Vermont Legislature SmartTranscripts:

[Sen. Ann Cummings (Chair)]: We are live. We are live. We are back. We're a few minutes early, but I have a feeling the next agenda item may go fairly well yesterday's. But today and I just learned this afternoon that there is a more extensive bill, but also extends or eliminates the sunset, deals with the veggie sunset in economic development. So I may sit on this bill for a while. I wanna talk to the chair over there because I don't if they're working on something, I don't wanna mess it up, and I'm assuming this is Yeah.

[Sen. Randy Brock (Member)]: It's it's in it's in the. It's very, very straightforward. It just eliminates it without any long description.

[Sen. Ann Cummings (Chair)]: Well, that's what this one does too. So I will check with her and see who gets the honor of doing whatever we do. I'm not sure what we will decide. So Jessica, come And on and you you've been in here.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: I have been here. That's what

[Sen. Ann Cummings (Chair)]: I thought. Yes. Yep. I have. K. The new SR lot, you're down in economic development. Oh. I think you were in here last year when we did the same bill.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: We did probably, was it on ship that I commented on?

[Sen. Ann Cummings (Chair)]: Maybe on Chip too. Yeah. And I don't think

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: we did and then maybe my first year as an executive director was when we were probably talking about this onset of the first time that she used.

[Sen. Ann Cummings (Chair)]: But, anyway, happy to be back. I would've seen you then in economics to go. Yes. Yep. Alright.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: I'm gonna log in to the Zoom, and then I'll get my slides

[Sen. Ann Cummings (Chair)]: up for the entity to go through with it. And No one did the past. He isn't just You're 22. I was gonna say 21. It's for example. Wow. What did say? Hold on. 16. 16 in health and welfare. Do people do that? We do. They do. Post COVID landscape. Well, they took all the seats out in health and welfare, if you're on the far side, you don't kneecap all the witnesses sitting behind you. It's still tight, but not as tight as it used to be. Thank you. Oh, it was you if I literally, if you moved your chair back at all, you can't

[Julia Rickards (Joint Fiscal Office)]: So you'd have people, like, sitting over you. Yeah. And it was really I mean, it

[Sen. Scott Beck (Member)]: was 2nd Floor. Yeah. It was

[Sen. Randy Brock (Member)]: up on the 2nd Floor.

[Sen. Scott Beck (Member)]: Yeah. Was like 46. One of those 11. Was like, we're like, 15. You could know.

[Sen. Ann Cummings (Chair)]: Yeah. Okay. I just think no one sits in the window sillery. You can grab a window sillery. Oh, thank you. Is there a chair?

[Sen. Randy Brock (Member)]: There's one over here.

[Sen. Ann Cummings (Chair)]: There's one over there. There's a reserve. I didn't think this was this exciting.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Can everyone see that?

[Sen. Ann Cummings (Chair)]: That's on the screen. Looks good. Oh, great. Okay, perfect.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Good luck. For the record, I'm Jessica Hartleben. I am the executive director of the Vermont Economic Progress Council. Thank you for having me here today. I understand that I only have a fifteen minute window, so I will go through these slides rather quickly, but I would be happy to come back. I gave this presentation just this morning to Senate Economic with Senator Brock and Senator Chittenden. Just at a high level, the Vermont Economic Progress Council is an independent board that was statutorily created. There are nine citizens that are appointed by the Governor Chittenden, two are appointed by the General Assembly. Those current appointments are Senator Wendy Harrison and Representative Abby Duke. There are also two non voting representatives from each region of the state. One is designated by the Regional Development Corporation, and one is designated by the Regional Planning Commission. VEPSI serves as the approval body for the Vermont Employment Growth Incentive, which we're gonna talk about today, the tax increment financing program, and the newly created community and funding infrastructure program, which was successfully launched last Friday. We currently have two full time employees, myself as the executive director. We have one program manager who's here with us today, Ellie Beckett, and a CHIP specialist, Farida Ibrahim. VEPSI receives its administrative support through the Agency of Commerce and Community Development, and we receive support from the Vermont Department of Tax Cuts, specifically related to the Veggie program and tax increment financing, and then we'll also receive that from the CHIP program. The legislative purpose of the Veggie program is to generate net new revenue to the state by encouraging businesses to add new payroll, create jobs, and make new capital investments. At a super high level, this is how the VEGI program works. Businesses will apply to the VEPC Council for an incentive that will outline a proposed job creation, which will include new wages and new capital investment. VEPSI works with the state's economists to analyze the economic impacts, the net fiscal benefits, and then determine eligibility. VEGI is a performance based program. There are no incentives that are paid to a company at the time that the VEGI Council or the Pepsi Council would approve an application. The Pepsi Council merely authorizes the amounts and determines the eligibility and then sets the level of the incentive that's based on the economic activity that is going to be projected to occur over a five year period. The applicant sets its own annual performance requirements with activity levels that would then be submitted as part of a final application. The awards are then made after the business meets those agreed upon performance benchmarks. Those annual VEGI claims must be filed with the Vermont Department of Taxes, and it must indicate that those annual performance benchmarks have been met. If the performance benchmarks are met, the annual incentive would be earned and would be paid out in five annual installments. Those performance requirements must also be maintained, and incentive payments are not prorated for partially meeting your performance requirements. Again, the Vermont Department of Taxes verifies whether approved applicants achieve those payroll or investment targets in order to receive those annual incentive payments, and the incentive is applied as a credit to the firm's payroll withholding tax. Veggie is a tax expenditure. You will see in the tax expenditure report that JFO provides in 2025, and as they explain that tax expenditures are those statutory provisions that reduce the amount of revenue that would otherwise be collected to encourage a particular activity or limit the amount of taxes that are collected from certain persons. The tax expenditure for the Veggie program is calculated under the individual income tax expenditures, other personal income tax expenditure. In 2023, the total income tax expenditures for the state of Vermont was $377,889,000 The percentage that Veggie was of that portion of money was point 6%. On average, because JFO calculates this out over a five year period, the incentives that are paid roughly equate to about $2,000,000 each year. The impact that Veggie has, we looked at a period for nine years, which is the total amount of the life cycle of the Veggie applicant. Dollars 170,000,000 in new capital investment, six forty jobs created, $43,700,000 in new qualifying payroll with an average wage of about $68,000 This is the impact over the last eighteen years of the program. The Veggie program has caused $1,200,000,000 in new capital investment in the state of Vermont, creating over 10,000 new jobs, dollars $613,000,000 in new qualifying payroll, and 41,500,000 in incentives paid. Question? Yeah. So just looking at

[Julia Rickards (Joint Fiscal Office)]: these two charts, specifically about the jobs created. So if it's 2,000 job or 10,000 jobs for over the fifteen years Yep. The only 640 of those 10,000 were created in the last eight years. So that's really front ended. Like, you're you're not creating many jobs in the last eight years.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Yeah. So I can defer to the program manager who can better explain that statistic. Ellie, do you wanna just announce your name and

