Vermont Legislature SmartTranscripts:

[Sen. Ann Cummings (Chair)]: We are live. And the Senate Finance ran a little walk in the board today. Now he passed a bill,

[Amy Spear, Vermont Chamber of Commerce]: first word of the session,

[Sen. Ann Cummings (Chair)]: and we're gonna start working our way through. We're gonna do some introductions and some walk throughs, and then I'm going to start working our way through the bills on the wall because it's almost February, so we have about six weeks and at this point we will continue to work on just background on ed financing, but until the education committees decide on what we're financing, we're kind of limited to any decision. So we'll continue that, but I think for the next couple of weeks I'm going to try and get as many of these bills out of here as we can. So today we're going to continue with our walk through. Senator Westerman isn't here, but Michelle Child is. So Michelle, welcome, say.

[Jake Gulick, Vermont Department of Taxes]: For

[Michelle Childs, Office of Legislative Counsel]: a number of years, I spent many mornings with Michelle in judiciary, don't get So, back to the record, Michelle Child's Office of Legislative Counsel, and I've been asked to do a walkthrough of S-two 52, but it's not much of a walkthrough, and I also just want to give a little caveat, is that particular bill request was for a rerun of something that was introduced in 2018, and so it's the language, sort of a continuation of that. And it's dealing with the record check fees that go to BCIC, and there's a record check fund, and there's a $30 fee for doing a record of Vermont Crime

[Nick (last name unknown), retired teacher and former AOE staff]: Information Center.

[Michelle Childs, Office of Legislative Counsel]: The Vermont Crime Information Center, that's the state repository that we have that criminal justice agencies can obtain records through there, but also any individual can get a copy of a Vermont record, conviction record. This is Vermont records only. Correct. Separate from the national. Right, mean BCIC does handle when criminal justice agencies are getting other records from the SGI, from NCIC, but right here we're just talking about Vermont conviction records. In current law, there's a provision in Title 33 in section 6,914 that authorized the commissioner for Dale to obtain background checks, conviction records for anybody who's an employee or a volunteer who's working with designated agencies that receives funding from Dale. And so there's the authorization in current law. And what the bill does is you'll see in section one, it's amending the language in title 20 because that's where you have the Vermont Crime Information chapter that deals with background checks. And it's amending the fee schedule there. And you'll see in section one that you have to go all the way to page libidin language on page two, subsection B, that the following types of requests are exempt from the Vermont criminal record check fee, which is currently $30 and what this does is on page three, it adds requests made by any organization or agency administering the program of no cost home delivered meals for elderly Vermonters in connection with Dale. So, I did reach out to Dale. I was looking at their policy. They do have a comprehensive background check policy, and my understanding from general counsel at Dale is that while they do require any volunteers who are working for such an agency that's receiving phosphatidyl to be administering programs, that they do require background checks, but that prospective workers and volunteers are not charged for the cost of those checks. So, I know that if you had us in the agency, then the agency that was providing services, I'm not quite clear as to, with regard to this proposal that's in S-two 53, it's the agency that is paying that $30 fee or that fee is waived. I think, you know, what I was looking at on BCIC's website, that those types of agencies that are doing record checks for folks who work with vulnerable adults can get a waiver. So I think if you decide to move forward on this and take it up, hearing from Stuart Scherer, who is the general counsel for Dale, would be a good idea to talk about types of programs that are concentrated here. How is that working now? Are they just receiving a waiver of the fee? Or is the fee somehow getting paid by Dale? I'm not quite there.

[Sen. Ann Cummings (Chair)]: Probably can send an email to the committee staff over there. Yeah. Let's see if you can come over. So, this is giving records to communities. No, but we're not clear who was paying the fees now or what's being Right, because it's the employees or the volunteers. There is a provision, like I said, with the NCIC that indicates that an agency that has been, that is doing the record check fee on behalf of Dale can apply to the wait numbers. Okay. So for now, we'll solve long term benefits. We're trying to solve, and then we'll talk to their general counsel to see who is actually paying if anybody's paying the fees. You know, nobody's paying fees. Maybe we need to hear from you. It's in my seat to see what that's doing to them. So okay. Let's do it at this point. We'll see if we can get doctor Westman in. If not, I can put this on for another day. This is just our first walk through. Okay. Thank you. Alright. I'm pretty sure everybody isn't in the room for that one. We're gonna go on to S220, an accolating to addressing education spending in fiscal year 2028 and 2029. And today, we have heard from all the B's, the Vermont Association of Principals, Business Managers, Superintendents, and School Boards. I think we've heard from all of them. I've been trying to hear from taxpayers, which is the other side of the the issue. But Jake is here. I saw Jake. It's Jake. Come on out. You're just with the tax.

[Jake Gulick, Vermont Department of Taxes]: I am. Yes. We don't

[Sen. Ann Cummings (Chair)]: have your school board at all.

[Jake Gulick, Vermont Department of Taxes]: I don't. Wanna be clear. And that's bad news. But, Jake Gulick, tax department. And, thanks for having us in. I have a really short presentation of my name on the website. And I'm gonna try to do that right here. I guess I kind of and she introduced the fact that the tax department does support s two twenty. The administration supports it. And then, hopefully, I'm gonna explain why in a second. I do see to

[Sen. Ann Cummings (Chair)]: I've been having trouble with this being sluggish today. Don't know if anyone else is. Sometimes the sand of the heart is okay.

[Sen. Thomas Chittenden (Vice Chair)]: Your screen's on YouTube right now, Jim.

[Jake Gulick, Vermont Department of Taxes]: Okay. Is it okay if I don't share, if I just do it from the thing under

[Sen. Ann Cummings (Chair)]: I have your thing. If you can share, that it'll help the room, but

[Jake Gulick, Vermont Department of Taxes]: Yeah. It's not opening a PowerPoint in my computer.

[Sen. Ann Cummings (Chair)]: So Yeah. I just had a lot of trouble getting documents open, so it may just be the this end of the hall. It's happened before. I'm at the bill or the PowerPoint. I'm looking at Jake's PowerPoint. Okay.

[Jake Gulick, Vermont Department of Taxes]: Well, my handout really doesn't have much to it, so it's pretty easy to work off the link on the website. So thanks for having tax department in. A few reasons why we definitely do support SQ 20. It is a good bridge to the foundation formula for a variety of reasons. We are thinking that the foundation formula is gonna start in FY '29, ideally. If it doesn't start until FY '30, then then Senator Bruce's plan could go another year. It's great timing to do it now. It would impact FY '28 budgets, which school districts are not even close to really starting to design. FY '27 has already been warned for almost all districts, so you can't really do anything about FY '27, but if you are going to do something about FY '28, now is the time to do it. We think that it is very well designed. A couple of years ago, there was a phase in for the new pupil rates in act one one twenty seven that have to do with equalized tax rates or school district tax rates. And what happened there, it is there is a provision that said your tax rates couldn't go up by more than 5%. So districts understood the implications of that, that if their tax rate can't possibly go up by more than 5%, then it's kind of like a blank check. So that is what happened back to 01/1927, and there had to be a course correction in February.

[Sen. Ann Cummings (Chair)]: Never going to do that again.

[Jake Gulick, Vermont Department of Taxes]: Yeah, yeah, it was a problem. This one is not Can

[Sen. Ann Cummings (Chair)]: I say that the Senate didn't create that problem when the bill left here? It was very different

[Sen. Ruth Hardy]: Yep.

[Sen. Ann Cummings (Chair)]: Than when it Yeah. Everybody. Yep. It

[Jake Gulick, Vermont Department of Taxes]: still had to be voted on by everybody. Yeah.

[Sen. Ann Cummings (Chair)]: I know. Well but it was said with further amendment, you know, midnight, that kind of thing.

[Jake Gulick, Vermont Department of Taxes]: Yeah. So

[Sen. Ann Cummings (Chair)]: yes. I and I do remember when it was supposed by the administration that schools be limited to 2%. It was a percent increase in January and all the school budgets had been warned and written and it was we had to allow school budgets to be revoted. It was another extremely painful process, which I don't think any of us that went through it would ever wanna go through with the damage.

[Jake Gulick, Vermont Department of Taxes]: Agreed. Yeah. It was painful. This one is not about tax rates. It's about per people spending. It's much more straightforward. I met with Julia Richter from GFO this morning to think about how it would play out and any behavioral potential behavioral impacts, and and we were not seeing any. So we think it did or I the tax department picks it. It's it's very well designed. It it doesn't have any clips in it. It leverages algebra, which I love, to have kind of like a smooth face down. So in

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: that way, it's of the day.

[Jake Gulick, Vermont Department of Taxes]: It's really, really quite good. You know, I've been doing this for, like, eleven years. There's been a handful of allowable growth proposals, and this one is probably the the most well designed. It's equitable because it helps close the gap between the high spenders and the low spenders by allowing the low ones to spend more. The very lowest could spend up to 9% more per people. The very the top half basically could only go to 3%, and in between, there's kind of like a slope down, which I have a little graph on the next page that shows that. There's a problem that all of us know about in the current system where the spending decisions of one district affect the taxes of another. And there are some districts that are very happy to spend more, and there are some districts which are very frugal, and the voters are very sensitive. This measure would prevent the high spenders from peaking tax capacity from the low spenders student yield. So it kind of locks the yield, and in fact, if you pass this, you will experience in the year, and possibly the year after, an extremely stable yield between the commissioner's letter and when a yield bill is passed. Because there isn't much question about school spending, it would be pretty well determined.

[Sen. Ann Cummings (Chair)]: Thank you. So

[Sen. Ruth Hardy]: one of the concerns I have is that this doesn't actually address the cost drivers in education. It just imposes a cap that tells school districts you can't spend more than x percentage, and a lot of the cost drivers in education are beyond the ability of the board, as you very well know. Beyond the ability of school boards to control, so they have to, you know, pay the health insurance costs, they have to pay whatever they have negotiated with their teachers union, they have to pay their utilities, they have to pay their contracts for busing, and they have to pay special education, that's not an option. They have to pay their facilities and bond costs and everything like that. So this isn't addressing some of the cost drivers. And so the things that school boards do have at their discretion to cut are often the things that impact kids the most directly, like the number of teachers and the number of, you know, humans in the building. And even some of those can't be cut because they have to provide special education services that are required by an IEP, etcetera. So I'm just concerned and some of the quote unquote high spending districts are districts that have higher negotiated salary costs, and so they can't do anything about it. So, I don't really feel like this is getting at what are the cost drivers of education, And what we're gonna see is some really perverse effects where school boards are forced to cut things out of their budgets because all those costs that I just listed plus probably more that I forgot will go up next year. So, even a limiting to 3% to 9% could be a cut in some ways. And all of our districts, as you also well know, are trying to find ways to address the cost drivers and try to reduce their expenses. And so I think that this will could put especially on some districts really, really punishing effects on the things that really impact kids in their classroom. And instead of having the, you know, being great if we could get them to, you know, to cut the things that are the cost drivers, but those are the things that, by definition, are the things that are hardest to cut, and so they're gonna cut the things they can cut.

[Jake Gulick, Vermont Department of Taxes]: Yeah, I'll say a couple things on that. The first one is, and I'm not quite putting my school board hat on here, but I am drawing from my knowledge of school board operations, which you also, many of you also have. So, school districts, in large, in lot of cases, have reserves or fund balances available. I think that the recommended amount is between 24%. Some school districts have much more than that. And if if if I was on a board faced with a three percent or whatever cap in a year, I would consider applying fund balance to get under the cap.

[Sen. Ruth Hardy]: Well, I'm gonna just push back on that because I think a lot of school districts have been drawn down on those reserves in the last few years to keep their tax rates as low as they possibly can. So if not as many districts probably have those reserves. And also, some districts are trying to build up reserves so they can afford capital costs Mhmm. You know, to to make the repairs to the buildings that are falling apart. And so if this is predicated on, oh, we're gonna let school districts use their reserves in order to do it, that also is not addressing the cost drivers. So, we're just making the problem worse instead of actually addressing the cost drivers of education, which is what we need to do in order to reduce the cost or slow the growth.

