Vermont Legislature SmartTranscripts:

[Emilie Kornheiser (Chair)]: We are in Ways and Means, Friday, February 20. We are going to work through five sixty six, 06:35, and 06:32. And first we have five sixty six. Michelle Childs, I think

[Rep. Erin Brady (Williston)]: this is your first time here this year. Is.

[Michelle Childs (Office of Legislative Counsel)]: Thank you for having me in. And I'm no longer working on cannabis, so this may actually be the only time I see

[Rep. Bridget Burkhardt (Clerk)]: you this year. That's a whole longer conversation.

[Michelle Childs (Office of Legislative Counsel)]: Okay. I work on cannabis if it's still criminal, but I'm not working on the regulated market anymore.

[Emilie Kornheiser (Chair)]: I guess that makes sense. Yeah.

[Michelle Childs (Office of Legislative Counsel)]: So thanks for having me in. For the record, Michelle Childs, Office of Legislative Counsel, and we're taking a look at H5-sixty six and the amendment that passed out of House judiciary. So

[Rep. Bridget Burkhardt (Clerk)]: I just want to give

[Michelle Childs (Office of Legislative Counsel)]: you just a little overview of what we're talking about. And we're talking about the court diversion programs and both the juvenile court diversion program and adult juvenile court diversion program. They're run out of the attorney general's office. And there's options for pre charge diversion and post charge diversion. Basically, General Assembly has been doing something over the last couple of decades of trying to provide a lot of off ramps in the criminal justice system. And diversion is one of those programs where someone can get diverted to a community record of board, and they can enter into a contract with them and have to meet certain conditions. If they comply and they successfully complete diversion, then if it's a pre charge, then charges aren't brought. If it's post charge, then those charges are dismissed. And then after a certain amount of time, after successful completion of the diversion program, right now the records are expunged, meaning that those records are destroyed. And what this proposal is doing in H. Five sixty is changing that so that those records would be sealed instead of expunged. And I don't know, I don't think I came in here on the big ceiling bill last year, but the General Assembly did undertake after years of attempts and working on this has generally moved to a system, moved away from a kind of combined system of expungement and sealing to one mostly of sealing. And the difference is because, expungement, like the record's literally gone. It doesn't exist any time, be referred to in any way for any purpose. But with ceiling, those records will still exist, but they're not public. So no one can obtain a copy of that record. The public can't, but there is some access. And that's identified currently in Title 13. Law enforcement has access to sealed records for criminal justice purposes. If the state is involved in litigation, somebody suing the state, maybe a use of force or something like that, there should be a code to looking at the concealed record for purposes of defending the state. And there's a list of exceptions. And nothing's changing with regard to that. The only thing that five sixty six does, it says for purposes of the post charge diversion, it's you successfully complete instead of your records being expunged, they'll be sealed. And then all the rules around sealing still apply. The reason why it's in here is because when the bill was introduced, it included a provision expanding the post charge diversion program in the adult system to include municipal criminal violations. So some towns and towns have some, not a lot, but they might have a criminal offense that is part of their municipal ordinances on something like public nudity or drinking in public or something like that, that they could bring a charge under those circumstances. And so this bill is introduced, was allowing for that. House judiciary took that out, and so it's no longer in the amendment. So the amendment that you have before you is really just the change from expungement to ceiling.

[Emilie Kornheiser (Chair)]: And so delightfully, judiciary essentially removed all of our jurisdiction over this bill. Yes, they did.

[Rep. Bridget Burkhardt (Clerk)]: Does anyone want to say I don't know.

[Michelle Childs (Office of Legislative Counsel)]: Can walk through the language and stuff, I know you have

[Rep. Bridget Burkhardt (Clerk)]: a lot of things to do.

[Rep. Erin Brady (Williston)]: Does anyone have any other questions? Chris, do you want

[Emilie Kornheiser (Chair)]: to say something for the record?

[John Gray (Office of Legislative Counsel)]: Sure, Chris, just for the record, as legislative counsel just excellently described, the bill does not have a fiscal impact because the underlying provision that could have had a fiscal impact was removed by House Judiciary's amendment. None of the provisions elsewhere in the bill related to expungement ceiling are expected to have a fiscal impact, so House Judiciary Committee, if you all agree and give you a few more things to worry about.

[Emilie Kornheiser (Chair)]: Thank you, Michelle.

[Michelle Childs (Office of Legislative Counsel)]: Sure, thanks so much. Feel free to have me in any time. You're coming in here, y'all are always a pleasure.

[Rep. Charles Kimbell (Ranking Member)]: Madam Chair, I would move that we find the amendment offered by the committee on judiciary favorable to H566.

[Rep. James Masland]: Thank you. Second. Thank you. Representative Kimbell moves that

[Emilie Kornheiser (Chair)]: we find H566 favorable as amended by the House Judiciary Committee. Representative seconds. Any discussion? Seeing none, clerk please call the roll. Thank you. Okay. Representative Branagan? Yes. All vote yes is Representative Burkhardt. Representative Higley? Yes. Representative Holcombe? Yes. Representative Kimbell?

[Scott Moore (Joint Fiscal Office)]: Yes.

