Vermont Legislature SmartTranscripts:

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Hello, punk breeds. It's on s 50 1. Nice to see you all. Today is some date. Twenty eighth. Glad to be here with you. We have two days left to wrap this up, and I have faith in the six of us that we can do that. I understand that the senators are bringing a proposal of amendment.

[Sen. Ann Cummings, Chair, Senate Finance]: We have one senator.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Oh, it's not a okay. This is not an offer from the no. Conferees. Okay.

[Sen. Randy Brock, Member]: Just one senator.

[Sen. Ann Cummings, Chair, Senate Finance]: Go forth, senator.

[Sen. Randy Brock, Member]: Alright. You should have a copy of some proposed language, but let me just summarize what it is that I'm suggesting that we do. I'm suggesting that change is to eliminate the elimination of this benefit at $120,000 at the beginning of it and a complete elimination of it at 175,000 That's the first thing. The second thing is I'm suggesting that we add a provision to prohibit the veterans payments for going to people who have dishonorable mischarges or bad conduct. Someone on the ladder that you raised with me today is something that I have not thought of before coming in today. That was that your committee, I believe, had discussed the issue of potentially having this apply on a gender basis to people who were discharged under the new Trump administration provisions that don't allow transgender people to serve, and that was not the intent of this amendment. And so it's one of the things that I think we should back up on that particular opposing to make sure that it does not inadvertently link in people of that category. Those, I'm personally positive, do not include people who are dishonorably discharged. And it's the dishonorably discharged that I'm most concerned about is I don't think that the law should be paying people who are thrown out of the military, typically for criminal convictions of serious crimes. And those people should be based on the discharge certificates that have to be presented or some evidence discharge has to be presented in order to get this benefit. They would be easily picked up. It's not an administratively difficult thing. The former issue and the reason for the request to have the committee consider not posing an income limit is because of those states, we're in a competition. And right now, as we talk about the major problems that Mark faces, housing is the one we talk about a lot, but there's also a demographic crisis because we don't get the people that we need to fill these jobs. And as we go through this list of jobs and then you match them to a lot of the military occupational specialties, you find a lot of people fit into this category. When we think about income, we have to remember that we are thinking about family income because that is how people file taxes. They don't file as individuals. A substantial number of people who retire from the military retire and relocate with their spouses. And you think about incomes, we talk about teachers right now. It's one of the categories of people that we need in addition to nurses and construction workers and linesmen and so on. That teacher average teacher salaries in Vermont right now are about 60,000 a year, at least that's what's being reported. So an individual retiree who effectively is a teacher, he's made less the first year, but he will make more the year afterwards, As a spouse who's also a teacher and that person, let's say, is making a sixty year, you already are at the limit with the salary of two teachers. And that means that the benefit is not nearly what's intended. And we recognize that as the only state, the only state us that has not the entire exemption, we're at a disadvantage because once we put that cap on, it says that if you're going to work and what we're our target is to treat this as an economic development tool as well. Our target is the person who is working, who's gonna retire in the late thirties or early forties, and has a career ahead of him or her. That career should be a career that matches what we're doing at the moment. Our discussions with ACCD and with the Department of Labor is focused on attracting. In other words, not just simply offering a benefit that lies on the table for someone to take, but to offer a benefit that uses advertising, that uses contacts with the transition people to military bases and the like in order to attract people to the robot much in the same way that we use the stay to stay program and other kinds of programs to attract people to Vermont to work here, to fill that void that we have. To do that, we need every tool in our toolkit that we can. This is a tool that will make us at least competitive with the rest of the nation. We would be, at this point, even if we adopt what has been proposed by the House, we we will be the last state other than California and the District Of Columbia that does not offer it. You know, benefit.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Senator Brock, I appreciate that argument. I think there's a question about whether or not expanding the benefit is germane to the committee of conference, given that's certainly not between our two positions. It's the expansion of the House's position. But I'd love to actually spend the second amendment seems something that I think would be helpful to discuss a little more because we spent a great deal of time on that question.