[Jake Gulick, Vermont Department of Taxes]: Yeah. And I can't put my actuary hat on because I'm not an actuary, but So, you don't have that

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

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: I don't even have that hat.

[Jake Gulick, Vermont Department of Taxes]: But, School Boards Association, Sue Segolowski was here last week and had a pretty insightful proposal around teacher healthcare.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Mhmm.

[Jake Gulick, Vermont Department of Taxes]: And then, superintendents right after her, school board school business officials concur that, what about looking at teacher healthcare and picking up actuarial value and how it compares to, say, state employees? Mhmm. So that would be a possibility for controlling some of the things that, you know, maybe can't, people say can't be controlled, but it's negotiated at the state level, so it could be an opportunity there to make this a little bit easier.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: And we will, is looking

[Sen. Ann Cummings (Chair)]: trying to find the right people to come to talk to us about that suggestion. We are working on it down the hall. One of the bills last year, we were told the cost by two to 3%, the infusion bill. It did. I think what it meant is you pay two to 3% less of an increase than you would have otherwise. Then we are working on those cost drivers. The schools do negotiate their contracts, so they do, at some point, have some controls of that.

[Sen. Ruth Hardy]: But not if they're in the middle of a contract

[Sen. Ann Cummings (Chair)]: Not if they have the middle.

[Sen. Ruth Hardy]: Gets imposed. But this is, again, two year

[Sen. Ann Cummings (Chair)]: kind of bridge. We're gonna today, we're gonna hear from the taxpayers. We know this is going to be painful for schools, but I think we're also trying to hear about what property taxes are to your taxpayers. And next year, the proposal is that 20,000,000 will be removed from the Ed Fund and the chance that there will be a $20,000,000 general fund transfer to cover that

[Sen. Ruth Hardy]: is Well, Madam chair, I I think that's a completely different issue. And also hearing from taxpayers, nobody at this table is disagreeing that property tax rates are too high. So I I I really think that the premise that being concerned about this means that we're not concerned about property tax rates, everybody is. I'm just saying that if we wanna have long term impacts of lowering the cost, we have to look at the cost drivers. And and health insurance is one of those cost drivers for sure. But this doesn't this doesn't look at the cost driver. This is just a, like, one time, two time Right. Punishment that will force school districts to cut things that are not the things that we need them to reduce costs on because they don't have the ability to do it in this short

[Sen. Ann Cummings (Chair)]: time need to find out, and I would look to them to tell us, because I haven't heard it yet, what they can reduce cost of. Because it's easy to say we can't control that cost, but we do have one of the highest laws, and it's higher than our average taxpayers can afford. So what can we what can we do? Nobody likes mergers or bigger districts or so what we're trying to find out is and this is a temporary path. And if you're a low spender I mean, you're a high spender, you're spending $20,000 a student. If you're a low spender, your spending is nine. That's a big variable in there. And the low spenders can spend up to 9% more. And I assume a lot of those are the ones who we would like to spend more in order to produce a better education. But we can just throw our hands up and say, we're not gonna do anything and which is pretty much what we did after 46. At 46, and we just kinda walked away. And I think we're back having this discussion, and it's more painful today than it was then because the costs have continued to escalate. And I don't have a silver bullet. This is a proposal. It's a short term proposal. So I got the chance of Chittenden. Love Chittenden. Yeah. I had it up a couple times. I would love to do a deeper dive when we say homeowners can't afford their property taxes. I'd like to learn more about that. I have very high property taxes. I don't like to pay property taxes, but I can afford them. And I know that many homeowners are income sensitized. I would like to dig into that premise a little

[Jeannie (Jenny) Albert, Rural School Community Alliance]: bit more because we throw

[Sen. Ann Cummings (Chair)]: it around a lot. I was in this committee yesterday proposing a second home tax to pay for school construction, and I will just throw out some of the numbers. But before I do that, having a reserve on school board too, having a reserve is sound fiscal policy 101. So asking us to throw our reserves out just is not a sound policy. I I I just it's just bristle at that. I know it's I know we're in unprecedented times, I but

[Jake Gulick, Vermont Department of Taxes]: would agree if school districts were staying exactly as they are now. But assuming that they this is a bridge to a foundation formula and different school districts, then, you know, it it what what what should be done with with reserves and fund balance? So the

[Sen. Ann Cummings (Chair)]: foundation formula is not a if I could throw some French out there. It's not a done deal yet. It's weekly it's an idea that we have on the table. So yesterday, talking about operations and maintenance, right, which is 200,000,000, $205,100,000 rounding up dollars a year. We have an outstanding school district debt of $480,000,000 Operations and maintenance went up 27.1% in fiscal year twenty five-twenty six. That's $27,600,000 I have a hard time sitting here knowing that we're not investing in our infrastructure and haven't since 2007 while we're, Senator Hardy's point, not addressing what is clearly a cost driver, a pretty significant one. And now we're saying that you need to cut, which is, I mean, cap is a cut, basically. So I have a hard time because to me it seems very hypocritical for us to be throwing down the hammer and not investing in critical infrastructure, which we haven't done since 2007. Okay. Send your Chittenden, and then I'm gonna let Jake move on because we have a lot of witnesses that we need to get you.

[Sen. Thomas Chittenden (Vice Chair)]: I didn't didn't know if had an answer to that question. That's

[Jeannie (Jenny) Albert, Rural School Community Alliance]: It's not a question. Just a comment.

[Sen. Ann Cummings (Chair)]: And they aren't getting paid each year today like the rest of the seven. So two

[Sen. Thomas Chittenden (Vice Chair)]: two questions on part of what you've introduced so far, Jake. But before you do that, I just I wanna say I I don't see this as a punishment. I do support this approach and this discussion because it seems a sensible step to correct the law in our system that is allowing districts to spread their spending decisions across the entire grandness of the state, and that has been amplified by the fact we have declining enrollment. So I do think this is a valid discussion for a policy that's been in place previously. In your testimony, I think I heard you say that you've been thinking about perverse incentives, incentives that this might affect. There's two that come to my mind, and I'd love to hear your reaction to it. I don't think this is the case and I too love a good algebraic equation. I'm trying to translate the language in here to what it would be. But do you see, I think I know the answer to this, do you see any incentive, I would call it reverse, if this were to go into effect, would you think districts would be more interested in wanting to pass their budgets this year to set their comparative base for FY twenty eight to be a higher amount or do you, the way you see the formula is that calculation gonna be independent of whatever their per pupil spending is this year?

[Jake Gulick, Vermont Department of Taxes]: Yeah. So so Julie and

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: I were talking about that this morning.

[Jake Gulick, Vermont Department of Taxes]: So first of all, on on current f y twenty seven budgets, they must have been more. So there's not much that can be done. There's a few districts who've worn a little later, but it it's really very few. I think if you would want it to be a little bit higher this year because then, you know, then it'll potentially gives you more room next year. Where yeah. Like, we were looking at some examples where if you artificially get a lower per pupil spending, would that allow you more? And it doesn't it doesn't work out that way. No. So I don't I don't think there is a an incentive there.

[Sen. Thomas Chittenden (Vice Chair)]: So the voters haven't voted yet, but, yeah,

[Sen. Ann Cummings (Chair)]: I I hear your point. Okay.

[Sen. Thomas Chittenden (Vice Chair)]: So I don't see it as a major thing, but you do see a possibility where it this might motivate more more voters to vote yes this year in order because you do see some potential benefit to the calculation next year, the

[Jake Gulick, Vermont Department of Taxes]: higher spending for people this year. I'm not sure how much the voters are gonna think about this, but school boards would Okay. To some extent. But, yeah, there's I don't think there's much incentive to to either try to make it higher or lower. Second last one.

[Sen. Thomas Chittenden (Vice Chair)]: Yeah. So I do and my understanding of this is I'm anticipating smaller school districts with smaller number of kids will feel the potential impact of this greater than larger districts because of enrollment changes. If two or a family moves out, takes five kids away out of 200, 300, there would you agree with that sentiment that this has the potential to both benefit and also penalize in a a larger proportional amount smaller school districts than larger ones where a single pupil proportionally represents a much smaller percentage to expand the calculation.

[Jake Gulick, Vermont Department of Taxes]: I think so it's based on per pupil, which is a good thing about it. If it was education spending, we kind of had some issues, and if it was tax rates, then we have real issues. So it's good that it's per pupil, but I think anytime you're in a district that's losing a lot of kids, you always have a challenging situation because our system is based on on per pupil spending. So just five out of

[Sen. Thomas Chittenden (Vice Chair)]: a 100 kids is different than five out of 5,000 kids. Volatility. Yeah.

[Austin Davis, Lake Champlain Chamber (Government Affairs)]: Five out of a 100 is

[Jake Gulick, Vermont Department of Taxes]: a rapid rate of decline. Thank you. Based on is it three year? Oh, is it smooth out? Two years. Three year. So

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: it it moves out a little bit.

[Sen. Ann Cummings (Chair)]: Yeah. We've done a lot to smooth it out. Cliffs and.

[Austin Davis, Lake Champlain Chamber (Government Affairs)]: If I

[Jake Gulick, Vermont Department of Taxes]: could say one more thing from taxpayers' perceptions perspective, according to JFO, it would save about $67,000,000 per year. So what that translates to is in the December first letter next year, that means instead of saying 10%, it would be a 6% increase. It's about 4% on the average bill increase. So that's significant,

[Sen. Ruth Hardy]: needed.

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: This would probably guarantee that spending in the education fund would go up north of 3%. I don't think we have a fund that's growing at 3%. I don't believe in a tax basis. Is pretty generous compared to what everybody else is dealing with.

[Sen. Ann Cummings (Chair)]: Oh, thank you. I

[Sen. Ruth Hardy]: just wanna remind everybody that so this year's number, the the alleged 12% increased half of that was because we bought down the tax rate last year. So, half of that is because is is a sort of self imposed percentage increase and is is really aggravating the conversation because the the the percentage increase is what people are focusing on, and that percentage was aggravated by us buying it down. And there's a proposal again on the table to do that, which would again aggravate next year's. But even still, the there's the most recent numbers from the Agency of Education that where school board numbers are coming in right now. It's actually dropped. I don't know if you've seen this number, but the Agency of Education yesterday gave testimony in house that the the apparent 5.8% is now down to 3.5% for this year. So I also think that school boards are doing the hard work of trying to cut their costs and reduce their budgets on their own and us imposing something on them that isn't sensitive to where their individual cost drivers are or their collective cost drivers are is going to end up cutting educational programs for kids, especially in the higher spending districts, many of which are lower, senator Chittenden. And and they're they're in a position where they can't cut their teacher salaries mid contract or you know? So I I think that being you know, what hearing from school districts about what they have done to reduce the costs, like the as the chair mentioned, the the cuts in health insurance this year, it didn't didn't bring it down to a negative, but it was a significant reduction in the health care, what it would have been had we not done some of the work we did, and had they not done some of the hard work at Beehive to try to figure out to cut costs. So it's it it is a sort of a a conversation on false pretenses when you're just looking at the percentage growth. And I I think if you're if you're a lover of algebra, then you gotta look at that as well.

