Vermont Legislature SmartTranscripts:

[Kendall Smith, Commissioner, Vermont Department of Labor]: We are live.

[Sen. Andrew Perchlik (Chair)]: Okay, this is Senate Appropriations, March 31, we're running FY '27 budget. Presentations today, have DEVA. We'll let you, Commissioner, introduce yourself and give you your presentation. Alright. Good afternoon, everyone. I am

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: for the record, I am Deshaun Rose. I have the privilege of serving as the elected commissioner. I also have folks online who I would like to introduce or have them introduce as well.

[Sen. Andrew Perchlik (Chair)]: They're there.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Alicia. Awesome. They all

[Sen. Andrew Perchlik (Chair)]: seem to be there. No. No. Disappeared.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Okay.

[Sen. Andrew Perchlik (Chair)]: Well, when they come back

[Sen. Virginia "Ginny" Lyons (Member)]: That's because they got in front of the butcher committee.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Because they're they're the

[Sen. Andrew Perchlik (Chair)]: we are feared. Yeah. Okay. Well, I'm sure they'll. Oh,

[Kendall Smith, Commissioner, Vermont Department of Labor]: there you go.

[Sen. Andrew Perchlik (Chair)]: Thanks for holding. That was a good week. I'm getting a little tired.

[Kendall Smith, Commissioner, Vermont Department of Labor]: I know.

[Sen. Andrew Perchlik (Chair)]: Alright. Are you sure you can introduce yourself? Good afternoon, everyone. My name is Alicia Cooper. I'm the director of managed care operations for the Department of Vermont Health Access.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: And then, Allison. Allison, would you like to introduce yourself?

[Kendall Smith, Commissioner, Vermont Department of Labor]: Sorry. I heard my

[Allison Nowak]: name when I joined. I was having everything froze for me, so apologies. My name is Allison Nowak. I'm a financial worker for you in the legal business.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Alright. And then Alex will be sharing the our presentation today.

[Alex McCracken, Director of Communications, DVHA]: Hi. Good afternoon. For the record, Alex McCracken, she, her pronouns, director of communications for the Department of Vermont Health Access.

[Sen. Andrew Perchlik (Chair)]: Alright. And you have presentation. I do have presentation.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: The

[Sen. Andrew Perchlik (Chair)]: one listed testimony.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Alright. Good afternoon, everyone. Today we'll go over a our this overview of Diva and then our s y twenty seven budget, both on our admin and our our project management, our program side, as well as one time funding. And if we have time, considering I know I have thirty minutes, but I'll just run through everything, we'll key accomplishments as well. When you see things in blue, I just want to note that we've discussed in our BAA testimony, so it'll just serve as a refresher for folks. Next slide. So one of the things that when we came in earlier this year, we talked about how the executive leadership team at the agency, which is comprised of the secretary, deputy secretary, Medicaid, health systems director, and the six commissioners identified the agency wide priorities to guide our budget and policy discussions. Those areas included housing, substance use and mental health, healthcare affordability, sustainability and quality, as well as building a strong, resilient agency workforce. With these priorities in mind, the leadership team developed our budget by looking across the agency as one integrated agency instead of six separate departments. We look to identify programs and approaches that we're working and building on them, making difficult decisions to eliminate others that no longer met our goals, and targeting investments for policies and programs that most effectively advance affordability to save us stability and protection for all of Vermont shirts. Here we see the mission of Diva and our values. These have not changed. What has changed, you will note, is we have refreshed our priorities going into this year, and that is instead of going through the pre established, which was value based performance improvement and workforce, we changed it to include five. We really champion member centric excellence. The mission is to serve our monitors, and so we strive to put the members first in everything that we do. Thinking about how do we use plain language, making letters and websites easier to read, and how do we incorporate member feedback in our policies and programs moving forward. The second one is to promote a high quality provider network. We remain focused in growing our provider network in Medicaid. We understand that having coverage isn't enough and if we want to, we have to have providers at the table. The third is advancing population health and quality of improvement for promoting a more whole health focus, not just focusing on the medical bills of the monitors. This ensures that we are looking at access to preventative care such as screenings and checkups, and considering things like food, housing, and transportation to improve their health. The two last remaining priorities are really internal for Diva. They are to strengthen our operational infrastructure and system modernization. It's important for us to think about how we operate behind the scenes and how good processing, such as processing applications, payments to providers, managing our systems. And then lastly, we can't do this without our folks, our workforce. So this is our last priority, supporting our staff through training, building leadership, and making it keep Diva a place where they want to work and stay. Next slide is, PIVA has a unique role, serving as both a managed care plan and core functions of a Medicaid agency. We under law determine eligibility, overseeing compliance of federal and state requirements, setting provider rates, managing benefits. At the same time, we operate a health plan responsible for the same things, managing our provider networks, advancing value based models, monitoring the quality. This kind of dual identity allows us to directly align policy, financing, care delivery in ways that other states cannot. Now turning to our FY twenty seven budget in summary. Our budget total for this upcoming year is $1,300,000,000, $579,000,000 in general fund. Here you see it broken out. About 10% of that is from our admin side, of 198,200,000.0, of which 56.9 96,000,000 come from the general fund. And programmatically, makes up the large percentage of 1,156,000,000 of 522 from the general fund. So diving into our admin budget, and for those who are following along in our budget book, this is on page 47. The numbers that you see reflected here in the PowerPoint represents the total across all of all of these sections, and the components that are broken out in the spreadsheet and not our ups and downs. I did also want to make note that the agency was managing a $75,000,000 shortfall, which shaped every aspect of this budget. If we have not proposed new initiatives beyond what is required by federal or state law, we're recommending several productions moving forward.

[Sen. Andrew Perchlik (Chair)]: Here, can you describe how you're doing

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: this gross? What you're what you're is this the net and the gross or the general fund and the gross? I'm not following what you mean by those terms. Yeah. So this is our gross amount. So this is the total from if if you look at our ups and downs in our spreadsheet, we have several sections. And so this is we're aggregating all those sections into this one top one.

[Sen. Andrew Perchlik (Chair)]: But the gross is a lower number. So the gross is yeah.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: So the gross is of the general fund plus federal matching that we would receive on Medicaid side.

[Sen. Andrew Perchlik (Chair)]: But it's probably you're taking the general funding and then subtracting the federal money to get the gross? Because the gross is a lower number than Oh, for the Oh,

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: that maybe it's I apologize. I see what you're saying there. Underneath the salaries. Salaries higher the gross is a lower number. Yeah. I think that I'll have to go back and make sure that I'm pretty sure that that one that is a typo, I just don't know. Okay. Okay. We'll fix that and report back to you on that.

[Sen. Andrew Perchlik (Chair)]: And like all the childcare, if I'm gonna lie that's a that's like a negative 30 k gross for a 130 k general fund? Correct. So I just don't understand how the gross is a lower number on anything.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Yeah. Allison, do you have any insight on that?

