Vermont Legislature SmartTranscripts:

[Senator Andrew Perchlik (Chair)]: Okay, we're live. It's the Senate Appropriate Committee, January 22. We've been going through budget adjustment, but we're gonna have built the right features and go over a report, which we'll have an application from Bob and the budget stuff, but we wanna just get an update on how things are going. We'll ask the report that was issued recently by BuzzFeed. Alright, so I'll let you introduce yourself for the record.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Sure, so for the record, I'm Doctor. Morgan Crossman, I'm the Executive Director of Building Bright Futures, which is Vermont's Early Childhood State Advisory Council, and this is my colleague, Anne Berlett, who is our Policy and Program Director. Welcome. Thank you now. Thank you for having

[Senator Andrew Perchlik (Chair)]: me. Oh, Mr. Rami Thick. Last name you called.

[Senator Richard Westman (Member)]: What's up? Yeah. We announced that you were late.

[Senator Andrew Perchlik (Chair)]: First time. I got shanghorn. Think you all have that enough.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Okay. He doesn't get a star. Alright. I'm Morgan Crossman. I'm the executive director of Building Bright Futures. We serve as Vermont's early childhood state advisory council, so we are named in both state and federal statute as your primary adviser on children and families prenatal to age eight. And one of our primary responsibilities within our legislative mandate is to monitor Act 76 and the impact of the child care law, among other components of our system for kids and families. One of the key things I need to name is that we are not lobbyists. We are advisers. We come to you and say, here's what we know, here's the data, here's the lived experience, and help support bringing you the most up to date, high quality data to an informed policy. We also don't administer programs. So we've worked with the administration, as well as legislative leaders to say, what do you need to know? What is the impact you're looking to make? Let us help people articulate that in the context of the vision that we've set out for kids and families over a period of time.

[Senator Andrew Perchlik (Chair)]: Did you exist before? Act 76 and We did.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Yes. Right. Yep. So it expanded our charge in act 76. So we're in title 33 chapter 46, and also in the Federal Head Start Act. So our scope expanded, and one of the primary functions in Act 76 for us is that monitoring element. So how do we know if the system's actually functioning in the way that you intended it to? Is the law and the policy working? What are the funding implications? Were there unintended consequences? So really trying to understand what we're seeing from all sides of that equation. What does it look like for families? What does it look like for communities, early childhood educators, businesses, and folks across the system? I also want to reflect our current configuration of the board. So again, we are a nonpartisan data driven entity. Our board is made up of 23 individuals, agency leaders across every agency, department, and division who support children and families. Two legislative leaders. So from the Senate is Senator Gulick, and then we have a range of at large members from partners across the state who are working directly with children and families. So just to remind folks of who is currently sitting in the voting seats on that board. Before we dive into Act 76 data, also wanna articulate that we have just passed the next five year strategic plan for the state of Vermont for kids and families. So this board and Building Bright Futures as a whole was created just outside of state governments to pull the vision and strategy for kids and families. Each five years, we go through a really robust process of collecting qualitative and quantitative data and doing a ton of system systems monitoring to understand the needs of kids and families. This next strategic plan has five key goals. We're not going to go through them all today, but just wanting you to know that Act 76 is a key part of what is prioritized in goal three related to early care learning, early childhood education, and it's the primary strategy for how we fund our childcare system in the state of Vermont, which is now operating at scale. So we're going to talk a little bit about big picture, where we are at App 76. I

[Senator Andrew Perchlik (Chair)]: would

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: be the first to tell you that I did not think we would have made as much progress as we've had in this amount of time. From an econometrics perspective, a research perspective, what I said to everyone is, we're looking for five year gains. Five and ten years is when we're likely to see impact. We are seeing significant measurable progress across all indicators. So the report that you have in your inboxes, but we can also send you another copy if you'd like. We sent the ACCE-seventy six monitoring report, and the most important thing I can say to you is that we as a state have made significant measurable progress. So for the first time, we've seen Act 76 not just being implemented, we're actually delivering service at scale.

[Senator Andrew Perchlik (Chair)]: And was it '21? What year was

[Senator Richard Westman (Member)]: it when we passed? 2023. So

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: again, that's a really quick turnaround for systemic change, right? So when we're looking at the scale and what we are providing, there are a range of indicators that Anne is gonna talk us through, but in terms of the 2025 data, what you're gonna hear about is the child care financial assistance program serving about 50% more families than it did before act 76, and that families are really saying this is such a game changer for us in terms of lower co pays. We're also seeing our programs report more predictable revenue, wage increases, benefit improvements, and the ways that they're able to invest in quality in the programs. At the same time, we as a state have distributed $2,700,000 in quality and capacity incentive payments to over 800 programs. And so we're operating a much larger system overall and really looking at that kind of fiscal stability. So, again, in terms of the highest level, all of the core structures that were put in place in Act 76 are functioning the way they were intended to. I think calling attention to the national context is really important as we're talking about how well we are doing in Vermont in the childcare arena. It's a really sobering national moment in terms of, you know, what many states are facing. So colleagues that we've been partnering with, learning from, and working with in the child care and early care and education space are facing audits, a ton of funding uncertainty, fear and stress in families and providers and the administrators running those programs. So just naming that we as a state are not immune, but because of the investments we've made, we're in a much more stable position because of that sustained state level investment.

[Senator Andrew Perchlik (Chair)]: Have you gotten calls from the Montgomery administration?

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Yet. Not yet. But but it is it's so important that we are holding both of those things. We have done some really amazing work in the state of Vermont. We're still partnering with states across the country and meeting with them fairly regularly to understand what those tensions and challenges are, how they are handling some of these things. So, yes, our system is doing incredibly well in the childcare space. We're delivering the results that you all intended to, and there's still some strength on our current system that we need to prioritize. And so that's why all of the monitoring that you all put into this legislation is so critical, because now we can actually tell you, here's what's going really well, and here's what we need to focus on in the next couple of years. So I'm gonna turn it over to Anna to talk you through some of this. And the thing I would name is, that five year strategic plan tells us in the next five years, here are the expectations for kids and families. We want high quality learning environments, and here's what we want for outcomes for kids. And again, we're already starting to see a ton of that progress, and our policy recommendations that we'll talk to you about a little bit later are where we're also seeing the priorities for this coming year.

[Senator Andrew Perchlik (Chair)]: Great. And that is the five year plan as well for the long term, or if it is refunding like on your website.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Yes, so we can send you the five year strategic plan, we'll also send you one pager, which is a new amazing visual with Amazon, And, yes, all of this data. And what Anna's gonna be presenting today, if you look at that report, there's a four page data snapshot right after the executive summary, and that's the data we're gonna be talking through this morning.

[Senator Andrew Perchlik (Chair)]: Finish recommendations of that five year plan IC?

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: So the five year plan itself has the level five goals. Then there are objectives that we've set as a state. This is the broad vision. And then there are objectives and strategies for how we're gonna the policy recommendations are based on those. Here's what we need to do this year in order to make progress in that five year vision. So we'll walk you through the policy recommendations towards the end.

[Senator Andrew Perchlik (Chair)]: Okay. Great. So before you go

[Senator Philip Baruth (Member, President Pro Tempore)]: from this slide, I'm looking at the one on the left.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: This is where we're gonna stay

[U.S. Senator Peter Welch]: here for the twelve minutes. Yes. Wait. Wait.

[Senator Philip Baruth (Member, President Pro Tempore)]: I'm just wondering why it looks like the last two figures don't correspond with the graph. So so it goes from 12,000 to 11,000, but the graphic goes up. I'm not even now.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: So there's a- There's a peak and then- Yeah.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: So, Brule, policy director, I policy see. Yeah. We're excited to walk through some of these key indicators related to kind of family affordability, which as folks know was one of the key goals of Act 76. So the image that the senator points out illustrates a really steady incline here in the number of children specifically that are enrolled in in the Child Care Financial Assistance Program. In the report that Morgan referenced, you can see the same kind of increase happening for the number of families that we're serving, as you would expect. There's some slight kind of dips that folks might have noted. Those are really standard, kind of based on what we expect to see from childcare enrollment over the course of a year with that response with the school counselor.

[Senator Andrew Perchlik (Chair)]: So, this is the dotted line, those are quarters, basically.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Correct. Yep, the dotted lines indicate quarters. We debated whether that was too much information for you all, quarterly versus annual, but it shows that there's a really, really nice increase. So it shows overall, you know, an increase from about 7,500 children in 2023 to nearly 12,000 in 2025. So just over two years. That is not, you know, as Martin said, that's not a marginal change. We're talking about a really significant system scale expansion and access. And we see this across every age group. So you'll see in the right hand graph here, the increase, from, again, those same time points, September 2023 to September 2025, a really nice increase across infants, toddlers, preschool aged children, and school aged children who are accessing childcare financial assistance for things like after school and summer care.

[U.S. Senator Peter Welch]: You

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: also will see on this same slide kind of pointing out just the scale of what the change in affordability looks like for families. So, for a family at about 275% of the federal poverty level with two kids

[Senator Andrew Perchlik (Chair)]: Anne, if you happen to know what two seventy five would have

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Great question.

[Senator Andrew Perchlik (Chair)]: Is that something? If you said

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: the chart, I'll

[Senator Andrew Perchlik (Chair)]: pick it up.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: The chart would be helpful, wouldn't it? Yeah. I can get that for you after. But this would mean roughly

[Senator Andrew Perchlik (Chair)]: Sorry to interrupt because sometimes people hear 275%, and they think that's a lot. But I know it's not.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Well, so this as as folks might remember, and it looks like it's about $42,000 a year, roughly. But as folks might remember, the eligibility overall goes up to $5.75. So previously, families at two seventy five would have been eligible, but they would have received less Right. Through the program. Now we see that they're, on average saving about $2,200 a month

[Senator Andrew Perchlik (Chair)]: being

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: enrolled in Child Care Financial Assistance Program. So again, not talking about kind of a small discount, particularly for those low to low middle income families. We're talking about a massive difference in what it looks like for them to afford other parts of life, whether it be Okay. Housing, groceries, other other expenses, and could potentially also really impact their decision making around blocking, which we'll see a little bit more data around in the next slide. So, continuing on looking at some indicators related to affordability and eligibility, one of the kind of things that we're keeping an eye on, and I think would be of interest to this committee, is that there are an additional 2,800 working families that were determined eligible in 2025 compared to 2023. So kind of looking at who is accessing the program overall in 2025, 65% of families accessing the program are working families. I don't have historical data on that, but I would gander the guess that, like, that is that is the highest percent of working families that we've likely ever had a cold program. On the left hand side here, you can see kind of the breakdown of families at various levels of the federal poverty level accessing childcare financial assistance as of this September, September 2025. This does not include one thing that's important to note is this does not include children that receive, whose families receive childcare financial assistance based on other service needs. So, service needs such as protective service agreements or being determined eligible through the Economic Division's programs. This underrepresents families overall, but you can see again, really nice participation from 175 to the top at five seventy five. And of course, the families at that higher end of the income scale are receiving less assistance based on based on their income.