[Sen. Ann Cummings (Chair)]: Okay. I'm gonna move us along. We have a lot of witnesses. So, James, thank you. Thank you. And we're gonna to Austin to the next. Good afternoon. First time is not a chair. That chair comes out. So There's this one around the side. Ow. That's what we said. Well,

[Austin Davis, Lake Champlain Chamber (Government Affairs)]: the record, I'll say this to Robert, government affairs in the Lake Campaign chamber. I'll try to give my comment brief because I know you've got a number of folks, but first, I'd just like to thank you for your continued work on education transformation and continuing to grapple with all these difficult factors. I know it's not easy. I'm here today to kind of just say that in the face of just all the instability, uncertainty, and lack of predictability that we are facing at the national level. The greatest thing that this body, this legislative body, can do for Vermonters is to revise some stability, certainty, and predictability. I think the monitors desperately want to know that you have a plan for the future and we're glad you're taking steps on education transformation, which we're appreciative of under Act 73. The plan is still heading roadblocks and has failed to create short term cost containment and it will take time to develop the savings. So, in the meantime, often financially fatigued and that's why I am here this afternoon to express support for some reasonable variable allowable growth rates and provided your committee to find on your committee page with a letter from a number of other business associations who echo that sentiment. Despite your ongoing reform efforts, we are facing another double digit property tax increase. I understand that some of that is due to a buy down. However, that still brings us up to a very sizable property tax increase of almost 6%, continuing a trend where property taxes have risen over 40% over the last five years. And I think that my members and many of the folks we work with share their perspective that some guidance from Montpelier, on how school budgeting should be done over the coming fiscal years would be a very large achievement for you folks to leave in May to direct some suitability to taxpayers and have them understand what the next few years look like for them. We had concerns about declining enrollment, even gram list growth, potential liabilities to limit the gram list growth, all while spending is increasing. I'd agree with Senator Beck's comment that 3% is still outpacing our economic our groundless growth in many instances. Our members in their personal and professional finances need to tailor their budgets to economic trends, and more often than not, fiscal framework and guardrails to provide limitations come from above. Similarly, every government entity in the state needs to budget in this way, where they have top down guidance on how they should start their budget. It is not unreasonable to expect our education system to do the same. Allowable growth rates, which are variable and tailored to each school, because I also love algebra, represent a reasonable and necessary outcome and interim cost containment that will give Vermonters a degree of certainty and predictability they deserve while they continue our education transformation. And such a method, as you heard from Jake, does check some important boxes. It still does allow local control and our decision making while ensuring outliers that affect the overall state budget and tax rate. It's also break and comply, that's rates for each school, are variable and specific, and allows the low spenders to catch up and move towards equity. Now, I just want to be clear, we don't see this as a substitute for larger scale education transformation, but a modern education system needs that desperately. We see this as a temporary tourniquet to contain cost while we need more surgical work to move towards broader transformation. With that, I'll take any questions.

[Sen. Ann Cummings (Chair)]: Operator? Thank you, Austin, for your testimony. And I appreciate you bringing up the word stability at a time of great instability and frankly, fear and anxiety coming from other geographic locations in our country. But I would ask you, how do you quantify your value stability in our education system? How do you see that as playing an important role in these unprecedented times?

[Austin Davis, Lake Champlain Chamber (Government Affairs)]: I think that in this instance, money can't bias stability. We spend more for people than most of any other state in the country, and it's not producing the results we see elsewhere in the country. And I think folks are providing stability in other aspects of state government. I mean, the agency administration gives effectively allowable growth rates at the beginning of the fiscal year for many departments who are dealing with vulnerable populations as well. DCF, corrections, all of HS, the list goes on. I've sat on the board of a human services provider who has a similar situation where they have an allowable growth rate that is dictated by numerous stakeholders, and they have to build their budget within it. I think that the education system has had the privilege of not having top down budget guidance for a long time, and after many years of that privilege, it can feel like punishment. However, it's just the reality of being able to in.

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

[Sen. Thomas Chittenden (Vice Chair)]: Great testimony. I want latch onto something you've said about how this is less demanding or less invasive than what Act 73 contemplates, which is absolutely true. I see the core issue of our current system is centralize the funding, we still have decentralized decision making, and this still allows for a great deal of decentralized decision making while still putting a, what I would argue, a sensible and considerate path on the overall growth relative to the

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Thank you for highlighting that. Questions

[Sen. Ann Cummings (Chair)]: for us. Thank you. You. General Doctor. Jean Albert. Think you know the whole team, but just introduce yourself and who you want to present.

[Jeannie (Jenny) Albert, Rural School Community Alliance]: Okay, thank you very much. Hi. Hello. Thank you for the opportunity. My name is Jenny Albert, and I'm from Lincoln. And I'm here as a member of the Girls School Community Alliance steering committee. My testimony is divided into a few parts. Know I'm gonna try to be as concise as possible if you've

[Sen. Ann Cummings (Chair)]: been at the schedule. It

[Jeannie (Jenny) Albert, Rural School Community Alliance]: does cover two main topics. We talked a little bit about our support, strong support for the CESAs, the Cooperative Education Service areas, and provided a little information about where we see the most beneficial reduction in costs that are even being seen already in state, as well as improved service and quality. The point of that is just to provide context for why we are thinking around S220s. I didn't want you to think about that.

[Sen. Ann Cummings (Chair)]: No, I just wanted to ask, I've known there is a cooperative service area in Southern Brits. I think we're gonna hear from them. Have your rural where are your rural schools in forming these? And if they can be formed and schools have been under all this pressure for a decade or more, why haven't they been formed? What keeps rural schools from forming these? Because they've suddenly become the be all and end all, but they're completely voluntary, so why haven't they haven't?

[Jeannie (Jenny) Albert, Rural School Community Alliance]: I'm not going be able to answer that completely. I do know that the one that's in Southern Havana is built from a collaborative that had started already. And there are other collaboratives in different parts of the state which have formed, they just don't, they're not called BOCES or they're called, that one was called BOCES, they're not called a CSAT. There are actual collaboratives already existing. Our position really is that we do support implementing them across the state. Because your question really comes down to how do you make them happen? And it may be that the best way to make them happen is to designate them, get people into them it's with some great to happen. We are open to that because we feel they're so beneficial and it is hard to do it among all the other things that school districts and supervisory unions are doing.

[Sen. Ann Cummings (Chair)]: Okay, but they have not gotten them to date? Somehow like like I said, some

[Jeannie (Jenny) Albert, Rural School Community Alliance]: of the collaboratives that exist today, I think, have a lot of overlap because they do have shared services within them. They're just not as robust, and and they can't learn from the others that have it in other states.

[Sen. Ann Cummings (Chair)]: I mean, are they jointly buying pencils and paper, or are they jointly doing human resources, budgeting?

[Jeannie (Jenny) Albert, Rural School Community Alliance]: I would be happy to, you

[Sen. Ann Cummings (Chair)]: know, make sure It would be helpful to know what is out there.

[Jeannie (Jenny) Albert, Rural School Community Alliance]: I think there's a certain amount of sharing of expertise, consultants, other types of services, but probably the simplest would be to provide you the information. Yeah. The kind

[Sen. Ann Cummings (Chair)]: of the best. Yeah.

[Sen. Ruth Hardy]: The I mean, one thing to note, master chair, is that the the the law that enabled ceases to exist was just passed, I think, in 2024. It's pretty it it's not like they've had the option of doing it for a long time. There are as as Jeannie mentions, there's lots of cooperative agreements, shared transportation contracts, etcetera. That has been happening for years. And a

[Sen. Ann Cummings (Chair)]: lot of the things that are proposed that CESAs do are things that the agency of education used to do and no longer does. But even with the CSAs, we're still looking at the same increased cost?

[Sen. Ruth Hardy]: No. No. Mean, with the CSAs that

[Sen. Ann Cummings (Chair)]: are out there now, whatever the only saving is being reflected in the present school budget.

[Sen. Ruth Hardy]: Well, I think it

[Sen. Ann Cummings (Chair)]: should ban them. Hear from the

[Sen. Ruth Hardy]: one that exists and what Yeah. They just started this year. So it you know, this is the

[Sen. Ann Cummings (Chair)]: first budget they're creating with the I mean, I'm just trying to find out where the information is. We Yeah. I'm not in theory, but this is a money committee. I need harm not for Yeah.

[Sen. Ruth Hardy]: And and and I

[Jeannie (Jenny) Albert, Rural School Community Alliance]: definitely encourage you to listen to have some come in from the end. Guess you maybe more than that, but there's something there.

[Sen. Ann Cummings (Chair)]: And if you can find, there's apparently, we're hearing from the Director?

[Sen. Ruth Hardy]: The current existing CISA director, and we had some overfeed

[Jeannie (Jenny) Albert, Rural School Community Alliance]: She has some really good numbers. Mean

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: a lot the shared services already happens. It just happens at the SU level. Yeah. I mean, it's having all the statements at the SU level.

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

[Jeannie (Jenny) Albert, Rural School Community Alliance]: I'm sort of setting the stage because we recognize that were that to happen, that CESAs would be implemented statewide, that takes a couple of years to get up and running. And so this testimony just speaks to what could be beneficial about having something like a spending cap.

[Sen. Ann Cummings (Chair)]: What's up there?

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: C-one 130 just went right up the street.

[Sen. Ann Cummings (Chair)]: I don't know.

[Jeannie (Jenny) Albert, Rural School Community Alliance]: I will continue. I did actually want to say first in the testimony that to thank Senator for their task force and together with your co chair, Representative Crowning, you succeeded in overseeing a process that was grounded in respect for facts and evidence. And you listened to the voices as well as other task force members. More than 5,000 Vermonters who engaged in surveys, meetings, and public comment. The Alliance, of course, the task force proposed three step phase roadmaps starting with implementation of CESAs across the state. And during this interim period, Vermont can take additional short term steps to reduce education spending. A carefully designed cap on district spending could be part of this effort. But we do believe that it should incorporate important safeguards to address issues that are beyond the control of school districts, such as declining pupil weights and certain extraordinary policies. It's already been talked about today. What I focused on in this testimony is looking at the allowable growth percentage, and in the testimony that was uploaded, you'll see a kind of what's called a scatter chart with a lot of dots on it. And the point of this is one way to get at the fact that there's a very high correlation between change in district per pupil spending and change in district weighted pupils. Yes. You've got numerators and denominators. And we're talking about maths. It's my area I'm happy to get into. The core though is, for this purpose, is that larger increases in per pupil spending, and this was, I was looking at fiscal year twenty five to twenty six, are associated with larger decreases in pupil rates. And to put some numbers to that, I created a couple of tables, hypothetical districts and their sizes, ultimately, ADM. What you can see is that even a very small reduction in weighted pupils would require a district to reduce spending to meet

[Sen. Ann Cummings (Chair)]: the

[Jeannie (Jenny) Albert, Rural School Community Alliance]: cap. And by very small, I mean, 10 or 12 waving pupils, which would not normally be a reason to cut spending necessarily. Nevertheless, force a district to do that. And what we offer is an alternative, which is that you can generate the allowable spending percentage, but not apply to per pupil spending, apply to education spending. Obviously, there's a lot of parameters in there. There's how you generate the percentage to begin with can be adjusted, obviously. And it doesn't save quite as much money. It saves about 5,000,000 less, according to my modeling. But I think that it's really important because, as people have already noted, these drop in pupil waiting can be very small, but still have an enormous effect. And this would at least partially protect that. A couple of other considerations, and then I'll finish, which is there may be a good reason not to reference the highest spender. Right now, that's how the allowable percentage is is described. I offered the possibility of using the excess excess spending threshold instead. The reason for that, I offered a couple of things, but one of them is it it at least is based on inflation in part. So it's like a real metric for the change in spending. It's also familiar to districts already. That would be another reason. I listed these are topics that have already been discussed, but in the numerator, if you want, basically, are a lot of costs for which they just don't have any control. Thinking about ways to carve those out, or just ways to manage that, I think is really important. But to finish about pupil weight and going back to that, because I think in some ways that's the biggest concern to me, or one of the biggest. And using the percentage applied to education spending will lessen the impact on districts experiencing a drop in pupil weights, but it won't eliminate potential challenges in the most extreme cases. So I would really recommend making sure to look at those extremes, because those are the ones that could be where any kind of cap would have maybe the most unpredictable outcomes. Even districts that Well, actually, I'll leave that out for now. And I guess I'll just add, on top of all of that is the challenge of getting accurate data. So, you know, when you're thinking about pupil rates and managing that, you have to first have that in mind.

