Vermont Legislature SmartTranscripts:

[Adam Greshin (Commissioner of Finance & Management)]: I'll say for We

[Committee Assistant/Staff (unidentified)]: are live.

[Andrew Perchlik (Chair)]: But she needs to

[Adam Greshin (Commissioner of Finance & Management)]: try and say different

[Committee Assistant/Staff (unidentified)]: That's not the The court that

[Adam Greshin (Commissioner of Finance & Management)]: will be swabbing in the VA. I said don't quit.

[Committee Assistant/Staff (unidentified)]: We are live. Anyway Okay. So this

[Andrew Perchlik (Chair)]: is the appropriations February 4. This is

[Adam Greshin (Commissioner of Finance & Management)]: what the last time I was

[Andrew Perchlik (Chair)]: talking. And we're going to be back to the budget. Just gonna ignore what are we doing? Language. We're doing the language of the.

[Richard Westman (Member, Lamoille District)]: No. No.

[Andrew Perchlik (Chair)]: $7.90 is the budget adjustment. Wow. I got mine.

[Committee Assistant/Staff (unidentified)]: Yeah. I

[Adam Greshin (Commissioner of Finance & Management)]: can do that if you want, but I don't

[Andrew Perchlik (Chair)]: We don't have that. Okay. So, yes, for defense, we have the budget adjustment act where we got a letter from the Secretary of Administration to the Commissioner of Finance and Management this year to talk about some other things about the House bid to the Governor's budget adjustment.

[Adam Greshin (Commissioner of Finance & Management)]: Commissioner of Finance and Management had a question regarding for the

[Richard Westman (Member, Lamoille District)]: 32 Engage.

[Andrew Perchlik (Chair)]: Okay.

[Adam Greshin (Commissioner of Finance & Management)]: So yes, you have, I believe, your main page, the two letters, one on policy that's written and signed by the Secretary of Administration, and one on technical adjustments, which is written by yours truly. Actually, I think all of you guys have any moment up there. The technical adjustments is just that technical. The way we prefer to see legislative intent expressed in the document, but not policy related. The letter from the Secretary of Administration tends to be more policy focused. That's the difference between. And, mister chair, would you prefer I I go over each, or would you want me to

[Andrew Perchlik (Chair)]: take You maybe start with the secretary's letter. Sure. And there's parts of the technical letter that you wanna pull into the to the main, which I think there's just three in main or four. So that she's

[Adam Greshin (Commissioner of Finance & Management)]: I'm I I can yeah. There's one in particular intersection. So, you know, first, I would say we were very pleased, you know, our main tenant, maybe the main tenant, the governor's budget adjustment was setting aside what amounted to almost $75,000,000 of unallocated to be put in a temporary reserve carry forward into fiscal twenty seven and transferred to the education fund. You will note in the governor's fiscal 'twenty seven budget, there is actually an amount that equals 115,000,000 It would be a component of that. The main component of that was this 74.9, is a amount from budget adjustment. And we were very happy, and we said so to the House that they let that in a reserve. We were less enthused that they broadened the uses of that reserve, and I think they swiped the language from the $30,000,000 you'll remember last year, that was $30,000,000 contingent reserve. I think they just lifted that language, which can be used for property tax relief. It can also be used for federal funding, back bill, housing challenges, and other abuses. And, you know, the governor was very specific. This is probably mechanics relief, so we would ask if you consider the house broadening of the use of that. Leave. And I don't

[Andrew Perchlik (Chair)]: think

[Adam Greshin (Commissioner of Finance & Management)]: I need to restate to this committee here. That's been a very, really large focus on property tax relief. So anything that would lessen the ability of the house, senate, and the other to provide some relief, I don't know, we consider going on to action.

[Andrew Perchlik (Chair)]: We could still not withstand it. I mean, it's but it just makes it clear. You just would appreciate the the same thing.

[Adam Greshin (Commissioner of Finance & Management)]: Actually, with this line, we wouldn't even have to not withstand it, but it does give you other options. So we were saying it's only. And even

[Andrew Perchlik (Chair)]: if you only give us one option, we can not withstand one option to do something.

[Adam Greshin (Commissioner of Finance & Management)]: But you guys are. The

[Andrew Perchlik (Chair)]: law is the law. Right.

[Adam Greshin (Commissioner of Finance & Management)]: Yeah. So I think, you know, that's the first point. The second point is I I think the House made several, well, actually, they made, let's say, seven or eight additions to the governor's proposal. Most of those, I think, were one time, pardon me, one time in nature, but there were a number of them that they factored into this. And as the secretary says in her letter, these are all what we support initiatives. I mean, nonlocacy medical transport, giving enhanced residential care facilities and AAAs increases. But we, you know, there are many things that we support that we opt ultimately either to do on a one time basis because I'm not sure we can sustain them more, not to do it all. So we just wanted to emphasize that we're, I think, going into a period where we've only been challenged with base revenue. So we're trying our best to keep the expenses out of base expenses. I will acknowledge that these are small. Know, many of them are, I think it's 40,000 or 30,000. I mean, these aren't huge expenditures, but small expenditures added to other small expenditures that could have been given up. So we're just, we're not objecting to the intent. I mean, it's difficult to object to. But this is Monica to point out that we're very careful with that basis.

