Vermont Legislature SmartTranscripts:

[Ezra Holden (Joint Fiscal Office)]: Here. They heard about you.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Good morning. Wednesday, March 25. This is the joint hearing between house transportation and house waiver means to review, discuss, understand a report that we received from the agency of education as requested in act 73 regarding school transportation grant

[Unidentified Committee Member]: funds.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: So we are growing Morgan, do want to say other than that?

[House Transportation Chair (unidentified)]: Good morning, and thank you for having us.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Great. We are gonna start with John Gray, and then we're gonna go to Ezra from the Joint Fiscal Office, and then we'll hear from the Agency of Education. Hi, John. Hello. And while John's making his way here, I'll just say, I think in an ideal legislative universe, we would be able to make some real steps next, real steps this year towards understanding and making changes in how this transportation funding works in the context of Act 73 implementation. And, we're getting a little bit of a late start on it. So we're gonna see how it goes. Perfect.

[John Gray (Office of Legislative Counsel)]: Good morning, everyone. John Gray, office of legislative council. I'm just gonna share with you something hopefully pretty straightforward this morning, the transportation reimbursement statute, which is in title 16. So I'm gonna pull that up on the screen share, and we can walk through this. Zoom in just a fudge, maybe. How did that make it smaller?

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: Today is gonna be.

[John Gray (Office of Legislative Counsel)]: Yes. Okay. So generally, title 16 secondtion forty sixteen distinguishes between allowable transportation expenditures, which we'll talk about in subsections a and b, and then also extraordinary transportation expenditures. As you'll see, these are both supplemented by rulemaking as well. So under subsection a, a school district or supervisory union that incurs allowable transportation expenditures, which will come to that defined term in subsection b, shall receive, so it is mandatory, a transportation reimbursement grant each year. That's in the amount of 50% of those expenditures, but it is capped. So you see the proviso provided, however, that in any year, the total amount of grants under the subsection shall not exceed the total amount of adjusted base year transportation grant expenditures, and then we have that figure. The total amount of the base year grant expenditures shall be 10,000,000 for FY ninety seven increased each year thereafter, by this index. So, practically, what this means is you will receive 50 percent of allowable transportation expenditures subject to a cap, and the cap is based on inflating that $10,000,000 figure from f y ninety seven to this day. So what happens at that point if you're above the cap? And as you might expect and I think you will hear, there's greater demand as I understand it than there are available funds under this section. If in any year, the total amount of grants under this subsection exceed that adjusted base year transportation grant expenditures, the amount of each grant awarded shall be reduced proportionately. Both will be paid from the ed fund and added to ed spending payment receipts paid under section forty eleven. So if you are in excess of that cap, reduce the reduce each grant proportionately. So what are allowable transportation expenditures? I'm gonna show you what the section itself has and note that it is further built out in rule. So under subsection b, allowable transportation expenditures means the cost of transporting students to and from school for regular classroom services. And then we have a list of exclusions. Shall not include expenditures for transporting students participating in curricular activities that take place off school grounds. So curricular activities off school grounds or transporting students participating in co curricular activities, so things outside of the traditional curriculum. State board will further define those allowable transportation expenditures by rule. I do have the rule pulled up in a separate tab if you would like to see that, and I can jump to that back.

[Ezra Holden (Joint Fiscal Office)]: When you jumped the index, is that NEEP or NIPA?

[John Gray (Office of Legislative Counsel)]: I think there is no actual callout of the relevant publication. It is just a generic unspecified figure. I think it would be a practical question what inflator has been used. I would expect the same as you're familiar with. Yep. But in this case, this is an instance where there could be greater specificity as to what the inflator should

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: be. Really new inflator chapter?

[John Gray (Office of Legislative Counsel)]: No. I know. I'm very excited. Okay. So this is your state board 9300 series, rulemaking on allowable and extraordinary transportation expenditures, and what you can see in ninety three zero two point one, allowable transportation expenditures means the cost of transporting students on one trip per school day to and from the school of enrollment. So they're treating the back and forth as one trip. Allowable transportation expenditures and those builds out from the text you just heard do not include expenditures for transporting students participating in such curricular activities that take place off school grounds, like work placement or technical education programs or for transporting students participating in such co curricular or extracurricular activities as field trips or athletic competitions. Allowable transportation expenditures are net of any revenues received for transporting students, school, and they do not include any expenditures which are eligible for reimbursement or payment elsewhere. One interesting piece in the rulemaking that you'll see in 9302.2 is that depreciation of school buses is maybe the built out thing in this rulemaking and is considered an allowable transportation expenditure. I can walk through that if you're interested, but, you know, they're just depreciating over a seven year period school buses. And they have some details as to how that's done, including establishing FMV for the buses at the time of the lease. With that, I will jump back unless folks had questions on this.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Representative Higley.