[Sen. Ann Cummings (Chair)]: Okay. We're hearing, yeah, on either end, there could be school building could blow up or burn down. We could have a business move out of town and take five families with them. This has no appeals process, and I'm wondering if an appeal you know, for those beyond the norm because three to 5% the 3% are on the really high spending towns. I mean, there's gotta be some wiggle room in $20,000 a student. And that cost is getting exported to the low spending tenants right now because it's all going into the Ed Fund and and coming out. So I'm wondering if some kind of an appeals process that would, you know, be able to deal with those truly, you know, unanticipated or kinds of things wouldn't work. So I'm just throwing that out, and I don't expect you to answer that, but,

[Sen. Ruth Hardy]: yeah send to Hardy and thank you. Jeannie, thank you for your testimony. I love when you get into the mass. I

[Sen. Ann Cummings (Chair)]: know you are also a lover of Alabrothera.

[Sen. Ruth Hardy]: You you make a really good point about the weighted pupils because the way the the proposal is proposed is on a per pupil, per weighted pupil basis and if there's a change in your, not only the weights themselves, but the mix of students that you have. So if your numbers of students who are living in poverty drop or your number of ELL students drop, those are huge weights that you're no longer gonna get. You might you might add other students, but you're dropping those students and that will make a big change in your per pupil weighted average. And that that might not necessarily change your cost because you still have to have a a full second grade class. So you can't get rid of your second grade teacher kind of, you know, logic. So I think modeling what you're talking about on a a education spending broadly and comparing it would be interesting, and I think we should ask JFO to do that. Because also your point about data is incredibly important. Our agency of education has shown time and time again that they

[Sen. Ann Cummings (Chair)]: are not

[Sen. Ruth Hardy]: capable of of continuing with accurate data. And right now, there's a particular problem that is just brewing out there with the poverty data, the data that is used to have weighted peoples who are living in poverty because of the changes at federal level. With the changes in Medicaid that will probably bump a whole bunch of kids off the Medicaid program, changes to SNAP that are gonna bump a bunch of kids off. Those kids will no longer have direct certification. They will then not be counted as a student who is living in poverty, even if they still are a student living in poverty. And so school districts will still have to serve those students, but they won't be counted and weighted in the same way. So school districts might have a drop in their weighted students and therefore an increase in their cost per weighted student that has nothing to do with their budget and has nothing to do with the choices they're making. It is purely a data issue, and it's purely an issue with the the the the the things that are happening at the federal level right now that is really making everything more chaotic for school districts. So I think thank you for pointing that out. And I also you made some other point that I just wanted to highlight, but I think that so much of this is beyond the control of school districts that this could have perverse effects just because we aren't thinking about these things or not taking into these into consideration. And and also, madam chair, some of the districts with the highest per pupil cost, I'm sitting between two friends from Virgin's, are districts that are small and don't have a lot of pupils, but still have to maintain a school district. So the Addison Northwest School District is a poster child for this. They have nothing more to cut. They have cut their programs down to the bone. They still have high pupil per people cost because they're a smaller district. They have done everything we have asked them to do in terms of trying to merge and trying and then shutting schools down. They've done all of the things, but they are just a small district right now and will be at least for two more years, if not longer, depending on how things so they would be one of the district that

[Sen. Ann Cummings (Chair)]: would be required to cut things that are directly pupil related in the classroom, and that would punish students. I'm going to ask us to just have direct questions, and we'll all have time for statements. Direct questions for your and see if we can move forward. I know it's hard for all of us, but any questions?

[Sen. Thomas Chittenden (Vice Chair)]: On your testimony, yes.

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

[Sen. Thomas Chittenden (Vice Chair)]: you for this table on page four of your testimony. It does a better job eloquently visualizing my previous question. And I wanna if you can recall, you basically outlined three mock districts of a small, medium, large, and you have a 4% across the board, a proportional decline in enrollment. The point I'm trying to make, I I get, I like that we're smoothing things, I think it picks up on what Senator Hardy is, rather than if it was a 4%, if you just imagine one family of five. So if you just think about the impact of that family in District A versus if that family was in District B versus in District C, then you're looking at that family of five in a small district, that's a 1.7 decrease in spending capacity and that same family of District C is a point two decrease. So that's that was my previous concern is the impact is going to I then that's why the question I'll frame to the so as to say consistent with the chairs, I really liked her idea about an appeals process, and I feel like I've heard that before, something that came up in previous discussions around this, where if this were to go into effect and you're one of those small districts and a family outside of your control or for whatever reason, a house has fire and all these fam all these concentrated families with lots of kids leave your district, that's gonna create some pretty undue expected pressure. Do you have any recollection of the previous appeals processes that you might think would make sense for us to look at?

[Jeannie (Jenny) Albert, Rural School Community Alliance]: I don't, I'm sorry to say, but I do appreciate what you were saying before, and it is true, and the interest, just quickly, data that I looked at for fiscal year twenty five to twenty six actually did include a mix of size districts. It wasn't one of these cases where just the fact of losing pupils, a significant, only affected smaller districts, but it has a greater impact. That's the way I would phrase it based on what Ruth was talking about at the table. And then I hadn't thought about until you just brought up the idea of an appeals process. Could think one of the ways I would think of it is being able to anticipate the categories that would impact certain districts disproportionately and a way to report that out with some degree of, I don't know, for the lack of a better term leniency or change in the way it works, seems like would help a lot. And also the other thing I would mention, Senator Hardy, the sort of subsets of students that maybe could benefit from a multi year look back. It is

[Sen. Ruth Hardy]: true that ADM is two years. I mean, LTW ADM is two years. But the issue you're talking about is highly, can be highly non fluctuating. Have you modeled, you mentioned the spending caps, have you modeled a change in the spending caps? I mean, because one thing that we can do is just adjust the spending cap. Have you looked at that?

[Jeannie (Jenny) Albert, Rural School Community Alliance]: I do a little bit because I wanted to just try to get them to match, like, the approach I was taking to the way it was in the bill, but but for me, just I'm happy to share whatever I want. Yeah. Because that's But you

[Sen. Ruth Hardy]: know, we already have in current law. And as you say, districts are used to it and so, that's a different another approach that we could use instead of this hard spending cap approach.

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: We've had different conversations similar to this committee, last past. We've struggled might have been to come up with appeals processes that we've just struggled really with with coming up with those.

[Sen. Ann Cummings (Chair)]: A different way of You've struggled with all of these things.

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: Yeah. A different way to do this might be to allow for a a two part test to protect against what you're talking about, a district that just loses students, because you could say you get, what's proposed in senate bill two twenty or at least your education spending from the year before plus maybe some small percentage, whichever is greater to try to protect as far as your protect that situation.

[Sen. Ruth Hardy]: Education spending for people or for

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: No. Education spending for the district. If you at least get that, maybe it worked plus one or some small percent, Basically,

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: a

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: a two you qualify for whichever one gets you more resources.

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

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: To protect.

[Sen. Ann Cummings (Chair)]: Yeah. We've got a couple. Yeah.

[Sen. Ruth Hardy]: Do you have that modeled out in previous years? I'm I'm trying to imagine how that worked.

[Sen. Thomas Chittenden (Vice Chair)]: She's the fallback, you couldn't have less money than you had.

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: Used to two tests.

[Sen. Ann Cummings (Chair)]: We're getting into complete discussion. Do we have questions for the system? Have some

[Sen. Ruth Hardy]: concrete to talk about.

[Sen. Ann Cummings (Chair)]: Well, Scott, one quick question for Jeanne. Could you just give us an example, one more example of stranded costs? As children leave a district and so money is pulled out of a district, what services remain? So what costs are still stranded on that district? Other than second grade. So I never heard you said second grade. What costs are So you talking

[Jeannie (Jenny) Albert, Rural School Community Alliance]: in other words, if there's fewer students but there's costs remaining, that's what you're asking? Or where services remain? I mean, I would say, I I think they basically all remain if we're talking about only less than 20 or, you know, sort of depends maybe. But the example I gave was 12. Presumably that's not all in one grade, right? So there's really no reason to cut if that's all you're seeing. You may have other reasons. And I would just add, and thank you again, that dealing with declining enrollment or declining LTW ADM is not a new thing. It's just the question of whether how a cap would exacerbate that. Like how it would make it even more difficult to deal with a system that

[Sen. Ann Cummings (Chair)]: we have in the bank? Yes. We have dealt with declining enrollment by raising costs per pupil. We had schools and both. Whatever they want, whatever it takes to do that, the cost gets exported into the ed fund and shared by everybody else. And that's where we've been. School does not fair the full cost of the increased spending. On the other hand, I've been a school that was the last one to vote their budget, the fourth try. And I have the heart to tell them, it really doesn't matter if you make these painful cuts because your tax rate is pretty much set because everybody else has voted to spend x amount. And so I think we've reached the breaking point. Okay. There is no easy answer. There is no unpainful answer, And we're trying to find a way forward. And, you know, I think that's where the difficulty is coming.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Well, this

[Jeannie (Jenny) Albert, Rural School Community Alliance]: I hope

[Sen. Ann Cummings (Chair)]: this is helpful to you. This has been helpful. I think it's opened up some suggestions, and it might you know, some of the okay.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: You let a superintendent sneak in this afternoon.

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

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Sharon, I am being paid, but I do pay taxes as well, so.

[Sen. Ann Cummings (Chair)]: We all do.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: So first, my name's Jamie Kennedy and I serve as the superintendent of schools of the White River Valley Supervisory Union. And you are?

[Sen. Ann Cummings (Chair)]: Who's in your supervisor? Yep. Know what White River is.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: I'm gonna tell you what it's actually not White River. And so the towns that I serve are, I have six districts, and I serve Bethel, Chelsea, Greenville, Hancock, Rochester, Royalton, Sharon, Stockbridge, Stratford, Tunbridge across three counties. That's lot of bunch of little towns. Yeah. And across Addison, kinda Orange, and Woods.

[Sen. Ann Cummings (Chair)]: I Washington County almost got Grantville. It was a toss-up with Grantville and Brain Creek.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Yep. It's about an hour and a half to get from Grandville over to Stratham. Yes. So I wanted to share

[Jeannie (Jenny) Albert, Rural School Community Alliance]: that just to give you

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: a little representation of who I serve. I'm coming here today to and we have about 1,700 students. And I provided you a chart of my written testimony in regards to the different operation within each of those districts. Four of the districts are unified. Two are single town school districts. I want to be clear with you that I agree and support the intent that I'd said we believe. And then therefore, I'm going to come to you today to advocate that we make certain the next steps we take are strategic, intentional, thoughtful, and measured. And hence, I'm going to talk to you about why there's an open I'm coming to you with an openness around S220, but to raise similar concerns that you've already started talking about here earlier today in regards to how we look at a possible implementation of a transition mechanism. I

[Sen. Ann Cummings (Chair)]: also want

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: to make sure that you understand that I support the work and the policy that came out of the redistricting task force that's been submitted to the legislature. And again, I want to thank the senator for her work and some respect in regards to the work in regards to task force. And, you know, within this written testimony, I think it's important to remember that we've only been implementing BOCES since 2024. I think some of us have regionally partnered to create some savings. Things like transportation contracts, right? Things like specialized programming for students in regards to needing to serve via special education services. But I do think that it ought to be even updated. And I think that you should have a date to be determined in legislation by the end of this session to say that we all need to step up and work together in order to tackle that important work. The special education report that was provided by the agency then really speaks to one of the areas that I think we need to really tackle within our cooperative educational service areas is this idea of how do we provide better programming for students to serve via IEPs by working together to create better in house programming for us to better monitor student growth over time in house and not being so reliant out of district placements. I think right now as an educational system, we are incredibly reliant on very high cost, they say nonprofit, although I argue sometimes that they are actually for profit intensive service providers to serve our students who have some of the most intensive needs, both socially, emotionally, and academically, and I believe we can do a lot better in house within our system with the implementation of the cooperative educational service area model. And so I do think there's going to be major savings if enacted and a real focus. There's lots of other things we should focus on, like professional development for our teachers, bulk purchasing in regards to curricular materials, transportation services. You know, there was a really good article in the digger, probably about a month now, in regards to transportation services. In some ways, we go out to contract for bids, but it often feels like transportation providers say, that's your area, I'm

[Jake Gulick, Vermont Department of Taxes]: not going to bid on it.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: So we want to bid and we only have one contractor actually bidding up services. So I think there's a lot of savings that we could see quite swiftly if you were to require us to implement those.

