Vermont Legislature SmartTranscripts:

[Sen. Ann Cummings (Chair)]: I have school board sets.

[John Gray (Office of Legislative Counsel)]: I'm gonna say all my brothers are from there. I was right

[Beth St. James (Office of Legislative Counsel)]: at

[Sen. Ann Cummings (Chair)]: it. Hope he didn't buy again. But

[Kirby (Office of Legislative Counsel)]: Sounds pretty good.

[Beth St. James (Office of Legislative Counsel)]: And we are long night. So I like We are about I

[Kirby (Office of Legislative Counsel)]: love this.

[Sen. Ann Cummings (Chair)]: Day. Friday. Early.

[John Gray (Office of Legislative Counsel)]: And walking and being Okay.

[Sen. Ann Cummings (Chair)]: Betty, I have a four room, and one of my members is in the hall. One is absent. But there are four of us, so think we could start. Do agree with patient?

[John Gray (Office of Legislative Counsel)]: And we did start with cement.

[Sen. Ann Cummings (Chair)]: And what I thought we would do today is a refresher since I'm not sure we ever got to go over the final version of act 73, it is not the bill that got voted out of here. A lot of it was negotiated on the floor or in some groups on the floor, and I thought before we started talking about whether or whether or not we needed to amend it, we should know what it is. So I've asked Beth and John, at this point I will leave it to you two if you've got a program or we've got an app staff. Okay. Your dog and popey show, right? You're our fourth stop. It is polished.

[Beth St. James (Office of Legislative Counsel)]: It depends on how much time you have and how many So, you've

[Sen. Ann Cummings (Chair)]: done ways and means and two education committees? Correct. All right, we are last on the list, that's normal. Before you start, there is a budgeting workshop Friday at noon in I believe Room 10 Or 11, if anyone house appropriations I guess does this every year, like how the budget does, how it gets developed, and I was told that senators are welcome. So it, again, is general information, and then it said one about where things to two weeks, I think, is a second workshop on budgeting. So,

[Beth St. James (Office of Legislative Counsel)]: Beth, the floor is over. Thank you. That's St. James' Office of Legislative Counsel. So I'm gonna go over sections one through 33, which are generally considered the education policy sections, which were the sections I was responsible for driving. I have a PowerPoint that summarizes those sections, and I will go at whatever speed you want me to go at and focus on whatever you want me to focus on.

[Sen. Ann Cummings (Chair)]: I'm starting to have black match. The committee of conference, which was long and hard. I think just summary of the end policy that's in it and then more specifically what financing No. That'll be

[Beth St. James (Office of Legislative Counsel)]: all John. Right? So I'll try and go quickly so that John has more time. Also, Charlotte has also posted for you various different handouts we've done over the last few months on act 73. So our act summary and timelines and notes, and also a list that I put together for the education policy committees, but I thought you might find helpful of reports that were due under act 73 and then hot links to everything that I was able to access. So that's on your website. So would you like me to share my screen? I have a PowerPoint, but I'm also happy to just talk through it, whatever you would like. Okay. Sure.

[Sen. Ann Cummings (Chair)]: Can you give me? If

[John Gray (Office of Legislative Counsel)]: you want to share the PowerPoint, just Yeah. Kind of

[Sen. Ann Cummings (Chair)]: mean, that well, sharing it also helps because if anybody is wanting to get home, they can see it. Okay. So that would be good.

[Beth St. James (Office of Legislative Counsel)]: So this is a summary. I'm just gonna give my little disclaimer here. This is a summary. Not every single detail or concept is on these slides. If there is a concept that you're wondering why I didn't cover it or where is it, probably somewhere buried in the ACT language itself, and we'll all find it. But again, this is just a summary. So we're gonna go over, I'm responsible for sections one through 33. Section one was the findings section. I did not cut and paste the findings here. We can flip over to the act itself if you'd like to look at it. The findings I think are important to you all because it lays out your legislative intent roadmap for the work you intend to do this session. Do you want to flip over and look at that or just know that that is where that intent lives? Section two, and I've got page numbers so you can find the applicable sections in The the Commission on the Future of Public Education section two, you all refocused the charge of the commission and asked them to report back on you on those four bullet points. And I have linked their final findings and recommendations here.

[Sen. Ann Cummings (Chair)]: We have done that. Section

[Beth St. James (Office of Legislative Counsel)]: three created the school district redistricting task force. Again, didn't cut and paste anything. If you want to dig into any of the enabling language, we can flip over to the app, but just know that it was section three, pages 18 to 24, and I have linked their final. Section four, create the school district voting word working group, which was created to do just what it sounds like it should do, and that is to recommend to you all constitutionally proportional voting wards within new school districts. This group exists. I believe they have met at least twice and they stand ready to take work whenever.

[Sen. Ann Cummings (Chair)]: They can districts to work. Correct.

[Beth St. James (Office of Legislative Counsel)]: The one point that I am pointing out everywhere I go is that one of their deliverables to you all is a recommendation regarding school board size, but there's no date by which they need to deliver that recommendation. I think that's largely going to be dependent on how big school districts are.

[Sen. Ann Cummings (Chair)]: Right? And

[Beth St. James (Office of Legislative Counsel)]: so if you get to a point where you think that that recommendation would be helpful to you, you're probably gonna have to reach out to the Secretary of State office to get that. There's no on prem trigger. Section six, class size minimums. Section six amended the education quality standards statute to establish class size minimums. We'll let the class size minimums speak for themselves. Multi age classrooms are also limited in grades K through eight to two grade levels per classroom. And then there are a bunch of exemptions for class size minimums, pre K, kindergarten, CTE, flexible pathways, terminal courses, advanced placement courses, specialist equipment courses, driver's ed classes, and small group services for special education or academic intervention or English learner. The state board may grant a waiver if the school is geographically isolated or is working on a compliance plan. And the secretary of education, if a school is not being classified as minimums over three consecutive years, then the secretary may take actions that are allowed when a school is not meeting education quality standards. And so on section seven, provide some guidance on that piece. So under current law, if there is any school that is not meeting any education quality standard or students are making insufficient progress in improving student performance, the secretary is required to provide written notice to the school of the actions or the district that the district must take to come into compliance and provide technical assistance over two years. If after the two years, the school is still not in compliance, then the secretary is required to make recommendations to the State Board of Education regarding next steps. And then the State Board of Education would have a final order. And there is a menu of options for the secretary to recommend. They could continue to provide technical assistance. The state could assume control of the school. There could be supervisor union boundary adjustments, or there could be some sort of consolidation ordered. What Act seven of Act 73 did is say, if we're here because the school is not meeting class size minimums, And the secretary has. It's been those three consecutive years and the secretary has offered technical assistance for two years and we're still non compliant. The state board is not allowed to order consolidation to cure that if that consolidation is gonna result in capital advantage. So the state board can't order consolidation if it requires building a wing or building a brand new school, if the school district couldn't pay for that out of the capital reserve account or any other monies they had available until you all establish new school district boundaries and take further actions regarding what happens if a school fails to meet education quality standards. The class size minimums, I

[Sen. Ann Cummings (Chair)]: should point out, do not take effect until 07/01/2026. So they are not in effect. Issue.