[Sen. Andrew Perchlik (Chair)]: I'm looking at the ups down right now, and I do see the the salary. I think that might just be a cycle, but it is also how we're merging all the benefits together. So it does I do see about the 30 k gross and the $1.30 k g f. So I'll just have to look to see how that roll up is because it's a multitude of different accounts. Okay.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Go ahead. And then from our vacancy rates, this represents where our budgeting at above 3%, but we are also seeing a 5% vacancy rate right now, which we are all we're currently recruiting to fill in those big those vacancies.

[Sen. Andrew Perchlik (Chair)]: And these negative numbers are compared to last fiscal year. Correct.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Moving on in terms of contracts. As the secretary mentioned earlier in her overview of the agency budget, we were making difficult decisions to eliminate efforts that no longer met our goals. One of those was the Medicare advocacy program. And so the purpose of this contract is to assist this agency in recouping Medicare funds for dual eligibles. However, over the years, we have consistently paid more for that contract than we have recruits. For instance, in '24, we had a ROI of 60%. In '25, we saw only 50% ROI. And so while we did have this so one of the things that we were looking at in terms of efficiencies, we felt that this was something that we could no longer afford to move forward. What is BLA statement? Vermont Legal Aid. The second thing you'll see under our contract is the Chief Medical Officer Support Contracts. These are two contracts that we contract for mental health clinical needs as well as for helping with the already increased prior authorizations. And so you see that as a twenty seven thousand general fund, 54,000 gross. There are a number of IT systems. So our managed care, I mean our Medicaid management information system, which is updates and maintenance, which requires us to do some an amendment for prior authorizations and interoperability development that stems from federal requirements, which that means to increase data sharing across and reduce overall payer and healthcare provider administration burden. That request is $150,000 General fund, point one four gross. The second one is our contract with Maximus for our call center as well. And then the last one is the Health HEDIS, which stands for Healthcare Effectiveness Data and Information Set, which is quality measures that we use for quality reporting across both federal and state purposes. We found an inefficiency there using the Medicaid Data Warehouse, an analytic solution, can now provide that functionality. And so we no longer needed that contract. Moving on to our Diva and on our ADS and operating expenses. Here you will see the data warehouse, annualization of maintenance and efforts of 2,120,000.00. General fund total of 8.49 gross. We also needed to increase the cost of our Oracle licenses for clinical, and that is of $140,000 in general fund. And then we also have our general maintenance for our RNN IS system, which is 67,000 in general and final. In terms of operating expenses, again, you've seen that we've discussed this in our BAA testimony. We are renting new states in Pilgrim Park, and that new lease space comes at 159,000 on the general plan. There are kind of two kind of big things, other things that are in our admin budget. HR one is really driving significant changes in our Medicaid eligibility. That will be implemented for January 1. That includes changes to healthcare eligibility based on immigration status, more frequent determinations every six months for new adults, and community engagement requirements for that new adult population. We are estimating a total of 12 new positions that would need an eligibility unit to meet those requirements. The positions will be reassigned from the position pool. And we're also requesting just over a million dollars or $510,000 in general fund for the estimated nine months of the position cost plus the equipment we need there.

[Sen. Andrew Perchlik (Chair)]: To that was that included? Those positions in house budget? Yes.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: There's also changes that impact our operating costs in terms of note more that will have to be more noticing to be printed, and that is an expected cost of 290,000 which is the share of $72,000 in the general plan. The other thing that we noted in our admin budget is the school based services will move to DIVA. Effective ten-one, in that case school based services will be measured by DIVA, AOE, or retained responsibility for Washington and educational policy. Of this, we are requesting a position in our business office. We also will have new school based electronic health record and random moment types on systems that will be implemented on Tim one. And those start up costs for votes are being covered by the Federal Home and Community Services branch for funding. And this system will require some ongoing maintenance beyond what is available in that funding. So

[Sen. Virginia "Ginny" Lyons (Member)]: with the transition from AOE over to Diva, what resources will be brought over to EVA to compensate.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: So we'll have that that new school based position in the business office that will help with the

[Sen. Virginia "Ginny" Lyons (Member)]: But will that come from AOE? They must currently have some management position, administrative position. So are they eliminating a position and we're shifting it over, or is this what what's happening?

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: I think this is a it's an entirely new position.

[Sen. Virginia "Ginny" Lyons (Member)]: I see. I'm phoning a friend.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: But I agree. The whole angle is

[Sen. Andrew Perchlik (Chair)]: doing this clock is this is the administration's proposal. Got it. Know that the house made some change to this.

[Sen. Virginia "Ginny" Lyons (Member)]: Got it. So I haven't I haven't seen it yet.

[Sen. Andrew Perchlik (Chair)]: Yeah. So they so you can come in and talk a little

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: bit more specifically about Okay.

[Sen. Andrew Perchlik (Chair)]: How they changed that proposal a little including the positions of some swap. Okay. Thank you.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: And then the payments to the school district, which is 17,000,000 from special fund. That includes the admin side. In terms of our debug program, but there are baseline changes. Here you see the consistent caseload. This is something that we deal with every year. And so what we're seeing as the factor of the h one, HR one plays a significant role in our caseload calculation this year, specifically for that new adult in general adult eligibility groups. But we are also while we're expecting that decrease in caseload, we are also seeing a general spend in general adults to increase that needed to be reflected in our PMPM. And so while you see that drop in the volume, that higher PM cost is prescribing that higher increase in our case load or in our utilization. The buy in allows states for the Medicare dollars to buy in for the dually eligible beneficiaries for Medicare. Might go otherwise forgo golf Medicare utilization due to cost. So we pick up their cost sharing. The number of month buying costs are determined at the federal level and then tied to Medicare financing calculations. The other one is the Medicare clawback this year. So every year Medicare calls back funding for prescription drugs. This is for state costs. However, states reimburse the federal government. So this is just for typing that we're reimbursing the federal government's costs associated with the transfer of prescription drug coverage. We generally like to try to absorb those costs, but this year we could not. The fourth item here is the annualization of The United States expansion. These amounts are presented as the estimated annualization for that seven months of that expansion up to 150% of the federal poverty level. And then every year we talk about that, we discuss this in BAA, the federally qualified health centers and rural health centers are required to rate change. And so this just reflects that increase of 2.7 adjustment for 2027. And in our next, here we'll see several policy changes. This is a part of our agency executive leadership team. We came together to solve a $75,000,000 shortfall. So the hard decisions were made. One, we'll see this rate increase. This is the only rate increase besides the FQHC and RAC. And this is for the Northeastern Family Institute Hospital Diversion Program. The rate increase proposal is targeted towards that specific youth diversion program, which has had a required rate review. And this increase is a result in that. Well,

[Sen. Virginia "Ginny" Lyons (Member)]: I was going to get to the when you get to the planning rate.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: The family planning rate? You want me to talk about it now? Then we have the applied behavioral health analysis called. This is where we transitioned some, we instituted a policy in our ADA in which we no longer allow concurrent billing for two codes that were inherently included for supervision. And so here you see that changed there. And this is support to kind of come into compliance and reduce our risk as a state. The family planning rate, Senator Lyons, is that we were not able to implement the appropriated family increase consistent with the legislative intent. That's why we recommended removing that in our VA. So this is just a continuation

[Sen. Andrew Perchlik (Chair)]: of

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: that in our proposed budget.