[Sen. Ann Cummings (Chair)]: But why don't you do it on your own?

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: We just started, and one of the reasons is, frankly, I think that just came out in 2024, and everyone thought as of last session, you were gonna lump us in the mega districts. And so we were waiting to see what was But gonna happen

[Sen. Ann Cummings (Chair)]: was there something that prohibited you in the past from We've

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: already started doing some of these things, and in the White River Valley, we built a bunch of internal programming to better serve our students via special ed. I have 1,700 students, only 10 are served out of district placements. And we partner with Hartford School District to create programming there regionally already for special ed servicing. And so some of these things are happening. I'm just saying that we ought to really look at providing the support and the focus to say, in the ever changing landscape of education, by the way, we are not static. We're also coming out of the pandemic, Senator. So to say that we need to get focused on this and try to remove some of the distractions in regards to are these SUs and SDs going to still be in place? Are we going be having to focus over the next two years on not creating a cooperative educational service but a much larger district? Those are all the questions we have in the field right now. And so if you want us to tackle them saying this is the focus area to do, and then, oh, by the way, we would also like you to focus on voluntary virtues at the SUSD level, because I don't talk to anyone in the educational field and or the folks that I serve in my 10 towns that think we need 52 JANEs, meaning superintendents. Alright? I think we all believe that we can do more efficiently than than that as a state. But what I think what if we could layer the cooperative education service area on, then allow for collaborative and cooperative mergers to happen, you know, by the grassroots, and I and I didn't put this data in in into this testimony, but I'm happy to share it with you. The districts that I served that felt like they got forced merge versus the districts that had a road map and voluntarily merged during F-forty six. The spending on all different accounts per pupil, Act 68 spending and taxes for those taxpayers are very different because one had a roadmap and the other felt forced. We're now starting to get there. So I think making certain that we set up our criteria around voluntary mergers and making certain that those voluntary mergers have a roadmap for better outcomes for kids and then result in savings is really important over time.

[Sen. Ann Cummings (Chair)]: I'm gonna play devil's advocate because that's what the voices outside this room are saying to me. You've been able to do voluntary mergers. They haven't by and large happened. No. By and large. You've been able to share services. I don't think there's anything that's forced the ICU services. And I went there and we dropped the ball at that forty sixth. And it's kind of boot until we really hit a property tax crisis. Students have kept going down, the costs have kept going up, and even if you exclude healthcare, which we're working on. So, if what we say is we're going what the other side is saying is that, okay, so we say, please go forward and merge and save money.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Wow.

[Sen. Ann Cummings (Chair)]: What happens? How soon can you save how much? You know, are we talking two years, five years, ten years, twenty years? Because the pressure on the other side, and you'll feel that pressure on town meeting day, because I'll be surprised if budgets don't go down, how how long can people bear the pressure? I don't I'm not working well, except here. So maybe senator Gulick, who's still working, her husband is still working, can afford property taxes. He's retired. Okay. But we're retired. We don't have any pensions. We didn't work for the state or a big company. We're living on what we saved, and my husband was a roofing salesman. I can't keep affording property taxes, and there is no place for me to downsize to except maybe a senior apartment, which I'm not ready to do that yet. So we've got this pressure that's built up with an aging population, continued decline in students, and we're being asked to find a solution. And so there are some good ideas out there, but how can they save enough money in enough time to keep from becoming unaffordable for most of the people? I think that's the pressure that we're dealing under. And I think we also know the schools are under a lot of pressure. They weren't set up for this declining enrollment population. And your buildings are all old, and they haven't heard any place that doesn't have a leaky roof. And I do know what leaky roofs cause because I took calls or what they cost, and they are not cheap on a building, for school building. I guess that's what I'm

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: So, Senator, I can't speak for the entire

[Sen. Ann Cummings (Chair)]: Yeah. But, I mean, in your district we did merge did

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: merge two Supervisory Unions voluntarily. We did prior to that 46.

[Sen. Ann Cummings (Chair)]: How many

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: And during that 46, we went from 10 single town school districts and we merged into six unified school districts. And I had districts close their schools during Act 40 '6, PFAS X '46 said they needed to. Yeah. And now they have non operating grades because of that. I have a district, Rainbow Hancock, that doesn't operate a school. They closed it during Act 46. They try to take the right steps because that is what they told they should have done. Exactly. And so what I am saying to you is that I believe that the seesaws actually get to the cost drivers. Special education, transportation, professional development, buildings as you're talking about, right? So I think that that actually gets to some of the major cost drivers. It's not gonna get to health care. We don't borrow that locally anymore. It's statewide. And what I'm saying is is that we ought to get to a more clear and transparent funding formula that has less variables. I'm I'm gonna give you a specific concern that I think is going to address Senator Chittenden's concerns around the S220 cap with one of my districts where their actual act 68 spending's down next year, but their per pupil spending's up by over 9%. So we did cut teachers and now we're gonna actually look at it would have to totally wipe out programming. So I'm open to this idea of a transitional cap. I wanna be clear Senator because I think we need to get to a well researched change in the funding formula because right now there's too many variables, right? Like the local decisions that boards are making, you're absolutely correct, you don't feel it on the ground. You can make cuts and actually have your at 68 spending down, but yet your taxes are going up 20%. And so, you know, with that said, I am completely supportive, and I think the field is, is in regards to getting to a foundation formula or some type of change to the funding formula that's more clear and transparent, but I think we need to really research that and get it right. What I say in here is that it ought not to rely on the requirement of mega districts by Vermont standards across rural Vermont in order to balance out these weights. And I've heard we need these larger districts in order to get the weights to work within the foundation for the lab. And that's the concern I have. So I'd rather we take our time, make sure we get it right. And the idea I have here is, is that yes, let's provide some type of transition cap to curb spending. I hear the call for that, I understand. But you know the example I gave you is that my district's overall expenditure budget is up less than a percentage for next year. This is already board approved, right? But their per pupil spending is going up 9.28% And we lost some pre K students because one of the providers locally lost their licensed teacher. So I couldn't get to count those students. That's the way it works. And so those are the students I lost primarily in regards to actual enrollment. The rest was weights, as Senator Hardy said. The changes that happen at the federal level and the fact that we, you know, we have universal meals, so we're asking families now to fill out household income forms, and frankly, I have real concerns about that when I look at it from an equity standpoint. Like, please tell me that you're living in poverty so we can count your student at a higher rate. That feels awful as an educator, right? And so we were reliant on direct service via Medicaid numbers and when the federal changes to Medicaid happened, I lost a whole bunch of weights. And so now that's why my per pupil spending's up 9% when actually we did use our reserves. We are using tuition reserve money to help offset what we're asking from from the Ed Fund for next year. So our Ed Fund spending's down, but my per pupil cost is up 9.28%. So I just wanted to share that as I understand the need for a transition in the cap. I just think we gotta make certain that there are provisions to ensure that situations like this are addressed. Either or. Yeah, and I like this idea too of, it could be like some type of advisory panel, right? Or it could be something where you're actually looking at x, because our x68 spend is actually down. You know, in that example, we could have, you know, spent more, but again, I'm looking at my constituents in the face and saying, taxes are going up 19% next year, and it's not because of your expenditure budget. That's not all my districts, that's just one particular one. And you asked a question about mergers and savings. In White River Unified District, Royalton and Bethel, Royalston tax rate is down 12.1% over the last five years and Bethel's down 1.1. Again though, that district, say it's not a big district either, I've got six twenty seven students in it, it's not that large, but they created a real vision in regards to how they were to create better economies of scale by merging, and it's resulted in better programming for kids, and they're attracting more students to come to their public high school. The other thing I wanted to say to you in regards to CAPS real quick before I wrap up is just, and I think you've already mentioned, just things that are out of our control, right, like health insurance costs that are borrowing statewide. For us, you know, making certain that announced tuition rates at both of the elementary and secondary level are capped at whatever in regards to the cap would be for per pupil or if you want an Act 68 spending, because we all ought to be playing on the same field.

[Sen. Ann Cummings (Chair)]: Tuition rates.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Meaning, like an example, I have Greenville Hancock, that's a non operating district. If I'm gonna comply with a cap, then they send a lot of their students to Rochester Stockbridge, which is in my SU. Rochester Stockbridge should not be able to announce their tuition at a percentage higher than what that cap is that you've that you've set for that per pupil. Alright. And that should go to public and independent schools.

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

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: But how about those that interplay with the allowance? Well, they could announce whatever, but the allowance would decay.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: I think that that should be tacked. Okay. Yeah.

[Sen. Ann Cummings (Chair)]: Okay. Thank you. It's good to say I have my hand up. So I think you asked a good question, and I'm not sure it got answered, which is why haven't the seesaws sort of just happened spontaneously over the last few years? And I think other than COVID being obviously a compelling reason, We looked at that in our redistricting committee, we have a whole section on it, which is that we don't expect this to just happen spontaneously. We are asking in our work for it to be mandated, but then for technical assistance from the AOE. We don't expect districts to be able to do this just completely on their own. They are going to need some support and some help because it's a new paradigm, right? It's something that a lot of districts haven't touched. I hear your point, like why hasn't it happened? I do think that we recognize that districts have been grappling with unfunded mandates. They've been grappling with poor support in rolling out some of the big MTSS and other efficiency based breeding and so on and so forth. It's been, they're constantly playing catch up. So for them to be able to suddenly pivot and start trying to do a seesaw without support, and I think Senator, Representative Polk have talked about this the other day, like implementation is really important. I just wanted to throw that out there, and I don't know if you wanna speak to that, but

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Yeah, yeah, thank you. Yeah, I mean, at 46, you know, we're really just coming off of the decade, and in the midst of that work, I think there has been some real great things, frankly, savings for taxpayers. I don't see that as a complete failure. And I also, you know, I just gotta remind folks is that there were some barriers, I think, to full implementation in regards to the pandemic was three years. And, you know, we're just we're coming out of that now in regards to school systems. And I think for some folks too, we are just waiting to see what the direction is in order to lead toward that that direction. I think some of that is some folks now are just waiting to see what direction Montoya's gonna take. And I hope, frankly, that you take the seesaw approach, that you do hold us accountable to look for the voluntary mergers and the task force got a 100 different school boards who wrote to them and said, we are open to looking to merge voluntarily. So I think there is a real willingness in the field to do that. I think as an example, if every SURSD just found a partner, we could get that RSU and SD footprint down to 26.

[Sen. Ruth Hardy]: Sounds like an elementary gym class.

[Jake Gulick, Vermont Department of Taxes]: Find my partner. Here we go.

[Sen. Ruth Hardy]: Can I ask a question? Yes. Okay. So do you have suggestions for if we were to go the voluntary merger ropes that the task force suggested. What criteria would you use for incentivizing or heavily suggesting or whatever you want, whatever term you want to use, a voluntary merger. So, You know, like, hey. You two need to find partners in gym class. How do we identify how would you identify who that should be?