[Andrew Perchlik (Chair)]: So does your particular letter offer a different way of wording it where it would be based, or do you not address it? It doesn't. We but we could.

[Adam Greshin (Commissioner of Finance & Management)]: I mean, the 1,100 appropriation would probably be a bit better if we did Yeah. Because they are factored into the b three hundreds. I thought I

[Andrew Perchlik (Chair)]: heard that in my it's difficult that it's gonna change, like, the rate, and so therefore, that is it kinda automatically be part of the base. This I got the sense talking to somebody that it might be more difficult to to switch it to the very.

[Adam Greshin (Commissioner of Finance & Management)]: Of the funding or something. And the way the global committee works or something. Yeah. I mean, you can have one time expenditures that are available for federal match that issue. But, actually, I I think our feeling was we just need to be careful putting additional things into place, and then the outcome and it creates a twenty seven days pressure, so we we need I mean, you'll if you accept the house version, you would need to then increase by that amount. Correct. That what? 27 budget too. So

[Andrew Perchlik (Chair)]: and I We'd have to

[Adam Greshin (Commissioner of Finance & Management)]: do that whether it's based or Well, if it's a onetime supplemental payment of the like, you you wouldn't need to take that. I mean, that would be considered, you know, onetime. I won't consider one time. Gonna get some good works done. And then Alright. You missed a good part.

[Committee Assistant/Staff (unidentified)]: Oh, that's okay. I can look at it on YouTube. And

[Adam Greshin (Commissioner of Finance & Management)]: then the housing authority assistance. You know, here too, as Bill of Leonard states, providing financial assistance, authorities that operate in Section eight programs. It's difficult to argue against that. We're aware that they are stressed. We had couple of requests for change. The first thing, and we, again, would like to be clear that this is a one time expenditure, and we're just worried that this will become an ongoing expense, and I just seem very nervous that we could sustain this completely. But I mean, as it's written, it is. So we're that's not a complaining part. But we just wanna be clear that this is, I think, a worthy expenditure being a good use of the set aside. I think more and this kind of where it starts to intersect on the tentacled side. It's just a it's an unusual structure, taking a $5,000,000 carve out, dollars 50,000,000 appropriation, and then ensuring in my understanding it carries forward until fully used or burdened, it's just from an accounting or control standpoint, it's a little challenging to do that. You have this subcomponent of a larger appropriation that you would have to kind of account for separately and allow the carry forward separately. We just style. An easier way to do it that maintains the intent, in fact makes it more clear, just go back to, well I guess it would be Act 27, the original $50,000,000 propitiation is, and just cross out $50,000,000 and put in $45,000,000 And then add to Act 27 a new appropriation for $5,000,000 to cover the Section eight voucher program. That would be our preferred and, frankly, the easiest way to do it. That way, it's separate, it's clear, it answers legislative intent clearly, but from an accounting standpoint, it might change your follow-up. And I think the final comment before asking questions is that the, I think, and Senator Perchlik, think you've had a conversation on this, we will be much happier if the appropriation made to DCF, that has experience with voucher programs. We also called out to the ACCD, Department of Housing and Community Development. Now as always, Alex Baruth, Commissioner Candid, said they make it happen, but they too would be a little spooky. They don't have experience with voucher programs. They have plenty of experience with federal government and federal funding, perhaps, but they don't have experience in actually implementing property programs. All in and DCFO, we prefer, if you agree with the House language, you know, two things. One, make it its own appropriation, dollars 5,000,000, and reduce the other appropriations from 50 to 45, and two, to make the appropriation to DCFPO, we'll administer with a cooperation, say, of DH. That would be our preference for this if you, again,

[Andrew Perchlik (Chair)]: So You had another technical change in that section 79 where you don't refer to the 50,000,000 about setting authority appropriate to carry forward. Do we need that if you have that section 86, that carry forward section since it all goes In other words, if you have a new appropriation, then

[Adam Greshin (Commissioner of Finance & Management)]: you could make for and then you could put that language in there. If it's part of the 50,000,000, that's already explained.

[Andrew Perchlik (Chair)]: So if you needed the $5,000,000 appropriation, the whole bill has this section 86 that carry forwards.

[Adam Greshin (Commissioner of Finance & Management)]: Yeah, you could use the same, the four zero nine. That's something that if you wanted to put in legislative intent, it shall be carried forward to a used or a bird. You know, we're we're fine with that. We make the point that if it's kept within the 50,000,000, it's just really not needed.

[Andrew Perchlik (Chair)]: I guess this doesn't reference I mean, it doesn't hurt that it would be changed repetitive.

[Adam Greshin (Commissioner of Finance & Management)]: The final thing in the policy letter is re remind. Think you will I don't know if you've spoken already to the Agency of Education, but the Secretary will be very articulate on the need for people on it. This program, she's near and dear to her heart. They actually are running the program currently. However, it's kind of financially out of my support. You know, they're running out of funding. They would like to continue it for another year. So because they they're running low on rent, they they ask to be put in the budget adjustment. If need be, we could use DAD26s, which is a way to move funding from one of the party agencies to another and keep them, at least get them lifeline through the end of the year. But aside from the kind of the technical or funding aspect machine, this is a I'm not the best person to speak on it, but in a broad sense, it's teaching teachers how to teach literacy, is an area I think we have flagged this area lagging in service program that she's very happy with. Anyway, don't think she would be a much better person to talk to. I think the House said they didn't hear about it, and they felt comfortable considering it in the fiscal twenty seven budget. They didn't have enough information or time to consider it with the DAN. I would acknowledge that on the other hand, I strongly encourage you to consider it for the 2027 if you're monthly. Think the Secretary is very

[Andrew Perchlik (Chair)]: believes it's important. Well, we'll have Secretary Sanderson discuss about it.

