Vermont Legislature SmartTranscripts:

[Senator Andrew Perchlik (Chair)]: And

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: we are that.

[Senator Andrew Perchlik (Chair)]: Well, bottom line is when you get it fixed.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Next year.

[Senator Virginia "Ginny" Lyons]: We'll talk. This doesn't happen. Maybe. We'll see. We got the whole thing already. Okay.

[Senator Anne Watson]: Hi. Good. How are you?

[Senator Andrew Perchlik (Chair)]: Well, we can talk. Okay, this is Senate appropriated. Catch, nine days, but I'll send it to you. We are talking about the Budget Adjustment Act which we've seen, and we have the JFO and the Tax Department give us the presentation. So I'll let you introduce yourselves and talk to us about the child care side.

[Emily Byrne, Joint Fiscal Office]: Sure, so, Emily Byrne, the Joint Fiscal Office.

[Andrew Stein, Vermont Department of Taxes]: Andrew Stein, Chief Operating Officer of Taxes.

[Emily Byrne, Joint Fiscal Office]: And so, we're going to talk about specific language in the Budget Adjustment Act that was recommended by the Governor and approved by the House that addresses the year end close out of the general fund and how the childcare contribution, which is the payroll tax, makes its way from the general fund to the child care contribution special fund at year end.

[Senator Andrew Perchlik (Chair)]: Are calling it a matrix or a construct?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Construct?

[Senator Andrew Perchlik (Chair)]: I've heard some people say it's the year end construct. Oh, What did I say? They just called it the close-up of Saint Pierre. Some people call it a construct, some people call it a matrix. I was gonna call it a roof of the count.

[Emily Byrne, Joint Fiscal Office]: The process.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: I'm gonna

[Emily Byrne, Joint Fiscal Office]: call it the process. The year end process. And I think before I get into the, like, the actual language and the mechanics of how the closeout process works, got pandered here from the tech department to talk about why this is necessary.

[Senator Virginia "Ginny" Lyons]: Yeah. Yeah.

[Senator Andrew Perchlik (Chair)]: So it's fixing a problem.

[Andrew Stein, Vermont Department of Taxes]: Yes. Yes. It's fixing an administrative problem that I also am going to tease a couple years in the future. One might be a smaller fix related to this, but let me just explain the general issue. The general issue is this. Actually, before I get into this general issue, let me explain to you why we did this. So when we were volatile in the stand up childcare contribution, that's every year we're volatile to do many things, we weren't certain at that time, there were some different versions of the childcare contribution that came through. And frankly there were different versions of a payroll tax that were coming through for different purposes. Ultimately this is the version that came through and this was the priority that the legislature had that session. And so thankfully the legislature decided to use a pretty simple construct for this. And so earlier versions would have been a lot more complicated and would have required us to stand up their own tax type. So the care contribution is its own tax type, but on the tax side, what we did to implement it is we folded it into two existing tax structures, so withholding and personal income tax. And ultimately it's an assessment on employers and so the only employers that are paying on the personal income tax side are self employed individuals. And that accounts for about 1.5% of total revenue. So vast majority of this revenue is businesses that have W-two wage earners working for them. And so it's paid as part of withholding. And right now

[Senator Andrew Perchlik (Chair)]: The same as a payroll tax. People got payroll tax, they're talking about withholding.

[Andrew Stein, Vermont Department of Taxes]: Well, it's a little bit different because withholding is used for personal income tax. It's a way of ensuring that the state has the necessary cash flows throughout the course of the year and people are paying their personal income taxes. Employers help, employers are actually permitting it on behalf of employees, but you make your W-two at the end of the year and you file your personal income taxes and it's like I've already paid this much through withholding,

[Emily Byrne, Joint Fiscal Office]: this

[Andrew Stein, Vermont Department of Taxes]: is different. Although depending on the structure, employers can pass some of this through to employees in terms of who puts the bill for this, which I can get more information on that later. But we, the reason we did that, well, two reasons. One is in terms of implementation costs, the stand itself as its own tax type in our system would have cost $1.25 to $2,000,000 depending on how we did it. So wanted to save that. We had a general fund appropriation that we never used before that. This was a couple of years ago. So saving taxpayers money, that was part of it. But frankly, I think an even bigger reason why we did this it just made it easier for tax payers. Essentially, it's like these are tax types that already exist. We add an extra line on the return and that's where they permit. And then they pay for it as part of the processes that they're already using to permit taxes, withholding and personal income taxes. Now the issue that this created, and we knew that this was an issue at the tax department, but it wasn't until the end of the fiscal year that Summit Finance and Management and the Joint Fiscal Office realized, oh, there's a bigger issue that we hadn't all envisioned here, which is, when you're remitting it on withholding, again, it's 98.5% of revenue, we're talking about $80 to $82,000,000 a year. When you're remitting this as part of withholding, the withholding returns in that first year come in on October 25, January 25, April 25 and July 25. And July 25 is after the end of the fiscal year and it's after the end of that true up period between fiscal years and so what that meant was we didn't have the data, again, knew that this would be the case on the tax side, we didn't have the data to send the money to the childcare special fund because we're getting all the withholding, all the childcare contribution receipts together. And there's no way for us to break that out until we have the return. When the return comes in, we have that data, the money automatically goes childcare special funding out of the general fund, remember. The issue was at the end of the fiscal year, there was an additional roughly $20,000,000 sitting in the general fund that was owed to the childcare special fund that we wouldn't have the data to shift over. And there were also statutes in place that required transfers out of the general fund for other purposes. And so the question was how are we going to deal with this? And we dealt with it on the fly by coming up with an estimate at the end of the year based on the initial three quarters, and it was transferred out, I'll let Emily touch more on that part later. But that's ultimately the reason why we're doing this. We'll need to do it again this year. We'll need to do it again the following fiscal year. But what I'm hopeful is we're at the beginning of a version upgrade to our system, and we're going to have the functionality which we haven't had in the past as part of this version upgrade to, on the withholding, the vast majority of payments that we received for withholding coming electronically. For us to be able to have a line for the childcare contribution and withholding. Employers will be able to break out what's childcare contribution and what's withholding when they make that payment in the future. It's gonna require a bit of education, it's going to require some outreach, some people aren't going to do it right, then we're going get the return, it will automatically true up in our system. But in general, we're going to be able to get a lot more money into the childcare special fund sooner rather than later. And I think it's also worth mentioning, this is only an issue for the last quarter. So for three quarters out of the year, this isn't an issue, it's the last quarter. And based on that last quarter, I have some numbers on here, what percentage is electronic payments are 99.17% of all withholding tax and childcare contribution payments. So if through outreach and education and this additional structure that we're going to have in our system, we're able to direct people to pay sooner rather than later, that's going to alleviate the need to transfer to do this estimate considerably. There may still be, and it's something that the Joint Fiscal Office Finance and Management Legislature will want to consider. There may still be like $1 to $2,000,000 that folks want to adjust that can participate. But in general, I think we're going to be able to ultimately resolve this issue.

[Senator Andrew Perchlik (Chair)]: Okay, yes, Sarah Lawson?

[Senator Anne Watson]: Thank you, I think there was a, there's, well okay, so you mentioned that it's like, the fact that it's July 25 is part of the problem but what I felt like I was hearing was that even if we were, well, I guess, this is really a question. If we were to change it somehow to be earlier in the month or even like June 30, yeah, does that, does that, I'm guessing that that does not solve the problem still.

[Andrew Stein, Vermont Department of Taxes]: The, so it's after, it's receipts for after June, so the way the trust happened, and we give, we give businesses twenty five days to organize all of the information necessary. And it aligns with federal reporting requirements too, we get better compliance if the state aligns better with

[Senator Anne Watson]: the, like

[Andrew Stein, Vermont Department of Taxes]: we wouldn't support moving

[Emily Byrne, Joint Fiscal Office]: Moving to date. So, moving to date Other issues. Yes. Okay. Yeah.

[Senator Anne Watson]: That makes sense. You need thinking

[Senator Andrew Perchlik (Chair)]: about

[Emily Byrne, Joint Fiscal Office]: it like as an employer, right? You need time for like sometimes the pay period process that time period, right? So, like, you're not going to process your payroll potentially until later. So, like, you need that true up time. Right.

[Senator Anne Watson]: And then, we end up in this space where we're having a true up even later. Yeah. Basically. Michigan. Okay. Thank you.

[Senator Andrew Perchlik (Chair)]: Cool. Alright. Alright. Mister chair.

[Andrew Stein, Vermont Department of Taxes]: Ultimately, this one. Alright, should we

[Senator Andrew Perchlik (Chair)]: have a center barista?

[Unknown committee member (Senator)]: Oh, hello everybody. I am assuming that this is purely an accounting measure and I've heard from several sources in JFO for instance that it's not connected to any attempt to move money to other priorities. My question would be, I haven't been able to get exact figures on what the uptake is of the child care special funds. I know that last year, last fiscal year, there was a percentage that was not being utilized. I know that attempts were made to increase utilization, and I'm wondering if you have that figure at this point.

[Andrew Stein, Vermont Department of Taxes]: I I don't, but DCF just provided a presentation to House Ways and Means this morning on this. I I did the first part of the presentation, ten minutes, just an overview on the revenue side and what uptake looked like in terms of revenue and compliance there. Because initially in the first quarter, we did have a little bit of issues with non compliance. We did have a really large payroll company that had an error in their calculation, but after three months, that was all resolved. But DCF then provided a presentation on these exact issues, Senator. I think they did a, I, they had a nice presentation on this. I think if, if you all are interested in that, I'm sure they'll be happy to come in here and provide that overview, but I defer to DCF on that.

[Unknown committee member (Senator)]: Okay, understood, and it would be great if DCF were somehow listening if if or if someone could notify them.

[Senator Andrew Perchlik (Chair)]: They're coming in today, talk about something else, but we could talk to them about that. But also, Elle

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: could

[Senator Andrew Perchlik (Chair)]: see if next week we could put them on the agenda.

[Andrew Stein, Vermont Department of Taxes]: Yeah, Jen McLaughlin and Carol If

[Unknown committee member (Senator)]: they're appearing today, then, you know, we can ask them.

[Senator Andrew Perchlik (Chair)]: Yeah.

[Andrew Stein, Vermont Department of Taxes]: Yeah.

[Senator Andrew Perchlik (Chair)]: Thank you.

[Andrew Stein, Vermont Department of Taxes]: Yeah, no problem. Yeah, they would, they received similar questions this morning, right? Explaining the situation. One thing I'll say is if this wasn't an issue with the mandatory statutory transfers, the general plan was in the first year there would be less money in the child care contribution, the child care special fund for the end of the fiscal year knowing that as of July it's all going to be in there, the initial thought was this would be a first year problem because every year after that there would be four quarters, but because of this issue that Emily is going to provide an overview of with some of the required transfers, if you make this transfer that first year, you have to do it every single year unless we can resolve it with that other process unexplained, so.

[Emily Byrne, Joint Fiscal Office]: Great, alright, I will share my screen. We've a little presentation to walk through this. And this is, as Andrew alluded to, this is language that we came up with over the summer, tax department, finance and management, and the joint fiscal office together.

