towns and see what it looks like. Right
[Representative Mark Higley (Member)]: now, let's see what happens.
[Emilie Kornheiser (Chair)]: For me, one of the pieces of Act 73 that I felt really hopeful about was that we were able to make sure the property checks credit, because I think going to be much more I think more people are better off as a result of it just on the face. But there's also this secondary piece, which is it's going to be much more policy flexible in the future than this particular system is. Less of a balloon effect. And for anyone who wants to dive deep into the balloon, long ago, it feels like now, there was a summer task force that worked on an income based education tax. And that policy aside, the bulk of that report really describes that balloon in-depth. And so I think it's a really helpful thing to read, whether you're interested in that policy or not.
[Julie Rutland (Joint Fiscal Office)]: I will send that link to Sorsha. And we also put together, during that task force, a slide deck that had a ton of graphs about pushing the balloon. A little outdated, but the intuition is still the same. The other piece I would add about the difference between homestead exemption in Act 73 and the property tax credit is that with the Act 73 homestead exemption, households will be
[Emilie Kornheiser (Chair)]: able
[Julie Rutland (Joint Fiscal Office)]: to better understand their property tax liability for the coming year. Because as we know under the current system, there's two rates applied to two different bases. The homestead rate applied to the homestead base, the income rate applied to the income base, then we look at the difference between the two. Whereas the homestead exemption is just exempting a portion of the base, and that's it.
[Representative Rebecca Holcombe (Member)]: President Russell, what did you do?
[Representative Edward "Teddy" Waszazak (Member)]: Yeah, thank you. I was listening, but maybe I wasn't. Before you said so that they could better understand, can you restate the first part of that sentence? It was a two part sentence.
[Kelly Murphy (Education Finance Director, Agency of Education)]: I don't know what I said.
[Julie Rutland (Joint Fiscal Office)]: Well, you said, you, we are proposing to do something. For the homestead exemption?
[Representative Edward "Teddy" Waszazak (Member)]: So that we could better understand it.
[Julie Rutland (Joint Fiscal Office)]: I think that some of the gist of what I said was, and it's not gonna be verbatim. That's fine. I think the gist of it was that in addition to the chair's comments about the differences to the current property tax credit structure and the homestead exemption, Another piece of it is property taxpayers will be able to better forecast or look into the future, better understand what their liability will be.
[Representative Edward "Teddy" Waszazak (Member)]: That helps. Thank you.
[Representative Rebecca Holcombe (Member)]: Yeah.
[Representative Charles Kimbell (Ranking Member)]: I was hoping you could clarify something, because when Rutland Waszazak asked about the maximum credits of $5,600 but there's also the municipal side of it, too, which is another $2,400 if I'm not mistaken, correct?
[Julie Rutland (Joint Fiscal Office)]: I would like to defer to John.
[John (Department of Taxes analyst)]: That is right.
[Representative Charles Kimbell (Ranking Member)]: So for a total of $8,000 so somebody could qualify for it.
[Emilie Kornheiser (Chair)]: The Bermuda School comes out of the
[Julie Rutland (Joint Fiscal Office)]: general fund.
[Representative Rebecca Holcombe (Member)]: Thanks. And that balloon part is really interesting.
[Julie Rutland (Joint Fiscal Office)]: Actually, was that your first project? It towards the beginning of my time here, yeah.
[Representative Rebecca Holcombe (Member)]: In that vein, I'm hoping that before we pass the yield bill, we can explore the balloon effects a little bit. I mean, I think this is great work. It will also shift, I think it's 35 or 45,000,000 onto tax taxpayers who earn above 90,000. For taxpayers who don't qualify, whose incomes are above 90,000, this will shift some of that cost onto them. We also know that The property tax, when you say this, it's a property tax So the Ed Fund is self balancing. So when some people receive a credit, others will pay for it. And in the same way, since we have a number of pretty significant policy initiatives that are going to possibly be creating demands on the spectrum, could we at least put them on a timeline before we talk about how we allocate one time money so we can anticipate that? And I'm taking the chip. I'm thinking of the housing bill that's now working its way through the house. I'm thinking of UPK, which is likely to increase spending if that's something we choose to do. And I'm sure there are others. I'm also aware that when Act 46 happened, it was paid for with merger transition tax subsidies. And if we are
[Emilie Kornheiser (Chair)]: There's still a couple of those around, right?
[Representative Rebecca Holcombe (Member)]: If we weren't giving those subsidies to them, it's going to fall back into budget. So we should expect some increased spending in the transition as well related to the cost of merging. It would just be nice to have a timeline so we can understand what the increases in spending that we are voting for are going to be and how to and when they're going to fit.
[Emilie Kornheiser (Chair)]: So I asked everyone to look at their committees of jurisdiction walls and for policy areas that would reduce education spending. And if folks could be ready to talk about those definitely by next Monday. And if folks are feeling ready sooner than that, that would be great so we can compile them into a list. Send me an email when you're ready. And then Representative Holcombe, it sounds like you already have a list sort of going of some of those pieces, and we have a timeline that's already sort of set up for Act 73. So if we could start putting those two things together. I
[Representative Rebecca Holcombe (Member)]: think a lot of them aren't policy decisions in '73.
[Emilie Kornheiser (Chair)]: No, know. I'm saying put the We have an existing timeline from Act 73, and we could put those other items that you're talking about onto that timeline in order to create a more comprehensive timeline? We can.
[Representative Rebecca Holcombe (Member)]: I guess I still have extraordinary concern. I mean, I'll just pick the obvious that I don't what people are talking about at all, which is the loss of ACA subsidies and what's that going to be going on. And when you look at who is being impacted, hitting predictable income bands, but what I don't see us doing across all committees is laying those bands on top of each other.
[Emilie Kornheiser (Chair)]: I was trying to respond to your first request about the timeline and implementation.
[Representative Rebecca Holcombe (Member)]: Right. Those are also on timeline because those are also hitting. So I guess I don't even know the universe of things that are going to be hitting, in particular hitting taxpayers isostatic between 90,150 at their rates. So it would just be nice to know who those people are and what are the various directions from which we're putting the rates on.
[Emilie Kornheiser (Chair)]: And so I think I'm asking you the things that you are aware of, if you could put into a if you could begin the process of putting those together so that we can add them to a timeline, that would be great. And we can add it to everyone's committee work. While I'm speaking of committee work having nothing to do with education finance, there are a lot of bills that are coming here, and committee members have not necessarily been discussing them with me or giving me a heads up in advance. And so this is a third request for everyone to really spend more time with your individual committee of drug convictions agenda and gossip Thank you. Does anyone have anything else on the yield bill or Library of the Back? It's really everyone, just so you know. Except for maybe representative.
[Representative Carol Ode (Member)]: Representative Ode, hello. Yeah. I I still have the question of where geographically the uptake has been with the income sensitivity and where in terms of age group it's been. And then also, well, going forward, what the prediction would be with the new 73 situation.
[Emilie Kornheiser (Chair)]: So, representative Ode, I think Julia mentioned that she sent something last week that was what was town by town on paying on income versus all the other choices. If you want to take a look at that and then think about how that's going to shape your decisions about the yield bill that we're going to be moving in a couple of weeks, We can talk about that again next week.
[Representative Carol Ode (Member)]: Okay. Thank you. Yep. That doesn't include age.
[Emilie Kornheiser (Chair)]: We're not gonna get age. That's just not gonna be available.
[Representative Carol Ode (Member)]: Alright. Well, you know, I read that Vermont is, like, number one in the nation for people who have paid off homes. No more mortgage on their homes. So I think about that, and I just maybe that's the question I want answered.
[Emilie Kornheiser (Chair)]: If you want to have a preliminary conversation with Chris Delia, he's sometimes able to answer questions about mortgages. And I know that Austin at the chamber, the Lake Champlain chamber, brought some information to us about that last year as well. But just checking in to see if they have updates on any of that. Representative Higley?
[Representative Mark Higley (Member)]: So just to ask in regards to what representative Holcombe suggested about a timeline. Is there also money involved with that as well? So not just a timeline. Okay. I mean, we can add to that the RADS, we can add to that the non homestead residential category. Lot of money in this.
[Emilie Kornheiser (Chair)]: Yeah, and so one piece that I'm really curious about for us to build out the yield bill is sort of between now and when the RADs or the property tax credits would be implemented, what is the gap that we're looking at in order to keep property taxes stable while we sort of make those transitions, and then looking at what that spending would be and what revenue might be available once that happens. So maybe we can look at that later this week or next week, Julia. Thanks. Yeah.
[Representative Rebecca Holcombe (Member)]: Has JFO had any opportunity to look at the impact of the kinds of transition we're making on public behavior? I don't think any state has implemented a foundation plan that forces cuts to budgets. And what we do know in other states is that when you cut budgets, you get flight from schools, which in our case is flight from the system and will defect the funding. Has anyone done any research, tried to anticipate?
[Emilie Kornheiser (Chair)]: I think it's not even clear to us yet if we're talking about cuts, I but think that's a little outside of the yield bill conversation. I think that's more about the foundation formula, which we will take a little more testimony. But
[Representative Rebecca Holcombe (Member)]: it does relate to the issue of financial stability and decision. Sure.
[Emilie Kornheiser (Chair)]: Yeah. I think that's a great segue, actually. I understand that we have signed a contractor for foundation formula exploration. Can you tell us a little bit about that?