[Adam Greshin (Commissioner of Finance & Management)]: Perfect. Anything else? Just a couple of technical notes in the technical letter. The first couple, we're we're just asking for kind of guidance, we'll call it eight ten language. I think the first one is more along, as you see in the explanation, just HHS was looking for a little more clarity rather than just more supplemental non emergency medical transport. They just wanted to say to increase the payment score, meaning it's not supplemental, it's just regular payments at a higher level. They thought that would make it just easier for them to ensure funds could be used for the federal Medicaid action. So it's really just a slight change in language. The section further down, there was, you may have noticed this $30,000 increase in Dale's base in section B330, that is intended for the Vermont Center for Independent Living, which a mealtime program they operate for people with disabilities, I believe. And made comments about our worry about that being base, but aside from that, if that is the intent of the Senate too, we would just ask you to state it out. Right now, what the House has done is they've given us $30,000 a base, which we can spend on anything we damn well please. And I think the intent would be the Yabidi would want us to spend that out. So just, you know, it just provides guidance. And the next one, kind of along a similar line, there was a carve out. You'll remember there was 14,500,000.0 total global commitment to Dale for emergency financial relief that was appropriated to Dale on a one time basis. What the House did was carve out of that $14,500,000 a small amount for the Area Agencies on Aging, and additionally for the enhancement of special care facilities, and then the balance of that 14.5 that we need for purchasing eventually. We're just asking to state that. It'll just be, I think, easier for the agency and human services, and particularly when they're considering federal match to state out. This is what this is. K. This is also part of your base concern. Yeah. Next section in the technical letter, I'm going to ask, as they say, for leave of the house, leave of the Senate, and with child harms. Think it's, know, we're talking about the year end of contract.

[Richard Westman (Member, Lamoille District)]: That's on

[Adam Greshin (Commissioner of Finance & Management)]: the child care contribution. There are two components of the child care contribution reserve. Two comments on that child care contribution. So this is not section 55? Yeah, that one is, I'm going to say, if we can skip over that, and maybe finance management will work with the joint fiscal office and prioritize, know, to figure out whether it does need to change or not. Every time I read it, I come to a different conclusion, and I figured, you know what, I think we may be good, so it's really my error for bringing that in there initially. It must have been when I put it in there, that must have been the time when I said, we gotta have this, and then maybe I went to sleep and woke up the next morning and decided, you know, have it stuffed. Right. There's two sections

[Andrew Perchlik (Chair)]: that you

[Adam Greshin (Commissioner of Finance & Management)]: have to The next one, though, the section 58 change, I think it is important, and and I think we get the intent, and we'll make sure that happens. But I think the, there's a, you know, in the house language maybe a bit of a confusion. We created, along with your joint fiscal office, a year end construct that would make sure, I mean, payments into the general fund from the childcare, from the payroll tax, were not subject to the year end waterfall. Remember, if we have surplus, it goes half to the bouncers or the other half to the state employees and the teacher's pension. And in fact, there is money that will be in the general fund almost certainly, because there's the childcare or the payroll tax that's paid in, but it sits in the general fund until tax reconciles it with quarterly cadence, which doesn't happen until Income date. It may even be in its late September. It's a number of weeks, if not months, after this. So in the meantime, we closed the It's a timing issue, really, that I don't We didn't, I certainly didn't think about when this payroll tax was instituted. So we created, with joint fiscal office, we worked together and created a construct that you see here. But what that is intended to do is to kind of put a reserve, a fence around what we estimate to be, not what we know to be, but what we estimate to be the component of the general fund balance that is due to the paper tax. And we did that actually this year the dark with naive financing, actually TACS sat down and we called them and said, what do you think it's going to be? Because we need to take that out of the general fund or it's going to be subject to the waterfalls. And so TATS came up with, I think, a perfectly reasonable estimate of what they thought it would be. We put that in a reserve, and then on July 1, got a reserve, and it went back into the general fund. That's essentially what this construct does, although it requires a consensus estimate of what that amount is going to be. In the first year or so, it's kind

[Richard Westman (Member, Lamoille District)]: of difficult.

[Adam Greshin (Commissioner of Finance & Management)]: We don't have history. I think years from now, we have looked back with pretty strong conviction and say, well, we'll take an exopenalty. But the first year, we're not sure whether there's seasonality to these payments. We don't know. So it took on a kind of a heightened sense of figuring out what that would be. So this construct essentially repeats our process, only we do it with the legislative joint fiscal office, we're both in it together, so you don't think those widely focusing finance and management on the fast one. But after the year ends and the new year starts, that money immediately is dropped back into the general fund. But this language says, and transfer an amount equal to that, to the actual receipts to the child care contribution special fund. We can't do

[Richard Westman (Member, Lamoille District)]: that because we don't know what those receipts are again. Right.