[Sen. Ann Cummings (Chair)]: What's the carrot and what's the stick?

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Well, I think

[Sen. Ruth Hardy]: What are the criteria first? Like, what are the characteristics? Characteristics?

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: So I I think it should make sense in regards to the geographical nature, right, of the new entity. Mhmm. Right? Like, we wanna make certain it's manageable.

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

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: I I think we should look at what does it mean in regards to leveling up, right? Like, wanna create some efficiency here. So I think we need to analyze it, but we're gonna bring two entities together. Is it going to make sense in regards to efficiency over time?

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

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Right? I think there are some mergers that we were gonna do right now. You're gonna see due to just a leveling up of contracts and things, major increases in regards to what that new entity may actually be spending. I don't think that's what anyone's looking for. Right? They're looking to try to create some efficiency. So I think research needs to be done that way. And I would start with looking at historically, where have there already been some partnership? We have, if you look around our neighbors, SUs and SDs, we have some SUs and SDs across the state right now that are not worse, but have longstanding ties. An example I can give you is down in White River Valley, you know, separate from Winooski Valley, that the supervisory unions between Exit 2 all the way up to Exit 5 used to have something called the Green Mountain Collaborative. We also share a regional tech center, that area, they used to do PE together with support from the AOE. So like there's already some regional, like long standing groups, those boards used to get together. Support from AOE. With support from AOE. AOE would I actually do think that there's just starting to look at those historical partnerships makes good sense, and I'm basing that purely out of the idea of like, this is my year six, I was coming out of a bunch of mergers, and those mergers where those partners had worked together some and really fostered this idea of a roadmap and plan, those mergers have been incredibly successful. The alternative when I first arrived was just trying to keep them together and see how

[Jake Gulick, Vermont Department of Taxes]: this was gonna be a benefit for

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: kids, and if we want our leaders to be instructional leaders and not managers trying to like heal harm done because it's felt forced, then we ought to be saying to them, go find a partner, come to the state board and show why this data makes sense and why it's gonna be able to work. Now this feels a lot like Act 46, but the difference I'm saying now is Act 46 tended to focus on the merger of districts. It didn't really, we didn't reduce many supervisory units. No. And I'm talking about having SUs and SDs focus on coming together. So there is a know, a whole different layer of what I'm talking about. And I think opportunity to find even more efficiency in that matter. I lived in Washington Central, right? They went from SU to SD. That's what we did and nothing else changed. So I'm saying like, try to find a partner to try to create some more efficiency at that level. Okay. Yes. Question. And a state board, as you all are aware, the state board has the ability, right, to look and change the boundaries of SU. So I think you could say, we're gonna give you this time to go find a partner, and then after that, the state board's gonna start to analyze what might make sense.

[Sen. Ann Cummings (Chair)]: Okay. Because that's.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: That's already in the There's

[Sen. Ann Cummings (Chair)]: pressure from the 5th Floor. There's pressure from the taxpayers. With all these good things, is your are your budgets different? Are your costs lower than places that didn't do it? Can you make a case that by doing all these things, lowered spending our tax rates? You talked about Bethel.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Not going well, Janet, Sharon, they didn't even merge, but again, I think we work really hard because we're, you know, we're the second largest geographical SU in the state. Like, we do some BOCES stuff already within our We function very much like a supervisory district, right? But as an SU, we give, you know, I have local accountability to those boards, which I appreciate because if something's not going well, they let me know, right? And there's accountability to that, but the taxpayers in those towns hold us accountable to make certain that we are being fiscally responsible and that we're increasing student outcomes. So yeah, I mean, average, if you were to look at my districts, the tax rate and sharings have been going up about 3%. That's a small district that only operates between pre K through six. Districts are not going up over 40% and our per pupil spending is less than the state average in five out of the six districts. And that's in rural Vermont, and again, I said, I've got my largest district, their tax rates are down over the last five years when the state average has been 40% on their, so yes.

[Jake Gulick, Vermont Department of Taxes]: Okay, we have good

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: data. I'm happy to send that data for you and provide you with that hard data. I just say, again, I leave you with, I think you should look at S-two 20, but look at it in combination with seesaws, voluntary mergers at the SUSD level, and implementation of a revised funding formula, right? Like I think there's a package there that you can put together and use S20 as a means

[Jake Gulick, Vermont Department of Taxes]: to help with the package.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: Okay.

[Jamie Kennedy, Superintendent, White River Valley Supervisory Union]: Thank you so much. I really appreciate the opportunity.

[Sen. Ann Cummings (Chair)]: Thank you. That's okay. Maybe when this is done, I'm gonna take a short break and then get some committee discussion about after all of this work, I was thinking about going with it. But it's on for possible vote on Friday, but that's just to keep us moving.

[Amy Spear, Vermont Chamber of Commerce]: Alright, I will kick it off then. Thank you for inviting us here this afternoon. My name is Amy Speer, I'm the president of Vermont Chamber of Commerce. Our general perspective on 02/20 is that it is grounded in fiscal responsibility and economic realities that we all know very well. I think this committee has heard a lot over the course of this current biennium about pressures that are facing Vermonters on all sides of the scale. But I do want to begin by acknowledging something important in my comments. Budgeting under constraint is really difficult. I think you're seeing that here in these conversations today. I'm bringing a perspective of what property tax increases are like for the private sector, for your small businesses that you see in your community. In the private sector, operating in a scarcity environment is never a goal. Scarcity limits innovation, it strains morale, and makes long term planning really hard and difficult. Schools, businesses, really want to operate in that prosperity space rather than responding to crisis, which I know that is what the work of this body is trying to get Vermont towards. I'm gonna be pretty brief, because I know we're a little bit over on time here, I'm gonna skip forward, because I did submit some written testimony. A good takeaway here is that S220, with all the feedback you received, could provide a path for education finance. For those of you that haven't seen it, the Vermont Futures Project released a competitiveness dashboard earlier this month, which does show a clear pattern in our economy. Education costs are rising much faster than our population. Workforce participation and income growth, they're all rising faster. S220 is a proposal that attempts to reconnect education spending growth to the economic capacity that is supporting Send that to Charlotte to make sure we get it. Yes, absolutely. I know a few of the senators listened to Kevin so I'll make sure you get

[Nick (last name unknown), retired teacher and former AOE staff]: a link to that competitive dashboard.

[Amy Spear, Vermont Chamber of Commerce]: As was mentioned earlier, I know there are years of reform conversations that have been going, but Vermont is facing another projected average property tax increase of nearly 12%, which you're all acutely aware of, for this coming fiscal year, following more than 40% growth over the past five years. So, that trajectory, as I mentioned before, based on the data and the competitiveness dashboard, is really disconnected from wage growth, household income trends, and business revenues growth across the state. That creates the scarcity constraint environment. We see this as a potential path to move away from that. So, when we think of where are we now, it's a little bit more of a cost drift than sustainable growth, and getting us on a path for sustainable growth and predictability as a state is important. And this matters because property taxes don't stop the tax bill when you receive it. They're embedded in operating costs of nearly every sector. They flow through in rents, housing costs for employees, goods and services, and ultimately consumer prices. So, increases at this scale compound through the economy and apply affordability pressures well beyond the original lobby that earn the tax bills. Vermont businesses are navigating this every day. I won't go into all the details on healthcare costs there, but overall, we're looking at education costs are growing unpredictably in a very constrained economy. A lot of unpredictability, not only from the national scale, but also at the state and local scale. When it's growing faster than the economy itself, it affects hiring, investment, it affects long term viability, particularly for those small and medium sized employers, which is what the vast majority of Vermont businesses are. So, over time, this weakens Vermont's competitiveness and undermines our confidence in fiscal stewardship. One of the leading indicators that I recommend this committee look at in the competitive dashboard, when we send it out, is the economic momentum rating. Vermont ranks last in the entire country for our economic momentum. That's four years worth of measure for population growth, workforce demand. I think there's four different measures in there. But we're going to last. I think this could be a step forward for us, because predictability really matters. So, I also wanna make sure it's clear that we don't see allowable growth as education reform. We see it as just an interim fiscal discipline, the interim activity that we've done. So, guess I'll pause there. Any questions that you have? I know very similar to testimony you heard earlier today, but happy to answer any questions that you do have about this. Committee, any questions for any?

[Sen. Ann Cummings (Chair)]: Can't So get happens to me, but last sometimes, I will send

[Amy Spear, Vermont Chamber of Commerce]: that link to the committee as well.

[Sen. Ann Cummings (Chair)]: Okay, I'm going on to Karen Lumpiet. Then, Chittenden and Nancy Feed and that we'll take a short break and then we'll talk. You want to