[Rep. Bridget Burkhardt (Clerk)]: Representative Masland? Yes. Representative Ode? Yes. Representative Page?

[Rep. Woodman Page]: Yes.

[Rep. Bridget Burkhardt (Clerk)]: Representative Waszazak? Yes. Representative Canfield? Yes. And Representative Kornheiser? Yes. We have voted the amendment favorable eleven zero zero. Representative Masland, you wanna report this?

[Rep. James Masland]: That would be

[Emilie Kornheiser (Chair)]: It's not personal. It's just the judiciary bill.

[Rep. James Masland]: See No. No. Having your I'm doing judiciary, and it's Okay. 81, and I will send the Thank you. Stuff to the clerk's office post case. Thank you.

[Rep. Erin Brady (Williston)]: Thank

[Emilie Kornheiser (Chair)]: you. What is John Grace turning?

[Rep. Bridget Burkhardt (Clerk)]: He wants to reach out.

[Rep. Charles Kimbell (Ranking Member)]: Do need to vote on the afterlife, though?

[Rep. James Masland]: No. Thank you.

[Emilie Kornheiser (Chair)]: Only if we had amended it, so we did not. Okay. I'm gonna do a weird thing. Let's take a brief pause. See. Please

[Rep. Bridget Burkhardt (Clerk)]: Don't go anywhere.

[Rep. Erin Brady (Williston)]: So we had, as folks know, we

[Emilie Kornheiser (Chair)]: had three different rescheduling things for today that moved everything around 12 times. And one of the things we did was move 886 out because Rebecca Sebelia, who's a national education financing expert, had to cancel, not because of the snow. But since we have some time, we're gonna do an initial description of the bill introduction with representative Brady on H-eight Thousand 86. And then next week or the week after, we'll have Rebecca Sebeliya in to talk about it in greater depth when we can reschedule that. And so it's gonna be two parters, so everyone's gonna have to retain the information from week to week, but we're really practicing that lately, it's gonna work out. So represent Brady, if you wanna join us.

[Rep. James Masland]: Thank you.

[Rep. Erin Brady (Williston)]: Thank very much for making it work. I'm moving targeted things and weather today.

[Rep. Bridget Burkhardt (Clerk)]: Do you wanna get Because in we're kind of tag teaming on this. You're welcome to

[Rep. Erin Brady (Williston)]: go sit there if you want, or

[Emilie Kornheiser (Chair)]: you can stay in

[Rep. Bridget Burkhardt (Clerk)]: your feed. It's totally up to you. Awesome.

[John Gray (Office of Legislative Counsel)]: Yeah, you can go up there.

[Rep. Erin Brady (Williston)]: It's great.

[Emilie Kornheiser (Chair)]: Teddy would like to share his desk.

[Rep. Bridget Burkhardt (Clerk)]: So true. Always happy. No, we're good. I got Yeah, got it. Thanks.

[Rep. Erin Brady (Williston)]: All right, thank you. All right. Representative

[Rep. Bridget Burkhardt (Clerk)]: Erin Brady of Williston, for the record, and representative Bridget Burkhardt, for the record.

[Rep. Erin Brady (Williston)]: Thanks for the opportunity this morning. We are obviously on the precipice likely of massive educational change, and we have to get it right. There's extraordinary focus on maps in this building and across the state. They are highly visual reminders of the potentially enormous change ahead. But we're concerned that we in this building and across the state are not as clear about the potentially enormous changes ahead under our foundation formula. We all know, you know very well in this committee, there's a long list of outstanding work to be done to make the foundation formula a reality. We're intensely following that work and want to ensure that we fully understand the implications for our schools. We introduced this short form bill because we think there's further work on regional differences in cost of labor in different parts of our state. A core purpose of Act 73 as it passed is to expand and strengthen educational opportunities for students. Just this week, this was repeated in the governor's statement when he talked about closing the opportunity gap. Certainly, our vision for closing that gap is not to level down opportunities. Certainly, that would be mild. A funding formula that does not adequately reflect regional cost realities will penalize districts that have already consolidated, operate at scale, and have made deep reductions to deliver responsible budgets. Many of the largest districts that operate class and school sizes at or above the goals outlined in Act 73 will have no choice but to reduce opportunities for students.