[Adam Greshin (Commissioner of Finance & Management)]: So, this will allow that to happen. That's the construct we've created, but we can't put it back in the general fund and transfer whatever amount's supposed to be in there, because we don't know what that amount is yet. It's going to be, hopefully, close to what we estimate. The chances are it'll never be exactly what we estimate, but it will be close. And by the way, the construct also creates a process that would make, would mitigate if we guess too low, or mitigate if we guess too high. So that the childcare contribution strategy fund will always be made whole, they'll always get the exact amount. But if we guess low, and they're doing more, it would come out of the balance reserve. If we guess high and reserve too much, then it'll go into the waterfall. So, anyway, that's the construct, but we would just encourage you to just take out a transfer of the amount because you don't know what that amount is. Right. So that, I believe, is the is the last. Yeah.

[Richard Westman (Member, Lamoille District)]: Okay.

[Andrew Perchlik (Chair)]: Very straightforward.

[Adam Greshin (Commissioner of Finance & Management)]: The rest of the technical letters, we'll see it. It creates the the two appropriations, the 45,000,000, which we draw from 50,000,000 and the new 5,000,000, which is we show you how we would do that. It's it's six pages, one

[Andrew Perchlik (Chair)]: of the shortest technical letters.

[Adam Greshin (Commissioner of Finance & Management)]: You guys do good work. I very dangerous. I I just gotta say that in the or made this comment. We had a semicaston. She's talking about the DAA to her administration. Said, you know, for a document that is very long on bookkeeping and very short on edition, it's just shocking how long it takes to be. Legislative process is kinda yeah. Takes a little while.

[Andrew Perchlik (Chair)]: That's its pros and cons.

[Richard Westman (Member, Lamoille District)]: So there you have it, mister chair.

[Andrew Perchlik (Chair)]: Can I ask you a question about a section that's not

[Adam Greshin (Commissioner of Finance & Management)]: new? Absolutely.

[Andrew Perchlik (Chair)]: It's just that the section I brought with you before, section 86, this carry forward language Yes. Which gives secretary administrations permission basically to carry forward instead of getting reverted. Well, what happens if we can't? Not withstands that and says, you you carry it all the most.

[Adam Greshin (Commissioner of Finance & Management)]: She or he has the authority to.

[Andrew Perchlik (Chair)]: And you carry it all.

[Adam Greshin (Commissioner of Finance & Management)]: Right. And we you wouldn't want. I

[Andrew Perchlik (Chair)]: mean, why did we say it need to be reverted and then put this in there? Is this a is Was there ever a time to didn't get carried forward by the secretary?

[Adam Greshin (Commissioner of Finance & Management)]: Not in my Somewhat do you mean? Prior saying that. She's been there

[Richard Westman (Member, Lamoille District)]: for predating all of us. So, like,

[Andrew Perchlik (Chair)]: the eighteen hundreds? Like something?

[Adam Greshin (Commissioner of Finance & Management)]: Well, Richard probably is our longest tenure, maybe Senator Lyons, but

[Richard Westman (Member, Lamoille District)]: I can't remember it never.

[Adam Greshin (Commissioner of Finance & Management)]: The the issue is, I mean, if we didn't have it in there, the secretary didn't have it, you'd want someone to have the authority, and you don't want it. I mean

[Andrew Perchlik (Chair)]: because why mom would have

[Adam Greshin (Commissioner of Finance & Management)]: Well, because you'd have to sit down and listen to a Each line of departments saying, could I carry You know, and a lot I don't

[Andrew Perchlik (Chair)]: know if it's for you

[Adam Greshin (Commissioner of Finance & Management)]: or whatever. Or whatever it is. But a lot of one time appropriations in particular that are made late in the year or so on, they haven't had a chance to dig into them, those are automatic, right, because they've only had a month or more of them. But there are many others that take a number of years to go through. There are a number of departments that have small, sometimes not so small base amounts left over, and it's a long process. I mean, I think it's a good question. Probably, by just coming in the back of my head, it's probably three to 400 lines and of I just I'm just

[Andrew Perchlik (Chair)]: telling you Gee, I don't wanna do that.

[Adam Greshin (Commissioner of Finance & Management)]: You don't wanna do that. But, I

[Andrew Perchlik (Chair)]: mean Is there a little bit of It's automatically reverted, or does this construct

[Adam Greshin (Commissioner of Finance & Management)]: take into account everything? Well, the construct, so there are there are appropriations that are automatically carried forward, and that's in in not statute, but in session law. You often will say, like, for example, we were just talking about this. That's a study guide. So it's not infrequent that you'll put in the 5,000,000 to whatever, Department of Finance and Management to do x y z and shall be carried forward. So those are automatically carried forward. But the reversions, yeah, there are some that we let revert. Nothing just just happens kind of without us.

[Andrew Perchlik (Chair)]: I didn't want to go into view with Liz. Looks like covers it everything. What is in what just reverted, but not covered by this construct.

[Adam Greshin (Commissioner of Finance & Management)]: But And something like anything that's not in there. So just So the three main funds are I guess it's

[Andrew Perchlik (Chair)]: like all the little special. Yeah.

