Vermont Legislature SmartTranscripts:

[Speaker 0]: Good morning, ways and means. It is Thursday, February 12, 9AM. We are continuing our work on pre kindergarten. And then at eleven, we are ideally finishing our work on H577. There have been a bunch of emails that we've received. My limited reviewing seem to all be in support of them. I believe they're posted under the bill. I don't know if I forwarded. They'll know.

[Unidentified Committee Member]: They're under today's date.

[Emilie (Joint Fiscal Office analyst)]: They're under today's date.

[Speaker 0]: And then at 11:30, we're hearing from Secretary Saunders about the full construction language in the governor's proposed budget. And then this afternoon, we're doing more work on the governor's proposed budget. And then at 02:30, we are doing an initial bill introduction walkthrough of 04:18. And then we have the floor. And I'm committed to being on time for the floor today, not because of the stars, but because there's a really great poet. Do I need

[Unidentified Committee Member (diarization mixed)]: a Michelle? I'm gonna go there. So

[Speaker 0]: pre k. Pre k. So Emilie and Ted are here to finish the presentation that they have been trying to finish with us for, I believe, three weeks now, but maybe four weeks. They've also, I believe, finished the report. And it's not on YouTube that we have not finished the presentation, to be clear. It is us. And we are we are so deeply engaged in this, and I think that's great. What we are doing today is we're going to finish this information. We are going to finish our key questions that we have. And then we are sending this all off to human services, who will then eventually send us something back.

[Emilie (Joint Fiscal Office analyst)]: With that, Emilie, you have the floor. Great. Thank you for having me again. I think when I was first here a couple weeks ago, you said, you never get to come here. Maybe that's That's funny. Maybe that's why it's taking a while. Anyway, so Emilie Bran, for the record, from the joint fiscal office. I'm going to share my screen. And I'm just going to jump right into the scenarios that we left off at, if that works. When I was here last time, we talked a little bit about how we did a quick overview of UPK itself and how that works. And then talked a little bit about we did went through the estimate financial exercise that we did Perfect. To look at about how much schools might be spending for kids. It was a very back of the envelope. If these are the numbers that we have available, this is what we come up with. But because we don't know what each individual public school is doing, how they're using other funds, how many hours they're providing, etcetera, it really it's not a great number to use for anything, but it's sort of a general average information. So we've done so where we left off last week is the bill that you are looking at, the language that had we sort of put together a couple scenarios for public schools around what would happen for public schools. Ted went through what would happen with private providers. This is looking at public schools. And so we have three general scenarios, again, very general, about what may happen at public schools with the changes as contemplated in the language you have in front of you. So the first scenario is what if universal pre K is provided in house, so all the slots are in the district? What happens if it's provided outside of the district? And what if it's both? And then in the third scenario, talked about it's all provided in house, but you have more demand for universal pre K than capacity within the public school. So in this scenario, too, this is how the money would move under the foundation formula with the building in front of me. So in this example, so we have hypothetical district A. There's currently 100 pre K pupils. There are 40 of them that are age three, and there are 60 that are in that four and five not yet in kindergarten age group, which is about what the split is, generally. It's about a sixtyforty split. So in district A, it has 75 pre K slots available. You assume under the new scenario that 60 of them are filled with the four and five year olds that are in that district, and that 15 remain unfilled. This goes now we're going take all those three year olds, and they're not going

[James Masland (Member)]: to be served in the

[Emilie (Joint Fiscal Office analyst)]: public setting anymore. They're going to go to private providers. So in this example, the school district would receive funding only for the 60 slots that are filled. So that would translate to about $900,000 in the education opportunity payment. This doesn't reflect any weights of those students that we just looked at, assuming none of these kids would qualify for English language learner or poverty weights. That would change the amount of education opportunity payment they would get. It's important to note, on the previous slide, we talked about that there were 75 slots, I think, in that district. But only 60 are filled, because only have 64 year olds. That school district has to pay for whatever the overhead associated with having 75 slots. So that is getting absorbed by that school district's budget, and it's not tied to how much payment they're actually receiving from the education fund. So that will drive some school districts' decisions in terms of how they're They're gonna have to figure out how many slots they can offer. And what's that marginal cost of adding a classroom? Then how many kids do they need to fully recover the costs of adding that classroom? So if District A had enough slots, if they were going to serve all of those children in house, they'd keep all of that money, all that $900,000 to educate those 60 pupils. They could get more money if those additional slots that they had available were filled. So if they get 15 more kids, they can fill those slots.

[Unidentified Committee Member]: And you're doing the $902,000 as the base, the 15,033 at a zero rate.

[Emilie (Joint Fiscal Office analyst)]: Yes, exactly. Yep. And the cost of operating each pre K program is going depend on the district. We don't know the individual expenses at an individual district level. So that's scenario one. Should I go into scenario two? Scenario two, we'll talk about district B. Same split. They've got 33 sorry, three nope, 43 year olds, and 64 and almost five and five not enrolled yet kids. We're going assume district B doesn't have any pre K slots available. They are sending all of their pre K kids to either other public schools or private providers. Of the 60 eligible pupils, 30 go to a neighboring public district, 30 go to a private provider. And recall, all those three year olds are now out of the public school setting. So in this example, they receive the education opportunity payment for the students attending other public schools. So the money would flow to district B, and then District B would send those funds to the public provider where those kids are attending. District B is not going to receive any money for any of the kids that are getting their UPK in a private setting. And that's how it breaks down. One thing that's important in sort of all of these scenarios, right? So, under the current formula, they get more money than they're sending to other schools, and that's generally to cover the administrative costs, because the districts have to manage where each of those kids are, make sure they're meeting all The UK requirements, both from the attendance perspective and also the educational requirements. In this scenario, If the money has to follow the kid, there's nothing left at the public school district to administer the program. So if all 30 of those kids were at public districts, they would have to manage the relationships with all of those public districts and cut checks accordingly and make sure they were there. That's how that would work. That's District B. And again, we don't know what the costs of the administration of that would be, but it would be borne by the district. It would depend on the district. So then the third scenario that we have is there's the UPK is provided in house, but there's more demand than they have capacity for. So same situation, same 100 kids. Maybe I'll say it right this time. 43 year olds and 64 year olds and almost five, and five not yet enrolled kindergarten. We'll assume they have 40 pre kindergarten slots. And of the 60 eligible pupils, 40 of them attend in house. 10 go to a neighboring public district, and 10 go to a nearby private provider. And the three year olds, they're still out, in case you forgot. So in District C, they receive an education opportunity payment for the 50 students that are attending public programs. So they retain the $601,000 they'll receive for the 40 students that are in the public school district. They are also going to receive $150,000 for the 10 pupils that are going to another public school, and they're going to send that public that money to the public schools where those kids are attending. And District C will also but they won't receive any money for the 10 children that are attending universal pre K at private providers. And again, we don't have any additional weights in here. This is just their education opportunity. So those costs are going to depend on the district. And District C is going to have to bear both the cost to operate their own pre K program and also any administrative costs associated with the kids that are attending universal pre K at a different public school. Any questions on that?