[Cameron Wood, Office of Legislative Counsel]: So, it's sort of

[Emily Byrne, Joint Fiscal Office]: consensus process, and is effectively the process that we did in FY '25, just codifying it so that it's clear. I think that, right, when finance and management goes to close the books, they want clear instructions on like, do this, then do this, then do this, then this. You know, having to do this process outside of the, what was in statute, you know, works, but it's better for everybody if it's documented and they know exactly what to do and when auditors come, they can say it's the process that we follow. So, at a high level, we'll go through the language, talk about the current state, why it's necessary again, and then what this new language does. So, I was in here a couple months ago to talk about the closeout process, but just a real quick overview of the current closeout process. So there are two in statute. There are two pieces that govern what happens at the end of the fiscal year closeout, and what happens to any revenue in the general fund that's unallocated, right? So sometimes the revenues come in higher than was forecasted and budgeted, and then we have to figure

[Senator Andrew Perchlik (Chair)]: out what to do with

[Emily Byrne, Joint Fiscal Office]: those funds. So the first thing that happens is outlined in 32 BSA three zero eight. The first thing that happens is we fill up the general fund stabilization reserve. So this is both rainy day fund, this is the first reserve. We budget to do this, so we always know it's 5% of prior year appropriations.

[Senator Andrew Perchlik (Chair)]: So when we close out FY '26, it's up '25 or it's up '26 because you're kind of doing it in '27?

[Emily Byrne, Joint Fiscal Office]: And when we close '26, the stabilization will be reserved at 5% of the FY 2025 appropriations.

[Senator Andrew Perchlik (Chair)]: And we put that in FY '26 budget.

[Emily Byrne, Joint Fiscal Office]: In the FY '26 budget, we made an assumption that we're going to need to transfer this much more. We know what the appropriations are by the time you pass the 2020

[Senator Andrew Perchlik (Chair)]: Sometimes it moves

[Emily Byrne, Joint Fiscal Office]: around, BAA moves it around, right? But we know that's what that number's going be. So, five percent of prior year appropriations, And then after that, follow 30 PMPSA three zero eight. So, this one we get a lot of discussion about in this committee. Sometimes it gets not withstood or things get put in front of the line on this. Does anything happen to fill up the stabilization reserve? It's split between the rainy day fund and the state teacher's retirement fund and the state employees' retirement funds.

[Senator Andrew Perchlik (Chair)]: And if the general, the rainy day fund, the general fund balance reserves doesn't have a PATH?

[Emily Byrne, Joint Fiscal Office]: The rainy day fund has a 10% of prior year.

[Senator Andrew Perchlik (Chair)]: So if we got to the cap, what

[Emily Byrne, Joint Fiscal Office]: would happen is 50% would go to the pension fund, the rainy 50% would just sit in the general fund, and be unallocated on reserves. Just go to the bonds. Just sit there

[Senator Virginia "Ginny" Lyons]: for next year. Okay. So, what's that?

[Senator Anne Watson]: I seem to remember a couple of years ago, there was like this, the waterfall, like there were all these groups that were hoping for the contingent money. With this construct, that doesn't allow for that.

[Senator Andrew Perchlik (Chair)]: Okay, okay. Do address Okay,

[Emily Byrne, Joint Fiscal Office]: this is like statute, all else equal, nobody does anything, there's no contingency list, nothing. This is what happens at the year end. So, in FY 2025 for closeout, finance and management and JFO tax department worked together to estimate the amount of the payroll taxes collected in the fourth quarter. Basically, if we hadn't estimated that, it would have been subject, it would have been in the general fund at year end, it would have been subject to this statutory requirements, right? So how the money would go to the rated A fund and then get split between the pensions and everything. We said, Woah, well that's not the intent, this is payroll tax money. It's not like, it goes to the general fund because of the administrative mechanics, but it really is childcare contribution special fund money. So we came up with an estimate for the fourth quarter and those funds were sort of reserved. They were put in a box, if you will, to be transferred to the childcare special fund once the number was trued up. So that money we sort of put to the side and said, it's not going to be subject to the closeout process. Once finance and management, once they were reserved, once we agreed upon that number, Finance and Management completed the closeout process, did what they needed to do. Once it was closed, they unreserved the money, and then they transferred it to the Child Care Contribution Special Fund that protected it from the statutory closeout process. So, this is what happened in FY twenty five. So, the first thing was follow 32,308, 5% went to the stabilization reserve. That's always the first thing that happens. This was after we had reserved that money. Then we had the list of contingent transactions, so this is what Senator Watson was referring to. So, in the budget bill, the General Assembly had not withstood the next step, the 30 two-308C, and said, Prior to executing 308C, climb this list of contingent transactions, and then do 308C. And those contingent transactions, if you'll recall, right, is the money that, the $50,000,000 that went to agency administration, the emergency award, you move the $8,000,000 for EDS, the $230,000,000 reserves. And then after that, anything left on the bottom line went to the rainy day fund and then to retirement.

[Senator Andrew Perchlik (Chair)]: Except to always have the notwithstanding Yes. The three zero eight C.

[Emily Byrne, Joint Fiscal Office]: Yeah, and I believe at closeout last year, there was about $1,000,000 that went to the rainy day fund and then not quite half $1,000,000 on my Schizophrenia fund. There was still a little bit of money left.

[Senator Andrew Perchlik (Chair)]: Does that answer your question, Stephanie?

[Senator Anne Watson]: It does. I

[Emily Byrne, Joint Fiscal Office]: think

[Senator Anne Watson]: I need to understand a little bit more about how, like, how notwithstanding works, because it's sort of like so, because this step two is like, notwithstanding this other construct, we're gonna do we're gonna allocate this money. Mhmm. And then as soon as that is accomplished, step three or three zero eight still happens. It's kind of like, it's not deleting it, it's just

[Emily Byrne, Joint Fiscal Office]: And it's one of those like

[Senator Andrew Perchlik (Chair)]: For the purpose of that money, we had, whatever, dollars 100,000,000 in the contingency, plus after you get through the $100,000,000 then whatever's left. It's three zero eight would have gone.

[Emily Byrne, Joint Fiscal Office]: Yeah, so yeah, and it's really like whatever's left, and it's possible you only get through part of the contingent list. It's possible you never get to the contingent list. It's possible, you know, like, that there's steps along the way, because we don't know what the revenue's gonna be until closeout is done.

[Senator Anne Watson]: I guess I have one follow-up question, and I apologize, perhaps, and maybe said this, but what determines how far down the list do

[Emily Byrne, Joint Fiscal Office]: you get if you're also going to do amount of money that's available?

[Senator Anne Watson]: So, okay, it's possible that you could, you don't get through the whole contingency list, and then there's nothing left over in freeway. Correct.

[Senator Andrew Perchlik (Chair)]: If you don't get through the contingency list, you're never gonna have freeway.

[Emily Byrne, Joint Fiscal Office]: Okay,

[Senator Andrew Perchlik (Chair)]: that's It gets all the way through the contingency

[Senator Anne Watson]: list. Okay.

[Senator Andrew Perchlik (Chair)]: It's not

[Senator Anne Watson]: like there's some, like,

[Senator Andrew Perchlik (Chair)]: the arguments about Ms. Burns said that there's this, talked about this because some people want there to be money that goes through your agency, and you're feeling it through your agency purposes, and That's where it gets comfortable.

[Senator Anne Watson]: Okay. I think I'm good. Thank you. Good. Yeah.

[Emily Byrne, Joint Fiscal Office]: So I'll go through the proposed BAA language. So what the BAA language does is codifies what actually happened in 2025. It ensures that finance management can still close the general fund timely. So, like, they could wait to close the general fund until after the tax department has received all of those returns and made the reconciliation, but it's good to get the general fund closed timely so we can see where we're at. And then it also ensures that the Child Care Contribution Special Fund gets all the money that the Child Care Contribution Special Fund is due. So, step part A of the new section.

[Senator Anne Watson]: I should have forgot

[Emily Byrne, Joint Fiscal Office]: to bring what actual section it is in the VA.

[Senator Virginia "Ginny" Lyons]: You need to check. I'm sorry. So,

[Emily Byrne, Joint Fiscal Office]: annually, no later than the close of the first week of the new fiscal year, tax, JFO, and finance management will come to a consensus estimate on the anticipated fourth quarter receipts that are due to the Child Care Contribution Special Fund. We'll figure out what that is. We were pretty close. We were very, like, it's doable. We've become pretty close on. So, we'll figure out what that number is. As part of the annual closeout process, the Commissioner of Finance and Management will reserve the amount that those three parties have agreed to is attributable to the child care contribution and reserve it in the general fund prior to doing 308C. So, will always fill the rainy day fund, or not the rainy day fund, excuse me, the stabilization fund, 5% fund. And then the next thing that will happen is reserve the child contribution fund, and then do three zero eight. Closeout is done, the Commissioner of Finance and Management will unreserve that money in anticipation of transferring it to the Child Care Contribution Fund. If the amount that's unreserved is greater than the actual receipts due to the Child Care Special Fund, than the excess. So, if it was, we reserve $100,000,000 but it turns out that there was only $95,000,000 worth of child care contribution that was collected. That $5,000,000 will get allocated in accordance with 308C. So, if we go to the pensions and the rating. If the amount unreserved is less than the actual proceeds to the Child Care Special Fund, then the difference between the amount reserved and the amount actually owed will be unreserved from the balance reserve, and it will go to the child care contribution special fund to make that whole. This does not contemplate, like, if money ends up in the pensions that shouldn't have gone to the pensions because we didn't reserve enough money, it doesn't go back in and take it back out of the pension funds. It will just take it out of the general fund balance reserve to cover that difference, but it makes sure that in either direction the Child Care Contribution Special Fund is made whole and has paid all of the payroll taxes to.

[Senator Andrew Perchlik (Chair)]: Sorry,

[Senator Anne Watson]: so, that's not the day. No, that's the,

[Emily Byrne, Joint Fiscal Office]: or that is the rainy day amount, sorry. Okay. Because I It is the rainy day. It's not the, like, the

[Senator Andrew Perchlik (Chair)]: Stabilization.

[Emily Byrne, Joint Fiscal Office]: The initial. The stabilization. Oh, wait a minute. The second. Oh, the secondary reserve. Gotcha. Okay.

[Senator Andrew Perchlik (Chair)]: It's the

[Andrew Stein, Vermont Department of Taxes]: actual rainy day.

[Emily Byrne, Joint Fiscal Office]: Yeah, that's what they're kind of all So, just to sort of walk you through step by step, so at the end of the FY '26, what will happen is first 03/2008, reserve money for the stabilization reserve. And so this is, yeah, reserve the amount owed to the child care contribution special fund. It'll be the consensus estimate of the fourth quarter payroll tax that are due. And then anything, once that's reserved, then we do step three, go to the general fund balance reserve retirement funds. Then unreserve the amount that was reserved in step two for the payroll tax, transfer it to the child care contribution fund, and then step five will be that reconciliation process, figure out if it was the right amount that was transferred or not,

[Senator Virginia "Ginny" Lyons]: and then true it up. So,

[Emily Byrne, Joint Fiscal Office]: that's what the statutory PAA proposal is. I should also throw out there that there is specific, there's a change in the budget adjustment specifically So, related to twenty first is three zero eight. The governor proposed to reserve $74,900,000 general fund to write off property taxes in fiscal year 2027 if there's any additional revenue at the end of the year. Then step three is to reserve the amount for the child care contribution fund.