[Rep. Mark Higley (Member, House Ways and Means)]: Do I remember that seven year depreciation, do school buses have to be replaced after seven years?

[John Gray (Office of Legislative Counsel)]: I do not know the answer to that.

[Unidentified Committee Member]: On the depreciation, you have some districts own their buses, some lease. How does that work?

[House Transportation Chair (unidentified)]: I

[John Gray (Office of Legislative Counsel)]: I think that this that this does try to address that consideration in ninety three zero two point four. I think if you're exclusively under a lease and you're not going to own at the end of it, which is what ninety three zero two point four is contemplating, I don't frankly know how they would I think that would be a question for folks in the field as to how that's done.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Just on that point, John. So this is saying that schools may be applying for reimbursement for the purchase of their buses, not necessarily for the actual service of transporting students to and from school?

[John Gray (Office of Legislative Counsel)]: They can count the depreciation of one seventh of that purchase price for the seven year period as an allowable transportation expenditure, which means they're eligible to receive a grant up to 50% of the cost for that purpose. So essentially, they're translating that depreciation into a grant and receiving those dollars.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: So some districts operate their own transportation systems and buy their buses, some lease buses and operate their own transportation, some contract with providers to do all of it. Is it fair to assume that when they're leasing or contracting, that the depreciation is built into cost of the lease or the?

[John Gray (Office of Legislative Counsel)]: I really don't know if I mean, that seems like a reasonable assumption. I just don't know how it's treated. Perfect. So we've talked in A and B.

[Unidentified Committee Member]: So we're going back maybe to basics here. So it's 10,000,000 up to 50% of all the expenditures that are allowed. But there's a 10,000,000 limit. Do we know or have a number of what all those expenditures are today?

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: We're hearing from the joint fiscal office after this, and they might. I'm not sure.

[John Gray (Office of Legislative Counsel)]: I don't think it's possible DH. I mean, part of the answer you would want to have a meaningful analysis of that question is also just knowing what the inflated figure is today, which I think that figure is available in the reimbursement guidelines report. So I think you can see the current figure, and I think it's also noted in the report, which I'm sure you're gonna hear testimony on that folks are beyond that cap. Right? But, yeah, I would be interested to know what all the contributions to that to that are. So a and b are about your allowable transportation expenditures, and that's your 50% cap for those pieces. And b addresses the extraordinary expenditures piece. So under subsection c, a district or supervisor union may apply, and the secretary may pay for extraordinary transportation expenditures. It is permissive. Right? It's may apply, may pay, incurred due to geographic or other conditions such as the need to transport students out of the school district to attend another school because the district does not maintain a public school. So these are extraordinary transportation expenditures incurred due to specific reasons, geographic or other conditions, which can be further built out in rule. And I can jump back to the rule for these purposes as well. Which the next sentence, the state board shall define a short eight transportation expenditures by rule. I will note something odd about the drafting of this subsection. Unlike subsection a, which specifies that 50% cap right and then says you will proportionately reduce above that, we don't see an explicit cap noted here, but it seems implicit in the section because the next line is to specify a base year grant expenditure amount, which would be meaningless in the absence of a cap. So I just wanted to note that that's an oddity of this subsection. And when we look at the rule, you'll also see that there seems to be an implicit acceptance that there is a cap on these pieces. So, the total amount of base year extraordinary transportation grant expenditures shall be $2.50 ks for FY 'ninety seven increased by the same inflator, which is not specified as to the relevant publisher of that inflator. Extraordinary transportation expenditures shall not be paid out of the funds appropriated under subsection b or other expenditure transportation expenditures. They will be paid from the ed fund and added to ed spending payment receipts. I'm gonna jump to the rules just to call out both