[Unidentified Committee Member]: All these scenarios, public district gets no funds for administering. Correct.

[Emilie (Joint Fiscal Office analyst)]: Yeah, under the current structure. Okay. So a couple of considerations about the new language and how it interacts with public districts. So the overall fiscal impacts are pretty unclear. And you sort of like we have to assume in isolation, all else equal, and it's hard to translate it to what's really happening on the ground. So in looking at some of the things that are changing in the bill, so requiring a UPK coordinator at each district will increase costs at districts if there's not already one employed. Some districts currently have UP coordinators. Some don't. So that would change and will depend on individual district. If you take the three year old out of UPK, if you remove that cost from the system, that will likely decrease costs to the education fund, because there's a whole population of kids that are no longer covered by the education fund. But changing the weight for the UPK kids to zero will increase the cost of the education fund. Going from a 0.46 to a zero or to a one will make it more expensive for the education fund to cover the four year olds. And if you're only counting UPK students enrolled in a public program and not paying tuition for the private centers, that will decrease cost of the education fund because that money going to those private providers won't come out of the education fund anymore. There's no real way to know the net ups and downs of any of these, because we don't have the data at the individual district level to know how these things would happen. But we know that they're going to work against each other. And we don't know the impact of the base and the weights are unclear. So as this funding potentially shifts, the districts may have to reconsider what they offer. Why is it unclear? Why is it unclear? Because I think if we don't know mix what is of students, pre K students, in terms of what weights they will qualify for, how that can get applied to the cost of the pre K programs that

[Speaker 0]: they Because it's currently the future, or because the AOE doesn't have the data? Oh, yeah.

[Emilie (Joint Fiscal Office analyst)]: It's a question we can't answer. So they're going have to figure out, as you change the funding stream for pre K, districts are going to have to reassess what they're actually offering and how they're offering it. If there are more students at the public school and the foundation formula, the weights may increase. Because one of the things that's happening right now that we've found anecdotally is that not all districts are looking at the pre K kids that they don't serve and figuring out what their weights are. So if you're a UPK student going to a private provider, the districts aren't necessarily collecting information about you, about poverty and English language order or any of the other information. So as there's a shift in this and the incentives start to change around what information is worth collecting and that how that changes what school districts get paid, that will start to shift, both for population. And so as all of these things are moving and working against each other, it's really hard to say what the actual impact would be to the education fund of all of these changes. And it's really going to depend on the behaviors of individual school districts, what happens in the CC Facts space and other to really have any idea of what's going to happen financially on the ground. So that's high level overview of some scenarios. I don't know if there are any questions on that. If not, I'll jump to yet another presentation that we put together to try to wrap it all up in a bow, if you will. Emilie, in that group of children that gave the private providers, and the school doesn't incur any cost at all, was zero there, those private providers, are they paid out of the Ed fund or the general fund or puzzle money of some sort? So right now, under current law, they would receive education fund if they're a pre qualified universal pre kindergarten provider for that student from the student's home district. Under the language that you were contemplating, they would no longer receive education fund dollars. The payment for their universal pre K would come from the child care financial assistance or the child care what's the contribution special fund, sorry, that's funded by the payroll tax that currently supports the CCPAT program. Okay, all right. And at the same amount that the kids going to the public school receive Or a different amount? I think that's to be determined. Chittenden, you want comment?

[Teddy (Joint Fiscal Office analyst)]: Temporary net joint fiscal office, as contemplated in the bill, it's in a similar way than how the statewide tuition rate is calculated for at 166, there'd be a similar determination knowing what the rate would be.

[Emilie (Joint Fiscal Office analyst)]: Thank you, Teddy. Is just observation for

[Unidentified Committee Member]: the committee. It's interesting, it's worth noting that the tuition is fixed, so the tuition is not weighted, and districts could have identified the demographics of those students and banked the excess tax capacity and they So generally chose not I think that's just worth noting. And I think it's an interesting contrast with what we do at the K-twelve level, where districts are also not compensated if we're gonna move to a foundation plan, or effectively underwriting tuitioning because the administrative cost is retained at the district, even if they pay the flat tuition. There's just very interesting parallels between K-twelve and pre kindergarten. But I think it's notable that there's no evidence that districts are banking weights for pre K students and using that to offset increases in their budget.

[Emilie (Joint Fiscal Office analyst)]: Share the next. So I think that before I jump in, I should say the report got published last night, finally, after blood, sweat, tears. All of the head really was like, get it over the line.

[Unidentified Committee Member (diarization mixed)]: We're looking at schedule as part of our

[Speaker 0]: handoff, as part of what we celebrate the release of the report, and as part of our handoff to the two other committees of jurisdiction on this, we're going to have a tri committee joint hearing to actually go through the report. A lot of that will be reviewed since he's

[Unidentified Committee Member (diarization mixed)]: been previewing it so effectively with us.

[Speaker 0]: But it'll also be our opportunity to bring the other committees into our 19 to some degree.

[James Masland (Member)]: Could you also, at some point, just explain which piece of this the various committees are going to look

[Emilie (Joint Fiscal Office analyst)]: at. Cool.

[Unidentified Committee Member (diarization mixed)]: That would be fun.

