Vermont Legislature SmartTranscripts:

[Anne Watson (Member)]: We are live.

[Andrew Perchlik (Chair)]: Live is senate appropriation at pumpkin pie day, and it's February 11. We are got our first bill of the year signed to the committee. And it's a bill brought to us by Senator Watson, so she's been presenting for us.

[Anne Watson (Member)]: Super, well thank you. So this is S-two 18, affectionately known as the SALT bill, also the chloride bill. A second. SALT is another acronym for something. Right. J. V.

[Andrew Perchlik (Chair)]: I. V.

[Anne Watson (Member)]: Okay, well it's not that. It is literally about chloride. So, this is a bill that has had a bit of a journey in this building. So, this, it started its life last year as s 29. This is actually language, think, that you have seen before. You may have.

[Andrew Perchlik (Chair)]: Or it's on ours. Is on S two eighteen, which is on your committee's website as introduced, which is on this past committee. It is. So

[Anne Watson (Member)]: as S 29, it started in natural resources. We took a lot of testimony on it, and it ended up having relevance to both transportation as well as judiciary. And so, we were able to get in from the Transportation Committee at that time, and it also went to Senate Judiciary, so you know, be familiar with that. And it ended up as language that was in 03/19, which ended up not going anywhere. And so it is back in this iteration as s two eighteen, which is standalone and is the agreed upon language that ended up, it's been in 03/19. So, just to recap what this bill does. So, the premise of it is that we are experiencing an increasing amount of chloride in our landscape. So, it's showing up in people's drinking water, it's showing up in bodies of water on the state, and increasing that salinity means that the biodiversity of species is under a lot of stress. And of course, source of that is primarily from salting of roads, parking lots, and sidewalks and stuff. Now, it's to the point where, I mean, you're familiar with the idea of TMDLs, Total Metaxone Daily Load for phosphorus, maybe, this is another concept. When we started this process, there was one TMDL for salt, for chloride, in Chittenden County, and because it had such a degree of chlorate contamination. And since we've started that bill, there's actually a handful more. There's something like four or there's a set that's supposed to be TMDLs this year and some more next year because the process takes the longest. Anyway, so it's an increasing problem. The, so getting back to where it comes from, so if it's mainly coming from our, salting our roads, sidewalks, and parking lots, one of the pressures that exists there is that if people are unsure of how much salt is adequate in the absence of any further guidance, well, if some salt is good, then more salt is better. And the possibility that someone might get sued for the slip and fall type of acid, if they have not sufficiently salted, then there's this pressure to over salt a surface. So, that is what this bill aims to address. It creates a voluntary program for commercial private salt applicators to participate in that would help them understand best management practices around salt so they would know this is how much salt is appropriate given these conditions. Then if they go through the program and they follow the best management practices and they've done the record keeping for that, then what they would gain is some level of liability protection for certain fall type accidents. So, that's sort of the main part of the bill. There's it also asks the Municipal Roads Program, which is run by the Agency of Transportation to do some work their curriculum on this to include SALTs as a part of their curriculum that they already offer to municipal road crews. So, that's a part of it. There's also, I believe, a study in here or report on the state's management of salts and sand storage facilities, that we understand how many of these places we have, where they are, what exposure the state has in terms of salts leaching out into waterways. That is, I think that covers the content generally. In terms of the appropriation, is, so section six is the appropriation, but it's I guess it's it's not really an appropriation. It is it says that the program that that the interest of natural resources does not need to move forward for the program unless they have funding to do it. They expressed to us concern that they are sometimes asked to run these programs, and then they don't get the sufficient funding. And so they were hoping to avoid that situation. Like, we don't have the money to do it, we don't want to have to put on the program. So, that's what the contingent funding is about. Though it's worth, so otherwise it does not have an appropriation in here, but it is worth identifying that there, we do anticipate that there would be some cost to set up the program. So, and this is, We actually started the bill with $250,000 to get started. You may wanna hear from the Agency of Natural Resources on this. My understanding is that they are estimating that it cost would $200,000 to stand up a program. It's not even necessarily with an FTE because it could be provided by a third party, and so it could be a contracted service. And then as I understand it, the Agency of Transportation is also looking for some funding for their part of it. I'll let them or we can maybe hear more about that. So that is, generally speaking, the bill and the appropriations implications.

[Andrew Perchlik (Chair)]: Yeah. Sorry, there's no funding section three in this? Is that one of the sections that doesn't

[Anne Watson (Member)]: section that is most relevant oh, something that I did not mention is that there is a fee report. Part of the intention with this program is that fees would at least in part go to pay for the program on ongoing basis. But we don't know what those should be, so that's why there's a fee report baked into this. But, sorry, to get to your question, the contingent implementation in funding is Section six.

[Andrew Perchlik (Chair)]: Right, but it says, duty to implement sections two, four, and five is contingent. So that makes me think that section three is not contingent. Which is just not just, but it's a study of all uncovered material.

[Anne Watson (Member)]: Right, so regardless of funding, we want them to do that. Yeah, get us that information. Right, but it's the program aspect of it then.

[Andrew Perchlik (Chair)]: Right, that they would be. Yeah. And study. And they're not they wanna I said, you if you added this in, or they wanted to that specific purpose and integration for the specific purpose, and they're not, like, potentially finding this funding someone else.