[Beth St. James (Office of Legislative Counsel)]: Section eight requires the State Board of Education to update a bunch of rules. They're going to update the education and I'm going to leave the dates to speak for themselves. Update the education quality standard rules to reflect the cost at minimums that we just walked through. And also statewide graduation requirements, statewide grad requirements will not take effect until the twenty seven-twenty eight school year. State Board's also updating independent school program approval rules to reflect those class size minimums, and they are reporting to you all with proposed standards for schools to be deemed small by necessity or sparse by necessity. And thanks to Ezra, I have found that report and linked to it

[Sen. Ann Cummings (Chair)]: on the report, the separate reports document. Okay. Because the Department of Education is coming in to give us an update on Friday. So that will be a good thing to find out if they can. Section

[Beth St. James (Office of Legislative Counsel)]: nine requires a bunch of reports from requires AOE to do some things and to give you all a bunch of reports. First thing it requires is that the agency recommend to the state board on or before January 1 statewide evaluation standards. And then the state board in section eight would be reviewing that and then updating education quality standards to reflect whatever decisions they make based on those recommendations. I've linked to those recommendations on the report document that Charlotte has posted for you. On a report January 15, AOE is required to develop and publish a statewide school calendar that would start in the twenty eight-twenty nine school year. And then they had a number of different reports that they were due to you. I'll just let them speak for themselves. And I believe that all of them have been turned into the legislature and are linked on those separate reports. Came in different reports, not one report. So there's a couple different ones to cover those topics. Section 10 requires the State Board of Education to essentially do a sunset review of all of the rules it is responsible for, to report back to you all on what can we sunset, what rules are no longer needed, what rules do we need to update, what's the plan for updating those rules, and are there any associated costs or staffing needs? That report is not due you all until December. Sections 12 through 20, I'm just going to say generally are the state age school construction program. Sections twelve, thirteen, sixteen, seventeen, and eighteen, and nineteen, I think 18. Anyway, the program itself does not become effective until 07/01/2026. So it's not effective yet. However, the State Aid for School Construction Program Advisory Board is up and running. That was effective 07/01/2025. And they do have a report for you all regarding legacy debt consolidation for new school districts. Is that linked into? Not in the slides, but in the separate reports document, yes. Okay, section 21 is the who gets tuition. Section 27 that we'll walk through in a minute is the how much tuition do they get. Section 21 is who gets that tuition. So section 21 amended the statute that governs what types of educational programs or schools the school district is allowed to pay tuition to. This took effect on 07/01/2025, so it

[Sen. Ann Cummings (Chair)]: is current law, no contingency.

[Beth St. James (Office of Legislative Counsel)]: Under Act 73 and the change is made to section eight twenty eight, school districts can pay tuition to public schools located in Vermont, independent schools that meet EQS, a tutorial program approved by the state board, and a frequent education program, a public school located in another state, therapeutic approved independent school located in Vermont or another country, or an approved independent school that meets these criteria. Do you want to go over the criteria or would you like for them to speak for themselves? No, sounds

[Sen. Ann Cummings (Chair)]: like your voice is. Oh. Yeah.

[Beth St. James (Office of Legislative Counsel)]: Make I'm this is actually pretty good compared to where I thought I would be. I going to say. I appreciate that. So I if you have any questions about that, don't hesitate to let me know. Okay. Yeah. I believe the agency has a list of schools that are eligible to receive public tuition based on this law on their website.

[Sen. Ann Cummings (Chair)]: So that would be something to ask. Mhmm.

[Sen. Randy Brock (Member)]: I'd be curious as to what schools, how private schools, independent schools that heretofore have been allowed to receive public funds. Who's been cut off? And I think it's just our information. I think it's it's important for us to know. And it might be important also to learn what the impact from those schools, what the schools have to say regarding the impact of that.

[Beth St. James (Office of Legislative Counsel)]: Section 21 also provides definition for therapeutic approved independent schools that term did not exist in Title 16 before Act 73. And then Section 22 is a tuition transition section that allows students who are enrolled for the twenty eighth of last year or this year in an approved independent school that does not meet those new requirements, they can continue to receive tuition through graduation. Sections 24 through 26 are amendments to the State Board of Education appointing authorities. The State Board was and is made of 10 members. On pre Act 73, the governor appointed all 10 members. Act 73 changed that. This current law went into effect this summer. And under the changes here, the governor would appoint eight members, including the two student members. The speaker would appoint one member, and the Senate Committee appointees would appoint one member. And the appointing authority that made the initial appointment will continue to fill any vacancies for that seat. Section 25 is a transition period appointment, so the speaker's going to fill the first vacancy. Committee on committees the second, none none the governor, and so on. The governor retains removal authority over all board members in section 46. However, the appointing authority that made the initial appointment would fill that vacancy. So, if the committee on committee, excuse me, if the governor removed the committee on committees appointee, the committee on committees would appoint the person to fill that vacancy. Section 27. This is the how much tuition section. This should really be more in.

[Sen. Ann Cummings (Chair)]: I take a minute. I'm okay.

[Beth St. James (Office of Legislative Counsel)]: If I take a minute, might never come back.

[Sen. Ann Cummings (Chair)]: Mhmm.

[Beth St. James (Office of Legislative Counsel)]: Section 27 is a little unfair to discuss before John gets to talk because it relies on the foundation formula, but I have faith that everyone in this room is an expert on the foundation formula, so we're just gonna go for it. We all understand. Section 27 is the first section that we are talking about today that has a contingent effective date. Section 27 has the same contingent effective date as the foundation formula, and that is 07/01/2028. If new school districts are operational and that cost factor formula report you ordered is received by the general assembly and you've had an opportunity to enact legislation and consideration of the report. So section 27 is really part of the foundation portion. And basically, what the majority of section 27 says is that tuition under the foundation formula is just going to be the base and weight fall of the student. So each district is required to pay to the receiving school. So that would be both public and approved independent schools. The base, which is 15,033, and then any weights for each student. So each student has the potential to be traveling with different money, depending on the weights that are applicable to this. That's for every tuition student. In addition, section 27 also allows receiving schools to charge an additional fee up to 5 percent of the base, not of weights, just the base, for each student attending a receiving school in grades nine through 12, but only if the receiving school has received permission from the state board to charge that fee and the electorate of each school district with at least one student attending the receiving school has approved supplemental district spending

[Sen. Ann Cummings (Chair)]: for that fee. How much longer have you got?

[Beth St. James (Office of Legislative Counsel)]: Just a minute. I'm really

[Sen. Ann Cummings (Chair)]: hard to get through it.

[Beth St. James (Office of Legislative Counsel)]: The district was also required to pay the full tuition charged students attending approved area independent schools that function as approved area CTE. Section 28 is also contingent or effective that is repealing all of the tuition statutes that would be unnecessary on this foundation formula. And section 28 requires State Board of Education to draft rules for the approval process for the fee. So, you can only charge that 5% of the base amount if you receive permission from the State Board. State board has to write rules on what that process looks like. And those rules have to include a requirement for schools to demonstrate the fee is necessary to educate the student the fees being applied to and the fees will not shift costs elsewhere than the school's budget. Section 29 was a state of special education delivery report from AOE. You have that, I've linked it here. Section 30 was a three year strategic plan for the delivery of special education. I've linked that here. Section 31 was a position to AOE to help with that strategic plan. Section 32 that unfortunately got bumped up to section 31, so it looks a little confusing. It was an appropriate 2,800,000.0 appropriation from the general fund AOE for the enumerated regions here, and section 33 were five limited service pool positions to AOE for education transformation work. You all know where to find me if you have questions about any. Oh, yeah, please.

