Vermont Legislature SmartTranscripts:

[Speaker 0]: You go. Some challenges.

[Carolyn Branagan (Member)]: We have

[Carol Ode (Member)]: some meetings. Hello. It's Thursday, April 2.

[Emilie Kornheiser (Chair)]: We had no good tricks played on us yesterday. And we are continuing our work on education transformation. And then at 10:00, we have the Chamber of Commerce joining us to talk about manufacturing. And then we're going to go back to education transformation at eleven We do need to go to the floor today, because the capital bill is there.

[William Canfield (Vice Chair)]: I'll double check. Think it's out of this.

[Emilie Kornheiser (Chair)]: It's not till tomorrow. We're not going to the floor today, and we're going to continue our work on the foundation formula contingencies. So I want to step back a brief moment and then have a conversation. And I know this is hard because we don't have the bill from House Education yet. It makes the conversation more confusing. But such is life here in the House of Representatives. I think the question in front of us is If our policy goal is to move towards greater economies of scale, and districts We're receiving a bill where districts are doing that in a facilitated, brokered way, but voluntarily, then what incentives do we want to put into policy, if any, in order to have that happen? And I'm going to be really frank. We can talk about them as tax incentives, but anyone who does not receive a tax incentive is receiving a tax penalty. We can pretend that that's not true with fancy words. And I'm sure at some point, of us will. But I think the policy decision before us is about tax incentives and tax penalties. And I think their first question is, is that something we want to be doing? And if it is something we want to be doing, then we're making choices about what would be the most effective way to do that.

[Carol Ode (Member)]: Discuss.

[Speaker 0]: Corollary Yeah. Is if we provide the incentives to everybody and everybody's paying for this, then it actually incentives. Self funding.

[William Canfield (Vice Chair)]: I think the testimony, some of the testimony we heard yesterday, my own experience in my district is that the tax incentives don't really work if the problem we're really trying to solve is getting folks to move to a system that they may or may not want their own individual communities. So I think that folks generally agree that we should have some mergers and some consolidations, but I feel like there's a dynamic at play of like, well, we're good in our community, but that community over there should merge. And I don't know that tax incentives are actually going to solve that problem, and that's why I remain skeptical of a voluntary merged system. What I worry about is, I think the only way that an incentive could work is if we make the incentive or the penalty very severe, And that worries me because if we make the penalties very severe and then folks still don't use it, then we're just harming the folks that we're actually trying to help. And I think that's a very difficult puzzle that will depend on what we get handed from the House of Education Committee.

[James Masland (Member)]: You talk about tax penalties? Are you still including excess spending, the higher spending?

[Emilie Kornheiser (Chair)]: I think that's one of the penalties. Yeah.

[Carol Ode (Member)]: I feel that I didn't quite hear that the tax incentives don't work. Tax incentives work in whatever way they work. I feel that I heard they may not be persuasive in a community for the community to choose whether to consolidate or not.

[Emilie Kornheiser (Chair)]: What does working mean if they don't work to do that? If one

[Carol Ode (Member)]: of the districts said, we showed what this meant dollars and cents wise, but culture overrode that. But in the end dollars and cents wise, it worked for that community because they ended up being more streamlined and instead of not an administrative cost, they didn't have to have all the duplication in that way. That works because for me that works because I think that works for them because that means they can put more resources to teaching and learning in the classroom and regular education. So it might not have been a persuasive argument, but in the end there is benefit at the local level and there's benefit for everyone contributing to the education fund, because there's cost effectiveness there and good educational, better educational, hopefully outcomes. So, think that you might or might not make an argument with those incentives when you're going to your voters, but they will be felt, and I think that we should definitely work on them. And because I like collaborative, you know, I find with where the house came out, education committee came out, cooperative, collaborative way of getting to where it's supposed, where maybe education transformation challenge with some divisions is going, and I think that it's going to take time to get there anyway, so fine, we'll do it with this structure. That's within the formulas, right? Getting to a formula that's coming in May or may not come in, the foundation level, and within the current form. Then in addition to that, the construction aid is a, to me it's another way. That's a big incentive. A big huge incentive that it's not depending on how it's funded, I think it can be very positive. I think it can be very community building and I think that Vermonters, where I live, when I've knocked on the door, they're concerned about everyone's mistake. Well, schools can be

[Speaker 0]: very

[Carol Ode (Member)]: important. They're not particularly angry about that and I think they'd be, they're not angry about it, and I think they'd be extremely happy to know that we are moving forward with constructing safe, healthy buildings for students to live and to be in and work in, for all employees to be in and work in. And that as the new buildings are being built, that the buildings left behind can become community hubs in different ways, whatever way we can help to incentivize. So I

[Speaker 0]: think we can really move forward positively.