[Julie Rutland (Joint Fiscal Office)]: Yes, absolutely. So Act 73 required JFO to go into contract with a consultant or consultants for a number of areas of further study in Act 73. So that included updates to special education weights, factoring in potential savings for school district consolidation and how that would factor into the base and weights, CTE funding and how that would fit into a recommendations for how that would fit into a foundation formula, small and sparse by necessity, a whole host of work to be conducted. Then when that work is completed, to then train JFO and the agency of education in the methodology to recalculate, recalibrate, and replicate all of those findings so that we can have the capacity to consensus model that for folks. So all to say And not just for folks, but
[Emilie Kornheiser (Chair)]: because recalibration is described in statute.
[Julie Rutland (Joint Fiscal Office)]: Yes, thank you. There's a process that I don't remember the timeline, but it's every X number of years. AOE and JFO in consensus need to provide consensus recommendations related to recalibration, recalculation of the weights and base amount. So that's an iterative process. So we, JFO, had an extensive review process. I can talk about it in more detail if that's helpful, but it included the bid and interviews and a work lot to understand the different bids and contractors. And we have awarded and executed a full contract for the entire scope of work to AIR, American Institutes for Research. And that report So we are working with them to make sure that they have all of the data that they need to be able to do that work. And then they will be issuing a final report to you, among other committees, in December. And then they will be available for testimony in next year's legislative session while also training JFO and AOE.
[Emilie Kornheiser (Chair)]: And so as we have sort of random thoughts about things we would want to put into scope of work as we go about doing our work, how will that work?
[Julie Rutland (Joint Fiscal Office)]: The scope of work has already been established. The contract has been executed. So I have standing weekly meetings with the contractor to make sure and understand the work that they're doing, and they are an independent contractor that has agreed on a scope of work. So if there are changes, they can't be made. That said, one piece of the scope of work is to look into potential savings of consolidated districts. So that's one area where we will be working with the contractor to understand the conversation regarding district consolidation and what the contractor should or shouldn't be using their modeling to look into.
[Representative Rebecca Holcombe (Member)]: I'm a little, I know that the Agency of Education sent out class size minimum guidance on Friday, and I will use the word unusual to describe it, but it also has financial implications. And I thought the state board was doing class size guidance.
[Emilie Kornheiser (Chair)]: Let's stay focused on just questions that we have about that contract for now. Representative Masland?
[Representative Rebecca Holcombe (Member)]: Think we've been talking about drivers of cost in the head fund, and I hope that there are potentially significant drivers cost in the way they're defining process. Okay. So Yeah.
[Representative Edward "Teddy" Waszazak (Member)]: I'm not sure best how to phrase it, but if there's contractor out there doing this work on potential savings, I'm curious to know what their metrics are, how they're framing up their answer, what they're looking at.
[Julie Rutland (Joint Fiscal Office)]: For savings? Yeah. I can think of a couple
[Representative Edward "Teddy" Waszazak (Member)]: of different ways to go to it, not articulated that right now, but how they frame their question and come
[Representative Carolyn Branagan (Member)]: up with their answer depend on what they come up with. Absolutely.
[Julie Rutland (Joint Fiscal Office)]: And this is something that I will say probably about the contract moving forward. I don't want to speak for the contractor because it's not my work. That being said, we're still very early in the process. And I think as the contractor gets closer to that part of the work, I'll be able to talk about it in more detail. They did include in their original bid and the follow-up questions and in the interview process talking about the nimbleness of their modeling, because it's all conducted in Stata that, dependent on how things evolve, they should be able to parse out different metrics.
[Representative Edward "Teddy" Waszazak (Member)]: Thank you. I'd be certainly interested in learning more as it goes forward.
[Representative Carolyn Branagan (Member)]: Yeah, me too. Thank you very much.
[Kelly Murphy (Education Finance Director, Agency of Education)]: Is the contract with the
[Representative Bridget Burkhardt (Clerk)]: consultants available on the GFLD website to review? I know the RFP was, and I've reviewed that, but is the contract itself what's there?
[Julie Rutland (Joint Fiscal Office)]: The contract is not. Is there a specific I would just like to see
[Representative Bridget Burkhardt (Clerk)]: what the scope of work was that was signed off on.
[Julie Rutland (Joint Fiscal Office)]: I can talk about that. I can share that right now, if that would be helpful.
[Emilie Kornheiser (Chair)]: So
[Julie Rutland (Joint Fiscal Office)]: I actually thought that question may come, but let me just
[Representative Rebecca Holcombe (Member)]: Do you want me to
[Julie Rutland (Joint Fiscal Office)]: go ahead and share my So the scope of work was really built on the legislative language that JFO was charged with in Act 73. And then we tried to flush it out a little bit and make it clear what we were looking for. I did share this with Soursha in case I ended up sharing it, so it can be posted as well. So this is the scope of work. Do you want me to just walk through? I will say, if you were to be looking at Act 73 and the scope of work, it's almost going to be the same. So the consultant will conduct analysis and provide recommendations for updates to the new funding structure established in Act 73, a cost function foundation formula. So we've separated it into different tasks. The first task is to recommend updates to special ed weights in the cost function foundation formula established by Act 73 to move from special education weights based upon disability categories to a reliance on the provision of special education services. And then we included that it will include a detailed explanation, including data and methodologies used in the analysis. Do want me to just walk through each task? I think so. Yeah. The second task is to recommend updates to any other weights in the foundation formula determined to be empirically necessary for an adequate and equitable education, taking into account cost savings generated by new, larger consolidated districts. This is also almost verbatim from Act 73. And we included a little bit of additional context that the consultant shall clearly explain benchmarks used to determine an adequate and equitable education in the analysis. The consultant shall also clearly identify and explain the estimated cost savings from new district configurations. They shall include detailed explanations of findings and recommendations, as well as detailed explanations of data and methodologies and underlying assumptions used in the analysis. And this latter part is pretty consistent throughout. We wanted to make sure that we understood all of the underlying assumptions, all of the data inputs, everything that was used to reach any of their findings and then recommendations.
[Representative Rebecca Holcombe (Member)]: That's not a black box. Exactly. Representative Holcombe? That language two things. Does that assume that they need to have the updated maps to be able to estimate? And are they gonna make assumptions about continuing buildings? I mean, the savings don't come from merging. So I'm trying to figure out what they're actually looking at in terms of savings for larger consolidated districts. And then the second question is, the first cost factor analysis excluded tuition students. Is this analysis going to look at tuition students? Is this the impact of tuition?
[Julie Rutland (Joint Fiscal Office)]: So to answer your first question, which was related to cost saving Let me answer the tuition question, because I have already lost your first question. The tuitioning question, will it look at tuitioning students? It depends on the data available. That's something that we've been talking with the contractors about. The principal investigators, his name is Drew Atkinson. So this is something I've been talking with Drew a lot about, about the prevalence of tuition, especially in certain districts, and being able to account for it and look into it in greater detail. Ultimately, it will depend on the benchmarks used to determine an adequate and equitable education. If that data does not exist for certain student groups, then there can't be a regression analysis run against it. Does that answer your question?
[Representative Rebecca Holcombe (Member)]: I'll have a lot more later. It's Okay. Did
[Julie Rutland (Joint Fiscal Office)]: you want to rephrase your earlier question or remind me? Okay.
[Emilie Kornheiser (Chair)]: Okay. I think you're taking us
[Julie Rutland (Joint Fiscal Office)]: through task three. Okay, task three. So this is to recommend suitable Task three is to recommend suitable geographic measures for determining sparsity within the foundation formula. You'll recall towards the end of the deliberations last year, there was a big conversation of how to measure sparsity. And that's when John Adams from GIS referred to zip code as asking someone how much it weighs in feet. So
[Emilie Kornheiser (Chair)]: I remember our conversation on the People Waiting Task Force eons before that, where we had a really extensive conversation about water. Yeah. Yes. So, yes, it's
[Representative Rebecca Holcombe (Member)]: helpful, yes. Yeah, and will this be focusing at the district level or at the school level? Because we also got sparsity stuff from the state board, which is looking at the school level, because the assumption is that it's a school quality, not a- Both district and school. So if you have a very large, let's just take a very large Windsor County district that has Hartford at one end and Rochester at the other, if you identify that as a sparse history because the district does have some of
[Julie Rutland (Joint Fiscal Office)]: the most sparse area, do those sparsity weights also apply to Hartford? Well, the task is for the contractor to recommend would be Answers to
[Emilie Kornheiser (Chair)]: that question.
[Julie Rutland (Joint Fiscal Office)]: Okay. So really, what this is doing is, these are some of the big, outstanding questions, some of the questions that people have been talking about a lot that were being deliberated last year. And you all, along with the majority of your colleagues, voted for JFO to contract with someone to recommend answers to these questions. The next task, task four, is whether For the contractor to determine whether it costs more to educate a secondary student than an elementary student in Vermont, and if so, to recommend an appropriate weight to capture the cost differential. Excuse me. You'll see that same piece, that including a detailed explanations of findings and recommendations, as well as detailed explanations of data. You don't
[Emilie Kornheiser (Chair)]: have to read each sub paragraph. Okay.
[Julie Rutland (Joint Fiscal Office)]: I won't read them, but I really do wanna underline them where we're asking for enough information so it's not a black box.
[Representative Rebecca Holcombe (Member)]: If we know that some districts significantly underspend because they're counting on parents dropping off their tuition, how do you
[Julie Rutland (Joint Fiscal Office)]: estimate the cost of secondary education? That's also a question for the contractor.
[Emilie Kornheiser (Chair)]: That's why we have this person doing these things.
[Representative Bridget Burkhardt (Clerk)]: And is that covered?
[Representative Rebecca Holcombe (Member)]: Like, how do we know that we'll keep them?