[Sen. Ann Cummings (Chair)]: This is not really our valuer. Thank you. You're welcome. And I

[Beth St. James (Office of Legislative Counsel)]: am not going to sit here and cough.

[Sen. Ann Cummings (Chair)]: Yeah. I'm going to and don't Joke myself out. Go rest your voice. Okay. Thank you. Welcome back.

[John Gray (Office of Legislative Counsel)]: Thank you. John Gray, office of legislative council. Let me see if I can shoot it up a little higher. And we are on. So where are we at? Ed Finance begins at section 34. I got the page there, but please don't fall in the act. And where are we in the statutes? We're in Title 16 for the first pieces that we're going to talk about. As you know, we'll jump to Title 32 later, which is more of your classic taxation. For right now, Title 16, Chapter 133, which is where the foundation form was actually created. Just an overview of the first education finance sections, got into this table here, basically foundation formula, that's your base and weights, some cleanup changes throughout the statutes, of course, we have to repeal a lot of existing education funding concepts. The creation of a supplemental district spending reserve. We're gonna talk about some impacts on title 16 of the supplemental district spending before we actually get to the supplemental district spending. Hopefully you guys remember, but I'll have slides on that and can talk through the way that that's calculated. A few reports and then of course, transitionary measures. Beth mentioned this, but the effective dates for the Foundation Formula rollout, it's all continually effective 07/01/2028. Those that you see effective on passage, that's your reports, and then one technical thing related to delaying the Ed Fund Advisory Committee's first meeting. Just a reminder, and again, Beth said this, but this is the actual language for the contingency. So that's 07/01/2028, and two pieces have to be met. New school districts assume responsibility for education of students, and you've received that foundation for the report under section 45 a, which is among my section, so we'll talk about it briefly. And then you got to have an opportunity to enact legislation in consideration of report.

[Sen. Ann Cummings (Chair)]: John, if I'm remembering Mhmm. One of the big issues with the committee conference is that the bill did away with the wait for secondary high school education.

[John Gray (Office of Legislative Counsel)]: That comes up in the the report requires a recommendation on whether.

[Sen. Ann Cummings (Chair)]: Yes, and has that come in?

[John Gray (Office of Legislative Counsel)]: No, so that report is actually something that JFO is contracting with consultants on, and that will come at the end of this year. It's kind of a wholesale foundation formula examination, weights, base, everything. Okay. It's December, shouldn't it? Yep. December of this year, December year. We're gonna start with sections thirty four and thirty five. This is your core foundation formula based on weights. So section 34, this is amending our set of definitions in title 16 chapter one thirty three to add a base amount. That's your per pupil figure of 15,033. It is adjusted for inflation this year, so this would grow over time, assuming inflation happens, which, well, does any indication, that's probably a fair assumption. Creates the educational opportunity payment. We can develop in our current system. Right? School districts vote budgets. We fund those budgets across the state. We'd We be switching from a system that does that to just creating these educational opportunity payments, which are really a mathematical exercise. You take your base amount and you multiply it by school districts' weighted long term membership. That gets you your educational opportunity payment, which will be raised by the new statewide education tax, which supplants the existing lowly varying stud rates. So educational opportunity payment is the full payment that a district receives in recognition of the cost of educating its students, and again, it's premised on that base amount. And then, of course, Section 34 repeals current education funding concepts. Section 35, I don't have the figures here just because trying to do a high level overview, but this is your pupil waiting section. I've got what it does here, but just to tell you what you're left with or what you would have under Act 73 starting in FY '29, you'd have one grade level weight. That's that pre k weight. It's a negative pupil weight. I think that's intended to be revisited this year. It's just kind of a holdover, it's not something that's drastic. You have an update to the economic disadvantage weight. We have an economic disadvantage weight in existing law, but this slightly tweaks the figure. I think it goes from like 1.02 to also no three, something like that. We also have an existing law, an English language learner weight, but it is a single weight. We also have categorical aid in existing law related to that. What you see in Act 73 is breaking out that EL weight, distinguished by both proficiency levels, so that's tests that are administered to determine proficiency, and also formal education level for students with limited or interrupted formal education. You'll also see shortly later on a set of appeals, including the census block grant for special education. In tandem with that, we have the creation of special education weights. Those are in three categories distinguished by disability cost. So depending on what a child's disability is, you would get a different weight. And then the repeal of existing small school and sparsity weights, those will be replaced, as you'll see shortly, with support grants. Just to remind everyone, the weights themselves would be additive so a student can pick up all kinds of weights. Right? And they would be, you know, multiplied by this 15,033 figure to determine your, essentially, the weighted fixed foundation amount. We next have the support grants for small schools and sparse schools. You can see the figures here, but I think it's probably more important to note just the eligibility conditions. So a small school must have two things. One is an objective numerical check. Does it have fewer than 100 pupils in two year average enrollment? And then it has to be annually determined to be small by necessity under standards established by the State Board of Education pursuant to Section 8B. The So wording there is maybe not perfect because I think it's under standards established by the State Board, it's not that the State Board has to do the determination, but that requires an annual determination that your small part is necessary, so it's an annual check. Very similar structure for the sparse schools. You have an objective check. Are you in a city, town, or incorporated village with fewer than 55 persons per square mile? And do you have that annual determination of sparse by necessity? I do want to note the city, town, or incorporated village, you may recall we had discussions last year about the appropriate geographic measure for determining sparsity. There was some debate as to whether zip code was appropriate. Among the measures that show up in the section 45A report, which is that contingent effective, that's the necessary report for that contingency, is a report on the appropriate, suitable, best sparsity geographic measure. So it may be more to come. We, of course, have repeals. Just gonna note, you know, the repeals that show up in section 42 here and flag a couple that I've already talked about. The census grant, that's repealed for special education because you now have those special education weights. And similarly, can see the categorical a for English learners in the top right is refueled. Now you have that broken out EL weight. Couple of other technical curriculum as well. So that that one seventy three from 2018? Yep. That does that go away? Because that was a census grant. I don't know the whole of that act, so it's hard for me to to to say, but in this particular piece, the whole of twenty nine sixty one, which census block grant, is appealed. Yeah. Right. Yeah. Yeah.

[Sen. Randy Brock (Member)]: If you're tolling out dollars based on the cents.

[John Gray (Office of Legislative Counsel)]: Yeah. That's going away. Yeah. That's going away. Right. Yep. I just wanna make sure I've reviewed that correctly. Yeah, that's the strange looking statute that has, like, for these years, you calculate it in this way for this next set

[Sen. Randy Brock (Member)]: of three year transition. Yeah. Think we're in the last year