[Sen. Randy Brock, Member]: Well, argue I that it is, Jermaine, that when you have in a particular dollar amount to restrict it, there was a purpose behind it. The question is, will it achieve the purpose that you want? Second is it has an issue regarding the amount of money that you're spending. And what we're suggesting in this amendment is the way we get this to match the budget is to hold off on its application. Wow. So that again is, again, the committee. So it's for the committee to decide. Yeah. On

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: the dishonorable discharge, working on Kimball has some really remarkable number of details on that. But I would just offer that in addition to sort of future dish dishonorable discharges under the Trump administration, I think there's also a long history of various political dishonorable discharges from don't ask, don't tell, and long before that, including we've heard a number of accounts of folks who reported rape and were considered and were dishonorably discharged from that. And so really want to be very careful about we were not able to get a great deal of quality testimony on the issue, but really wanna be very careful on that. I also understand there are administrative challenges with it that we might wanna when we hear from the tax department about Senator Cummings requested testimony about the tax credit that you all put forward. So maybe Director Samaroff can Deputy Commissioner Deputy Commissioner? Deputy Commissioner Samaroff.

[Sen. Ann Cummings, Chair, Senate Finance]: That's correct. Okay.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Can speak to both of those pieces when she comes up. Do I'm just I I feel awkward in the fact that your proposal and not your No. I think country's proposal, and so I'm trying to work through that.

[Sen. Ann Cummings, Chair, Senate Finance]: Development bill that came to our committee with this proposal on it. Mhmm. Knowing that that would get it sent back to you Mhmm. And you were already negotiating the same issue here, the economic development committee said it was okay if we stripped it so that their bill could go forward, not have to wait, go back to the chance of not getting out of here this week.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: So I'd offer that the cap, if you're speaking towards intent of our policy proposal, I think that there was a great deal of discomfort in exempting a certain category of taxpayers from taxation or a certain category of income from taxation. That's not generally how we try to structure our tax structure. And the way we could find our way to being more comfortable on that was at least placing a progressive cap on it in the bill. And so that was sort of where we were connecting that. I'm also very nervous about the idea of postponing a year, given how important that is to people. Mhmm.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance]: Yeah. So it's I think the statistics we had, there's 3,900, and I might get the numbers wrong, so forgive me. 3,900 military retirees in the state of Vermont right now receiving some kind of benefits. And of those, the people that are under $175,000 is about, I'm going to say 2,200. So there's 1,700 that are above that. So 1,700 with adjusted gross income that are above $175,000. So the question is who who is in need of a tax credit? The other part that I'll say in much of our discussions is is the exemption of military retirement pay enough of a lure to bring people in. When we looked at the statistics, the number of military retirees in the state of mind as a percentage of population was equal to or greater than other states that did have a full exemption. So we didn't think that it was that necessarily that effective of an attractive tool. So that's I mean, really, when we look at the numbers, we get it that people are saying we need every tool in the tool belt. Mhmm. And so we are willing to move towards the position of saying, is there something that we can do to help attract or at least not be as much of a detriment to folks retiring from the military, understanding that they receive it as soon as they're twenty years in the military, with some exceptions, and that they then would, be able to get full retirement pay as they pursue a second career. And so they do add a lot to our communities, and certainly do, and the extension of the mod survivor benefits is really good in this. I think there's, like,

[Sen. Randy Brock, Member]: I can't remember the number

[Sen. Thomas Chittenden, Vice Chair, Senate Finance]: of families, seven fifteen, something like that. Families that are receiving survivor benefits as well. It's all off the top of my head and we ate

[Sen. Randy Brock, Member]: it as well on in the day. But anyway so we hear you, and we thought we were really trying to come from zero to somewhere which was really close to what the request was. Well, certainly appreciate that, and there has been significant movement from what we've seen in prior years. At the same time, as we need to wrap it to the bill in economic development, we were looking at what tools do we need in order to attract the people to fill all these jobs that we can't fill? And I could find very few places where there's a match like there is between military retirees who are leaving service and the jobs that we need to fill at least according to what our state indicates. And with people who are not just entering the workforce that need CGD, but people who actually know how to do the things that we need done. And that's the thing that made this an attractive tool. And what we hear, particularly from the people who are operating the transition programs in the military, is that people will look at Vermont as it is right now and put Vermont down and cross it off the list right from the very start and don't look at it other than people who are retired because they have family here and other reasons. Bhavan is not on on the radar, and it's principally because of this picture. Do

[Sen. Ann Cummings, Chair, Senate Finance]: you want to hear from? I think I'm looking from the tax department since Does anyone You stripped down our entire bill. Indeed, we did. And we would because the reason was tax department said it was very difficult to do, and we'd like to know that.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Absolutely. Does anyone have any questions for Kirby Bikorki?