[Ellie Beckett (Program Manager, VEGI/VEPC)]: I'm Ellie Beckett. I'm the program manager for Veggie. So the first graphic would judge the applications that are in the final stage that have fully met all of their targets so far. So it doesn't include any of the applicants who maybe made, like,

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: four out

[Ellie Beckett (Program Manager, VEGI/VEPC)]: of five of their targets or two out of three. And all of those jobs did happen as well, they're included in this number. They're just not included in the prior. So, does look like it's very front ended, but that first one, again, is only capturing the applicants who have fully met all of their targets and are still active. It's not including those who might have, who are now in a reduced status, who didn't get the full incentive amount. Okay. So, is it If they didn't, didn't meet the requirements. It's not an all or nothing thing. They can get partial payment. So say you met your first year's target and you maintained that target for five years, you get that full year of incentive. But if you miss the second year of targets, you don't get second, third, fourth, or fifth year targets. Okay. So you partial in

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: that way. So and that's more in our annual report. We have that data also for you. Okay. So, again, I knew that we had a very limited amount

[Ellie Beckett (Program Manager, VEGI/VEPC)]: of time.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Yeah. So, was just trying to give a very, very high level. I would be happy to come back and explain the more of the meat and bones of the of the annual report if you have additional questions.

[Ellie Beckett (Program Manager, VEGI/VEPC)]: It just seemed weird that they would get credit for the first year of something. Like, they could create a job, and then that next year, that job could go away, but they're still getting credit for creating that job.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: No. They're not. Okay. Then how does that

[Ellie Beckett (Program Manager, VEGI/VEPC)]: work? So if they said in year one they were gonna create seven jobs, and

[Sen. Ann Cummings (Chair)]: they did create those seven jobs, would

[Ellie Beckett (Program Manager, VEGI/VEPC)]: get would get their they maintained those seven jobs for five years, they would get their incentive for that year one target of seven jobs. But if year two, they said they'd create five jobs, five more jobs, and they didn't create five more jobs, then they don't get the incentive for that second year. Do they get the year one incentive only after five years, keeping those jobs? They get one fifth of it each year for five years. So you get a first fifth of it when you create the jobs, and then for the next four years, you have to those jobs have to stay.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: They have to maintain it.

[Ellie Beckett (Program Manager, VEGI/VEPC)]: Okay. But they still will have gotten paid for one year even if next year the jobs go away.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: One fifth, not the full not the full payment.

[Sen. Ann Cummings (Chair)]: You get paid one fifth of

[Julia Rickards (Joint Fiscal Office)]: your understand what one year means. I'm just, okay, I mean, I guess I'd like to understand this more because it does seem like they're getting the benefit before they're actually having permanent impact.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: No, and I would be happy to explain it more fully, and the annual report does also give that additional explanation, but I also have, we also have some additional materials that I could probably send to you that might also help to explain the the overall program. Okay. That that works out over a nine year period.

[Julia Rickards (Joint Fiscal Office)]: Okay. Yeah. I just want to make sure that this is actually funding that's worth spending if we're going to make this thing permanent. Were takeout and sunset, but that the fact that they get paid before they do the full thing that they say they're going to do doesn't quite make sense to me.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Yeah, there I hear what you're saying, but I don't think that that's accurate and I'm happy to send you the follow-up information that would support that. Okay. So for every dollar that's spent currently from 2007 to 2023 on those incentives, there's been at least $42.7 that's been generated in payroll and capital investment that would otherwise not have occurred. So incentives matter for the state of Vermont. An example of this is the Weidmann Electrical Technology in St. Johnsbury. The VEGI program was integral in Weidman's decision to expand its facilities in the state of Vermont and not expand out of state. Weidman has a $43,000,000 project that's underway with 67 new jobs in the Saint Johns Ferry facility, and that has had a ripple effect throughout the Northeast Kingdom economy that has supported businesses which they purchase materials from. Weidmann also has used local contractors at all stages of this build out. And this photo is from our recent monitoring visit that we went on over the summer. This is S-three 27, which Senator Cummings, I believe you were talking to Senator Brock and Senator Chittenden about. This is the bill that's in the Senate Economic Development right now, which ties the veggie repeal, which is what I'm here to talk about today, which is

[Sen. Ann Cummings (Chair)]: F225. F225 is here, so.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: The bill says exactly the same thing, which

[Julia Rickards (Joint Fiscal Office)]: is to repeal the sunset.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Pepsi would support the elimination of the sunset on Veggie. The repeal of the sunset creates a more sustainable program structure and provides predictability for employers and for the state of Vermont. Incentives are a tool that we learned can influence private investment and shape economic outcomes. The BEPC staff hosts a retreat every fall, And this past fall, we were fortunate to have the Center for Competitive Economies come and provide us with an overview of the VEGI program and our rationale of why incentive programs are necessary for states in order

[Julia Rickards (Joint Fiscal Office)]: to be

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: competitive with other states. Bob Isaacson and Tyler Baines were our two presenters, and I provided their information to the chair of Senate Economic Development today because they were interested in hearing from him. They did a great job of presenting, and there were other legislators that were there to talk about that.

[Sen. Ann Cummings (Chair)]: As I remember, what we have to offer is significantly less than what other states offer. Right.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Veggie is the only tool that we currently have to offer to businesses in order to help us be able to secure long term benefits and to compete for business with our neighboring states. We support continued annual reporting and program evaluation from the legislature. We welcome that. We think that that supports transparency and accountability. Making Veggie permanent also provides Pepsi opportunity to focus on program improvements rather than having to come back every two years for legislative renewal. We are a staff of two that provide support for the Veggie program. We do have one full time staff member that we hired in November for Chip, but that is a very lean staff. So for us to have those resources to be able to focus on making suggestions about that to you in the future would be really helpful, I think, moving forward. And then lastly, this committee has not seen, but there is another bill that has been proposed by Senator Harrison. It was proposed last session related to an enhancement incentive for employee owned businesses that you

[Sen. Ann Cummings (Chair)]: have not seen. Yeah. I don't think that's come. Yeah.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: So just some closing thoughts as I see that my time is up. The Veggie Program has rigorous accountability and oversight. We have some very strong statutory safeguards that are already in place. Those can continue. We don't think any changes need to be made there. We support, again, regular reporting back to the legislature. Lastly, VEGI is also a performance verification, and it has a rigorous evaluation of payroll targets that must be achieved and must be verified by the tax department before any money is paid in the form of a rebate back to them.

[Sen. Ann Cummings (Chair)]: Thanks. Any questions?

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

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: you. You're welcome, and I will

[Julia Rickards (Joint Fiscal Office)]: get that information to you, Okay, and that

[Sen. Ann Cummings (Chair)]: will, again, going to see who's going to take the lead on this, but I have a feeling of a problem with the economic development. And we'll keep this appointment as a vehicle in case we need it. But if they would like us to to go further with them, they would do that. Okay? Okay. Thank you. You're welcome. Okay. They're in the hallway. They are in the hallway. One group can leave, and the next group can come in. Alright. That's just a hard stop at the core, so I was in term of her. I think she was drafting the amendments. Okay. I'd like whatever we do, I would like to give practice time to practice. Yeah. When it comes up enough, the end of the session.