[Sen. Virginia "Ginny" Lyons (Member)]: So I've heard that it has been implemented down here and it's not

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: in That's not been

[Sen. Virginia "Ginny" Lyons (Member)]: ninetyten match.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Not under the there was 100 there was 85,000 of the general fund that was appropriated last year that required us or required us to do that enhanced match, we cannot implement that in the way that it was, that legislation required us to do. And so that's the reason why we cannot implement it.

[Sen. Virginia "Ginny" Lyons (Member)]: So if we can't implement the way the legislation required it, is there a way that we can fix the legislation so that you can do it?

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Yes. So the answer to that is yes. And we have been working with plan care parenthood on on that. What that what that would look like on our end.

[Sen. Andrew Perchlik (Chair)]: So Okay. When we meet, we can talk about it.

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: Yeah. Okay.

[Sen. Andrew Perchlik (Chair)]: Yeah. We wanna know what that change has to bring in to do.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: The third is the per diem for emergency department stays. We recommend discontinuing the per diem rate for mental health extended stays in the emergency department, effective beginning of the next this twenty seventh. This rate was initially implemented in July 2022. As a temporary fix for a response to other crisis, the utilization has since declined significantly and we have run this by our clinical utilization review board, which has also recommended discontinuing due to

[Sen. Andrew Perchlik (Chair)]: the minimum uptake. You're discontinuing entirely or you're lowering the

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: per diem? We're just entirely. We're getting rid of payment. The next one is the dental incentive program or payment. This is eliminating dental incentive payments to providers. The payments were intended to encourage private dental practices to accept Medicaid patients. However, because of these modest payments, we have not seen a measurable increase in access there.

[Sen. Andrew Perchlik (Chair)]: Okay. So what would be an example of a provider that would get this? This is to encourage them to offer dental service? Yes.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: The next one we see is an increase in our prescription copays. We are recommending an increase in copays from dollar 1 for let me get this right. So messed up my numbers. From $1 to $4 for preferred drugs and from $3 to 8 for non preferred drugs. We have not updated our cost sharing since 2000 and

[Sen. Virginia "Ginny" Lyons (Member)]: So going to $8 seems pretty significant for the people we're talking about with who are ex zero income alone. So was I'm just registering that as a concern, and I'll continue to do that. I'm not sure how any of these folks are gonna be able to pay for their prescription drugs.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Yeah, I understand that, Nancy, where you're coming from. These are hard decisions that we made at the executive team level. But

[Sen. Virginia "Ginny" Lyons (Member)]: What analysis did you feel in terms of the effect on the Medicaid patients that we have?

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: On what their out of pockets would be or? Yeah. I mean, so they would still have that out of pocket cap, that 5% cap is still in place. So if they reach that because of the prescription drugs, they wouldn't have to pay anything more than that.

[Sen. Virginia "Ginny" Lyons (Member)]: Let's hope the Vermont prescription drug card goes through or something Absolutely. Changes here. And then it will be important to look at what's happening around this.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Yes. Well, also certain vulnerable groups, such as children and pregnant women are exempt from the cost sharing as well.

[Sen. Andrew Perchlik (Chair)]: Still

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: people. Correct. I understand that. The next the utilization of management. The people cleanup team has engaged in some initiatives related to the efficiency and system alignment, consistent with clinical best practices in areas such as DME, special rate agreements, coding reviews. And so we estimate that because of that we could save about $2,200,000 in birth. The last one is a reduction in our base due to the ACO ending. That used to be, the ACO uses an LPM PMs to about $0.75 per primary care and that because we no longer have a mechanism to send that payment out, this is the reason why we have put in that reduction.

[Sen. Virginia "Ginny" Lyons (Member)]: Can I go back up to so at some point, I'd like to chat with you about utilization management and how you're accomplishing that?

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Yep. We can have that. We'd love to have that conversation with you. And then for one time funding, we have two recommended requests here. One is for required system changes. The budget to implement the HR1 is about $5,000,000 We have grant funding of about 2,000,000 in federal funds, and so we expect the main cost to be a match at the 90%. And then lastly, we are requesting $2,000,000 for provider stabilization to support the stabilization of our providers in achieving sustainability within the system.

[Sen. Andrew Perchlik (Chair)]: And these were in the government's direction and in the House budget? Yes.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: And with that, I have some key accomplishments. One, we have worked really hard. The team has worked really hard to kinda sustain the marketplace. We've implemented the $10,000,000 in provider stabilization that the legislature appropriated to us. We have awarded to, or are in the process of awarding to providers. And so we've come out on the last slide, there was a report that linked to the report on provider stabilization on the work that we're doing there. We ended the ACO, and we report the hospital approval budget, and we had to stand at the market on the Medicare shared savings program. So with that, wraps up my my presentation.

[Sen. Andrew Perchlik (Chair)]: Thank you. If you could just look at that. I think maybe it was only in the first slide where you had the gross numbers that Yeah. Were

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: I'll let him correct it. Thank you.

[Sen. Andrew Perchlik (Chair)]: Any questions for the commissioner? Any last comments? No. Thank you. I appreciate it. And let's see. They're in the hallway. They're in

[Sen. Virginia "Ginny" Lyons (Member)]: the Yep.

[Sen. Andrew Perchlik (Chair)]: Okay. In numbers. Cough. Got

[Kendall Smith, Commissioner, Vermont Department of Labor]: five minute chair massages and cookies in the Statehouse Cafeteria today from four to 05:30. They'll be very happy. Know?

[Sen. Andrew Perchlik (Chair)]: Okay. We're back right by and all that. We're doing our FY twenty seven budget request last of the day, the Department of Labor. So welcome, commissioner. Thank you. And I'll let you introduce yourself and any team members you have and give us your presentation.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Great. And I just wanted to time check thirty minutes is kind of what we're seeing for her.

[Sen. Andrew Perchlik (Chair)]: Yes, we go. Yeah.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So Kendall Smith, commissioner of Vermont Department of Labor, and I'm joined up as Steve Goldbye.

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: Chad Westman,

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: I'm the CFO for the Department of Labor.

[Kendall Smith, Commissioner, Vermont Department of Labor]: And then we also have in the room, depending where questions go, Rowan and Chris, you can introduce yourselves. I'm Jerome Hallford. I'm policy of legislative affairs director of Department of Labor.

[Chris Winters, Deputy Commissioner, Vermont Department of Labor]: And Chris Winters, deputy commissioner of the Department of Labor.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So good afternoon. We have a PowerPoint, but we will try to stay in the casino or thirty minutes that Ron's putting on the screen and I believe will be sent to the community assistant if it's not already for posting or for further review.

[Sen. Andrew Perchlik (Chair)]: Is it the one that's called spending authority, do you have a presentation this one?