[House Transportation Chair (unidentified)]: some

[John Gray (Office of Legislative Counsel)]: of what the state board has spoken to on this front and also to show the language that supports what seems to be an implicit cap, which is just not listed in the statute. So ninety three zero four, ninety three zero four point one, extraordinary transportation expenditures are those budgeted reimbursable transportation expenditures, which for any school district, a, exceed 8.25% of the total of all budgeted expenditures submitted in the district's proceeding year budget collection form and are due to this is pulling in that reason requirement, are due to unavoidable and unusual circumstances related to the location of the school building within the district, the topograph topographical features of the district, the need to transport tuition students outside the district, conditions of the roads, or other unusual circumstances. So there's a dual check to get into this extraordinary transportation expenditures bucket. You need to exceed 8.25% of total of all budgeted expenditures submitted in the preceding year budget collection form, and those expenditures need to be attributable to unusual circumstances related to the location of the building or these kinds of features. The rule of making for this piece is a bit more expansive than what you saw aside from the detail on depreciation for the allowable transportation expenditures. Here, you have a setup process for application or award. And I can talk through these if you would like, but know that they are here. There's an application process for receiving extraordinary expenditures. The piece that does seem to suggest a cap here is the final line in ninety three zero five point three. Commissioner shall award an amount equal to transportation expenditures in excess of 8.25% of the preceding budgeted expenditures that are determined to be extraordinary transportation expenditures. If the amount of expenditures eligible for reimbursement statewide exceeds the total of funds authorized by law, funds shall be distributed proportionately. So it's in a similar cap. And I will just jump back so you can see it again. There'd be no reason to specify this base year expenditure amount in the absence of a of a cap. That is the full of the section. I'm happy to take questions on the law. I can't really speak to the practice.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Fortunately, have folks here to speak.

[John Gray (Office of Legislative Counsel)]: I'd love that.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Thank you, John.

[John Gray (Office of Legislative Counsel)]: Thank you.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Israel, thanks for joining us.

[Ezra Holden (Joint Fiscal Office)]: Morning, everyone. Treasurer Holden, joint fiscal office. Is it alright with the committee if I share my screen?

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Yes, please.

[Ezra Holden (Joint Fiscal Office)]: Alright. So today, I'm just going to be doing a high level overview of categorical aid for transportation. And so just to get this out of the way, joint fiscal office, nonpartisan legislative office. So what is categorical aid? I think it's helpful to just have a brief idea, especially for people who maybe don't work in the education space as much what categorical aid is. So categorical aid is funding that school districts receive directly from the education fund. This is sometimes known as funding off the top of the Ed Fund, and this is included in the district's offsetting revenues. So big picture, when a district is building its budget, they get to use the offsetting revenues to reduce that budget and then arrive at their education spending. So categorical aid is usually for a specific purpose. So for example, transportation reimbursement, but also special education, career and technical education, meal, school meals, etcetera. And the basis for how this aid is distributed depends on the type of aid. So it could be based on the population or long term membership of an SU or SD. It could be based on the total population of a certain student group, or it could be based on expenditures for a certain purpose. When we're talking about transportation categorically, that would fall under the expenditures for a certain purpose. You expend for transportation, and then your reimbursement is based on how much you spend on allowable transportation. So that leads us to the transportation reimbursement itself. And so the transportation reimbursement that I'm talking about is the statute that John Gray went through. So that is the categorical aid that a school district can receive to offset allowable transportation expenses. And a district would receive a grant that is equal to up to 50% of their eligible transportation expenditures, that were incurred two years prior. So, as John Gray went over, eligible expenditures include transport of a student to and from school, would not include the expenditures to transport that student off of school grounds for other curricular or co curricular activities. And the reimbursements are limited by the total amount of available categorical aid. And that transportation, limit is set out in statute there, the statute that John Gray already walked you through. In addition to this statute, there are additional types of categorical aid for transportation. You heard about the extraordinary expenditures. You also would have for your technical education, transportation assistance as well. And so finally, just to give you an idea of the available funding for transportation reimbursement. So as you heard, the categorical aid is increased by an inflator over time. The specific inflator is not set out in statute, but you can see here how it the categorical rate has increased since fiscal year twenty twenty. So in fiscal year twenty twenty seven, in the budget as introduced, about 26,900,000.0 would be available for categorical aid for transportation reimbursement. Now that includes both the standard up to 50% portion and also the extraordinary expenditure reimbursement. And this 2027 figure would assume that the budget as introduced is adopted. So that's all I have for content. Are there any questions?

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Sure you can go ahead. Yeah. Thank you for that, Ezra. Are you going to share any information regarding how much of that, for example, $26,900,000 in 2027 is going to the 50% versus the extraordinary?

[Ezra Holden (Joint Fiscal Office)]: So I think that the agency would be best equipped to break out how exactly it's split.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: And then with the same similarly, how that's distributed across the state might be a good question for the agency. Yeah. And maybe your question includes my question, when do they get this money? Is it before they have to pay the vendor or whoever is providing this or how do they pay the bus drivers at the time? When did it get the money?