[Julia Rickards (Joint Fiscal Office)]: Anyone want Yeah. But we're gonna start with you. Know you've got a hard stop. Yeah. Appreciate it. I don't know what we're talking about, but I appreciate it.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: I think education would be good to you.

[Sen. Ann Cummings (Chair)]: I think you were drafting. We need we're working on the child to prevent private or independent schools that get public tuition from being able to spend more than the public's. I think that's what we were doing. Concern was that if we put a cap on spending with Mhmm. You know, the the the two references and the appeals process, but we didn't cap tuition and public money to private or independent schools in the same way, we would be disadvantaging public schools. I'm looking at the committee. Did I get that?

[Sen. Scott Beck (Member)]: No. Trying to a good way of Parallel saying constraint.

[Sen. Ann Cummings (Chair)]: Yeah. Parallel constraint. But I think we heard that tuition is not quite as easy as budgets to to put a cap on or understand or it's a fairly complex system already. So I know, understand you have two versions for us, maybe more by now, but I'll give it to you.

[Julia Rickards (Joint Fiscal Office)]: Thank you. Beth St. James, Office of Legislative Council. I haven't shared anything with Charlotte's post because I didn't know what you wanted to be public, but I do do want me to send something to Charlotte or share my screen? Or

[Sen. Ann Cummings (Chair)]: You can send it to Charlotte. Okay. Share your screen so we can all see what we're looking. You know?

[Beth St. James (Office of Legislative Counsel)]: Let me just Hi. And I would say I had I had genuine confusion when I left here last night over what what you all were hoping to see. Okay. I went back and watched testimony. Oh my. And was a little still confused. I was gonna say I was a little it was a little more clever,

[Sen. Ann Cummings (Chair)]: really. That's what we should have asked you to do.

[Beth St. James (Office of Legislative Counsel)]: I don't know. So what I have for you is two options. If these do not reflect the policy choices you were hoping to see in the language, I apologize.

[Sen. Ann Cummings (Chair)]: Okay. Well, we should apologize because apparently, we are not clear at 04:00 on Friday afternoon nor are we clear at 05:30 on what date was the other Tuesday. Okay.

[Beth St. James (Office of Legislative Counsel)]: So I've got quick earlier. Sorry. I've got two options. The first option, and again, this would be applicable to both public and independent schools that receive tuition students. I literally took your education spending growth concept

[Sen. Ann Cummings (Chair)]: and applied it to tuition.

[Beth St. James (Office of Legislative Counsel)]: Notwithstanding any provision allowed on the contrary from two computers, 28, 29 only, the tuition charge pursuant to 16 BSA Chapter 21, which is the town tuition program, so that would exclude naturally CTE tuition for our public CTE tuition centers and special education funding. Okay. Because we heard from the CTEs this morning, and they were very concerned. They are

[Sen. Ann Cummings (Chair)]: excluded from all of this.

[Beth St. James (Office of Legislative Counsel)]: There's one type of independent school, or there's one type of CTE programming that would fall under Chapter 21, and that is a comprehensive high school. That is St. Johnsbury and Linden, are our two approved independent schools that also serve as regional career and technical centers. Their tuition for CTE programming is the same as their high school tuition. That's one tuition charge, and that is under Chapter 21. And then we have two public schools that are comprehensive high schools, but the tuition for CTE program offering in those schools is the tuition to attend the school under the town tuition program. It's not a separate tuition charge. So again, I just read the law, I don't execute it. I believe that by specifying chapter 21, we're excluding CTE tuition because that is covered under chapter 37. Okay. But I could be I'm happy to adjust that language. Okay. Well,

[Sen. Ann Cummings (Chair)]: I think that just leaves us of a problem we

[Sen. Scott Beck (Member)]: just So, heard

[Beth St. James (Office of Legislative Counsel)]: the tuition charged by receiving school in Vermont for those two fiscal years shall not exceed the sum of the tuition charged by the receiving school in the prior fiscal year and the receiving school's allowable tuition growth, provided, however, that this section shall not apply to pre K tuition. So allowable growth for a receiving school means the product of the receiving school's allowable tuition growth percentage, and the tuition charged by the receiving school for publicly funded students in the prior fiscal year. This should look very familiar to you because it is the exact same language in your education spending cap. Allowable tuition growth percentage for a receiving school means 9% of the difference between the tuition charged by the receiving school, publicly funded students in the prior fiscal year, and the highest tuition charged by receiving school, the publicly funded students in the prior fiscal year, provided that the minimal allowable tuition growth percentage shall be 3%. How do you calculate that percentage? You subtract the tuition charged by the receiving school in the prior fiscal year for publicly funded students from the highest tuition for publicly funded students charged by any receiving school in the prior fiscal year, divide the difference by the tuition charged by the receiving school for publicly funded students in the prior fiscal year, we multiply the percentage by 9%. And receiving school means the board of a receiving public school and approved independent school that is eligible to receive public tuition. So this is the exact same concept, just applied to tuition. Okay. That's option one.

[Sen. Ann Cummings (Chair)]: Don't get Those

[Sen. Scott Beck (Member)]: are the options.

[Beth St. James (Office of Legislative Counsel)]: Well, I It's so it's more simple. So okay.

[Sen. Scott Beck (Member)]: So I I just wanna put a clear

[Sen. Ann Cummings (Chair)]: And then surgery too.

[Sen. Scott Beck (Member)]: So is this saying that they may charge up to that amount or they have they charge have to charge that amount?

[Beth St. James (Office of Legislative Counsel)]: So let's see. I believe this shall not exceed. Shall not exceed.

[Sen. Scott Beck (Member)]: Okay. So that's fine. Okay. Thank you. Just wanna give her the option to be lower than Standard. On page one, line 20. Yes.

[Sen. Thomas Chittenden (Vice Chair)]: I'm trying to understand why you say provided at the minimum allowable tuition growth percentage shall be 3%. Wouldn't it be max?

[Beth St. James (Office of Legislative Counsel)]: That is what is in the average or the calculation for education spending.

[Sen. Scott Beck (Member)]: So a minimum allowance. You get at least three if you're

[Sen. Ann Cummings (Chair)]: You get at least three. That's the minimum. That's the lowest amount.

[Sen. Thomas Chittenden (Vice Chair)]: Oh, is that okay. The permissible cap?

[Sen. Scott Beck (Member)]: Yes. Okay. Yeah. Thank you.

[Beth St. James (Office of Legislative Counsel)]: Are you ready for a more simple one? Yeah. Sure. Option two. Notwithstanding any provision allowed on the contrary for fiscal years '28 and '29, only the tuition charged pursuant to 16 DSA Chapter 21 by a receiving school located in Vermont shall not exceed the tuition charged by the receiving school in the prior fiscal year plus NEPA.

[Sen. Ann Cummings (Chair)]: That is much sense.

[Sen. Scott Beck (Member)]: It is. You

[Beth St. James (Office of Legislative Counsel)]: could put whatever factor you want there. 3%, 2.8%, 77%, whatever it shall be.