[Adam Greshin (Commissioner of Finance & Management)]: The three main funds are there, and there are smaller funds and special funds where they, you know, automatically They do give to their bottom line, not to the general fund, you know, special funds, they stay at the special fund.

[Andrew Perchlik (Chair)]: Sometimes it'll work it'll say that any funds will stay in the fund, will will carry forward and stay there. Do they need to stay there, or that just belts and suspenders and keep people away from thinking about their dispute? Generally, the stay in

[Adam Greshin (Commissioner of Finance & Management)]: the fund language has is implied really interest based or interest. That's generally where the ratio stands. But otherwise

[Andrew Perchlik (Chair)]: It it gets reverted to the to the fund.

[Adam Greshin (Commissioner of Finance & Management)]: It's done. We all reverted to the general. It stays in the spectrum. That

[Andrew Perchlik (Chair)]: was my other question. I don't have any other questions. Does anybody else have a question? Well, if can't ask questions for me, then I'll ask him. He said he only had a question for me, but he's Thank not allowed to ask

[Adam Greshin (Commissioner of Finance & Management)]: you, guys. It's been a pleasure.

[Andrew Perchlik (Chair)]: As always. And the only thing, commissioner, about that base at one time, we might want your opinion on how you would work, how we did it. Alright. Because I'm not I mean, I need to go talk to.

[Adam Greshin (Commissioner of Finance & Management)]: Okay. There's an issue there or not. I'll be on that. That's fair. Okay. Great. Thank you.

[Richard Westman (Member, Lamoille District)]: I'd like the picture of us that talked I don't know. Changed that.

[Andrew Perchlik (Chair)]: I don't know what well, Norris tried to take Cameron, so we had to go to that camper.

[Richard Westman (Member, Lamoille District)]: So Well then you to me that you made this decision there because that's not true.

[Committee Assistant/Staff (unidentified)]: You're allowed to make the final decision. I was told by Patrick NIT that it is your decision if

[Richard Westman (Member, Lamoille District)]: you put

[Andrew Perchlik (Chair)]: it on the other.

[Richard Westman (Member, Lamoille District)]: I like the I

[Andrew Perchlik (Chair)]: like the gear. The drone gear. Yeah. That's a lot of.

[Committee Assistant/Staff (unidentified)]: That's the one that I like.

[Adam Greshin (Commissioner of Finance & Management)]: May I hit it again,

[Andrew Perchlik (Chair)]: Okay. Well, we'll have the appointment. Scott, why put don't your camera angle to use it? I thought hell would Just switched out

[Adam Greshin (Commissioner of Finance & Management)]: with the parent nurse. Okay. Authorized

[Andrew Perchlik (Chair)]: No. That was The camera broke. The Norris knocked it over.

[Committee Assistant/Staff (unidentified)]: That was my quick thinking, thank you. Under

[Andrew Perchlik (Chair)]: committee discussion, we had talked about the pilot fund, there's some legislation about the pilot fund, so we, Mr. Roots, come up with talk about

[Adam Greshin (Commissioner of Finance & Management)]: the pilot fund, and then he has a handout.

[Richard Westman (Member, Lamoille District)]: Mr. Roots.

[Adam Greshin (Commissioner of Finance & Management)]: Good morning, everyone. Chris, joint fiscal. There is a handout, as the chair said, that explains the pilot fund, and I will walk you through this at at sort of a high level. I'm really trying to focus on what the DAA is doing in relation to the pilot fund. You heard a presentation from my colleague, Ted, two Fridays ago about, like, how pilot payments are calculated, and, like, he's your expert on that.

[Chris (Joint Fiscal Office)]: I'm not. But I really wanna focus on just, like, the accounting mechanics about what's going on in the pilot special fund. I just wanna remind everybody that this special fund, where does the money come from? It comes from the 25% share of local option tax revenue. So when a town elects to levy a local option tax on a commercial activity that occurs within its borders, the town can retain 75 percent of the proceeds, 25% goes to the pilot special fund.

[Andrew Perchlik (Chair)]: And is that like '26, the first year it's 25%, you see? Correct.

[Chris (Joint Fiscal Office)]: So if you see online, the chart on the left side, on line 17, you see all the revenues get down from 15.8 Line nine

[Richard Westman (Member, Lamoille District)]: seventeen, they get back

[Andrew Perchlik (Chair)]: to I'm sorry, line 11. I'm listening. Line 11. Everybody's very good.

[Richard Westman (Member, Lamoille District)]: Thank you, senator Westman. Oh, I'm just saying. I I I forgot

[Chris (Joint Fiscal Office)]: that I actually numbered the lines when I was, like, looking at the in Excel. But when you see that drop from the 14.88 to the 14.57 on projected revenue. That's because that change took effect for the '26. It's from 30 to Right. It went from $70.30 to $75.25. So that's the amount That's the revenue source we're talking about here. That money goes into a special fund, the pilot fund. You all, in the budget every year, make appropriations out of that special fund to pay for the pilot payments to municipalities that have state owned buildings and universities. This is not the ANR pilot. This is for the state buildings. Montpelier is included in that general pilot total. There's also some funding for correctional facility pilot, and every once in a while, you'll make some one time appropriations out of the fund. So the first three lines, lines two, three, and four, sort of represent the ongoing annual pilot obligations out of the fund, you know, about a year or so.