[Carol Ode (Member)]: And I think we need a dozen subjects. I

[Carolyn Branagan (Member)]: didn't get the message particularly strong that these things were all that helpful, Either one, granted sort of the others. It wouldn't bother me if we either did away with them or did not change them. I think putting more money in it is questionable.

[Carol Ode (Member)]: Can I just ask a quick question? When you

[Bridget Burkhardt (Clerk)]: say grants, are you talking about the small and sparse grants that we're talking about each year? Are you talking about grants for merger incentives? Well, both. I was thinking of the grants in place of the

[Carolyn Branagan (Member)]: rates. But I think it works. I think my feeling is there for both. I didn't hear that anything was all that wildly successful. I might have missed it, but I didn't hear that. And I mean, we're starting to get into a lot of money. There's going to be some need for school construction, and that money is going to have to come from somewhere. We know that we're already still getting, what, 20 schools a year putting their budgets down so they go back to revoke. So just trying to respond to the Vermonters out there. There's a limit to what they can afford.

[Emilie Kornheiser (Chair)]: And I wanna, Just in the hopes of having a focused conversation, I think school construction is, of course, related to all of these things, and it's an important piece of the puzzle and important incentive. As much as we can stay on the idea of using just tax levers, like grants and tax discounts, tax increases as what we think about using that tool in particular. I think right now, the tax structure very explicitly supports smallness. And if the policy direction that we move forward with in Act 73 is scale, then we have a tax policy that is in opposition to the policy goal. I understand that, and the implications of doing something about that might not be implications that we're interested in, but I want to be sort of explicit about us making that decision or not making that decision.

[Speaker 0]: Bridget, do you have something? It

[Bridget Burkhardt (Clerk)]: is probably too specific to reframe the bigger conversation again. But structuring things as a few cents off the tax rate and phasing that in and phasing that out and all of that, I don't think that reaches folks in the communities. I honestly don't think half the time, unless it's a significant change in their tax rates, at least the blowback that we get in the communities that I represent is that you're always increasing our taxes. Even if you go to them and say, well, look, the last two years, the tax rate was flat or the tax rate actually went down. I have the experience of being on the board and saying, your tax rate actually went down last year, and we're not even back up above this year where it was three years ago. That's not the perception. And so a couple of cents here and a couple of cents there, as you said yesterday, with all of that getting mixed in with then all tax rates going up and washing away, essentially, incentives, I just don't think that those are going have a particular incentive. So I hate to reduce stuff because this happens all the time where folks say, well, the whole school funding formula is just too complicated, and that means it doesn't work. And so we have to make it simpler just so people understand it. I hate that argument because it's complex for a reason. We've layered things on it to try to make it more progressive and to make it fairer and to make it more equitable. And that's where we've gotten to and quickly get into a conversation about make it simpler, but then do this and then do this and then suddenly you're back to where we are. However, in this instance, when we were talking to districts about trying to help them merge, I do think a clearer mechanism, perhaps grants that are helping them with planning for mergers. Or I know that you're trying to keep the school construction aside. Think something tangible, like school construction. Like, we are going to build you a new elementary school that's bigger than these, that will house these two different elementary schools in a newer, better, healthier space, I think those are more tangible incentives that might actually drive some change. They're also more expensive incentives. But I think those could be framed as more the rest of the state supporting all of this as opposed to being penalized. Because when you just start talking about dollars and cents off the tax rate, then it does quickly get to, well, you're penalizing the rest of us to give an incentive on the tax rate to somebody else. One piece that I

[Emilie Kornheiser (Chair)]: And I think trying to make something simple. We talked yesterday too about making something simple enough that will be sort of interesting and digestible to a regular person living their life, I think, is a tall order. And agree that a building is sort of the best way to do that. Everything we've ever heard in testimony about the value of excess spending threshold for superintendents and school boards is that it's a valuable tool for them to use. And so it's about offering tools to help superintendents and school boards manage change, rather than to help to manage change with voters, rather than a tool to help voters manage change. And I don't know if that's a helpful perspective to put into the mix. I'm really not arguing in one direction or another. I'm just trying to layer in more clouds.