[Kendall Smith, Commissioner, Vermont Department of Labor]: This is separate presentation. What you might have in front of you is the more kind of spreadsheet looking document, and ours is a little bit different because our accounting system, PARS, is different than vision. So I know it

[Sen. Virginia "Ginny" Lyons (Member)]: looks sometimes a little bit better? No.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So I know sometimes it looks a little bit different maybe than other agencies and departments based on partners that we'll talk about here in a second. Okay. So I believe everybody in this committee is fairly familiar with the Department of Labor generally speaking. So I'll fly through just the first two sides, which are background. But just as a refresher, I'll start with just facilities and footprint and then get into programs. We have a central office here in Montpelier next to the high school down the street, and that is really programmatic administration and where approximately half of our employees report out of. And then we have 11 regional offices throughout the state. You'll see the location on the right hand side. Those are workforce offices. And what can happen there is people can walk in or they can make appointments in person or virtually for help with job employment training and career counseling type services. So if you want to walk in and say help me with my resume, or I'm looking for a job or I need to practice my interview skills. We also have employer liaisons out of those offices that are working with the local communities on the employer side of the house to understand when they have openings and what they're looking for so they can best match the job seekers that we counsel. Great, we'll go to the next slide. This is just a little bit of the primary org chart, and we'll go through the divisions here as it relates to the budget in more detail. We have the commissioner, we have the commissioner's office, he met a few of those folks in the room today. And then we have four divisions, workforce development, labor market information or LMI, unemployment insurance, workers' comp and safety. Under workers' comp and safety is OSHA, Project WorkSafe, workers' compensation, as well as tramway. We inspect all the school books in the state, which is kind of a, I guess, maybe lesser known aspect of what the Department of Labor does. Then we also have a legal office as well as a business office, which Chad heads up. Attached to us in statute, although they are independent in terms of their authorities and what they do but for kind of administrative support and services, is the Office of Workforce Strategy and Development, which is a newly created office that the legislature put put in place about two years ago now that's headed up by Sabina Haskell. They are not here today. We will cover their budget for them. It's pretty straightforward but depending on any questions you have there, we'll do our best that we might refer you to speak directly with Subina since they are independent in case we miss anything. There's also four boards you'll see in the corner that are statutorily connected to us that we oversee the passenger trammer board, again connected with C list, the apprenticeship advisory board, the labor relations board nominating committee, and the employment security board, which is a UI appeals level that you

[Sen. Virginia "Ginny" Lyons (Member)]: can go through. Go to next slide.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So I just covered again our main scope of jurisdiction and work. I won't necessarily read through that again. We have two sixty three clinic positions, permitted and limited service. Our current vacancy rate is 12.55% or 33 positions, spread across the divisions and we can see how that breaks out as we go How

[Sen. Andrew Perchlik (Chair)]: does that compare to past years or since you've been there?

[Kendall Smith, Commissioner, Vermont Department of Labor]: This is mostly regular churn. I will say this is a little bit higher than what we even presented in the house because we have some openings in UI and because we are eighteen months away from launching a whole new UI IT system, we're building off on making a couple hires, and it's not gonna make sense to train people in the old system for a month when that train is even longer than that, and then retrain them in the new system this spring summer. So this is even a little bit higher than what we present in the house and primarily for that reason. But otherwise, it's mostly regular churn. We are this year, right now, as we sit here, about 50% federally funded. That is actually down a little bit from when we were in last year because we had a major federal grant called the Routine grant that totaled over 22,000,000 ish approximately that is ending with a six year grant. So that number last year would have been a little bit higher. Again, as we sit here, we are reliant about 50% on federal funds. And you can see how that's broken out in the pie chart on the screen. In terms of where are the big flashes in the pans here that we wanna highlight for you, this is one of them. We'll go through what we know and what we don't as we continue to talk, but we currently do not have our current federal fiscal year allocations.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: So

[Kendall Smith, Commissioner, Vermont Department of Labor]: we do know the US department '26. Correct. So we're about halfway to two thirds of way through our fiscal year of October through September, and we do not yet have our final allocations.

[Sen. Andrew Perchlik (Chair)]: You don't have the money or you

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: don't have the number for both?

[Kendall Smith, Commissioner, Vermont Department of Labor]: The currently operating operation resolution.

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: Yeah. A little bit of both. So so we have access to dollars, but we don't know the full amount of what those dollars So we've been operating our programs under the continuing resolution numbers, and we don't know yet what the real numbers are going to be. They haven't divvied up the pie, so to speak, from when the budget was signed in June at the June.

[Kendall Smith, Commissioner, Vermont Department of Labor]: We do have some perspective, though. We do know what the the massive UFD well budget is and where there's downs. So while I cannot promise anything, I'll talk about that a little bit more. I'm not in a panic situation where there are downs because some of these downs are about $10,000,000 a program overall. That divided by 50 states and territories may not end up being so bad and something that we can can work with. But we'll we'll get to do this again this October. So that's where we're getting a little bit what's the reconciliation when we sit before the next year going to look like if we don't get our final allocations until July, August. Chad's been reaching out to the regional office weekly and sharing case some of the very direct emails about how this is very hard for us to plan and our legislative session is progressing and they're like, we know and appreciate your patience. All right.

[Sen. Andrew Perchlik (Chair)]: Okay, good luck.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Thank you. We can go through a little bit more about where to look out. This is really just kind of a calendar year 2025 mostly service year in review. In the event anyone's interested in, I just went through some programs that how many Vermonters are we actually interacting with at least in calendar year 2025.

[Sen. Andrew Perchlik (Chair)]: I will read every one of

[Kendall Smith, Commissioner, Vermont Department of Labor]: these numbers. You all can kind of peruse them. And if you see something that interests you, obviously, let me know. In track, you've got over 25,000 UI payments in terms of self-service through workforce development, 10,500 for monitors. Case managed, so again a higher level of service is the top three bullets that you'll see five in the cohort depending on our federal funding streams. So just thought that might be a thing.

[Sen. Andrew Perchlik (Chair)]: Yeah. So, Nora.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Unpaid tips.

[Sen. Andrew Perchlik (Chair)]: How do you how do you direct that?

[Kendall Smith, Commissioner, Vermont Department of Labor]: So wage and hour, is that where you're looking right now? Unpaid tips. Yep. So this is mostly complaint based. So if you feel like you worked overtime and you were not paid or you are owed tips or any number of these things, I have my employer is not giving me the sick time that I've accrued and I'm guaranteed by law, etcetera, etcetera. We will reach in our legal team that goes in and investigates those. And sometimes there are findings, sometimes there are not, depending on the investigations. And, Rowan, I believe this is the number, because I know you have folks together, is just why I'm looking at you of complaints that we received that we did investigate. That's my understanding as well. Yes. There may be more complaints as well

[Sen. Virginia "Ginny" Lyons (Member)]: about

[Kendall Smith, Commissioner, Vermont Department of Labor]: the investigation. There's a couple different types. There's a full investigation, and then there's just reaching out to people who are saying, hey. There may be a misunderstanding. This is something that needs to be fixed. That's very frequently how that is actually fixed. So my apologies.

[Sen. Andrew Perchlik (Chair)]: They can do an anonymous.

[Kendall Smith, Commissioner, Vermont Department of Labor]: You can, but we can't do as much to help you if you if you figure out how to contact us anonymously. There's less

[Sen. Andrew Perchlik (Chair)]: Well, just so that you don't have to tell the employer who who it was that complained. Correct. Correct. Again. To the employer, not to you. Yeah. Are there fines involved or is it just corrective action?