[Andrew Perchlik (Chair)]: And those are just set by statute, like, corrections, it's $40,000 a year. We would have to

[Chris (Joint Fiscal Office)]: Yeah, you set that in the budget in this formula, and it's

[Andrew Perchlik (Chair)]: Yeah, right.

[Chris (Joint Fiscal Office)]: Right, right, You occasionally also, in addition to those 12,500,000.0 or so of recurring payments to the pilot programs, you occasionally make some one time appropriations out of the fund. In the current fiscal year, you might remember that there was a million dollars through the municipal grand list stabilization program to help towns deal with the impacts to their grand list of buyouts of flood prone properties. That million dollars is gonna trickle out over a period of time. And the expected expenditure columns here on these charts were put together with the help of our colleagues from the tax department. So I'm trying to compare the appropriations and what is actually expected to be spent out of the fund. So there's sort of two moving parts to pay attention to here. The governor's recommend for the BAA included a $500,000 one time appropriation from the pilot fund to the tax department to help with some telecom valuation work. That was related to act one forty five that you all passed two years ago, which repealed the telephone tax. That was a pretty antiquated small tax and shifted telecom property and communications property to the Grand List. Pretty complicated process. The tax department is working with the vendor, and they would expect that half $1,000,000 appropriation would be spent down over about three years. So I highlighted that in yellow. It's just one of those moving parts in the VIA. The house did concur with that. So you see that in age seven ninety. Those of you on the transportation committees might remember that last year, you shifted the town highway non federal disaster appropriation from the T fund over to the pilot fund, 1,150,000.00 a year. That was done for FY '26. The finance and management authorized an excess receipt to V TRANS to allow them to spend an extra 360 out of that fund, 360,000 out of

[Richard Westman (Member, Lamoille District)]: that fund, to deal with two additional invoices to towns this year.

[Chris (Joint Fiscal Office)]: And finance and management had proposed that V TRANS find the money within its budget to pay the pilot fund back for that money. The House did not agree with that. The House instead allowed the it was like 292,000 from the T Fund to revert and remain in the T Fund, the condition of the fund, and the house also reverted the 67,000 roughly of general fund, and swept it into the general fund. Long way of saying that the pilot fund ate that extra $360,000 of cost in that line in FY twenty six. So if you go over to the right side of the chart, you will see on line seven that that AOT, Cal Highway Non Federal Disaster Line, that 1,510,000 is 360,000 and change higher than it is on the left side because of that. The last thing I wanted to draw your attention to was the governor's recommended FY twenty seven budget recommends shifting 3,410,000.00 of costs at the tax department for grand list support, for reappraisals and listing payments to towns. That 3,410,000.00 has been paid out of the general fund, and the governor has proposed shifting that to the pilot fund because these costs benefit towns by helping them maintain their grand lists. This is the per parcel payment comes out of this line. The there's some some appeals assistance for complex valuations. There's some straining costs. The house decided to take that construct that the governor recommended in FY twenty seven and begin it in the FY twenty six BAA. So they shifted that $3,410,000 of costs off the general fund over the pilot fund, therefore freeing up 3,410,000.00 in the general fund that can be used elsewhere in the BAA. The most notable example of how that money was used was the $3,000,000 reserve for the teacher pension to deal with the reduced expectation on the federal contributions. So that's how the house accommodated that in the BIA. What I wanna show you is that over on the right side, the pilot special fund ended FY '25 with a surplus of $15,000,000 we expect that with all of these changes that are proposed, the fund would end FY '27 with about $11,600,000 So the surplus would be fairly healthy and that would still be higher than where the fund ended FY '24, which was about $10,300,000 The, a few things to keep in mind here that aren't on the chart is that we try to budget those pilot payments conservatively so that there's a sufficient appropriation to make sure every town gets what the formula says they should. Because if you don't do that and the appropriation's not enough, then everybody's payments get prorated. So actual costs are likely to come down a little lower than the $12,200,000 Another thing I wanted to point out is that we expect revenues will continue to increase in future years as more towns adopt local option taxes. And it's hard to predict that before town meeting, but we expect the revenue picture is gonna continue to be pretty strong in fund. Okay. Senator Westman?

[Richard Westman (Member, Lamoille District)]: Well, that was gonna be my question. I have three communities that are talking about local auction taxes now. Yeah. And one of the communities is above what the set limit, the 1%, they're going to 2%, we're trying to in that. Is that calculated, that's calculated zinc here? We don't calculate what towns might be doing. We base the estimates based on what towns have adopted them, and what is

[Chris (Joint Fiscal Office)]: in place now, because some towns have changed their mind, and they've adopted it and then repealed. So, that goes to