[Sen. Ann Cummings (Chair)]: That way if there is

[John Gray (Office of Legislative Counsel)]: But I can't give a

[Sen. Ann Cummings (Chair)]: no spike in the price of pencils or computer paper or who knows? There may be 200% tariff on computer ink. And that would be wouldn't probably be in NEPA yet.

[Beth St. James (Office of Legislative Counsel)]: Because there's a delay in putting out the NEPA.

[Sen. Scott Beck (Member)]: Beth, in this option right here, tuition, how are you defining the tuition there?

[Beth St. James (Office of Legislative Counsel)]: I am not, I am not

[Sen. Scott Beck (Member)]: finding Okay. Tuition I mean, for an independent school, it's very clear what tuition means for a public school, it's a little more nuanced, but

[Beth St. James (Office of Legislative Counsel)]: I mean, I know I could talk, but this is what I've spent my day thinking about, so I'm happy to I continue this conversation with do believe tuition charged is, could potentially for public schools be an ambiguous term.

[Sen. Scott Beck (Member)]: I

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: thought this was Jessica. Could this just be for independent schools?

[Beth St. James (Office of Legislative Counsel)]: That would be a policy choice that you could certainly make. So what happens

[Sen. Ann Cummings (Chair)]: to school A tuitions all its high school to high school B? It wouldn't it just follow the whatever that's true. It would do the two to it would be covered under.

[Beth St. James (Office of Legislative Counsel)]: Yeah. It would still be yeah. It would still be if.

[Sen. Thomas Chittenden (Vice Chair)]: Except money's coming from a district that would still have their cap.

[Beth St. James (Office of Legislative Counsel)]: Yes. Okay. Yeah.

[Sen. Scott Beck (Member)]: Okay. So that's the problem. If you have a receiving you have receiving public school and let's say they go up by 10%, the sending school district has to pay a tuition that's not a 10%, yet their education spending is probably, you know, the 3%. It'd be a little So that's a very problematic for that sending school district.

[Sen. Ann Cummings (Chair)]: Well, if we're saying that they can't spend more than three or 9% more than the receiving school

[Sen. Thomas Chittenden (Vice Chair)]: Pricing themselves up at the most

[Sen. Ann Cummings (Chair)]: to have to adjust. It's this is an increase. Right. So for two years, they can't increase their tuition more than the three to 9% depending on the budget.

[Sen. Scott Beck (Member)]: So that's more, I think, similar in the thinking in the first example.

[Beth St. James (Office of Legislative Counsel)]: Both examples 2A and 2B as drafted for now apply to both public and independent schools. It would be a policy choice for you all on whether to bifurcate the two. But have have this language just applied to one and not the other.

[Sen. Ann Cummings (Chair)]: Perfect. I just sent it to Charlotte. Oh, okay.

[Beth St. James (Office of Legislative Counsel)]: It is there now, Scott, if you refresh.

[Sen. Ann Cummings (Chair)]: I mean, the second one is definitely

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: I would do the second one and just apply it to independent schools and let the public school commissions follow the what the yeah, what the other public schools are doing in terms of setting their budgets.

[Sen. Scott Beck (Member)]: So, okay, what you run into there is, anyways, is that you might have a public school that's a receiving school that's receiving kids from number of different school districts. I mean, they could have a tuition for each of those school districts. They? No. Right now, they said one.

[Sen. Ann Cummings (Chair)]: No. But right now, do they charge different tuition rates? I didn't think so.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: So is your concern I'm I'm trying

[Beth St. James (Office of Legislative Counsel)]: to understand the so if if a school district is receiving kids from five different school districts and each of those five different school districts has a different percentage that they're allowed to increase their budget because of their own education spending and blah blah blah. Then if the receiving school is limiting what they can If their tuition is charged, it the amount that they're charging is higher than what a school district's allowable growth rate is, then Yeah. The setting school would be dinged. They could Yeah. Yeah. So I I but I think that

[Sen. Ann Cummings (Chair)]: wouldn't the ambition that you're paying determine your cost per pupil?

[Beth St. James (Office of Legislative Counsel)]: I'm pulling up the net cost per pupil statutes right now. And you're

[Sen. Ann Cummings (Chair)]: I mean Yeah. I mean, if if you're paying tuition and the student goes with their weights. Right? No weights yet? No. No. So you're just paying tuition. That is your cost per student. You are to would take that student out. So that will determine how much your increase could be But

[Beth St. James (Office of Legislative Counsel)]: the the tuition. I think it determines that I think it determines it on one side,

[Sen. Ann Cummings (Chair)]: but not the other. Maybe other thing is receiving zip up for everybody.

[Beth St. James (Office of Legislative Counsel)]: That's option two here. Yeah.

[Sen. Ann Cummings (Chair)]: And that would make it you can see if it was schools, and if there is an outlier, there is an appeals process. So is for two years. Okay.

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

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: of the things that I I mean, I

[Beth St. James (Office of Legislative Counsel)]: asked Julia this and I think that it's a question of getting the data but in general, we haven't really seen how all of this would impact individual districts. We don't, what I was asking was what are the tuition rates and what have we seen that increase by? But similarly, what are the increases on a long term weighted average pupil? So just as an example, in talking to superintendents, I believe the Berry School District this year on an individual long term weighted pupil, it's a 13.5% increase per pupil. But their average, their budget, their education spending in total is 5%. Yes. Something like that. So they would be pinched really hard by both options. They would have to cut quite a bit out of their budget. So I guess Well they get it

[Sen. Ann Cummings (Chair)]: probably 9% increase because they're fairly low spending district. That's on the per pupil, so they would

[Beth St. James (Office of Legislative Counsel)]: have to cut 4.5% on a per pupil basis if they got the 9%. Because right now, it's their their increase is 13 Okay. Five Then they

[Sen. Ann Cummings (Chair)]: can go to their budget spending. Which which is

[Beth St. James (Office of Legislative Counsel)]: increasing by 5%. So and NIFA is So two point that's the thing, like and I asked for this on on a tuition basis to see sort of how things are playing out for tuition, but it's true on a on a per district basis as well, trying to see, like, how is this going to impact school budgets. And all we can do is look at, I think last year's data, if that even exists, but having that kind of, that we don't have issues, knowing the budget increases have been on both the pure per pupil and a total ad spend and tuition basis And I think would be really helpful to know before we pass it.

[Sen. Ann Cummings (Chair)]: Right. But I think we lost the ability to get that kind of information when Brad James retired. Well, is not how it should be. The agency about that.

[Beth St. James (Office of Legislative Counsel)]: The education should be able to ban the process.

[Sen. Ann Cummings (Chair)]: They should, but at this point they can.

[Sen. Scott Beck (Member)]: Well they can it's not that hard we have the announced tuition reports and the allowable tuition reports for a number of years. It's not just tuition though I

[Beth St. James (Office of Legislative Counsel)]: mean it's for the other stuff too, long term weighted average per people increases and also the total ad spend increase.