[Charles Kimbell (Ranking Member)]: I have to agree with Bridget that sometimes we are too clever by half, and so that people can't really understand what it is we're trying to achieve with a different tax rate policy law. Like the guy, I believe it was from Mount Abe, that said people perceived it as a tax increase when the incentives were wearing off.

[William Canfield (Vice Chair)]: That doesn't work, so it's a pretzel logic.

[Charles Kimbell (Ranking Member)]: As simple as it can be, as meaningful and significant, I think that's where we have to go.

[Carolyn Branagan (Member)]: Yeah, James.

[James Masland (Member)]: Several comments I think are quite helpful. We've heard a bunch of different things, incentives here, incentives there, land banks, and a number of the things yesterday. And we

[Speaker 0]: can

[James Masland (Member)]: follow each one as introduced into a sensible conclusion within each package. I'm unsure within the committee what problem we're trying to solve. And we'd go one way or another way depending on what problem we're trying to solve. And We have several Close enough with several approaches. We have merit. Would prefer as a committee, just, you know, general, that we work together on a problem that we agree we're trying to solve, but I'm not sure what that problem is within the committee. And so I can say I can be helpful or curmudgeon depending on which way we decide to go. And I'm just offering that as an explanation of my blank stares or between the earphones here, you know.

[Emilie Kornheiser (Chair)]: Is the way I outlined the problem we were trying to solve fifteen minutes ago not Okay, did you disagree with that being

[Speaker 0]: the problem that we're trying to solve?

[James Masland (Member)]: No, I do not. Okay.

[Emilie Kornheiser (Chair)]: It would You're welcome to, I just No,

[James Masland (Member)]: no, there are a lot of thoughts that really haven't gelled as I'm and what I'm pleading for or asking for is two thoughts. If we agreed on the problems that we're trying to solve, and I think we're close to them, we'd probably be doing a better job here putting together the things we've heard in the last couple of days and seeing how to use them. And that's probably enough for this. Otherwise, I'll work through it, all of it's today, and hopefully we'll make better progress.

[Emilie Kornheiser (Chair)]: I'm gonna catch up with the folks who are terribly late. I'm probably here to stop here. Which is that, to be very frank, we are receiving a bill where the idea of moving towards greater scale is a brokered process, a brokered voluntary process. And the question before us is, are we going to use tax tools to make a difference? And we can talk about it just as tax incentives. But at the end of the day, the other side of a tax incentive is a tax penalty, even if we pretend that that's not true. And so are we interested in designing tax incentive penalties in order to help facilitate and motivate Vermonters to move towards these economies of scale? Or do we not think that that's an effective tool? And I want to make that decision before we get really fancy with using those tools.

[Mark Higley (Member)]: The choice is tax incentives or tax penalties or both?

[Emilie Kornheiser (Chair)]: They're the same thing, I think, is the reality. Because any tax incentive is going to be paid for by the folks who don't receive it. And so those folks who don't receive it are getting a tax penalty. And frankly, even the people who get the tax incentives are, to some degree, paying for the tax incentives.

[Carol Ode (Member)]: Checkers. But doesn't that depend on where the incentive money has come? Sort of,

[Emilie Kornheiser (Chair)]: but not really. We could say it's coming from left field over here, but at the end of the day, we're applying it in this place when we could apply it in a different place.

[Carol Ode (Member)]: Outside The UK. I'm saying

[Bridget Burkhardt (Clerk)]: if we Okay. Let's say we

[Emilie Kornheiser (Chair)]: pulled it Let's say federal money fell down from the sky in some magic universe, and we decided to just apply it to tax incentives. Yeah. The decision to just apply it to tax incentives instead of applying it to everyone would mean that functionally, we are

[Carol Ode (Member)]: Any help we give to somebody is not given to them. Right.