[John Gray (Office of Legislative Counsel)]: of transition. Yep, that's right. We can jump to this next section quickly, but just so we capture all the sections throughout Act 73, there's a set of conforming changes. This is just updating references to Ed Spending, from Ed spending to EOP and supplemental spending, cleaning up some outdated language in the stabilization reserve that harkets back to the time of its enactment. It's truly non substantive. It's just outdated language. And then more substantively, and I think I talked about this before, Section 45C delays the first meeting of the Ed Fund Advisory Committee, was initially scheduled to meet July 15 year, and was bumped out a year in recognition of the dramatic number of changes that happened in this Act. While we haven't really talked about supplemental district spending yet, I will talk about that in detail, but just noting that its impacts from Title 32 reach into Title 16 in these ways. So one is the revenues from the supplemental district spending tax need a home, and the home that they have is they flow to the Ed Fund just as statewide education tax revenues do. However, in the right column, you'll see a portion of them, the recaptured portion, will be reserved within the Supplemental District Spending Reserve, and it's used for two purposes. If there's any miscalculations, the recapture can be used to offset those miscalculations, and then maybe more significantly, in your remaining recapture could be used to decrease following year statewide education property tax rates. Another huge thing in this section is the way that school budget votes are changed, or the school budgets themselves are changed. Under the existing system, as we know, school districts are voting on the whole of their ed spending, so it's the pool of their budget. In this case, a school district would no longer vote on the whole of the budget, you're only voting on supplemental district spending. So it's just what a school district would elect to spend above the EOP that it receives for its students, which means some school districts may not pursue a vote at all. The other thing to note about the difference in the way that the budget is going to appear is not only will you see this as a vote on funds above the EOP, it would show the resulting supplemental district spending tax rate that's required to raise those funds. And the thinking is that this is gonna have some more certainty than exists in the current budget vote where it's unclear what the economic impacts of your vote are, it's hard to connect that vote to how it might hurt your wallet. In this case, it's a more direct exercise, which we'll come to shortly. We've got a few reports in these sections. So just to note, AOE will be reporting, or already has reported, the guidelines for medical transportation to be covered by the transportation reimbursement grant, JFO reporting on inflationary measures and funding for pre K and early care, Then the Section 45A report is your B report that we've talked about a number of times already. That's the data shinformally report. That's what your contingent effective dates require, and it's going to address some specific pieces, potentially moving away from special education weights to a reliance on special education services, updates to any other weights as empirically necessary, examining that sparsity measure, as you noted before, examining the cost of secondary students and whether a weight should accompany that, and then how to account for CTE with the foundation for the time. So all of that had to come at the end of this year. I should say that one thing to note about this report is there are specific directives in it to consider the cost impacts of consolidating school districts, obviously given the current bluff that's happening in the school district consolidation space, it may be difficult for the contractor to do that kind of analysis. They will be, in some ways, riding on the decisions that the legislature makes this issue. Lastly, in the first section of first set of ed finance sections, we have a transition to move school districts off of their current ed spending and onto the EOP. This happens across fiscal years '29 through '32. The way it works, to put it simply, is you just identify the gap. You identify the gap between the district's FY '25 ed spending and their FY '29 EOP, which again, their EOP is just determined by multiplying that base, comes away to long term membership. It may look funny to see the FY '25 records here, but I think the discussions that happened last year were trying to prevent the incentive effects of choosing a future year education spending so people could manipulate the transition gap that they receive. Using this gap between a school district's ed spending and its EOP, a yearly adjustment is made to the EOP that they would receive. It's basically prorating across five years. So if your school district has ed spending above the EOP that they would receive, you're just moving them down over five years towards the EOP that they would receive. And similarly, if your school district is below the EOP that they would receive, you're adjusting them upwards from their ed spend and to that EOP. So that by FY thirty three, all school districts are fully transitioned onto their educational opportunity payments.

[Beth St. James (Office of Legislative Counsel)]: Wait, can you go back?

[Sen. Ann Cummings (Chair)]: Yes. I think,

[Beth St. James (Office of Legislative Counsel)]: is it under the reports section? Did you do that yet? I I

[Sen. Ann Cummings (Chair)]: Yes.

[John Gray (Office of Legislative Counsel)]: Yes.

[Beth St. James (Office of Legislative Counsel)]: The and maybe you said this, and I was zoning out. Apologies if John, if you were. But on the page 88 through 98. Yeah. Move away from special education waits to reliance to a reliance on special education services. What what do you mean by that bullet?

[John Gray (Office of Legislative Counsel)]: So I I will say that I don't know fully what the general assembly intended, but there the the specific language is to recommend updates to the foundation formula to move off of or away from special education waits. I I think the idea is if there's gonna be a different method of delivery of special education services, we might have to revisit the way that if either waits are appropriate for that or not, or it could be a manipulation of the waits themselves if you change the method of delivery. So another way to say something that I said earlier, a lot of what the contractor is asked to do, they're gonna need information from you guys. Let's talk about the approach is within that policy section. Right? And as I remember it, the administration

[Sen. Ann Cummings (Chair)]: was saying that we'll deal with special ed and transportation out there. We're not gonna deal with those costs in this

[John Gray (Office of Legislative Counsel)]: bill. Which which could be one of the ways that you think about this if special education would be dealt with separately. Part of the question of where do cost belong? Do you build them into a foundation formula? Should they come in the form of grant? Like here, that age three enacts a change from sparsity, small school weights, to grants, support grants for those. So sometimes a question of, are grants better, are weights better, how do you think about that?

[Sen. Ann Cummings (Chair)]: Special is still in the ether, I think.

[Beth St. James (Office of Legislative Counsel)]: Well, there are ways for special education. That's why I don't I don't recall this. I I recall Yeah. Almost everything about this act, but not that specific language, like, trying to remember when

[John Gray (Office of Legislative Counsel)]: three plus, you know, e e c, and that's correct.

[Beth St. James (Office of Legislative Counsel)]: Yeah. And I and I don't remember what what the thought on this part particular thing was. But I I

[John Gray (Office of Legislative Counsel)]: just remember sitting in a room on the mezzanine draft to hear. Sure. But I I when I read this to put together the presentation, it is interesting to pass an act that immediately ines Ed Weitz and then tasks someone with revisiting. Although you could also say the whole of this section is asking someone to revisit the entirety of the family.

[Beth St. James (Office of Legislative Counsel)]: Well, this whole section was in order to get it

[Sen. Ann Cummings (Chair)]: to compromise, as you will recall.

[Kirby (Office of Legislative Counsel)]: No comment.

[John Gray (Office of Legislative Counsel)]: Okay, so just a high level summary of all that we just went through. Foundation formula with a base amount of 15,000 per pupil plus those updated weights.

[Sen. Randy Brock (Member)]: What year is it? FY '25.

[John Gray (Office of Legislative Counsel)]: FY '29. So 07/01/2020. But I mean at 15,000,

[Sen. Randy Brock (Member)]: is that FY $24? I don't I think

[John Gray (Office of Legislative Counsel)]: it's '25. FY '25 and then inflate it from there. Okay. Yep. The educational opportunity payments have been created. Again, that's your base times weighted long term membership. In place of small school, and the sparsity wings, you now have small school and sparse school support grants. I should say, just to note, unlike the existing structure where some of the characteristics are drawn from the districts as a whole, and you can think this is especially meaningful for sparsity, the determination is made right at tighter level. So it's really about sparse schools, which sounds funny, but it's a strange term, but it's more about the school characteristic than it is the district characteristic. And then lastly, change to your budget votes is exclusive to your supplemental district spending, and those budget votes would display the required tax rate. So now we're jumping to the education property tax changes. Those begin at section 46. In the VSA, are now in Title 32 and we're jumping into chapter 135, your education property tax. So again, I got another table for these sections. We're gonna be talking about supplemental district spending, the imposition of a statewide education tax rate in place of locally varying homestead rates, flow through changes to the December 1 letter, a homestead rate transition. Additionally, have the property tax credit repeal and replacement with the new income sensitive measures, which are made through the homestead exemption, then just some conformations. Similarly, almost all of this is continually effective 07/01/2028. The piece that you see on the left of 07/01/2027, this is your December 1 letter. The reason this comes out first is that you need the recommendation from that letter in advance of the f one twenty nine rollout so it becomes effective earlier. And then what you see on the right, the effective on passage, that's our report, so the work is being done on that. Just showing again, Tennessee language, two pieces. New school districts have assumed responsibility for education, and you've received that Section 45 A report to allow legislation in consideration.