[Senator Andrew Perchlik (Chair)]: Then any You have to sort of transfer into that special money. When you're reserving it, what are you doing?

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: Transferring it?

[Emily Byrne, Joint Fiscal Office]: You're not transferring it, just say, Put a

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: box around it. You put a box around it,

[Senator Virginia "Ginny" Lyons]: yeah.

[Emily Byrne, Joint Fiscal Office]: There's no real good way to, yeah, it stays in the general fund, it's part of the general fund, it's just like, restricted within the general fund. So, reserve the child with care amount, then file 308c, whatever's left goes to the pensions and the Ready to Aid Fund, and then unreserve it and transfer it to the childcare contribution special fund, and then true it up. I should point out, this is what the governor proposed. What's in the House version is actually flipping steps three and steps two. So, what the House has proposed is that first, set aside the money for the stabilization reserve, then reserve the money into the healthcare contribution fund, and then set aside money for property tax buy down, then do three zero eight. There is a little bit of a change for you guys to contemplate, and we can talk about pros and cons and why. And I finance and management, I believe Adam Gresham spoke about it yesterday, and it's in the technical letter. But that's just a

[Senator Anne Watson]: small change.

[Senator Andrew Perchlik (Chair)]: So there isn't a risk, we didn't have to, because I think last week, maybe we set up an actual reserve, but we're not setting up a reserve account. There's not a new reserve fund.

[Emily Byrne, Joint Fiscal Office]: It's really like a temporary mechanism that finance will use for like four days of July. Two weeks in July. Yeah. It'll be reserve it, close it down, but unreserve it. Okay.

[Senator Andrew Perchlik (Chair)]: Makes sense. You have another question?

[Senator Anne Watson]: I have so many questions. Great. So, I wanted to make sure that I understand. So, there's some decision to be made about whether we flip step two and step three, is that right? So, maybe you're gonna talk about this, yeah, so, I'm curious as to what you think the pros and cons might be of which order. Sure. So,

[Emily Byrne, Joint Fiscal Office]: now, if

[Senator Anne Watson]: in the event

[Emily Byrne, Joint Fiscal Office]: there are, we get to June 30, or once the general fund is ready to be closed, and there is not enough money to meet the 70, like, and then, you know, we've done our best budgeting, we assume there's going to be a certain amount left on the bottom line, right? 75 plus whatever's supposed to go to the stabilization reserve. That number is less than what we thought it was going to be. The way this is set up means set aside the money in stabilization reserve, set aside the $74,000,000 and then maybe you don't reserve as much as you thought you were going to reserve, right? So, there's this sort of In three. Yeah, the step process. Yeah, in step three, right? So, would you then would you wanna reserve the payroll tax first and then see how much of the $75,000,000 is available to set aside for next year? Then you could deal with the difference in the Budget Adjustment Act if you need to or whatever, but hopefully that does come to fruition, but that's the sort of thinking is what's the What would you do? What would you rather have come first in the event that the revenues don't perform to the forecast, or what we entered, when we finish the budget, what we think they're gonna be. And effective full check.

[Andrew Stein, Vermont Department of Taxes]: No, and just just to make sure everybody's clear on this, my understanding, Emily, you you just touched on this a little before, the way that the if if revenues came in low, money would actually come out of one of those reserve funds into the child care special fund because that's easy. I should you know, the aim is to make that fund whole. I know that, but financing management might

[Senator Andrew Perchlik (Chair)]: wanna chat with them more about that. That's okay. And is there language in here that that we do what Andrew just says that it would if if there's a shortage of revenue, and we do it the way the government bonds with the stabilization reserve make the job here. Are there any? I

[Emily Byrne, Joint Fiscal Office]: think, yeah, based on the language which part was it? Part d that says that it's less. No, it's a Part D. If it's less than actual receipts, then you use the balance reserve to cover the transfer. So,

[Senator Virginia "Ginny" Lyons]: you know,

[Emily Byrne, Joint Fiscal Office]: it's a good finance measure.

[Senator Andrew Perchlik (Chair)]: And then you would start the next fiscal year with the general fund balance under its 5%.

[Emily Byrne, Joint Fiscal Office]: It wouldn't be under its 5% because there's no minimum for the rainy day fund. So there's

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: a Right.

[Senator Andrew Perchlik (Chair)]: I guess, obviously, the next year, you'd have to make a step difference. First, that's the first thing.

[Emily Byrne, Joint Fiscal Office]: Right, well it wouldn't be the stabilization reserve, it would be the secondary reserve. Which like, you could make it up.

[Senator Andrew Perchlik (Chair)]: Right, right.

[Emily Byrne, Joint Fiscal Office]: You could say like, we right. Don't have

[Senator Virginia "Ginny" Lyons]: the stabilization.

[Senator Andrew Perchlik (Chair)]: Right. Okay.

[Andrew Stein, Vermont Department of Taxes]: I think another way of thinking about this too though, if you found yourself in that situation, ultimately whatever's owed to the childcare special fund, that is coming from the childcare contribution. So the question, and you're all ultimately lawmakers. You could make a decision, hey, we wanna override this the following session. Right. If if you wanted it to stay in the general fund or the way the way that this would play out. We know how much scant stuff over. All the time. All the time. Yeah, well,

[Senator Anne Watson]: so I just wanted to make sure I was listening. So which way, which order did the governor recommend this, and which way has the house recommended this?

[Emily Byrne, Joint Fiscal Office]: The governor recommended the $74,000,000 and then the childcare reserve, the house recommended childcare reserve.

[Senator Andrew Perchlik (Chair)]: Anything else? That's good.

[Emily Byrne, Joint Fiscal Office]: Sorry there were no puppets, I guess.

[Senator Andrew Perchlik (Chair)]: A lot of appropriates in my list of puppets. Okay. Well, if there's no other questions, thank you for your time. Great. We got James here.

[Senator Anne Watson]: I'm gonna go work for James.

[Senator Andrew Perchlik (Chair)]: Virginia, would you wanna ask something around that? Sure.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: Thank you. I'm Brad from Stapley, Joint Discourse. Here today to talk about section eight housing in the House Recommended Budget Adjustment Act. What section is the section eight of? So this is section 79 in the House Recommended, which starts on line 11 of page 53. Section 79, housing assistance, page 53. So this provision was not in the governor's recommended budget adjustment this year. This is a section that was added in the House Recommended Budget Adjustment Act. The basic intent, purpose of this provision is to make funds available to public housing authorities to prevent the termination of Section eight housing options. They're also known as Housing Choice Statures. You'll you'll hear them referred to that way, but I, in presentations, have been referring to Section eight vouchers. It's the co available term that's most familiar the most. Chad Perchlik, I could start by getting a little bit of background on section eight housing vouchers and just like the the fundamentals of how it works into the public housing authorities, if you think that would be helpful. Yeah.

[Senator Andrew Perchlik (Chair)]: It is. Sure. It is.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: So I I people are generally familiar with this program, but it's not something that the state has engaged with before to my knowledge. Section eight housing choice vouchers are federal program run through the Department of Housing and Urban Development. Funds from HUD for section eight vouchers flow directly to public housing authorities. There's no kind of crossover with the state historically, and we have nine public housing authorities in state of Vermont who administer section eight housing vouchers. So what's on your you have some examples? Yeah. So statewide, we have the Vermont State Housing Authority, who you all may have heard of or from. They were involved in helping to coordinate this effort, this kind of proposal back when the VA was in the house, but the rest of the nine are all municipal housing authorities. So some of them might be familiar members of the many are Montpelier Housing Authority, Barrie Housing Authority, Winooski, Burlington, where there's a Rutland Housing Authority, then there's state municipal throughout the state, and then a nice that has statewide coverage, whatever those municipal housing authorities don't operate. Public housing authorities administer other programs, other voucher programs besides section eight, but this is definitely their bread and butter, one of their their premier programs. And the way public housing authorities kind of operate is they are allowed to retain an administrative fee for every section eight housing voucher that is in circulation at a given calendar year. And that's where the bulk of their operational funds come from. Right? Like, you need folks who are out there processing contracts with landlords, sending payments to landlords. And so those positions are by and large funded by a fee, collected as a you know, based on the amount of vouchers that a public housing authority administers. That comes relevant later when we talk about some of the financial challenges that public housing authorities have been facing in recent years. Last thing I'll say though, you know, housing section eight basics is that the basic criteria for a section eight housing voucher is limited to low income people, generally meaning 50% or less of the area median income. We're talking about low income households, elderly people, or people with disabilities by much when we're talking about Section eight. Any other questions about Section eight before I move on? Great. There are about 8,000 section eight housing vouchers in circulation in Vermont across the nine housing authorities, and these are funded on a calendar year basis by HUD. So those are the basics I'll flag for the committee. I think the history as to how this proposal came for the house, it is now before you all, is that public housing authorities, specifically sectioning housing vouchers, were level funded for two calendar years at the federal level. So calendar year '24 and '25 were both level funded continuing resolutions. What that meant was as inflation progressed over those two years, particularly in the housing market, the, you know, purchasing power, so to speak, of housing vouchers went down, particularly in our area. Housing authorities had to deal with the fact that they no longer that, you know, their dollars weren't going as far as they once were. Right? That potted money was stable, but cost for vouchers were going up. Housing have already tapped a balanced budget. They can't run into deficits, and so the way they were dealing with this over the last few years was retiring vouchers through attrition, meaning as folks gradually out of the program, no longer need their vouchers, and return them to the housing authority, those vouchers weren't being reissued. And so they're still authorized to be issued by

[Senator Andrew Perchlik (Chair)]: the public housing authorities, but they

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: haven't had the funds to keep them in circulation. Because do they have

[Senator Andrew Perchlik (Chair)]: is there a required match? A match from the state or from? From the housing, like why could they not just pass the money through to the landlords of the Section eight for some reason? Even if it's a lower percentage of the rent.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: That, so I think what you're describing is maybe like lowering the benefit level, and it might be an example of what you're describing, like lowering the subsidy given to

[Senator Andrew Perchlik (Chair)]: the They're less money because of inflation from the feds. Why not just give less money for the recipients? That is an option. Yes.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: There are various operational adjustments that housing authorities can and have made to avoid shortfalls in funding. Retiring efforts through attrition has been the principal means they've achieved that, but there are others reducing the benefit amount is another tool.