[Anne Watson (Member)]: Is have

[Unidentified committee member]: I agree. I just have a Good.

[Andrew Perchlik (Chair)]: You know, I did our work for us, but then Sorry. It's enormous. Are you done, I am. I just had a quick question. I know we're looking at 02/18 Yes. Or 02/19, vice versa, whatever it is now. Did the affirmative

[Anne Watson (Member)]: Defense.

[Andrew Perchlik (Chair)]: Defense change at all in this at all. And are we looking at establishing our own program,

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: or we're gonna mirror New Hampshire's program? What are we looking at here?

[Anne Watson (Member)]: Sorry, so I did not mention that. Yes, this program is intended to mirror what New Hampshire's program does. So, it's very similar. Could do It's conceivable that Vermont could contract with the same people to run our program. I think there may be some detailed differences, but in general, I think it's it's basically just Thank you for that. I

[Andrew Perchlik (Chair)]: thought you had your own game going here. I didn't know.

[Anne Watson (Member)]: Oh, no. No. You didn't invent this idea.

[Andrew Perchlik (Chair)]: Started running. I lost a section here, but the section on training and food, third party potential for training. Yes. Are there are there any people out there who do this?

[Anne Watson (Member)]: Yes. In New Hampshire, there's also people in New York So who

[Andrew Perchlik (Chair)]: if the agency doesn't know who needs

[Unidentified committee member]: to Yes. Track

[Andrew Perchlik (Chair)]: their final

[Anne Watson (Member)]: And I suspect they may be both with that. Okay.

[Andrew Perchlik (Chair)]: Any other questions? We will I just need to go ahead and pull the information. Yeah. So are we I I think it worked. They got a straw poll or a bowl or something. We're take a vote, but I was gonna have JFO because I think there's a fiscal item just to get us here. Are you ready? I assume that this section's fixed. The the fiscal note is.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yes. This is

[Joint Fiscal Office Analyst (unidentified)]: a relatively brief fiscal note. There is a copy posted online on the committee webpage. As you heard, implementation of most of the section of the bill apart from section three the report from ANR about salt storage facilities would be contingent implementation would be contingent on receiving appropriation for this dedicated purpose. JFO so nothing happens unless you all and others agree to, for those sections, provide an appropriation. Regarding a potential appropriation amount, Joint Fiscal Office has been in touch with the Agency of Transportation, the Agency of Natural Resources. To get a sense for what an appropriate amount might be for those agencies to implement the work that's contemplated in the bill, ANR estimates that 350,000 would be necessary for program implementation. That's roughly, excuse me, roughly in line with what they had presented, for similar versions of this bill that circulated last year. That 350,000 consists of one time $200,000 appropriation for combatant services to kind of develop a program, help to develop the best practices on which it would be training self applicators, as well as a recurring $150,000 appropriation, which would be used for a permanent classified position within the agency of natural resources to run the program. So that's within ANR. You'll see in the bill also that training for municipal salt applicators would be run through the Vermont Local Roads program,

[Andrew Perchlik (Chair)]: which is, for those of you

[Joint Fiscal Office Analyst (unidentified)]: who aren't familiar, kind of a technical assistance program provided by AOT to municipal roads departments. This bill would direct AOT to incorporate the chloride contamination reduction program training into Vermont Local Roads for municipal certification. AOT has also been in touch with the Joint Fiscal Office and estimates that they would need 350,000 for that work, which consists of 200,000 for contracted services and 150,000 for a permanent classified position. Both of those costs are anticipated to be recurring by the agency of transportation. I would just share with the committee that I think I've been in touch with the agency separately. I've looked to kind of all three of us, GFO, ANR and AOT together on on the email chains and talk about potential cost sharing, how that appropriation might be spread across the agencies. And, I think both agencies agree there is the potential for some of the work in this bill to be, contemplated in this bill to be spread across those two agencies, as well as some of the appropriated monies, to be shared across those two agencies. But if that's something the agency is interested in hearing or that the committee is interested in hearing more about, I would certainly encourage you all to hear from ANR and AOT because I know they have thoughts on both what it would take, what would be necessary to implement this program in their respective agencies, as well as how they might work together and with you all on on the legislative side to dig into what an appropriation, a sufficient appropriation would look like and what the opportunities are for them to maybe share, for example, some of those contracted services for getting the program up and running. I know they would also appreciate the opportunity to share more about, for example, how you believe the program works and how they contemplate incorporating this work into that program. But yeah, so to summarize, implementation largely contingent on appropriation, and there's information in the fiscal note on

[Andrew Perchlik (Chair)]: what the agencies have estimated for their own respective mitigation costs. And they're not, they didn't report any implementation costs for section three?

[Joint Fiscal Office Analyst (unidentified)]: That being the report from ANR on road salt storage. No. In my communications with DEC, I've been working with Bethany Sergeant from DEC on this. I have they have not flagged any implementation costs for section three. I think we have AR in the room if they would like to flag any, but that they have not flagged the cost associated with with section three. Believe the idea is that it will be accomplished through the base, but

[Charles Martin (Agency of Natural Resources)]: I I should speak for the agency. Charles Martin, AR. So I think we contemplate that There's a court obligation being a handful of hours. I mean, probably not notable for reference of this. So Okay. Know, something that the information essentially already exists. We just need to request it and package it and send it to the legislature. Okay. Thank you. So the fiscal effect is with the section six contingency language de minimis

[Joint Fiscal Office Analyst (unidentified)]: depending. Meaning section three, that The whole bill. As currently drafted, yeah, as currently before you all, If, obviously, if the appropriation were made, would no longer be de minimis. As before you all, it's entirely contingent.