[Sen. Ann Cummings (Chair)]: I think, as we're going forward with that, I'd like to do a little. I'd like to do more on the change in the homestead exemption or property tax, income sensitivity

[John Gray (Office of Legislative Counsel)]: Okay.

[Sen. Ann Cummings (Chair)]: Whatever we're calling it. Not today.

[John Gray (Office of Legislative Counsel)]: Yeah.

[Sen. Ann Cummings (Chair)]: I think that's really some place that we didn't. It's on page 98, which sets everybody homestead nonhomestead, nonresidential, and non

[John Gray (Office of Legislative Counsel)]: Oh, the the classifications themselves? Classification. Kirby will be And

[Sen. Ann Cummings (Chair)]: Kirby can I'm not gonna hold us here today, Kirby, if that's okay with you.

[Kirby (Office of Legislative Counsel)]: You say no, she'd go.

[Sen. Ann Cummings (Chair)]: No, you can stay. But I think that's one I'd like to have us understand. You did a lot of work on that, but I think it's it might be refreshing to figure out where we landed. I remember a lot of curve graphs and

[John Gray (Office of Legislative Counsel)]: Oh, the homestead exemption. Tax and forward task with Yes. About to come back with. Right? For the homestead exemption? Yeah. Yeah. There's a specific report, section 53 Yeah. Taxes reporting by the end of this year on a potential the the way that it left here was we felt okay, but thought maybe you could do better on the curve, and so they kept with coming back to the report on alternative structure, and one of the directives was consider income sensitivity measures that might extend benefits for a household of up to 175,000 in household income.

[Sen. Ann Cummings (Chair)]: Okay,

[John Gray (Office of Legislative Counsel)]: that's there's some

[Sen. Ann Cummings (Chair)]: I haven't seen.

[John Gray (Office of Legislative Counsel)]: It's not until the end of this year, I think.

[Sen. Ann Cummings (Chair)]: That's not really helpful. I know the second home, homestead, non residential report is in. Mhmm. And we will be doing a joint here hearing ways and means to have that presented. It's pretty lengthy, but this this little paragraph with the one point zero, one point

[John Gray (Office of Legislative Counsel)]: zero Yes.

[Sen. Ann Cummings (Chair)]: That's where you will deal with that because you will change that one to. Everything else.

[John Gray (Office of Legislative Counsel)]: Yep. I can't. Yeah. The way so we're talking about 32 BSA section fifty four zero two, which is your education property tax liability section. And, in the switch from locally varying homestead rates to a statewide education tax rate, a uniform statewide education tax rate, the way that different actual rates are assigned is through that table of statutory factors. So currently it's one, meaning every kind of property regardless of classification receives the same rate, but once you have those recommended statutory factors, depending on what you implement, you could essentially use them as levers to assign liability to different classes of property. So now we're going to jump into the most complicated thing I will describe today, I think. The supplemental interest spending, the way that it's calculated. I'm hoping that folks remember a lot of this. There's a relatively simple, I think, intuitive explanation, but I also want to talk about some of the math since this is a committee pretty well equipped to deal with it, if you're interested. So, Section 46, this is the moving away from locally varying sorry, this is adding definitions to Title 32 for your supplemental district spending. So eliminating current funding for the language. What is supplemental district spending? It is the spending that voters of a district may approve above their educational opportunity payment up to a half of 5% of the district's unweighted foundation amount. So this is 5% not of the weighted, not the EOP. Basically, can think of it as a unweighted amount if you took a non weighted student count and multiply that by your base. Would give you 5% of that would give you what your cap is. So this is what voters would be voting on. The supplemental district spending tax is imposed uniformly, meaning that everyone had to use the same rate to raise the same amount of funds, but only school districts that are voting supplemental district spending will be paying any supplemental district spending tax, and their rate will just be determined in the way that anyone else's would be. So to rate that supplemental long district spending, a district must impose the rate that would be required to raise those funds in the lowest tax and investing district. I that's the most intuitive way to think about it. Everyone has to apply the same rate to raise the same amount of funds. And what rate do you apply? You apply the same rate that would be required in the lowest tax and capacity district. The inevitable result is districts are raising more funds than they voted in supplemental district spending that the country recaptured.

[Sen. Ann Cummings (Chair)]: And that is our freedom required.

[John Gray (Office of Legislative Counsel)]: That's the equalization measure that's been introduced to try to address the the freedom concerns.