[Sen. Ruth Hardy]: take a short break now? No. Think you will.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: So, good afternoon. I have to apologize. I forgot my hearing aids today. So, if you want to ask me a question, yell. Something to light. So, I testified in this committee last year when you were passing four fifty four, which has now become Act 63, so I'm just gonna kind of focus on some of the things that happened in that bill. You do have comprehensive testimony from me from last year if you wanna ask some questions. Karen Lafayette, I'm testifying not only as a lobbyist for the Low Income Advocacy Council, but as a taxpayer in the city of Burlington. Full disclosure, I represented the city of Burlington for many years as a lobbyist, and I'm a former representative, and I served on the ways and means when we passed Act 60. Today, I'm here to talk about Act 73 has passed and the changes to income sensitivity, The addition of the homestead exemption and the municipal tax credit, which you maintained. I also want to talk about the current situation for low and moderate income Vermonters and the effect of VAC 60 on those taxpayers. Over the years, low income Vermonters, we've lost a lot of income sensitivity with caps and restrictions. And although there's been a buy down of the tax rate, the last number of years, it's a buy down on the whole tax rate, and it hasn't been targeted. So you find many low income Vermonters paying upwards of 10%, 15%, 20% of their income for combined property taxes, education. The restructuring law still has a number of pieces of work and many issues with respect to the redistricting, the consolidation, and specific funding formula mandates, both tremendously important and fairly dramatic changes that are called for an act 60. But before these changes even take place and before we know what the effects on budgets are, on tax rates, and whether or not there's any savings to be achieved, Act 63 also makes changes in the property tax credit for education, moving away from income sensitivity to a homestead exemption, and does nothing to update the income sensitivity, leaving many low and moderate income Vermonters paying large percentages of their income for state and local property taxes. And this particular situation is exacerbated by those moderate and low income Vermonters that live in towns that have high property values and high municipal taxes. Act 60 was all about equity, access to education funds for schools across the state, and equal tax burdens for equal per pupil spending. Three fourths of Vermonters or 70% of Vermonters were able to pay their property taxes based on the value, based not on the value of their property, but based on their income. It remains to be seen with the return of the foundation formula and or spending mandates or caps will continue to provide that equal access to education financing and the opportunity of that, the promise of Act 60 for equal educational opportunity. If you have the same for people spending and the same income, your tax burden would be based on your income and not on the value of your property. And that has diminished over the years. We have not updated income sensitivity in many years. We have reduced equity among taxpayers. And at a time when property values have soared and affordable housing options are scarce, we have reduced the value of the house that is income sensitized from 500 ks at one time to 400 ks. Now, we increased the income of those who could qualify for income sensitivity, but we did not increase the qualifying income for those who could receive a property tax credit for education and for municipal tax credits. That has remained at 47 ks for decades now in the state. And there is an $8,000 cap on property tax credit, so you currently can receive $5,600 for education tax credit and $2,400 for the municipal tax credit. Act 73 establishes a homestead exemption in place of the property tax credit for education. Under the previous law, most homestead property taxpayers were eligible for property tax credits based on the income and the house site value. Act 73 repeals the property tax credit and establishes a homestead exemption. It exempts a certain portion of a claimant's house site value from the homestead property tax, but only on the first $425,000 of value. The homestead exemption is tiered based on household income, where households with lower incomes can exempt more. It does maintain the municipal tax credit, and that's set at 3% of income that households are expected to pay, but no increase in the qualifying income and maintains the $2,400 cap, which does nothing to address the storing increases in property values or the rising municipal costs in many areas of the state. The effect of these caps on certain groups of people, especially lower income persons living in higher value properties, over 400 ks, is that even though their town's income rate for education financing might be 2.5% of their income, and their cap on their municipal tax credit is 3% of their income, they are paying double that percentage for their property taxes because of the cap on the value of the house that's income sensitized and because of the amount of the credit that is capped as well. If I'm using Burlington as an example, this is an increase to many homeowners. In 2024, property taxes on a house of $525,000 are just short of $13,000 in the city, dollars 8,400 for education and 4,400 for the municipal tax credit. So a person of lower income Burlington living in a $525,000 house is going to pay 2.5% of their income on the first 400 of value and the assigned property tax rate against the remaining 125,000. Even if that person qualified for maximum credits, they would always at least be paying $5,000.13000 dollars in taxes, and they could get $8,000 in credits if they qualified. With a 60 household income, the total taxes on this taxpayer would be 11% of income, get no break on the municipal taxes. With a household of $40,000 qualifying for the municipal tax credit as well as education, they'd be paying 11.6% of their income. With the Act 73 changes, once you do all the math, and I think I did it somewhat correctly, because there's a lot of numbers here, so someone can check them if they'd like to, but I put most of the information too off of joint fiscal calculations. In Burlington, in a house assessed at five twenty five again with a homestead exemption for education and no break on the municipal tax, that $60,000 K person would go up to 13.4% of their income, and the person earning 40%, excuse me, let me take that back. What I did was because the ranges go from 40 to 60 and then they go from 60, so I did for sixty and forty, and then I also did for sixty one and forty one. And it changes it by a couple of things, but that's one of the other inequities in the homestead exemption instead of by their income, is that an extra thousand dollars of income puts you in a different place in terms of what you're paying? And there's a 70% reduction for a person, a 60% reduction for a person making $60,000 and an 80% reduction for a person making $40,000 So depending on which rate you are, they actually increase for the person both making $60,000 and making $40,000 And if you get the higher rate of exemption, you get tax rate for the $40,000 person of 10.7 and for $41,000 k, you get 12% of your income respectively, depending on which bracket you're in. So both households, the $60,000 and the $40,000 would greatly benefit by increasing or eliminating the municipal property tax credit cap to more closely reflect the intended 3% of income that's called for in statute, and the rising municipal costs and property values increasing, and increasing the income limit for a break on municipal taxes. One of the inequities in the legislation and the current law is something the committee talked about last session, and that is the increase in property values in the past few years and the disparity in assessed values from region to region. If we are moving away from an income sensitivity to the homestead exemption, which seems evident in this legislation, we should try and adjust the legislation to reflect the differences in different regions. Know, Chittenden County should get a higher exemption than on the, higher than $425,000 of household value, and maybe other regions are less. This does and can reduce the cost of more rural areas and where property values are lower, and especially for people who don't have high municipal taxes, it will in fact probably lower their taxes. But for people who, lower income people, moderate income people who don't qualify for the municipal tax credit or live in places where the values of their property is higher than it is in the rest of the state and they have high municipal tax rates, this will increase their taxes. And the whole point of the savings and doing this to reduce is to make education more affordable, and this clearly doesn't do this for certain class of people. Property values in the city, Chittenden and other parts of the state, typical home in the South End Of Burlington has increased in value from 300 ks to over 500 ks in the past couple of years. And even though those property values have been adjusted for the CLA over the years, there was a dramatic shift in the city of Burlington after reappraisal from commercial property to residential, so it was like a double effect because even though it's been adjusted to be fair market value when they do that adjustment for your education taxes, there was a shift within the city of where the value came from, because by law, you can't increase the amount of money raised with a reappraisal, but we can shift where it comes from. So that's been a problem as well. The current cap on income sensitivity of 400 ks is very problematic for many homeowners who saw the property values increase dramatically when we did the reappraisal, and there's no corresponding income their households. In other words, they did nothing to increase the value of their properties. Same properties and they're probably more in disrepair, but they just doubled in They what their

[Sen. Ann Cummings (Chair)]: didn't best a kitchen Excuse me? They didn't add a new kitchen or or a

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: a third third Right, bath. Right, exactly. And we all well know you could have the same physical structure of a house in the city of Burlington and somewhere else in maybe Orleans County or something like that, and those people have the same incomes and they're spending the same per pupil, and one person is gonna be paying $8,000 and the next person should be paying $3,000 if it's based on the value of your house and not on your income. This changes the basic premise of Act 60. Even if you spend the same amount per pupil, have the same income, the value of your property will greatly determine what you pay in property taxes, not your income. Property value does not necessarily reflect the ability to pay in many, many cases. Without an update of income sensitivity and with Act 60 as passed, many homeowners, especially those who live in towns with high property values and high municipal taxes, are not gonna be able to afford their property taxes, and they have few options to change that. As Senator Cummings has brought up a number of times, many seniors are needing to age in place. There's no place to go. Can't, even though I can sell my house in the city of Burlington for probably more than is listed on the tax rules, I can't purchase another house in the city for that price and not have a mortgage, and I might be able to find an affordable condominium, but then I have HOA fees, and those can be as much as a mortgage payment. And just, we all know what the housing situation is in the city and everywhere else in the state. Finding affordable, sustainable housing is problematic. So there's many people who have lived in their house for forty years, they are retired, their income has gone down, they don't have a huge amount of

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

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: and they're finding no way to earn more money, and

[Sen. Ann Cummings (Chair)]: their property taxes are going up exponentially. And when you age, you need to be in a more urban area. You're here to medical facilities. You have public transportation. If you are aging, maybe you could find a house if you could for the same price, but it would be out somewhere. Should limit mobility. Right. It would change your whole social interaction and structure, you would lose your neighborhood, your family home. So there's other factors.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: So in finishing, that's your question. Yeah, I mean, I've lived in the city for seventy one years, and, you know, I've represented the city and the legislature. My grandfather was mayor of the city. I don't wanna leave, you know, I wanna stay there, even with all these problems. So really, would love you to look at three things that could make the changes that you made in Act 60 somewhat fair for people of moderate and low income, and that is assessing a higher property reduction, property value adjustment for different regions. So, people in Burlington maybe or in Chittenden County would get, you know, something off, would get the reduction, the homestead exemption off of 500,600 thousand dollars and not $425,000 an increase in the municipal tax credit cap. The $2,400 for a number of years now ever since the property values doubled in the city of Burlington, people are hitting that cap and so they're paying much more than the 3% that's in statute for municipal tax credits, and we have had that credit for fifty five years in this state. And that included education at that time. And then increase the amount of the income to qualify for the municipal tax credit. Anybody knows that they're raising a family or they have a house and they're making $60,000 paying, you know, twelve, fourteen, 15% of that income for property taxes is just substantial, You especially with understand that. All

[Sen. Ann Cummings (Chair)]: the other Raise that income. Your municipality probably won't like it, but that money will have to get collected. It'll raise the rates for everybody else.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: That money gets paid for through the general fund. That does not the municipal municipality gets a check from the state for We can't the municipal tax collection,

[Sen. Ann Cummings (Chair)]: and that I couldn't touch it because I've tried.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: Because you I'm sorry.

[Sen. Ann Cummings (Chair)]: I'll just have to look at that because I've been told before that we couldn't touch that.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: Oh, well, I'm pretty sure if I remember correctly that it comes out of the general fund.

[Sen. Ann Cummings (Chair)]: Have to be done through the budget.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: Yeah, it doesn't come out of the education fund, because I know that you guys are discussing if you didn't have any income sensitivity or homestead exemption, you could reduce the rate across the board for everybody. But the municipal tax credit that we've had for fifty five years, don't think it's ever come from, comes out of the general fund, and they send a check to the municipality for whatever your break is. Whoever's telling me they have had it

[Sen. Ann Cummings (Chair)]: wrong. Wouldn't bill them.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: Unless that's changed, that's what I believe.

[Sen. Ann Cummings (Chair)]: It used to be 35,000. Yes, yeah. When it first started, that's true. Okay, Senator Hardy then sent.

[Sen. Ruth Hardy]: Thank you for your testimony. I didn't see it online. If you could send it to post it because you had a lot of numbers in there now.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: I did. Yeah. But the

[Sen. Ruth Hardy]: property tax exemption that I remember your testimony from last year, and you probably remember us looking at the charts and the colors and trying to find the smoothest, you know, whatever. There is a report coming to us next December from the tax department on trying to look at some adjustments including changing the income levels and the sort of where the the the change the the tiers are so big. So Is that the tiers

[Sen. Ann Cummings (Chair)]: for the homestead exemption or is that the the

[Sen. Ruth Hardy]: For the homestead exemption, for the new for the new Okay. New one So, there's a report coming in there. If I we can look at what we ask them to do, because one of the things that we could ask them if we didn't already is your first suggestion about varying house site values per region of the state because obviously that does make a difference. I think we talked about that. We settled on 04/25 as a sort of compromise. Right.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: It's an increase from 400, but it is an exemption. It's not

[Sen. Ruth Hardy]: a Exactly. No, I get that. I get that. And so, you know, we could ask the tax department to look at other things. I mean, part of the what the reason we have the report in there is because we couldn't we didn't have enough time to sort of provide.

[Nick (last name unknown), retired teacher and former AOE staff]: Right. I remember you

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: had that in the report.

[Sen. Ruth Hardy]: But there's certainly more things we could ask them about. And one thing we we didn't didn't really ever talk about the interaction between the education property tax credit amount and level and the municipal one, that we sort of like put the municipal one aside. But I think your testimony is good because it it shows that they do interact in a way. And so that's another thing we could actually add to the report we have from taxes is making recommendations on, you know, how the nation the combination of the two. Because if you're a taxpayer that qualifies for one of them, you're probably a taxpayer that co qualifies for the other, and they're obviously gonna have impact. You're right that that the municipal tax credit is paid out of the the general fund, and I point to the appropriations committee saying that. But but it it was never we never talked about it in here, and I and I think that it's worth the conversation. I know you ran out

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: of time, and Yeah. That's the other thing is the the information from the joint fiscal shows the effect on the education tax credit. So it's kind of a little misleading.

[Sen. Ruth Hardy]: Yeah, because there's this other piece. I think that that would be helpful to have the full effect. Mean, were a variety of reasons we went to the exemption versus the credit. Right, I understand. But I think having more information in that report, I think we should make changes to to this part of act 73 this year until we get the the report to look at next year. And anybody who's sitting at the table next year can talk about it. Hopefully, you can come out and talk to them. Sure. But without having we kind of set it up that we want to have more information from task before we make changes to it. Right, and I think asking for more information from them is a fair thing.

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: Right, I think public assets actually is doing some different things with some information that they're providing as well. Yeah, and I mean that's what we ask for is in the interim to at least update the income sensitivity because people for three or four years now have been paying a much higher percentage.

[Sen. Ruth Hardy]: Right, and I think that's a really good point that you're making about, like, you know, not all taxpayers are the same and you're in here advocating for the low and moderate income taxpayers who are feeling the brunt of everything and and you're absolutely right. There are more things that we could do of help them and and that's

[Nick (last name unknown), retired teacher and former AOE staff]: I appreciate that. The other thing

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: you could look at too is I think joint, one of the joint fiscal spreadsheets actually shows that the amount of people in that situation of high property tax towns, you know, over $500,000 or $4.50, and lower incomes, it is not that many. I'm talking maybe there's $23,000, I don't know.