[Andrew Perchlik (Chair)]: Do you have anything?

[Anne Watson (Member)]: Well, I guess I just wanna add, if you all feel like you do need a physician for this, I wanna make sure that you have the space to say, because I was like, oh, maybe not, but if you

[Andrew Perchlik (Chair)]: Are you talking about section three?

[Anne Watson (Member)]: For setting up the, not for section three, but for setting up the program. Yeah.

[Andrew Perchlik (Chair)]: I think we did definitely complete an FTE.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Okay. Not

[Andrew Perchlik (Chair)]: sure there. That's not, by no means am I requesting an FTE for this bill.

[Anne Watson (Member)]: Yeah. I'm

[Andrew Perchlik (Chair)]: just saying that we envision there's

[Joint Fiscal Office Analyst (unidentified)]: been some work in my car. Okay.

[Anne Watson (Member)]: I just wanted to make sure that I was staying accurate on that.

[Andrew Perchlik (Chair)]: Yep. And, Brady, did you are you here for support, or did you have Yeah. She said nothing. I'm here for everything you need me for. Is this language which we always have the contingency or did it change anyway specifically for this bill other than identifying specific sections? So my It's close. We were directed by house appropriations to come up with some uniform contingency language because it's for new programs such as this. You're looking for placeholders effectively, and so you reach your final negotiation. This isn't exactly the same as with placeholder that we came up with because we came up with that after the signing. Okay. But it's it's sufficiently close. Okay. Okay. Well, Okay. With that, I would entertain a motion.

[Unidentified committee member]: Oh, just before that, I one question, and I'll ask it in I've asked if every city is on the street. The towns are not mandated.

[Andrew Perchlik (Chair)]: No coverage. You're good. What? No coverage. No cover required, man. Yeah. We'll get the report we talked about in transportation about Yep. How many are accepted or not covered.

[Unidentified committee member]: Yep. Well, actually, I that shouldn't be a hard report to put together, because two thirds of the state there are in the Champlain Valley Watershed, we already have the information for it. It's the other third of the state that we don't. Mhmm. So we know that. But I only ask that question because I will be asked about towns, and I got it from the leader of the pack and some committee across the hall.

[Andrew Perchlik (Chair)]: Okay. Just asking one other question on the $200,000 appropriation from the agency of the Local Roads program.

[Anne Watson (Member)]: Do you mean for B TRANS or for AMR?

[Andrew Perchlik (Chair)]: For B TRANS. Okay. So that's an ongoing that's in every it's incorporated into their program, below the road program. At a $200,000 a year cost Okay.

[Anne Watson (Member)]: We should have

[Unidentified committee member]: Coverage. Yeah. Doesn't like

[Joint Fiscal Office Analyst (unidentified)]: love to, but I don't see anybody And, Sarah, I I wouldn't want to speak on behalf of the agency, but I can share with you the information that's been shared with me Okay. Beginning with ART. So the Vermont Local Behavioral Program, I believe it's it's currently staffed by about two folks two folks who run the existing curriculum. ART anticipates that they would work with contractor to deliver the trainings. It's how they're current they're they're currently envisioning implementing the bill, working with a contractor on an ongoing basis to deliver any additional trainings that will be required under the chloroQueen Habitatio Reduction Program. I think the agency anticipates that one, interest among municipal applicators would be quite high given the benefits that the certification would would incur. And they anticipate that they would need additional contractor and staff capacity to get those trainings up and running. $200,000 on a recurring basis to actually run the programs, administer the trainings, and $150,000 for a full time position, which in my conversation with the AOT, are envisioning to be primarily on the back end, supporting program logistics, scheduling, etcetera, given existing staff constraints within the program. Okay. So you said $1.50, but you're talking a and r there. It's 200 for for AOT. And from AOT, $150,000 for a full time position. So they are estimating $200,000 recurring for contract support as well as $150,000 for an FTE. Again, in speaking with both agencies, think they both agree there might be some opportunities to share some of that work in consultation with the legislature, but that's what AOT is currently anticipating. Does that answer your question? It's it's two parts. It's kind of that 350,000 to AOT based on their estimate breaks into two pots, 200,000 for contracting and 150 for a position. Okay. I guess

[Andrew Perchlik (Chair)]: yeah. I think I get it now. I I was looking at the second the last line where it talks about local rows, you know, needing one more permanent classified position, but that's that's the 200 that's up above part of that three fifty. So it's three fifty altogether. To a or to a l c. And they're okay with it. Somebody is anybody here to tell me it's they're okay with it?

[Joint Fiscal Office Analyst (unidentified)]: I I would wanna speak to the agency on that point.