[Emilie (Joint Fiscal Office analyst)]: So this is also going to get into some of the consideration parts of the report and some of the I don't want

[Speaker 0]: to say

[Emilie (Joint Fiscal Office analyst)]: conclusions necessarily, because we're just like, here's how it works. Here are some financial incentives based on the academic exercise that JFO went through. Here are some things to think about Yes. So the report is out. It's on the JFO website. It'll end up on the legislative website as well. But it's very exciting. Teddy, you can join me whenever you want to, but you can also hang out back there. It's totally up to you. So just at a high level, I thought we would this was a chart that's in the National Institute for Early Education Research, the state of preschool yearbook in 2024. And just as we were digging into information and looking at all of these reports and things about pre K in The US, just I think this is an interesting chart in terms of On the left hand side, think it's the left, right? Yeah, the left, is access for four year olds in state funded pre K programs. Vermont is at the over 70, like we're at 76% of four year olds that are in universal pre K. And in contrast, if you look at what the rest of the country is doing in terms of access for three year olds, Vermont is the only green state in the country in terms of access for three year olds. And there's about 58% of three year olds enrolled as of 2024 in universal pre day. And those are the policy decisions that have been made. And this is who's being served through the UPK program as it compares to the rest of the country. And currently, Vermont is ranked number two in the country for access to preschool. This, as you recall, the report is framed around parents, schools, and providers. I couldn't help myself but to throw that in there just one more time. So the incentives that we talk about in the report, there's both general incentives, and they're sort of like this academic exercise that we did. Act 73 required that we report enough financial incentives specifically in the early care and learning system. But the financial incentives are only one component of the incentives that are driving the behaviors of private providers and schools and families. And just to note that we did not get into special education and the funding of special education for pre K students in that analysis. So in general, families and providers are all working together to try to find the right setting and the right cost of care for their businesses or their family pocketbooks or what the school district, what the community needs in terms of access to pre K. I think providers want to meet the needs of families in the broader community. Providers in the fence is not just private providers, it's also school districts. I think everybody who's in this ecosystem wants to make sure that three and four year olds have access. And as part of this analysis, there was really looking at those theoretical pieces. At the margins and this is true, I think, for policy generally. At the margins, there's always going to be scenarios where there are families who don't perfectly fit the mold or providers or districts or whatever. We see this in CCFAP and UPK and their interaction and where there are potential where the example that we talk about a lot is how CCFAP counts the hours, and they reduce the hours that you qualify for if you're enrolled in UPK. And if that changes, whether or not you qualify for a part time or full time certificate, that can impact behaviors. It's not like there are a lot of people enrolled in both of these programs, so these things are not likely It's not that everybody enrolled in these programs has this problem. But on the margin, there are likely some behaviors that are impacted by the way the programs are structured. And in general, universal pre K makes childcare cheaper for families, either by lowering the family chair for somebody enrolled in CCFAP or by reducing the out of pocket costs for somebody who's paying fully out of pocket. And again, so this is that example. At the margin, it can impact family decision making or provider decision making in terms of revenue coming in. That family share, right? Some families have to figure out, does it make sense to enroll in C? Is my out of pocket cost if I enroll in CCFAP higher or lower than if I just pay for child care out of pocket? And then how does UPK interact with that? Does that lower my out of pocket cost to the point that it doesn't make sense for me to enroll in CCFAP or not? This is just saying that example that I just outlined in words. And the chart below has the cutoff that if the median market rate was $325 per week and a family is at that higher end of the income end of things, it may be worth their while to pay out. It may be cheaper for them to pay out of pocket than to enroll in CCFAB. And also, it gets complicated by the fact that the providers can decide how much of the family share to actually collect. That can further drive behavior. So recall Ted talked a lot about this, but differences in revenues in terms of you can serve more preschool students than you can infants means that you get more revenue operating a pre K classroom than you do an infant classroom. So as a provider or as a private provider, it'd be more economically viable to serve preschool students than to serve infants. And part of how to make your business work is figuring out the balance between you can use the older kids to subsidize the younger kids.

[Unidentified Committee Member (diarization mixed)]: Do you mean difference in gross revenue or net revenue?

[Speaker 0]: My assumption is net, but I just I typed.

[Teddy (Joint Fiscal Office analyst)]: Yeah. They're functionally the same. There's not much difference in the cost of running an infant versus a preschool classroom. There's not. You might have like slightly different inputs, but you have to serve eight kids with two staff members in an infant classroom and you serve 20 by two staff. But there's not like your cost structure is in my experience.

[Emilie (Joint Fiscal Office analyst)]: Once you have the same number of teachers- You don't have

[Speaker 0]: the same number. I mean, I guess I'm imagining you have the same number of students and more or less teachers, and you're imagining you have the same number of teachers and more or less students, and that's why you're thinking about gross revenue and not seeing it as net?

[Teddy (Joint Fiscal Office analyst)]: Yeah, I think it's the same. We

[Emilie (Joint Fiscal Office analyst)]: can think about it as net revenue.

[Teddy (Joint Fiscal Office analyst)]: Okay. Yeah, I think both of them. Yes, in the report it's presented as gross. That's why I got stuck.

[Emilie (Joint Fiscal Office analyst)]: Okay. And depending on how these programs are structured I'm gonna

[Unidentified Committee Member (diarization mixed)]: pause. Yeah, I know.

[Emilie (Joint Fiscal Office analyst)]: So I was looking at it.

[Speaker 0]: The gross, is it more gross revenue per child?

[Emilie (Joint Fiscal Office analyst)]: Teddy, do you want to How is it more gross revenue?

[Teddy (Joint Fiscal Office analyst)]: We should be thinking about it in terms of revenue per classroom. The gross, if we're talking about exclusively in the CCPAT system, there are differential state rates for each child. And so per child, you're receiving more money per infant child and less money for preschool students. So yes, this is a statement about the revenue at the classroom level as opposed

[Unidentified Committee Member]: to the level.

[Teddy (Joint Fiscal Office analyst)]: The extra money you're receiving for CCFAP doesn't outweigh the fact that you can only serve any infants in a classroom.

[Emilie (Joint Fiscal Office analyst)]: All right, lots of different ways to use that word. Okay. Do they stop being infants and start being That's

[Speaker 0]: a question for not me. It's in our report,

[Emilie (Joint Fiscal Office analyst)]: I should tell this. I think it's three.