[Senator Andrew Perchlik (Chair)]: And you didn't ask for it. My advice would be to add a dollar number. Mhmm. So maybe when you go to the next meeting, just so can people?

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: How much assistance folks are receiving?

[Senator Andrew Perchlik (Chair)]: No. Income levels. Because I think Okay. Don't understand that somebody at 200% poverty level is still

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Yeah, very much. Yeah, absolutely. Yes.

[Senator Richard Westman (Member)]: Okay,

[U.S. Senator Peter Welch]: so

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: access and kind of family affordability isn't the only part of the equation and isn't the only thing we want to kind of draw the committee's attention to. Our role in monitoring things related to childcare supply and the workforce are also really critical to understanding the impact of the investments and the ability for the impacts of the investments to be sustainable and for us to keep seeing the good gains that we've seen as a state. So, this slide kind of illustrates a couple of mixed truths or kind of tensions in what we're seeing from the data, which is aligned with what the intent of the law was, which was a real focus on family affordability and program sustainability, but less so on things related to the workforce directly.

[U.S. Senator Peter Welch]: So, on

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: the positive side, you can see on the slide that we're seeing kind of modest gains, about a 5.2% growth in the workforce working in regulated childcare, and a more substantial gain, 22.4% increase in the number of educators with a degree that are in the workforce. That being said, kind of the collection of that data and the incentives to collect that data did increase during this time along with the changes of Act 76. And at the same time, despite kind of these modest increases related to the workforce, we hear from conversations that we have with with folks across the state that staffing shortages are still described as the biggest challenges across all all of those conversations. So we have a series of listening sessions this fall with folks, and I I I attended those across the state and a few virtually and universally staffing shortages, specifically kind of the delay that you all have likely heard about related to fingerprinting, supported background checks, comes off really universally as kind of the factor that people worry about. It's strain on the workforce and on kind of growth in our childcare supply overall. We also still see gaps, especially for infant and toddler care. There's really great new work from our partners at First Children's Finance about the supply and demand of regulated childcare. So, you'll see some images from that study on the screen.

[Senator Andrew Perchlik (Chair)]: Senator Baruth.

[Senator Philip Baruth (Member, President Pro Tempore)]: Yeah. I just wanted to stop you on infant and toddler. Sure. In the budget last year, I believe we made a change that upped the percentage. Yeah. Has that had an impact yet?

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Yeah, so it's, we've heard that those increases were really helpful to programs. The increase was to the infant toddler reimbursement rates. As you referenced, it is quite recent, and folks in the listening sessions express gratitude, and I think those are having an impact and we should actually add an image about this, but because of the kind of ratio that is required of infant care, it's still just so much more expensive to provide, and programs take a more significant loss in providing infant care, as you all know. So I think particularly for workforce, for having qualified, ready, early educators who are able to stop those infant rooms, it's still a big strain.

[Senator Andrew Perchlik (Chair)]: The

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: thing I would add about that too, is that what we're not showing is what that capacity and supply has looked like over time, and we have always had really big challenges with providing infant and toddler care in my pocket So, pretty This is a national and a kind of long standing issue that both are paying attention to right now. Yeah,

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: so there's still supply and demand gas, as we've noted, particularly in infant care, as well as toddler care. And it's- it's, uneven, you know, the gains are uneven across the state, which is something we certainly kind of are- are monitoring as well. I think it's also kind of important to note that some of the- the gains that we're seeing in supply and in workforce are more side effects than versus like direct impacts of Act 76 because there wasn't that focus on the workforce. So anecdotally, we're fearing that many expansions are happening in programs that previously had closed classrooms because they couldn't find work workers. So, we're not necessarily seeing new spaces. There's new spaces, but there's also a lot of kind of newly reopened spaces, which is promising to see.

[Senator Andrew Perchlik (Chair)]: Or not closed spaces.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Not closed spaces.

[Senator Andrew Perchlik (Chair)]: So the graph of the sire capacity and slots, I'm not understanding what that graph, the lower right

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: The lower right hem graph? Yeah. Yeah. So, it's a stacked bar graph, so it's a little bit confusing. It shows that we are currently, we currently have supply for about 3,000 infants.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Right.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Actually Now

[Senator Andrew Perchlik (Chair)]: says reported desired.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Yep. And if you look, it's the graph on top is twenty twenty five. The graph on the bottom is twenty twenty three. So we're seeing an increase in the capacity overall, but there's still a gap of a little less than 5,000 slots for infants statewide.

[Senator Andrew Perchlik (Chair)]: So the yellow for both of those supposed to be the same. One is current functional capacity, one is current desired capacity. The bulk is supposed to be the supply.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Yes, they both are essentially supply. I think there was a change. We to work friends in the methodology there, but I think there was a change in how it was The

[Senator Andrew Perchlik (Chair)]: basic is the green is shrinking.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: That's Correct. The green is shrinking.

[Senator Andrew Perchlik (Chair)]: That's what I was Yeah. Okay. I got

[Senator Richard Westman (Member)]: it. Oh,

[U.S. Senator Peter Welch]: no. No. That was just it. The green was, you know, the gap is being reduced. Yes, exactly.

[Senator Andrew Perchlik (Chair)]: Okay, thank you.

[U.S. Senator Peter Welch]: Yeah.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Alright, so I'm going to hand it back over to Morgan, who's going to talk a little bit more about the fiscal status of the program.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: And before I do that, I just want to name that the way that we're compiling all of this data is by partnership with the Child Development Division, the Department of Taxes, the Agency of Education, and then a range of community based partners who are also actively collecting data on workforce conditions, what is happening in the field. So, a part of our job is not always to be capturing and collecting new data, although we are. It's also compiling and bringing it to you all. So, as we're talking about finance, if there are very in-depth questions around the payroll tax and and the ways these things are working, absolutely drawing your attention to the tax department and to the child development division for additional additional data here. However, because this committee is very excited to hear about spending and revenues and all of those projections. What's really important for you to know right now is that child care contribution revenue is stabilizing. And in talking with the Child Development Division, but also the Department of Tax, they are projecting that there's about 99% of that roughly a $172,000,000 budgeted for CCFAP will be expended. So we are not in a position like we have been in previous years where there is an underspend of a significant dollar amount. We're talking about a 1%.

[Senator Andrew Perchlik (Chair)]: Yeah. Correct. 1.6. That's your projection.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: That is the projection based on the bid year. Right? So, what you're seeing is that the timeline of reporting between tax and CDD is, you know, we're still getting that data in. So, based on their current projections, we are planning to spend 99% of that funding.

[Senator Philip Baruth (Member, President Pro Tempore)]: So, in other words, it's an illusion that we've approved by term 1,000.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Correct. So there have been several discussions among partners and others asking questions about a significant under spent. That's not actually what we're seeing based on these projections.

[Senator Philip Baruth (Member, President Pro Tempore)]: Will say, I feel like we're nitpicking your slides.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: That's okay.

[U.S. Senator Peter Welch]: I don't mean to

[Senator Andrew Perchlik (Chair)]: do that,

[Senator Philip Baruth (Member, President Pro Tempore)]: but but this is the second time in your presentation that the somebody looking at it would say there's a falloff from the previous year. Mhmm. And there's not, if I'm understanding you correctly. There's neither a falloff in the revenue nor in the uptake. But looking quickly at several of the slides to give that impression. So here, I don't I don't know that I would present it that way because when you look at the total and then you look at the years, you're like, oh, so somebody not having your

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: A different conclusion.

[Senator Philip Baruth (Member, President Pro Tempore)]: Explanation is gonna come to the just

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: A different conclusion. Yes. It's entirely fair.

[Senator Andrew Perchlik (Chair)]: But just because you don't have two

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: It's because there are two quarters missing. Did you Yeah. Yeah.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: I would just add, you know, and, again, the department of taxes are the folks to talk about with, you know, more specifics, but it it from what I understand and what they conveyed to our team, you know, you're seeing about $20,000,000 per quarter this fiscal year. Yeah. Which was which what they anticipate seeing in those second two quarters. Yep. So, the it's stabilizing and should be actually notably higher than it was in the first fiscal year that this was implemented, given compliance and rollout and all of those things. Right.

[Senator Andrew Perchlik (Chair)]: That's why the q one of FY twenty five was so low because that's just when it started to roll.