[Sen. Ann Cummings, Chair, Senate Finance]: Great. Okay. Thanks for

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: your participation in the process of your making Bikorki. Hope we did that. Okay. I wonder if you could before we go to the clinic care credit, I wonder if you which is not called out. I'm sorry. I wonder if you could take a moment to talk about sort of I know that you had a way of verifying military service, and I wonder if this amendment would complicate that.

[Rebecca Sampson, Deputy Commissioner, Vermont Department of Taxes]: Yeah. Yeah. Thanks for the question. For the record, Rebecca Samrak, deputy commissioner, department of taxes. And, yeah, I think that adding, you know, kind of more detail to a veteran's exemption, like excluding certain class of veterans could kind of get our, you know, administrative frontline staff into some, you know, awkward, murky territory when it comes to the review of refundable credits, which is an area, you know, we'll we'll discuss more with the caregiver tax credit as well where, you know, that's the the refundable credits that, you know, we send out the door is like a a big area of integrity for for our department, you know, making sure that those are there's thoughtful review, thorough review given to those claims, and that we're doing, you know, a a great job protecting state coffers. So, you know, when when there's a lot of nuance that doesn't have a clear paper trail, which which admittedly, I'm not sure what the, you know, kind of, like, your your discharge letter looks like in an honorable verse dishonorable situation and certainly the nuance that would be discussed at this table, like, the the types of dishonorable discharge, like, some are, you know, valued differently, I think, in this conversation. I don't see, you know, that having a very clear paper trail, like, something objective that a tax examiner can be like, you know, like, you qualify and you don't. And what I would worry about is, you know, having staff in in pretty awkward conversations with people about, like, whether or not they're, you know, truly eligible for this credit and kind of rehatching, you know, potentially intense, you know, parts of someone's personal history, you know, to get at something that, you know, we'd hope to be a little more kind of dry. So I do have administrative concerns about, you know, complicating the veterans credit too too much beyond just, you know Do it

[Sen. Randy Brock, Member]: for you. Discharged from service. Do you think a a call to the Veterans Affairs officer the Veterans Affairs office could straighten that out?

[Rebecca Sampson, Deputy Commissioner, Vermont Department of Taxes]: Absolutely. But that is, like, a a level of review that would be pretty unprecedented to have someone making a call with every claim we receive.

[Sen. Randy Brock, Member]: They could provide you with a cheat sheet of the description of different types of discharges.

[Rebecca Sampson, Deputy Commissioner, Vermont Department of Taxes]: Yeah, I mean, I think there are, I I am confident that we would, you know, find our way to, you know, administer any complex any complex, you know, program that this body, you know, sends our way. But the question of, you know, like, lift versus, you know, what we're getting out of that, I think is, you know, a big one for us. We wanna make sure that folks are overall, you know, like, we're continuing to be able to kind of, like, have the kind of customer experience, customer service experience that we hope all Vermonters get when they interact with our departments. Don't really try to be more positive, helpful, a little less, like, mining into hard parts of your professional history for for this example. Let just ask you a question.

[Sen. Randy Brock, Member]: In what did you envision using as your identifier for military retiree right now?

[Rebecca Sampson, Deputy Commissioner, Vermont Department of Taxes]: Yeah. Sure. So, you know, I I will say that, you know, until this becomes law, we don't generally, like, you know, have a full, you know, implementation huddle with our operational directors and divisions about how things will go. So that we don't have, like, you know, an operational plan that will, you know, that that's already finalized right now. But what's helpful about this is that I have had a number of people describe how just, like, with a few clicks, you can download your discharge letter from the VA. I haven't had

[Sen. Randy Brock, Member]: looking that's what I'm asking for as opposed to whether or you're getting anything that's automated to you now that would tell you that or potentially now would tell you that, and you would have to go to the individual in order to get that information. Now I know I I suspect it's been changed now, it's something that I had to look into very, very quickly. Typically, the discharge certificate, not on the certificate, but on the document, the DD-four 214, which is the discharge certificate. There used to be, and they have taken it off, and so I want to double check, what's called an SPN, service something program number, which is a three digit number that tells you why a person has been discharged. I remember using it in the Paul Lara's case, for example, because he said he was discharged because of just some medical condition, he was discharged for personality disorder and a number of other things. That SPN would indicate the character type of discharge, whether it was a dishonorable discharge, bad cognitive discharge, and so on. And that may be available in an automated way right now, but I don't know and I would have to check.