[Teddy (Joint Fiscal Office analyst)]: No, top layers are two to three. I think it's zero to two, but I'm gonna look it up.

[Emilie (Joint Fiscal Office analyst)]: Think it's zero to two, two and three, and then and then up kindergarten are the preschoolers.

[Unidentified Committee Member]: And toddler preschool. I mean, toddler preschool. Yeah.

[Emilie (Joint Fiscal Office analyst)]: Should I keep going?

[Speaker 0]: Yeah, and, Chen, just jump on in when you have an

[Emilie (Joint Fiscal Office analyst)]: answer to represent writing his question. Continue, Emilie. Okay. So, right, and in some cases, depending on how programs are structured, a provider can get both the CCFAP rate and the universal pre K rate for a child. In other instances, you'll only get CCFAP. It depends on this interaction between the family share and what income level the individual family is. And I think in talking with folks, providers are working with families to try to figure out what works for the family. Because at the end of the day, want to have slots filled. And so public schools are thinking about what different types of pre K programs are working best in their communities. The decisions about what's happening for pre K at a school district is part of the district from the school board. It's voted on by voters and how it fits into local education settings. And I think it's not done in a vacuum. They're looking at what other providers are in the community, what are the needs of the community, whether

[Teddy (Joint Fiscal Office analyst)]: or

[Emilie (Joint Fiscal Office analyst)]: not they have the actual infrastructure to offer programs. Not every school has the space, which is driving some of this decision making. And they have to think about the interaction between what's the benefit of having additional ADM for those pre K students and what that does for their tax rates and what the actual costs are of running a program and how does that net out. And they're also contemplating We saw I know there's no document of what every school district is doing at this point. I know there's some discussion about that that needs to happen and folks are working on that. But at this point, there are some school districts that are thinking about how they can leverage the CCFAP program or other sources of revenue to offer some to meet their UPK requirement, but then also draw in offsetting revenue from other existing financing streams, and whether or not that's a workable solution for an individual district. And that can also include, in some districts, we found that they operate the UPK program a program within the school, and then there's a nonprofit or some other private provider that operates in the building, a separate program from an accounting perspective for the rest of the day's childcare services. So there some hybrids. There's lots of ways that school districts are doing this. And they have to respond to all of these incentive community needs with the realities of the circumstances in different ways. And that has resulted in all what do I say? If you've talked to one school district about their pre K program, you know about one pre K program. So for example, these are the ones that we have in our report, and these are not meant to be representative. But in St. Johnsbury, they are offering a full day public school pre K program for all four year olds. And then all of the three year olds go to private providers. We don't offer any in house for three year olds, versus Rutland City that's doing all private tuition payments.

[Unidentified Committee Member]: St. Johnsbury operates their full day public program. It's a tuition four year old in addition to the pay full day for students for tuition of four-eleven.

[Emilie (Joint Fiscal Office analyst)]: I think they only have to pay the ten hour, the tuition rate for anyone that's switched out. So if a parent opts to not attend the public program and either go to another public school or go to a private provider, St. John's Ferry's obligation is only to pay the UPK tuition rate. So yeah, Rutland City is tuitioning all of their students. Did you have something to add?

[James Masland (Member)]: You just

[Teddy (Joint Fiscal Office analyst)]: slide. I have a question.

[Emilie (Joint Fiscal Office analyst)]: I Oh, have sorry. But yes, I'll get to that. And then I'll probably forget. But wave your arms. And then, Bennington and Rowland, they operate what they offer is different in each school and within the school districts. So, again, we don't have the statewide data. And you probably all are familiar with whatever program is offered in your local community, which is not familiar. My example, they do ten hours every other day for two cohorts of kids or not ten hours every day. They do two ten hour programs, one that's Monday, Wednesday, and one that's Tuesday, Thursday for a set of kids. So districts are meeting the UPK obligations in a

[Speaker 0]: lot of different ways. And then do they also

[Unidentified Committee Member (diarization mixed)]: offer ten hours at partner sites

[Emilie (Joint Fiscal Office analyst)]: in one place? Yes. So to the extent a parent always has the option to choose a different prequal, as long as they go to a prequalified provider and fill out the paperwork and meet all the attendance requirements, they can receive the universal pre

[Teddy (Joint Fiscal Office analyst)]: K. Ted,

[Emilie (Joint Fiscal Office analyst)]: you have an answer to the earlier question.

[Teddy (Joint Fiscal Office analyst)]: I do. It is infant are defined as birth to years, and then toddlers are two years to three years, then preschool is four, and five not yet enrolled in parent. Thank you.

[Emilie (Joint Fiscal Office analyst)]: So before we jump into some of the options that we came up with in the report and ideas, and I should Even before this part, is the options and the things to think about that JFO put in the report are by no means all of the options. They were just three options that we come up with as directions you could go. But there's a whole range of things you could do in this space. And to that end, one of the things we spend a lot of time talking about, both internally and with other stakeholders as we are putting together the report, is really trying to understand what the bigger goals are of making changes in the early care and learning space. And what does the general assembly want to prioritize going forward? Is this about workforce development and support? And we looked a lot at Act 166 and at Act 73 and what nope, not Act 73, Act 76. Act 76, the changes in the child care system to look at what were the goals outlined in those bills and how do they align with what the next steps are. So it is the changes in this system about kindergarten readiness for three and four year olds or different, or just four year olds, is about increasing participation in the public school system or reducing costs to the education fund? Or are there other things that are driving the decision making process and what those goals are going to drive what the best policy intervention is. And without going into this report, knowing what the specific goals were, why we're like, Here's some options, but we don't actually know what you end up doing is going depend on what you're trying to achieve.

[Unidentified Committee Member]: Go back to your initial bullets on child workforce development. Are you talking about developing workforce for early childhood education?