[Senator Andrew Perchlik (Chair)]: Because they just they get a lump sum, so if they had 8,000 and then they switch to 7,000, that lump sum, each individual recipient gets 100. That's why by attrition, that's why they do the key to the level funding of the recipients.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: I would say a couple of responses to that. The individual subsidy received by an individual or household depends on their income, their household size. So that isn't a flat amount, but it can be does so varies from recipient to recipient. But the subsidy level can be adjusted by

[Senator Andrew Perchlik (Chair)]: the public housing authorities. They need to stretch funds further, for example. That's why getting rid of one of the vouchers helps them because it gives they can use, you know, less people they gotta spend their money. Exactly. They're shrinking the number

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: of vouchers that they have to pay for that are out there in circulation, And then that they have the same pool of money available to pay for vouchers, other vouchers that are still in use. Right? The pot of money has stayed stable the last couple of years. They're taking up the town circulation to spread that money as far as they can. Okay. And there are other operational adjustments they've made as to cost savings. Right? One example is, you know, vouchers may be taken away from participants if they break certain rules of the program a number of times. Maybe you give them one or two strike systems three or 14 away the voucher as an ease of taking more options out of circulation, bringing their spending in line with your actual budget. These are examples of things that the housing authorities should have a few. Yes. So two ramifications or two immediate consequences of taking vouchers out of circulation as housing authorities have had to do. One is that there are fewer vouchers in circulation providing rental assistance to families in Vermont. That's the one immediate consequence. The second is every year, HUD, when they're not operating on continuing resolution and doing level funding, does a recalculation to determine how much each housing authority is going to receive in funding. Part of that funding renewal calculation takes into account how many vouchers you had in circulation out there in use being leased by tenants in the year prior. So if you take vouchers out of circulation to bring your costs in line with your budget, that means you're having fewer vouchers included in your next year funding recalculation, should you see you, meaning the public housing authority, see your annual funding go down year over year as you're taking more and more vouchers out of circulation. And so you can see that that creates a feedback loop where you're forced to view the public housing authority is forced to take vapors out of circulation to lower costs. That means they get less money from HUD the next year, more vapors taken out of

[Senator Andrew Perchlik (Chair)]: of the house. Mister Commissioner? Yes. So that being known as true vacancy savings on the gas block, is there any way to recoup those vouchers in years moving forward if, in fact, we need for each shelter's need for more than throughout?

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: Yes. So theoretically, if HUD were to authorize or take were to give public housing parties more money in a future budget year, vouchers could voucher enrollment could be increased. There's kind of two things to be aware of. One is the number of vouchers that the housing parties are authorized to have in circulation. Let's call that 500, purely made up, that medical number. But then there's the number that they're actually funded to give out. And they're only funded to give out 250 House of Choice vouchers. So they're authorized to get five. They've only ever received money to get two fifty. Maybe next year they get an increase from the vets and they can enroll 300 people instead of 250. And then that increased enrollment would feature would would figure into their next funding renewal. Okay. Thank you. Given that vouchers have been taken out of circulation in Vermont by our ninth housing authorities to help avoid budget shortfalls in recent years, the proposal that had been put forward in the house was that the state of Vermont would make an appropriation, the state entity, to then disperse the public housing authorities, which those housing authorities could then use to cover some of their operational costs and use the funding that's freed up in their budgets by that appropriation by by the state funds to keep vouchers in circulation. There are some mechanics underneath that that we can discuss in more detail if the committee would like. There are regulations about which PHA accounts can be used for what purposes, and so there are details beneath there. But essentially, the state would appropriate in a proposal before you $5,000,000 to a state entity to distribute to public housing authorities. If public housing authorities are in the situation of either to retire vouchers, right, they're in a shortfall position after retire vouchers, They could apply for this funding, demonstrate financial needs to the state entity in charge of that appropriation, and receive funds to prevent the termination of vouchers. It's kind of basics. Any questions about the basic mechanics, how that

[Senator Andrew Perchlik (Chair)]: would work? I assume because of regulations, we can't just I guess we'd have to give it to the agencies or the authorities. So a thing that are more direct like that. Appropriation?

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: I I don't believe a direct appropriation to housing authorities would be permissible. There was some discussion on the outside about whether the Vermont State Housing Authorities, since they are created by the state, could receive a direct appropriation. The route of the house ended up going for various reasons, not least of which is, you know, it just the administrative capacity. An appropriation in the house proposal is made to the agency of administration to administer these

[Senator Andrew Perchlik (Chair)]: Right, that's what I think we got paid rather than just one.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: Yes, you all have heard from Secretary Clark suggesting, I believe, that the appropriation be made to DCF and that fund be dispersed and funding applications be evaluated in consultation with other state agencies with subject matter expertise. So the proposal before you all today would take, you all might remember in fiscal year twenty twenty six, you authorized $50,000,000 in spending authority to the agency of agency administration, which could then be utilized by the emergency board to compensate for lost federal funds, disruptions in federal funding, things of that nature. The proposal before you all would direct the agency administration to utilize $5,000,000 of that $50,000,000 to provide this assistance to public housing authorities. You also have a proposal before you all, technical letter from the administration has some recommended changes to how that appropriation is worded. I think the administration's preference in their technical letter is that the amount of the $50,000,000 appropriation say, away from last year, be reduced to 45. Right. And that a separate appropriation of the amount of 5,000,000 that we made for sectioning. Makes sense. JFO is evaluating that language. And I think we'll be able to speak with you all about that

[Senator Andrew Perchlik (Chair)]: in more detail later this week.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: Just going to go through the sections of section or the subsections of section 79. I'm going to make sure we haven't missed anything relevant. You'll notice that there basically have the $5,000,000 directions, the agency administration to use that 50,000,000 appropriation for section eight assistance, specifies the permissible uses for housing authority use of this money. So housing authorities be authorized to maintain a current housing assistance payment, that's, you know, section eight voucher in other words, or to prevent the retirement of a housing prevent the retirement of a voucher currently in use. So it's really the two permissible uses of these funds by housing authorities, either to maintain a current voucher or to prevent the return voucher. It's also important to note that this language requires that all monies dispersed under this appropriation be in line with applicable regulations, guidance, etcetera. There was a lot of discussion on the house side about how can we make sure that this appropriation doesn't run afoul applicable federal rules, regs, etcetera. And so the way that that's approaching this is just say that, you know, where file prior approval from put is required, Vermont will also, you know, require that approval be be given before funding is dispersed. And also that, the agency administration or whoever the the receiving appropriation the proceeding entity ends up being, would be required to establish procedures for validating that expenditures conformed with applicable HUD requirements, ensuring that access to funds authorized in this section is made available to all housing properties across the state.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Question about that.

[Senator Andrew Perchlik (Chair)]: Thanks, Sarah.

[Senator Virginia "Ginny" Lyons]: In

[Senator Anne Watson]: the distribution that money to the different housing authorities, is there some mechanism to ensure that the distribution is proportional to, like, how much they're needed.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: So, you know,

[Senator Anne Watson]: like, they they don't all have the same number the same caseload, I guess.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: I'm not

[Senator Anne Watson]: sure if it's, like, where it is, but the I guess there's question of, like, how's it's provided?

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: So in language abstracted, you have AOA or if you all choose to make a change request by the administration, DCF, validating the expenditures. One, conform with HUD requirements are necessary to cover use of the funds after that. And that funds are available to housing authorities. I think part of what speaks to your concern or your your question rather is the language about proper expenses that expenditures are necessary and proper prior to the issuance of funds. And if you look earlier in section 79, funding is available for two purposes, to maintain existing housing assistance payments or to prevent the retirement of a housing assistance payment. I would say the agency in charge of this appropriation would need to come up with some form of certifying that a housing authority is actually in a position imminently retiring housing voucher or in a position where vouchers might be taken out of circulation, right, before funds are issued. There's not currently language about, for example, geographical distribution of funds, dividing the funds evenly between the nine entities, anything like that. I would say right now and and Cameron is in the room right now and and drafting the language. Now, the language contemplates is demonstrating financial needs and and, you know, proper use of funds, I e, keeping vouchers in circulation. So to the extent that some housing authorities are in more in the danger of retiring vouchers, you might see requirement put forth by the administration that's proposal to prioritize those most immediately looking at retiring doctors.

[Senator Anne Watson]: I guess I could just see there, you know, the potential for, you know, 5,000,000 is not enough and the demand is more than can be adequately spread around, then how does, I'm just wondering about, you know, choices that would need to be made. But anyway,

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: I that's a good question, right? The guidelines that you all give to the receiving entity of this appropriation are important for those reasons, right? How is distribution power advised?

[Senator Andrew Perchlik (Chair)]: It could be another question for DCF. Like, how would they divide it out if they get to that situation?

[Senator Virginia "Ginny" Lyons]: If it gets to DCF.

[Senator Andrew Perchlik (Chair)]: If it gets to DCF, it'd be

[Senator Virginia "Ginny" Lyons]: ninety days.

[Senator Andrew Perchlik (Chair)]: Sorry, you're right.

[Senator Virginia "Ginny" Lyons]: Yeah. How was the decision making made around giving it to AOA and then it sounds to me as if it's an emergency board decision, you said something about having the emergency board make this decision, so it sounds like another set of steps. That's one question. And then the other question is do we have a prediction of what the funding is going to look like? Is it going to be a steady state funding from here on in? Are we gonna see an exacerbation of what we're seeing right now over the past two years?

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: Thank you for that question. I think that's a really important point. This is a one time appropriation. This is not a recurring or base appropriation. A sustainability question. Right. And I think not only is that the way this section is structured, but that was, you know, the intention in in house appropriations, and that was the conversation all the conversations I heard on the house side, that this would be a one time appropriation of funds to prevent the retirement of vouchers. To your first question, the e board doesn't have as the language is currently drafted, the e board would not have a role in distributing these funds. The connection between this section and the e board is that $50,000,000 that's appropriated to AOA for use by the e board in fiscal year twenty six. This section takes 5,000,000 of that 50 and directs AOA, you all may change that, to, you know, use those funds for section eight housing support or for distribution public housing properties. That's the only connection between the emergency board and this appropriation is that it's taking 5,000,000 of that 50 and repurposing it for sectioning support.

[Senator Virginia "Ginny" Lyons]: And remind me how the AOA is going to distribute. What's the timing? I mean, it Rather than having it going directly to the authorities or through DCF.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: It's a good question. I think you would have to hear from AOA or who the receiving entity ends up being about how quickly they anticipate it to stand up, administrative requirements and procedures around this appropriation. I I wouldn't wanna speak to how long it might take.

[Senator Virginia "Ginny" Lyons]: So it depends on what housing is available too. Right.

[Senator Andrew Perchlik (Chair)]: But

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: yeah, there's some pieces to that are how long does it take the receiving entity to set up the necessary procedures, how long does it take housing authorities to apply, how their application is verified, how long does take for payments to be processed. That will all figure into the timing. I think it's your questions for whatever agency receives response.

[Senator Andrew Perchlik (Chair)]: Are you definitely not wanting to have some time for our attorney to come up and talk about this partnership, Unless there was something else you want.

[Senator Virginia "Ginny" Lyons]: No.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: I think that's it. Yeah. You'll hear more about this from Cameron, but just wanted to put a finer point on there was a lot of conversation about making sure these funds align to the best that we can accomplish with all federal rules and regulations. And I think Cameron can better speak to that than I am, but that's definitely a part of the appropriation language that I haven't covered as much as I'd like to speak to.

[Cameron Wood, Office of Legislative Counsel]: Afternoon. For the record, Cameron Wood, office of legislative counsel. I will be the attorney in the room, so I don't mean to bring down the mood, but I'm gonna get a little serious about the language that you have in front of you to answer some of the questions that came up already around what I'll call maybe equitable distributions of the funds that are available here. That's why you'll see the language in D2, and I believe this is going to be on page 54 of the as passed version. All it states is that the agency of administration shall ensure that access to funds is made available to all housing authorities. It doesn't say anything about whether certain funds have to be available to the local boards versus the state. So it would be a question posed to whatever administrative entity ultimately administers of how they would go about accomplishing that. And then if you all felt there needed to be stronger language to ensure certain access for the different housing authorities who potentially might add additional language there. I just want to make sure that's clear. At this point, it could be a first come, first serve type situation, in which case, as was mentioned, the administrative capacity of those local housing authorities may be relevant to that conversation. So that's the first thing. The second thing, I just want to talk a little bit about sustainability. I think that's a great question that you all need to think about. As James kind of mentioned, the way this really works and how a lot of federal programs work, unfortunately, you stay, get block funding, and then your funding for the following year is dictated by how many individuals you serve through the funding that we gave you. So if your numbers go down, we'll just give you less money the next year, and it kind of turns into this downward spiral.