[Rep. Bridget Burkhardt (Clerk)]: So another reason that we are introducing the bill is that the geographic variations in Vermont that result in structural cost differences have received an extraordinary amount of discussion and policy work. Some districts are located in sparsely populated areas, as we know, resulting in higher transportation costs and typically smaller schools. Some schools have so few students that the fixed costs involved in running a school result in higher per pupil spending, and there's extensive ongoing work to ensure that we adequately resource schools that are small by necessity. Similarly, districts in some parts of the state faced higher than average labor costs. Act 73 accounted for analysis of certain structural differences between districts and the scope of work for development of the foundation formula, but it did not account for regional differences in labor costs. According to research by APA Consulting, who you saw a lot of last year, at least 10 other states have recognized the need for regional adjustments to account for differences in cost of labor for districts, cost of living for staff working in districts, and or cost of doing business for districts in certain areas of the state. We have a link in the testimony to a memorandum from Education Commission of the States that describes the methodology that different states use to do this. I won't go into detail on each of their different methodologies, but Alaska, Colorado, Maine, New York, and Virginia are covered in that written memo that was sent to rep Frady during the off session. And then there are several other states that have used regional cost adjustments for years and update them periodically. We asked the Vermont Association of School Business Officers, VASBO, who we've seen a lot of in this committee, because they are the school employees on the frontline of budgeting and resource allocation for their opinion on adding a regional cost adjustment to the funding formula. And they can't take a position yet because there's not really a bill before them. There's a very short form bill and they would need to see the whole proposal. But in concept, they do like the idea of regional cost adjustment. And the quote that I got back from them was, They do support the concept of exploring regional cost adjustment to ensure our funding system more accurately reflects the economic realities faced by school districts across the state. If we do not account for regional cost differences, opportunities for students at high labor cost areas will suffer. To manage within a funding formula that is based on average labor costs, high labor costs districts in the future state would either have to increase student teacher ratios by increasing class sizes or some other method, or they would have to cut programming opportunities in order to reduce the number of teachers and staff. Districts in areas with higher labor costs in Vermont generally operate with class sizes well above minimum set out in Act 73, And they also have some of the highest student teacher and student staff ratios in the state. We added a little chart at the bottom. We understand, as with all of the data that's in this presentation, a lot more work would need to be done to gather data and refine it. It's all very complex as we all know from previous testimony when you start to get into which districts operate, which ones don't, how many grades they operate, all that's very complex. And we're proposing that that work be done as we talk about the funding formula. So this makes it more likely that we will require districts closest to the scale envisioned in Act 73 to make significant cuts from the outset. Many of these same districts have already been dealing with cuts to their tax capacity under Act 127, and that's meant reductions in opportunities for students. We've talked a lot about lack of opportunities in districts that are below scale, but we haven't talked a lot about access for kids in districts at scale that have faced budget cuts. One example of this is high school students sitting in multiple study halls during the week, because there simply aren't enough teachers in the bigger high schools, in some cases now, to let kids have a schedule that actually has classes throughout every single one of their days. So a lot of them are being sort of being warehoused with a single aide to watch over them instead of being in class all day. So just as we erode public support for public education with taxes that are too high and unpredictable, we erode support when we cut opportunities to the point that families who can choose other options pull their kids out of the system. Act 73 did not include a mandate to consider regional cost differences in the development of foundation formula, as we heard in testimony from the JFO last week. Last session, Doctor. Tammy Colby outlined four categories of costs that should at least be considered, even if some of them are dismissed, when designing a foundation formula. So we've put a link into a presentation that Doctor. Colby did back in March. And those big buckets of thoughts are individual student risks. So things that we did talk about a lot last year, disability status and English language learners, for example, the social context of schooling. So the concentration of economic disadvantage, scale and sparsity, which of course we've talked a lot about as well, district and school enrollment, grade level, population sparsity, and degree of virality. Geographic variation in input prices was one of the buckets in her testimony which we chose to move past in our discussions last year. And that would include things like employee wages and non personnel resources. There are different ways that this could be added into a funding formula, not necessarily the foundation formula itself, but the overall school funding formula that we move forward. We could make an adjustment to the base of the foundation formula. We could also apply regional multipliers to the base, which is what a lot of other states do, if you go read that memo that was prepared. An adjustment to the supplemental district spending, there are lots of different ways that we could adjust that to account for regional differences. And we could talk about categorical grants that would lessen the impact of some of these differences. Education is people business. Salaries and benefits make up 80% or more of most school districts' budgets across the state, as they should. Teachers and staff are paid more in certain parts of the state for many reasons. Fully equalizing staff across the state is unrealistic and inappropriate, and it is somewhat misleading, we feel, in what the administration has put out in its discussions in Act 73. If we fully level up so that all teachers are paid exactly the same, we will raise costs significantly, even as we are trying to rein them in. The design of a regional cost adjustment and the decision of whether to implement one would require more research on differences in cost of living across the state and the impact of those differences in school districts. But some of the high level considerations for cost of living that we looked into ourselves a little bit were home values. So the average home value across Vermont right now, according to Zillow, Zillow has a whole research arm beyond just the sort of pretty pictures and the listings The that are average across Vermont as of 12/31/2025 was $379,669 In Chittenden County, the average is $497,901 The Loyal County has also a very high housing crisis, Randolph County as well. At the other end of the spectrum, Essex County has an average home value of $216,000 And there are several other, they're just very big, a very big spectrum of housing costs. And that's a very big component of cost of living in these different areas. Another way we looked at it, this is not really sort of a very technical way that researchers look at it, but we were trying to compare the average teacher salaries in different districts to those housing prices, just as a way of getting a sense of just how those different housing prices and possibly might be impacting teachers within those districts or staff within those districts. So, you'll see there's another table that we'll provide to Sourcer, that's a spreadsheet that sort of just runs through all the different supervisory unions and does this little comparison of average teacher salary to average home value in the county that that school district is located in. So for example, Champaign Valley School District, who we both represent, that percentage is about 17.7% if you take the average teacher salary of 88,000 and divide it by the Chittenden County average home value. In other places with lower housing values, even with lower teacher salaries, that comparison is more like 25% or 28%. So it's very different. Another way of looking at this is the basic needs budget, which we talked a little bit about last year. We haven't really talked about it again, because it's only updated and updated so often, but there are documented differences in cost of living in rural versus urban areas in Vermont. So the basic needs budget talks about the fact that for a single person with no children, the urban wage needs to be 12.5% higher than it does in a rural area of Vermont to meet basic needs. And for two adults and two children, the gap is smaller, but it's still 6.8%, at least as of 2024. Another thing that's really tough to talk about sometimes, because it really does get right to the heart of talking about teachers' pay, which is super uncomfortable, but it needs to be talked about. A lot of the reason that there are these big differences in teacher pay is the result of historical negotiations that have sort of built upon one another. It's nearly impossible to lower pay for educators in high labor cost districts, nor would we want to. We have to start from where we are today, and we're not creating a school prior to the new education system from scratch. Act 73 will move around real people, students and teachers, and real dollars. And given the structure of contracts, abruptly curtailing wage increases means that earlier career teachers would not earn enough to make ends meet while paying a surcharge into the pension system, which they require to pay more in than later career teachers. And it would be hard for them to do that and pay off student loans and make ends meet if we don't continue to adjust for cost of living in different areas. Furthermore, increasing healthcare costs have had a bigger impact in some districts than others. We know that health care costs have risen faster than almost any other education costs, and the move to negotiate health care at the state level, which was meant to somehow even the balance a little bit around the state of how we're paying for employee benefits within school districts actually exacerbated the impact of these rising healthcare costs in some districts. So in history, there were districts. When we had three different levers at the negotiating table, we had health care, salaries, and working conditions at the negotiating table. Some districts made the bargain that they were going to pay higher salaries and pay less for benefits. And that was a fair trade. That's what they worked out at the bargaining table with their employees. When things got pulled up to the state level, a lot of those districts were left holding the bag because health care costs have gone up every year. At least the balance of who pays for them has gone up every single year because of how the statewide bargaining works. So the arbitrator in those negotiations, every time that there has been bargaining between school boards and the union has chosen the union's proposal. And so districts that were already paying high salaries are also paying now a much higher percentage of health care costs than they were before that move to do things at the state level.