[Kendall Smith, Commissioner, Vermont Department of Labor]: No, there can be fines. Depending on what we are.

[Sen. Andrew Perchlik (Chair)]: Yeah. And were there any of these that like were different from past years? Because I don't have context.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Would need to get back to you on the trend line if wanted us to compare that year over year. I can say we answered a similar question for house general maybe back in January and when we looked at it at that time we weren't seeing big swings. It

[Sen. Andrew Perchlik (Chair)]: was only once you get to COVID then everything crazy.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Yeah. It can take COVID out of out of the track. Yeah. COVID is going to especially for the family versus like all of our programs in terms of activity. Right.

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: Okay. Yeah.

[Sen. Andrew Perchlik (Chair)]: Yeah. If you happen to have any interesting Okay. Alright.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So now we're gonna get into our budget a little bit more granularly by division. And if, again, anytime you guys wanna say, like, move it along, just let us know. So the Workforce Development Division is what you can see here first. They have approximately 75 staff, currently nine positions vacant, but some of those are posted and under recruitment. Again, we have those 11 regional offices across the state, so I characterize the majority of that as regular churn. The work that our workforce team does in terms of core services is primarily federally funded. So this is one area that I'm very anxious to understand what our final allocations are. So all of those regional offices, when we are case managing people, all of that is primarily through what's called the WIOA funding or the Workforce Innovation and Opportunity Act, more commonly said as WIOA. And there's been several proposals taken out by the way around potentially changing that and changing the construct of it to a block grant where maybe there'd be more flexibility in terms of how you can respond but also overall less funding, how the House and the Senate initially were concentrating, changing that program differed significantly, also significantly how from the Trump administration is proposing. At the end of the day, there are not significant changes in WIOA in terms of what the US DOL budget currently looks like, but I'm not confident that that will be the case always as this conversation continues over the next two or three years. So under here on the slide you can see discrete amounts of money. These are all program line items that we get federally funded to serve these different populations. And then under that,

[Sen. Andrew Perchlik (Chair)]: you can see What's next slide?

[Kendall Smith, Commissioner, Vermont Department of Labor]: No, so federally funded programs. These are all youth employment services, Dislocative Workers, Refugee, Immigrant, Registered, Apprenticeship, and then a program called Reimbursement Services and Eligibility Assessment or RESEA. We say all the letters, we don't make it into a word on that acronym. But that is a federally required function where there's an algorithm for UI recipients. And if you are identified as potentially being at risk of maxing out your benefits, you get mandated to participate in employment counseling and you have to do these counseling sessions with an RESEA service provider in order to continue to receive your UI benefits. So is that a federally funded service provider? Yes. Yeah. Okay. And then the state funded workforce initiatives that we have are underneath. Yep. It's all federally funded, Or underneath. So work based learning, adult CTE, a workforce expansion pilot. We do a lot of sector work, job fairs. In Vermont, JobLink is our case management system.

[Sen. Andrew Perchlik (Chair)]: And is the general fund like the same as last year? About 3% kind of increase? Yes.

[Kendall Smith, Commissioner, Vermont Department of Labor]: I

[Sen. Andrew Perchlik (Chair)]: see you have refugee and immigrant services in there. Mhmm. The way the trends are going today, expect to see any additional funding for that particular line item or?

[Kendall Smith, Commissioner, Vermont Department of Labor]: I do not want to forecast Congress, but no would be my gut reaction in terms of additional funding. Next slide. So again, this is in terms of what we know and what we don't around our federal fiscal year '26 funding levels for all of these activities. So in terms of what's in The US UOL budget that was signed, sorry, I should have adjusted this top line when we did this in the house. We were still working off a conference report that had not been fully passed. But there's no changes in terms of the numbers underneath. The WIOA adult line item is down 10,000,000 So that again is money when somebody, if anybody in this room was to walk into one of our regional jobs centers and say, I'm looking for employment, and here are my barriers, and here's the type of support I need. If you're eligible for WIOA funding, there are some socioeconomic indicators and factors you have to meet. That is what that staff will build their time to when they help you. So that program across everything in The US DOL budget is down 10,000,000. I'm not necessarily super So nationally this this 10,000,000 down is somehow gonna get eaten up by 50 states and territories. A lot of the stuff is all formulaic, and we basically get a small state minimum.

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: We get a small state minimum. To put that into context, $10,000,000 down is 1% of the entire wheel of budget for

[Sen. Andrew Perchlik (Chair)]: the company.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So this may not be at the end of the day something that I'm coming back to when we get our final allocation super concerned about, but I do think important to eliminate National activities underneath that is a hodgepodge of programs, but ones that you can kind of wrap your minds around is our seasonal farm work program that we help administer through H2A. We have the Instant Housing with who are hosting H2A farm workers. And we also have advocates that go out and meet with those farm workers and make sure that they don't have complaints, that they're comfortable. So that's, this is kind of like in a variety of, hopefully, of things, but that is probably the most significant program on. That RCA program I just talked about is up 79,000,000. I think that trends with, again, this administration and Congress's goals of moving people off of benefits, where again, if you're going through RCA, the goal is that you are successfully moving off of UI benefits and finding more employment. So we will likely get an increase in funding for that activity, CBD, how much. We talked about how it's formulated and again, all of these things are national, so hopefully they will not be too significant for us. Where money is also raining down federally to states in certain ways is for registered apprenticeship. All these things you see listed under here are monies that are not going to labor departments, but the federal government has made competitive grant programs for businesses and intermediaries to receive directly if they are hiring and utilizing registered apprentices or starting registered apprenticeship programs. So that is actually great. Apprenticeship is a shared priority for us, for the department, something that the state and we've worked with the legislature on in the past in terms of expanding registered apprenticeships and promoting that pathway to employment. So we are promoting these opportunities to Vermont employers that they could be taking advantage of these. The first one just as an example is a tax credit that manufacturing companies can apply for. It's pretty significant and I apologize I do not remember the exact amount unless you do from all the times we've said this per manufacturing apprentice or credits that they bring on, but it's a couple thousand dollars per registered apprentice that they hire. And we expect this to continue. So I wrote more to come. We keep hearing that signal there's gonna be more commission money available. Okay. So I think I

[Sen. Andrew Perchlik (Chair)]: just do a quick question, commissioner, under

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: the select industries. Do we have a lot of those in Vermont or Last third

[Sen. Andrew Perchlik (Chair)]: line down here?

[Kendall Smith, Commissioner, Vermont Department of Labor]: I'm sorry, where

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: are you looking?

[Sen. Andrew Perchlik (Chair)]: Last one hundred and forty five years.

[Kendall Smith, Commissioner, Vermont Department of Labor]: The next to the last bullet.