[Senator Andrew Perchlik (Chair)]: A lot of programs when I was

[Cameron Wood, Office of Legislative Counsel]: at the Department of Labor unfortunately are funded that way. You serve less people this year, we'll give you less money for next year because you peers that you don't need it, which then means you have less money to serve people following here. So that's kind of, I think there is a sustainability concern. I mean, you inject money, and assuming it works the way that it's intended to work, housing vouchers are maintained, or they're able to put in circulation maybe additional vouchers as opposed to having to retire them, what does that mean for the following year? If the federal government cuts the program, you're still back in the same situation that you are now. I don't think that's the intention here. I'm not trying to say anything negative about that, but I do think it's a question that should be asked, and others can choose that better than I can. What I just wanted to mention, and again this is my role as the attorney here, is about how this could potentially operate and whether or not it's gonna operate the way that it's intended to operate based on the words on page. Okay, so when you look at this, look at page fifty three and fifty four, the bottom of 53, lines eighteen and nineteen say that funding may be made available to a housing authority for one of

[Senator Andrew Perchlik (Chair)]: the following purposes. You look at

[Cameron Wood, Office of Legislative Counsel]: the next page, maintain a current housing assistance payment in use, or prevent the retirement of a housing assistance payment. So then the question becomes how they do that, and is it in alignment with applicable federal HUD regulations. You have to look at the HUD guidance that has been provided to determine whether or not this is an allowable use of state funds, and there is a question as to whether the state can do this, and whether the federal government will authorize the state to do this. When you look at this guidance document, it says that housing authorities are able to use certain other funds to maintain housing assistance payments. That includes things like their unrestricted net assets, basically their administrative reserve funds. So we give you this money, you use portions of it for admin, that can roll over, you can use that in future years for housing assistance payments if you would like, because it's money that we've already given to you. What the guidance appears to say, and I have to say appears because the words don't line up exactly perfectly, so I think arguments can be made, but what the guidance does say is you can't use state funds to expand use in the program. And so there are some questions here about whether or not this is going to work. Other things the guidance does say though, the guidance does say that with HUD approval, prior approval, you can prevent the termination of assistance. So let's go back to the language of the page here, the sub two. It says, with prior approval from HUD, to provide funding to a housing authority in order to prevent the termination of assistance. So the other language that is key in the BAA that you have in front of you is it does say that the agency of administration, that wants E1 now, the agency of administration shall establish procedures for validating that such expenditures conform to applicable HUD requirements. So there's just, there's a question about whether the sub one on page 54 is going to accomplish the goal that you're intending to accomplish. HUD could come in and say, this is contrary to our guidance, you cannot do this, in which case, you can go to the two and seek HUD approval, and they may approve it, but that's only gonna be to not terminate vouchers, it's not gonna be to maintain current ones. And then you also do have the backstop of the agency having to validate that any payments are in compliance. So I'm not here to say that don't do this, please don't interpret You what I'm saying do have the backstops in the language, I think, to ensure that monies are expended in compliance with the federal guidance. I'm just wanting to make sure that you all are aware that there is a question about what is the mechanism that this

[Senator Andrew Perchlik (Chair)]: is gonna lead in practice. So is the risk that they would just deny it, or they wouldn't allow us to, they wouldn't use it to create our formula for next year, or is there a chance of penalty or something? I don't think there's a

[Cameron Wood, Office of Legislative Counsel]: chance for a penalty. I think it's just a chance that federal government says you can't use it for some of these purposes, and then you seek out approval prior to termination, and they may only authorize a subset of funds, so you may not end up expending the $5,000,000 all of this fiscal year or this calendar year, in which case you're not putting that kind of backstop against the downward spiral of housing vouchers that the money's intended to because I would assume

[Senator Andrew Perchlik (Chair)]: this is a lot of other state to do.

[Cameron Wood, Office of Legislative Counsel]: That's kind of, I think, the purpose of the guidance. If a state could simply inject money into the program such that it dictates what the federal government gives you the following year, then I think more states are gonna, could take that approach, and then it's kind of the states having a little bit of dictation of how much money they're gonna get from the federal government, I imagine that's probably why this guidance is here, to say, you're not gonna do that, you're only gonna do it with our permission. Okay, thanks for that.

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: And just a fiscal corollary to what Cameron just laid out, if to the extent that HUD does permit public housing authorities to be sponsored to prevent the termination of vouchers, despite this being a one time appropriation, part of the thinking behind this proposal was that to the extent how employees are prevented from terminating more vouchers, they're increasing the amount of vouchers that are used for future funding recalculations at the federal level. And so the intention, the idea behind the proposal is that there would be some dividends in future years in terms of maximizing federal funding by seeking vouchers in circulation or credit from being terminated. I think those are all good points to consider about whether will allow that and Okay. You know, federal uncertainty, but it's a one time appropriation with the idea being that there will be a benefit for at least a certain number of years of key vouchers in circulation and harm. Helping the population. It's worth worth to try.

[Cameron Wood, Office of Legislative Counsel]: The the one thing I wanted to mention, I think if regardless of whether you keep it with the agency administration, you move it to another administrative agency, keeping d one in or some sort of requirement of that dispersing entity to ensure that the disbursements are in compliance with HUD regs, because to be clear, you're not gonna take state money inject it directly into the state housing authority's payment assistance bank accounts to then pay out. This is gonna be kind of an administrative dance, if you will, and so I just want to emphasize the need to maintain some sort of level of oversight there in

[Senator Andrew Perchlik (Chair)]: that regard. Okay. I have a question on moving off from here, sir, which I appreciate is on c, a vote of the majority of the housing authorities can solicit any vote, positive or negative, to vote? So that's

[Cameron Wood, Office of Legislative Counsel]: a good question. A vote of the majority of the housing authorities commissioner shall be required prior to requesting the way I was drafting that, and it wasn't, it was it was the request to draft it to ensure that there was an affirmative vote from the commissioners to seek access to the funds before the housing authority moved forward. So that's the intention behind that language.

[Senator Andrew Perchlik (Chair)]: We're put the word affirmative in there? I think that would help clarify. Yes, sir. An affirmative vote. Permit. Because you could have a majority say no.

[Senator Virginia "Ginny" Lyons]: And then on F,

[Senator Andrew Perchlik (Chair)]: I assume that the intent of that is to make sure this fund is carried forward. Sir. The wording in a way that makes it seem like it

[Cameron Wood, Office of Legislative Counsel]: would revert. Only if it is by an act of the general assembly, so the housing authorities don't operate on a fiscal year, state fiscal year, they operate on a calendar year, this is intended to be for FY '26 budget adjustment, so that language was there to ensure that the funds would still be available post July, unless there was an act of the general assembly to revert the money. So it would be available in FY26. Thought

[Senator Andrew Perchlik (Chair)]: we had language that said that all money will revert, or we do have language in the statutes that says all money will revert.

[Cameron Wood, Office of Legislative Counsel]: There's language in the B and A to

[Senator Andrew Perchlik (Chair)]: that effect, I would not No, just in statutes from the past. It's just in statutes, does that count as an act, even though we did it in room before? Would still be an act of the federalist. I'll defer that question to the Joint Fiscal Office. I'm not aware of that language. I have a question about reverting. We have language in the VA that says all funds will be carried forward, it gives authority to Section 86. The it's just worded a little differently here, I wonder if we wanted to carry forward, I would just say, shut carry forward. Right. I think the act that we have and that things would revert couldn't trigger the second part of that it's reverted.

[Cameron Wood, Office of Legislative Counsel]: I think initially we simply have that the unexpended appropriation shall carry forward into subsequent fiscal years and remain available. There was some tweak to the language by JFO, so that's why I was just referring first language better. It goes without saying that if we it,

[Senator Andrew Perchlik (Chair)]: we revert it or we not withstand it, we don't need to say that we're But we'll let Jay think about that. Maybe we'll figure it out right now. Okay. Thank you. You're welcome. Alright. So now we'll move to I don't know if we have DCF slash OBO. I guess OBO is not like

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: It is part of

[Senator Andrew Perchlik (Chair)]: OBO is part of DCF, I guess. Yeah. I think of it as different departments.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Afternoon. The office of economic opportunity, which is in department for children and families, which is one of the largest departments across state government. There's so many safety human services. So we are, like, 21 people out of, I think, a thousand people in the department. We are part of the company.

[Senator Andrew Perchlik (Chair)]: I agree.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Yeah. Thank you for

[Senator Andrew Perchlik (Chair)]: I forgot something for it. Well, we were actually gonna ask you to talk about it right now. So But we were gonna the. Okay. Maybe we have other stuff.

[Senator Virginia "Ginny" Lyons]: Can we ask about this, too? Can you comment?

[Senator Andrew Perchlik (Chair)]: Well, she's, no, we are. We have questions for DCF about other things.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: I'm happy to try to answer whatever I can. I have my colleague, Marvell, here with me from the department, and we can take notes, and if we can't answer the questions, we can get back to you with your responses.

[Senator Andrew Perchlik (Chair)]: So, have questions for DCF about the childcare fund. We have the administration that this program about these Section eight vouchers administered by DCF and not by agency of administration. We have questions about either DCF or COA about how they would administer. But the Fed, we had UEA to talk specifically about the

[Senator Virginia "Ginny" Lyons]: In the HOP, sorry.

[Senator Andrew Perchlik (Chair)]: The HOP.

[Senator Virginia "Ginny" Lyons]: Yeah, think we can follow-up

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: with Janet I think regarding the Vermont State Housing Authority shelter, or funding for subsidies, I think it was helpful for me to listen to the prior testimony, and I think for whether it's AOA or DCF, we would just have to understand how much administrative work that would be to ensure that compliance. I'm not sure that we have previously been aware of what was being reviewed in terms of the necessary monitoring,

[Senator Virginia "Ginny" Lyons]: but we can

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: follow-up on that.

[Senator Andrew Perchlik (Chair)]: Okay.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: But happy to start with the shelter and Yeah. VA.

[Senator Andrew Perchlik (Chair)]: Great. Thank you.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: I I think my understanding is just a general overview of the $2,000,000, is that correct, our BAA ask for shelter in residence. So, yeah, thank you so much. As you know, over the past few years, we have made investments in community based shelters across the state, growing our shelter capacity for homeowners experiencing homelessness. That is a complicated and winding road sometimes to create a shelter from nothing. It often involves complex real estate acquisition, significant permitting, zoning, profits within communities, as well as sometimes very complicated and long term rehabilitation of properties. And so, we have projects identified that we would like to be able to move forward to continue to develop access to shelter capacity and safe, and that is what that $2,000,000 is identified to allow us to do.