[Emilie (Joint Fiscal Office analyst)]: Are you talking about the role of early childhood education and that individual's potential success in the workforce? Or the ability for parents to stay in the workforce. It could be any of those things, right? All three are. All three. Yep. So in terms of and speaking about those options, just generally, as you contemplate the work that needs to be done per Act 73 and to try to align the pre K early care learning system with education transformation, you could focus primarily just on the universal pre K weight. That's the piece Act 73 that needs to get looked at. And you can make limited changes to it. And at some point, there's going to be a need to align UPK with the foundation formula, In terms of major changes to the system, in terms of how it interacts with CC, FAP, how many hours kids receive, you could leave it largely unchanged until you really get education transformation off the ground and rolling and figuring out if there's buildings that have capacity as things start to shift and move in individual districts. Or take a more comprehensive approach, evaluate the programs and the funding streams really in-depth, and figure out what a comprehensive change would look like and how that would change the whole early care and learning ecosystem. And really anything in between. There are lots of small tweaks you could make. There are major changes you could do. So one of the ideas that we've put in the report, and this is not endorsing this idea at all, but just through the exercise that we have gone through over however many months it's been since we were charged with this report. But thinking about money follows the student policy, sort of similar to the tuition for independent schools. So right now, in Act 73, under the foundation formula, the money would follow the kids. So, it would provide parity between what's going on with independent schools and for the private pre K providers in terms of receiving the amount of money. Like, if it has been determined that that student should receive a different amount of money because of the characteristics of that student, then that money travels with that kid. Have to think of And in thinking about how this works in the current universal PK structure, right? So if money follows the kids, if the weights aren't changed, home districts would gain a tax capacity for the different weights, but send the statewide tuition, and what the interaction is between those two things.

[Speaker 0]: But you said if the current structure is maintained, do you mean end seventy three is implemented?

[Emilie (Joint Fiscal Office analyst)]: So, yeah, I think I'm looking at this again this morning. Current structure is maintained. Home districts will gain the tax capacity from the different weights. They wouldn't gain tax capacity, they'd gain money. They would gain the money, yes. Okay. So you have to pay And it's a little tricky too, in terms of when any changes would go into effect. Like, would they happen before Act 73 fully rolls out or after, and that would change tax capacity if it goes before or if it happens when 73 goes, then it would change the education opportunity payment.

[Speaker 0]: Representative Asz?

[James Masland (Member)]: Thank you. On options. Focus primarily on universal pre K, wait, or take a more comprehensive approach? Are we gonna get input or other policy committees gonna come forward with a desired approach? We are, we

[Speaker 0]: have this block of testimony. We are gonna finish our list of questions. And then we are handing that list of questions to the House Human Services Committee, who will do a lot more work on this. And then I'm gonna keep on talking and answering your question. And then the House Education Committee will weigh in on that. They will be working collaboratively. As part of that handoff, we are gonna have a joint hearing, all three committees, to unveil and review the finished report next Friday at one location TBD.

[Teddy (Joint Fiscal Office analyst)]: Thank you.

[Speaker 0]: Yes. And that will be an opportunity for us to, to some degree, catch up the other two committees on our thinking thus far and for us all to hear the same information at the same time. Yes. Representative Ode, hello. Nice to

[Carol Ode (Member)]: So see nice to be back. So this last oh, I forgot. Never mind.

[Emilie (Joint Fiscal Office analyst)]: I'm sorry. Thought I'd tricked that.

[Speaker 0]: Excuse me, Emilie. Sorry.

[Emilie (Joint Fiscal Office analyst)]: I'm sorry. Nothing to be sorry about. And as I mentioned before, at this point, it's not clear that districts are collecting the comprehensive data on students in terms of how they would qualify for other weights. Some districts may are I think in what we've seen, some districts are, some districts aren't. But because we don't know how many kids from each of those districts are going to private providers or public providers, there's no way to know if they're collecting it just on the kids that they're serving in their school district, or if they're also collect We just don't Some districts are doing it and some aren't. And so, under this scenario where you send all of the money with the kid, the districts that are managing the movement of kids are left with no money to administer the movement of the students.

[Speaker 0]: Okay, ask a question. So,

[Unidentified Committee Member (diarization mixed)]: could we put something in there that would allow school districts to sure would. Yeah. Okay, and then the other thing is, if the money is going to go to private and to public, does the public school system have to comply with particular quality standards that the privates don't have to comply with?

[Emilie (Joint Fiscal Office analyst)]: Under the current universal pre there's requirements to be a universal pre K provider, and the school districts and the private The private providers have to follow those educational requirements to become a pre qualified provider, and the public schools have to demonstrate that they So, do the public schools have to

[Unidentified Committee Member (diarization mixed)]: do more than the private?

[Emilie (Joint Fiscal Office analyst)]: Yes, I believe so. I think the difference is that the public schools have to have a licensed teacher in all of the classrooms versus the private providers have to have a licensed teacher on Yeah,

[Unidentified Committee Member (diarization mixed)]: the policy question that's raised for me is, how would we ever give the same amount of money if there's no licensed teacher to the practice?

[Speaker 0]: I think that's a great question for the two committees that do sort of the regulatory side of this.

[Emilie (Joint Fiscal Office analyst)]: And there's a report, I can't remember, I can send That

[Speaker 0]: is actually, You have brought back a question that has Certainly sitting in the room.

[Emilie (Joint Fiscal Office analyst)]: Yes. No,

[Speaker 0]: nothing to apologize for.

[Emilie (Joint Fiscal Office analyst)]: There's a report that DCF and AOE did, I believe, last year or the year before that kind of outlines, here's what everybody has to do in the program. Just lines that outline. It reminds me,

[Unidentified Committee Member (diarization mixed)]: again, if we said the weight were one, then there's also the additional weight for EL or poverty.

[Unidentified Committee Member]: They collect the data. We're not sure if

[Emilie (Joint Fiscal Office analyst)]: they yeah. So

[Unidentified Committee Member (diarization mixed)]: So, there I pause again, wonder, will the dollars be used to provide the extra help, educational opportunity for the weighted student institutional weight. It's going to that. Can

[Speaker 0]: you write that down yourself right now? And then Emilie is done, we'll collect all the questions that we still have sitting.

[Unidentified Committee Member (diarization mixed)]: Super cool. It was a question for us in our speech district

[Speaker 0]: for you. Oh, it's a great question. Yes. Absolutely. Yeah.

[Teddy (Joint Fiscal Office analyst)]: Another

[Speaker 0]: option. Sorry. The reason I'm asking you to write it down is the time it takes to have someone else write it down is yes, great. Okay.