[Sen. Andrew Perchlik (Chair)]: Select industries. Sorry. So yes, we do have some

[Kendall Smith, Commissioner, Vermont Department of Labor]: of those in Vermont. However, they do seem to have a focus on shift building, which we do not do in Vermont in a lot of these, but AI needs to be a focus as well in terms of what can be done around apprenticeship and AI manufacturing trades,

[Sen. Andrew Perchlik (Chair)]: but the

[Kendall Smith, Commissioner, Vermont Department of Labor]: ones that we do see popping up as being priority points when people are hired for things like

[Sen. Andrew Perchlik (Chair)]: What about airships? What about electric airships? Electric? Electric airships.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Oh, electric airships aren't really great. No, but I mean, I personally support that if they were to create a program that could support that industry. Alright. So the other thing I'm getting through kind of like the heaviest stuff first, and then it goes a little bit maybe more quickly from here. The other thing that's notable about our budget, in case you have questions, is there were several one time funds that were reverted to the general fund when the governor proposed his budget outlined here. And I'm happy to walk through those. And there are just again being a newer commissioner and there are new staff kind of working through the chain of events and some of these very much predate a lot of members in this room time. So the returnship program, some of you in this room might remember that it was from calendar year 2018. And it was funding to support people that had been out of the workforce for a long time returning to the workforce where they might need to upscale or brush off their training. So thank

[Sen. Andrew Perchlik (Chair)]: a

[Kendall Smith, Commissioner, Vermont Department of Labor]: mother who took time off to stay home with her kids for ten years and then is returning to the labor force after ten years of being a stay at home mom. Should we do any additional training or

[Sen. Andrew Perchlik (Chair)]: It's just like $75,000 original.

[Kendall Smith, Commissioner, Vermont Department of Labor]: It was 75,000

[Sen. Andrew Perchlik (Chair)]: Or rendering or something.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Where do I

[Kendall Smith, Commissioner, Vermont Department of Labor]: see this here? So no, it was

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Pretty small.

[Kendall Smith, Commissioner, Vermont Department of Labor]: I'm sorry. So we have 37 plus 33. 75, is that what you're getting at? Yes. So we, the department, spent $33,000 We did not spend approximately $38,000 And in the context of our budget, this is adjustable to us, that was reverted. There was a pot of money from, again, calendar year 2019 that we had, 70,000 for post secondary and new Americans. Act 80 was the budget number that year, and we looked and we looked and we could not find the policy language. We were trying to figure out what is this to go with it. So unfortunately, I will just be totally transparent and accountable. Do not have a good answer for you about what this money was intended for and why it did not get out from the department. We could not find it's on the budget. We found the money in the budget. We could not find any Any language. Any language from all the like, most likely committees and bills.

[Sen. Andrew Perchlik (Chair)]: Sounds like some JFO wanna research. Yeah. Well, again, so 70,000, I think you have a

[Kendall Smith, Commissioner, Vermont Department of Labor]: hard on that rabbit hole you wanna go. The next three, I understand again, are a little bit new year. So $275,000 was appropriated to the department also in Act 80, which is the budget of 2019 to support apprenticeship training, post secondary CTE, through workforce education and training funds. We have a lot of other money that we use currently to do this work. And this unfortunately did not get extended and we relied on additional funds. And I'm gonna point out one of those a little bit here in a second. But we do have a whole separate apprenticeship program line item that's nearly a million dollars, just like to juxtapose the apprenticeship could have been used here, but we also have another million dollars until we leverage other other funds.

[Sen. Andrew Perchlik (Chair)]: Okay.

[Kendall Smith, Commissioner, Vermont Department of Labor]: The new American labor force money, this was actually a pass through to the state workforce development board at the time from the department. I do have some historical knowledge of this from my prior role, where they put out a bid for a contractor to help try to identify goals in terms of employment supports for new Americans and create programming and resources. They did not get any bids on the RFP. And then the state workforce development board turned over, the executive director turned over, the new office was created. So that got reverted. And then this last one is the biggest one where I understand that you have the most questions. This was about a million dollars for workplace learning programs and initiatives. At the same time, we received an additional allocation of 1,500,000.0 to support workplace learning initiatives. And we did fully extend that bucket and had not gotten to now the next million dollar tranche that was allocated separately. So that was also swept.

[Sen. Andrew Perchlik (Chair)]: Okay.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So all of this money was re socialized for other priorities in the governor's proposed budget. As you know, that becomes a giant pool, so there's no strings I can draw. But we're very supportive of most of things in that budget that will support workforce housing All right, next slide. Labor market information. LMI, if you've ever heard Matt Baruth speak, for example, he's the director of that department and some of our state economists. He is very engaging and great at what he does. So they currently have 11 positions. They have one vacancy. This person just left to be a supervisor at AOT like two weeks ago. So we're very happy for him in terms of his own career progression. And we'll be getting that agency posted here soon. This division is also primarily federally funded, similar to workforce that you just saw in terms of their base activities. There is a grant, one of many grants that they received from the federal government called the Workforce Innovation Grant. And that one is down again nationally 9,700,000.0, same story, not sure how that will be socialized across the 50 states.

[Sen. Andrew Perchlik (Chair)]: And these ones, these other divisions would be good if we had elected last year's comparison.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: In a sense, we'd have that in

[Sen. Andrew Perchlik (Chair)]: the year for that second.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Going with this compensation and safety, Again, this encompasses four different programs at the end of the day, workers' comp, Project WorkSafe, passenger tramway, and OSHA. Then each one of those is funded differently, where workers' compensation is almost all special funded or entirely special funded. And then OSHA is 50% state, 50% federal, and we match and we overmatch. Correct, Chad? Slightly overmatch. We're slightly overmatch. What's our match there? It's not

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: a normal ninetyten. For work safe, it is about eighteen and twenty.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Eighteen, twenty two? Yes. And same for OSHA?

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: OSHA is a fiftyfifty. And then we we slightly overmatched more than 50%. Percent.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Okay. In terms of federal impact here, there's again a 13,000,000 reduction to USCOL enforcement agencies including OSHF, but that is other things too. So we are waiting to hear how that ultimately impacts OSHA. But again, we're continuing same story, different division. We hopeful that this will not be dramatic for us and we can absorb any of these downs.

[Sen. Andrew Perchlik (Chair)]: Okay.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Then our last kind of our last will be here, unemployment insurance. About 81 staff, 15% vacancy rate. That again, going back to the beginning, and we'll talk about who wanna know around the status of UI modernization projects, launching a new system imminently, and we're thinking it doesn't make sense to bring people on eventually a member of the old system before the new system comes online. But UI, we get all of our administrative funding for UI from federal dollars. So all of our staff salary can I jump in if I interrupt you? But all of our staff salary for this is all those federal admin dollars. Mhmm. And we're waiting for our final fiscal year allocation. UI admin, again, in the US U of L budget itself was level funded, which in this environment, I think is in, but we will see how that trickles down. We normally receive about 10,000,000. And so we're hoping that we again receive that 10,000,000. And I'm not sitting in front of you in a few months saying we only got 8,000,000. And we now have to figure out how to make up that $2,000,000 pool for this. That was essentially an admin work.

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: And just one one small clarification,

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: we do receive some general funds for

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: the UI program and that's for our modernization efforts, our staff members on the modernization. Okay.