[Richard Westman (Member, Lamoille District)]: You get a better sense after town meeting week, what towns are expected to be pursuing local option taxes, and by when. But the tax department has indicated in testimony to other committees that there's several towns that are exploring doing additional local option taxes, I'm the Sierra Town gonna say this out, and part of this comes as chair of the Transportation Committee, where 70 to 80% of every single town's budget, except for a few large ones, but goes for roads. It goes to And we've been terrible at funding local towns. It's a 2% increase for local towns. As I look at this, and I see us beginning to piecemeal all the money that's coming into this, and particularly when they're going above the 1%, should we not have a consistent formula that says we're going to distribute at least a piece of local option tax to all towns, maybe through local roads or highway. What's happening here in my view is that, and I'm going to my hometown, which has a ski area, I've got snow that want, or we've got snow. They want me to go two to 3%. I've got Morristown that's looking to raise, Morristown is gonna raise 1,200,000.0 and put 800,000 of it into their town roads, and over a five year plan to bring their, and as I back out of this, I look out and say all of the towns that are smaller, that have no ability to raise revenue, get left behind, and they're the ones that do all the shopping and going to restaurants in Snow, going to Williston, doing that. And would it not be a time to start to look at this and say, if there's gonna be growth beyond the 1%, and this is a real growing area, should we consider that the 25%? But we develop a formula to think about a piece, at least a piece of this should be, go on to help all

[Chris (Joint Fiscal Office)]: the dentists. Yeah, I think your question is well taken. One of the things that I would point out is under the current sort of revenue projections going into the pilot fund, and based on these proposed shifts of expenditures and what the ongoing costs of the pilot payments to towns will be, There is very little room in the pilot fund to put an additional significant recurring annual expense in under the current revenue Having said that, that picture will likely change in the future as more towns come online with local option taxes to the extent that they do, and if towns do wanna do something above and beyond the current law, 1% local option tax, I think the opportunity is ripe to have a conversation about how you treat that money. Whether you route us through the

[Richard Westman (Member, Lamoille District)]: same I system or look at STOW and say, I'm not into dipping into what they already do, but if they want to go to 2%, should we not say that a portion of those increases and they're going forward, not the looking back to anybody, but the pieces going forward, if I could dedicate them specifically to help communities with their roads in every community across the state, We've been vocally and adequately helping them. And if I look at the last five years, we've had 60% increase in construction costs for the state, and we've been increasing for local roads by 2% a year. You can't tell me that the towns haven't faced the same kind of increase, and that and the bulk up in this whole picture, when you're having double digit increases on on the education side, I've got communities that aren't keeping their roads up because they can't pass budgets. I I think, senator, what I

[Chris (Joint Fiscal Office)]: hear you saying is there's an opportunity to have a conversation around if towns were to increase sort of do something above and beyond the existing 1%. Do deal do with that second percent in a

[Richard Westman (Member, Lamoille District)]: way that makes sense for road infrastructure? I don't wanna do anything with the existing formula for the existing piece, but if they're gonna go forward

[Andrew Perchlik (Chair)]: Okay, Senator Lamoille?

[Committee Assistant/Staff (unidentified)]: Well, I mean, was just thinking that the original local options tax was to offset some of the loss of education property taxes as a result of Act 60. And we know that we currently have a very high need for capital, school capital expenditures, so theoretically either a percentage of the remaining amount or a new tax could also be, I don't wanna say new tax, you could use an 80% of that $11,000,000 to put it into a capital construction fund.

[Andrew Perchlik (Chair)]: There's no robust discussions in

[Richard Westman (Member, Lamoille District)]: the So there's a robust discussion.

[Chris (Joint Fiscal Office)]: Are, I've heard many robust discussions around this building about ideas on how to help municipalities with the pilot fund. Yeah. I would add words to

[Richard Westman (Member, Lamoille District)]: the list. I would just suggest though that at this time, it looks to me like this we're beginning to nickel and dime. And do we wanna, should we not have a fuller discussion? 2% based on the economic

[Committee Assistant/Staff (unidentified)]: output for the individual community, so the communities income.

[Richard Westman (Member, Lamoille District)]: Well, you served on a select board for years. I know. A lot of it was rows.

[Committee Assistant/Staff (unidentified)]: Oh, it is. I mean, it definitely is.

[Chris (Joint Fiscal Office)]: Is there a ceiling on the option tax? I'm wearing 1% under her law.

[Andrew Perchlik (Chair)]: 1% under her law. Yeah. So when Stowe is asking to go, too, we'd have to change the statute.

[Chris (Joint Fiscal Office)]: That's all that. I'm not an attorney,

[Richard Westman (Member, Lamoille District)]: but that's my understanding. No, a peanut's not quite right. Is it an attorney? No, they have a charter and they're approaching it and they're going to bring the charter for us for approval.

[Andrew Perchlik (Chair)]: Right, so we just have to approve it.

[Chris (Joint Fiscal Office)]: That's the way, typically, until last year when you all changed the funding form, the ratio to seventy fivetwenty five, most of the time when towns were going to put in a local option was the charter amendment.

[Richard Westman (Member, Lamoille District)]: And the charter allows you to go outside the existing block.

[Andrew Perchlik (Chair)]: Figured we'll go past the one for some reason. So this number you have in front parent's out of those, that was about 3.7. That was

[Chris (Joint Fiscal Office)]: just that was my crude math to show the cost change between what the governor recommended and what was reflected in the house BAA, and that is the addition of that 368,000 and change from the town highway nonfederal disasters, plus that $3,400,000 or $3,000,000 of tax. And now

[Andrew Perchlik (Chair)]: do I understand this chart correctly that every year, giving these numbers, we're spending like two point or one, 2,100,000.0 more than we bring in. I wouldn't,

[Chris (Joint Fiscal Office)]: I wouldn't say that every year, because some of this is spend down on one time appropriations that's gonna occur in different periods of time. The, recurring lines under current law are lines two, three, and four, and if you all were to make the change the governor's proposing around the reappraisal payments line, would be with credit loss.