[Sen. Scott Beck (Member)]: We have the other fund. I'm

[Sen. Thomas Chittenden (Vice Chair)]: not looking for an answer here, but what is a curiosity to me is I understand that we've had this in place before back in 2016, and then we pulled it back. I'm wondering how we did this then. Not looking for you to answer that on the spot, but I'm kind of curious how it was structured when the lawful spending growth paths were replaced previously with regards to independent schools. Secondly, and I'm going to carefully say this, I recall the big Act 73 discussions last session, the House did a lot of the work upfront, then once they've lifted across the finish line over to us, that's when a lot of certainty was then known about what that modeling would look like, and a lot of the numbers came out. So my point here is, in this case, we're taking this on now relatively early in the session where I would expect much more certainty with the great staff of JFB to then flush a lot of these implications and numbers out before we're in the heyday of Lady Gulick and May. I want those answers too before I vote for something, but I just know that a lot of this would get flushed out further down the track.

[Sen. Ann Cummings (Chair)]: We're not gonna get those answers in the next day or two. Per digits. We've got issues with the end department and their ability to crank it out. I don't think JFO has that kind of information, and Beth needs to leave in six minutes. That's a great point.

[Beth St. James (Office of Legislative Counsel)]: Can give you an extra pat.

[Sen. Randy Brock (Member)]: Oh,

[Sen. Ann Cummings (Chair)]: don't miss that. I'm trying to make a make a decision between

[Beth St. James (Office of Legislative Counsel)]: one or two. I I need to leave now.

[Sen. Scott Beck (Member)]: That on the the first the first option.

[Julia Rickards (Joint Fiscal Office)]: Yes.

[Sen. Scott Beck (Member)]: Page two. Yeah. B sub I.

[Julia Rickards (Joint Fiscal Office)]: Yes.

[Sen. Scott Beck (Member)]: Subtract the tuition. Are you thinking allowable amounts or is that still to be

[Julia Rickards (Joint Fiscal Office)]: Not. There's that that term is not defined.

[Sen. Scott Beck (Member)]: Okay. Good. It's the same as the second option. Okay. Yeah. Thank you.

[Sen. Ann Cummings (Chair)]: Okay. Okay. Committing. How many like option one? Yeah. How many I got two likes option one. How many like option two?

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: I like option two, but I would like it to be more clear on the fact that this is tuition going to independent schools, and not just tuition writ large. That was my intent when I decided to do an amendment.

[Sen. Ann Cummings (Chair)]: Well, if you do that, what would stop your high school who's capped at 3% from upping their tuition 25% to cover their cost? What

[Sen. Thomas Chittenden (Vice Chair)]: I would really what I like is the synchronicity between what is contemplated in or everybody in with independent schools. And so if we go back to the other language and do as much as we can to mirror it, which is I believe what Elizabeth had presented to start is that that language directly mirrored the language in the allowable spending growth caps. That to me is a great starting point to really have the intent be to have the same allowable growth gap. So I like option one only because that's where I believe our current landing place is for the other

[Sen. Scott Beck (Member)]: language. But if we

[Sen. Thomas Chittenden (Vice Chair)]: go to Nipah in 02/20, you know, it's not going to synchronize.

[Julia Rickards (Joint Fiscal Office)]: Well, isn't it? I I think that one of the things we talked about was doing a pump. Both of them as options but I I also had asked about whether we could accomplish some of the same goals of this affair with the excess spending threshold which is easier to understand, Senator Brock.

[Sen. Ann Cummings (Chair)]: And it was, I don't know if that. Except the accounts can spend over it and they have. And Thank you.

[Julia Rickards (Joint Fiscal Office)]: But it I think very few towns spend over it, and it's something that's already in existence. So I'm just curious about looking at that as an option instead of creating something that's confusing everyone.

[Sen. Scott Beck (Member)]: I think when a tuition is allowed, tuition growth, I think it mirrors what we're doing in the rest of 2020. Okay.

[Sen. Ann Cummings (Chair)]: Does anyone want to end now and go back to the status quo and change the allowable spending cap? No penalty. What is that? Well, it would be if you double tap

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: the total Excess excess spending threshold.

[Julia Rickards (Joint Fiscal Office)]: I well, I I I feel like we're trying to deal with all these decisions without actual data, and it's really, really hard and irresponsible to be like, oh, I kind of like this one because it sounds better, but we don't actually know how it's going

[Sen. Ann Cummings (Chair)]: to impact our schools. No, and we don't have the luxury of having that data. Well, that seems unacceptable to me. A lot of this is unacceptable, but double digit property taxes are also becoming unacceptable. I understand that, and

[Julia Rickards (Joint Fiscal Office)]: I'm not saying they're not, but what I'm saying is that we as policymakers should be able to make policy based on data that we see before us. And the agency of education and the tax department are required to provide data, especially when we ask for it. And there if we don't have the data to be able to see what the impact of these options would be, I don't think it's responsible for us to just guess. I mean, we had a question, you know, senator Beck and I were trying to figure out, like, sending, receiving thing, and we actually don't know without the data. So

[Sen. Ann Cummings (Chair)]: what is the option? If we don't do this, do we do nothing? Do we do something else? I can't make the department of education. And since we lost our last data cruncher, I don't know that we've gotten a new one. I haven't seen any data since Brad left. Last time we had this kind of individual school day, it the weights and this one I don't know. So Senator Chittenden

[Sen. Thomas Chittenden (Vice Chair)]: I I go back to my previous point and that if we come to some consensus, the NIFA notion, I believe, just came up. It was Tuesday, maybe it was Friday. The day is blurred together. But if we do start to come around to some consensus, I don't know if we have to vote it out, but maybe that gives us a few days if the agency of education hears some general consensus of where we're going on these points, then maybe that will trigger to get us the data to have that informed more informed discussion before we vote this thing out.

[Sen. Scott Beck (Member)]: But Okay. I know what you're

[Sen. Ann Cummings (Chair)]: talking about. Email AOE and ask them if they have the ability to generate the data on a district level of implementing these increases and tuition caps. Is that what we're asking for?

[Sen. Thomas Chittenden (Vice Chair)]: Yeah. The allowable growth

[Julia Rickards (Joint Fiscal Office)]: caps. Not just tuition though, for also long term weighted average per pupil for every single district. What is the average plus the total education spending? We need to know all of it. We need to be able to see what the impact of this is.

[Sen. Ann Cummings (Chair)]: Okay, and if we can't get it, then it's our decision to do nothing?

[Julia Rickards (Joint Fiscal Office)]: Let's see what the data shows us before we make a decision.

[Sen. Ann Cummings (Chair)]: If we can't get the data, and I have a strong suspicion we can't, are we then saying that we are going to do nothing for the next it'll probably be three or more years before I would not.

[Sen. Thomas Chittenden (Vice Chair)]: As one member of this committee,

[Sen. Scott Beck (Member)]: I would not I would not wanna do nothing. Feel

[Sen. Thomas Chittenden (Vice Chair)]: like we need to do something to continue this conversation. I know the weeks are slipping by, but it is relatively early in the session for us to get what submission has to

[Sen. Ann Cummings (Chair)]: be placed. We are talking about FY twenty seven here. Right. Are talking about, yeah, we are not talking about this year.