[Sen. Andrew Perchlik (Chair)]: That's what that 5,000,000

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: is? Correct.

[Sen. Andrew Perchlik (Chair)]: Is is this the area you were talking about? You're not filling vacancies because of the donor stations. So you were at six positions, and you're now at 12.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Yeah. We get a lot of churn. So there's multiple different programs here. So I think our UI call center, high burnout rate, answering phones all day, taking those planes. Then there's also broad mitigation program integrity. You can see kind of the list of their other activities here. And so some regular churn, but again, we will fill these. Our plan is to fill them. It's just let's wait another couple weeks before we post them because, again, bringing some knowledge to train them in the new system and a bit of forget everything you just taught me for four weeks isn't gonna be a good use of their time or ours. All right. The business office, we can I see I'll print this slide? Chat, unless there's anything you wanna add here, but they're funded by socialized contributions across all the programs and department. Okay.

[Sen. Andrew Perchlik (Chair)]: Yeah. Alright.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Do you wanna know about our single audit?

[Sen. Andrew Perchlik (Chair)]: Unless there are some crazy findings. Nope.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Don't know if you wanna give, like, just a two second summary.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: No. Think that's

[Sen. Andrew Perchlik (Chair)]: fine. We won't stop trying.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Alright. Yeah. So then the last thing you should have this is small, and you may have it as another spreadsheet as well. Starts to get into where you wanted to know what was last year's budget compared to this year's budget. So for again, I'm not even gonna like, I know you guys probably can't read those numbers right now either. So you're asking about our general fund, that is socialized, that 3% increase just across all programs where we can put it with the exception of SLAs and internal service fees. Those are going up. So the governor's office and finance and management, I believe gave everybody that's been on behalf of my colleagues a little bit more in their ISS and SLA lines. But otherwise, that 3% is kind of equally spread across all of our general funded activities. Thank you. And for that, remember, the other place that's more than 3%, again, is that office of workforce strategy and development is a new office. Since we were here last year, there was one person when we were in last year. There's now two, and there were two positions authorized for that office. Those two individual salary and benefits are much higher than their predecessors. So they actually had a deficit, and it's a very small budget to start. 200 and something. Do you remember the So it's 200 and something. So there is an up to fill. I think it was a $51,000 deficit there based off their operating expenses.

[Sen. Andrew Perchlik (Chair)]: Yeah. And even though we can go through those and figure out what they were last year, it's difficult. So it'd be nice if if you're gonna do these tables, you have FY '26, you know, the prior year and then this year. On the

[Kendall Smith, Commissioner, Vermont Department of Labor]: next sheet, if this doesn't change

[Sen. Andrew Perchlik (Chair)]: Even on the next sheet. Okay.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So I don't know if it's

[Sen. Virginia "Ginny" Lyons (Member)]: on the if you so we will get

[Kendall Smith, Commissioner, Vermont Department of Labor]: this to you if it's not in your current packet in front of you. But yes, this has the last year added past compared to this year.

[Sen. Virginia "Ginny" Lyons (Member)]: Yeah,

[Sen. Andrew Perchlik (Chair)]: I know you can see it there.

[Sen. Virginia "Ginny" Lyons (Member)]: Yeah, I can see it there.

[Sen. Andrew Perchlik (Chair)]: But you have to total it up. Like, you don't just see

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: the number.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Oh, a grand scheme? We

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: we can do that. What so you're asking for each division's total per

[Sen. Andrew Perchlik (Chair)]: Yeah. Like, you had these little tables in each thing. If you have that, but for FY '26, it's a lot easier to just do.

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: That's an easy thing to do now. So

[Kendall Smith, Commissioner, Vermont Department of Labor]: that is really the the end of the dollars and cents story. The other things that we can share with you, depending on what you're interested in or not interested in, is UI modernization. Deputy commissioner Wintershall has really been diving in this time to its UI team. That is our single biggest priority this session, is to make sure that new system launches well. It is slated to schedule sorry, to launch spring summer twenty sixth. We're not saying an exact date yet, but we do have one in the contract who's been very strong with our vendor. It's important to us when this launches. We're confident in it and it goes well.

[Sen. Andrew Perchlik (Chair)]: What's the name of the system?

[Kendall Smith, Commissioner, Vermont Department of Labor]: That's a that's a great question that we've been noodling on. Okay. The new UI system. Yeah. How

[Sen. Andrew Perchlik (Chair)]: about you?

[Kendall Smith, Commissioner, Vermont Department of Labor]: Fast. Fast is our vendor, and we call the project itself Fuse Okay. In terms of the project name. But

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: We're talking about

[Sen. Andrew Perchlik (Chair)]: the proper name later.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Yes. In terms of, like, we're now it's the new UI system. Our current UI system, this might sound familiar to you all, at 55 years old, it uses COBOL. And I'm not exaggerating when I say there's very few people that know how to program it, and you really can't do much with it at

[Sen. Andrew Perchlik (Chair)]: this This been a problem for years. Yes. So you just start but you this has been going on for a few years.

[Kendall Smith, Commissioner, Vermont Department of Labor]: This Yeah. This well, this phase started in calendar year '24.

[Sen. Andrew Perchlik (Chair)]: This phase so there's prior days really tall. When did you sign the

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: contract with that? Have that. I wanna say '24.

[Kendall Smith, Commissioner, Vermont Department of Labor]: We started '24. So there's

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: there's preliminary work for that.

[Sen. Andrew Perchlik (Chair)]: And you're saying on '27? No.

[Kendall Smith, Commissioner, Vermont Department of Labor]: It's gonna launch imminently in in February. But but we while we're not publicly announcing a date yet, we will invite all of you to any sort of maybe ceremonial ribbon. I don't know. But we'll make sure it works first. Event before we stick to football here is we've been again, we've been very strong with our vendor that this needs to work well. And so if we need more time, we need two more weeks to test or two more weeks to train our employees, we're gonna take that and make sure that this launches as smoothly as possible. There will eventually be an announcement about the dates, but I'm just Is not prepared to

[Sen. Andrew Perchlik (Chair)]: is it been on budget?

[Kendall Smith, Commissioner, Vermont Department of Labor]: It has been on budget so far in terms of the money that you all appropriated to build it and to implement it. We are now in the phase where we are considering those out year based cost of licensing fees and kind of with the vendor, what are they on the board moving forward or not when we need updates.

[Sen. Andrew Perchlik (Chair)]: What was the total cost?

[Kendall Smith, Commissioner, Vermont Department of Labor]: For the hold on. Unless you have that at your fingertips. In terms of the implementation, was 30

[Sen. Andrew Perchlik (Chair)]: Remember, think we put money aside a couple of years in preparation Or for

[Kendall Smith, Commissioner, Vermont Department of Labor]: we just didn't have it at your fingertips in our ABCIC

[Sen. Andrew Perchlik (Chair)]: Is there an old mainframe that you push off the top of your building? You could be good.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Yeah. I'm concerned. Nobody our staff again, this is gonna

[Sen. Andrew Perchlik (Chair)]: More people would come to the river, though, cutting Yeah.

[Kendall Smith, Commissioner, Vermont Department of Labor]: See that. Maybe we could, like, sell tickets or something.