[Rep. Erin Brady (Williston)]: One last thing that we've talked a bit and worked on quite a bit outside of committee time is the impact and the relationship here with our teacher workforce, and knowing that we have some pretty significant teacher workforce challenges and that a potential concern about how the foundation formula would impact that. Research consistently shows high quality teaching is the top school based variable for student success. There are so many outside of school variables that have tremendous impact on students, as we know. The education workforce shortage is a national problem. There's been over a 50% reduction in enrollment in teacher prep programs in the last fifteen years. That number is actually a couple of years old, and it might be worse now. This is impacting all districts in Vermont, although some challenges vary regionally. Just a couple of years ago, the legislature, the education committee started to do some thoughtful work on this important policy area. We made some modest investments using pandemic funding, but those funds are now depleted. We don't have any teacher loan forgiveness or any of those programs operating any at this point. And we lack a statewide investment in this critical part of our workforce. We lag behind many other states and expanding multiple pathways into the teaching career. And in the most rural parts of our state, the most promising work happening to increase the pool of skilled teachers are a variety of grow your own programs, especially in the Northeast Kingdom. Naturally, grow your own programs can be so successful because support staff, who are often those who are being trained to become licensed teachers, live in the communities where they work and are likely to stay there. And the hope is that these prospective teachers would continue to teach, learn, grow in the district, contributing to more sustainable teaching workforce. And again, there's some really good little pockets of work happening in the state through the Vermont NEA, through the Vermont BREC, John Castles, BREC. Thank you. Brill Education Cooperative. But a foundation formula does not address, nor is it the place to address, the sustained work we need to do to encourage more people to become teachers and keep current teachers in the profession in all parts of the state. And we've just attached another short policy memo. It's a couple of years outdated now about some of the policy levers other states are using to address teacher shortages. So thank you for the opportunity today, especially I know given the logistics are challenging. We bring the short form bill to the committee to encourage us to move from the theoretical discussions. They're becoming very real, not theoretical and outside right now. We had last session about education transformation and into conversations about the practical effects of what we passed in '73 on our school systems. Systems are made of people, and our students, our teachers, our school leaders are not aligned that can be easily moved on a map or a column that can be eliminated in a spreadsheet without having a real life impact. So the most consequential education reform of a generation, if that is what Act 73 will become, must deliver benefits to the whole world. Thank you both. Thank you very much. That was long. Sorry.

[Emilie Kornheiser (Chair)]: No, it was great. And we're going to take more testimony on this with two national experts either next week or the week after. I understand the town meeting break is there. I'm saying the last night of weeks before anyone cracks me on that one. Represent Masland.

[Rep. James Masland]: Thank you for much. This issue has been out there for quite a while, as you know, because I appreciate the fact that, first that you're bringing it forward, your testimony is pretty thorough, that's very helpful. And also your recognition that there'll be wobbles, shall we say, at logistic boundaries. But we have to start somewhere. Yep. We have to work our way through it. So, good start. Great, Brook, thank you.