[U.S. Senator Peter Welch]: Exactly. Yep.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Yep. Exactly. So

[Senator Philip Baruth (Member, President Pro Tempore)]: Well, that is big news.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: It it is. Congratulations. To you all. Congratulations to everyone. Right? This one this one's really important because, again, we're seeing it quicker than most people would have anticipated. This is very large scale systems change. What we're seeing is a very complex system mature really quickly. We're seeing predictable revenue, we're seeing predictable spending at this point, and really high participation rates already in, you know, a matter of a couple of years. So, really, really important, and a really big celebration for the state in the context of what what else we're seeing across the country. I can't come in and present all fundings to you. So, I do wanna also call attention to some of the challenges and the constraints that we're facing. Again, it's not to say that we shouldn't be celebrating where there are real wins, it's how do we now maintain and where do we prioritize for this next year. And so, some of the things that we are continuing to see that Anna already mentioned is workforce shortages and sustainability challenges for programs. And there are a range of partners with the Child Development Division and opportunities focusing in this area. I should also name for this committee in particular that in the last month and a half, we received as a state $12,700,000 from the federal government through something called the preschool development grant. Building Bright Futures in partnership with primarily the Agency of Human Services Child Development Division, but also the Agency of Education and others submitted a really strong application, and we're one of 23 states who receive this funding, and it is all about strengthening early childhood education systems. So, includes childcare, pre kindergarten education. So, we are really prioritizing a lot of the challenges that you're hearing about this afternoon. In terms of administrative complexity, there are all the biggest challenges with roll out and implementation. What I will say is that I've been really pleased with the way that the Child Development Division has managed this process in terms of the communication and in terms of the partnership with communities and folks who are administering programs, implementing different pieces, and capturing data. So,

[U.S. Senator Peter Welch]: one of the things that I

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: think Joanna mentioned earlier was some of the challenges around fingerprinting and background checks, and the way that, again, state agencies are trying to come together to solve some of these big challenges for our programs. The other thing that you saw, especially when we're talking about access and what that looks like, there's still inadequate access, and it really depends on where in the state our kids and families are, so that's something we're also monitoring. What we need to pay attention to, is this is absolutely anticipated change and implementation challenges. So, not looking at this as a sign of policy failure, it's here's what we prioritize next, as we're thinking about how our system is changing, and what are the pressure points, and what are the levers that we need to use to refine and to stabilize the system. Alright, and I mentioned PolicyRecs earlier, so just want to close with saying we have a range of recommendations that come from the State Advisory Council Network. The one that is specific to these childcare investments are really about Act 76 and protecting the investment that you all have made, and how we think about strengthening all of those systems to support kids and families. And it's really about, again, protecting the investments that we've made and ensuring that we're taking the next step in supporting early childhood education holistically. The other that I would call your attention to, because so many folks are talking about becoming our education this year in the context of ed transformation, is that we are very focused on how we maintain and continue strengthening universal community dollars in education. In terms of the kind of final takeaways, the the big picture is Act 76 is working, and you all have so much. We, as a state, have so much to accelerate. We are delivering services to kids at scale. We're stabilizing families and programs, and it's in such an important moment given a national context where other states across the country are struggling in childcare, and the investment that we've made is actually moving us in the opposite direction. So, we're doing a really great job. Our job for the next year, the next five and ten, is to continue monitoring, but also to maintain stability of the system and to make sure that we have equitable access and

[U.S. Senator Peter Welch]: and.

[Senator Andrew Perchlik (Chair)]: Great.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Any questions for us?

[Senator Andrew Perchlik (Chair)]: We

[U.S. Senator Peter Welch]: didn't.

[Senator Andrew Perchlik (Chair)]: Okay. Yeah. Center Wells would be here shortly, I think.

[Senator Philip Baruth (Member, President Pro Tempore)]: I think we got this close.

[Senator Andrew Perchlik (Chair)]: Yes. Yeah. Were they here? Yeah. Because I got it out of the.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Like But

[U.S. Senator Peter Welch]: I don't know. Just. Yeah.

[Senator Andrew Perchlik (Chair)]: It's like So so we have a second. Mhmm. So I don't have any interaction with They're federal, right?

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: So in terms of our monitoring, we came and talked to you about child care today, but we're actually responsible for monitoring the entire early childhood stuff, whether it is pre K related, mental health, basic needs, we have so many partners, actually, we had a member on our board, my CDOYO, in previous years, and so we- Oh, gosh. Yeah, we work very closely with the Head Start programs, and have been monitoring what is happening federally, both with the Head Start directors themselves, but also with the treasurer's office and the administration to really think about how we prioritize and how we think about Head Start in the context of childcare, pre kindergarten education, and after school.

[Senator Andrew Perchlik (Chair)]: Great, now you've, I don't know if you've looked at the language about the childcare fund and the budget adjustment act that's in the house. We'll wait to, like, get into it till it comes over here, but I don't know. And you're not logged in, so you probably can't answer the question, but I'd be interested in what you or others in that space think or that language and how it deals with the the money in the home.

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Happy to come back, but I will not come in and tell you what I think

[Senator Andrew Perchlik (Chair)]: you should

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: do about it, but I

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: will answer questions and help you think critically about based on the mission.

[Senator Andrew Perchlik (Chair)]: Or if there's some polity impacts you might

[Dr. Morgan Crossman (Executive Director, Building Bright Futures)]: Yep. See it. It has an unintended aspect. Okay.

[Senator Andrew Perchlik (Chair)]: Thank you. Thank you. Thanks for your work.

[U.S. Senator Peter Welch]: Thank you. See you next week.

[Senator Andrew Perchlik (Chair)]: I'll see you.

[U.S. Senator Peter Welch]: Hi, everybody.

[Senator Andrew Perchlik (Chair)]: That's something we know about.

[U.S. Senator Peter Welch]: It's so good to be here.

[Senator Andrew Perchlik (Chair)]: Yeah. Thank you so much for joining us. Floor is yours.

[U.S. Senator Peter Welch]: Is introduction? That

[Senator Andrew Perchlik (Chair)]: Yeah. Know everybody here, so we don't need to do the introduction.

[U.S. Senator Peter Welch]: You know what? I love, you know, because in my line of work, there's the high point, the low point is the introduction. Here's away from the truth and here's the self serving. Well, you know the situation. I wanted to start by saying, again, I just so appreciate the work that General Assembly has done, but it's incredibly difficult because we went from COVID where there was a lot of money coming in and you had to figure out how to use it in a practical way to the end of those funds. And then the thing that is the most worrisome for me, and I'm sure to you, is that there's an effort in the administration, especially with this Russell vote, to claw back money that Congress has approved and that you're depending on rightly so. And you're seeing that in a variety of different programs. So it's not you don't even have this it's not going from the timing of this ambitious, activist Jefferson, part of the federal government to help all states cope with the lights being out from the economy during COVID, to them trotting out. But you now have one big beautiful bill for instance that took an immense amount of money away. It was just cuts across the board, especially in healthcare, which you know, and it's very disturbing to you and to all of us. But that's something where we know that the hospitals are already starting to adjust in anticipation of the loss of revenue that they're going see more locally from their healthcare, but still needing care. So I really worry about that a lot. We're making, there's a bunch of us on both sides of the aisle, small groups still doing our level best to see if we can somehow extend the tax credits for folks who are getting health

[Senator Andrew Perchlik (Chair)]: care

[U.S. Senator Peter Welch]: in the exchange. I was talking to somebody from the Northeast King who used to farm up, but his premiums here in Vermont are going from $900 to $3,200 a month. Right? So, likely he's not going to get insurance or have to get some plan. So, those are actions that the federal government is taking that are imposing an incredible burden, not just on the states, but on the communities, because the ripple effect on that is really, really terrible. And some of the things also that are in the areas, the funding we got from broadband was really terrific. And we remember months after tremendous now with our community union districts. And then the new administration is really being difficult about allocating that money. And also this huge apparel has shown real bias for the satellite the styrene system, increases it. It's a Musk program. That's something that just doesn't work in Vermont. At least in the last of Vermont school, have bills and stuff. It's just not a practical option. And one of the things I worry about on that is that the whole point of getting the broadband deployed was to be at the high speed broadband, so we're future proofed, because we're in an area of being treated like the second class citizen, we've got to know very, very well, preacher and choir, but we're not going to have an economy if we don't have the same access to high speed internet. That's now an essential component of having an account. And with people working remote, that has to be something that's available to anybody who has simply not. There's some good news, but it's complicated with sort of non budgetary issues. But the Senate appropriators in the House Senate are working very bipartisan way And trying to get the appropriation bill back on track. Senator Collins and Senator Murray. When we returned, actually the House right now is considering a number of the budget bills, we've been operating a lot of times on these so called continuing resolutions. And I mean, people are in turn with the responsibility of passing the budget. You know how hard it is? But what's happened in Washington is that your equivalent committee in our department does not pass the budget, so you get a continuing resolution. It's just kind of a flat line approach, which obviously is you're not making judgments about hard judgments, have to make about where you do have to increase your spending or places where you might have to cut and accommodate the revenue base you're going to have. So there's really good news there, because there's responsible funding, would say, for a lot of the research programs and health care programs and the education programs. The question we're going to have is just emerging, rising on what's going on in the homeland security, what's going on in Minneapolis and other states where there's just such a core of the conduct of ICE that is swung into jeopardy, the capacity to pass three different budget bills that have the most impact on our states. So that's just part of the situation we have in Washington with the administration. All of that is to say, you've got the dynamic in Washington where the head of the office of management, He you're less is using tools that have not been used, and maybe he does not have to write to you, and that includes empowerment. That includes taking money that was specifically appropriate for one purpose and then reverting it into another purpose. The administration is feeling this interfering with the congressional priorities, the legislative priorities, humbling, and he did, I don't know if it was appropriate on the basis of the decision by the committee, and then your proposal, sending the Senate. Again, hostility towards the federal government plan and partnership role in many areas that the states legitimately do have a help on. So that creates obviously a fair amount of uncertainty for you guys because it's changing. It's not like even if there's an agreement that necessarily means that it would be followed by the administration. So I don't have an answer for how we would deal with that. But I am opposed that that burden is being imposed on you and your counterparts in the legislature's own country. But that is the reality of the dynamic we're facing. So the bottom line here is that you've got the good news is that you've got the Senate appropriators and the House appropriators who are working mostly in a bipartisan way. That's good. And want to pass a budget that is more consistent with maintaining the commitments that the federal government has had to the states. Number two, you have a dangerous dynamic with an administration and people like Rusty Bowen who see what the Congress pass it as a budget as advisory to follow what they feel like. And they don't usually, the rest of the country doesn't usually follow. So literally it would be as if you guys passed the budget here, you got the full vote of the Senate and the House, And then we had administration action that said we won't file this regardless. So it's tough, it's a tough time. And the other thing, of course, is that the revenue base has been handled with the money related to the bill. Those tax cuts are not beneficial to Vermont. The revenue loss, steps removed to Vermont. So, we say that taxes aren't beneficial because they really are skewed towards corporations and very wealthy. Just on that point, this is related to the budget, but it's, know, Vermont has been such an eager effort to have campaign finance reform. We passed legislation to limit on how much a campaign could spend, it was ultimately declared unconstitution by the Supreme Court. But in the year Citizens, the year before Citizens United was passed, 100 wealthiest individuals in The United States contributed $44,000,000 to the campaign, Last year it was a billion dollars. And they don't speak for the majority of needs of others. I bring that up because it's a dynamic in this really affecting the latitude that I think that the democratic elected people can be dealing with. Said she needs money, eventually, and she goes into that $50 that only time we people can get to the various campaigns. So I already stopped there, and that's where I began, expressing my gratitude probably would have been. Yeah.