[Mark Higley (Member)]: Yes. So, the sake of argument, I mean, what we went through yesterday or whatever, certainly confusing. Why is there not the ability to have a per pupil incentive? In other words, I think it was addressed in one of the issues, 400 a student?

[Charles Kimbell (Ranking Member)]: Yes. With

[Mark Higley (Member)]: that, there's

[Charles Kimbell (Ranking Member)]: a times.

[Mark Higley (Member)]: Is there a reason we need to get so technical in what we were looking at as far

[Emilie Kornheiser (Chair)]: as might have gotten a too technical too fast, which is why we're having this conversation right now, which is, do we even think it's a good idea to shape the tax policy towards this goal of greater scale?

[Mark Higley (Member)]: Again, I heard some say that the incentives weren't a major part of their decision, but on the other hand, I still took advantage. I mean, you know, I'm sure it must have helped to some degree.

[James Masland (Member)]: So if

[Charles Kimbell (Ranking Member)]: we can back up for a second. So the bill that we're getting from house education has a concept of CSOs. But within those CSOs are areas where there could be school consolidate. It's completely voluntary. There's resistance to any school consolidation for a number of issues, but part of it's cultural, part of it's meant to overcome that resistance, you need to provide something that's significant enough to make them want to even think about. So what is significant enough to make them want to even think about it and then do it? And is a tax break, or is it actual grant money that they get? And that's, I'm not sure what the answer to that is. If that's, because I understand it, that's what we're trying to That's the question.

[Carol Ode (Member)]: Rebecca, please. Because our formula Is your hand correct? Oh, sorry.

[Bridget Burkhardt (Clerk)]: No, no, no, no, I

[Carolyn Branagan (Member)]: was just giving her hand, her arm

[Carol Ode (Member)]: a break while you spoke.

[Speaker 0]: So did she, go ahead, Carol. Oh, haven't? I'm so sorry, go ahead, Rebecca. I'm gonna respectfully ask that they do not use the word culture, in part because in education that has pretty horrible history in terms of really problematizing particularly high charter schools and implying that there's something cultural about them that keeps them the way they are. I also think that there are two enduring findings. One is that leveling up does work in terms of improving outcomes, but also that people don't move even with incentives unless they think moving will be better off. So I feel like part of it is making sure that it's clear that there's something tangible that leads these systems better off. When I listen to what's happening over there, when I listen to the competitions in our house, I believe our school districts actually know their numbers better than we do. And they're making, they're optimizing locally. It's just that our incentives misaligned in ways that discourage what we think is rational behavior, that they may be acting quite rationally from their local perspective. I really agree with the comments about keeping it simple, in part because people are still struggling to explain the transition rates plus the sense off at the same time, and adding a third layer of complication and you find an apartment professional at the same time, I think it's gonna just make people lose their minds. But again, one of the powers of construction, I think it can't, if we do it, I do think it has to be tied to things that we know have prevented collaboration earlier. When you look at the Act 46 mergers, the whole point of the accelerated phase was to have a slow start so the agency could figure out how to support mergers. And they had 11 rushed through the gate in the first year. No one would expect that. And we ended up reducing districts by about 118. There was a lot of interest in it, but the places that moved were the places that were already consolidated at the supervisory level and all shared an operating structure. That's an easy merger because it doesn't even change on the ground. What we're talking about now is much harder. So I think if we're gonna do those, we have to talk about, unfortunately, the things that get in the way. One is not having relationships. So we're asking districts that don't have existing relationships to talk about becoming partners. We have to talk about less wealthy versus wealthier districts, because that's been a historical barrier. If you look at Lincoln, why did Lincoln pull out about aid? Maiden's partly the small schools, but it's also a more permanent district And than the rest of the we have to talk about choice versus no choice. We heard yesterday that we pulled out and started paying tuition. It actually increased the per pupil cost for the district they left, and now they're paying tuition on the side. People don't want to merge because they don't want to give that up. And if they don't give that up, we're not going to get the cost and the team that people are talking about. So unless the incentives are targeting those things, I don't see how any of this is going lead to what we say we want for Vermont schools. Oh, and one last thing. If we're going talk about the excess spending penalty as a meaning of the spending penalty, we have to talk about the way we make tuition students because it is totally distorted. We also have to talk about the impact of topping off tuition in some places, which is shielding people from exposure to access to public health. It's just hugely problematic.