[Julie Rutland (Joint Fiscal Office)]: That's something that I'm meeting with them every week. Pass Pass five is recommend how to account for the provision of CTE within the Vermont's foundation formula, funding formula. And we included that they must clearly describe how it would be included in the foundation formula, including the financing stream and the recommended funding amount. And then, the part that I like. I don't want to.
[Representative Carolyn Branagan (Member)]: Don't want to.
[Representative Edward "Teddy" Waszazak (Member)]: There's
[Representative Charles Kimbell (Ranking Member)]: too many details.
[Julie Rutland (Joint Fiscal Office)]: Detail the details. Yeah, nice catch. Next, we have task six. So this is recommend updates or changes to other components of the foundation formula, including the base amount. This would also include the weights, that would be required as a consequence of any recommendations from task one through five. So one of the reasons that JFO decided to go with a single contractor for this work is so that the contractor can do all of the work together, so that if you squeeze the balloon over here, to make sure that you're accounting for it in all of the other places in the funding formula. And so, this is just that explicit task that, based off of recommendations here, the other changes that would need to be implemented. This is the training piece for JFO and AOE staff to update the analyses in the future. We're requiring that the consultant must identify all of the factors, weights, and analyses that would need to be updated in future years, a recommended schedule for those updates, documentation at a level of detail sufficient so that we can replicate the results, and then training JFO and AOE staff to update and replicate those results in the future. Do you know if they're using the same methodology before, where the model was designed to estimate what it
[Representative Rebecca Holcombe (Member)]: would cost to educate all students to the average level of performance. Is that the same approach that we're taking in the study?
[Julie Rutland (Joint Fiscal Office)]: So, part of this is for the consultant to identify the metrics to measure an adequate and equitable education. So, they're looking into data in addition to scores. They're also looking into data of chronic absenteeism and other metrics that I can't think of off the top of my head.
[Representative Carolyn Branagan (Member)]: I'm sorry, what did you say to that acceptable level of performance per child?
[Julie Rutland (Joint Fiscal Office)]: Of education, yes. So I said this is the piece where all of this gets to the right If you're asking the funding level, it's like the right funding level for what? And so part of that is for the consultant to identify how are they measuring an adequate and equitable education. And that's because that is the language that JFO was charged with. And so task two says that the consultant must explain the benchmarks that they're using to get to that adequate education. Does that answer your question?
[Representative Carolyn Branagan (Member)]: Well, I'm just wondering how in the world we determine that.
[Emilie Kornheiser (Chair)]: That's why they get to be a contractor.
[Representative Carolyn Branagan (Member)]: I've said enough. That's, I
[Representative Rebecca Holcombe (Member)]: mean, and
[Emilie Kornheiser (Chair)]: the pupil weights in current law are also sort of based on a similar frame.
[Representative Carolyn Branagan (Member)]: Because what's adequate for her child might not be adequate for my child.
[Emilie Kornheiser (Chair)]: I think John may even have a lot to say about the word adequate, but we're not gonna skim right in.
[Representative Carolyn Branagan (Member)]: Oh, I can't wait. Thank you, Julie.
[Representative Rebecca Holcombe (Member)]: Any comparative analysis looking at neighbor states too, for example, or is it just looking at Vermont data?
[Julie Rutland (Joint Fiscal Office)]: That's something that we've been talking about with them about and wanting to make sure that it's not Vermont specific, but looking at national data or other states, it's challenging to compare based off of the way that we are actually met with him this morning, and we were actually having exactly this conversation of how to compare against other states when we have different statutes, different governance, different metrics. And so I guess the short answer to your question is yes, and it's an ongoing conversation in terms of what and how and where that's appropriate.
[Representative Rebecca Holcombe (Member)]: Yeah. Will they also be identifying specific policy decisions that may explain some of that vision?
[Julie Rutland (Joint Fiscal Office)]: Don't know. I would say that is a little outside of the scope of work. And getting into the final paragraph
[Representative Rebecca Holcombe (Member)]: that
[Julie Rutland (Joint Fiscal Office)]: we have here, within the scope of work, that this is the minimum obligation of the consultant and doesn't limit the consultant's ability to recommend additional updates or provide additional information. But I
[Emilie Kornheiser (Chair)]: would imagine, Representative Holcombe, that some of them just naming their assumptions, which they are very explicitly asked to do over and over again, would get to some of that question as well. Not necessarily, because I'm just saying some of it. I wasn't saying it.
[Representative Rebecca Holcombe (Member)]: I it addresses my concern, which is that we ask schools to do things that other states don't ask them to do. And if you don't have comparative data, you actually don't know that that's not how other states do it.
[Julie Rutland (Joint Fiscal Office)]: And I think that gets exactly to the point of where it can be challenging to compare against other states. So we need to be careful of comparing against other states and not comparing against other states, because what may look to be apples to apples at face value may, in fact, not be apples to apples.
[Representative Rebecca Holcombe (Member)]: I appreciate that so much, and I wish people were that careful. Other people were that careful. Thank you.
[Emilie Kornheiser (Chair)]: Task eight. They will have to come talk to us.
[Julie Rutland (Joint Fiscal Office)]: Yes. So we've included that he can come in person up to several times and also be available for remote testimony as needed. Again, minimum obligation. And essentially, that will be in constant communication. We have these standing weekly meetings. And I'm in the process of setting up meetings with our administration partners to make those introductions and make sure that everybody is communicating from the beginning.
[Emilie Kornheiser (Chair)]: Any other questions for Julia? Okay. Are you going to ask us to take a deep transition breath to start to change topics? Can we take a two minute break Do people follow through on that? That would have been good staying on this floor. Herbie at 02:15 on regional assessment districts. Still here in Ways and Means, and we are gonna begin our work return to our work on the regional assessment districts. Kirby made some edits and expansions since last we were together on this. And
[Julie Rutland (Joint Fiscal Office)]: as we go
[Emilie Kornheiser (Chair)]: through, note things that are working or not working. If you have things you wanna change, you have a responsibility to bring those back next time we're on this. That's all I'll it
[Representative Rebecca Holcombe (Member)]: go for you, Chittenden.
[Kirby Keane (Legislative Counsel)]: So, Kirby Keane, legislative council. Yes, as the chair said, we've expanded from just an outline to actual legislative language. So we've got 17 fun pages on regional assessment districts. A lot of those pages are on the appeals process, so if you weren't bored, I can help you.
[Emilie Kornheiser (Chair)]: I actually got a disagreement from an email about the appeals process just this last week,
[Representative Mark Higley (Member)]: and I was like, I
[Emilie Kornheiser (Chair)]: feel very well informed on this right now.
[Kirby Keane (Legislative Counsel)]: That's great. That's great.
[Representative Edward "Teddy" Waszazak (Member)]: That's great.
[Kirby Keane (Legislative Counsel)]: Let's make it exciting then.
[Emilie Kornheiser (Chair)]: So
[Kirby Keane (Legislative Counsel)]: we'll get into it. Before, as a refresher, we went through an outline of a lot of the decision points from the RAD report that was published by the department, which offered a lot of helpful details, and using that as a guide, and based on the feedback from going through the outline, I put together legislative language. Some of this has bones that existed in in Act 73, and this is building off of that. So the first section that we'll look at on page one is all from Act 73. It was the legislative intent that was decided last year. This is a language that's just meant to guide PBR in some of the places where they have deference. So PBR is to focus on having regional assessment districts that make sure that properties on the grant list are regularly appraised, property data collection is consistent and standardized across the state, and property evaluation is conducted by trained and served by individuals and firms. So those are your legislative intent for what you think matters for Regional Assessment Districts. And then we get into new language. So starting on line 13, this is a change from Act 73. We're under Act 73, the Regional Assessment Districts were to be county based, based on the RAD report is being changed so that it's more school district boundary based. We don't know what those are, so this is an attempt to have legislative language that could work that where you don't have to know what the districts are in the first place here. So it says that the commissioner shall identify in commissioner force meeting the Department of Taxes shall identify and establish regional assessment districts to effectuate the subchapter as follows. Number one, well, this is trying to do kind of multiple things at once. Right? So some of the language slightly contradicts itself. I'll just say that at the beginning, because you're balancing some different things here. So number one, where practicable, the commissioner shall prioritize regional assessment district boundaries that align with school district boundaries. If necessary to follow the other criteria under this subsection, the commissioner may establish more than one regional assessment district in a school district. That goes to situations like, say, a school district in Chittenden County that would have maybe a lot of parcels, and it might make sense.
[Representative Edward "Teddy" Waszazak (Member)]: To
[Emilie Kornheiser (Chair)]: be Too many
[Kirby Keane (Legislative Counsel)]: manageable for the appeals process, but plenty of parcels, if you cut it into two, still having plenty of parcels as far as having efficiency for attracting appraisal firms and such. So there is some leeway there for the commissioner to actually have one RAD or two RADs within one school district. Number two, where practicable, the commissioner shall establish regional assessment district boundaries that include more than one entire school district. So that's the opposite situation where you need to bundle together some school districts in order to get the right number of parcels. Number three, the Commissioner shall prioritize regional assessment districts that include a minimum of 10,000 parcels that comes out of the report from two years ago on assessments where the department had used an outside consultant that had suggested that, and that report in general has suggested that 10,000 parcels was a good size for an economy of scale. For some background, the department's pointed out that Vermont has something like on average, you know, fewer than 2,000 parcels in jurisdictions, and if you compare that to nationwide, you're looking at a nationwide average that's tens of thousands. So moving away from such a small amount, right?