[Rep. Bridget Burkhardt (Clerk)]: I

[Rep. Erin Brady (Williston)]: want to give folks a chance,

[Emilie Kornheiser (Chair)]: but we're also sort of We are going to take significantly more testimony on this in later weeks. So you have your colleagues right in front of you, but we will be able to dive in later. Yeah, you can both say something. I just want to be like, this is not the last time we're talking about this by chance.

[Rep. Bridget Burkhardt (Clerk)]: I'm so glad you all looked at the housing costs and the ratio to the salary, that is just really helpful I think, for working at this, and I think that's something that we have to take into account with also the property tax relief, the new property tax relief, because Period. Thanks. In some parts of state, you have fairly moderate income folks living in very high housing cost costs, and so where we put those boundaries on the tax exemption can have a big impact. I was just going quickly ask if you had also looked at teacher longevity, because what we know from previous work is that districts like year two, have paid more, but they also have much more experienced teachers. And I just wondered if you looked at that correlation as well. We had not dived that deep, anecdotally, yet we know that's the case, that that would be further work that would need to be done if we were to flesh out the impact of potential regional cost adjustment.

[Rep. Erin Brady (Williston)]: And I'll for my own job at Colchester High School, when I applied in 2006, there were, I think, 150 applicants. Today, we are lucky to get two or three, and sometimes we are calling past student teachers to try to find applicants for open positions. And that's totally anecdotal and not how we should make decisions. But we get testimony constantly in house education. And quite frankly, before funding and the entire structure of our system became what was on the agenda, the number one issue that the education field was bringing to us was the teacher pipeline, the quality, the strength of the teacher workforce pipeline. And again, it's not just a Vermont issue, but I think at one point right in the throes of the pandemic, we tied with Alaska for the most exodus from the field and the most dire future workforce shortages in terms of coming into the pipeline and staying longevity and staying.

[Emilie Kornheiser (Chair)]: Yeah, I think there's a lot that our state is grappling with that many other states are about to grapple with. And we get to be sort of the leaders of the pack in a lot of those. Yes.

[Rep. Erin Brady (Williston)]: Thank you both so much. Thank you.

[Rep. Bridget Burkhardt (Clerk)]: And thank you for jumping in at the last minute.

[Emilie Kornheiser (Chair)]: Folks, we are gonna, as I said, remember whatever thoughts you had from this, because we're gonna come back to it in later weeks. We are gonna now move to H635, because apparently John Gray does things other than education finance. Would you like to join us?

[Rep. Erin Brady (Williston)]: Thank you.

[John Gray (Office of Legislative Counsel)]: Morning, everyone. Morning, John. John Gray, Office of Legislative Counsel. This one will be fairly simple to walk through. We're talking about H635, and I will screen share. I think I might have even appropriately sized my window. Yes. Good luck. Biggest success of the week. Okay. Six thirty five. Segment of purpose is super helpful on this one. This is really what the bill does. The bill proposes to eliminate supervisory fees imposed by the Department of Corrections. So these are fees that the Commissioner of Corrections imposes on certain kinds of sentences like probation and parole. And this is just removing the authority for the Commissioner of Corrections to impose these fees. So starting at the bottom of the first page, we're dealing with the section of statute in title 28 that deals with the authorities that the Commissioner of Corrections has, what powers they have, and the commissioner is charged with. You're gonna see in Subdivision 12, this is sort of ancillary to the actual substantive removal of the authority to impose fees, but just know that in Subdivision 12 here, one of the things the commissioner can do is engage with private collections agencies to collect certain kinds of fines, penalties and fees, and we're just striking the reference to supervisory fees because at the point that you've removed the authority to oppose the fees, you no longer need to have the authority to engage with the collection agency to collect the nonexistent fee. Okay, page two, the real heart of this, subsection C. So starting on line seven, in existing law, the commissioner is charged with collecting a fee of up to the amount of $30 per month as a supervisory fee from each person under the supervision of the department on probation furlough, preapproved furlough, supervised community sentence, or parole. Those would be credited to a special supervision and victim restitution fund, and then there are rules governing the supervisory fees striking the whole of that section. So you can think of it as the first line as the real piece that you're concerned with. This is striking the authority to collect those fees. You may hear from the Department of Corrections, but I think the testimony was that the actual fee collected is $15 I believe, and those are not going to any sort of victim restitution at this point. So this does not disrupt any victim restitution.

[Emilie Kornheiser (Chair)]: And we are gonna hear from Scott Moore from JFO.