[Unidentified Committee Member (diarization mixed)]: Remember the billings with the choice to ask Another

[Emilie (Joint Fiscal Office analyst)]: option is you could prorate their weights based on the number of hours they're actually provided. I think one of the questions in terms of reviewing UPK weight right now is it's negative zero point five four. Where did that come from? If one school district is providing an all day program and a different district is only doing the tuition payments to the private provider, how do you reconcile that they get the same those kids all get the same weight? And

[Speaker 0]: so when you say Okay, so when you say you're referring to the base weight, basically.

[Emilie (Joint Fiscal Office analyst)]: It is not, okay. Right, but you could link it to the hours that are provided.

[Speaker 0]: And then the weights that would get added to that weight, say poverty.

[Emilie (Joint Fiscal Office analyst)]: You could prorate it, or you could just add it could be completely additive, depending on

[Speaker 0]: And really different impacts about right now, we're talking about a future law where we would not have a variable base. But there's such different impacts of having a variable base and what those weights mean under a variable base. We would want to be careful not to do that in this situation.

[Emilie (Joint Fiscal Office analyst)]: Right, yeah. You are a school district, you ought to do a half day pre K program. You get half a weight. If you operate a whole day program, you get a whole weight. So then you're kind of linking the amount of funding to the amount of education that is provided. However, this would be incredibly administratively complicated, both for school districts and for trying to figure out how much money is paid places, especially if you start to get into if a kid goes to a private provider outside of their home district, and what are those interactions? And you could This contemplates both what is the school district providing, but then how could you link the tuition payment to the private providers to the number of hours of UPKs they're providing. Why is

[Speaker 0]: it administratively complicated? For CCFEP, they're collecting the number of hours for those payments, aren't they?

[Emilie (Joint Fiscal Office analyst)]: I think if you were starting to ask the school if the payment to the school district was dependent on where the parents were choosing to send their kid and how many hours of universal pre K were provided at that private provider, depending on how much burden you put on the school district to calculate and keep track of, I've got 30 kids, and they're going to 10 different private providers. And now I've to keep track of how many hours of UPK they're getting and then report that back to figure out how many What the weight is for each of those individual kids. That could just a lot, depending on the size of the district and how complicated it got. But it's a thing. Yeah. Another thing to consider is change how UPK is counted when the CCFAP certificate amount is calculated. Right now, if a child is enrolled in universal pre K, when DCF calculates how many hours of CCFAP that child gets, they subtract the ten hours from that. However many hours that child qualifies for, less ten, where that puts them on the part time, full time thing is what drives incentives to enroll in any of those programs. So, you could look at how that ten hours gets counted. That would potentially remove any behavior that's happening on those margins in terms of people opting in and out of either program and how they're enrolling, just because of how those hours are counted. The disadvantage is you drift into that. There's this open question, are people getting paid twice for the same hours? And depending on who you talk to, there's a little bit of different perspective on whether or not it's a double payment or not. One of the things that we heard in working on the pre K report is if you're asking us, a provider, to do more work to provide universal pre K for those specific ten hours, then it inherently costs more to have a licensed teacher on staff or to adopt the curriculum requirements. And so is it really double payment if, for those ten hours, you're asking somebody to do more than they would if it was just providing child care? I don't have the answer to that, but that was a philosophical question that was put forward. So in some large takeaways, things that JFO learned while we went through this exercise, the whole thing is interconnected. It's one big ecosystem, And it's hard to make it's going be hard to make changes. In the policymaking, we talk about it in a lot of places, like the balloon analogy. You poke the balloon, and it's going to pop out some crouts. And to bring the Head Start back, we haven't talked about Head Start a lot, but there's this federal program that's also part of this ecosystem that's also utilizing CC, FAP, and UPK. And Head Start supports the lowest income children. So thinking about any changes in these two spaces, what's the downstream impact on those Head Start programs? And how they're using these two programs to provide state match to operate. And how changes in universal pre kindergarten hours that are required. Right now, it's ten hours. That ten hours informs the calculation of CCFAP. How changing the number of UPK hours that are required, how that will flow into the calculation of CCFAP and how many hours of CCFAP people then qualify for.

[Unidentified Committee Member (diarization mixed)]: Do you have something? Yeah. That just popped.

[Emilie (Joint Fiscal Office analyst)]: And again, I know we've said this a bunch of times, but just to say it home again, the data is limited in this space. But that makes it hard to make informed changes to the system. I think looking at a lot of the national statistics, those two slides I brought up, two pictures at the beginning, we're serving a lot of a lot of kids are getting universal pre kindergarten. Again, and folks that we talked to we had one conversation with some school business managers, which they're not in the classroom. They're not the frontline folks. But they were like, when you talk to the teachers, when you talk to the people who are interacting, it's obvious which kids went through universal pre K programs and which kid didn't when they show up for kindergarten. I think that's an important thing to keep in mind. And Ted had this on the slide, but I'll say I deleted it, but I'll say it out loud. We don't have all the answers. We went through this exercise. We learned a whole lot. Obviously, we've been in here however many times at this point, for how many hours, to talk about all of this. And there's a lot to think about in this space. Happy to answer any other questions or think through any other things that might be helpful at this point while you've got us here. Any questions currently?

[Speaker 0]: I was thinking we would ask Emilie questions, take a brief break, and then come back and have a discussion to finish our list of questions.

[Unidentified Committee Member]: I bring Ted up here in case Ted, I'm sorry.

[Speaker 0]: Have you not sat with him the whole time?

[Emilie (Joint Fiscal Office analyst)]: I should have actually I really wanted you to.

[Teddy (Joint Fiscal Office analyst)]: That's why I'm yes, I was just like bumping up.

[Speaker 0]: Now's your chance. Go on up there.

[Emilie (Joint Fiscal Office analyst)]: Yes. And if you have anything you want to like Well, I should If you have anything you would like Ted to offer, or if you'd like him to provide

[Speaker 0]: Thank you. It's very polite. Is Ted, there anything you would like to say before

[James Masland (Member)]: I open

[Emilie (Joint Fiscal Office analyst)]: it up for questions?