[Andrew Perchlik (Chair)]: Yeah. Fair enough. Yeah. The bill in itself, I want to support creating another classified position in the state that we're in. The line of about to turn off the state of the wrong place. Point that we're in, I'm hesitant about that without taking some more testimony on because, you know, I think that there's I want a sport to go. I liked, the you theory behind this, so on and so forth, but as far as creating another classified position, hesitate point at in time versus maybe looking at a one time allocation until we're in better shape here, the $350,000 that's gonna increase incrementally over each year, as we all go out with cost savings, insurance, water, it's going to increase every year. I'm just not sure this is the year that we should be putting a whole lot of full plan classified positions in. Nothing? Oh, no. The bill's good. What's that? It's a classified position that I'm hesitant. Well, to be clear, this bill doesn't create a classified position, nor does it appropriate to any matter. So this just would the fiscal note just says if they were to do the program, they would need a classified position, but it doesn't create one. If they were to if we support it, they're gonna create a position. No. We would definitely have to approve them to get in a position, and we have to give them the money. The bill does not give them any more. But that's what that section six says like. Also, I can support the bill today and vote against the appropriation bill? Mean we're getting section three done. If bill passes, section three would be, we get the report on the salt ships. Then the other ones would be contingent on creating a position and the funding. I mean, maybe they would we're getting the funding. They would find a way to do it without a position to do contracts, but there would be no provision created and no appropriation. So I guess I I want support senator Watsonville.

[Anne Watson (Member)]: He did.

[Andrew Perchlik (Chair)]: The appropriation port portion afterwards, I guess, that ANR and AOT can share, I guess, one here from them. Yeah. And so we will do this with any other bill that we get before we do the budget. If there's a new preparation in there, we'll take the same contingent language and say Take it out. Strip this strip that out, put this in there, and then have that discussion as we do the whole big building for M 57. Okay. That made me feel better. Yes. Yeah. We want you to be able to stop. Okay. Well, unless there's any comments or questions, I will entertain a motion to pass it all favorably. Okay. Is that all been moved to favor of any? The clerk now commence the. He closed the bailout and programs. Is it just available as presented with the with the contingent? You wanna hold this? That's that's okay. Okay. Senator Baruth. Senator Brennan. Yes. Senator Lyons. Yes.

[Virginia "Ginny" Lyons]: Senator Norris. Yes. Senator Watson? Yes. Senator Westman?

[Richard Westman]: Yes. Senator Perchlik? Yes. Okay. Thank you, committees.

[Andrew Perchlik (Chair)]: Yes. So who will be the reporter? Assume it could be senator Lamoille. I

[Anne Watson (Member)]: assume so. We think she knows a girl enough to

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: go Correct.

[Anne Watson (Member)]: Probably does. Yeah.

[Andrew Perchlik (Chair)]: You can study Yeah.

[Unidentified committee member]: Yeah. It's a cram at the end. A It's it's a it's

[Anne Watson (Member)]: a. There's that's a potential

[Andrew Perchlik (Chair)]: Oh, wait a minute. Wait

[Anne Watson (Member)]: a second. You know?

[Andrew Perchlik (Chair)]: Back off mute, and we are continuing testimony for today, and this is about f y twenty seven budget request.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Right? The tax department.

[Andrew Perchlik (Chair)]: You are the tax, but I'll let you introduce yourselves and give us your presentation.

[William “Bill” Shouldice IV (Commissioner of Taxes)]: Yeah, for the record, my name is Bill Schulweiss, fourth. I could be confused with my father and my mother. My son or my grandson, whose waiting child was Schulweiss, Last time I was in this room, I testified on behalf of the Agency of Commerce, who I was secretary for Howard Dean in the '90s. And it's great to be here in my new capacity as commissioner of tax. Somebody may know I was, haven't left state government. I was the president and CEO of the York and Family Foundation, and I was president and CEO of the Vermont Country Store. You have a long history. And then I was President and CEO for my Pennybird company before Andrew asked me to work with him here in the taxi bus. It's been a great group of people. I was actually surprised during the interview process that I expected to see a bunch of folks who were just interested in catching the monitors not paying their taxes. Think that's not the case. They're very interested in making sure the modernists take advantage of every tax opportunity they can under the belief system that it's not our money, it's theirs. And if we can get it back into their hands sooner rather than later, it certainly goes towards the governor's mandate of making Vermont as affordable as we can. We've a great staff and a great customer service team and we're the middle of a tax season right now. We're cool to kick off our tax season and the web stage session. All kind of a big time for you.

[Andrew Perchlik (Chair)]: My pleasure to be here. Thanks for taking the job.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: And now he's president and CEO of tax, similar to the federal model. Do know way with commissioner titles?