[Representative Charles Kimbell (Ranking Member)]: Kirby, on number three, because on numbers one and two, you have more practical, but you don't have that on number three. It makes sense still to have that if you have a proposed RAV that is 9,000 parcels. I put that in
[Kirby Keane (Legislative Counsel)]: the first two because there is some conflict with one another, and so to avoid if there was some kind of challenge for it offers a lot of deference where you say we're practical and it says prioritize. So there's a lot of room for movement there. The third one, I thought that the committee was more determined, it still says prioritize, so it's not a hard cap, but it doesn't offer that extra, like especially extra like wiggle room, basically. You know, I don't think that the where practicable is necessary there, but that is just a message that there's deference.
[Emilie Kornheiser (Chair)]: This is not a criticism. This is a genuine question. What is the difference between the word practicable and practical?
[Kirby Keane (Legislative Counsel)]: It's essentially the same.
[Representative Edward "Teddy" Waszazak (Member)]: Did you see the differences there de minimis?
[Kirby Keane (Legislative Counsel)]: I've been told that people who don't work for JFO should not ever say that. Even as a joke. Okay, so number four, in establishing boundaries, the commissioner shall balance the need for districts with more than 10,000 parcels, so full reappraisals are conducted regularly and efficiently. That's just for context to give part of the legislative reasoning for why that exists. So to balance that need with the need to keep district size manageable for the administrative appeals process. So there's a lot of discretion for the department here, and part of that has to come out of, depending on what part of the state you're talking about, there's going to be very different needs around this. So in subsection B, we have after the initial establishment of regional assessment districts, the commissioner may modify district boundaries. So there's a process here for in the future as things change, let's say some school districts have a lot, the school districts themselves change, maybe because it's student populations in different places, there's an ability here for the department to come in and to modify those. It requires providing municipalities a year's notice, and to provide the reasons in writing why the change is needed to support the criteria above. Subsection C, member municipalities of IRAD shall fully reappraise every six years. This is the six year reappraisal schedule that was already in Act 73, but because of some of the ways things got moved around, it ended up in subsection C here. Big difference though is that municipalities under this language that you're looking at all throughout, it's built on the idea that right now, or you know for the short term at least, the municipalities have the choice to jointly reappraise under the RAD. They could still go out on their own, and that comes from recent department feedback through the RAD report and through the testimony that they think that after their stakeholder group, they have the opinion that it would be better to implement this in a way where it's not all mandatory right away, to meet all the needs that exist. So this is written that way, joint reappraisals will still be optional under the RADS. Subsection D is just to clarify that none of this is meant to change anything to do with municipal grant lists?
[Representative Rebecca Holcombe (Member)]: Someone over here has a question. It
[Kelly Murphy (Education Finance Director, Agency of Education)]: wasn't exactly a question.
[Representative Bridget Burkhardt (Clerk)]: It was more of a thought about, that's fine if one municipality, for that municipality, thinks it's better to go off and do their own thing with them. What about the others in its root? That kind of leaves them hanging if it was better for them to have, say there's one that's bigger than the other two, for example, and those other two are then left in the same situation they're in now, which is hard to find a contractor to do their work even if someone goes on. That was just a thought that pops. That's why I was sort of like, I'm not sure it's
[Emilie Kornheiser (Chair)]: a question or some- I worry about that scenario probably more than it's helping. So I'm curious how. What about this language makes you worry about it?
[Representative Bridget Burkhardt (Clerk)]: A municipal, I may conduct a follow-up review jointly with one or more other member of municipalities. So, say I don't know. So I'll just make up an example. So say I'm South Burlington, and for me, I would prefer to just be independent and go do my own thing and have my own coffee. Yeah, but
[Emilie Kornheiser (Chair)]: that's what we're gonna do.
[Representative Bridget Burkhardt (Clerk)]: But let's, yeah, St. George or some other group. If I go off and do my own thing, then they're kind of left with, it sort of defeats the purpose of having rats if we make it. So if there was a runway, perhaps, maybe the first time around, we kind of see how this goes. I don't know. If there's a way to meet both of those needs of not wanting to be mandatory all at once and completely switch over to doing all at once. But then the whole intent really is for all of us to be working together. Some more shells, fewer maze. Yeah.
[Emilie Kornheiser (Chair)]: Maybe a little bit. Okay. Yeah. Representative Higley?
[Representative Mark Higley (Member)]: My concern goes a little bit further in regards to other member municipalities that may contract jointly with one or more third parties to conduct a reappraisal. So that means that there could be two appraisal firms and you are going to contract with two appraisal firms, but wouldn't one appraisal firm be committed to just one of the, or to a number of the towns? I mean, don't see how it's gonna work where you could have two firms and not divide it up in I'm the
[Kirby Keane (Legislative Counsel)]: imagining a scenario would be something like maybe six towns get together and then they end up having to get two firms, maybe one for two of the towns and the other one for whatever. Like, you know, I think it was a drafting choice to say one or more there. It wasn't for any specific thing. It was just to not have language that seems to impose details on municipalities or restrictions on municipalities unintentionally. But I agree, I don't see a scenario where two firms are hired for one municipality. That would seem really messy. Certainly none of this requires anything like that.
[Representative Carolyn Branagan (Member)]: When Okay. You
[Emilie Kornheiser (Chair)]: say okay, Representative Higley, do you feel like your concern is satisfied with the language there, now that you've gone deeper into it, or you want to keep on thinking about it?
[Representative Mark Higley (Member)]: Well, it might be good if you could think of some wording in Kirby that would be added, that, you know, as you explained it, Yeah, I would hate to think there would be two firms able to roam over six towns.
[Kirby Keane (Legislative Counsel)]: Under this language, if that happened, it would be because the municipality wanted to do that.
[Emilie Kornheiser (Chair)]: Maybe we don't want a municipality to do that.
[Kirby Keane (Legislative Counsel)]: Okay. And then
[Representative Rebecca Holcombe (Member)]: Yeah, appreciate Rick's question because I had the same question. And just going back
[Representative Carolyn Branagan (Member)]: to what problem we're trying
[Representative Rebecca Holcombe (Member)]: to solve, think part of it is the inconsistency. And so I think there's horizontal, there's vertical within the RAS, and I think this is a question where you're eroding the consistency. And I just have to say again, I'm not sure I'm persuaded that the school district thing is important within the RADS, in part because one of the things we need is consistency across the RADS, and not to check on consistency across RADS too, just gonna say. Because I think that's an issue people have as well.
[Emilie Kornheiser (Chair)]: I feel very committed to minimizing CLA issues. And I think if possible, have one reappraisal within a school district, that would go really far into the CLA problem. But we'll get to that more later in the language, I think.
[Representative Rebecca Holcombe (Member)]: Part of it is getting everybody raised on
[Emilie Kornheiser (Chair)]: the twenty fifth. Yeah, absolutely. Yes, that is one part of the CLA.
[Kirby Keane (Legislative Counsel)]: Subsection E here expressly prevents municipalities from trying to appeal the inclusion into a regional assessment district. Don't know if this is a likely legal concern, included it because my understanding was that you would not want a municipality to have the ability to basically, through litigation, derail the wrap process for a few years. I mean, they could, to be clear, they could still, if there was actually an actionable thing that happened that they could go to court on, that would still be allowed. It just would be an administrative issue. So we have on page three, section thirty four seventeen. These are the guidelines that PVR is to establish to help bring consistency from RAD to RAD. This is all from Act 73, nothing's changed. Subsection B is significant because this this goes to the six year schedule in PVR deciding which RADs are which years under that schedule. Starting on line 17, we have section three thousand four and eighteen. This is the establishment of the Regional Assessment District Appeals Board. That was the most recent name recommendation from the department. So, you will have the acronym of a RAD AB, if people or the RAD Board, maybe the board of appeals to make it the RADBA. We need to get John in here to get his opinion. So it says there's established the regional assessment district appeals board for each RAD established under the sub chapter. The board shall hear appeals evaluations within its regional assessment district. That means hearing all appeals evaluations. Those that are related to a mastery appraisal every six years, but also those related to brandless maintenance and the changes that happen at the municipal level in between. So to be clear about that, there's been different versions going back to the last session.
[Representative Charles Kimbell (Ranking Member)]: So that wouldn't go back to the municipal listers you're saying or assessors about a grand list change.
[Kirby Keane (Legislative Counsel)]: There'd still be the grievances, but instead of any interim adjustments that are made that would under current law be appealed to the BCA, would go to this instead.
[Representative Charles Kimbell (Ranking Member)]: Okay, so
[Kirby Keane (Legislative Counsel)]: that's one way to think of it. Anything under current law that would be about property valuation appeal that would go to the BCA would go here. BCAs will still exist, they have other duties, but they would not hear appeals of property valuations. Were you saying there was a difference between a grievance and an appeal? The grievance is the first kind of more informal process between the property owner and the lister, and then the lister makes a final decision, and then that can be appealed to the BCA.
[Representative Charles Kimbell (Ranking Member)]: Alright, I don't think that's spelled out in here, right?
[Kirby Keane (Legislative Counsel)]: Not really, not really. This is just replacing the BCA role with the rad ab.
[Emilie Kornheiser (Chair)]: And the difference between a grievance and an appeal is other areas of statute?
[Kirby Keane (Legislative Counsel)]: Yeah, we don't have any language on the grievances here.
[Representative Carolyn Branagan (Member)]: Represent Branagan? So what we're talking about here is a scenario where we no longer have the low paying appraisers for it and the team
[Emilie Kornheiser (Chair)]: doesn't even hire No, we do.
[Kirby Keane (Legislative Counsel)]: We have all of that. Nothing changes with that.
[Representative Carolyn Branagan (Member)]: What do they do? Do they do?