[Sen. Ann Cummings (Chair)]: Sean, is this put in as a permanent thing, or was

[John Gray (Office of Legislative Counsel)]: it a we have like a five year There is a transition to roll out the cap. So in the first ten years, there's actually a different the first nine years, there's a different cap. The first five years, you have a 10% cap, and then you go down to 5% by FY '38, I wanna say. So the first five years, you have 10%, and then you bring it down by 1% each year. But the actual concept of supplemental district spending in Act 73 is perfect. There's nothing in Act 73 that says supplemental district spending is going away and you're gonna be entirely on EOQ. But we do have a transition mechanism for the cap. So the left side is kind of more intuitive description of supplemental district spending, the right is some of the math, but I I hope that think it makes sense with the bottom left bullet, basically. So the way it works is we benchmark rates to the school district with the lowest taxing capacity district, and that is the district that's anticipated to have the lowest brand list for long term membership in the upcoming fiscal year. Basically, you can think of this as who has the least property wealth per student available. And that's based on regardless if they do SDS, right? Exactly. The poll for determining that is not related to any vote. It's truly, and this backs the December 1 letter, the commissioner of taxes will just look to identify who has the least property wealth per student. That's your school district's lowest taxing capacity. And the way that it's translated into action is through the supplemental district spending yield. This works differently than the existing yields, but the simple concept that it is, it just identifies how much revenue per long term membership, so this is just the student count, it's not weighted, how much revenue would be raised in that district at a rate of $1 per $100 to equalize education property value. So how much could be raised in a 1% pass, basically? And if you think about it, what happens is you take your school districts per pupil supplemental district spending, and you just divide that by the yield. And what that tells you is the rate that would be required in the lowest tax and capacity district to raise those funds. When you apply that to your school district's company tax base, Unless you are that lowest taxing capacity district, it's gonna produce extra revenue, and that is your recapture, like we talked about earlier, that flows into the ed fund, and then it's reserved within that supplemental interest spending reserve and held potentially reduce following year statewide property taxes. So here's the transition. I love this one because I don't really have to explain it. You can just look at it and see. That's nice. Go from 10% down to 5% over a two year period. You do get that 10% cap for that first transitionary period, which are also going through a number of other transitions, right, like moving from ed spending to EOP, as we'll come to shortly, there's also a homestead rate transition as well, so we got all kinds of transitions in this ad. Yes, okay, changes to 5,402, this is your property tax liability section, and then updates the Discernment one letter. So, you know, the big Ed Finance property tax changes here are you're replacing the existing property tax mechanism that fully funds locally voted school budgets and accounts for that variation through varying homestead rates. You're replacing it with just a uniform statewide education pass. This means everyone's getting that same rate in application because of the CLA and statewide adjustment. It may look different on bills. There's a uniform statewide education tax rate that's gonna be recommended, as you'll see in the Discernment one letter. Now, it's still the case that that statewide education tax would be adjusted, and this is what we were talking about earlier, by statutory factors to assign liabilities to different classifications. Kirby will talk about this eventually, but that's your homestead, non homestead, non residential, and non homestead residential currently in law in Act seven zero three. Those statutory factors are one, so effectively all the classifications are taxed at that statewide education tax rate. But if you think about it, you had a statutory factor of two for one of them, you would be doubling that uniform statewide education tax rate. Additionally, the amendment to Section 50 four(two) imposes that local supplemental district spending tax. It's calculated exactly the way that I just described. You take your districts per pupil supplemental district spending, and you just divide it by the supplemental district spending yield. That tells you the tax rate required to raise those funds. Section 48 amends the December 1 letter. It eliminates the current recommendations for yields because you no longer have those varying homestead rates, and instead you get a statewide education property tax rate to fund spending from the Ed Fund. And the hope with the December 1 letter and what I think there's reason for optimism around is that there would be a bit more certainty to to the figures that you receive here. If you think about what you're trying to fund here, you're not anticipating school budgets that haven't been voted on yet. Right? You're voting on I'm sorry. The the recommendation is just based on a rate to raise the EOPs for all the school districts, which, again, is a mathematical exercise. Similarly, identification of supplemental district spending yield is a mathematical exercise. Commissioner of Texas just identifies what's the lowest taxing capacity district, asks how much they can raise at that $1 per $100 of equalized education property value, and and that's just a long term spending yield. So more of a mathematical exercise, less of a prediction of what what might come months later, although there could still be variation. And then lastly, some conforming changes to pick up references to the Verde rates. I hinted at this, there's a homestead rate transition, really similar structure to what you saw before with the educational opportunity payments and across the same time periods of fiscal years twenty nineteen-thirty two, with everyone fully transitioned in FY33. You identify a transition gap, so in this case, you are determining the difference between the statewide homestead rate, which again is the same rate for everyone, determining the difference between that FY twenty nine statewide homestead rate, which is used on the EOPs and the district's prior year homestead rate. Using that gap, which is fixed in time, right, it's not adjusted each year, Using that fixed gap, make an adjustment to the school districts, the statewide homestead rate, and you're basically prorating the only five year period. So if your homestead rate was above the rate required to fund the EOPs, that statewide, the uniformed statewide homestead rate you'd be moved downward. And then similarly, if your homestead rate in FY '28 was below what would be required to fund the EOPs, you're moved incrementally upward. But note that it is just an adjustment to that rate, and it's based on a fixed transition gap. Similar to the earlier EOP transition, the gap is meant to be determined based on, gives greater certainty to the commission of taxes, to the tax department, if you have actual fixed gaps. Switching gears a bit, we have the repeal of the property tax credit and the new income sensitivity measure, so that's implementing the homestead property tax exemption. This is rolled out at the same time based on the same contingencies as the foundation formula. And unlike the tax credit system, where you're taxed on the full value of the property, right, and you receive a credit against that tax, this actually reduces the tax liability. So the homestead property tax exemption reduces the amount of house site value subject to any education taxes. It's available for households as enacted with household income not more than $115,000 and it provides our scaled range, right, in inverse relation between household income and homestead exemption. So the bottom of the bracket, if you made 0 to 25,000 in household income, you would receive a 95% homestead exemption against the first $425,000 in outside value. Similarly, if you made between 110 and 115,000, you get a 10% homestead exemption against that same outside value. Section 51 just codifies the purpose. I think it's pretty obvious. Reduce tax liability for households with that type of income. And this is the report we were talking about earlier, section 53. December 15 year, acts to report on an alternative homestead exemption structure includes a couple of things, but importantly, what we noted before, an analysis of the implications of moving to income sensitivity that provides benefits to households of up to a $175,000 in household income. That's the grass you were talking about earlier, like that curve that you see. May also remember the I was gonna say you may remember the colored squares and trying to get everyone to be a happy color. I don't know how that works. This would also include recommendations for updates to the Homestead Declaration.

[Sen. Ann Cummings (Chair)]: John, can I ask a question? Yes. I don't wanna ask you a policy question because I know you don't like policy questions or you don't like you don't wanna answer them. I can refuse to. That this task policy could I mean, it's I know it's contingent in this bill on drawing new districts, but it could exist outside of Yes. Thank you.

[John Gray (Office of Legislative Counsel)]: Okay. You you can pursue all of these things are only linked to that by the decisions that you guys made to make them contingent. Right. There's nothing inherently linked between the income sensitivity measures and the school district configuration. Thank you. Lastly, just to have a boring final set of slides, conforming changes. Any So references to the property tax credit are replaced with references to the homestead exemption, trying to extend those benefits in the exact way that they're currently extended under law, and then updating the directives of the Ed Fund Advisory Committee to address that foundation form of roll out and the new consent exemption. High level overview of what we just did in title 32. You're replacing Act 73 replaces locally varying homestead rates with a statewide education tax to be adjusted by those tax specifications, statutory factors, imposes a supplemental district spending tax for districts to raise funds locally for any voted supplemental district spending using those equalization measures where we benchmarked to the lowest tax and capacity district, repeal of the property tax credit system and replacement with the new homestead exemption, which is your new when people talk about income sensitivity measures, this would you this is what you would be referencing in the future, the homestead exemption. Lastly, I just wanted to note you can click on this link or it may be posted elsewhere, but we do have an act summary on our website, or the legislative website. It's just a two page summary of everything that that I and Kirby will talk about, basically. And then I find beautiful final slide. Oh, nice. Thank you. That's what I was looking for.

[Beth St. James (Office of Legislative Counsel)]: So And,

[Sen. Ann Cummings (Chair)]: Kirby, I figured out what happened. You're on the back of the page.

[John Gray (Office of Legislative Counsel)]: Oh, okay.

[Sen. Ann Cummings (Chair)]: That was Alexandra. And it just said invited. But I think I don't think anyone's gonna absorb anymore at this point in time. But we've got Julian coming in tomorrow, and I think your presentation might work better with them because we'll be doing they're gonna be doing the end fund. We'll be doing all numbers tomorrow. Would it work? Or do you think we need to do it now?

[Kirby (Office of Legislative Counsel)]: It what time was that?

[Sen. Ann Cummings (Chair)]: They are right here 01:30.

[Kirby (Office of Legislative Counsel)]: Yeah. I'm booked.

[Sen. Ann Cummings (Chair)]: Okay.

[Kirby (Office of Legislative Counsel)]: If you want, I can give you a very fast overview now. It's it's 12 pages in the bill, really, but

[John Gray (Office of Legislative Counsel)]: Okay. I I can also say that it more intuitively links with the statutory factors we just talked about Yeah. Than it probably does, like, the Ed Fund.

[Sen. Ann Cummings (Chair)]: Okay. If we do that strictly. Okay.

[John Gray (Office of Legislative Counsel)]: And

[Sen. Ann Cummings (Chair)]: we have all sort of all It's been amazing.

[John Gray (Office of Legislative Counsel)]: Screen.