[Ezra Holden (Joint Fiscal Office)]: Sure. So as I understand it, and I think this is referenced so it's from expenditures incurred two years prior. So what I understand is a district would incur an expenditure in one year. They would file, submit all of those expenditures to receive a grant following year, and then they would receive reimbursement afterwards. So, yeah, it's reimbursing expenditures that they have already incurred and paid. Just wondering, the percent increases on that graph look very steady. Is that really just by the inflation factor? I think that would be a question for the agency, how it's been inflated and which inflator is used.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Hey, Desiree. Agency of Education team, however you would like to Hey. Good morning, folks. Morning. One sec to get things turned on.

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: Slide,

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Cheryl? Yes, please.

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: Chair, we're okay with the screen? Yes, please. So for the record, Jill Briggs Campbell, Deputy Secretary of Education and Chief of Operations. I think the transportation folks haven't seen the Agency of Education very often, so I'll let Kelly introduce themselves as well.

[Kelly Murphy (Director of Education Finance, AOE)]: Good morning. I'm Kelly Murphy. I am the Director of Education Finance.

[Ted Gates (Senior Fiscal Analyst, AOE)]: Ted Gates, Senior Fiscal Analyst.

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: So hopefully we can answer some of those questions. Sort of our plan here is just to walk you through kind of the high level, know, key takeaways and themes from the report that we submitted in December per Act 73, and you should have a link to that report as well. And then we can also sort of pause and get a little bit more into the weeds around the full expenditures and reimbursements as well. So just a brief kind of framing of the report. So again, this was directed in section 44, about 73, And we organized it around, as we have with most of our reports here, a description of the current state. We have some inputs from partners in the field and also stakeholders around how transportation is or is not working. Some of the challenges and opportunities within the state. We took a look at brief literature review of how other states fund transportation and like spoiler alert, all states are struggling with this. There is no perfect system. And then we also wanted to highlight some key considerations for legislative decision making, as Rep. Kornheiser was signaling. This is all wrapped up in how we fund our system, what our governance structure might look like, and sort of the elements of Act 73. So we wanted to signal some areas of additional inquiry and some consideration. And then final recommendations, just sort of signaling and modeling, would be based upon policy decisions made by this body and would be kind of that next phase of the work. Alright, so going on to the next slide you've already heard about the state statutes. Thank you, John. I actually learned a little something about depreciation today, which I did not have my eye on.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: So now I'm going to

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: go dive into that. But we also want to signal that there's some federal laws and requirements as well. So the in Vermont are really a combination. It is sort of important to note that in Vermont, a lot of the categories of transportation are, they're not mandated, right? So they are discretionary, but that there are some elements of transportation that are required either under state or federal law. So there is this combination of statutory requirements that sort of result in the way that we provide transportation or not in Vermont. So very high level again because you've already dug into the detail around the state statute. School boards may provide transportation based on age, health, distance, road conditions. Districts must create and maintain a public transportation policy, whatever that policy would be. And they have to report annual costs and data to the state.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Whether they're seeking reimbursement or not.

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: So there is also, and this is where we get into these kind of layers of requirements that result in sort of a patchwork of transportation policies and services. So we've already talked about the state reimbursement. I'm not going to dive into that. We've talked a bit about CTE transportation per mile reimbursement adjusted annually. We also then look at some

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: of the federal

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: requirements. So under students with disabilities, IDEA, if transportation is required in a student's individual education plan, which is the kind of foundational document that outlines the services that a student needs if they have a diagnosed disability. Transportation may be required as part of that IEP. It would be written into the IEP and into the individual transportation plan. So, is some federal requirement there. And then the other kind of major statutory requirement is actually under And so, under McKinney McKinney Vento, students are guaranteed transportation to their school of origin. And really, the framework here is a federal preference or even requirement that continuity of education services is prioritized. And so if you have a student who is unhoused or is in foster care and moving around, there's a priority to keep them in their school of origin, matter where they're residing. And that then becomes a requirement on maybe two different districts to share the responsibility for those transportation requirements. So it tends to be just, this is a general statement and just giving you an example of where we tend to see extraordinary transportation costs come up for transportation of homeless students under McKinney Vento, and then also students with disabilities under IDEA. Those are some of the places where we tend to see extraordinary transportation costs crop up. Again, current system overview, you've already seen this. So 50% of allowable transportation costs, we have sort of maxed out that allowable pot of funds. So it's approximately 26,000,000 statewide annually. We'll get into the details there. The median award is about 450,000, but there's a range here for a variety of reasons. And I would say one of the key takeaways from our report and the work that we've done is not surprising to the folks who are engaged deeply in the education system, the sort of complexities of size, governance, geography, rurality, and a whole variety of sort of locally derived choices results in a system that is highly variable and raises questions around equity and access that we're grappling with sort of across the system. So all those themes that hold true for almost every aspect of our education system also hold true for transportation.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Yeah, go ahead. Yeah, just going back to your last slide, Jill, would you mind just sharing a little bit more information on the CTE per mile reimbursement?