[Senator Andrew Perchlik (Chair)]: And is there language on this, or is it just the $2,000,000? No,

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: it's just sort of a three century.

[Senator Andrew Perchlik (Chair)]: Okay.

[Senator Virginia "Ginny" Lyons]: I think they're.

[Senator Andrew Perchlik (Chair)]: So speed three twenty five, but you've been looking for either on your

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: How to propose something different than what the administration proposed. But

[Senator Andrew Perchlik (Chair)]: is that that's just that'll be different in in the spite of what the continuing in your explanation of the request.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: I think right. I mean, I think it's it's challenging to give project specific details because, again, these are happening in communities with sometimes legal and other dynamics that we don't want to get ahead of that could potentially inadvertently derail a project, but primarily it's for significant renovations for a project that we want to be able to support.

[Senator Andrew Perchlik (Chair)]: And is it, because I think people have asked if it's new shelters, supporting shelters, also maybe it depends on

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: This would be creating more year round capacity.

[Senator Andrew Perchlik (Chair)]: It could

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: be a storm

[Senator Andrew Perchlik (Chair)]: shelter, it could be a cold weather shelter that you're making year round, or adding beds to an existing

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Right, we're trying to create more year round shelter capacity in this system.

[Senator Andrew Perchlik (Chair)]: And it could be ones that are run by the state or by third parties?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: This would be community based providers as the operator. Okay.

[Senator Andrew Perchlik (Chair)]: And then the house reduced by 2,000,000 to 680,000. They they did they move money around? Why does it say it's net neutral?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: From a general fund standpoint, it's the same amount of money. So they reduced the amount, and then they redirected it to section 81, if you look in the language. So another, another activity that we support is client financial assistance. So this is direct financial assistance to benefit individuals experiencing or at risk of homelessness, things like security deposit, rental arrears, utility deposit. And so the house alternative was a reduction in a shelter portion of the 2,000,000, and then use the remainder for increased plant based financial assistance.

[Senator Andrew Perchlik (Chair)]: And that would be correct. That was our view when you fund that through

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: customers. We have, yeah, sorry to interrupt. We have fund administrators in communities across the state, and so the way that process works is we allocate funds to them, they receive applications from individuals and their housing case managers to say, hey, here's my housing plan, here's how this money would fit into it, talk about things like budget, maybe other resources they're leveraging, and so the health proposal helps to increase that.

[Senator Andrew Perchlik (Chair)]: So the providers that have listed the House Adenden may, those are the same providers you would have used for that assistance programs or just maybe different amounts?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: I don't think I saw their list of specific providers. I'm sorry.

[Senator Virginia "Ginny" Lyons]: Do you wanna see my hair on?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: No, because don't pull. I'm sorry. Here, this is

[Senator Virginia "Ginny" Lyons]: a list.

[Senator Andrew Perchlik (Chair)]: On page 56.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Thank you so much. I'm assuming it's the same ones. And we have that.

[Senator Virginia "Ginny" Lyons]: Across the state.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Yeah. Yes. So they

[Senator Andrew Perchlik (Chair)]: You can see that 1.3 of the 2,000,000, and divide it amongst these providers.

[Senator Virginia "Ginny" Lyons]: To bring them back to twenty twenty five levels, is what it says in the language.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Yeah, I think that these are the providers that we work with as fund administrators, although New Story Center is not their domestic violence shelter in. We also have some shelters that have and Good Samaritan Haven in this case, it looks like they are not necessarily following our allocation. So they've sort of blended together here, both the fund administrators as well as shelters have some direct financial systems that we refer to as, like, diversion funding, they can, in the moment, if someone's able to make a plan, they can do that really quickly to hopefully prevent someone from committing to homelessness or help them exit closely. So it looks like they have included our fund administrators, but have also included two shelters. I I think there are two levels here. One is the administration and the house have different proposals. But I think if you went with the house's proposal, I think the administration would prefer that the total amount of the 1.3 comes to our office for distribution based on the spending that we are seeing at the moment. So we quarterly track each fund administrator's spending, and so I think that would allow for more real time allocation than this, which I believe they probably identified oh, looks like they have groundworks on here too, that they probably identified in the fall. So that would be a change. If you accepted the HHS proposal as an alternative to the administrations, I would just ask that we be able to allocate the money based on real time spending as we're seeing it across the communities.

[Senator Virginia "Ginny" Lyons]: Have you seen a change since the fall?

[Senator Andrew Perchlik (Chair)]: Go ahead.

[Senator Virginia "Ginny" Lyons]: I was just wondering if you've seen a change since fall. We

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: I I actually have a meeting with my team on Friday to review the second quarter spending. So it'll be hot off the press. Yeah. We receive quarterly updates on spending from all of our recipients of financial assistance, and so we would have our updated projections. And I could share some of that back with you. I think, again, by the time maybe you even get a few weeks later into the process, this could be a you know, that would just be a a potential recommendation if you were to move forward with this.

[Senator Virginia "Ginny" Lyons]: Yeah, maybe. So,

[Senator Andrew Perchlik (Chair)]: you does it, you pay the providers on a reimbursement basis?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Our grants allow, with general funds, we allow for up to a month of an advance, as long as they are reporting monthly to us on their spending. We wanna make sure that the spending is flowing and going out the door, but we recognize that there's a pressure for them, so we do allow for a month in advance, it's not purely reimbursement.

[Senator Andrew Perchlik (Chair)]: Okay, so your request, which is kind of, I don't want to joke, it's kind of we might list all these providers open if there's other ones that are anonymous or ones that don't think that should be in here, then do you be allowed to make the allocation that it's not set in in the bill, especially you would prefer?

[Senator Virginia "Ginny" Lyons]: Consistent with current needs. I know. Right.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: So, again, recognizing that you before this, right, the administration had a different proposal than the house. Right. And, however, if you were to move forward with the house's recommendation, I would request that adjustment, because I would also pay for seats to then be locked in if after second quarter spending we're seeing, oh, one of these providers does not need this much, but another needs more, I'd rather It is. If we're able to make that flexibility.

[Senator Andrew Perchlik (Chair)]: Is payments to the provider something that you could be worth thinking of happening with the 2,000,000, though?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Not in our VA.

[Senator Andrew Perchlik (Chair)]: Because you would just No, be

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: we would be focusing on the shelter the shelter expansion one time.

[Senator Andrew Perchlik (Chair)]: Okay.

[Senator Virginia "Ginny" Lyons]: You so much. There you go.

[Senator Andrew Perchlik (Chair)]: Okay. Well, do you do you have any do you have anything in writing that you want to send to our committee about how how you would suggest the language change? We welcome seeing that. Very well-to-do that. That would be helpful.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: What is your timeline for that? What timeline would be helpful? Yeah, well, I think

[Senator Andrew Perchlik (Chair)]: Tuesday we're hoping to vote it out, we'll see how that goes. That's the good community. Right. Okay. You have a major community talk about this at all?

[Senator Virginia "Ginny" Lyons]: Tomorrow morning.

[Senator Andrew Perchlik (Chair)]: Okay.

[Senator Virginia "Ginny" Lyons]: We're gonna be looking at the everything that relates to us. Amy's coming in with Noel.

[Senator Andrew Perchlik (Chair)]: Okay. So you're taking up this and the other section of

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: We'll take

[Senator Virginia "Ginny" Lyons]: yeah. We've got a whole We'll

[Senator Andrew Perchlik (Chair)]: BAA morning tomorrow?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: We'll a BAA morning tomorrow.

[Senator Virginia "Ginny" Lyons]: Okay, great. We'll take a few trips, we can.

[Senator Andrew Perchlik (Chair)]: Okay, great. Okay, well I don't think we have Okay. Is there something else you want to tell us?

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: No. Thank you so much, and my apologies for not noting this second page of us. But thank you, and we can send some additional information. Okay.

[Senator Andrew Perchlik (Chair)]: That'd be great. Alright. Thanks.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Same, Pam.

[Senator Virginia "Ginny" Lyons]: Thanks for good hearing. Yes.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Thank you so really appreciate that. Okay.

[Senator Andrew Perchlik (Chair)]: It'll be interesting to see if your committee provide us a recommendation on that.

[Senator Virginia "Ginny" Lyons]: We'll try. And we have I know I've been working on some language looking at the designated agency issue with the administration, and no one's been a huge help with that. And then I have another little piece of language that I'll be bringing again.

[Senator Andrew Perchlik (Chair)]: I forgot what section. I do have this we need to spectrum now. Yeah. I do have a couple of questions. One in reference to the child care care packs or whatever else. Are there any I mean, we appear to be, like, having 5,000 children a year in Vermont. We're losing, like, 6,700 people a year in Vermont. This was originally set up, I believe, summers around, hope to raise $125,000,000. I see where, you know, some going to the that was there a cap on this? At what point in time? Said, we don't need $125,000,000 We still have but we still have tax taxpayers for something that we said is going toward this. It's really not normal because we've lost too much population. We lost 1,800 people last year out of the state. That was my question. I think it's a fair question. And I think we heard from, like, what's growth is and and building bright futures about all child care ecosystem, like how many what's the need out there. And so I think that would be a good question for them to move on. I would assume that they would, if there's still a need, if there's families that can't find slots for childcare, they might need to spend more money to get those slots because it's difficult. I know we still have a shortage of infant childcare. It's very difficult for families to find infant childcare, so they might have to spend more money to get somebody to open an infant child care. But yeah, I think it's helpful if those demographic changes continue where we're not having child children that need care. We really continued his payroll tax when that wasn't intended for what we may be spending. I was like, we can always find a way to spend the money, but that's not what we Right. Well, I think it would be a good thing to bring up if somebody was wanting to take money out of the fund or something else. Like they say, hey, don't need it. And that kind of happened last year with some of the reserves. The governor was saying, some of this money we can spend elsewhere because we don't need it this year. We said, no, we want to save it, we want it to carry forward year to year needs. But if somebody says, hey, we we should take 25,000,000 out of the child care fund, use it for paving roads because we have a need there. Then somebody can say, hey. You're you're paying a tax for child care, not for road paving. You should use it for Right. Right. That's that's the location. I'm glad Emily came back saying now I can direct my next question for her. I just got a an email from a institute. It says the Department of Independent Living who mentioned reforming the development services by implementing payment reforms and conflict free case management.

[Senator Anne Watson]: No.

[Senator Andrew Perchlik (Chair)]: There's currently placeholder language in the BAA. If you develop a permanent language, agree to accept the monetary partner's proposed language, which includes a 7% utilization threshold, and the initial full year of reforms. Educate me a little bit on that. I don't have Dale, don't know that's

[Senator Virginia "Ginny" Lyons]: language that I'm working on with Nolan. There is language in here as number

[Senator Andrew Perchlik (Chair)]: 83.

[Senator Virginia "Ginny" Lyons]: Three. So there has been a discussion going on for at least a year now between Dale and the designated agencies and there's a new way of, there's a new payment process for designated agencies and we can talk about it when I have some more, have the language in, but essentially what's happening is that designated agencies are, don't have the money to cover their costs and that could cause them to go into the red. So what we're trying to find is a way of sustaining them over the next seventeen months more or less while the new payment system gets into place. So we'll have, Dale's had one perspective and the agency and the DAA's had another perspective on how to accomplish that And I think that we're really getting, we've finally gotten to a place where we might have some total, you know, are dissatisfied but can come together.