[Rebecca Sampson, Deputy Commissioner, Vermont Department of Taxes]: Yeah. I mean, you're you're bringing up some great questions because we, you know, we have we definitely have work to do to see if there I think our assumption is that this would have to be a case by case, you know, if we decide to check on the eligibility criteria, which is not it's not our norm to require paperwork upfront for claimants. It's more, should a return meet some other characteristics that flags for additional review, that's when we'd often follow-up for more information

[Sen. Randy Brock, Member]: about it. And the other thing, which is there's also the other states, the other 47 states that do this, do they have a method that would be easy and clean and perhaps automated to get you a checking?

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Yeah. I remember you looking into this.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance]: I I yes and no. And I'm trying to recall all the stuff because I'm trying to remember. I think there's five or six different classifications of discharge, and it is the form that you suggest, whether it's other than honorable, bad conduct, dishonorable, but there's also honorable in the matters without any kind of early dismissal, I believe, is one. So you're not suggesting that we cut those out. No. So there is that form, and you can verify, but it would take that two part verification. Mhmm. So different I think it's

[Sen. Randy Brock, Member]: easy to find. Also, just to require, we've got the list of contacts in other states. We've got doing some of the research on this to see how others do it, whether or not there is an automated way.

[Sen. Ann Cummings, Chair, Senate Finance]: Well, think the concern, one of the

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: pieces of nuance that I think deputy commissioner brought up is having people sort of dive too deep into someone's life. The example that you shared about someone having personality disorder, I think that diagnosis even has what it actually is used, what circumstances someone receives a personality disorder has changed in breathtaking ways in the last hundred years. Yeah. And often significant amounts of discrimination attached to it. Right? Mhmm. And so those kinds of values based decisions that have, you know, haunted our military service, as well as, like, all the rest of our government bureaucracy, are things that I don't know if we wanna reinforce in our statute

[Sen. Thomas Chittenden, Vice Chair, Senate Finance]: today.

[Sen. Randy Brock, Member]: Well, that's why suggesting a very narrow classification as to what you're looking at. And if to the extent that you can receive it directly as an answer to a question as opposed to having a look at every document, That would be the ideal situation to get that done.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: And I so here so far, it probably can't be done, but let's should move on to the other

[Sen. Ann Cummings, Chair, Senate Finance]: side of what I'm thinking. I don't think the votes are here to And do that

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: so let's put that topic aside.

[Sen. Ann Cummings, Chair, Senate Finance]: I would like to hear why you rejected our entire bill. Absolutely. And it's, you know, it's not entirely on

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: unmet trade concerns, but Thank you for your I don't wanna put that entirely on you. Yeah.

[Rebecca Sampson, Deputy Commissioner, Vermont Department of Taxes]: Yeah. So, you know, as I I just mentioned, the integrity of our refundable credit programs is, you know, one of our it's kind of our our bread and butter. It's not our favorite piece of tax administration to talk about the, you know, fraud management and, you know, kind of, like, managing the the the claims to our refundable credits that that are filed with integrity. But it's a big part of our work. And so in this caregiver credit, it's just a it's a tricky set of eligibility criteria to verify through a tax program. You know, it feels to me like a very compelling cause, but maybe something that could be done more effectively as, like, a a direct human services program rather than through the tax department. And and some of the reasons are let's see. Like, the the three major eligibility criteria is that the caregiver is unpaid, that they're working at least twenty hours a week on the care for individual that has some specific needs around daily care. So, like, two of the three of those components are we have not, you know, been sitting down with our operational directors, you know, conceived of any way that we could verify that. So unpaid is not something we're really good at verifying at the tax department. We're really good at verifying the presence of income, not so much the absence of it. And especially in these the situation contemplated by this credit, which is like you're within your family system. Know, You if there was compensation, I don't think it would be, like, on a w two. You know? It would probably be under the table. Also, the spending at least twenty hours per week is impossible to verify, you know, beyond attestation. So those are, you know, kind of like the two big flags. The bill does contemplate the department receiving, you know, like a doctor's note that kind of verifies that the person receiving care from the credit claimant does, in fact, need, you know, support with these activities of daily living. And that's helpful, but it does it's a little like, this is unprecedented and a little awkward for the department as well because we would be receiving very sensitive medical information about an individual who is not even the taxpayer, not the person that's claiming the credit. It's about a third party. And because I think that the bill's designed to be flexible around, you know, the the flexibility that, you know, family has to, you know, achieve to to manage, like, caregiving like this in their house. There's no limit on how many people could claim credit for care for the same individual. So it just you know, there's really no we don't feel like there's a lot of avenues for us to to administer such a generous refundable credit with, you know, with a lot of confidence that we're giving it to people that are truly eligible when there's so much that would just be based on a personal attestation.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: I wanna sort of validate to you all that I personally, at least, think that the intent around it is incredible. And I think it's actually well, the feds are doing this now too, but I think it's really sort of innovative thinking to when to use a tax credit in place of a program in this way. I really appreciate that. And so I would love if, you know, there could be more summer work or, like, with way more attention towards administration. I am someone anecdotally just have had a few friends in the last few years try to account for the amount of care work they do in their own households with their partners, mostly as a couple's TIFF, and how remarkably difficult that converse you know, is to declare what is care work and what is not care work in the context of a family or a household. And I can't imagine the tax department wading into such a thing.