[Carol Ode (Member)]: And this now, and then the, it's going to be just like a session and then I also think that moving towards something positive is the way you go and I think that I could put a lot of things in there, listen to that, it's excellent. I think that the building with the right, the construction is going to help us do this. Yeah. Oh, this is what I was saying, is health and safety regulations, rules, I mean, considering what those should look like in school, that's gonna help get us there. Okay, let's not go down

[Emilie Kornheiser (Chair)]: that road. Okay. Thank you. I just does anyone want to try to develop tax tools in order to incentivize consolidation? I have not heard a single person interested in that around this table.

[Charles Kimbell (Ranking Member)]: Say it again?

[Emilie Kornheiser (Chair)]: To use tax tools to incentivize consolidation. I have not heard anyone at this table interested in that. Okay. You're interested in that, but you think school construction's more important, but you are interested in I am Okay. Interested Great. In Okay. Thank you. Both things. Both things. Thanks.

[Carol Ode (Member)]: Because of what you said in the very beginning, we were trying to optimize for merging essentially for size, being smaller, I mean, that's the thing, but the whole system is built for not being smaller.

[Carolyn Branagan (Member)]: It is. For being smaller. It is, yeah. Madam chair, you have access to the bigger picture in a lot of ways that we don't. So what do you think about this? I I

[Emilie Kornheiser (Chair)]: really don't know, representative Branagan. I think the fact that we have a policy system that is designed to support and pay for small, small by choice, is certainly problematic if that's not the policy direction we're going in. But I also don't

[Mark Higley (Member)]: Just one person. Representative Higley. Well, another issue that comes to mind that I think we maybe have to solve first, to incentivize people to consolidate a little bit more and I've heard it in a fairly local school district that said that we're willing to merge with some other schools but we're not willing to merge with a school that has high bonding debt.

[Carol Ode (Member)]: Okay.

[Mark Higley (Member)]: So how do we, and we've started to talk about that as well, how do we deal with that? Where, you could be merging with a school that has a very high bonding debt and how is that gonna affect your, regardless of an incentive to do it, is it gonna backfire or you're gonna be in the hunt for part of that debt?

[Emilie Kornheiser (Chair)]: And so that's like taking disincentives off the table, I think is a very helpful piece of the puzzle. Yeah, okay.

[James Masland (Member)]: Jim? Yeah, thank you. I've got a couple of thoughts, not necessarily linear. Wish I were being more helpful this morning. But yesterday evening, I went to the hearing downstairs on Act one eighty one, which is a different subject.

[William Canfield (Vice Chair)]: Sure is. But some one of

[James Masland (Member)]: the representatives who was there at near the close said, you're talking to rural America. I mean, we were listening to rural rural America. And and much of the concern or difficulty or whatever you wanna call it about consolidation has to do in in in large part with with rural versus more metropolitan and urban, how things integrate or not. And I just offer that that is one of the lenses that we're looking through, whether we acknowledge it or not, and it makes this discussion difficult. Another thought is, though, when we're talking about buildings, you know, new buildings, old buildings, and the things we heard yesterday that it's worth were very helpful within that discussion, I'd I'd offer that buildings are explicitly tangible and they cost this much and they prefer these functions and that is a mechanism that we can use to work through this discussion, recognizing that there are underlying concerns that that we're touching the surface of without really solving a problem. So those are some thoughts, and I'm not sure that they're helpful, but I'm aware that they're out there and it maybe within an hour or two I'll be able to better articulate what I'm trying to say. Thank

[William Canfield (Vice Chair)]: Following up on the conversation that was just had with Representative Higley and yourself, think that the framing of removing disincentives for the current system that, I don't want say incentivizing, but that supports lack of scale. I don't know if that's actually

[Mark Higley (Member)]: a distinction between the tax incentive conversations, but

[William Canfield (Vice Chair)]: that was really helpful in that. I think it's something that is more interesting to me, how can we change the current formula to further disincentivize the small by choice. I think that the point Chittenden is right about growth for a month versus urban, for what that counts in the state is also important.