[Senator Philip Baruth (Member, President Pro Tempore)]: Pro Temps, Senator Baruth. Thank you, Senator Welch. Specific question, and maybe coming from my own paranoia, as the saying goes, it's not paranoia if they really are out to get you. So I'm thinking about the money for rural hospitals, the 195 or 198, I can't remember, million over five years for total of 1,000,000,000. From its face, it it it seems great understanding that the big beautiful bill costs health care elsewhere to a much greater degree. So in that sense, it's kind of, it's taking a bunch, giving you back a little. But with that said, my worry is that as they're rolling that out, at the very last moment in the process, there will be an attempt to assert conditions like making gender affirming paralegal. Right. Is that something you think is a a worry founded in reality? Or do you think that that money is going roll out without further conditions?

[U.S. Senator Peter Welch]: No, here's what I have seen and observed, and I think I'll be reading the news, and see and observe it. There's an immense amount of arbitrary actions that come out of nowhere for no reason. Okay? So you don't know. But what you do know is that you can't count on anything Because if there is an arbitrary reason that the administration has, like something you did or Governor Spout did, will they act? They've done it. We've seen that. We've seen actions that are being done as political payback. And now the administration doesn't like what someone did. So I think that your apprehension about that has a very solid foundation. I hate to say that. I hate to say that, okay? I hate it. And by the way, that could happen in blue states obviously are being targeted more, but that arbitrary conduct goes across the board. And you can't operate. It's like these tariffs, you know, I'm talking to my businesses and it's not just how high the tariffs are and how that feeds into the traffic. They don't know what it is from day to day. So how are you appropriate when you don't know from day to day what it's gonna be? But my son on that is that you've just got to do the best you can, have the best policy, know, and do everything that's within your power to do. I think it's a healthy apprehension that maybe it can turn out. But by the way, that's a really important thing. You know, we talked just briefly to the governor about that. You know, this is where it just, this is going to be your responsibility, the governor's responsibility. That's going make a difference if you can get a good plan. It's actually going to be about getting a better health care system and benefits too from others as opposed to the leg study or you know. And I think the danger that I'm worried about is that if it's not done in a timely way, there'll be a lot of administration people who want to claw that back. So I would be focused on getting this done and getting it done right and getting it done quickly.

[Senator Andrew Perchlik (Chair)]: Thank you. A question on Congress's lack of a backbone, maybe. Is that one way of saying it's a stand up to the administration? I'm not surprised what the administration's doing budget for the to the budget as you've laid out, but I have been surprised that Congress has kind of rolled over on it, not you and it's the majority there. But I don't know if you've seen any change in your colleagues, like that they've maybe had him and had enough of that, because you're basically bypassing the Congress. You you have raised what I think

[U.S. Senator Peter Welch]: is the existential crisis in government. You're seeing executive overreach and congressional capitulation, and it's a toxic burden. You know, all of us have a responsibility to the institutional authorities and responsibilities we have, whatever branch government we're in. And obviously the legislature is the same as us, taxing, spending is really your job. And that's been encroached upon. And this is kind of new, I mean, was talking to Senator Leahy about this, but know, years past when there was like an impoundment, which is essentially executive disregard of the decision of the general assembly, the Republicans and Democrats were united in opposing that because it went to the heart of what their responsibilities And I use this third, can use the term authority, but it's not that you need the authority. It's your job to be doing that. So I think that's the biggest work

[Senator Andrew Perchlik (Chair)]: Are you seeing any change, are there, those that are getting tired of it or wondering what their purpose is?

[U.S. Senator Peter Welch]: You know, I'm seeing no change. I'm seeing, no, the answer is no, not yet. What there should be here is an institutional coalition that we stand for making sure that the general assembly has the powers to represent the people that sent the secret. And if you give up your taxing and spending, what's the point? Okay. And I'm not seeing that that's the case in Congress. And, one of the things I do do is spend a lot of time talking to my Republican colleagues because I'll ask them about, hey, what's going to happen to your community hospitals? Because the harmony that's being inflicted here, it's not a partisan deal. Okay? So, know, when I was talking to these folks in Vermont businesses yesterday about the tariffs and what they're going through. I don't know who was Republican there or Democrat, right? They just all had the same building their businesses working. They're all being handled in the same way by the tariffs. So when I talk to my colleagues, I'll say, what's going on with like your small businesses in these tariffs? And the story that will give me is identical to what I heard yesterday. This is what really makes me kind of heartbroken because the pain and the challenges that you're contending with here on behalf of Vermonters, access to healthcare, affordable housing, better education. Those are universal. The needs are universal. Okay? And you have to have a strong legislature to be able to play an effective role in trying to address it. So, unfortunately I can't say that I'm seeing pushback. And, you know, I saw a little bit of Denmark issue, know, the Denmark and the president reviewed the dare last week, was still threatening military action there in the tariffs. And I saw four responses from my colleagues about this, the situation, the damaging impact on NATO, since it was so patently arbitrary. I think we've got to get there. And we really, that's our job as legislators, not those Republicans or Democrats.

[Senator Andrew Perchlik (Chair)]: Anne, I know you have other things you're doing today, but is there any is there any side of hope that you can give us?

[U.S. Senator Peter Welch]: Well, hope I got is coming in this building. No, I'm quite serious. Look, this is new, what's going on in Washington. There used to be guardrails And you have a fierce fight, as you do in this bill, about policy. But we're now having a fierce fight about whether power should even exist, right? And you're seeing shocking things like people get prosecuted because the administration does not like their political point of view. I mean, that's a horrible, shocking, terrible thing to do. So the norms have been checked. And you know, the thing I run into is I think identical to what you run into. People ask what can I do or what's going on? And the fact is we've got to hang in. But I do think that our legislature, legislatures where there is more of an inner appreciation of their shared problems, even if there's a fierce debate about the solutions, that muscle has to be strengthened. And we need more of what you do here in Washington.

[Senator Andrew Perchlik (Chair)]: So,

[U.S. Senator Peter Welch]: you know, my hope is that people are, at the local level, I see, are being creative and hanging in, even if they're dismayed about this happening down in Washington. You know, the speech today in Dallas was a pretty astonishing thing, because it was not a recitation of mutual support and mutual aspiration. It was a kind of wholesale criticism. People who've been our very, very close friends for decades for centuries, right? But we gotta hang in. And it's important, what you're doing here. It's really hard. It's been harder than ever. And I do think it's really also important to try to maintain the bipartisan commitment to solving problems. I'm not asking anybody to back off and fierce advocacy from your point of view. But at the end of the day, we've got to make housing better. At the end of the day, we gotta make education better. At the end of the day, we have to have healthcare more affordable and accessible. And what I think is the glue here is that even folks that you disagree with and disagree with in this room, you can have some confidence that the underlying motivation is to achieve that goal. And I'm not certain that's necessarily the case working working out. Well, it's really, really nice for me to get back. Mean, we had Northeast Kingdom Day, just running to lots of people and just seeing everybody working hard and doing the best they can. It's really good. Perfect. You've come,

[Senator Richard Westman (Member)]: it feels like welcome home.

[U.S. Senator Peter Welch]: Yeah, does, yeah. No, it's very, very nice. I mean, especially we'll be happier, but it's not, you know, the pressures that are being imposed on you, and then of course the dialogue, it's all divisive, that takes its toll on that capacity because trust is so essential in the work you do. And that includes trusting people you disagree with, right? So, the language is so used, the vilification in Washington just for roads that trust is the glue that helps us get through our differences. So it's a different world now I've been there in 2007. Well your comment about working together is so absolutely critical and just making sure that I think we're doing that, as you know. I think you are too. No, think you are putting up and it's really, really important, even if you don't see the payoff now. You know, it's sad for me because there's a lot of really good people in the Senate. A lot of my Republican colleagues are really good. They're under a lot of pressure because they pay a price if they defy Trump. So, you know, they're in a tough situation. We do have a responsibility to our institution regardless of which argument. So thank you.

[Senator Andrew Perchlik (Chair)]: Thank you for your nice Easter.

[U.S. Senator Peter Welch]: No. It's really been nice to meet you. Appreciate Thank you. Thank you. Good to see you. You too. The start

[Senator Richard Westman (Member)]: of the picture, he doesn't talk about swinging onions.

[Senator Andrew Perchlik (Chair)]: That's your former part. We'll move to the speaker.

[U.S. Senator Peter Welch]: I think the term backbone was what? Was cheap.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Okay. Off. Phone protocol. Commissioner Gresham regrets that he can't make it this afternoon. He had a personal issue come out

[Senator Philip Baruth (Member, President Pro Tempore)]: of his voice. I will

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: try to take you through

[U.S. Senator Peter Welch]: Okay.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: On my own. Okay. You don't mind that the clock has already been run a little bit by by senator Welch. So

[Senator Andrew Perchlik (Chair)]: you have But you didn't give us any good news, so we're hoping you only ask good things.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: You know, it's I would have to say it's not necessarily bad. Put together we put together a budget that Commissioner Gresham was quoted as telling the media in a briefing the other day, no one in which no one will go hungry, and although it's tighter than it has been in in recent years, I think that's a pretty fair assessment. We're putting forth a a budget that continues to fund current services of government, and that uses up most of the base revenue available. We're a lot lighter on the one time initiatives and somewhat lighter on base initiatives, but government is continuing to be funded, and you'll see where the priorities for the remaining funds are going in terms of initiatives, which is probably an early to emergency housing. So I am ready to to walk you through. I thought what I would do this does everyone have a copy of this document?

[Senator Andrew Perchlik (Chair)]: Just on our On your screen. We have. Okay. Are those available? Because I I like our copies. They

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: are Could find them. They were not

[Senator Andrew Perchlik (Chair)]: We can send we can ask the print room to

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: print

[Senator Andrew Perchlik (Chair)]: those paper out.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: They they were not printed in the bound book form this year. Just one of one of our belt tightening measures in the as we embark on this season. But I don't have any copies, and I'm sorry I didn't sorry I didn't bring any. I would It's gonna be projected?