[Teddy (Joint Fiscal Office analyst)]: The only thing I would add, and I think I've mentioned this, is that to emphasize Emilie's point about how complicated this space is, Emilie has experience at the agency of education. I spent time on the private provider side. I cannot emphasize how many times over the summer we would have a conversation about a specific policy or noodling, and then an hour later we would end up exactly where we started. So just through the window into the process of reporting the whole summer. That happened quite a bit. A lot? Yeah, so just wanted to put that there. Yes.

[Emilie (Joint Fiscal Office analyst)]: It was fun though.

[Teddy (Joint Fiscal Office analyst)]: Yeah, was fun. Representative

[Speaker 0]: Ode, think you had a question.

[Carol Ode (Member)]: On page 12, you say advantage would be better to link the amount of funding a school provides for the amount of education provided so it's thinking about the quality of education provided you're right I would think that a licensed teacher is going to be a higher quality than not a licensed teacher But, that's a question I have is should be there any relationship there. And another, you said that this very first thing after option, you do prorate universal pre k waits based on the number of hours provided. It's that the hours that are available and then you don't know whether there'll be take up of them or truly they wait at the end and say, well, we provide three sixty seven hours, even though they could have been there for more. They could take attendance, how does that work?

[Emilie (Joint Fiscal Office analyst)]: So, for your first question, just to clarify, the better in that advantage statement was not a qualifier on the type of education. Was just a Better meaning it would link the amount of funding with the number of hours, right? So, not speaking to education quality at all or what the requirements are. It's just like, if we want thirty hours a week, I'm going to make up numbers. Want there to be thirty hours is considered a full day or a full day week amount of pre kindergarten and the school only offers fifteen hours a week, then they would get half the amount of a full week because that's how many hours, because they're not providing the full day worth of pre K. That's all, but it would just tie those two together.

[Carol Ode (Member)]: I know that part. What I was talking about, the amount of education providers doesn't speak to the quality of it, so I wonder if we could maybe ask the education about that. Do they want to talk about quality? Yeah, so add that to your questions. All right, and then the second question was weights based on the number of hours provided. If they say this is my program and it's a thirty hour program,

[James Masland (Member)]: how are you

[Carol Ode (Member)]: going to keep track of what people have used and not used? Am I going down the wrong lane?

[Teddy (Joint Fiscal Office analyst)]: That would ultimately be a policy choice to use that phrase, but you could structure it any number of ways. Could say you could limit it to you can only do a half time program or a full time program. You could allow folks to scale and that has different levels of administrative complexity with those different choices. So I would, yeah.

[Carol Ode (Member)]: Correct. Provided versus the case up.

[Teddy (Joint Fiscal Office analyst)]: So there are provisions, yes, there are provisions thinking about providers, if they had, it would be up to providers, right, to say to the school district in that case, we had children in the program. We said we're going to be open for X number of hours. We were only open for Y, so we're invoicing for that number of hours, and you'd have to have some sort of mechanism to see who's actually providing the hours. But that's a whole set of considerations to think through how that might work.

[Carol Ode (Member)]: So let's just say the program says we're offering 20 and then parents don't show up

[Emilie (Joint Fiscal Office analyst)]: for the full 20. So that currently happens. So if you, and maybe speaking from personal experience, if you are enrolled in universal pre K programs like public school, there is requirement to be there to receive the education. And if you hypothetically want to take your kids to Utah for a week and are enrolled in universal pre K, luckily. So hopefully your provider will let you know that, Hey, just so you know, if you want to retain your public benefit to receive public education for your child, they need to be here to receive that, or the money doesn't keep flowing. So that's a current piece of the system where it's just like public school, right? If you don't show up, there's truancy, there's all that sort of stuff. So that's current. Presumably that would continue. But that's a policy choice.

[Speaker 0]: And there's a slightly different system around attendance and financial incentives under CCFAP that's sort of more the Human Services Committee's thing. But there's a system for that, too.

[Unidentified Committee Member (diarization mixed)]: I was thinking about two things, and one of them was the providers, sort of geared up for x number of students, somebody drops out.

[Emilie (Joint Fiscal Office analyst)]: Yes, that's a concern to have. Okay. Yep. And

[Speaker 0]: use truancy language. Just wanna be clear, there's no truancy until you're actually past kindergarten, because there's no mandate around that. Represent what's that.

[James Masland (Member)]: But if your kid is sick or we go to Utah for a week, is it so specific that they weren't there on Tuesday and Thursday so that money doesn't come for those due dates? No.

[Emilie (Joint Fiscal Office analyst)]: No, it's a like, you have to be there. And I think there's a right that's different if you're sick or if you're like, I'm just not going to go to school today. There's provisions for if they get the flu.

[Unidentified Committee Member]: Just a couple of questions. One is just trying to figure out the right weight is the biggest challenge, I think, and we're talking about what the cost of the program is. I like the idea of prorating, but we really don't have a sense of the common benefit if it's ten hours, if it's twenty hours, that kind of stuff. Then the proration of it would be difficult. Am on the right? Okay. The second question I have is, in terms of the capacity of CCFAP, we don't really know if children that are three years old, would be that would be in a private setting. And then the families do rely on CCFAP and not universal pre K. Does CCFAP have the capacity to actually pay for the difference from what it's paying now to make up the difference essentially for the universal pre K for those three year olds?

[Emilie (Joint Fiscal Office analyst)]: It would depend on what ultimately happens with the four year olds, right? Unfortunately. So if the four year olds move to the education fund in a different way than they currently are, and the three year olds go to CCPAP, then it would be the net of having them in both. There's no good way to show that with my hands. And then having that move to having the split happen.

[Speaker 0]: If math was really tidy, which it's not, you were doubling the hours of four year olds, but you're taking three year olds out, and so it would be a wash. But math was but it's not that tidy. Is that what you were that was like the Venn diagram you were trying Yeah, to exactly.

[Teddy (Joint Fiscal Office analyst)]: Yeah, with the caveat that there are more four year olds in the universal pre K system

[Unidentified Committee Member]: than three year olds. The sixty four year split that you're talking about. The other question is if the money follows the student, and does that mean that in a private setting under your modeling or considerations, that if it was the full weight 15,000, that the private setting would get that 15,000. I guess it's coming back to the same question, you know, what does that mean? Yeah, seems like a big increase there.

[Teddy (Joint Fiscal Office analyst)]: And if I could, I will be doing some work on the back end to try and get a better picture of different changes than what would happen on the CC5 Child Care Conspirations Special Fund side. But that's like a data work in parts.