[Andrew Perchlik (Chair)]: I'm joking.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Andrew Stein, Chief Operating Officer of Taxes. I want to thank Commissioner Schuldice. Came in last year, middle of the legislative session, middle of the tax season, Craig Bollio, who was here before, wonderful, left the department in great shape. And I think it's been really helpful to have somebody come in from the outside. Big shoes to fill with Craig, but Bill's a commissioner of a different model, and he brings a lot of experience and a lot of success to the department. And I have the emphasis on service, which resonates really well with our leadership team and our employees, and bringing that service perspective from the private sector and the public sector earlier in his career has certainly benefited the department in a lot of ways. So, you know, we're regularly looking to build on what's working at the department, and we have a lot that is working, but there's a lot of area for improvement too, and bringing that fresh set of eyes, asking service minded questions has really been helpful, and we've got a lot of big plans for the next year too. So, I wanna thank you for your usual for that. All right, I'll get into the budget, we don't have that much time, so typically I begin, and you all have seen this, I'm just gonna breeze right by this, but we begin with the mission, our goals to be a model of service oriented tax administration, reduce the tax gap and promote a healthy organizational culture that helps our employees thrive, and put an emphasis on our core values of service, integrity, growth, and community. When we talk about growth, we're talking about the evolution of the workplace, we're talking about the department evolving with the times, we're talking about providing a solid career path and communicating with staff to meet goals and recognize their accomplishments and ensuring that there's a growth mindset, opportunities for education, those types of things. Service and integrity, I feel like those the big ones for our department when we think about core values. Service is kind of at the forefront of everything we do. We should I think our leadership team does a good job. I think many of our employees do a good job, but we should in general be asking ourselves how can we solve the problems facing Vermonters today? How how can we best serve Vermonters? How can we meet Vermonters where they are? You know, how how can we treat each taxpayer fairly? How can we provide reliable, clear communication and guidance? And how can we promote voluntary compliance to reduce the tax gap? On the integrity side, with the amount of money we bring in, we brought in over $3,000,000,000 last year for the state of Vermont. Most of that is from voluntary compliance and the sensitivity of the information we have. This is a really critical one for us. And sometimes we have to weigh various process improvements and say, if this is a little bit more service minded and it creates some risk on the integrity side, we need to be able to identify that, mitigate them, and live with them. Or sometimes we might say, you know, the risks that this could potentially pose aren't worth the service gain. So sometimes when we're weighing various improvements or changes to processes, look at things through those two lenses. And then community, the last of those values, that's kinda the heart of everything you do in terms of the organization. We we think about community, but also the communities we serve in Vermont. Really, everything we do is in service of Vermont's communities, so.

[Andrew Perchlik (Chair)]: Can I ask you a question on your reduced, the tax Please? You know what tax gap is? We

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: don't have So we do not know what we do not know. It's a difficult The hard

[Andrew Perchlik (Chair)]: goal is to know if he meant it to be known.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yeah, and so you can scale that. So Yeah.

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

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: You can you can scale what the federal government's done, and and the federal government doesn't have the exact same tax portfolio that the state of Vermont has. No. So if if we, yeah, if if we scale it to if if we scale it to the the IRS's former estimates to Vermont, it's about $300,000,000. So it's it's a bit over $300,000,000.

[Andrew Perchlik (Chair)]: So how we know if we're hitting the goal? How do

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: we know if we're hitting the goal? So For Michigan. Yeah, yeah, So we, there a number of compliance initiatives that we have, targeted audit programs. Like right now, a big targeted audit program requires is around the child care contribution. The new childcare contribution. And so we know, for example, what that audit program is yielding. We also know, and in a lot of cases, it's just, it's it's helping taxpayers understand their obligations. Taxpayers finally amended returns and us seeing gains there. We do quantify various compliance that Right. We do. Yeah. We we track that in our system. I think we can do a better job of tracking after we get compliance from taxpayers, tracking moving forward, what would receive involuntary compliance. But it can be tough to say, like, you know, say that it's it's due to compliance at a certain point if your taxpayer has been complying for five, six, ten years, know, years changes, organization issues, what have you. But, yeah, we do and I'd I'd be happy to circle back if you're interested, we do quantify various compliance entities. So right now we're doing a big exercise internally, looking at updating our KPIs, our key performance indicators, and some of those pertain to reducing the tax gap. So some of some of those performance measurements that we wanna be looking at over time are based around reducing the tax gap, and they're they're focused on various forms of compliance.

[Andrew Perchlik (Chair)]: Are you collecting every year? What's that?

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Do you it's the annual p APM? Some some some are annual. Some are pending depending on what the, like, API is. Right. Frankly, right now, we're I I just reviewed a draft from our team that's working on this, and some of the questions that I had for some of them are, how frequently do we wanna take a snapshot of this? So for example, vacancy savings. If we're looking at promoting a healthy organizational culture that helps our employees thrive, looking at retention is a really good way of looking at that. And in terms of vacancy, not vacancy savings, but our percent of vacant positions, what how frequently do how frequently do we wanna assess that? I'd say annually, it's not ideal. So maybe on a quarterly basis, we do that. In this presentation, we have a metric for our vacancy rate, and it's based on a twelve month snapshot. So we took a snapshot each month and then average that to say this was our vacancy rate. So that's an example. Okay. Whereas another one that's gonna be annual is what percentage of refunds could be issued by June 1. That's gonna be an eight month every year. And we aim to hit 95% by June 1, within forty five days at the end of the filing. Makes sense. So with regard to our budget, we're looking at a $38,000,000 budget this year. That's up about, I believe it's 2.34% increase year over year across all of our funds. 90% of that salaries and benefits in IT, that's the bulk of our spending. We had some our our bread and butter IT system, the tax, our integrated tax system, very high performing system. It's the same system that the state of California uses. New York, Massachusetts, Finland, New Zealand, Denmark is is going to be implementing the system. For example, thirty thirty other 30 plus other states use this system. It's built by this company called Fast Enterprises. They just built the new DMV system, and they're working, you know, out of overhaul their system. We have some other IT systems as well. We just wrapped up our new scanning system, which I put under current initiatives here. Now our new scanning system is fully implemented. We're getting the ton of efficiencies from that. We are in the middle of we're at the end of implementing a new property tax system for the state and for municipalities. That's been a little rockier than our past IT rollouts, and we're kind of straddling that system in another system built by the company, Nemrick. That's a really tough one. The property tax system is a really tough one. It's really, A property tax system is not the most standard, not the most consistent, not the most consolidated property tax systems, and building an IT system for that is a challenge, no doubt. But that's not the only issue with that project. So we're working through things, and we're aiming to get it right, and we'll go from there. So the rest of our budget, be 11%, there's not a lot of wiggle room here, rent and billing services, postage and printing, internal services, and then And other includes things like furniture and, you know, all sorts of other personnel expenses, the types of contracts, travel expenses,