[Woodman Page (Member)]: I also listened to the Zoom meeting last night and it wasn't supposed to be about just, you know, 181, although it did turn into that key issue throughout the listening tour. It was supposed to listen to Vermonters and what their concerns were, 181 being primarily part of that. But I also heard, yes, urban versus rural. And I also heard that our legislature, our leaders, all of us, were not listening to the monitors with their concerns. And in many ways we aren't.

[Emilie Kornheiser (Chair)]: So in this particular context of a move towards greater scale of our school governance structures, what does listening to Vermonters look like?

[Woodman Page (Member)]: I think Vermonters are trying to tell us that they're at a breaking point. They can't afford anything more that's going to cost them. And we're affected by these health.

[Carolyn Branagan (Member)]: Observation is really important too, you know. I think I often remember something that we used to talk about on the school board when I was a student, I was a child back then, but learned so much since. But a lot of what we did in the old days was right, and being on the school board or on the Race and Means Committee is a lot like being a parent, because you can look out there and you know who needs a new pair of sneakers, and you know who wants a skateboard. You heard this story? No, no. And you use that understanding of being a grown up and a parent and of knowing what you have for income coming in to decide how you're going to pay for those sneakers and then to decide if you're going to pay for the skateboard. That's the situation we're at right now. They're telling us out there that they can't afford the skateboards anymore. At least in my district, I hear it loud and clear every year. And it has to stop. And we have to think of something more economical to get the structure set up so that they can afford it, and at least not make it worse.

[Speaker 0]: I guess what the skateboards are, in your analogy? Like what

[Bridget Burkhardt (Clerk)]: are the skateboards that people are telling you they can't afford to pay for anymore? Or do they give you that level of clarity? Or is it just, it's too much, then we just have to cut somewhere?

[James Masland (Member)]: Well, I

[Carolyn Branagan (Member)]: don't know exactly what the skateboards are, but I think they might be language number eight when you already have seven foreign languages. Things like that, they're wonderful to have, but this is Vermont. We only have 630,000 people here. Can't afford everything like they can in Connecticut or New Jersey. We just don't have the population to support. So I think it's things like that. I'm not saying that in your community, you shouldn't afford that. If you can afford it, right. But mine can't. So we have to somehow collaborate and make sure that everybody gets their sneakers.

[James Masland (Member)]: Thank you. Going back to where you started, madam chair, which is greater scale. There are merits, clear merits in greater scale so we can figure out how to get there. A number of years ago, someone not in the building brought a bunch of people from Latvia here when they were learning about democracy after the breakup of the Soviet Union and brought this guy to a select board meeting in and we ended up talking about a broken piece of the back home. Here he ideally, they were in in Vermont in small towns to learn about democracy. And the question this guy asked is, why were you talking about a broken piece on the back home? And the answer from somebody else was, people talk about what they know. And a lot of the discussion, particularly last night at the one hundred eighty one House discussion, was people talking about what they know. They had an idea of other things to talk about, but they want to bring immediate concerns to us and get back to where we were a few minutes ago, kind of a little bit of a stretch, I think talking about I think talking about buildings and how we might build them and where they go, tangible things, would be a a useful lens mechanism or whatever you wanna call it, thank you for nodding your head, to get to a discretion discussion of scale and and how do we make those decisions. To have something in front of us and a place to land our thoughts for a further discussion. Hopefully that's helpful. I'm trying to get a little more focus as we go through the day here.

[Emilie Kornheiser (Chair)]: Bridget, I'm on today.

[Bridget Burkhardt (Clerk)]: That's something that Mark was saying about debt. If we, in future state, are moving toward a foundation formula, we're going to have to figure out debt separately from whether it's a merger incentive or not, because you can't be giving everyone the same amount per child. And then some districts have a lot of debt on their books and would have to remove programming or not have the same opportunities for kids in order to pay down that debt. So we're going to have to figure that out. So I guess, to frame it in that some of the things I think we're going to have to do to move toward a foundation formula and some of the other tax policy that we have may not be explicitly incentives, but it may be removing some disincentives as we move down that path. One other thing, and it's not exactly in the same vein, but it is about debt, is the whole point of debt, we talk about this a lot because we really thought about building a new high school and middle school in South Burlington several years ago, is intergenerational equity. And so I know it's not easy to tell people this, but if you're emerging from the district that has a lot of debt, they presumably use that debt for They really own a lot of capital. Yes. Have a lot of capital. They spend that debt on, and you're going to then get the use of whatever new building that was, whatever long term thing. Because hopefully they weren't funding short term things with long term money. And so that's a hard frame to try to communicate to community members. But that's really how we thought about funding a building instead of doing it all upfront, which is almost impossible to do because of the scale money that you're talking about anyway. You don't want everybody whose income right now to be paying for all of that that's hopefully going to be used for forty years, up into the future, thirty years out

[James Masland (Member)]: in the future. Thank you.