[Sen. Scott Beck (Member)]: Julia, that's her name for the future.

[Julia Rickards (Joint Fiscal Office)]: Julia. Hi, Julia Rickards, AFO. I think it'd be helpful to clarify what precisely analysis and data is needed and the underlying policy decisions for that analysis. So for instance, with respect to the definition of tuition, to the point that Beth was raising about tuition not being defined, are we talking about allowable tuition, announced tuition, tuition after the true up process? I did reach out to AOE last night after your conversation to get tuition data. I've received some tuition data. I have I need I I I think that there needs to be more guidance as to what specific avenues you need us to dive into. Okay. To be able to provide the analysis committee.

[Sen. Ann Cummings (Chair)]: Committee. What data do we need? And we need to be very clear and succinct. I am not clear as to what data we are asking for. I thought the proposal was to cap spending.

[Sen. Scott Beck (Member)]: And

[Sen. Ann Cummings (Chair)]: that what data do we need? We've given two options, and we've given an appeals process. We then got in and that seemed to be pretty clear. I didn't, I'm not sure what data do we need to go forward with that.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: I think the idea is, since we have a complicated funding mechanism here in the state, what will this funding have to look like on the ground in various districts? Because we have to be willing as a committee to accept the potential harm that we're going to do.

[Sen. Ann Cummings (Chair)]: I understand we don't want

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: to do any, we don't want to do nothing, but we have to be able to sleep with the fact that we are going to be doing some harm in some districts and what does that look like. So to me, that is data I would like to know.

[Sen. Ann Cummings (Chair)]: Okay. I wanna leave out harm is a pejorative word. I'm not sure that we're going to do harm as an injury. We may limit expansion, but car we haven't had testimony that said we're going to do harm. We may make it more difficult, but is it every time we increase? Is it an improvement in education? Chair, I don't appreciate being scolded. We know that cost drivers are what is raising taxes right now, so we are not dealing with cost drivers in what we're doing. Not what schools can do cost drivers. I don't think that that is actual accurate, madam chair. A lot of

[Julia Rickards (Joint Fiscal Office)]: the cost driver station are things that are big picture statewide. Yeah. And the largest one was the health care that is is negotiated at the state level, not at the school district level.

[Sen. Ann Cummings (Chair)]: That is correct.

[Julia Rickards (Joint Fiscal Office)]: So I do I completely agree, and I've said this multiple times. This proposal does not address the cost drivers, and it will force school districts to make cuts in things that they can control, which is the education of students in classrooms. I think that what Senator Gulick was trying to say is like, we need to be able to understand what are the implications of the actions we're taking. I think all of us, all of us want to address the rising property tax rates. All of us do. But we also need to understand how we're doing that and who is impacted. So what I would like to see in terms of specific data is education spending, total education spending by district for and I don't know if this year's proposed budgets are available in a so it would have to be the So last two I wanna see the last two years of education spending and to be able to get an idea of how much education spending total increase for each district. And then the long term weighted average per pupil education spending because we're we're talking about two different ways of calculating education spending or the increase. So just like in the bill, what was the last two years so we can see, if Barry went up 13.5 or that's projected, what are we seeing across the state by school districts? So is the three to 9% totally under or over or is that the sweet spot? And the same with the NIFA, is the 2.8% of the NIFA the right amount that we should be using? Or is there a better number? Is it more or less? Without data, we're just picking numbers out of the air. And the same with the tuition. What is what is the tuition that is being charged for different types of students, whether they're elementary or high school or going to public schools or private schools? And the tuition stuff is super confusing and I don't quite understand it all, frankly. But being able to do the same kind of analysis for tuition so we can say, is applying the same percentages to tuition reasonable or not? Or could it be taken care of by just looking at their budgets in some cases? Or are there more complications that we don't understand? Just passing a bill without understanding the implications of it, especially in this atmosphere where everything is so charged, just feels irresponsible. Okay.

[Sen. Ann Cummings (Chair)]: So, the data we want from the education department is the total education spending of every district in the state for the last two years. So and we wanna be able to calculate the increase or decrease in that, and now we wanna know the long term weighted average. Total education spending per district, not total for the state, but the five districts. Total ed by district those last two years. And then the long term weighted average student Per pupil.

[Julia Rickards (Joint Fiscal Office)]: Per pupil. The the term that's used in the bill.

[Sen. Ann Cummings (Chair)]: Long term per pupil. Mhmm.

[Sen. Scott Beck (Member)]: Term per pupil. Empty each arm.

[Sen. Ann Cummings (Chair)]: Establishing out the chair. Weighted average for the last two years. Yep.

[Sen. Scott Beck (Member)]: The tuition, well, I mean, that's all in the if you wanna look at tuition, helps tuition growth, either aggregate or on school basis, that's all the house tuition report. And then the allowable tuition report has all the the actual spending on a student basis. So Yeah.

[Sen. Ann Cummings (Chair)]: Yeah. What We've got reports. What I like things on the list. So we want the annual

[Sen. Scott Beck (Member)]: I think he wants tuition Two years. Two years. Announced tuitions. Announced tuition. They do by school and by aggregate.

[Sen. Ann Cummings (Chair)]: Oh, what do mean by aggregate?

[Sen. Scott Beck (Member)]: Like, the average of everything, how they all stacked up. And then you wanna see the allowable amounts that were calculated by AOE for all the public schools for two years.

[Sen. Ann Cummings (Chair)]: That's when you come back and you've given us ten extra minutes, I think we're gonna need a tutorial of what is the yeah. What is the announced? What is the allowable tuition?

[Julia Rickards (Joint Fiscal Office)]: Yeah. I can unfortunately do that in my sleep now. Oh. It's still confusing. And as with so many things in education finance, the law does not necessarily carry you the entire way through a process. Like, there's there's there's a there's business processes that happen in the fields that are not captured in the black and white law, and and this is the big one. For example, allowable tuition announced tuition is set prior to the next school year, so everyone knows how much they're gonna pay.

[Sen. Scott Beck (Member)]: Yep.

[Julia Rickards (Joint Fiscal Office)]: And then once budget once data is received by AOE in the fall, the highest amount that a district can charge, which in statute is called the net cost per pupil, I think colloquially it has been referred to as the allowable tuition. But then there is a true up process. If you are paying, if you pay tuition, if your announced tuition is through, is on either side of 3%, there is a true up process. And that true up process is not just cutting in check, it could be credits. And I don't know, especially because I am not your numbers gal, I don't know that the actual number that a school district ends up paying is captured in either allowable or amounts depending on how much each district actually paid in tuition? You could, but if they're paying to different school districts, you would wanna paying to different schools, you would wanna capture all of that.

[Sen. Ann Cummings (Chair)]: So we wanna know how much each school district paid. How about an average per pupil cost for each district?

[Julia Rickards (Joint Fiscal Office)]: As long as it was separated between elementary and secondary, and there was excluding special ed like any extra fee for special education. But to sound under Beck's point, allowable tuition and announced tuition are already on the agency's website and very easily accessible. It's just that what actually was paid that No. Grew up throughout

[Sen. Ann Cummings (Chair)]: So they yeah. It's like average wholesale price for drugs, also known as eight months paid.