[Sen. Ann Cummings (Chair)]: So

[Kirby (Office of Legislative Counsel)]: the quick version here, and it can be quick, I think, is I'm gonna talk about property tax classifications, and I'm going to talk about the original assessment districts. I think for your purposes, it's going to be the classifications that you're concerned about. As a refresher, act 73 created one new tax classification for Vermont. We currently have homestead and nonhomestead. Act 73 out of nonhomestead, a subset called nonhomestead residential, which was intended to classify second homes as short term rentals as their own thing. Things that you should be aware of. So so really, I mean, that's that really is the the gist of what there's a there's a lot of law here, but it was just to get at that. So for your purposes, what you should be aware of is, one, there's a definition, maximum b three non homestead residential. It says it's a partial or portion of parcel for which a homestead was not declared.

[Sen. Ann Cummings (Chair)]: And

[Kirby (Office of Legislative Counsel)]: that has a residential property as defined by the commissioner by rule. I think the chair mentioned earlier that there was a lot of discussion and a lot of negotiation. This is what she landed on. It's basically, you could say it's prompting to the Department of Taxes to figure out the nitty gritty of the definition. The department has weighed in. I think the chair mentioned earlier too that there this section 61 b of this require the department to issue a report by 12/15/2025. They did so. I think the report's great. Part of that report is recommendations for factors that John was talking about.

[Sen. Ann Cummings (Chair)]: They both help.

[John Gray (Office of Legislative Counsel)]: They just figured again.

[Kirby (Office of Legislative Counsel)]: That gives you some background information such as as Act 73 required them to do to recommend a multiplier that would ensure that any revenue derived from the new classification would cover the cost of education fund caused by the homestead exemption that John was talking about, and it also required that they put in their report multipliers that would ensure any new revenue derived from the non homestead residential classification would mitigate forecasted property tax increases. There's a lot of caveats because there's lot of unknown information about what things are gonna look like in a couple years when all of this would become law. But given those restrictions that they were dealing with, those limitations, they you know, they did they, their best. So I was I was aware that Ways and Means was hearing from the department for the next Tuesday afternoon, but it sounds like that they will be enjoying

[Sen. Ann Cummings (Chair)]: We may make the we're doing a joint planning tomorrow and the chair would be waiting some meetings and then join us. So

[John Gray (Office of Legislative Counsel)]: Okay.

[Sen. Ann Cummings (Chair)]: I think we have

[Kirby (Office of Legislative Counsel)]: I think that's

[Sen. Ann Cummings (Chair)]: one that I definitely would like best to all be here to say. There are some recommendations or things we need to do to move this forward. It will require significant amount of work perhaps from your local listers, which depending on the qualifications of your local listers and whether or not they're employed or volunteer, we'll hear from the Mhmm. The Listers Association. But I think we may find that there will be a request for additional funding to do this. I wouldn't be surprised. We do pay a perfect parcel fee now to be the grand list updated, but this this will be a big update. Yeah.

[Kirby (Office of Legislative Counsel)]: And so I'm sure the the department will also, next Tuesday, go in go into that. They're

[Sen. Ann Cummings (Chair)]: to

[Kirby (Office of Legislative Counsel)]: give you a heads up, they're definitely going to talk about the definitions, and they're gonna want some further changes for narrowing some of these things down, such as focusing on defining a dwelling. They don't wanna have to leave everything up to their judgment. They I think they would like some additional clarification in the law this session. So I think that's something that they'll talk about. Yeah.

[Sen. Ann Cummings (Chair)]: Just

[Kirby (Office of Legislative Counsel)]: so just as a reminder, classifications are part of the contingency provisions in the effective dates, as in it's tied to setting up new districts. Pat mentioned that before. Just wanna let you know classifications is also part of that. In addition, though, to that contingency, the classifications have their own specific contingency, which is that these will not take effect unless by 07/01/2028, the legislature creates a new tax rate multiplier to be used for these. As John mentioned, the current draft is that 73 is enacted, has a factor of one for every classification time, which means that there's no difference. But because folks were aware that these these aren't being created to do nothing with.

[Sen. Ann Cummings (Chair)]: Really?

[Kirby (Office of Legislative Counsel)]: Let's before 07/01/2028, decide what you wanna do. But, you know, that's still well in the future. And you'll be talking about

[John Gray (Office of Legislative Counsel)]: it next Tuesday. It's a big part of what we're talking about.

[Kirby (Office of Legislative Counsel)]: So I think those are the big things to make you fully aware of classifications. Another reminder is that part of this was the regional assessment districts, just as a refresher.

[Sen. Ann Cummings (Chair)]: That's right.

[Kirby (Office of Legislative Counsel)]: By this is a little later timeline than other things. By 01/01/2029, Act 73 would have Vermont transitioning over to having mass reappraisals done on a basically county level. Currently, every municipality's on on the hook to do that for themselves. And there's testimony last year of how some of them struggle, and it's yeah. This has been something that's there

[John Gray (Office of Legislative Counsel)]: was acts 86 from

[Kirby (Office of Legislative Counsel)]: a few years ago related to this. This is just part of part of something that the general system is gonna work on for a while, and it's also part of this. By next Thursday, you should get another report from the Department of Taxes about this topic. It's due July 15 or January 15. Sorry.

[Sen. Ann Cummings (Chair)]: And we were I remember discussing the importance of making sure that these assessment districts coincided with whatever school district we set up so that you wouldn't have half your district be reappraised at different times from the other.

[Kirby (Office of Legislative Counsel)]: There was talk of that, but the language in here currently hasn't been based on counties.

[Beth St. James (Office of Legislative Counsel)]: Thank you, madam chair. I'm just scanning the language quickly, and I know my eyes are picking it up. But was there language specifically about appeals, appraisal appeals, and how those or was that something that we asked the working group to talk about?

[Kirby (Office of Legislative Counsel)]: Exactly. The working group. It's like it's right here.

[John Gray (Office of Legislative Counsel)]: The working group report that you will

[Kirby (Office of Legislative Counsel)]: proceed next week deals with these four things, plus, you know, the fourth one is whatever else PBR must include. But the appeals is one of the number two bid.

[Beth St. James (Office of Legislative Counsel)]: Okay. Okay. That's good. I'll I'll and this report is coming is coming to us next week. Mhmm. Okay. That's good. I have a constituent who has might wanna testify about her experience with it and appeal. It's just Kinda interesting.

[Sen. Ann Cummings (Chair)]: Relate to this. It related to the tax tax sale bill. Mhmm. And we set a limit that you we set what you had to owe before you could go to tax sale. There's enough. Apparently, one of my towns has this it was set up as a development, but it has these tiny lots and the taxes are only, like, $50 a year and to reach that, I've asked property valuation to have us Are they trying

[Beth St. James (Office of Legislative Counsel)]: to do a tax sale on it?

[Sen. Ann Cummings (Chair)]: They they're individual lots, and they were sold, like, fifty years ago. It's, like, they don't know who owns them sometimes. They

[Beth St. James (Office of Legislative Counsel)]: can't they aren't getting any taxes,

[Sen. Ann Cummings (Chair)]: but at some point I think I'm gonna be looking for a vehicle to fix this. There may be other places that did something similar. This was, as far as I know, it's Warren.

[Beth St. James (Office of Legislative Counsel)]: Interesting. Yeah, I

[Sen. Ann Cummings (Chair)]: think that's not related to It's not related to this, but I will be looking for a place to hang. What

[Kirby (Office of Legislative Counsel)]: what this does relate to is property valuation appeals. Yeah. Yeah. And and if you don't like the value that was designed to get that

[Beth St. James (Office of Legislative Counsel)]: Right. Right. And that's what I have a constituent who has an interesting story, but I wanna

[Sen. Ann Cummings (Chair)]: hear the report first before I ask the other comment.