[Joint Fiscal Office Analyst (unidentified)]: those types of things.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: You know, we have, part DAs and and field auditors who are field based. We also have folks based in Montpelier who have all those types of things or travel expenses. They're not super high. And then internal services, internal service funds like this revolving fund and our finance and management fees. I put ADS fees under IT for this. Alright.

[Andrew Perchlik (Chair)]: That was kinda group it all together. Yes. They're all

[Anne Watson (Member)]: I'm trying to see this in a future way. But the the IT portion of that, is that one time for improvements, or is that I

[Andrew Perchlik (Chair)]: Everything.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: It's both. It's both. It's It's combined.

[Anne Watson (Member)]: Okay.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yeah. And I can I'll just go ahead two slides. Our IT expenses are actually down. Oh. And that's this year, and that's because we're coming off several implementations. We're at the very end, essentially coming off the implementation of the new property tax system. We just shifted current use into the VPAX system that went live at the December. That used to be an older legacy system. It's now in our integrated tax system. We just wrapped up the scanning project. So coming off of those implementations has,

[Andrew Perchlik (Chair)]: you

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: know, given up has alleviated some pressure, but that that can swing year over year. And then there's ongoing maintenance and support payments, ADS payments, payments for servers, different types of hardware, that type of thing that go in there. There's also things like our Cambridge microsimulation software that we share with the office, the policy changes that goes through IT. So that can be back and swing year over year. We do for full transparency, we do from our IT fund have the remainder of a multiyear appropriation. It's three point about 3,200,000.0 that remains that would save for a number of years for version upgrade of our integrated tax system throughout the outset of. So we're updating our integrated tax system this year. We're on what's called version 12. DMV is on core 21, which came out in 2021, and DOLs on core 26, which is 2026, and we're upgrading to core 26.

[Andrew Perchlik (Chair)]: Nice.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yeah. Okay. Anyways, it's a lot of inside baseball today.

[Anne Watson (Member)]: No, that's okay. That's good to know to write these things.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yep. And that's gonna be a big project for us internally this year. So in terms of current initiative and implementing new policies, including a range of new personal income tax credit and exemption updates, new local option tax downs, that's a big lift. At this point every year, we're looking at, like, something like four to eight of these pretty much on an annual basis, and there's a lot of outreach, and there's a lot of work on that front. And then there's a lot of work moving forward with various remote sellers, or sellers that might be in your order, or that might have postal zip code that's typically associated with a town, a city, and so yeah. There's a lot of out there's there's a lot of outreach and education on that front. It's it's a bit of a lift, but we're happy to do it. We're about we're about to request that you could give us a preview of what you know is out there with transportation. Oh, okay. Okay. In terms of the an overview of existing local option pounds and what's to come on the horizon?

[William “Bill” Shouldice IV (Commissioner of Taxes)]: We had

[Andrew Perchlik (Chair)]: we had a partner to do with the what pounds and history and all that. So

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yeah. Sure. I think I shared with and I'd I'd be happy to share with you all. I did create a list for ourselves, and I think I shared with Chris about towns that indicated they will go to unlock in 2026, and these are just the ones that have communicated it to us.

[Joint Fiscal Office Analyst (unidentified)]: Yeah.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Towns that have reached out and indicated they are considering it, but haven't indicated they're going to. And then towns that have reached out to just explore it, and it's looking like seven pounds have indicated that we'll vote in 2026. Again, those are just the ones we know of. Right. You wanna know what they are right now?

[Andrew Perchlik (Chair)]: No. Can't.

[Anne Watson (Member)]: That's good. No.

[Andrew Perchlik (Chair)]: We can't. We can't. We We running on a topic. No. No. I think if people wanna wait you ready for transportation.

[Joint Fiscal Office Analyst (unidentified)]: We can come back. I

[Unidentified committee member]: enjoy. I'm

[William “Bill” Shouldice IV (Commissioner of Taxes)]: happy. Is there any on the other side about me answer it? That's all he wants to know.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: I'm happy to email it to you too based on those chunks. That saves you all

[Unidentified committee member]: Well, you're you're the department's gonna have to come in therapy.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Oh, yeah. Okay. Sounds good. Will that be pie? You can have those as well.

[Unidentified committee member]: I can probably, depending how lucrative it looks.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: You might sweeten the

[Anne Watson (Member)]: deal. I might.

[Andrew Perchlik (Chair)]: You can negotiate with the transportation share. So

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: other initiatives, we wanna maintain high service levels this tax season, and some of our KPIs are further in the year. But one KPI I wanna spotlight that isn't in our typical performance management budget are phone calls. We handled a 115,000 calls in the calendar year point five. That's over 90% of calls that came in. And the call wait times were down to a minute five seconds, which was a bit over twenty second reduction to the year prior, which was an improvement not the year prior to that. So I'm pleased with that when I talk with the Yeah. Colleagues in other states. I don't hear of any wait times in terms of the Department of Tax and Revenue that low. A great team handling this at our department. Just going through this, emphasis on employee growth this year.