[Andrew Perchlik (Chair)]: So it would be more than the estimated tax. Mean, it would slowly eat away at that balance.

[Chris (Joint Fiscal Office)]: For a little bit, and then If there's more low cost. Correct. And again, that 12.2 is conservatively budgeted. And my understanding is that what the governor had recommended with putting that 3.41 into this fund, the tax department was comfortable that the pilot fund would be able

[Andrew Perchlik (Chair)]: to support that for the future based on how they project revenues and expenditures are likely to turn. It would be 3.4 every year. But I guess would be credit if this would follow Act 73 plan on doing reappraisal of each?

[Chris (Joint Fiscal Office)]: No, this is really, this is payments to towns for a grand list maintenance. They get a proposal fee every year.

[Andrew Perchlik (Chair)]: Okay, it's not the reappraisal part of No, that's

[Chris (Joint Fiscal Office)]: a different, And that 3.41 will fluctuate a little bit from year to year. It's been pretty stable.

[Andrew Perchlik (Chair)]: So this is just to help them maintain their databases and whatever they needed. Yeah. Reappraisal for the grand list, the next 73 would come out

[Chris (Joint Fiscal Office)]: of some other fund. That's my understanding. And and they also do some help with some towns for really complex litigation They are. Precisely, and some of the stricter training and things like that. The tax department can give you a robust rundown of that section of their department when

[Andrew Perchlik (Chair)]: they have it. And do you know, off top of your head, did transportation in their budget put the 1.5 in their budget for the non designated disasters for clinical violence? That revenue would stay in the

[Chris (Joint Fiscal Office)]: T fund and drop to the bottom line and help them end FY '26 in less of a deficit than they're currently producing.

[Andrew Perchlik (Chair)]: No, I'm talking about their FY '27 budget.

[Chris (Joint Fiscal Office)]: This doesn't impact their FY '27 budget. I'm not

[Andrew Perchlik (Chair)]: saying it does, what I'm asking is, did they put in their FY twenty seven budget a million dollars, which they used to do before last year that would kinda come from

[Chris (Joint Fiscal Office)]: the Oh, I'm sorry, you were asking me a different question. No. That's the 1,150,000.00 for town highway non federal disasters in the gov rec for next year is back in the teaching. Okay. That's the first.

[Andrew Perchlik (Chair)]: Okay. Along those lines, do they know that they're getting an extra $360,000 They do. It's in there.

[Chris (Joint Fiscal Office)]: Well, they've been told that the house has done that. Okay. That is not for an additional project. My understanding is that would help them help cushion the pretty severe issue they have, and hopefully lessen their reliance on federal indirects by a little bit of money next year. I think the committee felt that given the state of the different funds, that if the pilot fund was having a surplus, and the other funds were not, that

[Andrew Perchlik (Chair)]: they disagree with finance and management. Another question for Senator Westman, I think. Sure. If I may. Yeah. The SCO, the option, 1% additional LOT that they're looking at, are they on a fast track for that? They're voting on it. This March. You can ask that you know, they're voting on

[Richard Westman (Member, Lamoille District)]: it in

[Chris (Joint Fiscal Office)]: March. And they're hoping that they would get

[Richard Westman (Member, Lamoille District)]: it approved on this this meeting. Okay. Well

[Andrew Perchlik (Chair)]: But it seems like that necessitates

[Chris (Joint Fiscal Office)]: some of the Westman's robust station to really die.

[Richard Westman (Member, Lamoille District)]: If they're successful, it's going to be pushed beyond, and they won't be the only ones. The problem is, because Morseville just north of them is voting on a 1%, Cambridge is talking about 1% rooms and meals. This is just my area. But as they do that and they do a round, I would dare say that 90% of the people that work in Stout live someplace, live in the feeder towns around, and they're all dying and they can't keep up their roads either. So how would I distribute this money and at least take them apiece and more fairly distribute it out? I certainly think the town that is the host town, at the base, gets what they get. I wouldn't touch any of that, but if you're gonna go beyond that, should it, instead of 75%, should maybe you get 5025% get shared in New York? We do, but is it not time to have that as a discussion, particularly when we're having surpluses here and it looks like we're picking this apart?

[Andrew Perchlik (Chair)]: And just to bolster your idea and maybe expedite the conversation, I mean, I think it was on channel three news last night, the night before where they were talking about towns actually giving up town roads because they can't afford to maintain to, you know, and turning it into private roads and houses with two or three, you know, houses on a road. So that's what they're resorting to at this point. They're so stressed. Yeah. Alright. Be robust.

[Chris (Joint Fiscal Office)]: Sounds like this is big place in transportation. Basically, we have. Yeah. Well, we got a couple of.

[Andrew Perchlik (Chair)]: We have to have a farm on the community. Yeah.

[Committee Assistant/Staff (unidentified)]: We Oh, we do. Oh, yeah.

[Chris (Joint Fiscal Office)]: We We do.

[Andrew Perchlik (Chair)]: Okay. Anything else for mister Ruth?

[Chris (Joint Fiscal Office)]: Pilot? Okay. Thank you. Good. It's all good. Thank you.