[Kirby Keane (Legislative Counsel)]: Too much. Right? Too much work. The only thing the only duty that could be taken, and it's not necessarily so under current law, we're talking about mass reappraisal that are done, right, that are sometimes, you know, long periods of time happen between them, and for some municipalities, the blister or assessor for that municipality will conduct that mass reappraisal, but oftentimes it's hired out to firms that specialize in this. So for municipalities that hire firms already, that municipalities lister or assessor would not have their duties changed, because they're not doing that work already. For the municipalities that are currently doing it on their own, well under this language, they could keep doing that too actually, because the joint reappraisal is optional.
[Representative Rebecca Holcombe (Member)]: So you think it makes them different from the other talents in the district?
[Kirby Keane (Legislative Counsel)]: Yes, That's this language based on the recommendations from the department.
[Emilie Kornheiser (Chair)]: And what I'm hearing from the committee, and I'm not saying everyone voted for this sentence I'm about to say, I'm saying general vibe that I'm checking back in with the committee about, is that folks want to move to a little bit greater consistency than that.
[Representative Carolyn Branagan (Member)]: I agree that need to do that. What I'm a little worried about is Vermont, where you know who your appraiser is and you can talk to them when they come because you've run them all your life, and there's a comfort there to trust that I don't want to get rid of. On the other hand, I know that the town I live in has been fifteen years without a rehearsal, and we've tried to hire people and we can't. I know there's a need for this, but I'm being careful about what we're losing.
[Kirby Keane (Legislative Counsel)]: Yeah, so it doesn't change the local issuers and assessors and what they're doing now, really. Potentially, depending on the policy decisions you make, when it comes to the mass reappraisals, it may take that off their plate, that one thing, but the grand list maintenance that they do year to year and the tracking relating to homesteads, current use, property tax exemptions, and checking out those things. There's a lot that they do as far as maintaining the grant list that under this scheme they would continue to do. Okay. So subsection B here, did we get through A?
[Emilie Kornheiser (Chair)]: Yes. I don't know
[Kirby Keane (Legislative Counsel)]: if we got all the way through it. So we have these new boards that we're replacing the BCA's role. There's a provision stating that PBR will provide training and technical assistance to the board, but also other staffing and funding for a board shall be provided by its member municipalities. So PBR is not taking full responsibility for the administrative assistance. Subsection B, all municipalities within the jurisdiction shall be considered members. The board will contain at least one representative appointed from each member municipality and the representatives are appointed for three year terms of the legislative body of municipality. So it's like board, city council, whatever. As far as the number of board members possible, this language bases it on per 1,000 parcels in the municipality. So a municipality could appoint up to, it doesn't have to, it has to appoint at least one. Every municipality in the RAD appoints at least one representative to the board, but they could also appoint additional members up to one per thousand parcels in the municipality rounded up. So if you have 1,500 parcels, that would be, you could have up to two representatives on the board.
[Emilie Kornheiser (Chair)]: Yes. I'll just
[Representative Edward "Teddy" Waszazak (Member)]: say that I'm concerned about the size of the board getting too big to really function.
[Emilie Kornheiser (Chair)]: Well, it'll I think he's going to get to that. Anti warm issues. Next up.
[Kirby Keane (Legislative Counsel)]: So give you like an idea, based on the other parts of this language and what it's shooting for, is you're telling the Department of Taxes to have at least 10,000 parcels so that if assuming that that gets done, you would have at least 10 members, or up to at least 10, maybe fewer. Say in some cases, could have 30 or 40, conceivably, based on what we know about parcels in Vermont. So yeah, you could have 30 or 40 potentially, but that would mean that every municipality is maxing out. Having some experience on local boards and things, I think sometimes periods of times pass where there's a vacancy when they can't find someone. So you'll have those issues, you'll probably even have issues, I would imagine, sometimes with municipality that would struggle to even send their one that they have to send.
[Emilie Kornheiser (Chair)]: The part that when Kirby and I were doing, I don't know if I want to call it algebra, but it was sort of like a brainstorming, what's a minimum, what's a maximum, how could this possibly work conversation. And thinking through the fact that the entire board would not hear every appeal, that the appeals are a much smaller group of people. I think we'll get to that a bit. That's where it all worked.
[Kirby Keane (Legislative Counsel)]: Yeah, if that's your concern. And maybe I shot past your concern there. It's panels of three, is the way this is written.
[Representative Edward "Teddy" Waszazak (Member)]: Okay, so similar to these. Okay, because that's yeah. We've had issues with corn just on our inner city board, so I'm thinking.
[Kirby Keane (Legislative Counsel)]: So, it's panels of three, other ones are kind of in reserve, or they're going to be assigned cases, so to speak, so that the same three are not having to do every single case.
[Representative Mark Higley (Member)]: Joe, before we go If you go up to bottom of section A again, when it talks about public evaluation reviewers should provide training and technical assistance. Other staffing and funding for a board shall be provided by its member latest spouse. How is that proportionally going to be dished out?
[Representative Edward "Teddy" Waszazak (Member)]: Such a good question.
[Kirby Keane (Legislative Counsel)]: Under language, it's not addressed, so it's going to be up to those municipalities to work together. You're providing any guidelines or rules for that.
[Emilie Kornheiser (Chair)]: If you have a suggestion for how to do that well, please do so. That would be great.
[Kirby Keane (Legislative Counsel)]: That also lets me segue into one thing I did want to make sure I noted for you, and that is out of all of these things out of the RAD report that we're adapting here, the department's made it clear to me that the ins and outs of the appeals board, they don't feel qualified to speak on very much. So you can take their recommendations as the lightest touch or however you want to put that. And they've suggested that you get some testimony from people much more acquainted with municipal processes.
[Representative Rebecca Holcombe (Member)]: This may just pull a language issue that I'm not understanding. It says, a municipality may appoint one board member per thousand rounded up to the nearest thousand. Does that mean if you have a thousand round up to 2,002 members?
[Kirby Keane (Legislative Counsel)]: That's Kirby's attempt at saying, you know, rounding up to the next thousand. So if five you 100 parcels, you would have one representative because that would round up to 1,000. If you have 1,200 parcels that would round up to 2,000 and so you could have two. I think those are the right words. Maybe instead of nearest, I should say next. I would definitely call in Jim Bowe on that fifth grade math question. Okay, so we were on subsection C, abort shall elect the infected abort.
[Emilie Kornheiser (Chair)]: Specifically, are you willing to take on that fairly annoying task?
[Representative Mark Higley (Member)]: Yeah, I mean, I've taken on a couple of tasks here and come up with a little bit of an answer, but I can That's a tough one.
[Emilie Kornheiser (Chair)]: I know, it's tough one. But there's other ways. There are a few different ways that we do it for other things. Like communication union districts and supervisory unions. There's other ways municipalities come together to do things and pay for them.
[Representative Mark Higley (Member)]: It's really kind of an unknown figure year to year. It all depends on how many appeals you have, which tenants are involved in the appeal. Like you said, it's not gonna be all of them. It's gonna be three maybe. And
[Emilie Kornheiser (Chair)]: frankly, like some So, let's say you have two towns that are both in Iraq. One of them reappraised five years ago, and one of them hasn't reappraised for twenty five years. Probably the one that hasn't done it for twenty five years is going to have more appeals. Should they have a greater responsibility to pay for those appeals than the appeals coming from the town that just did it? I don't know. What's fair?
[Representative Mark Higley (Member)]: And it's my understanding too that in the report they recommended that there was like three out of the whole group of regional borders of authority, so to speak. One of those would be from the panel that was given. Did I read that?
[Kirby Keane (Legislative Counsel)]: This language actually precludes, if I am following your question correctly, it precludes a representative from sitting on an appeal from their own municipality.
[Representative Mark Higley (Member)]: Worth that. Something I
[Representative Charles Kimbell (Ranking Member)]: remember reading something about that and that would work. I I got a question, Mark is the right person to answer and I'm not sure, but what I'm not sure is in most large reappraisal of a town, the firm that does the reappraisal usually includes managing the appeals, and sitting in and hearing the appeals. What and I imagine that would be the same in this this case. But the municipalities also incur additional expenses for staffing.
[Kirby Keane (Legislative Counsel)]: Mhmm.
[Representative Charles Kimbell (Ranking Member)]: So I'm wondering if it if they are currently having that large expense and this is just the same kind of level of expense in hearing appeals. I don't know from a municipality's level or does this mean their budget goes up?
[Kirby Keane (Legislative Counsel)]: I'm trying to figure out. Yeah, okay, so in your scenario, reappraisal firm would be a party. It wouldn't be part of the RAP appeals board, and so that wouldn't change from current law. So whatever expense comes with that would be the same as now. Is there an additional cost you were asking about?
[Representative Charles Kimbell (Ranking Member)]: Just in the municipality, if members of the RAD board, they have to be paid by their respective municipalities, right, for participating?
[Kirby Keane (Legislative Counsel)]: They can be, or it could be all volunteer. Maybe compensated.
[Representative Edward "Teddy" Waszazak (Member)]: BC doesn't get paid now. It's a few.
[Emilie Kornheiser (Chair)]: Maybe they'll be driving somewhere and they would need mileage reimbursement. Or maybe not.
[Kirby Keane (Legislative Counsel)]: That provision's mostly there to just allow for a municipality that wants to do that to maybe recruit.
[Representative Charles Kimbell (Ranking Member)]: Alright, I was just trying to figure out if it needs another expense for the municipality they don't currently have.
[Kirby Keane (Legislative Counsel)]: Think Montpelier has at times discussed, the city government in Maupilier has discussed possibly compensating people on boards like this. And so for the municipalities that want to do that sort of thing, this isn't stopping it.