[Senator Andrew Perchlik (Chair)]: No. Well well, I don't know if if you could do that now.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Yeah. If would but I will go get the copies, and they will be here in, like Okay. Ten minutes.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Okay. And I'm gonna key on really two pages of the document and walk you through the g f budget construct. And those are pages they're described in the book as pages ten and eleven. And if you're printing from the PDF document, they actually display after the title page is pages eleven and twelve on the PDF. I did print out one large print edition for my aging eyes to walk through, but if if it would be helpful, we could we could pull this up on the screen, if that would

[Senator Richard Westman (Member)]: be helpful in the meantime.

[U.S. Senator Peter Welch]: We've got it.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: You've got it. Is everyone up to speed and on the same page as I am? Ben?

[Senator Andrew Perchlik (Chair)]: We'll print some out, so we'll get some, and it's simple. So it looks like people have some access to a screen, so we can look at it that way. I have a question about where I'd recover from.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: You know? I usually and I'm I'm actually not prepared.

[Senator Philip Baruth (Member, President Pro Tempore)]: It used to be Caledonia when Jane was

[Senator Andrew Perchlik (Chair)]: Was always there doing It was Caledonia. Could be Washington County. Don't know.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: There you go.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: I I think it's Washington County. In in recent years, our executive assistant, Reinhold, has provided all the cover photos for the executive budget summary from her own collection of photographs she's taken. So I'll have to ask her specifically where you're looking from. Now

[U.S. Senator Peter Welch]: Okay. Thank you. Okay.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: So now we are all literally on the same page, and I was gonna kick it off with this page, which is a brief review, a summary of all of the revenue sources that are incorporated in the governor's budget, starting at the top. The largest number, the 2,533,000,000.000, is the EOR forecast as of last week, as of last Friday. The forecast did involve a revenue downgrade for the first time in in quite a few years. So that that number, the 2.533, is down 8,600,000.0 from the July e board upgrade. Although to kind of put things in perspective, you may recall, from January 26, they were at we were at a 2,400,000,000.0 even revenue forecast. It was upgraded pretty significantly, 77,000,000 or so in July, and so now we're just taking an $8,600,000 step down from that. So another way, you know, as I was kind of looking at last year's same same book that's being presented now, you know, even though we're we're in what we feel is a tightening revenue environment, and the downgrade was something that certainly caught everyone's attention, We're still a $130,000,000 up from the January 26

[Senator Andrew Perchlik (Chair)]: Mhmm.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Revenue forecast for fiscal twenty sixth. So I just think it's it's helpful to kind of to kind of look at it look at these things in perspective. So and and and that represents a 5.4% increase from the f y twenty six revenue as of last year. But it's only in in terms of the revised numbers, we're only up 2.1% from the from the FY twenty six revenue level as of July. I hope that's not confusing, but one way I was trying to get the top line numbers in my head for frame of reference. So we're starting with the e board revenue forecast at the top. We add to that additional property transfer tax, which is additional to the amounts that the economists forecast. No way does this affect the statutory property transfer tax obligations, PHCV is fully funded.

[Senator Andrew Perchlik (Chair)]: This is the additional property tax. That's the estimate. This is the forecast number, not the actual. That's right.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: We're forecasting this amount of additional property tax. Additional to the portion that's in the two point five And three actually, this part of the presentation, I know commissioner Gresham explained in house appropriations the other day, and I I did not brush up.

[Senator Andrew Perchlik (Chair)]: Right. Can't remember why

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: there's It's a there's a there there is a funny I can respond with that Right. That detail afterwards. I'm sorry. Don't have

[Senator Andrew Perchlik (Chair)]: to tip with myself. Know. Like, something happens after we hit a certain amount of property tax, right, then the different formula pertains to that. So then it doesn't go to the CHCD and saying, the the formula changes after certain dollar amounts. Is that what

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: That that is true. However, I think that I think that I think those amounts are still covered in the economist forecast. This is something that comes from the tax from from the tax department in addition, and I'm sorry, I can't recall the exact I remember talking about last year, I remember saying at this time. It has been and that number in recent years with more substantial real estate sales volume, that number was in, like, the $15,000,000 range. This is it's come down relatively over the past few years. So the next clump of numbers are the direct applications, primarily from other areas of government that we consider additional sources of PACE General Fund revenue. The AHS certified matching funds transfer has remained at the same amount for a number of years now. The amount from the Department of Financial Regulation of $66,400,000 is fairly consistent with the FY '26 level. AG settlement's estimate of $2,000,000 is identical to FY '26, and unclaimed property is up a bit, and sports wagering about platinum. The main change was in liquor, actually, where we're up about, $6,000,000. We were at a lower, an artificially kind of understated amount for the f y twenty six liquor direct application of under $15,000,000, and that was because they were in a deficit position that, so they were catching up to get out of the deficit. You may recall there were a few years in a row that based on some liquor legislation, the direct act from liquor was set in statute

[Senator Andrew Perchlik (Chair)]: Mhmm.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Or or in session law, at least, at a particular amount. But that meant that there was actually more coming out than they had to to give, and it created over a few years a deficit position. That's been cleared up, that now we're hoping we're back to business as usual, and back to, like, the 20,000,000 plus range for a direct app from liquor as opposed to the f y 26 level of, 14 point something. It was a little under $15,000,000. So Do

[Senator Andrew Perchlik (Chair)]: you think that we will return to getting a direct app from the secretary of state's office? Because I don't think you've gotten one by

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: We haven't in a few years now.

[Senator Andrew Perchlik (Chair)]: Yeah. Wonder how long do we keep on this one on those two. I didn't know if that was temporary, or are we just assuming things change how they're operating that on this that where there would be excess?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: What I what I know is that for at least a couple years, you know, what we heard was that they were funding, like, IT modernization and some kind of unique what sounded like, you know, unique sort of upgrade and modernization initiative type things. So, you know, might expect we're not spending every dime if if if those projects have run their course. But but we're

[Senator Andrew Perchlik (Chair)]: We could we could ask the secretary of state. Yeah. So

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: that total of a 108,000,000 in direct applications from other funds is up 6,000,000 from the FY '26. Again, that's nearly Mhmm. To the liquor transfer. We do have two sources of one time revenue. The nine there's a $9,500,000 number, which is reversions from prior year one time appropriations, some of them going back to as far as fiscal eighteen and associated with programs that have been dormant for years that may have had a $20,000 balance or $200,000 that was still unobligated. We were really doing some look under the couch cushion, work here during the past few weeks, especially in light of the revenue change to come up with, to come up with a little bit more to cover the bottom line with the governor's initiative plans. So those are those are all itemized in the d one zero two secondtion of the language. Over half of that amount is from a single appropriation, which was a FEMA denial reserve, so it really wasn't appropriated for a specific purpose, other than if we have things denied by FEMA, we've got this $15,000,000 reserve we can tap into. There was, still, there is as of a couple weeks ago, there was 10,600,000.0 remaining in that, reserve appropriation unobligated. We are proposing to reserve 5.1 or a little less than half of that amount. And Doug Farnham, our chief recovery officer, you know, advised us that he didn't think that amount would pose any problem based on, you know, what their experience is so far and what they are aware of and in terms of things that could be at risk for denial.

[Senator Andrew Perchlik (Chair)]: But center run, is is that pot of money unrestricted, or is it, yeah, unrestricted, I guess?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: So, well, by the pot, mean the FEMA denial reserve appropriation? Yeah, yep. Well, it's unrestricted in the sense that it can be applied to any denial of a P1 In any area? Yes. Yep. And so my recollection is that whether it were COVID related or flood related. I think we're already past the COVID. I think we're done with all the COVID process, and in fact, we are also proposing to revert an $890,000 balance as part of this 9.5 that was from a COVID, FEMA reserve. But, but, yeah, I mean, restricted to in the sense that it can only be used towards FEMA denials, but, yeah.

[Senator Andrew Perchlik (Chair)]: Which we

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: have. We're leaving so we're leaving over 5,000,000 still with this proposal in that in that, in that bucket should things should things come up.

[Senator Andrew Perchlik (Chair)]: Well, we did have that one denial from the fifteenth. The appeals that I think got was under $5,000,000.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Yeah, I'm aware of one that's a 2,000,000 that's in the pipeline.

[Senator Andrew Perchlik (Chair)]: Is that reversions from prior, what type of reversion include that money that was in S90, '91? Oh,

[U.S. Senator Peter Welch]: the $10,000,000 Was that 10 or 9? That was $10,000,000 that's still floating around in the budget.

[Senator Andrew Perchlik (Chair)]: Where were that?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Yeah. That's bottom line. It wasn't that. It's not that. These are these are specific these are funds sitting, you know, with departments for various one time appropriation purposes, And what we did was go through with every, agency and department reporting to the governor and ask for a status update on all these, appropriations, most of them prior to FY '25. I think there's only one that involves 25, and, you know, identify, for instance, in granting programs, okay, everything's obligated except $200,000. We're gonna recommend the 2,000 the 200,000 be reverted, so on and so forth. So this is, yeah, what I, as I like to call couch cushion monument, which is, yeah, we're gonna, you know, go back, start turning the house upside down and find funds that we may have forgotten about. Good. And the detail is in D102, and, you know, for more specific questions, any of the agencies and departments representing those appropriations can provide more detail. The one thing I did want to key on is they are all, they were all offered up voluntarily by agencies and departments, as opposed to being, you know, just shaken down by finance and management. So we were, we were persistent in our inquiries, but there was, everything was, I use the term voluntary, terms of agencies and departments thought these amounts could be offered. So that's the 9,500,000.0 of reversions, and then there's the big number, the 104,900,000.0, which represents two reserves being unreserved. The first of those is a $30,000,000 reserve established in Act 27, which specified a number of different potential uses for the reserve, among them property tax relief being listed as one of those uses by the legislature. So the governor is proposing to unreserve that amount for the purpose of property tax relief and also unreserved the $74,900,000 that he recommended be put into a reserve in the Budget Adjustment Act for FY '26. And again, the source of that 74,900,000.0 available unallocated in FY '26, that's largely related to the aforementioned revenue upgrade in July 2547.