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: Yeah, and so Ezra was also signaling this, and we can dive into some of the details around this, but this actually is part of the, I don't want to get this wrong, the CTE categorical grant. So there are some requirements around boarding students. Let's say you don't have a CTE center in your district, but students have access to it, and the district is required to provide transportation so they can access it. So it's an equity analysis. Okay. I didn't get that from the previous slide or from the previous presentation.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: But so CTE is transportation is reimbursed for CTE at sub level. Yes. Okay. And while we're back on this slide, you talked about priority and then you changed requirements, then you went back to priority. Those are two different words to me.

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: For the McKinney Vento? Yes. Yes. So, and there is a little bit of art and science happening here. So the federal requirements from McKinney Vento have a strong preference. And sometimes when the federal government says preference, it's translated as a requirement, but not always, because they're sort of a, to the best extent possible, right? So there's a very strong preference for maintaining the student in their school of origin. So they have that continuity of kind of that experience while they're facing a lot of disruption outside of that world. The way that this actually gets operationalized is that the agency of education is required and does work with the districts to determine to what extent it is possible to achieve that kind of continuity and maintaining the student. So for example, and this really tends to fall not surprisingly on certain districts across the state who tend to have larger homeless student populations and also kind of co location of the services that our students would be receiving. So a real life example is we've had students who maybe their families were located in Barrie, they've been displaced. This actually happened a lot around the twenty twenty three floods. So we saw this kind of upsurge. Those families were then relocated to Rutland. And this is where then the agency McKinney Vento, we have a staff person who is our McKinney Vento state director, works with the districts on what is going to be reasonable and possible with a strong preference for maintaining the student in their kind of home district, which would be Barrie. Perfect. Thank you. And so you can imagine the transportation issues that crop up around them. And we do tend to see that's where some of those extraordinary expenses kick in.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: And then does the agency have the last word and whether that is an allowable expense or does it correct?

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: No. They have the last word and that's sort of

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: the authority. So if the district makes that decision without consulting with the agency and then submits for reimbursement, is that something that happens?

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: I don't know of a case where that's happened, but it would certainly be something We're usually engaged on the front end in those conversations.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Sorry, we can go two more slides now. Sorry about that. Okay,

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: so we've talked about our current system and I talked about the wide range of variability within the system. When we're talking about reimbursement for transportation, I'm now going to kick it over to Kelly and Ted to talk about

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: this part. Sure.

[Kelly Murphy (Director of Education Finance, AOE)]: So thank you very much. And so we've already gone through a lot of this. And so I'm not going to try to speak to those items. But a couple of the things that I really did want to highlight.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: I'm sorry. There's there's a lot of white noise in this room behind us. And so it's actually very hard for the way it's very hard for the witnesses. I'm sorry.

[Kelly Murphy (Director of Education Finance, AOE)]: That's okay. Thank you for saying that is the am I okay with sound okay great. I'll project. So the two pieces here that I really wanted to highlight are the allowed expenditures in the extraordinary threshold. As we get on in the slides here, you'll see where we're at to date. Ezra did a nice job of providing the trend and you can see those trends within our slides as well in a different way. I'm not going to get into specifics, but I do want to point your attention to allowable expenditures and then the extraordinary threshold. There are a few components there that I do want to talk about a little bit because we've been looking at this 9300 series rule, And there are some we have a rule that has been in place that we've been using since 2001. And it went through the whole process, but was never lodged. And so we're actually, that's what we're using. So there is a slight difference in the extraordinary threshold that does allow for disparate to benefit from that. And so I'll go over that, but you can see a little bit of what that is. So a little bit different. I just want to point that out than what was just discussed previously. And this is actually what we do use. And so what we do is we look at a 96 percentile threshold. So 4% of those expenses actually get captured in this extraordinary threshold. So I'm going to show the next slide. And then the other thing that I do want to know too is that just the process in terms of the application and award. So the districts do apply through the annual statistical reporting. So there is a look back. So you've got the year that it's set in as we spoke to this too. You've got the year that the expense was incurred, then reported and then reimbursed. And so there is a lag in terms of what we're seeing. And so we've got the example there for the Apoille six payments. And so just looking at this slide, there are a couple of pieces that I want to highlight. So we've got the appropriation year over year. If you were to look at sort of our reporting of the transportation costs and the amount that's in the appropriation FY25, it's a little funky because there was an instance in two districts where we did have some expenditures that were not captured, and so they got picked up in the big bill. And so I just want to note that. The percentages and the appropriation change there is slightly different than if you would have looked at what was initially appropriated. There is that. We do have that captured appropriately documented, but just to catch that up. So it does skew the percentages and change a little bit. So just speaking a little bit to the change in the index, we do inflate based on the index. It does shift that. If the amount captured from those two districts was 218,000, and you can again take a look at the big bill and see what the specifics were around those two payments. But if those were not included in the FY25 column, the percentage change for FY25 would be 7.59% versus the 8.52% and would be 3.2% versus the 2.32%. And so you can see in '26 and '27, they're relatively close. It doesn't look that way right now because of the way it's captured. However, I just wanted to highlight. We are monitoring pretty closely and working with those districts in 'twenty seven to ensure that it does not happen again and that we have the appropriate costs. May come back with a little bit more on that, so there may be a little bit of a shift.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Did you say you are using What's that? Did you say you are using NEPA NEPA? If you're later?