[Andrew Perchlik (Chair)]: We're gonna skip to the other slide. You're right, I'm gonna have to.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Ups and downs, this is just a summary of the ups and downs. You have a more granular one later on, but high level salaries and wages are up $568,425. You've got health insurance up, retirement up. Other benefits and workers' comp, that's down a little. I don't remember exactly what goes in there. Honestly, this can just be one or two in in in employee situations that can lead to this being up or down. Decrease in contractual services, that's pretty much all due to the coming off of the implementation stage of several IT projects. One other thing in here, we're part of the multistate multistate tax commissions joint audit committee. It's a bunch of states that come together to pull resources, and there's this common group of auditors that audit corporate income tax, really, really big multinational corporations typically is what they focus on, and our payment into that dropped precipitously after California joined. So it's kind of based on scale and they're big, so they pay more and we're paying less than we had anticipated paying. Increase in accessibility costs for interpreters in the past couple of years placed a heavy emphasis on providing enhanced interpretation and translation services. Our spend on that was a bit over $22,000 last year. In the past, we didn't budget at all for this, which frankly, not an ideal situation. I'm glad we're budgeting for it now. In the in the past, we have used surplus for the past two, three years. This has been an emphasis of ours. We put a emphasis on accessibility. Major updates to our forums last year and this year, and there's major ADA laws going into effect in April, which in general enhance access to various accessibility services. Increase in education and training contracts. This is in response to employee feedback from the employee engagement survey where our employees told us they want more opportunities to grow, they want more education opportunities, They want to develop different skill sets to help them do their jobs better. And so we're taking that seriously and we to support them. Increase in service of papers. I wish I could summarize this under something else. For some reason, this goes under first thing services on here. Need to get the numbers lined up. I had to put it on here. That's just $3,000 for things like expenses for process servers or sheriff's departments serving legal documents like summons.

[Andrew Perchlik (Chair)]: It's $3,000. Great.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: And then net net operating expenses, that's ADS charges, ISFs, education supplies, education and training expenses for conferences, travel, general liability insurance, office equipment, those types of things. So, I mean, we don't really have much discretion in terms of being able to meet our core mission. We we put the emphasis on the people in the IT systems, and where we have a little bit of wiggle room, we do things like put an emphasis on education and training.

[Andrew Perchlik (Chair)]: Yeah. I think your slide 10 is a good example of that. Compared to other agencies where I've seen these numbers, you're doing very well. And they've got folios, biggest credit.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yeah. I I think Craig took that to to another level. I think Kai, really. Kai Sandszen is now at DFR when he came in. He put a heavy emphasis on this, and then I think Craig took it to another level. And then this is something that's really important to Commissioner Chittenden as well. Don't know if they want touch on this at all.

[William “Bill” Shouldice IV (Commissioner of Taxes)]: Yeah. No, we when they did the survey this year, we put it around in every department. We said, you know, please do us a favor and get Zachary Gonzales as you can because we don't hear from you. We can't readjust our priorities to serve you. And I think they took us up on that seriously as they came back with a lot of ideas about things they needed to grow and develop on a career path basis. And it's hard enough to recruit somebody in this tight labor market. And so our emphasis around satisfaction and retention and giving a career path and opportunity so that they can see their both compensation as well as their professional fulfillment accomplished by staying with fund.

[Andrew Perchlik (Chair)]: Yeah. Compared to some of the numbers we've seen in my morning committee, they're impressive.

[William “Bill” Shouldice IV (Commissioner of Taxes)]: And you you probably know, mister Chittenden, is this is I inherited this legacy. It's nothing I've done to to drive these numbers. Actually, you can take me off the rolls around it.

[Andrew Perchlik (Chair)]: I go down 25.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: I don't know. You were you were in the role for about six months when this took place.

[Andrew Perchlik (Chair)]: Yeah. That that helps.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: So

[Andrew Perchlik (Chair)]: And what job how many positions do you have? Are you having difficulty hiring?

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: We have why don't I go to the vacancy? Right. Slides 23. Yeah. 23. Yeah. We are struggling in one area of our operations primarily higher. Outside of that area, so and that's our compliance division. Outside of our compliance division, we've had less than a 5% vacancy rate, which is pretty great. Yeah. And when I came into this role in early twenty twenty one, we were just at the beginning of a big, like, attrition cycle. Yeah. And I wanna say that year, our vacancy rate got up to, like, 25%, something like that, which was really, really high. So we formed a cross divisional department wide recruiting team and put a heavy emphasis on recruitment, recruitment materials, outreach, those types of things. And we were able to get our vacancy rate down. Typically, it was between 56.5% for several years. And then around last year, yeah, last fiscal year, we started to have some some more vacancies in our compliance division. And we also had some supervisors, including our audit manager who's out with transportation. Frankly, were recruited. Many of them were recruited from elsewhere in state government. And losing audit manager, key audit supervisor, and a couple of other supervisors, then that we didn't have people in the hiring manager role. But even when you have people in the hiring manager role, right now, is all around the country this is a difficult group to recruit for. And frankly, we don't compensate as highly as other states, nowhere near as highly as private sector for the SIFT side. And we're often able to, in other areas like in our tax payer services area, we're able to find folks from banking, insurance, and other similar fields that are service oriented and intersect with the financial space where people can be educated on the tax side to help on that service front. But when it comes to auditing, doing certain types of auditing, it's much more difficult to find qualified applicants. And frankly, the work is not I don't I don't think it's I don't think it's as appealing to as many people as maybe some of the more service oriented work. Even though this group does do a lot of service work, they do a lot of education, they do a lot on the voluntary compliance end, It's it's it's tough work, and we did just have a class action RFR for all of those And that that just went up one pay grade. All of those positions went up one pay grade. I don't know if that's gonna be enough. I'm also not a I'm not necessarily ideological, but I'm not a huge fan of the market factor adjustment that creates equities. Mhmm. I realize 87 here. I mean, I frankly, the state is Yeah. I work there. The state is very ripe for an update to our classification system.