[Unidentified Committee Member (diarization mixed)]: Representative Ode? Thinking about

[Speaker 0]: Is there a question for them? I'm not seeing it

[Unidentified Committee Member (diarization mixed)]: happen. Asking

[Speaker 0]: you, why are you asking them a question?

[Unidentified Committee Member (diarization mixed)]: Did you think about who owns the private center? Because there's, did you think about what the incentives might be for someone to open private childcare centers or any preschool run preschool programs versus you know if the money follows a student.

[Teddy (Joint Fiscal Office analyst)]: I wouldn't say we've had specific conversations around different options. We'll just note that generally the environment for folks who are interested in running childcare centers is dramatically different now due to increases in the CCAP state rates than it was in 2019, where it was really marginal and hard to make the business go. As to, I think to the extent you're thinking through financial changes that either if they expand benefits for private providers, that would obviously make the model stronger. This is a very general statement, but yeah, we didn't go through each option and consider how they would impact private providers. The business owners.

[Unidentified Committee Member (diarization mixed)]: Who owns childcare centers?

[Speaker 0]: Can I ask you a question about your question? Yeah. I remember that when we passed the recent childcare bill that I actually can't even remember the bill number on anymore because the world is a wild place. We spent a lot of time talking about private equity and incentives for private equity. Is that where you're going?

[Unidentified Committee Member]: I'm there.

[Emilie (Joint Fiscal Office analyst)]: Okay. Do you

[Speaker 0]: have anything on that more specific question? Okay. No.

[Emilie (Joint Fiscal Office analyst)]: We did not get us the business models of the individual child care centers and how that may drive choices.

[Speaker 0]: So I'm guessing on the West Coast, it does it seems to be less a thing here now, but maybe it could become more a thing.

[Unidentified Committee Member (diarization mixed)]: Yes? This is a strange question, if the if the the weight follows, is cash and follows the student versus a bank. What's the other choice? Is there any other choice?

[Teddy (Joint Fiscal Office analyst)]: The second one is prorating weights, Then the other one, so there are three right options presented. One is So this one prorating the weights, one is money falls to students. The third one is changing how CCFab hours are calculated with UBK involved.

[Emilie (Joint Fiscal Office analyst)]: But I think the money's gonna follow the student. The legislature hasn't made a decision, really, like it was not part of Act 73 with universal pre K that weights would follow the student, right? Like if that is But it's not that we made

[Speaker 0]: a decision they wouldn't, we just didn't make any decision.

[Emilie (Joint Fiscal Office analyst)]: Yeah, was no decision. Okay.

[Unidentified Committee Member (diarization mixed)]: I guess what I'm getting at is, I don't know how we could avoid sending a cash payment to a child care center. A child shows up at school and says, I want child care pre care.

[Speaker 0]: I mean, are ways we could say the state as a whole is going to contract with private providers, five private providers in every region, and send them a direct payment for a capacity payment entirely. Then they would not have I mean, mechanical ways that could be possible. They're not necessarily what the language we have in front of us does, and they're very far from what happens now, they're certainly not There's mechanical ways to do most anything. I'm

[Unidentified Committee Member (diarization mixed)]: saying that. I'm about the mechanics. I'm thinking about incentives for people to own and run something where there are no licensed teachers running? So I want us to be

[Speaker 0]: careful about how we talk about licensed teachers and not licensed teachers, because there are actually a huge number of rules about to become a pre K provider that involve lots of licensing and lots of really powerfully useful oversight to make sure those kids are getting a really quality education. And we haven't taken any testimony on it because it's very far outside of our jurisdiction. Yes. Represent Burkhardt. And I'm going to yes.

[Bridget Burkhardt (Clerk)]: My My question is actually a bit of a mechanical one too. And I guess I'm trying to understand current state so that I can then picture what we're talking about for future state. So in a school budget right now, you sort of, or at least in districts that operate pre K, you sort of budget for how many classroom of pre K you're going to have, and you budget for capacity. And that capacity is a lot stricter for pre K than it is for say, even a kindergarten or first grade or second grade classroom, because there are usually guidelines for those, but they're not strict adherence to only a certain number of kids with a certain number of teachers in the classroom. So there's a little bit more flexibility in this other part. So my question is right now, districts also have to budget that there are I'm sorry, do districts budget for that money that comes in that they then send back out for tuition? And so what happens in current state if they way under budget for how many pre K students they are tuitioning out. I guess my question is, if there are other payments during the year that aren't in the budget that come to a district, say they end up with more uptake for pre K, do they have to sort of estimate all of their pre paid students at the outset.

[Emilie (Joint Fiscal Office analyst)]: Yep. And they're doing their budget this time of year. They're making an estimate in terms of how many tuition payments they're going to make and how much it's going to cost to operate if they're operating. And then when the bill becomes due, like any other bill within a fiscal year, they have to pay it. And if they're wrong, they have to figure it out.

[Bridget Burkhardt (Clerk)]: Yes. And figuring it out might potentially be more challenging in a future state where money is tied to a specific child, their foundation formula. Because you're also then, yeah, just trying to think that through. Thank you. That's all.

[Unidentified Committee Member]: Back to the stories too.

[Bridget Burkhardt (Clerk)]: Yeah. I just said that kindergarten is extremely challenging on its own to estimate. Really hard. So some years you'll have like, I remember my child's school, some years you would have 50 kindergartners and literally the next year, 86 out of nowhere. And you would be adding classrooms and all of that. And I would just imagine that pre K would be even harder because those are people who are not yet engaged with the public school system. And so the more you're trying to have public schools manage money for folks who aren't yet engaged in public school, It just is trickier. That being said, it makes it easier to estimate kindergarten. If you are more engaged with parents earlier on, then you have a better sense of what the flow into kindergarten will look like. That's all.

[Speaker 0]: Any other questions for Emilie and Ted? Okay, we're going to take a break until 10:25, 10:30, then we're going to have a committee discussion until eleven where we can finalize our list of questions that we're sending off to other committees.

[Unidentified Committee Member (diarization mixed)]: So you're gonna say 10:25 or 10:35?

[Speaker 0]: Ten 10:28.