[Kelly Murphy (Director of Education Finance, AOE)]: It's very generalized. And actually, I wrote that down as thing to just double check to see what we are actually using. So you know that we do grow it. And I'm getting up to speed, but I want to validate that. I'll certainly update that. So then the next pieces that I just wanted to show is the extraordinary threshold. So this is a little bit different from what is in the rule at the 8.25% of the threshold. And this is where we get into that sort of language around the 96 percentile and how we take a look at those extraordinary costs. And so this actually does favor districts a little bit more. That, the way that we run the calculation right now and have been for many years, as I understand it, is that we take the allowable transportation spend by the education spend, which then comes up with the percentage of what that would look like, and then take the delta between the threshold average. And then that's what they would get for their allowable expense. And so sorry, just to clarify, since you what your since your current and it seems like

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: a long standing practice is different from statute and rules, are you are submitting the updated procedure? We

[Kelly Murphy (Director of Education Finance, AOE)]: will most certainly be doing that.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: It looks like this goes back

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: to 2001. Yes.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: We've already said that. Yeah. No. Absolutely. That's why it's so outstanding. And then that will go through is that gonna go through internally and then to LPAR? Yes. Okay. Thanks. Thank you for asking. So we

[Kelly Murphy (Director of Education Finance, AOE)]: do want to be transparent about Cool.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: Mark, will you let us know when that's happening? Will you let us know when it gets there? Thanks.

[Kelly Murphy (Director of Education Finance, AOE)]: So then just on to

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: the next slide. This is oh, a little bit

[Kelly Murphy (Director of Education Finance, AOE)]: black there. So this is and this actually dies a little bit. But this is actually how we send the report. Maybe we need to do something with our color scheme. What's our spreadsheet? Well, yes. They're both spreadsheets. Yes, they are. And so you can see here what we've got. The total amount on the bottom line there for the statutory amount is about 26,000,000, and then we've got just shy of 50,000 for the extraordinary with three districts. And you can

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: see who they are. And I would sort of we wanna put sort of a caution on these numbers, right? Because every district has its own policy around which transportation services it's going to provide. It's very hard to make meaning out of this, except for a wide range of variability, right? So some districts provide transportation for elementary students. Some districts provide transportation for elementary, middle, some all the way up through high school, some within If you live within two miles, they don't have transportation. Some don't provide necessarily much transportation at all. So it's very I wouldn't only thing I would extrapolate out of this is that there's a wide range of variability and maybe we have an opportunity to rethink how we do this in the future.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: I really appreciate you saying that. What we have trouble doing is looking at this and trying to figure out what patterns can explain. You've done a great job with some expenses. Mean, I know that Kimbell, which is a mandatory driver. People have to respond to that, and I really appreciate you putting that front and center. When you look at who doesn't advise transportation at all, we've got some districts that don't provide any transportation, some that only provide the elementary level and some that provide the K-twelve, are there any patterns in operation structure that might align with some of those choices that might help us understand why differences are made?

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: Yeah, so that is the next layer of analysis and modeling that I would like to do. And so I agree with you. We need to understand what And I also think that another layer of analysis I'd like to do is exactly what you were pointing to earlier, which is, are there differences that we see if they're contracting for the services, if they own it in house? What are those ranges of variability? Because I think as we get into some of our key considerations, when we're thinking about how we might fund and have an edge like a transportation system, we need to think about factors like rurality right and those there's usually additional costs right for obvious reasons. So our next phase of work is doing that level of analysis to see if we can pull out some trends and highlights, and it's just a matter of being able to dig in with the field.