[Senator Andrew Perchlik (Chair)]: Because this comes from the director at NCSS in St. Albertson. Last line is the 70% utilization threshold will help us maintain quality services and a stable workforce while developing workforce to achieve a higher utilization rate.

[Senator Virginia "Ginny" Lyons]: Right, so that means paying up front for 70% utilization and then allowing for the DA to use that money and if they don't reach that 70% utilization they'll have to pay it back. So there's a concern about what's the right number for what you're asking, 70%, 80%, 60%, what is it?

[Senator Andrew Perchlik (Chair)]: Something you're look at tomorrow?

[Senator Virginia "Ginny" Lyons]: That's what I'm looking at and I do have some language that we'll be able to bring in. I've been working with Nolan on it, but it is a huge concern. We do not lose our DAs. We absolutely cannot lose our DAs. We're gonna it's been huge system across the state for folks who know that. So we want to make sure that we get the number right. That's essentially what we're saying. Because numbers mean people who are being cared for. Ultimately, it's not about the dollar. It's about the human beings

[Senator Andrew Perchlik (Chair)]: who's being

[Senator Virginia "Ginny" Lyons]: cared for for that dollar.

[Senator Andrew Perchlik (Chair)]: And in my last question, I and I I'm also very late, but,

[Cameron Wood, Office of Legislative Counsel]: you know, we certainly

[Senator Andrew Perchlik (Chair)]: got. Good. Of that $50,000,000 that we set aside for anticipation of lacking February, then my understanding that we spent, or proposed, $5,000,000 before AOA, when we just discussed for section eight. We spent six point three six point three of this for SNAP. Yep. Plus So I bring this down to 39 plus. There's a proposal for another 5,000,000 for other senator Bruce brought up here today as far as coverage in case of Yeah. Bruce language doesn't have a dollar number associated with it. Volume number. And I think there might be a here the administration might propose changes to his language, and maybe that $5,000,000 will come from them. I was thinking there was didn't we take some other money out of that 50,000,000 out? That those are just the maybe I was thinking that 5,000,000 for the section So we're down to 40 34 over 34,000,000 now with everything. That's including the $55,000,000 just take out, it's $39,000,000 Correct, it's $39,000,000 municipalities or the language of Senate Baruth proposed passes, the municipalities or state can draw down funds. Right now, the the language you propose, never cash. So if there were the cash of $5,000,000, that would that would be a benefit. And I don't know if he's still online or not, but my concern when I heard that was, well, that's fine, but state police, said they're down. And the municipality, he's talking about the large municipality, which was part of the police. So I don't know who will be giving this money to him, and there's not a whole lot of bodies that

[Andrew Stein, Vermont Department of Taxes]: have to do the work

[Senator Andrew Perchlik (Chair)]: these Right. Why they could be overtime? Oh, yeah. But still But they would, you know, they would they would that they might have forced overtime to deal with some emergency. And then they they could go to the state and say, we have a million dollars of overtime that deal with these protests or the situation. So they would get reimbursed for those. Yeah. So during your absence, doctor Brown, we're we're talking about the proposal of additional money for the 5,000,000, I guess, came up originally the day there. I guess there's gonna be some discussion or, like, falsely changed it. It may come out of AOA instead of I don't know. We're going looking out here. Yeah. Perfect. You cut hands out. Ruth's. So you fit from that language? Yeah. Yeah. Yeah. They put a money amount, sir? No, we didn't. Okay. So if it comes out of 50,000,000, which is now 39,000,000. 39,000,000. If we kept the 5, it's a section 85,000,000. That language is you could spend 39,000,000. So that way, there was a concern that maybe there should be a bad one. Yeah. In case maybe you need $39 But this was not this was for the the general fund? No. This comes out at 50,000,000. Oh, okay. That's as you'll see. So while we're in session, we can make that decision. Yeah. Now can you board do that for us? Right. Right.

[Senator Virginia "Ginny" Lyons]: So the other language I have is related to fee three $0.01. It's global commitment and looking at Well, I don't think it will have money in it, but planning and implementation. I'll bring that in tomorrow. Okay. That takes a while. Okay. Do you

[Senator Andrew Perchlik (Chair)]: have questions, Sarah?

[Senator Anne Watson]: Since we're we're talking about. Yeah. For this, so if we I apologize.

[Emily Byrne, Joint Fiscal Office]: I'm just at beginning.

[Senator Anne Watson]: We're sort of adding for the part that we were just talking about in terms of the housing voucher section eight program. So the having affirmative vote as you mentioned, and then wondering if we want to add something like distribution, having due consideration for proportional distribution of the money

[Senator Andrew Perchlik (Chair)]: across. Between those lines.

[Senator Virginia "Ginny" Lyons]: Yeah, you mean for DCF. Are you talking about, are still talking about the 5,000,000? Yeah. The different, Yeah. We did another section.

[Senator Andrew Perchlik (Chair)]: Work doesn't stop.

[Senator Virginia "Ginny" Lyons]: Yeah. Okay.

[Senator Andrew Perchlik (Chair)]: Because the only thing that you pointed to is ensure the section is made available for all authorities across the state. You would like to see something about the appropriations being. So you might wanna add a quick note to determine what I like. So I was hoping maybe we'd spend some time, close out some sections, which we could just do for a while, or we could pick a break and come back and work when we drive in. Let's do it. We have

[Senator Virginia "Ginny" Lyons]: a meeting at 03:30, so I'm having to go through.

[Senator Andrew Perchlik (Chair)]: We'll go till 03:29. No. Okay. So Amy, you wanna do that?

[Senator Virginia "Ginny" Lyons]: We will the ones with the checkboxes.

[Senator Andrew Perchlik (Chair)]: Yeah. Under the checkbox, we might wanna see the work the tweeting when the government has I mean, we can do it from over there, too. But we can just go through the starting well, assume we would not make changes to the lines two through seven. No. There's nothing we're doing to generate more revenue.

[Senator Anne Watson]: In a

[Senator Andrew Perchlik (Chair)]: budget you've already passed. In a budget that we are looking So there's nothing we're going to do there. So we would start on line, well, B 125. So the next three are these reorganizations. The first one is net neutral. Mean, I they're all net neutral in Ginny. Right? This is just move this is moving opposition.

[Emily Byrne, Joint Fiscal Office]: It's moving no. It's moving a

[Cameron Wood, Office of Legislative Counsel]: bunch of things.

[Emily Byrne, Joint Fiscal Office]: She's moving all the committee assistance Oh, right. Out of legislature to legislative council. Opposition to JFO.

[Senator Andrew Perchlik (Chair)]: It's kind of restructuring how we staff the legislation. And you'll notice you'll notice nothing under the government recommend. There wasn't anything under the government recommended on this. This is something that basically oversight. The meeting on the legislative oversight approved this. We're talking about it, right?

[Senator Virginia "Ginny" Lyons]: Yes, we did.

[Senator Andrew Perchlik (Chair)]: So I'm assuming we can close out those three unless anybody here has a question or comment on it. You started on 112. Yeah. Site 12. Yeah. The '12, 13, and 14. Yep. That's Okay. The homeowner homeowner rebate is just a downgrade from a few because because fewer houses are eligible. They're they're they have their sent out $1.25 $9 left. That's just kind of what happened more than what we're saying. And then that's the same with the renter rebate, just the other way. It's just a coincidence that it's the same amount, right? It looks like there's some kind of correlation, and it's an estimate, right? Lower and the rest of the specific. We're okay with that estimate. So here's the first one that the house changed to something on. And this is the fund, which we sort of talked about yesterday. Oh, yeah. Mhmm. Yeah. And so we can either agree to this or if people still have questions, but it's basically that money for the municipals reappraisal.

[Senator Anne Watson]: Do we know why that was in

[Emily Byrne, Joint Fiscal Office]: the BAA as opposed to what they've done? Governor didn't propose it. I don't know why I didn't go to the BAA, but he did the House did.

[Senator Andrew Perchlik (Chair)]: And where what's how is this funded now? This isn't a new or is it an

[Emily Byrne, Joint Fiscal Office]: It's general funded now. So it reduced the general fund and increased

[Senator Andrew Perchlik (Chair)]: So credit house in a way, the house binds 3,410,000 of general fund by moving this, taking out a pilot fund saying it's helping municipalities, it's connected to the cost of two. Well, I guess it's not connected to the local option.

[Senator Virginia "Ginny" Lyons]: But it's out of general fund.

[Senator Andrew Perchlik (Chair)]: It is now out of general fund. This would move it out of the pilot fund, we heard from group yesterday that there's money in there.

[Senator Virginia "Ginny" Lyons]: Yeah. Oh, wasn't this

[Senator Andrew Perchlik (Chair)]: Did he say it was healthy?

[Senator Virginia "Ginny" Lyons]: Yes. He said

[Senator Andrew Perchlik (Chair)]: this was still

[Senator Anne Watson]: If I'm recalling, it was, isn't there a way make a, was it gonna be that there was a statutory change to make it continue to come out of general fund, they were just starting it?

[Senator Andrew Perchlik (Chair)]: This would be a continue with all through the future years, it would all come out of the pile. Right.

[Senator Anne Watson]: I mean, I'm not opposed to it.

[Senator Andrew Perchlik (Chair)]: Mean, going to fund it one way or the other.

[Senator Virginia "Ginny" Lyons]: Yeah.

[Senator Andrew Perchlik (Chair)]: So it's do we fund it out of the general fund or do we fund it out of the pilot?

[Senator Anne Watson]: For the future?

[Senator Andrew Perchlik (Chair)]: Right, the future if the pilot funding goes down, we could take it back out. So

[Senator Virginia "Ginny" Lyons]: the question is, do any of the amendments that we have coming in have general fund implications? And the answer might be yes.

[Senator Andrew Perchlik (Chair)]: So No. Well, so this would be who was the. Is well, it well, the house the house spent this month.

[Senator Virginia "Ginny" Lyons]: Yeah. It is

[Senator Andrew Perchlik (Chair)]: spent. So regardless, we have to if we had anything that had a general sign

[Senator Virginia "Ginny" Lyons]: We had

[Senator Andrew Perchlik (Chair)]: expenditure, you'd have to find it somewhere. You could find it here. You could find it somewhere.

[Senator Anne Watson]: Okay. And my question was just do you do it now? Like, is there urgency versus do you just

[Senator Andrew Perchlik (Chair)]: wait until the big bill? Yeah. Yeah. I don't remember we didn't ask That's what I question. Ask We representative Chittenden. I don't remember his name. You guys didn't know.

[Senator Anne Watson]: There's an urgency, but to your point, it's

[Senator Virginia "Ginny" Lyons]: it's a you're in the hole. You don't do it.

[Senator Andrew Perchlik (Chair)]: Right.

[Senator Virginia "Ginny" Lyons]: Well, then you might see it.

[Senator Andrew Perchlik (Chair)]: That's that's a problem.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Then finding a way to

[Emily Byrne, Joint Fiscal Office]: The biggest change in the House's budget adjustment is an additional $3,000,000 to make sure that the ADAC for the teachers is how

[Senator Andrew Perchlik (Chair)]: they found you. This is You could say this is how they sound the ADAC.