[Kirby (Office of Legislative Counsel)]: The a lot of the focus in this report is is on who has authority. Mhmm. Should the state be more involved or less involved? That's what a lot of it's about, and including with the appeals.

[Sen. Ann Cummings (Chair)]: Mhmm. Yeah.

[Kirby (Office of Legislative Counsel)]: So those those are the big things. If you'd like, I can briefly show you the contingency language since the effective dates are right here. So as a refresher about all of this, subsection FF of the effective dates section says that the following section shall take effect on 07/01/2028 provided that the new school districts contemplated by the Senate have assumed responsibility for the education of all resident students and that the expert tasked with developing a cost factor foundation formula has provided to the General Assembly the report pursuant to section 45a, which provides General Assembly an opportunity to enact legislation in consideration of the report. And these were all the sections of Act 73 that are contingent on that. And I think you heard from John and Beth about a lot of this, and the last one is the property tax classifications that have been there.

[Sen. Ann Cummings (Chair)]: So essentially, according to this bill, if we wanted to go ahead with a new property tax classifications or if we wanted to move ahead with the new homestead exemption proposal, we can't do that until the new school districts are in place. Not necessarily. Well, there is always the word notwithstanding, but

[John Gray (Office of Legislative Counsel)]: We'd to just change them.

[Sen. Ann Cummings (Chair)]: We'd have to change things. All we would have

[Beth St. James (Office of Legislative Counsel)]: to do is get rid of the language that says that we

[Sen. Ann Cummings (Chair)]: can't do it. Right. It would be notwithstanding. But, apparently, the

[Beth St. James (Office of Legislative Counsel)]: government I don't think

[Sen. Ann Cummings (Chair)]: be it a us to do that. I don't think it would be a notwithstanding. I think

[Beth St. James (Office of Legislative Counsel)]: it would just be a delete. Not a draft. I

[Kirby (Office of Legislative Counsel)]: think we'd be able figure out.

[Sen. Ann Cummings (Chair)]: There's another thing right now. We everything is hinged on the foundation formula. Have a consultant, exemption, and once they figure out what it is, it will be our job to figure out how to pay for it, which is all these sections that John and Kirby just went over. I don't know what the committee is thinking. I've got to deal with the chair. I think this week just see what he is thinking about doing. And that may and I have no idea what the house and committee is thinking about doing. But we can, I think, take the time to look more deeply into some of these issues? The biggest one we ran into last year, if you remember, was to do the we have the transitions, but I don't think remember last year that broke out the impact of the tax rates if we just went to the per pupil spending and it caused mass panic. Either the low spending towns would see their tax rates go up and the high spending towns would see their tax rates go down, but so with their student spending and they weren't you know, that would have impacts on their education program. So if we want to talk about a foundation formula, apart from the redistricting there seems to be some debate over whether larger districts would save money and I can't remember being given any information because things were pretty much being written as they were being presented about what savings is in the districts, is the savings in consolidating schools, is it a combination? Where is that savings located and then who makes that decision and under what circumstances. I think if we went to the foundation formula, schools would find themselves having to make decisions that they may not want to make now, but they can export the cost of and we have bought down that that spending for the last this will be the third year, which means nobody has really felt the full consequences of their vote. Yeah. So we have been pushing people, but I think it's we are not gonna be able to do that next year. We might this year, but there are other things that we aren't doing. Can I have to say one thing? Sure. I think you bring up a really good question. Just where are the cost savings? Yep. It's No. We never time where you did that last year.

[John Gray (Office of Legislative Counsel)]: I get pitching superintendent's office. Scott's list operating.

[Sen. Ann Cummings (Chair)]: Well, we say you. We will have you you need adults to educate kids. Yes. It is not in teachers.

[Sen. Randy Brock (Member)]: But the people that are teaching.

[Sen. Ann Cummings (Chair)]: Are a reversal of the system. We will have the pro tem's proposal will be sent to us tomorrow and we will Graham, John is gonna have the privilege of walking through that with us and then the school boards have already been in for their representative to see me, so my intention is that we will have the school boards, superintendents, whoever we need in. I'm sure the NDA will wanna talk to us about that, about their concerns about that proposal. I'm gonna ask the Department of Education to talk to us. Wish we could get numbers, but Yeah.

[Sen. Randy Brock (Member)]: JFO. I think I'm gonna

[Sen. Ann Cummings (Chair)]: get those JFO is gonna come in. They're still working with the consultant on some of these things. I'm more interested in how many teachers have already been laid off. I mean, Barry is laying off two in this year's budget. They're being and that may or may not be the wisest decision from an educational point of view if it's being driven solely by the ability to pass a budget. And Things are not good now. Randy Brock. Can I just say that we co located a lot of that data on the redistricting webpage because that was one of the things that we looked into and there are fewer teachers, there are more support staff for fewer teachers every year? Did you recognize it? How much of that is mental health staff? Think we broke that out.

[Sen. Randy Brock (Member)]: We are going to need, I mean, I don't know what senator Bruce you know, but we are gonna need JFO to tell us.

[Beth St. James (Office of Legislative Counsel)]: Like Oh, yeah.

[Sen. Randy Brock (Member)]: If we did this, how much money, less money would we spend compared to, you know

[Sen. Ann Cummings (Chair)]: And I'm sure that we're going to hear that they don't control health insurance. This is for two years, I think.

[Sen. Randy Brock (Member)]: Yeah, COVID-nineteen seems to have somebody quantify what

[Sen. Ann Cummings (Chair)]: But the number if you have a labor contract that says your labor's going up 5% next year and your health insurance goes up 10% next year.

[Sen. Randy Brock (Member)]: So how many people are you giving to?

[Sen. Ann Cummings (Chair)]: Yes. I mean, how that leaves no place to take it out except education. Well, staffing. Yes. True level of staffing where you gotta go. So I told him we would give it a fair hearing. He has said he thinks we need to do something to say that we are trying to do something real. I would like to know, if the Department of Education knows, how many schools actually came up against or made decisions based on they would come up against the excess spending threshold for last year. Was that effective? I don't know if anyone knows that at this point. I know it was an issue locally with school budgeting that they were about to hit, and they have recommended the closure through elementary schools. Well, was also an issue with districts that desperately need to upgrade their facilities and they can't because they're bumping up against the excess spending threshold. Right. And so, they're stuck. Yeah. And that's happening down in the Windsor area. Don't know. As we speak. I haven't heard of a school yet that doesn't have a leaky roof. We can't pass a bond. Some are worse than others, but yeah. Yeah. Yeah. Think some of them don't have buckets under in these classrooms yet, but it is we got money to write the HVAC system, which is in COVID. Yep. But if the roof's leaking on the HVAC, you're gonna start growing molds. So we do need to come up with some school maintenance, not necessarily construction, but major maintenance. Or decouple it from education spending somehow. See if we could that might

[Sen. Randy Brock (Member)]: be an interesting idea.

[Sen. Ann Cummings (Chair)]: Yeah. I'll share it. Okay.

[John Gray (Office of Legislative Counsel)]: Would you

[Beth St. James (Office of Legislative Counsel)]: like to go offline? I think

[Sen. Ann Cummings (Chair)]: we can go offline.