[Senator Andrew Perchlik (Chair)]: Yes, there was.

[U.S. Senator Peter Welch]: This 74,900,000.0, is that money that is otherwise right now sitting in the general fund, where does that live? Yes.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Yep. Okay. Yep. So it's an unallocated balance on the general fund, which is not currently reserved if the Budget Adjustment Act proposed by the governor were enacted verbatim by the legislature. I won't hold my breath, but we'll we'll put that out there. Then it would be reserved and held in that reserve until close of FY '26, in which case it would become available to property tax relief in '27. Any questions on, the sources totaling the 2,759,000,000.000 for the general fund? Okay. So I'm gonna flip my page over, And on page 11, we have a somewhat longer list describing all the uses of that 2,759,000,000.

[Senator Andrew Perchlik (Chair)]: It's page 12 on the PDF.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Yep, page 12 on the PDF and the page number at the bottom of the page. The top box, are three boxes, sections that make up this worksheet. The very top one is where we are describing current services appropriation changes, basically. So this is where, as the governor mentioned in his speech, a $139,000,000 cost just to keep keep the lights on and keep doing things as we are doing without program changes. And so this worksheet basically attempts to provide a little bit more detail behind that number. The first number we sort of need to calculate is what's the starting point to compare to for FY '26 base appropriations for current services. So we're coming up with the top bolded number on the right hand column of 2,350,000,000 by taking FY 'twenty six as pass base appropriations in Act 27, sections B-one 100 through B-one thousand. That adds up to $2,319,000,000 We add to that the General Fund Pay Act appropriations for all three branches, that adds to 27,791,000 The next adjustment is a little less straightforward, and I probably need to take a moment to explain it. I'm adding on this worksheet this $4,035,000 amount to the base starting point to account for what was essentially general fund support in FY '26 to the Cannabis Control Board. And the reason I'm doing this is that one of the aspects of the governor's current services budget recommendation, and it's buried in this longer line of items labeled current services appropriation changes, but there is actually a new general fund appropriation to the Cannabis Control Board in the governor's recommended budget. That's $4,576,000. They have not previously ever received a general fund appropriation. In the past, they have always funded all their operations out from the Cannabis Regulation Fund. The only source of revenue into that fund are fees paid by licensees, and there has been a gap of approximately this $4,000,000 in in FY twenty six between the fee revenue collected into the cannabis regulation fund and the operating expenses of the board. And in f y twenty six, the only way they're getting funded without going into a deficit position is according to law, what they did, and this was going back to 2022, Act one eighty five, for FY '23, '24, and '25, the cannabis excise tax, instead of going to the general fund where it was supposed to go, was redirected by the legislature to go into the cannabis regulation fund. And that it was specified in law that for those three fiscal years, the CCB would spend as much as they needed to out of that fund, essentially. And at the end of the year, after the close of the year, the commissioner of finance and management would sweep the balance into the general fund. It's kind of a a bizarre structure, and the revenue wasn't even reflected in the GM in the same year as it was being as it was being generated by sales. What we ended up doing for f y twenty six was instead of sweeping that whole amount according to law, we we not withstood law and left $4,000,000 in their fund knowing that that would be enough to fund the gap through FY '26, and knowing that we would need to come up with some solution since the excise tax is now going to the general fund, and it's now part of our general fund revenue that we're reporting, you know, every month, that we're gonna need to do something else to fund this operation. So we're proposing a general fund appropriation now of, in in the amount required to fund their current their current operations. And that's the four, a little over $4,500,000. That's up quite a bit, a half million dollars from the amount of support they needed in FY '26, largely because their operations now include a lab operation and operating costs, and so it's our hope that now they're built up and built out, and now they've got their enforcement pieces, their lab pieces, we'll fund them with the general fund appropriation as needed, and then hopefully we'll only see relatively small changes in line with other agency and department based appropriations going forward in FY '28 and beyond. But in this year, there this is a new thing, and that's why I'm showing the offset of money that would have otherwise gone to the general fund up above that 4,000,000. Otherwise, our current services increase year over year would look, I think, higher than it really is since we were supporting this operation. Sorry it took a little bit of a long winded explanation, but I wanted to explain what was going on with that. Why do you

[Senator Andrew Perchlik (Chair)]: have these? I guess I'm not understanding this worksheet a little bit. Sure. Why you have this FY '26 like the base appropriations?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Okay, sure. So the big sound bite is, know, people say, okay, how much are your base appropriations increase? How much is your base spending going up? Right. In order to calculate that, we first have to calculate what's the base that we're starting from. So that's why we have a few numbers here. Besides just the Act 27 total base appropriations, we really It's on there for comparison purposes. It's for comparison purposes. Doesn't go with your calculations or otherwise. No, it's, well, it only informs the calculation of, for instance, if I didn't include that 4,000,000 for cannabis the, in the starting point, then at the bottom, instead of showing $139,000,000 increase just to keep the lights on, it would show 143, and it would show 6.1% instead of 5.9. So it's just a matter of and then the other adjustments there are, actually, specified in law. So the the legislature gave itself a million and a half extra dollars in FY '26, you may recall, anticipating uncertainty around, you know, we may have to keep coming back due to federal fund issues and so on and so forth. But in but in the bill, that's right, it wasn't used. And also in the bill, there was language, and I think the citation is specified here saying, for purposes of calculating base appropriations, you know, this should not be considered part of our base, even though it was in that base theft ID. I

[Senator Andrew Perchlik (Chair)]: get it. I get it. So

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: so that's what that's all about, is to, make some adjustments to come up with the starting point of 2,350,000,000.00, and then these are all the things we're adding to that in order to come up with, we're adding 139,000,000 of changes to come up with now a current services amount of $2,489,000,000 And then this is how it breaks down in terms of what are the specific pressures that are causing that just to keep the current services activities. So they're itemized out here. The first one is increase in salaries and wages, which for the general fund is $28,400,000 pressure.

[Senator Andrew Perchlik (Chair)]: And you don't have to go through each one those. I

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: will then highlight the most notable areas. So there are significant increases here pertaining to the agency of digital services. So there is

[Senator Andrew Perchlik (Chair)]: So the the increase in their general fund is representing a decrease in their SLA.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Yes. So the the first, the first line listed here, is the 10,834,000.000, that's the increase in allocated charges that are allocated out by formula to all agencies and departments statewide, and and this is the amount that is budgeted to be borne by the general fund. The al the ADS allocation is also allocated out to special funds and federal funds as well. This is just the general fund pressure amount. One of the reasons it is increasing to such a degree is that ADS may have talked to you in the past about their plan to change their model of billing and recovery and budgeting, and a major component of that is to shift a number of costs from the SLA method of billing, which is in arrears a year after the fact, for actual services received. And there's some things that that are essentially received by all all users, for instance, the Microsoft Office. Mhmm. Microsoft Office costs are statewide, over $8,000,000 and instead of figuring out the license bill to each user and sending the itemized bills a year after the fact in arrears to users and agencies and departments named by name, they're just doing statewide Microsoft licensing, and they're now building it into the allocation. So, for instance, just $8,000,000 or so of the increase is attributed to used to bill out by SLA for Microsoft. It's now just part of the allocation that's allocated to everyone. There are also other costs in there that involve things like cybersecurity costs, some of which some of which have increased, I believe, and some of which had not previously really being adequately recovered by the billing model. So really, in sum, there's really two factors going on with the ADS increases. And so, speak in just kind of general terms, let's say around half or so of the increase, some of it is related to the change in model from things moving into the allocation that were formerly billed by SLA. However, what we found is that there were a lot of things that simply weren't being recovered. Didn't have adequate they didn't have adequate systems. And so now so that's some of the things that are being built into the allocation, and then some things to the tune of $9,084,000 are now being funded with a straight GF appropriation because some of their activities, have increased in particular in recent years involving things like artificial intelligence governance and data governance and some other things that it's hard to hand a department a bill for a specific service that they received. It would be even harder to hand them a bill and then ask them to look for federal reimbursement.

[Senator Andrew Perchlik (Chair)]: Yeah.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: So so so these base costs that were not, in our estimation, very allocable are being put into that $9,000,000 GF number. And then the allocable charges are increasing, because a lot of them are moving from from the SLA model. So there is that corresponding decrease

[Senator Andrew Perchlik (Chair)]: Yeah.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Still a net increase, because a lot of things weren't adequately being captured, like cybersecurity costs that are allocable, but they weren't previously built into the model. I'm sure you'll be interested to hear a lot more from ADS.

[Senator Andrew Perchlik (Chair)]: Yeah, we could get in. So yeah, we don't have the time to get into that kind of level of detail. So any other highlights or things you want to point out?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: You know, just in terms of magnitude, the increase in global commitment, GF match for federal funds, is certainly a significant number at over 26,000,000. Over half of that amount is over half of that increase is related to an FMAP percentage change, and the balance is really related to utilization increases. It's not caseload. It's utilization and it's

[Senator Andrew Perchlik (Chair)]: Similar depth in VA. Yes, yes.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: And that really, certainly, retirement costs are significant, dollars 23,600,000.0 of increases related to the state teachers' retirement system pension and OPEB out of the general fund, and you know, about 11,000,000 in the general fund related to retirement plans, to the employer contribution to both the defined benefit and defined contribution plans. And actually, a couple million dollars of that is what I was surprised to see is related to the defined contribution plan, which is for people like me who are exempts and are not part of the pension system and choose instead to have a, you know, if if I may not be around for enough years to invest into a pension plan, depending on the pleasure of our next of our next governor, the DC plan. But the DC plan, the employer contributions have been increased significantly to account for, it's not that the plan contribution amounts have changed, they're the same percentages, it's OPEB related costs, so they're now funding the other post employment benefits piece, basically the health benefit, which can be earned at five or 10 and the other years of service achieved. That applies to DC people as well as to D people, DV people, and that's a couple million dollars there of an increase. I mentioned the cannabis piece. So out of current services, that's really the

[U.S. Senator Peter Welch]: meat of it.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: The other internal service fund allocations increases of a little over 3,000,000. I think work comp is the biggest single driver in there. So, Any other questions on the current services piece? Nope. K. Moving into the next box then, we've got our governor's initiatives. So, at the the the first session are, our our base initiatives, new new base funding changes. And at at the top, we've actually got a general fund decrease. So what we're proposing to do here is to fund, reappraisal and listing payments that have historically been funded out of the general fund using the pilot special fund instead. So the pilot special fund, its balances have really been growing recently as more towns have added on the, the local option tax. So the local option tax, which is I believe it was recently changed. It used to be $70.30. 75. Now it's $75.25. That's with more towns coming on, that 25 to the state has, you know, built up a balance and up in that fund that tax can explain the details tax department can explain the details

[Senator Andrew Perchlik (Chair)]: Yeah.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: More than I can, but we'll be able to think fund tomorrow we're gonna

[Senator Andrew Perchlik (Chair)]: learn to

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Okay. Great. But but this is based on we'll we'll still be able to fund a 100% pilot payments to to towns in terms of being paid the or

[Senator Andrew Perchlik (Chair)]: appraisal cost before? This is new.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Out of the general fund.