[Emilie Kornheiser (Chair)]: And we can take gonna, once we get through sort of one more round on this, we'll take testimony from all the people who know stuff like that.
[Representative Mark Higley (Member)]: This is just a follow-up on Charlie's question and maybe it should be eventually written into the guidelines around the overall process for appraisals, but the appraisers that we had did two grievance hearings, a pre grievance hearing and then a regular grievance hearing. Trying to alleviate anybody's concerns in advance of them coming to their grievance.
[Representative Charles Kimbell (Ranking Member)]: Yeah, like settle out of court and then, you know.
[Representative Mark Higley (Member)]: Yeah, right, kind of, yeah. But again, now that you mentioned that, I mean, it sounds to me like they're gonna create these guidelines for all appraisers to do the same thing.
[Emilie Kornheiser (Chair)]: They meaning the Yes.
[Representative Edward "Teddy" Waszazak (Member)]: So,
[Kirby Keane (Legislative Counsel)]: there are some provisions about electing an executive board to help manage all of this. Members will vote amongst themselves for that. Last And of all, the hearings held here will follow the law relating to administrative hearings. And 3419, the appeals process itself. So this is based off of the BCA process as it exists now within thirty days following the date of notice. I believe the BCA process under current law is fourteen days, but this thirty days was taken from language that was considered in this committee last year. So that's what that's why a lot of this language is based off of last year's discussions. Within thirty days following the date of notice, a person agreed by the final valuation decision of an assessing official, that language is used to cover both mastery appraisals and maintenance type appraisals. So they may appeal either of those things to the RAD. There's like a word to delete there. The RAD appeals board, An appeal of evaluation decision of a reappraisal decision that is erroneously made to municipality shall be considered timely if it would have been timely filed to the recent assessment district. This came up recently when it comes to the current use appeals, So we wanted to make sure we just covered that situation, and then there's an extra fourteen days for municipality to forward those erroneously filed appeals on because there probably will be taxpayers to notify their their town that they would like to appeal as opposed to the rat. The next subdivision on line seven here is the board shall schedule meetings to hear and determine the appeals no later than thirty days after the last date allowed for a notice of appeal. Because the fourteen days is built in, there's at least some question there if you want to think about whether that should be expanded because in this timeline you would have notice of the valuation, then you would have thirty days to appeal. But if you appeal it to the town, say on the twenty ninth day, and then the town waits fourteen days, forty five days have passed, so there's only about two weeks left for this thirty day period. And so the board, I don't know if boards will feel like that two weeks is enough or if they would want more notice or they would want more leeway here.
[Emilie Kornheiser (Chair)]: Thank you for flagging that.
[Kirby Keane (Legislative Counsel)]: Just something I'm not sure about. Notice of the time and place of the hearing shall be given by posting a warning. This is all the same warning and notice procedures that are followed for the BCA hearings now. This is where we have the provision that hearings will be conducted before a panel of three board members. So the language here does address how large these panels are. This is the same process as the BCA is now the highlighted provision there is the requirement that's in current law for the BCA to go and inspect the property is made optional in this language if both parties agree to waive it. We also have language about what happens when an appellate won't allow an appeals board panel to inspect the property, it means that they effectively withdraw their appeal, which is current law with BCAs. And then there's language that came out of COVID that's part of the BCA statute relating to electronic inspections in cases of emergency. And then subdivision three is the board shall within fifteen days from the time of inspection, issue a written determination, file it with the clerk of municipality in which the property is located, and with PBR. This is the same process the BCA follows now. Subdivision 4 is not withstanding any personal law contrary if the board does not substantially comply with the requirements in subsection and its appeal is not withdrawn. The consequences for basically the board making a mistake is that the value is set at a value that will produce a tax liability equal to the tax liability for the preceding year. That's how it's done under current law. This, though, I might need to revisit this, because this is specific to Mass reappraisal years. There may be a different approach that we would want to do for other
[Emilie Kornheiser (Chair)]: Pan seers? Because
[Kirby Keane (Legislative Counsel)]: doing it this way is an assumption that a mastery appraisal was just done for everyone. I think it gets frozen and I don't know. I'll look at that and make sure that that language works.
[Emilie Kornheiser (Chair)]: Okay, and we can I mean, is
[Kirby Keane (Legislative Counsel)]: Yeah? Tax has been very helpful in working these things out. I'm expecting to get some feedback from them on conforming language and other things, and they've already been very helpful with this. Subsection B, a board member shall not be a panelist for a hearing involving a property located in the municipality for the member's representative. There's that provision that we talked about before.
[Representative Charles Kimbell (Ranking Member)]: What do
[Representative Edward "Teddy" Waszazak (Member)]: you want?
[Representative Charles Kimbell (Ranking Member)]: Three board members, just silent on how they're selected from the whole board.
[Kirby Keane (Legislative Counsel)]: Presumably, it would be that executive board that works that out.
[Representative Charles Kimbell (Ranking Member)]: Should it say that's three members appointed by the executive board? I don't know how that's done another statute.
[Kirby Keane (Legislative Counsel)]: I mean, from my legal concerns, I feel like leaving that to be sorted out is fine. It's up to you for a policy decision if you have a process in mind that you would want them to follow.
[Representative Edward "Teddy" Waszazak (Member)]: I'll just say for one that's worth it at the BCA level now, it's just like a who wants to take Black Wall Street? Three eighteen up. Who wants to take Main Street?
[Representative Charles Kimbell (Ranking Member)]: Self sorting. Largest district in Maine.
[Representative Rebecca Holcombe (Member)]: Yeah. They've had I
[Emilie Kornheiser (Chair)]: also could imagine a scenario where we spell it out very explicitly, and then we have to change up the program tries to execute it. It might be it's sort of the opposite question of we don't do it, then someone comes and says, we need more structure here. It's yep.
[Representative Charles Kimbell (Ranking Member)]: Yep.
[Emilie Kornheiser (Chair)]: Thank you.
[Kirby Keane (Legislative Counsel)]: Okay, then from the RAD appeals board, there's appeals to the commissioner. The way that this is written, which is based again off of some committee discussion from last year, slight change from current law in that under current law, a party can choose whether they appeal to the Department of Taxes or to straight to court. There was testimony last year, I had a discussion with Department of Taxes today and they helped jog my memory. There testimony last year that you heard from, I believe municipalities, saying that it's a lot more cost effective for us to have appeals go to the department, because it's not as formal process, it's not as expensive. So the draft we had last year took the court out of it at this step. That's why the court was taken out, it's based off of testimony from last year and it was committee decision when you were considering this. And that's the version that you have before you write down. It's the same process as appeals to the commissioner, except for that change of removing the option of going straight to court. There is still the option here for the Department of Taxes to decide this is more appropriate for court, and the department can forward it to court rather than hearing the appeal at the department level. And I think that's at the bottom of page seven is that language. If in the opinion of the commissioner an appeal involves a complex or unique property or evaluation that would be best adjudicated by the spirit board. We also have this if an appeal was made to the commissioner and they forward it, it's considered timely. Okay, so the subsection is on for the last day, which appeals may be taken from a determination of the RAD appeals board. One of the parties may on written application of one or more taxpayers of the municipality. In this case, this is not the part. This is specifically on the municipality on a written application from one or more taxpayers of the municipality whose combined grand list represents at least 3% of the grand list of the municipality preceding year can appeal evaluation decision. This would be of a different property. And this would be, I think the department has done some research here. There's some history about why this happens at the BCA level now. So it's included here because of that. And it has to do with equity within the town. But we can talk about that more if you want. But I should probably come back. So when a taxpayer, one of the parties claims that an appeal to the commissioner is defective in any way, such as, you know, required information was left out, that it wasn't timely, something like that. On or before thirty days after mailing of the notice of appeal, the taxpayer or the party shall file objections in writing with commissioner and furnish the appellant or appellant's attorney with a copy of the objections. When the party so requests, the commissioner is required to fix the time and place for the hearing and objections, they shall notify the parties. So the commissioner has to make a decision on those objection on those objectives. This is just appeals process stuff. Subsection d deals with withdrawn appeals. Section E deals with the process for when the commissioner forwards an appeal to Superior Court. Subsection F has a provision stating that these appeals are done de novo, which means that the factual record and the decisions made at the lower level are not given deference, that the commissioner will start from scratch.
[Representative Charles Kimbell (Ranking Member)]: It
[Kirby Keane (Legislative Counsel)]: means the appeal is from scratch. The other way that an appeal could take place is basically that the factual record is preserved so that the appellate court not have the ability to say, oh no, we actually think that this other thing happened, and we're going to decide this case based on other facts. And that's that's that's not allowed for for some appeals, like in court, but for for this, it's it's de novo. So it's the commissioner can take in new facts and and the parties can introduce new findings.
[Representative Charles Kimbell (Ranking Member)]: Doesn't the commissioner also have to disregard facts previously presented, so if there was an appraisal done by either of the parties, then they couldn't consider but have to order a new appraisal?
[Kirby Keane (Legislative Counsel)]: I'm not familiar with that. Can't think of anything that would prevent the same facts being reintroduced, so to speak.
[Representative Mark Higley (Member)]: I can hear from
[Emilie Kornheiser (Chair)]: department and other folks on that.
[Representative Edward "Teddy" Waszazak (Member)]: This actually means from the beginning. Start over.
[Kirby Keane (Legislative Counsel)]: In Latin?
[Representative Edward "Teddy" Waszazak (Member)]: You can have the same witnesses over and over again, or you can introduce new witnesses from the beginning. Clean slips.