[Andrew Perchlik (Chair)]: Right. Well, we we gave you some money to start that last year. They're more than.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yeah. It can it cannot come soon enough from my perspective. Okay. Seven years. But in general, so we're working with our compliance division. It it is it's still tough sledding. I was meeting with our compliance director earlier today about the situation. But outside of that, our vacancy rate is very low. So our our vacancy rate's trending down, but it's it's been trending down closer to, like, 11% this year. And compliance is that's priority for us.

[Andrew Perchlik (Chair)]: I like the way you have your presentation. I'm not gonna get through all of the slides, but that you have programming your goals and some metrics from the past years. Appreciate that Yeah. Presentation, And that you have all the mandates, much money you have been doing to them. That's awesome.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: And that's just from last year. We're a department that receives every year a heavy policy bill in terms of implementation. Right. We call it the ledge build. It's like things passed through the legislature, now we need to build it. And our ledge build every year is pretty hefty. So at

[Andrew Perchlik (Chair)]: least there's, like, 10 pages here. That's just from last year. That's just last year.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: So you can go to our website and and take a look at past year prior year legislative mandates. And if you have questions about the status of any of them, I'm happy to answer, but I didn't wanna fill this, you know, with a 100 pages.

[Andrew Perchlik (Chair)]: Right. And I appreciate you getting back to me on that weird military paper.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Oh, yeah. No problem.

[Andrew Perchlik (Chair)]: Anything else?

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: The only other thing I'd I'd spotlight at a high level is just the let me go under our grants. We administer I I would put grants in quotation marks, so I don't really view any of them as true grants. But, you know, we have our let's see. Sorry. I'm trying to move too. So we have pilot. We have homeowner rebate. We have renter credit, but reappraisal and listing payments are one of our grants. And there's a proposal to ship this to the pilot funds. It's in the general fund. In 2018, I believe it was 2018 shifted from that fund to the general fund. This would shift to the pilot fund. The BAA shifts this to the pilot fund this fiscal year. Most of this has already been spent, so we would just have to do, like, a journal entry to make it so that So

[Andrew Perchlik (Chair)]: this just carries into next fiscal year what we did for this fiscal year in the VA?

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yes.

[Andrew Perchlik (Chair)]: Yep. No changes to the dollar number. Right? No.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Yeah. It's pretty safe. $88 and 50¢ per parcel payment, $1 per parcel payment, $100,000 Lister Education Program, $70,000 for utility

[Andrew Perchlik (Chair)]: valuation. Why isn't it just $9.50? First one's gonna pay $15.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: They're for different purposes and different sections of statute, but it's a good question. And there it's now a proposal to have an additional $66 per person.

[Andrew Perchlik (Chair)]: Yeah. That's why you don't go into transportation. Have other things they might have tried to make it.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: Alright.

[Andrew Perchlik (Chair)]: Okay. So that's the orrelia. I'll change everything else, that one page of up and downs is pretty straightforward of just Yeah. Increase with the wages. Yeah.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: When I was in here before you know, just when I was in here before on the VA, the homeowner rebate, the reason it's down, same reason here. That's the circuit breaker, payment to municipalities to make them whole from the government fund. Then rent, it says renter rebate, but it's really renter credits that's up.

[Andrew Perchlik (Chair)]: So it's like saying the VA one's down, what's up? Yeah.

[Andrew Stein (Chief Operating Officer, Department of Taxes)]: But in the BAA, it's up to 11,000,000 this year for the renter credit, and we're estimating 11 and a half million. That's And that that accounts for inflation. It gets adjusted for inflation.

[Andrew Perchlik (Chair)]: Yeah. All right. I don't have any questions. Anybody else have any questions for tax, raise the new commissioner, or he's not done yet anymore?

[William “Bill” Shouldice IV (Commissioner of Taxes)]: Yeah, no, I thank you for your time. Would just say that one of the questions I didn't ask Andrew and Rebecca and the governor when I took this position was, I asked after I've been with the governor, was how much money do we have in the budget to do things that we want to do? So my entrepreneurial spirit was and that flight was doused immediately, but we'll find a way to do the resources we have, we'll be able to get excited about it.

[Andrew Perchlik (Chair)]: To the. It should be fun for people. I appreciate the entrepreneur everything else. Okay. Well, with that, we can pick a break until legal aid gets here. So maybe they're in the hallway.