[Sen. Thomas Chittenden, Vice Chair, Senate Finance]: Just say tips. That's a department. That

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: was my first time freeze.

[Sen. Ann Cummings, Chair, Senate Finance]: So, mean, the whole day.

[Sen. Randy Brock, Member]: You know You catch up. Your mention of world war in this area is probably justified because, you know, we hear, for example, the Alzheimer's Association time and time again of the unpaid care work that caregivers are giving to patients. And from an economic perspective, what we also hear is that it keeps people out of expensive care in institutions The for a period of problem is, as you mentioned, it's hard to document in a way that you're comfortable with for tax purposes, but at the same time, it probably is worth doing some kind of study to get better estimates of what does it really cost in Vermont and what does it really save in Vermont. And given the cost of inpatient care for people who have Alzheimer's or other forms of dementia, that's a huge cost that we bear. Yeah.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Did anyone have any other questions for Rebecca? Thanks. Thank you. Did you all take any testimony on, Thursup's program out of the HS that I think is called Choices for Care, but I could be wrong

[Sen. Ann Cummings, Chair, Senate Finance]: because it's Choices for Care. Yeah. Okay.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: You all take testimony about that? I've been curious how these two things overlap, and I have absolutely Get no

[Sen. Ann Cummings, Chair, Senate Finance]: home health nurses into your home rather than go to a nursing home, you can get the same kind of services. It's not That's a different program than what I'm talking about.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Okay. So what I'm thinking of, and it might not be called Choices for Care, is there's some program that might not even exist anymore. It might have just existed five years ago. And maybe by speaking in to the committee of conference, someone will message me with the name of Berger, if that sometimes happens. Okay.

[Sen. Ann Cummings, Chair, Senate Finance]: Because I

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: know. Is the idea that family members are eligible to receive a stipend from the state

[Sen. Ann Cummings, Chair, Senate Finance]: with the current care. That's Medicaid. You can choose your caregiver pack if it's not

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: a Did I ask you about this, like, months ago? And I told

[Sen. Ann Cummings, Chair, Senate Finance]: We did take testimony on that. Okay. And that's but that is usually a yeah. Full time. I guess it can be part time. Okay. Yes. That is there.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: So were you imagining that folks would be eligible for both of

[Sen. Ann Cummings, Chair, Senate Finance]: that and the tax credit? No. Okay. This was just for the credit for the people that are just doing what families do unbehaved.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: So could there be in a household, could there be one family member who's providing unpaid care and one family member who's been getting the tax credit and another family member who's providing paid care under Medicaid and getting that No. Anything else, team?

[Sen. Ann Cummings, Chair, Senate Finance]: No.

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: Okay. Well, it's been a pleasure. I imagine we'll see you tomorrow or Friday. We'll see you. And we'll all move on to a different the conference now.

[Sen. Ann Cummings, Chair, Senate Finance]: Yes. Yep. Well, think sorry. Yep. Just trying

[Sen. Randy Brock, Member]: to make sure, is the proposal to lift the other than

[Rep. Emilie Kornheiser, Chair, House Ways & Means]: think we think this is not an official proposal from the country. That was just said.

[Sen. Ann Cummings, Chair, Senate Finance]: I think right now what's on the table is our proposal to add Right.

[Rebecca Sampson, Deputy Commissioner, Vermont Department of Taxes]: To us before I Okay. Thank you.