[Senator Andrew Perchlik (Chair)]: So we were paying There's a bunch of forgot that we were spending

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: There's some weird there's some weird different things that general fund was being used for, towns with hydroelectric dams and the costs associated with those listing. There's some list of training.

[Senator Andrew Perchlik (Chair)]: It's not all towns are your appraised list. It's it was just certain ones that Well, there's that certain ones, but

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: then there's also and it's it's you can see the details in the language document.

[Senator Andrew Perchlik (Chair)]: Yeah.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: There are these per parcel fees of or or these per per parcel payments of either $88 and 50¢ per parcel, or $1 per parcel that are paid to towns when they do reappraisals. So that has been funded out of the general fund, and we're and he was saying, now this money that came from the towns, why don't we fund that with the money from the towns going back to them, which would be a a legitimate use of the fund, we believe, and let the general fund be freed up for general state purposes?

[Senator Andrew Perchlik (Chair)]: Senator Norris? Yes. On those lines, I see the state it's my understanding. The state has given permission to landowners who actually have two separate deeds, but their properties above one another as far as the $8,050.50 fee is concerned. Is that saving or costing more? Are we losing money on that? Or

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: On that particular issue? Yeah. I would have to defer the tax department's visit tomorrow. Okay. Yeah.

[Senator Andrew Perchlik (Chair)]: Alright. Yeah. Because I know that well, personally, I get two different deeds. Right. Because the property is above one another, they can assess it as one whole properties with two separate deeds, and they only have to pay up a one Okay. One fee on that. So I'm gonna That's it. That's interesting. Yeah. So we'll start the fee, and if you'll go to the general fund.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: But the fees we're yeah. We're we're not changing the payment to the towns at all. Right. We're changing the source of the payment. Right. The source of funds is now we're proposing to use the pilot special fund to send the money back to the towns that they've already sent us.

[U.S. Senator Peter Welch]: Back to the landlords?

[Senator Andrew Perchlik (Chair)]: 901.

[U.S. Senator Peter Welch]: So this change I mean,

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: I can check out

[U.S. Senator Peter Welch]: the language, but this change you're proposing is for this to go for these things to go on from the pilot fund in perpetuity, or just Yes. For this

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: So, yeah, we're proposing statutory change.

[U.S. Senator Peter Welch]: Statutory change.

[Senator Andrew Perchlik (Chair)]: Okay. And,

[U.S. Senator Peter Welch]: I mean, as I recall, I mean, we can talk about this more, but what what I'm recalling is that we're not anticipating that that the pilot fund is gonna be going significantly downwards. And so I guess I'm much I'm reading about the pressure on the pilot fund to sustain Yeah. That kind of

[Senator Andrew Perchlik (Chair)]: Yeah. I think Chittenden is gonna come in. Okay. So we're not here for tax.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: We're Oh, okay. To talk To balance

[Senator Andrew Perchlik (Chair)]: of the fund and Yeah. Surplus. But this do these is the dollar amount 3,400,000.0, is that just based on prior you mean, it shows that appraisals, or does this have any connection to 73 and setting up of the new rotating appraisals?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: No. I don't believe well, the the calculation of the amount was it was calculated by the tax department and given to us in terms of what would you expend what would you expect we would be spending out of the general fund for these purposes, they performed the calculation, and then we took that number and said, with this change in language in statute, we could create this amount of savings, reducing general fund appropriations and and replacing them with pilot special fund appropriations. About '73 said where the money for the appraisals was come coming from. Remember they set up a new so every town or region gets a reappraisal every three years, so you don't have these such wild CLA changes. Right.

[Senator Andrew Perchlik (Chair)]: But I don't remember where that money Well, we've given

[Senator Richard Westman (Member)]: a payment to the town for a parcel for

[Senator Andrew Perchlik (Chair)]: a very long time. Right. But I don't know if that was just gonna be the same under the STU Act 73 system where each area gets appraised automatically. That's not a question.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Okay.

[Senator Andrew Perchlik (Chair)]: Again, you don't have to go through each line, but

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Moving on. Yeah, I suppose just in terms of highlights, the base initiatives are smaller this year in terms of amounts, with the exception of over $10,000,000 for a DCF housing plan. And the components of that are staffing, hotel program, but for family and medical people, medically vulnerable persons, and also recovery shelters and case management services. This is an increase basically over an existing, like, 8,000,000 for emergency housing already in the general assistance appropriation. Okay. So they're looking at a total of, like, some 18,000,000 of ongoing base to basically operate a shelter program as opposed to what we've been doing, which is more of the one time funded. And is recovery shelters

[Senator Andrew Perchlik (Chair)]: permanent shelters, are those emergency shelters? I assume those are permanent shelter, when you use the term recovery.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: I believe so. You know, you really need DCF to give you the more specific details, but Yeah.

[Senator Andrew Perchlik (Chair)]: Okay. Find the other

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: And that's one of the components, and that's something like an operating cost of, like, a couple million or so out of that. That's not a majority component, but that's one of the pieces. Okay. So that's the big one. And then the the second biggest one really is a proposal for base funding for, the Vermont Housing Improvement Program, the VHIP program, which has been tremendously successful. There was $4,000,000 in the FY26 budget, that's all allocated at this time. We'd love to see the program continue every year at that level anyway.

[Senator Andrew Perchlik (Chair)]: So that's

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: part of the governor's recommendation here.

[Senator Andrew Perchlik (Chair)]: Okay, one times.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Some of, yeah, I was just looking quickly to see if there was anything else I should specifically call out. So moving on to one times, again, DCF's emergency housing plan is the big ticket item, $21,183,000. 6,000,000 of that is related to standing up new shelters. Emergency shelters? What's that? Are they would those be emergency shelters? Yes. Just temporary as needed? Well, I my understanding is more of a permanent shelter. You're standing up a shelter that will then be, you know, an operating cost going forward once it's established in this. So my understanding, mister chair, of this number is there's about out of that 21.2, about 15,000,000 is to continue emergency housing under the current model.

[Senator Andrew Perchlik (Chair)]: Different than funding a burnout?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Yes, this is different. We still have so you'll recall what we call what's commonly referred to as the hotel multiple, that's just been funded with one time appropriations. Still have to continue funding that type of service to the tune of 15,000,000, but then there's another 6,000,000 to, which is a one time cost, but will be to stand up what I understand to be a more permanent shelter solution that will then

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: Is there language also this?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: I do not Or is

[U.S. Senator Peter Welch]: it gonna be the GA pro the GA housing cold weather?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: The yeah. Language does language does not really feature in in this bill, and we're refract we're we're reflecting the appropriation Yeah. Have breakdown between

[Senator Richard Westman (Member)]: what would be more traditional GA, which is fifteen and and six, and how and they must have when they come in, they must be able to give us at least the number of beds they would hope to open with the sick. I'm sure they can.

[Senator Andrew Perchlik (Chair)]: Yeah. Yeah. We'll get we'll get more information from DCF when they come in. Did we talk about police radios last year?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: We did. Yeah.

[Senator Andrew Perchlik (Chair)]: And then I

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: must confess I've been talking about police radios more than I would have cared to lately, but we are hoping that we're coming up with a a more permanent solution. So last year, there was a onetime appropriation for police radios that replaced about half of their fleet, and they are eager to replace the balance. In the governor's f y twenty six budget, we put in $500,000 into their base that would so that every year, we were picturing it, you can be buying radios as you need them each year, and we won't be in this position where we all of a sudden need millions to replace an entire fleet. We thought that was a good idea. In fact, that was the governor's idea, and the governor said, just put in the half million dollar a year. The problem for DPS is that for technological and other considerations, what they really need is to put away a little bit of money each year and then spend it in large chunks periodically. And what didn't work well from an accounting standpoint was putting it in their base because it could be spent on anything. And if it wasn't, it could be carried forward, but then they would have to be sure to segregate that amount carried forward. And then are you gonna build up carry forward amounts up to, like, $2,000,000 over multiple years? So we said, okay. We just gotta set up a special fund, and we took it out of their base. We gave them a 500 on their ups and downs. You'll see a $500,000 down, and what we're saying instead is let's send a transfer to a special fund, and it will be segregated and can be used for that purpose. And we'll, we're suggesting the $500,000 a year appropriation be replaced by a tri annual transfer in that amount. They're also able to sell old radio equipment and, have that be a revenue source to the fund Okay. As well. So Yeah. We discussed the

[Senator Andrew Perchlik (Chair)]: 500,000 for the guns also on this. Right. I thought we asked for language on this to put together a five year plan. That's the one we're going to do. I haven't met with DPS, but I I will bring this up in question. Okay. Yeah. Because maybe for the firearms, they wanna have a replacement fund as well. It's supposed to be a five year capital plan. Supposed to be getting here, not an automatic. I haven't thought it. Yeah. That'd be good. Okay. I think that takes it down to transfers.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: So the so I should point out there

[Senator Andrew Perchlik (Chair)]: We have a a total We have a Richard Westman's favorite back built of those.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: That's exactly what I was just gonna Yeah. On.

[Senator Andrew Perchlik (Chair)]: Yeah.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: The if you look in the language, the total transfer to the Ed Fund is a $114,900,000. However, really only a 104.9 of that is really for property tax relief. There is another $10,000,000, that were basically proposing to backfill lost revenue to the ad fund by starting to step down by $10,000,000 a year to the motor vehicle purchase and use tax that's going to the ad fund. So Right. That would be phased out by fiscal fiscal thirty one in fiscal thirty one.