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: I'll just Yeah, go ahead. I really appreciate that. And when you look at that, I think it would be really important to work in district structure. There are some districts. So, I think we need to understand the relationship between tuition and cost and transportation because particularly as we look at some of the districts who are proposing to make, I think we need to anticipate that Yes. As well. Absolutely. Agreed. Yeah. I wanna offer that we have ten minutes left. We're about halfway through your presentation. I think that we're heading it's it's like the key considerations part we're having. Okay. I'm walking away. It's not personal, and I'll get an update from her.

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: She's storming out. She doesn't want to hold the glasses. All right. Thanks, Jack. So one of the things that we did want to do is add some qualitative as well as some quantitative. So we've got the quantitative that describes the system and how much we're spending in various places, but beginning to get to some of the things that Rep Holcombe was talking about, which is the whys and what are the consequences of the decisions and sort of the structure that we currently have? So we were really looking at two places where we've been engaging in this. One was we actually went all the way back to 2024 when we did our listen and learn. And one of the key questions that we asked at every single one of our sessions across the state, and we've met with over a thousand Vermonters, was what are the conditions for student success? And transportation actually came up a lot. And so I went back through kind of all the report and all the meeting notes and pulled out those mentions of transportation. And whether it was district leaders, educators, parents, community members, folks were really pointing to inconsistent access to transportation is about access, opportunity, and equity. And really folks were pointing out, it's about access to career and technical education and other education programming that sort of expands their opportunity. But it's also a baseline sort of fundamental issue of literally students just accessing school and education. And as we're also thinking about really wanting to try to get our feet undressed and really make major reductions in chronic absenteeism, which in Vermont tends to be one in four students are chronically absent. In the state of Vermont, and this has been persistent since COVID, we've really not been able to reduce these numbers significantly. One of the things that we need to talk about is transportation and how that becomes kind of a fundamental access issue. And the second round of kind of conversation that we had was with folks from districts. We kind of did a survey and grabbed some folks for some focus groups and really tried to dig in with them on what are some of the challenges and obstacles to be able to provide kind of universal transportation. And one of the things that they wanted to point out is that oftentimes we think about elementary school kiddos and maybe even middle school, but they were pointing out that transportation is an equity and access issue for our high school students as well. If you have a one car household, those 14 and 15 year olds are gonna be as challenged to get to school as any seven or eight year old. So they wanted me to make that point. They've pointed very clearly, very consistently to some major obstacles. So the first is severe statewide bus driver shortages. And what they were pointing out is that the licensure requirements, which is a CDL license, folks who have that license can go work in other sectors and make more money. So we have a licensure requirement, which I think we would all probably agree with is really important since they're transporting some of our most vulnerable individuals

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: in

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: the state. Our kids, we want them to be safe and have highly qualified bus drivers, but they are pointing out that they are not able to compete. They also have talked about rising and unpredictable costs, fuel, contracted partners, vendors, So as we have depreciating fleets and fleets that are getting older, the cost of actually purchasing the new equipment, we know all of those inflationary pressures exist in the education sector as well. So replacement buses are becoming more and more expensive. They also talked about rurality. So rural geography increases the cost of transportation, And you're also just sort of losing economies of scale in small rural districts. And they talked about limited vendor competition is driving pilot prices. So these were some of the major kind of challenges that they're facing. And I wanna sort of signal that every single person in a district that we talked to said, We want to provide universal transportation. We do. But they really, really wanted to caution that any new mandates that would require universal transportation have got to grapple with these key obstacles. They were really clear that if we decided this next year, that every student must have access or every student within two miles, whatever those measures are, they would not be able to meet those requirements because they lack the bus drivers. They just simply lack the bus drivers to be able to do it. And so they're going to fail in any requirement unless we actually deal with some of the system issues. So they've been really, really helpful in those conversations. Again, equity and access are a recurring theme. So transportation needs to extend beyond elementary students. Districts noted that universal access, if affordable, would be the most equitable approach. So again, a real commitment and an understanding of the fact that transportation, inconsistent transportation services are a barrier for students and that geography plays a major role in Vermont. And we're in mud season, right? So this is a real lived thing. I actually happen to get a lot of emails when bus routes are canceled. They pop up in my work email. It's like a holdover from COVID. And there's a lot of like, we've gotta delay school start, or we're not running this route today because the roads are so muddy or the roads are icy. They also talked about a lot of our bus routes don't have centralized pickup locations. So it's like going house to house, kid to kid. So are there ways to actually be more efficient? And I will say that there is a strong preference in this informal survey. So of course, we wanna dig in and validate. There's a strong preference for statewide contracts And they really Or regionalized contracts. So they actually were recognizing that they're having to kind of go it alone district to district is a barrier and is likely actually driving costs up. And I always love to share just a small anecdote, which is that I live here in Montpelier, just a few blocks away, and I have three different district buses go past my house every morning. So we have three different districts running a bus route up my street every morning. And I always love to sort of bring that as like, these are some of the inefficiencies that exist in our system today. All right, so I will kind of, I know we're running out of