[Julia Rickards (Joint Fiscal Office)]: So now that that's clear, I'm I gonna need

[Sen. Ann Cummings (Chair)]: mean, it's it's almost useless information. Alright. Let's start out with total ed spending by district for the last two years. And then long term for people weighted average for the last two years. We get that. And then maybe we will ask the agency of education to come in and talk to us about tuition. Julia, can you help clarify any of this? Well, what do we need, or do you know what they do and don't have?

[Julia Rickards (Joint Fiscal Office)]: I'm happy to clarify. I cannot speak for the agency of education. I will say, did just send this to Charlotte. The agency of education posts publicly online the per weighted pupil spending data by school district over the past ten years or so. Okay. I just sent that to Charlotte. As soon as the firewall lets it get into Charlotte's inbox, think she'll forward it to the committee. With respect to the tuition information, I am not an expert on tuitioning. I've been trying to understand the data and what is collected. I know that the school district redistricting task force received one data set with respect to tuition data that I always shared with me yesterday or last night. Beyond that, I beyond that I think think the, that the questions are,

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

[Julia Rickards (Joint Fiscal Office)]: the analysis needs, usually analysis needs to respond to a question, right? And so the question is, from my perspective, in doing more analysis, what are, how can we support you with analysis to inform this policy discussion? The per pupil data's online, the allowable growth percentage, the overall estimated savings for FY '27. I certainly can't speak to what that will look like in specific school That would be a question to the field. And then for tuitioning, I would need to brush up more on tuition data or.

[Sen. Ann Cummings (Chair)]: Yeah, I think we're gonna have someone else add. Senator Hardy, what kind of analysis do you want from this?

[Sen. Ruth Hardy (Member)]: So I'm looking at the spreadsheet from last year that has, what year this is, But, on the staff, like, this is this year. I think it would be just helpful for us to have the proposal shown in how would it impact all the districts. So, we can see, like, if this were to go into had gone into effect, what would have happened if the and I'm not positive I have these numbers right for Barry, but that's what I remember. It's 13.5% long term weighted average education spending increase. If that had happened, they would have had to go down to probably 9%. You know, that would have cut how much would that have cut out of their budget? And, you know, what would the impact be on individual school districts so we can look and see

[Sen. Randy Brock (Member)]: what that right now. I think that's the first thing I've heard today that I think is useful. That has underlying concerns about the value and the accuracy and the consistency of some of the data that we've been collecting all along, and to do detailed changes to that data based on what we know and what we think right now, I think it's just going to add to the confusion. I do think the notion of taking data that we have and looking at it the way that the center has suggested is probably useful exercise.

[Sen. Thomas Chittenden (Vice Chair)]: Yes. So I was making a note of the data request in that conversation. I had everything that you listed and then my first bullet to Senator Hardy's point I had, tell me if this captures what you just said. Using the contemplated S two twenty allowable spending grow the past, what would be the district by district implications if this were to have been applied in fiscal year twenty seven?

[Sen. Ruth Hardy (Member)]: Exactly. So we can see district by district on the individual basis and the total ad spent. So for the f y so the the underlying analysis, the estimated savings if it were to happen in f y twenty seven is calculated using the preliminary budget estimates to use for the December 1 letter. Mhmm. That data is confidential, so I cannot share unless the agency of education grants permission. I can't share that that data. Right. That's why I was asking for the previous two years because that's available. So it wouldn't be an accurate description of what we would maybe save, but it would illustrate what we're talking about. So it'd be redoing the analysis on FY '26 data instead of FY '27 data for a district by district for a doubt.

[Julia Rickards (Joint Fiscal Office)]: Yeah. If if you can't give us shares data, I mean, I think that's the best we could do. Right? Unless you have another idea. Yes. Yeah.

[Sen. Thomas Chittenden (Vice Chair)]: Give you a general idea of how this would affect districts. Okay.

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

[Julia Rickards (Joint Fiscal Office)]: that will be the way to do. Yeah. Because it's, so I'll need to go back and do that. Other piece too though is I still don't That's the allowable growth percentage piece. I'm with you. Do it. Okay. The tuition piece, I still don't know. Why don't they get anything? Because I don't

[John Gray (Office of Legislative Counsel)]: Yeah, the tuition piece, sorry, John Gray, I was the counsel, the tuition piece would have to operate within the constraints of the ed spending here, meaning that they're gonna be constrained regardless of the changes that you do with tuitioning, right? So if you're looking for the same kind of impact that you would see for the ad spending, you can't see it in the tuition piece because the effect there is gonna be the ways that people negotiate within the constrained budget that happens.

[Julia Rickards (Joint Fiscal Office)]: Not at Senator Chittenden's point, is that it might already be taken care of except for independent school tuition, which is different. I

[Sen. Scott Beck (Member)]: think what you want to see is I want you to think you want to see two years of the allowable growth.

[Sen. Ann Cummings (Chair)]: Okay. Tuition. We're talking about the last two years.

[Sen. Scott Beck (Member)]: Yeah. The tuition, the allowable growth tuition for all the public schools. Oh, tuition. Well, the, yeah. What they,

[Sen. Ann Cummings (Chair)]: still working on per pupil spending, so you want to be allowed

[John Gray (Office of Legislative Counsel)]: And just FYI, we're not gonna have the per pupil spending in the latest trap because we switch to an aggregate, that spending comes up, so To deal with the net up.

[Julia Rickards (Joint Fiscal Office)]: Can we do either or, whichever is greater?

[John Gray (Office of Legislative Counsel)]: Yes, I will explain you when I testify on that piece, I have to have the apples to apples still, so we had heard people before, we'll now have, it will be the greater of, but I have to, it has to be apples to apples, I can't compare. No,

[Sen. Ann Cummings (Chair)]: you can't compare, yeah.

[Sen. Scott Beck (Member)]: For tuitioning, you take the allowable growth report from the one that just came out, And the one for the previous year. Yeah. And you can see the growth in the allowable between from school to school from, you know, over a two year time period, which gives you, you know, what percentage they grew over-

[Sen. Thomas Chittenden (Vice Chair)]: District to district.

[Sen. Scott Beck (Member)]: No, they do run a school by school basis typically.

[Julia Rickards (Joint Fiscal Office)]: Because it's elementary and high school. Yeah.

[Sen. Scott Beck (Member)]: Yeah. So you see, know, okay, you know, public school a, this was their allowable in fy24. This was their allowable in FY25, you can see the growth.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: All right.

[Sen. Scott Beck (Member)]: You do that for every school, know, and then you would, the comparable is, on the independent school side, is their announced tuition because that's all they get. They don't get to do allowable. They don't get the true up. So their announced is actually what they receive. You do that same thing for all the 18 independent schools there, they charge in you know, FY '24, what they charge in FY twenty five, what was the growth? And I think that's what you're trying to to see if they fit in these windows that senator Hardy is talking about.