[Kirby Keane (Legislative Counsel)]: That would be wild if you're like, you have to introduce nothing but new facts.
[Representative Edward "Teddy" Waszazak (Member)]: So,
[Representative Charles Kimbell (Ranking Member)]: the
[Kirby Keane (Legislative Counsel)]: provisions here on bottom of page 10 deal with the findings and determinations by the commissioner and the process for making any changes to the grand list. Subsect subdivision two here at the top of page 11 deals with a request requests for an inspection, which the parties can do. The commissioners are required to conduct an inspection, whereas the Rat Appeals Board is required, but if there's a request, the commissioner then has to do that.
[Emilie Kornheiser (Chair)]: To be it's not the commissioner going and checking.
[Kirby Keane (Legislative Counsel)]: Nope. The the vision for this at this point through the department's recommendations to the RAD report would be that at the same time there would be a full time property valuation hearing officer. Currently, as you probably recall, PVR uses part time hearing officers. Under this version of things, PVR would have a full time hearing officer, so it would be that person.
[Representative Rebecca Holcombe (Member)]: This is written in the singular, but I assume it would also, if it was a group of owners appealing unison, it would be the same process.
[Kirby Keane (Legislative Counsel)]: Or we
[Representative Rebecca Holcombe (Member)]: treat them as a group.
[Kirby Keane (Legislative Counsel)]: You give an Yeah, example of
[Representative Rebecca Holcombe (Member)]: so in our town, there was
[Representative Carolyn Branagan (Member)]: a lawsuit
[Representative Rebecca Holcombe (Member)]: because more recent arrivals argued that their properties were being evaluated at a higher base than people who've been longtime residents, and they won. But where would that come through in this process?
[Kirby Keane (Legislative Counsel)]: I'm not connecting that with the
[Representative Rebecca Holcombe (Member)]: I think you would Yeah, mean, I think I need to just go through
[Emilie Kornheiser (Chair)]: the whole Again, ask the tax department as well.
[Kirby Keane (Legislative Counsel)]: Subdivision three deals with states of emergency like before, except for the commissioner appeals level. G is requirements for the commissioner to notify when it's when the commissioner's made a determination, notify the parties. And that's it.
[Emilie Kornheiser (Chair)]: We were trying to be subtle, but
[Kirby Keane (Legislative Counsel)]: Okay. The next section, we're getting near the end, thankfully. I'm running on steam. Probably obvious, you say it out loud. The next section is the beginning of some conforming changes that will need to be made for this. So what you have here is the appeals process to the BCA, which was getting repealed because it's being replaced. Yeah. Will need to be some more conforming changes,
[Representative Edward "Teddy" Waszazak (Member)]: so I
[Kirby Keane (Legislative Counsel)]: expect to need to update this a little bit more to make sure that I've caught all the conforming changes that need to be made. The next section is a change based on based on the department's request to make changes to the transition provisions that are in Act 73. So this section is the provision from Act 73, but all of the parts requiring the either PVR to stop ordering mastery appraisals or for municipalities to conduct mastery appraisals. There were provisions to halt those at certain times. The department has said that some of those things will be problematic in the transition for them. So they've asked for some of those provisions to be removed. For purposes of this language, removed all of them. I think you want to hear from the department about what, if there's any of that that they would want back. But this is basically to provide more flexibility for the transition than X-seventy three had. The next section is the equalization study. And it adds the provision that all municipalities within a RAD will be treated as a single entity for purposes of the equalization process. So you've heard testimony recently on that, and that's a department recommendation. And then the way this is drafted, there's repeals of the relevant act 73 secondtions on RADS. There's a section that's already taken place. It was the RAD report that's not being revealed. So this is meant to all replace that. I don't have the same contingency language that x 73 had, so I'll just note that. I don't know what the policies are around around that at this point. The next section starting at line 14 on page 16 is the per parcel payments that was part of the RAD report. What you're looking at now, so there's three per parcel payments conceivably. One is for the equalization study, that's $1 per parcel. That's a separate section of law that is not here, because it's already separate from the rest. But the other two are put together in the law, That is this $8.50 per parcel payment that's part of current law is for both reappraisals and for grand list maintenance. Department has requested that those things be separated out. So this language does that. A one would be a per parcel payment for grand list maintenance only. And part two is a different approach where it says during the year in which a municipality is scheduled to fully reappraise, a municipality may notify the commissioner in writing that is prepared to commence the full reappraisal. Within thirty days, the commissioner shall estimate the cost of the municipality's full reappraisal and transfer to the municipality be lesser of two thirds of the estimated cost or $66 per grand list parcel in the municipality. Where does that $66 come from? It's two thirds of what the department has estimated, that it should cost. Just generally.
[Emilie Kornheiser (Chair)]: And so there was a conversation at some point, and maybe in the report, about the department holding the money. That just seems like an opportunity to make a random another special fund that isn't really quite a special fund, that we're sending money but not really sending money, that we're holding the money we didn't send, and why not just send it when it's needed? That's sort of the thought there.
[Representative Mark Higley (Member)]: Interesting, Kirby, go back to forty-forty one A-one census of the grandmas. I think you referred to it the other way around. I mean, to me, $8.50 just for the maintenance of the grandmas.
[Kirby Keane (Legislative Counsel)]: Well, that's why I have that highlighted, thank you. I wanted to circle back to that. I haven't changed that. That amount is what's in statute now to include the cost of reappraisal. With the reappraisal being taken out of that per parcel fee, there's a policy question for you. How much should the brand list maintenance per parcel fee be? My assumption in this is that you don't plan to keep it at $8.50.
[Emilie Kornheiser (Chair)]: So would want to hear from, rather than us coming up with a random number, I'd want to hear from the department and the league about what they think the number should be.
[Representative Mark Higley (Member)]: That's what I looked into a little bit. Unlike us, we might buy an extra computer prior to reappraisal and a few other things, but it's not a lot. I mean, we can make it a lot if you want.
[Representative Charles Kimbell (Ranking Member)]: That's $66 so there'd have to be an annual allocation for scheduled reappraisals coming through that would be in the budget to go out to the RADS to pay for the appraisals, so it's not accumulating money anywhere necessarily. Yeah.
[Kirby Keane (Legislative Counsel)]: I've talked to JFO about this, and it would be part of the department's budget process.
[Representative Charles Kimbell (Ranking Member)]: And that assumes then that the municipality picks up the other three.
[Representative Mark Higley (Member)]: Sorry to go back a little bit, Kirby, but again, in reading the report, PVR talked about an appeal docket clerk.
[Kirby Keane (Legislative Counsel)]: Yeah, that's what we're about to get to.
[Representative Carolyn Branagan (Member)]: You're actually going forward, not backwards.
[Kirby Keane (Legislative Counsel)]: Yeah. It's just I neither I or the department at this point are prepared to give the exact language for that, but we're working on it. And my hope is next time you see this, they'll they'll be the language that's actually creating those positions.
[Representative Mark Higley (Member)]: So is that where the appeals would actually go to? Is a clerk
[Kirby Keane (Legislative Counsel)]: The the appeals to the commissioner that we were looking at? Yes. They would go to this new hearing officer position. Yeah.
[Representative Mark Higley (Member)]: And then if we can actually go all the way back to the beginning.
[Emilie Kornheiser (Chair)]: Can we just finish the effective date?
[Representative Mark Higley (Member)]: Is that okay with you?
[Kirby Keane (Legislative Counsel)]: So the effective dates are you know, the
[Emilie Kornheiser (Chair)]: sense of completion.
[Kirby Keane (Legislative Counsel)]: The repeals and the transition provisions and the effective date section are all on passage. Most of this is going to follow the act 73 timeline, which, was 01/01/2029 for the RAD changes. And then, the property evaluation hearing officers that take effect July 1 to set up, to set that up before rats fall on.
[Representative Edward "Teddy" Waszazak (Member)]: K. Back to the beginning. So could we go
[Representative Mark Higley (Member)]: back to the first page? And where it talks about property valuation is conducted by trained and certified individuals. Just
[Emilie Kornheiser (Chair)]: because you're scrolling, going back.
[Representative Mark Higley (Member)]: Yes. So is that certified individual certified through OPR or is that just a certification through PBR?
[Kirby Keane (Legislative Counsel)]: The department in the RAD report and in testimony recently have talked about the workforce development that they've said that this is going to be a necessary part to making all of this successful is to do workforce development around this. The three things that they've talked about. So as far as what this, you know, what they've talked about around this is how I imagine how they're gonna be implementing this this provision you're talking about. What were the three? If you could remember, there was there was talk about having a OPR certification.
[Emilie Kornheiser (Chair)]: Didn't go quite that far, but yeah.
[Kirby Keane (Legislative Counsel)]: That's something the department's pursuing. They're not asking for any legislative ask related to that at this point. They're also pursuing apprenticeship programs through Department of Labor and existing program.
[Emilie Kornheiser (Chair)]: And they didn't want anything from us on that.
[Representative Rebecca Holcombe (Member)]: If you
[Representative Mark Higley (Member)]: can just go back to the Summarize Review though, you're saying the department is looking at that. My understanding of the Summarize Review is either the occupation has to request it or the legislature has to request it.
[Emilie Kornheiser (Chair)]: So when they came in, I asked sort of explicitly, do you need something from us on that? And they said, no, not yet. So when they come back in, let's go a little I think maybe they were thinking that would happen next year, but let's talk to them when they come back.
[Representative Mark Higley (Member)]: Okay. Because
[Emilie Kornheiser (Chair)]: As agreed. Yes. Yeah. Yeah. I've got some revelations.