[Sen. Andrew Perchlik (Chair)]: We have

[Kendall Smith, Commissioner, Vermont Department of Labor]: a chance to, like, whack

[Sen. Andrew Perchlik (Chair)]: it. Yeah.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Right. This is gonna be really important for our staff morale as well as for Vermonters and the claimants, and, hopefully, for you all, where when we're sitting here next year, you'll be able to say the amount of constituent outreach I've received with people struggling with their UI claims has significantly decreased. That is what success looks like to me.

[Sen. Andrew Perchlik (Chair)]: Well, it's still bad during COVID. Anything is getting better. Yeah. Yeah. The amount of calls we got. Yes. So

[Kendall Smith, Commissioner, Vermont Department of Labor]: we're currently on time. Again, that's imminent. It's like sixty to ninety days away. So more to come there. And when we came into the start of the session, I was telling everybody this is our single biggest priority and unfortunately, it overlaps with your session in terms of the real crunch time in terms of why you may not be seeing us in prayer every day. So we're focused on that project. Otherwise, again, we have very little that we have been practically advocating for this session. We've been trying to support the education transformation conversations as we can, specifically around CTE and adult CTE in terms of where does labor and education overlap on a Venn diagram. We do have some registered apprenticeship technical corrections that will be moving their way through the process. I know you just had Diva in here, so Daritya, but we've been working a lot with our counterparts at AHS prepare for the work requirements that will kick in this winter and how our regional offices can be supporting people if they need to find employment in order to continue to receive their benefits. So that's been a body of work unto itself that is going on behind the scenes in the backdrop of everything else. HIT is going

[Sen. Virginia "Ginny" Lyons (Member)]: to be so and it generally so important. It is how you're going to do it.

[Kendall Smith, Commissioner, Vermont Department of Labor]: I know. And again, I we've been very lucky with the addition of deputy commissioner Winters coming from AHS and some of these spaces to help us really bring these two puzzle pieces together from labor and the agency of human services to

[Sen. Andrew Perchlik (Chair)]: because they're getting 12 new stuff, but you're not getting any expense to deal

[Kendall Smith, Commissioner, Vermont Department of Labor]: with that. No.

[Sen. Andrew Perchlik (Chair)]: Do you have any last words about the early college program and Oh. How you see that as

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: workforce development?

[Kendall Smith, Commissioner, Vermont Department of Labor]: Yes. I do. So thank you for bringing that up. Just to backtrack, so there is I I believe you're referring to the prayer promise Well, And then Or

[Sen. Andrew Perchlik (Chair)]: There's just been more discussion about early college. People want to get rid of it.

[Kendall Smith, Commissioner, Vermont Department of Labor]: Okay. So

[Sen. Andrew Perchlik (Chair)]: Okay. But they don't know. Well, do you have any thoughts on that?

[Kendall Smith, Commissioner, Vermont Department of Labor]: Yes. So from the Department of Labor perspective, whether it is early college or like I mentioned, the third promise program where you can get your associate's degree after doing early college, we are fully bought into those remaining options for Vermonters and for our students, especially when we look at our matriculation rate into higher education and training being less than fifty percent right now. And we're trying to get a better handle on where are the other youth going. And if you break that down by gender, it's even less. We're only thirty percent of our males are matriculating into higher education and training at this moment after they graduate high school. They need to have more ways to keep students engaged in their futures. So whether that's early college, whether that's pre apprenticeship, whether that is making that associate's degree accessible, and accelerated through things like the McClure Promise, know they have two more years of philanthropic dollars going into that. When we think about our workforce expansion goals, and we know every sector right now has a crisis where it doesn't matter if I'm visiting a manufacturer, or a farm or a food processor or a hospital, everybody's telling me, I can't find workers and I will train. Just give me somebody that shows up every day to make eye contact. That's my bar right now and then I will train them. So we're constantly thinking about how we're retaining more youth in our state. Again, there's not a lot of them out of our public school system, we're only graduating something like 5,000, maybe 400 kids a year total. And so if you then back down there, only 2,500 ish I'm using our numbers are both higher ed and training. We want to make sure that we're equipping everybody for their future and to be successful in our communities and in our labor force and in all the sectors. And so also think about how Act 77 flexible pathways comes into play here. I think this is the moment if we are bought into flexible pathways and we mean that, then we've got to mean that. And you have to have these options like early college or pre apprenticeships or internships or face learning opportunities, all of them for our youth and not be so focused only on what's happening in the four walls of our public

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: schools. Sorry.

[Kendall Smith, Commissioner, Vermont Department of Labor]: I know that. I'm very sorry.

[Sen. Andrew Perchlik (Chair)]: Good. Well, thought you may have an opinion about it.

[Sen. Virginia "Ginny" Lyons (Member)]: For a second. And Pathways fits in with that as well because you can direct kids can just find a directed pathway Mhmm. To something that maybe it's not college. Right. Maybe, you know,

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: so yeah.

[Sen. Andrew Perchlik (Chair)]: Is there a

[Sen. Virginia "Ginny" Lyons (Member)]: I'm totally

[Sen. Andrew Perchlik (Chair)]: early college version for CDs? Like, if somebody says, either can't get into CTE There is some kind of apprenticeship.

[Kendall Smith, Commissioner, Vermont Department of Labor]: There is. I've heard of the full fast forward, but I would need to double check that. I'm not thinking about using that with an ad program. There is and there has been this is where I'm getting a little bit over my seas, so I just want to acknowledge that and we need to dive in a little bit deeper with the Agency of Education. But there I know there has been some kind of questioning about how well is that program working, both for the students and for the CTE centers themselves, both from a funding perspective and when they see the CTE kids for their second year, their senior year go off to early college, it makes it harder than to offer those programs in the second year in the school because they're losing the bodies. But I don't think that's a reason to not offer those other opportunities. Just have to

[Sen. Andrew Perchlik (Chair)]: figure out Those are kicking, usually are kicking. They don't have other options.

[Kendall Smith, Commissioner, Vermont Department of Labor]: We just have to think bigger about how then to make the system work.

[Sen. Andrew Perchlik (Chair)]: Okay. Thank you. Yes. I don't know.

[Deshaun Rose, Commissioner, Department of Vermont Health Access (DVHA)]: Just a quick question. So

[Sen. Andrew Perchlik (Chair)]: in case I missed it, where are you the governors recommend below percentage percentage wise?

[Kendall Smith, Commissioner, Vermont Department of Labor]: What came to you is exactly what's in the governor's recommend for labor. If that's so

[Sen. Andrew Perchlik (Chair)]: Under the 3%.

[Kendall Smith, Commissioner, Vermont Department of Labor]: So under three b or 3%.

[Chad Westman, Chief Financial Officer, Vermont Department of Labor]: No. With with the SLA ops that that the Commissioner mentioned and with the ups from the Office of State Workforce Board, we're up at about 4.78% over last year's general fund budget.

[Kendall Smith, Commissioner, Vermont Department of Labor]: It does however mirror what is in your budget that came from the House is exactly for labor laws and the governor's recommends.

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