[John Gray (Office of Legislative Counsel)]: So that's the core of the bill striking that supervisory fee. The rest of it is sort of just add on provisions that are doubly clear as to what's happening here. So section two is a section law provision, subsection A is a prohibition on future collection of these supervisory fees. So Department of Corrections shall not assess, bill or collect any supervisory fee or employ a collection agency or other entity to do the same. So this is saying, DOC, you shall not directly or indirectly collect these supervisory fees. You may ask the question, well, what about currently outstanding supervisory fees? And that's addressed in subsection B. DOC to forgive all outstanding supervisory fees and eliminate all references to outstanding fees in its records and on its web based portal, which is one of the mechanisms that it uses to collect these supervisory fee payments. Okay, so you can't bill, you can't collect, you need to forgive all of the outstanding fees once you're already going through the process of collection. It may seem clear that they would need to be stopped under subsection a, but just to be triply clear, we had subsection c, the DOC shall cease all efforts to collect any outstanding supervisory fees, including wage garnishment or tax set off debt collection, which is one of the methods that the department may use, and coordinate with any agency made party to supervisory fee collection to cease that collection. And then subsection d is just a extra precaution. I think you're gonna hear from DOC that this isn't the way failure to pay works, but just to make clear, failure to pay any supervisory fee shall not constitute a violation of probation, parole, furlough, or any other sentence. You're not gonna be dinged for failure to pay, no longer can you collect, you need to forgive, and cease any ongoing efforts. Lastly, section three is your rules review process. As you may recall from section one, we had a piece dealing with authority to adopt rules for these supervisory fees, and this is saying that DOC shall identify any rule that's adopted under that authority that's now struck and notify the Secretary of State of the repeal by operation of law. Technically, don't have to do this. It automatically happens under the Administrative Procedure Act, but the commissioner does need to notify the Secretary of State and then should, on page four, review its rules, policies, procedures to remove references to those supervisory fees. The thing that you don't see here, the effective date, so I'm gonna jump tabs now, the one amendment that the committee made, because that's the bill that's introduced, is to change the effective date from passage to 07/01/2027, which is to give DOC a bit more time, which I'm sure they can speak to. And that is the bill.

[Emilie Kornheiser (Chair)]: Cool. Questions for John. We're gonna hear from the department, and we're gonna hear from joint fiscal. Seeing none. That was so clear, John. Thank you. You were fine. Scott, have you ever testified to this before?

[Scott Moore (Joint Fiscal Office)]: Not in session time of care.

[Emilie Kornheiser (Chair)]: So glad to see you.

[Scott Moore (Joint Fiscal Office)]: Last session either. We've session before you.

[Emilie Kornheiser (Chair)]: Okay. Well, welcome. Been a little while.

[Scott Moore (Joint Fiscal Office)]: Welcome. Morning. Rebecca, Good Scott Moore, legislative finance manager for the Joint Fiscal Office. I have prepared a fiscal note for you all. Give me one second, can put it on the screen. Hopefully, that's big enough for everybody to see. Perfect. As John just mentioned, this bill would have the Department of Corrections no longer collecting the supervisory fee that does have a fiscal impact. This would have a net loss of revenue to the Department of Corrections. This bill would also eliminate outstanding debt for these fees, and then the bill would not go into effect, as John said, until 07/01/2027. As such, that means there will be no fiscal impact for this year or FY '27. This will go into effect starting FY '28, just so you have that in your heads. So Section one does talk about the removal of the fees. I did point out here that it is $15 per individual per month that the Department of Correction charges. They do have the authority to charge up to 30. Their practice is to charge only 15. There are some individuals that this fee is waived for. As you can see here, individuals enrolled in Reach Up Social Security disability and the Vermont age, blind and disabled programs, as well as individuals accepted by another state under the interstate compact, individuals residing in a residential treatment facility or housed in a correctional facility, and then finally, individuals on parole for life with an approved exemption request. So they would not be charged this fee. The fees do come with some operational costs just to be able to collect the fees. These fees are collected in a couple of different ways. First of all, there is an electronic payment method where individuals can submit payment through a credit card, a debit card or an e check, and that does have a 3% per debit or credit card transaction, and $1.5 per e check. There's also another method, this lock block method.

[Emilie Kornheiser (Chair)]: The fee charged to the payer or The the

[Scott Moore (Joint Fiscal Office)]: Department of Corrections absorbs all the groceries.

[Emilie Kornheiser (Chair)]: Sorry to interrupt.

[Scott Moore (Joint Fiscal Office)]: No worries. There's a lockbox method where individuals can submit a money order to an off-site post office box, which then gets collected and submitted. And then finally, this tax setup program where annually the Department of Corrections gives a list to the tax department of any individuals who have accounts that are 90 days or older with at least $45 and more in arrears. And as I just mentioned, fees and costs for all these are absorbed by the Department of Corrections. This table here was provided to me by the Department of Corrections, and it shows the revenue that's been generated the past six years as well as the operating costs. Any net revenue would go back to the operational costs for proration and pool. You can see here the operating cost at f y twenty five is $20,000. That is gonna be consistent of those three percent charges, two things, postage for mailing out letters for collections, and that lockbox setup. One thing you will notice is that in FY '25, FY '24, that is a much higher amount than previous years, and that's due to the introduction of that electronic payment method. Out of that, not having that electronic payment method, you wouldn't see those fees.

[Rep. Erin Brady (Williston)]: Why has the revenue gone down so much?