[Emily Byrne, Joint Fiscal Office]: That's the

[Senator Andrew Perchlik (Chair)]: So if you didn't do this and then you still did the AEDEC, you'd have to find $3,000,000 From somewhere else. And since we don't have money on the bottom line, other than, like, dollars 18,000, thousand You'd have to take it from somewhere, or you'd have to get financed through a tax, really fast. That's fine. Okay, so I'm gonna say we're closing that up. 17? Yep. Okay. 18. It's recommended that the governor agree to the house overall judiciary. Well, this is judiciary getting insurance This is for the transport deputies and knowledge. This was approved by the house, proposed by the governor.

[Cameron Wood, Office of Legislative Counsel]: Yes.

[Senator Andrew Perchlik (Chair)]: You're favor of that? Good. $2.00 7. Next $2.00 7 per diems?

[Senator Virginia "Ginny" Lyons]: Mhmm.

[Senator Andrew Perchlik (Chair)]: What was that? I can't remember why they're in these three, but it's only $5,000. And you said the mark per. Do you remember what? Okay. Right. Amy's looking at funding for transfer deputy establishment 27, which was last year. This is well, it was this $5,000. We we approved it, but we didn't approved it. We didn't fund it. It said we're just in the VA, which we're working on. And this is just part of it. It's 5,000. Right? So that's 50,000. 50,000. It should be around 50,000. So, yeah, we do remember that. So that one will close out. That second picture. Safety, s of the internal service funds, allocations, overtime, and the Norris' favorite item. Are you okay? Well, I am. I mean, the governor had to pick the Bronx, and we Right. Cost another $8,000 out of I already have some budget, but that's fine. He said it's a miracle. There must have been an need for public safety there. So Do you Yeah. Just I'm okay with it, I guess. But do you recall if that was a whole law in Burlington? Do you have a share of that? Or I don't think that's Did we put the whole bill for that? I believe when we footed the whole bill, we got the time We we've been in the whole bill. Yeah. Yeah. I wouldn't wanna make this a practice. So Right. In the future, I guess I'm okay with it now. I want all the damn right now. Yeah. Right. And I see if they had their own over time. And I think they might like, this is just state police, but I think they were sheriff and other. Mhmm. I think even, like, DMV was called in to help for a time. So this is part of it, but I I get the point about not making it on government expense. You'll just let me know when you find that in.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Yeah. I think it's related to the accountability. Oh, the It's a whole package. Yeah.

[Senator Andrew Perchlik (Chair)]: Okay. So we're okay with my July 24, that's the computer project. $570,000. Any questions there? I'm not there. This was just that there were less guards used the tuition benefits, so there was less need for money, which we kinda knew was gonna happen. Remember in the budget. Review and development. She's at us doing a new new whole program, if I remember correctly. Yeah. We're okay with it? Mhmm. Since the thirty Feb mark of the. Go ahead. The payment of this. Mhmm. The '30 just from here till June 30. Right? Yeah. Just for June 30. Yeah. Okay. This doesn't affect their request. And then this is zero and neutral. This is just rearranging how the SLAs are transferred. So I don't know why it's even here, because there's language in the middle. Is that why it's even here?

[Senator Anne Watson]: You know, some people want to

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: have a somebody some folks like to talk about ADS.

[Senator Andrew Perchlik (Chair)]: SLAs. Do people do that too? Okay. It was not language in them. Was only section. Yeah. A reconciliation for the human services secretary's office. We have a question there. Speaking of ADS, this was More money. ADS.

[Senator Virginia "Ginny" Lyons]: $3.00 1 may have language with that, so I really wanna leave it open. Think it's gonna be a money issue, but if we could just leave that open temporarily.

[Senator Andrew Perchlik (Chair)]: Okay. That's line 31301. And the issue, the $27, do you have is that do you wanna keep that up in? Or

[Senator Virginia "Ginny" Lyons]: No. That one, I think, is complete. Pumping? Yeah. Yeah. That's it.

[Senator Andrew Perchlik (Chair)]: Oh, this is the bank. Yeah, this is the cover. So 32. 32 goes out, yeah. I don't remember what the medical provider contract increase was.

[Senator Virginia "Ginny" Lyons]: Mental health services. Prior authorization reviews. Set.

[Senator Andrew Perchlik (Chair)]: Okay. It's your committee, so

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Yeah. We'll be looking at it tomorrow.

[Senator Virginia "Ginny" Lyons]: If something if a red flag pops up. We can open the.

[Senator Andrew Perchlik (Chair)]: This

[Senator Virginia "Ginny" Lyons]: contract? What is this for? The pilgrim housing.

[Senator Andrew Perchlik (Chair)]: Oh, we're adapting. Yes. It's not the lease of a building for the staff. You're not Yeah.

[Senator Virginia "Ginny" Lyons]: Not the staff.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Lease. Not lease.

[Senator Andrew Perchlik (Chair)]: Kind of like contracting. They also had some new Oracle licenses which they Yeah. Probably connected.

[Senator Virginia "Ginny" Lyons]: Getting more contract and then What was getting well? Isn't that It's a health care administration. For

[Senator Andrew Perchlik (Chair)]: employees. That's not the same one that the DOC's.

[Senator Virginia "Ginny" Lyons]: No. Pain one. Well, yeah. It's WellPath. Right. Wait. I have to remember. Is it WellPath or WellPath currently or the DOC? Right. Right. GainWell is different. That's a Yep. Yeah. I

[Senator Andrew Perchlik (Chair)]: don't know GainWell, but I don't know.

[Senator Virginia "Ginny" Lyons]: I've been to visit GainWell.

[Senator Andrew Perchlik (Chair)]: Okay. Data warehouse. Yeah. That's important. Yeah. Organization is up. That's okay. So this is the funding swap that I've been with an earlier one. Mhmm. Okay. Clawback, I don't remember talking about the clawback. And then you just really sure. Did you just locate 38, 39? Yes. Yeah. Do you remember an interview with the? I think flying back from

[Emily Byrne, Joint Fiscal Office]: It's a federal thing related to pharmacy, I believe. It's a good question.

[Senator Virginia "Ginny" Lyons]: It's a good question. Okay.

[Senator Andrew Perchlik (Chair)]: Well, that helped him

[Emily Byrne, Joint Fiscal Office]: It's just an update. Like, the Fed say, this is your number. Yeah.

[Senator Andrew Perchlik (Chair)]: You can pay it.

[Emily Byrne, Joint Fiscal Office]: Or they give you less of

[Andrew Stein, Vermont Department of Taxes]: a number and.

[Senator Andrew Perchlik (Chair)]: That's kind of like a true up on the clawback.

[Emily Byrne, Joint Fiscal Office]: It's a true up of the clawback.

[Senator Andrew Perchlik (Chair)]: Oh, okay. The clawback is the So is that open or are we going I think we can close it. We'll send our line with those that open about. And then we ordered that this is net because $0 is related to Yeah. $30. Closeout 41. Chip case load import. Yep. This is And then more on the BP and the meter, I'll go to 312. And then this is the this is one the house changed. They took $50,000, and you see over in the the column where they divided that money out for HIV prevention. I think there was some federal remember talking to them? Was there federal? No.

[Senator Virginia "Ginny" Lyons]: That's all, Chittenden.

[Senator Andrew Perchlik (Chair)]: But, no, was it in response to some federal action on HIV funding?

[Senator Virginia "Ginny" Lyons]: I can't remember. No.

[Senator Andrew Perchlik (Chair)]: Think there was something. I think Is this we didn't see your testimony that we could. It's it's there's these three organizations getting money for HIV prevention and treatment. Didn't they close one in Burlington, right, center? Yeah. Is that

[Senator Virginia "Ginny" Lyons]: what this is? I think this is part of it.

[Senator Andrew Perchlik (Chair)]: Part of it. But it's it's probably the. Then it's also Southern. Mhmm. I think there was some reason about these dollar numbers. Think We gave them money in the last year in the budget. And it's just the just. I did talk to them. I did. What's this doesn't tell us this. That's if there was some wording.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: There is. Section. So, like,

[Senator Virginia "Ginny" Lyons]: file 25. Section 25.

[Senator Andrew Perchlik (Chair)]: Section 25 will just Just the numbers.

[Senator Virginia "Ginny" Lyons]: Oh, pretty b three twelve there.

[Senator Andrew Perchlik (Chair)]: I thought there was some in the language section where they had the three organizations.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: Oh, it's not

[Senator Virginia "Ginny" Lyons]: in it's not in oh, look at that.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: I'm sorry. 77. 77. 77. 7. Yeah. That's right.

[Senator Andrew Perchlik (Chair)]: I'm age 52. Okay. Typical client in the instance. Typical part. Do you know I mean?

[Senator Virginia "Ginny" Lyons]: No. That would be No. Well,

[Senator Andrew Perchlik (Chair)]: should we I'm okay with this one.

[Senator Virginia "Ginny" Lyons]: Right. I remember this. Yeah. It was the three centers that needed an increase to cover expenses.

[Senator Andrew Perchlik (Chair)]: Yeah. So we'll close that one out and then we'll close out our work for the day. We got two forty four for us. Not bad. We only have one that will be left up.

[Senator Virginia "Ginny" Lyons]: So a lot of this next section and some of what we've done, committee will go through tomorrow. Yeah. The DMH will be able to add anything

[Senator Andrew Perchlik (Chair)]: more than we've added in here. Yeah. The DMH and DCF failed stuff was brought to your committee. I I mentioned the correction steps to your chair, judiciary. It it seemed like you wanted to take too many times, talk about About what? Just the changes to corrections. No. We had corrections in the statement. Were talking about

[Senator Virginia "Ginny" Lyons]: I'll get it up.

[Andrew Stein, Vermont Department of Taxes]: On the

[Senator Andrew Perchlik (Chair)]: results. But being hard, we came in. But I also, the other judiciary thing was the the deficit of the council for the record checks. There's no record checks. No. Mhmm. Right. Well, I almost don't still don't know where to go for a pass. It's it's a one time thing where it's through a BPS. Right? As far as We're just raising Their fee. Yeah. Their fee or something here. What do we what was the name? A million $59,000 and everything else? And then weren't they gonna send us information about how many criminal record checks they have?

[Unknown Joint Fiscal Office analyst (Section 8 housing)]: I think we did.

[Senator Andrew Perchlik (Chair)]: So Okay. What Jack Wallam have because something is the icing. Yes. Like, would a $5 fee raise all the money and then or we just gonna have them come in next year ask for the of debt so they can or and is that something that we wanna do or do we want if we were to add a fee to the budget, it would have to go over to finance because it would be a fee. And senator, come on and said, no. She don't handle it. Talk to her about it. She said there was some judiciary. She didn't go to a judiciary. Well, I remember when we were job offer, be with OPR, and they would be the ones that would Any fee and you'd set together by hand, blew it and send it to them. Maybe she just didn't wanna do Well, I'm not it's not that I'm pushing here. Yeah. Yeah. Where does it start? Know what I'm saying? Yeah.

[Sarah Phillips, Director, Office of Economic Opportunity (DCF)]: There is some language in section 53 that the house put in for a report back to Oh, that's next year about how to

[Senator Virginia "Ginny" Lyons]: make it not going to They have to get

[Senator Andrew Perchlik (Chair)]: said you need to come back and watch your sustainability plan.