[Nick (last name unknown), retired teacher and former AOE staff]: Yeah. There's

[Sen. Ann Cummings (Chair)]: not that many people in each

[Sen. Ruth Hardy]: of these categories, and that's where you have to sort of make the call of, like, how many people is this gonna impact? In other words, one category is, like, forty forty households were in it or

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: Right, but if it doesn't cost anything to do that, you could do something.

[Sen. Ruth Hardy]: Yeah, that's what we were trying to adjust. I appreciate that. I

[Karen Lafayette, Low Income Advocacy Council (Lobbyist) and Burlington taxpayer]: think taking another look at it and the information would greatly increase the affordability for some of

[Sen. Ann Cummings (Chair)]: these folks that I'm talking about. Yeah. Thank you. Thank you very much. Okay, thank you. We're gonna go back to senior modestly, And thank you all for being patient with us. You got a lot to do. Hi. I'm Tina Muncy. And before I retired, I taught for a lot of years, partly in Montpelier.

[Tina Muncy (Public witness, retired educator and taxpayer)]: I was principal of Washington District. And then I taught at the college level. I taught teachers to be principals. So I have a little comprehension of running schools. But I really came to job as a taxpayer in Vermont. People my age, 80 and older, are now paying as much per month for their taxes as they pay for their mortgage payments when they bought their house. And if taxes increased, we just can't afford to live here anymore. And that's a sad thing. And, actually, I talked to my daughter who lives in Jeffersonville last night, and she said, would you please tell that for people my age, we understand the price of houses have gone up, but even if I can afford to buy a house, then I can't afford to pay the taxes that go with the house, and that's a problem. Now one of the things that I did for several years was on the I was on the Montpelier School Board, and now I hang out in the audience to cheer them on, and they, I think, try really hard to produce a budget is they can educate the students of Mount Hillier, and they can make something affordable for the people that live here. And I believe it can't be done anymore at a local level. That is a state problem, and the state has to do something about it. Now I was on the school board when we merged with Roxbury, And Roxbury people said to me on that committee, we're not going to Northfield, which was fifteen minutes away. Because they'll close our school, and they'll put our kids on the bus, and they'll send them to the there's and we don't want that to happen. And I said to them, if you're not financially feasible, we'll close your school. And they said, oh, no. My failure would never close School. Well, what did we do? We had to close Roxbury School and for two reasons, and I just want you to keep this in mind because I think it pertains to small schools across the state. I think there are two reasons. When they built those schools, we had a different education system than we had now. When they built those schools, we had no special ed. When they built those schools, children with severe disabilities did not attend public schools. So when Roxbury was an operating school in our district, if you had a special ed student that needed twenty minutes of instruction three times a week, special instruction, Montpelier couldn't find anybody to go there. And if you look at the whole system, Montpelier in union school has a lot of skilled people, a lot of resources. Those same skilled people and resources couldn't be transported to Rosner. So it was not an equitable education. So there were really two things. One is, community can't afford to run a small school with a handful of kids because it's too expensive. And then second, you're not providing an equitable education. So I think when actually Ann came to a school board meeting and the representative from Roxbury said to her and the other legislators that happened to be here, small towns will not voluntarily close a small school. It just isn't gonna happen. So that goes back to the fact that locally, schools just can't do that. Yes. So we're leaving it to you. Yes. That's what I'm saying. And at state level, unlike the people that came with all those figures, I don't have any figures. And I don't have a solution to the problem.

[Nick (last name unknown), retired teacher and former AOE staff]: But what I do tell you

[Tina Muncy (Public witness, retired educator and taxpayer)]: and have told our representatives that I elected you to have some courage. So I need you to do something to fix the system so that we can afford to continue to give our students a good education. If you go up Main Street and around that 90 degree curve at the top, that was the Green Mountain School there on the left. I believe my daughter was in second grade when that school was closed, and the students were put into the Montpelier School System. That would have been in the eighties, nineties maybe. But until then, that group of special needs, other students went to the weak schools that had behavioral needs, not necessarily the best place for anybody. But, yes, that's a whole new set, And then decisions we've made about discipline and exclusion and other things in the school have just put the demands on teachers at very different level than it used to be. And I understand it's a Vermont tradition to have small schools, but we just can't afford them. I and I don't and as I said, I also don't think you're giving an equitable education. So, thank you. Thank you. Any thoughts or questions? Thank you. You're very welcome.

[Amy Spear, Vermont Chamber of Commerce]: The

[Sen. Ann Cummings (Chair)]: taxpayers are the majority in this discussion, and it is the other side. You have a family here. I have family here. Don't really wanna move to New Hampshire or Florida or but you you do have to put groceries on the table and then eat. And and and we have been us older people have been paying taxes for a long time. Okay.

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: Related to the last comment you made, Tina, I would just say that I think there is a great layer to that. I think that small is very different at the elementary school. Right? Is it?

[Sen. Ann Cummings (Chair)]: Yeah. Yes. And if if you were going to when I talked to other taxpayers, if you were going to have a small school, you know, kindergarten, first, second grade, however Yeah. That's what Roxbury was. When when we merged with them, the third and fourth of

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: them Sure.

[Sen. Ann Cummings (Chair)]: Came here, and the little kids were there. And it does work better, but it's still if you only have a small amount of kids,

[Jake Gulick, Vermont Department of Taxes]: it's awful.

[Unknown Committee Member (possibly Sen. Scott Beck or Sen. Randy Brock)]: There is too small, but it is variable by Right, every

[Sen. Ann Cummings (Chair)]: it is. They're small and there's mining. And the services, when I was principal at Washington Village, I used to say to the school board all the time, under 100 kids, you're not gonna be financially feasible. But the other thing I talked to them about was the seventh and eighth grade, which I had there. And I said, I think you're putting your kids at a disadvantage when you're in seventh and eighth grade. I can't I can't afford a science lab. And those kids are gonna go to a high school where there are kids that came from school that had a science lab that had all of those. It's harder in middle school, basically. Yeah. Yeah. It is. Thank you. Thank you. Hello? Hi. I'll be very fast. I'm Nick

[Nick (last name unknown), retired teacher and former AOE staff]: to read, and I live in Macmillan,

[Sen. Ann Cummings (Chair)]: but I've lived for a long

[Nick (last name unknown), retired teacher and former AOE staff]: time in Randolph. I was a teacher for thirty years in elementary school in Randolph, and then I just worked in higher education, and I taught in a number of teacher preparation programs. I also worked for the AOE for a while, just working on teacher programs. And importantly to this conversation, was part of the merger committee also with Tina, who emerged from Montpelier to Roxbury. I have two quick things to say. One is immediate, like today, and the other is a little historical perspective. Today, was a guest teacher. Called substitute teachers, they call them guest teachers in elementary school. Yeah, it's 19. At the elementary school in Montpelier, and I was in a fourth grade class, and there were three students from Roxbury. And I asked them, Are you a Roxbury student? And the three of them came, three girls, and said, Yeah, we came from Roxbury. Now they've had a full year to sort of get used to it and blend. But I said, How was it? I mean, how do you like the school? Is it better? Is it worse? Is the same? They all said it's much better. And I said, well, what made it work for you? And they said, thought a minute and said, it just took some time to get used to. And so I think that's kind of important to know. They blended in. I didn't know who they were, which ones were that. And they've I think they blended in. They liked the size. They said I like all the people. I like the size. I like different teachers. That's just from today. Historically, I'd like to share something. I lived for a while in West Brookfield, which is

[Jeannie (Jenny) Albert, Rural School Community Alliance]: a community that is tiny, and

[Nick (last name unknown), retired teacher and former AOE staff]: it used to have a school, a post office, and a little sawmill. And it had a wonderful schoolhouse right in the middle, and I got to know a woman named Stella who taught in that school. She's long gone, but she taught in there. And she was the first, ultimately the first principal of the big school, which was the Brookfield School, when they closed down all the little one room school houses and went into the Brookfield School. Now, the big Brookfield School is now on the verge of closing. So, historically, now interestingly, I did a little AI research. In 1900, there were 1,501 room schoolhouses. In 1967, there were 20, and now there's one that you know. Interestingly, when they moved from the one room school houses to the big schools like Brookfield and Braintree, the issues were resistance to change, loss of local identity, loss of democracy, resistance to state control, and the fear of bigness, that was one room schoolhouses to Brookfield. So now look where we are now. It's the same issue. I taught in Randolph, Randolph when and merged East Randolph Randolph Center to the big school in Randolph. It is a big school. And and it is a big school. And parents from East Randolph on the farms would say they're they do drugs in that school. You know, it's just too big. This is a theme here. And now they all are in what's called and since 2000, they're in the Randolph Elementary School. They're all together. I I taught there for ten years. I never knew who was from East Randolph and who was from down the street. And they as they did with the girls the little girls from Roxbury, it took some time and they just got used to it. And so I just think it's important to think about this over time. We go from, I I'm not sure we really want to go back to the one room schoolhouses. Maybe some people would, but this is sort of an inevitable evolution. I think it's an evolution. There might be people that say it's a devolution. I think it's an evolution, and the kids just get used to it. As a number of kids is declining, you probably have that.

[Sen. Ann Cummings (Chair)]: If you had 10 kids in that one room schoolhouse, you probably have two or three. Correct. It it varies. And I and I would echo, Tina,

[Nick (last name unknown), retired teacher and former AOE staff]: is the needs now. Right now at the local school, you have some Afghan children. You have, you know, you have lots of needs. And the one thing that we didn't talk about Roxbury School is that you can't it's get about FTE, full time equivalent. You have you would get a point three FTE nurse and a point two FTE librarian. You just can't find the quality to support all of the services in a small school because you're looking at putting together little tiny bits of FTE, whereas in a bigger in a bigger school, you have full time FTEs. I've heard that. I know they had

[Sen. Ann Cummings (Chair)]: okay. One each one of them 32 districts. They had a art teacher that traveled between the schools. They couldn't keep an art teacher because having to load up all your art supplies, put it in your car, move it to the next school. Load it

[Nick (last name unknown), retired teacher and former AOE staff]: in And

[Amy Spear, Vermont Chamber of Commerce]: that's what they did

[Nick (last name unknown), retired teacher and former AOE staff]: in Randolph when the Randolph had all the stuff and they put it in a the the special services, the title one people, all the services would drive over the hill, Randolph Center, and then down to East Randolph with all whatever they needed. And eventually

[Sen. Ann Cummings (Chair)]: a full time job, Emily. As you should. Yeah. Not to

[Nick (last name unknown), retired teacher and former AOE staff]: mention the mileage and the time off task that you're spending driving as opposed to teaching.

[Sen. Ann Cummings (Chair)]: I just have a process question. Madam Chair, you like to say this is the money committee. I'm just wondering, have you presented, as you said, education? Because you're really talking the governance and you're

[Nick (last name unknown), retired teacher and former AOE staff]: talking Right. Was worried that I was in the wrong committee, so I just thought I'd share.

[Sen. Ann Cummings (Chair)]: Well, have you are you going to go to that committee? I don't know. Okay. We were invited to come here. We were invited to come okay.

[Nick (last name unknown), retired teacher and former AOE staff]: The woman at the other table might

[Sen. Ann Cummings (Chair)]: have Anybody who's a taxpayer that would like to come to talk about the impact because the professionals in the schools are well ordered enough. Your average taxpayers only heard from meeting day. Right. And then they have less there's three or four more school votes. They disappear for the year, and they aren't here. And it's important that we hear all the sides of election.

[Austin Davis, Lake Champlain Chamber (Government Affairs)]: Thank you. Thank you.

[Sen. Ann Cummings (Chair)]: You. Maybe take a tiny minute break. Yeah. And then I just wanna have some distraction so I know what I need to ask that. I'm going to get the