[Representative Mark Higley (Member)]: I'm sorry.
[Emilie Kornheiser (Chair)]: Oh, you're talking Yeah, I know the Secretary of State's Office also doesn't like it has reached their maximum of sunrise reviews without clear instructions and money, because they were sunrising a few reviewing a few too many sunrises a couple
[Representative Rebecca Holcombe (Member)]: years ago.
[Representative Mark Higley (Member)]: Any time that you have licensure involved,
[Emilie Kornheiser (Chair)]: the price of folks that are going
[Representative Mark Higley (Member)]: to do the reappraisal, is it going be $100 per se? The
[Kirby Keane (Legislative Counsel)]: third plan that they had under the RAD report was this was a legislative ask for the general assembly to provide funding for the Lister certification that already exists in statute. So that's under section thirty four thirty six. There's a certification Lister Education Programs. And to do that, they're asking for money.
[Representative Charles Kimbell (Ranking Member)]: I can't find that in their budget right now. I thought it was a million dollars, but it may not be.
[Kirby Keane (Legislative Counsel)]: 100,000. Yeah. We made it. Yes.
[Representative Edward "Teddy" Waszazak (Member)]: Kirby. Yeah. Page 15, line 14.
[Representative Carolyn Branagan (Member)]: Look at the screen.
[Representative Edward "Teddy" Waszazak (Member)]: The equalization study? Yes. That's all existing language.
[Kirby Keane (Legislative Counsel)]: Mhmm. So if if
[Representative Edward "Teddy" Waszazak (Member)]: part of our deal here is gonna change the gun list assessment date. Mhmm. This language did the same because that's
[Representative Charles Kimbell (Ranking Member)]: April 1. That doesn't help.
[Kirby Keane (Legislative Counsel)]: That is anticipated to be January 1. It's just this language isn't tackling that issue.
[Representative Edward "Teddy" Waszazak (Member)]: That's what you're waiting for.
[Emilie Kornheiser (Chair)]: Nice catch. Anyone else have any questions on this? Yes?
[Kirby Keane (Legislative Counsel)]: Not a
[Representative Edward "Teddy" Waszazak (Member)]: question. Revisiting the discussion of the panels and how prescriptive to be in setting those up. I'm also just thinking, let's say Washington State Kennedy was erratic, no, we're not doing it, but I think we should just leave them to self organize the panels because it would make more sense for people from the valley to go to Mount Pillars as opposed to driving all the way to Caboille. Think we just want a chair and panels.
[Representative Rebecca Holcombe (Member)]: Next question is GovOps.
[Representative Bridget Burkhardt (Clerk)]: Can I take a look at this? Okay. I just wanted know what the process was, because I'm guessing maybe probably on opinion once we start talking about VCA, no DCA.
[Representative Mark Higley (Member)]: There's another provision in there that I believe PVR was suggesting that possibly the reappraisals and the RADs are funded through the ED Fund and what we have in
[Representative Carolyn Branagan (Member)]: here, RADs
[Representative Mark Higley (Member)]: are funded through the municipalities, so can maybe find that eventually in report to see how it was specifically addressed, but I've got that in one of my notes anyway.
[Representative Rebecca Holcombe (Member)]: This
[Kirby Keane (Legislative Counsel)]: isn't directly related, but I mean, just so that the community is aware, we talked about the proposal fees and things. There's another way that municipalities are compensated under current law, which this does not change, which is that a portion of the ed ed taxes are retained by municipalities for the work they do in collecting that.
[Representative Rebecca Holcombe (Member)]: Kind of building into fiscal note?
[Emilie Kornheiser (Chair)]: Like a little one, maybe. Probably not. I'm not sure. It depends on what because none of it is spending for this year, so it's possible that it wouldn't. We would just get a conversation with CFO. But we can just
[Representative Rebecca Holcombe (Member)]: And the reason I ask is, you're expecting this First of this incredible work, are we expecting this to want that assessment in a period of time?
[Emilie Kornheiser (Chair)]: I'm sorry, lost the middle of your sentence.
[Representative Rebecca Holcombe (Member)]: Are we expecting this to lead to successful mass appraisal in the shorter periods, so then we'd see higher costs.
[Emilie Kornheiser (Chair)]: Assumption that's a good question for the department. My assumption has been that in setting the six year timeline, we've already did that. Yeah.
[Representative Charles Kimbell (Ranking Member)]: Just not to debate Representative Waszazak, but I think because it's multiple municipalities, there might be the concern that one municipality dominates and appeals court by always putting somebody on it. So I don't know. I have to think on that. So there might be something where no two from the same municipality I don't know, live in that red.
[Emilie Kornheiser (Chair)]: How about you two work it out amongst yourselves and bring us a proposal? Thank you, team. Okay. And Representative Higley, you're going figure out how it all gets paid for. Are there there's a we're going to get some information from the department in various places. What are other outstanding pieces that I lost back up? There was one more that you wrote down. I remember you writing it.
[Representative Charles Kimbell (Ranking Member)]: Whether or not we need to add any kind of reference to the grievance process versus the appeals process.
[Emilie Kornheiser (Chair)]: Just like a cross reference.
[Representative Charles Kimbell (Ranking Member)]: Yeah. It's not to replace the grievance process in which this happens and is further clarified in title, whatever, subsection.
[Kirby Keane (Legislative Counsel)]: I mean, the grievance process will the statutes for that will continue to exist. Yeah. But but, yeah, I can take a look to make sure there's no confusion.
[Representative Charles Kimbell (Ranking Member)]: Right. Right. And my thinking about this, I was a little confused as to what's a grievance versus an appeal.
[Representative Carolyn Branagan (Member)]: Mhmm.
[Representative Charles Kimbell (Ranking Member)]: Grievance with the the the assessor to figure out, no. You got my you got
[Representative Edward "Teddy" Waszazak (Member)]: my property wrong. That's not that
[Representative Charles Kimbell (Ranking Member)]: much square feet that I'm going study.
[Kirby Keane (Legislative Counsel)]: One difference is this language does specify a final decision, which legally means something because for the grievance process, the decision is not final at that point.
[Emilie Kornheiser (Chair)]: One thing that it's also for us to get clear that just because we don't understand the statute doesn't mean that people who actually follow this. What do know? Sometimes that's true and sometimes
[Representative Edward "Teddy" Waszazak (Member)]: was going to say.
[Emilie Kornheiser (Chair)]: Totally. No, and I didn't mean they will definitely. I'm just saying that those are different scenarios. Representative Ode, do you have a question? Thought? Would you like
[Representative Carol Ode (Member)]: to speak? Please speak. A little while ago, quite a while ago, Kirby said something like referred to a section where a city or town could appeal or could, no, bring a lawsuit, and then they wouldn't have to start to comply for whatever amount of time. So I wanted to hear more about that from Kirby, please.
[Kirby Keane (Legislative Counsel)]: Oh, yeah. That's just I was explaining why I included a provision expressly preventing municipalities from appealing their placement in a RAD. I was just trying to get out ahead of some things that could come up. It's not anything, any specific reason. So there's a provision saying municipality shall not have a right to appeal its inclusion in a regional assessment district. People can get creative with lawsuits. They could try to say, Oh, a mistake was made. We should have been in this other one because you do have this differential process for the container is deciding it's not so it's not the statute expressly saying town X is in RAD Z.
[Representative Carol Ode (Member)]: Yeah.
[Emilie Kornheiser (Chair)]: So
[Kirby Keane (Legislative Counsel)]: there's so so because because it's not so obvious like that, a town might want to try to challenge the commissioner's decision to put them somewhere. So just to prevent that, because if that if if that were not addressed, it's probably not likely at all, but it's at least conceivable that if a lawsuit did happen over that challenge like that, and then a court decided to give a temporary injunction, then that can mean that entire RAD would be affected for as long as that litigation takes place.
[Representative Rebecca Holcombe (Member)]: Sure.
[Kirby Keane (Legislative Counsel)]: So totally a policy decision for you, of course.
[Emilie Kornheiser (Chair)]: Think it's Whether
[Representative Carol Ode (Member)]: to do that. I I appreciate it. Thank you.
[Representative Charles Kimbell (Ranking Member)]: Yeah. Doesn't prevent a municipality from suing to withdraw from a rat though.
[Kirby Keane (Legislative Counsel)]: Yeah. It may not do much at the end of the day as far as if a court thinks that it has jurisdiction over a suit that's brought, this provision is not going to stop that. You know, we can't deny people their day in court when it's but it's but as far as the administrative process, like try an an attempt to appeal to the commissioner or something like that, like, this is specific that that's not allowed. And this and it might be helpful in some cases where a court would throw it out because of this. Maybe.
[Representative Mark Higley (Member)]: Great. Oh, yeah. That's it. So maybe I misspoke, and I think it was under Balla's proposal. They talked about making appraisals entirely funded by this.
[Emilie Kornheiser (Chair)]: You're the one proposing it, so do what you will. You're the one writing the mini proposal, so do what you will.
[Representative Carolyn Branagan (Member)]: Thank you, Kirby.
[Emilie Kornheiser (Chair)]: So we're gonna pick this back up next week. Is that right? Yep, next week. But if we can squeeze in some time before that, we might, just for the two pieces we're working on. If anyone has any ideas between now and then, please reach out to me and Kirby about them so we can have a full bill for our next round. I think at that point, it'll be close enough that we can send it to stakeholders and get their feedback. So we'd like to have it with enough notice for them to actually read it and such. Because if it's an association, they have to send it to their members and collect feedback from their members, collate the feedback. You all know that. Okay. Thank you, and I'll see everyone tomorrow at nine.