[William Canfield (Vice Chair)]: I think this probably goes without saying, but I feel like it's worth saying in this moment, too, of we're spending a lot of time talking about tax incentives and money and the bottom line, people's budgets, affordability, all of which is extremely important. And another problem we're trying to solve is increasing equity for students themselves throughout our education system. So yes, we have districts that are paying to support the small by choice community aspect of small schools, but there's also just great disparity in actual education outcome and student experience across our education system. The kids in my district, they're not getting the same quality of education that folks in other wealthier districts are getting. And that's just We get very lost in numbers and needs of tax policy in this room. So I just wanted to I felt that that was worth saying for a moment.

[Carol Ode (Member)]: We're gonna spend Let's spend a

[Emilie Kornheiser (Chair)]: few minutes talking about the disincentives that we want to remove. And let's try not to be too Try to be realistic with it, if possible. And I would say including those disincentives to offer students the full opportunities available to them and disincentives to merge. So one is district debt. One might be district or facilities. Yep, so opposite side of it.

[Bridget Burkhardt (Clerk)]: Yep, that was what I should say. One concern is operating structure. Really, the concern about different operating structures and one district having choice, the other district not having choice, real concerns about that. That's separate than the tax incentive side of it, I guess. Another funny side of it, though, is differences in teacher pay and educator pay in general.

[Carol Ode (Member)]: There's issues around pre K, if

[Speaker 0]: a district is offering full time pre K, it's eating that, it's actually under weighted for that, so it's eating that out of its local budget, which may not be something another district can afford to do. So that's one thing, and also on the tuition, we give the full base as tuition. There's nothing left for administrative overpass or special education at the SUE.

[Emilie Kornheiser (Chair)]: That's in pre K too. That's a substandard to merge. In the context, was the tuition part of your pre K? Well, It's still with

[Bridget Burkhardt (Clerk)]: pre K too. I'm just saying pre K is already good. Anyone

[Carol Ode (Member)]: else have a disincentive to? Just purely financially. Yes, please.

[Emilie Kornheiser (Chair)]: I think there's an interesting thing about in the context. I think there's often a social disincentive to merge with a district where the population might be lower income. And I think there's an interesting part in the context of weights where it benefits a district's either revenue or tax capacity to merge with a district that has higher needs. And so I think that's an interesting part of the It's an interesting piece of the puzzle that I don't think gets very much I think people don't talk about it very much.

[Bridget Burkhardt (Clerk)]: Think that's what Peter talks about when he's talking about flexibility. Like when you're in a bigger group, there's a little bit more flexibility in choices that you're making.

[Speaker 0]: I think that's highly dependent on the footprint and whether you have the capacity to adjust your footprint. And interestingly, I know there's back 46, there are lots of cases where less wealth accounts passed not to be merged with twelve year town. But in those, maybe some of the achievement gaps within our bigger districts are actually bigger. You're actually better off in your smaller district if you're disadvantaged if you're in the bigger district. And it's easy to lose attention to those immediate support services sometimes in the big district.

[Emilie Kornheiser (Chair)]: So I could see what we heard from Burlington about how they budget internally. I think that kind of thing really might help reduce the disincentives around a more disadvantaged district wanting to sort of stay on its own.

[Mark Higley (Member)]: Basically foundation formula.

[Emilie Kornheiser (Chair)]: Yeah, it's like an intradistrict foundation formula. Yes. So I

[Speaker 0]: think it's best for you.