[Scott Moore (Joint Fiscal Office)]: I would have to defer to the Department of Corrections specifically, but my understanding is it really is dependent upon individuals that are being charged. Test money was given at 4,077,

[Emilie Kornheiser (Chair)]: five

[Scott Moore (Joint Fiscal Office)]: did get that number right? We're currently on furlough or for these different programs to be able to be charged. Dollars 15 a month. That's how you get to those numbers. There may have been just a different amount of individuals over the years that have to ask them the specifics for that. And in section two, we do talk about the total forgiveness of the supervisory fees. We can see that. Zero to thirty days, currently there's outstanding 58,000, so from the salon. When you see 120 plus days, 3,300,000.0, hundred and twenty plus days, I don't want anybody to be confused. Department of Corrections did give testimony that a lot of that is many years. It's not just one hundred and twenty one days, you have $3,000,000 Suddenly, it's years and years of

[Emilie Kornheiser (Chair)]: There was no point where it was being written off?

[Scott Moore (Joint Fiscal Office)]: At this point, correct. So after this bill passes, then they would write that off.

[Emilie Kornheiser (Chair)]: But it's unlikely it would get I'll ask them, but it's unlikely that it would get collected either.

[Scott Moore (Joint Fiscal Office)]: As a former damages expert for securities litigation, I can tell you that debt does get bad after ninety days. After one hundred and twenty days, get delinquent. And then depending upon your statute of limitations for your collections, it's most likely this debt would be uncollectible.

[Rep. Erin Brady (Williston)]: Just want make sure I

[Rep. Bridget Burkhardt (Clerk)]: understand that number. So that is uncollected debt on supervisory services that have already been provided. It's not based on estimated revenue.

[Scott Moore (Joint Fiscal Office)]: No, this is old debt that they've already charged the asthma most of

[Rep. Charles Kimbell (Ranking Member)]: I have a few accounting questions. First, it was stated by Legis Council that none of the funds there have been no funds going to the Victim Restitution Fund at this point from this fee. Is there something in the provision that says anything over a certain dollar amount or net revenue would go to the Victim Restitution Fund, or is it just?

[Scott Moore (Joint Fiscal Office)]: Not that I saw in the statute. I'm not sure that the PUC had any rules assigned to that that might speak to that. Nothing that I saw. I didn't do a deep, deep dive into the particular rules that PUC has set up.

[Rep. Charles Kimbell (Ranking Member)]: So fiscal year 'twenty through 'twenty five on your chart, does that reflect the amounts billed or collected? Collected.

[Scott Moore (Joint Fiscal Office)]: So testimony was provided that I believe it was $600,000 in FY 'twenty five would have been billable. And of that, 300,000 was collected. Last accounting question.

[Rep. Charles Kimbell (Ranking Member)]: The $3,500,000 writing it off,

[Scott Moore (Joint Fiscal Office)]: what does that do to the budget? Looking at the way Vision, which I think you all are familiar with, and I put your expenses in, and thank you for doing it today so I can approve it. Applause for the other role I do. I don't believe that these are currently booked as accounts receivable. I think once the money comes in, they book it as RADS. It's not anything that suddenly you're going to see a huge fall in the budget. Oh, we had $3,000,000 No, not there anymore. I think that's just a matter of the budgetary, how they put an actual conversion.

[Rep. Charles Kimbell (Ranking Member)]: It's all on a cash basis, not accrual.

[Emilie Kornheiser (Chair)]: And it's all the amendment to FY27 means that none of this would be relevant to the budget of charge?

[Scott Moore (Joint Fiscal Office)]: Yes. It's entirely possible between now and FY27, we'll go gangbusters and collect it all.

[Rep. Charles Kimbell (Ranking Member)]: Reason I asked, if it was recognized revenue in those years but not collected, and then you're Then

[Scott Moore (Joint Fiscal Office)]: you have a hole. So

[John Gray (Office of Legislative Counsel)]: given that, there's nothing that we will have to backfill.

[Scott Moore (Joint Fiscal Office)]: Correct. Well, for this write off, that's correct.

[John Gray (Office of Legislative Counsel)]: What are the fees for? What are they paying for? It's a wonderful question. I would

[Scott Moore (Joint Fiscal Office)]: point to my friends on the bench to my left about what the actual supervisory fee does. That, I don't know.

[Emilie Kornheiser (Chair)]: And we'll ask them when you're done.

[Rep. Bridget Burkhardt (Clerk)]: Yeah, so this money goes,

[Rep. Erin Brady (Williston)]: if it were here, it would go into the kitty at the Department of Corrections, and they would use it for what?

[Scott Moore (Joint Fiscal Office)]: Correct. Testimony was given by Department of Corrections that the staff time to administer this and collect the money is actually more than the fees that are generated. So it would go toward their operational budget to pay for the operation per person.

[Rep. Erin Brady (Williston)]: So the operating costs there don't include personnel time?

[Scott Moore (Joint Fiscal Office)]: No. This is just the actual transaction Great.

[Emilie Kornheiser (Chair)]: Thank you. That was the perfect lead to end on.

[Scott Moore (Joint Fiscal Office)]: Wonderful. I will stop sharing and let you continue about me as I fumble with the sharing of my screen. Thanks.

[Rep. Erin Brady (Williston)]: Deputy Commissioner Calver?

[Emilie Kornheiser (Chair)]: Welcome to Ways and Means.

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: Hi. Yeah. Thanks for having me. Kristen Calver, Deputy Commissioner Corrections for the Record. That went down a little lower than I expected. Sorry about that.