[Senator Andrew Perchlik (Chair)]: Just said it was your favorite. You said it was your favorite.

[Senator Richard Westman (Member)]: You know, it was '35.

[Senator Andrew Perchlik (Chair)]: You don't wanna wait five years.

[Senator Richard Westman (Member)]: You know?

[Senator Andrew Perchlik (Chair)]: Yeah. We need we need 35.

[Senator Richard Westman (Member)]: We need 35. Yeah. It's something to pay our.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: So those are all the policy related initiatives here in the middle box on this worksheet. At the bottom of the page, we've got transfers and reserves that are more or less required as opposed to being initiatives. We're making a transfer to the general obligation bonds debt service fund of about $74,000,000 That's down from it was 81,000,000 The on FY '20 actual amount of debt service obligations is around $77,000,000 However, we found that there was a remaining balance left in the debt service fund, so that further reduced the amount of general fund we need to transfer to that fund. So we're saving some $8,000,000 versus what we sent to debt service last year from the general fund. The transfer to the capital infrastructure fund is formulaic. That's just based on 4% prior year appropriations less debt service payment.

[Senator Andrew Perchlik (Chair)]: And that's also called the Capital Cash Fund?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: That's right. Yes. This is So

[Senator Andrew Perchlik (Chair)]: it's 4% minus that 73,000,000

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: or less than the prior That's right. Transfer to the Tax Computers System Modernization Fund is something that we now see every year, two transfers, one from the GF and one from the Education Fund in a smaller amount, and that's how that's how taxes

[Senator Andrew Perchlik (Chair)]: And does the I can't remember what the capital infrastructure fund is included in the governor's budget, the uses of that?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: It's included in the governor's capital budget recommendation. It is not included in this So not this thing.

[U.S. Senator Peter Welch]: It is

[Senator Andrew Perchlik (Chair)]: not this adjustment. Yes. There's so when does that come out later? No. This this is an adjustment because it's a two year bill. That's right.

[Anna Brouillette (Policy & Program Director, Building Bright Futures)]: That's

[Senator Andrew Perchlik (Chair)]: right. So this showed how

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: the governor also spent that 17 Any uses of that would be shelved in? Yes.

[Senator Andrew Perchlik (Chair)]: If that died. And also any changes to the borrowing. That's right. Both the cash and the Both cash. Yes. Okay. Yes. That tax tax computer modernization fund, does that go away, or is that No.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Yeah. It's every year. And so the history of this is they used to they used to fund this fund, senator Brennan, with there was sort of a wonky formula, like, they would take 2% of all collections or something like that. And, when they were collecting a lot from delinquent taxpayers, there were, that was funding this fund adequately. What happened, which is actually good news, is one of the results of all the investment in computer modernization is it made it easier for people to actually pay what they owe, but that meant collections went down. So now there was a gap, and they weren't they weren't called, you know, because that's what was in statute. The only mechanism was like to take a percentage off the top of everything they they gained via collections. So what it was replaced by was now leaving collections alone, it all goes to the general fund instead of taking piece. But what they're at what they're doing is is allocating via a percentage basis, and I can't remember the exact formula. This is the second or third year that we've been doing this, but it's the the general fund and the ad fund that both pay to this. It is every year from those two funds only. No other funds are assessed a a transfer. We've got the amount reserved in the budget stabilization reserve. This $9,000,000 amount keeps it at its statutory maximum of 5%, so as much as it can hold there. And then we've got the the 27.53 reserve, which this amount's consistent with the report we presented to JFC, and I believe it was November. You'll see at the very bottom bottom line number of 2,759,000,000.000 should match to the dollar, the amount of sources listed on the other page. So Okay. I you could call it a balanced budget proposal.

[Senator Andrew Perchlik (Chair)]: One second. Okay. You said that 9.4 was 5% statutorily max or 10?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Am 5%. Pretty sure that's 5% prior year appropriations.

[U.S. Senator Peter Welch]: Yes. Okay.

[Senator Andrew Perchlik (Chair)]: And that's just the amount to get the fund up to 5%.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: This is the amount to get it to yes, to the statutory So maximum we're not allowed, and in fact, we're not required to put in that amount. Sometimes there's a misunderstanding there. It's not actually required by law. What the law says is it can hold no more than 5% of prior year appropriations. What we've done, at least in the past five budgets that I've been involved with, is funded to that maximum level for the budget stabilization reserve. There is there was a question in HACC the the balance reserve, often called the rainy day fund, and why we're not proposing a dedicated transfer into that fund, which there has not been one, that's funded through sort of the waterfall construct of unallocated funds at the end of

[Senator Richard Westman (Member)]: the year. Any money in that?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Is quite a bit.

[Senator Andrew Perchlik (Chair)]: Yeah.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Quite a bit. It's over a 100,000,000, I believe. There isn't a general fund summary document. Why do

[Senator Andrew Perchlik (Chair)]: you think it's raining? I can hear it. Yeah. Yeah. Can hear it. It's raining over the transportation side. That's snow. There's is there

[Senator Richard Westman (Member)]: a human services caseload to serve?

[Senator Andrew Perchlik (Chair)]: Yeah.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: There is. Yeah. On page 20 is that on page 21, senator Westman, you'll see a document that's basically an operating statement, general fund summary FY twenty four-twenty seven, and at the bottom section of that page, at the bottom of the page labeled page 21, shows the reserve amounts. So, the budget stabilization reserve is 127. It will be if we add the $9,000,000 in FY '27. It currently sits at 118,000,000. So we're proposing to add 9 to bring it up to 127. The GF balance reserve is almost $100,000,000 It's 99.06. And you can see the caseload reserve has been over $90,000,000 in recent history. What are the other reserves? That's a great question. The $134,000,000 you see in BAA is the 74.9 that the governor is proposing to reserve, and then there are $230,000,000 reservists that I mentioned. One of them we're proposing to unreserve and use for property tax relief. The other $30,000,000 reserve that you see is still reflected in f y twenty seven. That one was fenced off by the legislature only for federal funds related concerns. So that one is still sitting there in FY 'twenty seven.

[Senator Andrew Perchlik (Chair)]: Yeah, was glad to see that you didn't spend that, because I think we're gonna need it, unfortunately.

[Senator Richard Westman (Member)]: The only reason I asked is these are not very great amounts if the economy did turn down. Yeah. And in relationship to pick out a number if there was an uptick in unemployment, and what would that mean? And in, you know, we are taking, laying aside a significant amount of money for property tax relief. And as you look at this, these are not great numbers if you went into a recession. Okay. And where are

[Senator Andrew Perchlik (Chair)]: we at? I just bring that up. Right on, whatever, $2,700,000. 100,700,000.0 is pretty small. Do you know why it was capped? I asked somebody why we capped it. They were afraid of us reserving too much money because they just wanna spend it for their their whatever they want today. Is there a, there a, gaps you kind of recommended in that the dollar amount? Percentage amount?

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: I can't explain the history.

[Senator Andrew Perchlik (Chair)]: Just as an account

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Behind the cap.

[Senator Andrew Perchlik (Chair)]: Numbers guy, do you think 5% is

[Senator Richard Westman (Member)]: the revenue? Well, five five the 5% reserve, we really can't touch. The 5% reserve is only there when Just to close out the fiscal year. That's right. Close out the fiscal year, and then the first thing we have to pay for in the next fiscal year is that they created this when the governor brings up 91 is the year. We put we had a back deficit. What the governor mentioned is the deficit in his speech was not the back deficit. It was the ongoing deficit, but we had a back deficit as he put tears on the income tax. In the middle 90s, the bond agencies all came to all the states and said you have to have a reserve. So we really can't use that for anything. The only thing we can use quickly, if there was a downturn in the economy, is the human services caseload reserve and and the balance

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: The balance reserve as well.

[Senator Richard Westman (Member)]: To use those at and and to have flexibility. So and the 5%, some states have gone beyond the five offset, but we really can't use Right. You could start to use

[Senator Andrew Perchlik (Chair)]: it by by your budget, but it would be a sneaky way of using

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: that I noticed that in the last session, actually, the legislature increased the statutory maximum for the balance reserve to 10%. Yeah.

[Senator Andrew Perchlik (Chair)]: Because we had all that money. I think we had to do to put all the money aside that we wanted to federal fund. But do you do you have an opinion on

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: the reserve? The the opinion I would give is that, again, to, as senator Westman points out, the budget stabilization reserve, it's only there to go into a closeout if you need to. And so, well, doesn't sound like a lot of money compared to two point On five the other hand, if we're faced with a dramatic change in revenue, we're required to present a rescission plan.

[Senator Andrew Perchlik (Chair)]: Right.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: So we're gonna be cutting expenses. So this is really only to cover what you haven't cut already. Already

[Senator Andrew Perchlik (Chair)]: closed out.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: And if you still need something to close the year. So if you view it through that lens, it actually is quite a bit of money, because we're required by law to take, you know, dramatic action to reduce Right. Our other mentioned, laid out what the revenue is. And so this is really only like to cover the error.

[Senator Andrew Perchlik (Chair)]: Yeah.

[Senator Richard Westman (Member)]: And what right. And what I might say to you, because you've you've been trying to tell you the bond houses would come in, they do a review every year of what we do. And and they're they would come down on us hard. Right. I mean, that's why we have to have a real dollar. That's why you have to have a real dollar. So it's really on the those other two pots of money that come into use if if we went into a downturn or, you know, and and this we haven't faced before, or if we get to the second half of this year, and as they talk, Senator Welch talks about healthcare particularly, because Medicaid is the largest expenditure for that, And in the fall we heard that as much as 45,000 people could use their healthcare, where would we go for money quickly? It's only those two reserves in there. And given the amount we spend on Medicaid, which is $2,000,000,000 that's not a lot of money. Or we would cut services. Or you would cut services.

[Senator Andrew Perchlik (Chair)]: Okay, well that's a good introduction to the government budget.

[Department of Finance & Management representative (on behalf of Commissioner Adam Greshin)]: Okay.

[Senator Andrew Perchlik (Chair)]: I think we're planning to adjourn about now. I think Norris wants to keep talking about the budget, so long.