[William Canfield (Vice Chair)]: I think similar vein on foundation formula moving towards a new funding system is that right now there's also an incentive for districts who are struggling financially, and by struggling financially, mean the population of the district, the taxpayers who are struggling financially, there's an incentive to vote down their budget because even if they vote down a budget like Barry and all the rest of the budgets passed across the state, their taxes still go up. So they see it as a, I'm gonna vote no to minimize the tax increase, and I think

[James Masland (Member)]: that's another reason to move forward with

[William Canfield (Vice Chair)]: a funding formula as set out in Act 73.

[Emilie Kornheiser (Chair)]: Trying to figure out how to write that down as a different Try very.

[James Masland (Member)]: Can you finish

[William Canfield (Vice Chair)]: that last sentence?

[James Masland (Member)]: Funny formula as set out.

[William Canfield (Vice Chair)]: In Act 73.

[Emilie Kornheiser (Chair)]: So the disincentive that we're removing in the scenario that you laid out is a disincentive to spend To pass budgets, I think.

[William Canfield (Vice Chair)]: There's a disincentive

[Emilie Kornheiser (Chair)]: From my perspective, I understand this isn't I guess I'm confused because it feels like if your taxes are gonna go up whether you vote your budget in or not, why wouldn't you vote your budget in?

[William Canfield (Vice Chair)]: Because if you vote your budget in and all the other budgets pass, your net increase in taxes is going to be greater than if your individual district Your taxes are going to go up, let's say, I'm just going to make a big example, are going to go up $200 if all the other districts pass. If all the other districts pass, policy or district pass, then it goes up $250 So you're gonna vote yours down, just say like, all right, I'm gonna minimize the damage. You control what I

[James Masland (Member)]: can. Correct, correct.

[Speaker 0]: But should be clear,

[William Canfield (Vice Chair)]: I don't necessarily agree. It should be happening, I just think that is what's actually happening. Tim?

[James Masland (Member)]: Yeah, thanks. Another thought that made you from left field. Do any of us remember Gauss from high school physics? Yeah. Gauss. I don't think I took high school. There was this gentleman named Gauss, and he had a principle, and you can draw a line around something and say, within this district, everything is neutral within the circle. And when you go outside things change, and some of what we're trying to do here is basically isolate the discussion within Gauss's brains and see if we can solve a problem there and then move to a larger realm. I don't have an answer right now except I realize in the discussions we're trying to isolate a problem and trying to solve it, or a couple of problems. But we need to recognize that there are always contingencies from outside, distance and logistics that mess up our process. But this neat work we're trying to do, and I just thought this might last week, recognizing that that's part of where we're going right now, I have hope, madam chair, we're getting closer. I

[Charles Kimbell (Ranking Member)]: think the biggest dissent is the belief that any change is just gonna cost more money.

[James Masland (Member)]: Right. That's an email.

[Carolyn Branagan (Member)]: Yeah. Can you Transportation.

[Emilie Kornheiser (Chair)]: Is a disincentive? Disincentive. The cost of transportation? Have

[William Canfield (Vice Chair)]: Yeah, cost of

[Carol Ode (Member)]: how it can be, yes. Thinking about any change, there's been a bit, and people are going have to change what they do. Sometimes the school bus is going through community to an excellent

[James Masland (Member)]: And

[Carolyn Branagan (Member)]: I think some work in specific tuition. You need to look at these tuition schools because if you send your child out of your neighborhood to a school where you don't have any control over the tuition. Like in Barrie, for example, those people are voting only using the only tool they have to keep their tax rate lower. You don't have any control over that tuition that you send your kid out to. Neither just that school. They also don't have control because they've got a certain amount of kids which might be increasing. And I think there's a weakness in intuition and not knowing where your child is going to go to school and allowing that advantage, definitely don't get fired for this one. My folks love tuitioning because they get to choose what they see as the best school. We don't offer transportation to high school kids. It's also the factor of how can parents get their kid there. So transportation is really important for the high school kids in my area. But you know what I'm saying? I think we ought to look at both ends of that tuition question, the children who are being sent and the communities that

[Carol Ode (Member)]: are received. Excellent. Thank you.

[Emilie Kornheiser (Chair)]: I think that's a great place to stop for now. We are going to make our way downstairs to Room 11 to hear from the Chamber of Commerce about manufacturing, and then we'll come back up here at eleven.

[Bridget Burkhardt (Clerk)]: I'll see you all downstairs.