[Emilie Kornheiser (Chair)]: There we go. So

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: I do have a presentation I sent along yesterday or the day before. I can't quite remember. But I think Scott and everyone has done a great job in framing it up. So I wonder what your preference is as far as working through that presentation.

[Emilie Kornheiser (Chair)]: I guess I would just sort of go to the key questions. Like, what are they charged for? What do you think of this bill?

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: Yeah. All great questions. As far as what they're charged for, there's nothing specific. I think it was put into place many years ago, decade plus, as an accountability measure for folks. And I think it's purely that. However, as you saw from the statute, we don't have a lot of ability to collect based on, you know, filing violations, re incarceration, extending probationary terms. So it's really somewhat of an honor system. I think there's very small reasons for folks to pay, and that could be getting a travel permit or something extra. But I don't see a lot of that happening in the field these days. There was a question about why folks aren't paying, and I think we can look at our own budgets and make that assumption. A lot of costs have gone up. Housing, transportation, food, just everything has gone up. So while someone may not qualify for one of the waivers, I think there are a lot of other reasons why the collection has gone down. Pandemic certainly inflated that, as you can see from the revenue numbers and the collections. But the assessments didn't stop, and so I think it created a bigger imbalance.

[Emilie Kornheiser (Chair)]: I imagine that the folks that are under your supervision might have average lower incomes than

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: Yeah, typically, that's what we see, a number of socioeconomic factors that bring us to our system. And that, I think, is reflected in the collections.

[Emilie Kornheiser (Chair)]: And are you comfortable with the language in the bill and

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: the loss of revenue, given that it sounds like you would have more money? Right. I would say not comfortable. I mean, officially, this wasn't part of the governor's recommended budget or policy submissions this year. So we can't express, you know, approval of this or support. But we're open to the conversation and continuing to provide information that's needed so folks can get the decision.

[Emilie Kornheiser (Chair)]: And what Scott said about you're spending more to collect this than you are receiving? Correct.

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: Yeah. So there's a large number. It's about $500,000 in GF that we spend with base budget positions. So that's the cost of the effort to collect on top. But that's a fraction of those folks' positions. So we wouldn't, I think, the bill passes, seek to remove any positions, just to be very clear on that. But that is an operational cost, our payroll cost.

[Scott Moore (Joint Fiscal Office)]: Wait a minute.

[Rep. Charles Kimbell (Ranking Member)]: You said you're spending $500,000 to collect $300,000 Correct.

[Scott Moore (Joint Fiscal Office)]: Yes. Great.

[Rep. Charles Kimbell (Ranking Member)]: Yeah, that's a good path.

[Emilie Kornheiser (Chair)]: Any other questions?

[Rep. Charles Kimbell (Ranking Member)]: Yes. If you didn't collect this, would those people be doing something else?

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: Yes. So I think we're not unique. All departments are doing more with less. And so this would just free up time to do other work. In particular, in the field, they'd be doing more contact, more visits, spending more time collecting or connecting people with services. We're going through a number of financial system changes, so the business office staff would be diverted to other work in that arena. And any time work shifts in the field or facilities, the business office flexes to support that as well. So there's plenty of other work that exists to fill that effort. Perhaps make Vermont a little safer. Absolutely. Yeah. Yep.

[Rep. Charles Kimbell (Ranking Member)]: Last question. Sure. There might be some intention of charging the fee about accountability. If you remove the fee, do you see any deleterious effect?

[Rep. Bridget Burkhardt (Clerk)]: Great. It's just a few syllables.

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: I know. That's a great word of the day. I don't know the answer to that. Trying to think back to before we were assessing a fee, I don't know if it made a big difference. It could have, but I think it would be anecdotal. We don't really have any data to support it, but that could be something we could do, certainly. Well,

[Emilie Kornheiser (Chair)]: thank you so much for your time. Really appreciate it.

[Kristen Calver (Deputy Commissioner, Department of Corrections)]: Thanks for having me. Good to meet you all.

[Rep. Bridget Burkhardt (Clerk)]: 35 as of today.

[Rep. Erin Brady (Williston)]: Does anyone have any need anything else? Okay.

[Rep. Charles Kimbell (Ranking Member)]: Madam Chair, I would move that we find H635 favorable.

[Emilie Kornheiser (Chair)]: Thanks. Okay. Representative Kimbell moves that we find H635 favorable. Representative Branagan seconded. Any discussions? Seeing none, of course, please call the roll. Representative Chittenden? Yes. I'll vote yes. Does Representative Burkhardt? Representative Higley? Yes.

[Rep. Bridget Burkhardt (Clerk)]: Representative Holcombe? Yes. Representative Kimbell? Yes. Representative Masland? Yes. Representative Ode? Yes. Representative Page? Yes.

[Rep. Woodman Page]: Representative Waszazak? Yes. Representative Canfield? Yes. And Representative Kornheiser?

[Emilie Kornheiser (Chair)]: Yes. We have voted the bill favorable as amended, eleven-zero-zero.

[Emilie Kornheiser (Chair)]: Thank you. Folks, we're gonna take a break while we find my pillow ready. So please be back here on time at 11:30.

[Rep. Erin Brady (Williston)]: Thank you.