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: time here, so I'm gonna

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: be very brief. Considerations and recommendations. As I said, other states, we Actually, let's jump to the next one. So, national context. We work with our partners at Ed Commission of the States. They had just completed a 50 state survey of how folks do their transportation funding. There's different models, but these are some of the key things that we would wanna be looking at. Particularly in a rural state, we need to take account of rurality. There's different models for doing this. Wisconsin actually has a model that we might wanna take a look at because they have similar rurality and then sort of population centers. And then different ways of funding the system. Many of them do categorical grant on the front end. So it's sort of built into the larger budget. Some of them build it into their foundation formula, and some do a reimbursement based grant the way that we do. So I think that there's a lot of opportunity here as we're looking at the larger education transformation to actually think about how we could rethink this system. And I know that the Agency of Transportation had some success partnering with UVM to do some of the modeling. That's really like that. If we were going to move forward with say a statewide contract or regional approach to this in a different governance framework, these are some of the kind of really nitty gritty detail that we would want to get into. But we have a model for how to do this because we've done it with our public transportation system as well. And we can also think about some of the creative solutions that some states have used. So utilizing a public transportation system, doing reimbursements for parents who are transporting kids. There's lots of different ways that we can do this, and we should be creative and flexible. Look forward to engaging with you more on this issue.

[Ezra Holden (Joint Fiscal Office)]: We've got about

[House Transportation Chair (unidentified)]: two to three minutes left.

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: I know. Really wrapped up those last couple of slides pretty quickly. I encourage you to read the report. We actually pointed out a lot of these considerations in greater detail.

[Ezra Holden (Joint Fiscal Office)]: I'm not sure if I

[House Transportation Chair (unidentified)]: can, so I have to take the chance to make a comment. We deal with public transportation significantly more in transportation than we do in the education side. But we have had members that have been particularly interested in this area and have had students send feedback about each spot. It isn't what I haven't heard mentioned and I before I bring it up is to be required to build a system to serve every address, serve every student, but there is no requirement to participate in that system is incredibly challenging. As we build a public transportation system that people want everywhere, but do not require to use in any way and have a financial burden that is directly tied to that system is incredibly challenging. And I would certainly caution that that is a major issue, the issue to equity. People choose where they live, and they choose whether to participate, and whether they're going to be required to participate from a kindergarten all the way to a high school in the same service and whatnot, thus having three buses go past your place because there's significant resistance to that. But being required to build a system to serve everyone with no requirement to pay directly for it or use it is a major challenge. Secondly, have to say that one of the things that's not on the major issue with the busing is that to find a service that only services from 07:30 in the morning till 08:30 in the morning and then to work again from 02:30 in the afternoon to 03:30 with a few other bus rides is incredibly limiting in any staffing, recruitment, or peaks if it's not tied to any other parts. I would consider that a major challenge that is not on your slide, but should be recognized that the work that we're asking people to do here is very limiting in their compensation and their availability and completely an adjustment to their lives. They're doing it out of some level of usually public service piece. But these are cautions that I would say from the transportation side of things that are significant that I didn't hear in the presentation. I

[Jill Briggs-Campbell (Deputy Secretary of Education, AOE)]: And we do have some examples of how, particularly in rural districts, they're managing this. In urban districts, those buses are busier because they are transporting kids to CTE and other programs. For example, I was just up in Essex North in Canaan, right? About as rural and distant as you can get. And their bus driver is also their PE teacher. He's wearing multiple hats and it's how they're making it work so financially viable for the district is those kind of creative

[Rep. Emilie Kornheiser (Chair, House Ways and Means)]: solutions. But you're right.

[House Transportation Chair (unidentified)]: That's a make do way that Vermont used to be, that the janitor was also the bus driver, also, you know, and the crossing guard was also the teacher, was also the playground, and things were a different world back then. The idea of we find a way to make do is not necessarily how we solve a lot of these things today. My apologies for dominating the last few minutes. Thank you very much to everybody for joining. It's 10:00.