[Sen. Ann Cummings (Chair)]: I'm trying to figure out who has I guess that is on

[Sen. Scott Beck (Member)]: Oh, it's on their website. Yeah. Okay. It's just somebody if somebody could compile it into I mean, they only publish on an annual basis. Right? You'd have to

[Sen. Ann Cummings (Chair)]: Look last year. Yeah.

[Sen. Scott Beck (Member)]: Exactly.

[Sen. Ann Cummings (Chair)]: Before. Yeah. And look at what the growth trends were there.

[Sen. Scott Beck (Member)]: Yeah. Is it is it Ken Ken Bates from AOE? Who is it? Ken?

[Sen. Ann Cummings (Chair)]: He's got the client here. 10.

[Julia Rickards (Joint Fiscal Office)]: 10.

[Sen. Scott Beck (Member)]: 10. 10. Eight. Pete. He's the one that puts together the reports, I think. He probably could do a two year, you know, what He's the one that we will ask Yeah.

[Sen. Ann Cummings (Chair)]: AOE to send us over a voucher. That one that can be accessed through the allowable tuition, the allowable You

[Sen. Scott Beck (Member)]: don't need the amount

[Sen. Ann Cummings (Chair)]: of spring. Or Independence there. Yeah. Yes. Okay. And these are for public schools. Right?

[Sen. Scott Beck (Member)]: The allowables only for public schools.

[Sen. Ann Cummings (Chair)]: It's only allowable for public schools. And then are we asking Julia to do the last two years on a district by district basis, or are we going to ask AOE? I would prefer our own staff.

[Sen. Scott Beck (Member)]: So you don't have education spending in long term leave, and everybody

[Sen. Ann Cummings (Chair)]: looking for longer and waited at. I

[Sen. Thomas Chittenden (Vice Chair)]: just sent an email that when I think I captured some of those points. I sent it

[Sen. Scott Beck (Member)]: to you, madam chair, and Michelle and I'll let Charlotte. She did.

[Sen. Thomas Chittenden (Vice Chair)]: Stepped in front of Senator Mattos earlier, my apologies.

[Sen. Christopher Mattos (Clerk)]: That was about twenty minutes ago. Yeah. And I apologize. Stepped up your hand

[Sen. Thomas Chittenden (Vice Chair)]: and I missed it. Yeah.

[Julia Rickards (Joint Fiscal Office)]: Jump in there, bud.

[Sen. Christopher Mattos (Clerk)]: No, I'd like to respect the process. I hope I hand up. Julia, is this what you're talking about where you can't overlay FY '27? You provided this

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Exactly. Us.

[Julia Rickards (Joint Fiscal Office)]: Thank you. Yes. Thank you. Exactly. So this is using all of the Staking '26. FY '26 going forward. The challenges with the the comparing it to FY '27 because the FY twenty seven data is confidential. Even though they're warned, the vast majority of

[Sen. Ann Cummings (Chair)]: them But they aren't voting.

[Julia Rickards (Joint Fiscal Office)]: So we're using the, so taking a step back, the way that the allowable growth works is it's comparing to the prior year.

[Sen. Christopher Mattos (Clerk)]: Right.

[Julia Rickards (Joint Fiscal Office)]: So to your point, the graph that you're showing there is based off of FY '26.

[Sen. Christopher Mattos (Clerk)]: Yeah.

[Julia Rickards (Joint Fiscal Office)]: To calculate savings, we have to compare against what the preliminary estimates are for FY '27. That data I can't share, because it was used for the December 1 letter calculation where school districts said, here is our best guess about our growth in education spending. The warm budget data, of course, is public data, and the agency of education is in the process of collecting that data.

[Sen. Christopher Mattos (Clerk)]: We used get that little box from

[Julia Rickards (Joint Fiscal Office)]: And it still is coming. It came into ways and means the first time from AOE last week, challenges that the little box from Brad and Nicole and now Kelly is the sample size is still so low in terms of the budget, the official budget data that they collected, that we can't use that to replace our preliminary confidential district by district projections.

[Sen. Christopher Mattos (Clerk)]: I just It should be coming soon though, right?

[Julia Rickards (Joint Fiscal Office)]: Yeah, so every week, AOE will be coming in with updated budget information. This just hasn't happened yet.

[Sen. Christopher Mattos (Clerk)]: I think I just wanna see that overlaid on this, Like, here's what you would have been allowed, and here's what your FY '27 warned budget is.

[Julia Rickards (Joint Fiscal Office)]: Once there's warned budget data, that will be a simple crosswalk. I just don't have the warned budget data yet. Thank you.

[Sen. Christopher Mattos (Clerk)]: I guess I don't want you to recreate the wheel.

[Julia Rickards (Joint Fiscal Office)]: I I I'm happy to share the FY '26 allowable growth percentage or allowable growth education spending or FY '26 and spend grown by. It's just the comparison against f y twenty seven that I can't share. And if the committee needs to see it for an earlier year, that's my job. If if that's

[Sen. Christopher Mattos (Clerk)]: because you take '25 applied and what? Actually, '26 was. 2526. Yeah. So it's not confidential anymore.

[Julia Rickards (Joint Fiscal Office)]: The the only other challenge I will say too is we can only go back to f y twenty five because of x y '27 and the change

[Sen. Scott Beck (Member)]: of the viewpoints. Yeah.

[Sen. Thomas Chittenden (Vice Chair)]: On this point, to center what Matt senator Mattos is saying, we that data will be available sometime over the next month. Correct? Okay.

[Julia Rickards (Joint Fiscal Office)]: Yes. So we can update it in the next month, but just blind without passing a bill without data analysis is really not good practice.

[Sen. Scott Beck (Member)]: I not disagree. Yeah. I know you're not.

[Sen. Thomas Chittenden (Vice Chair)]: I just remember Act 73 last year. A lot of the numbers came out after it looked across the finish line in the house.

[Sen. Ann Cummings (Chair)]: Okay. So we are going to wait until we have the twenty seven one budget? Is that the decision?

[Sen. Christopher Mattos (Clerk)]: I would say as this trickles out, if it gets to a point for Julia, think she can make a statistical analysis of it.

[Sen. Ann Cummings (Chair)]: Maybe By the time it trickles out, we're at town meeting and crossover.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: That's what she gets. Well, I

[Sen. Ann Cummings (Chair)]: mean, this just has to make make crossover. We have time. I mean, what's the rush right now? I'm not rushing. I'm saying that if we have to wait till all the budgets are warm, we have got very limited time to get it out, but we can

[Julia Rickards (Joint Fiscal Office)]: I mean, we can start with the last two years to see

[Sen. Ann Cummings (Chair)]: what Well, if we do the last two years, are we going to be able to make a decision, or after we spent hours of committee time looking at the last two years, we're looking at the per pupil spending broke? Is that what we're looking at for the last two years? They were looking at how much were people spending first district.

[Sen. Scott Beck (Member)]: LTW EDM analysis, then you got the education spending by district analysis. And that'll tell us, you know, that'll tell us.

[Sen. Ann Cummings (Chair)]: So how quickly can we get all that? Not by tomorrow, I'm sure.

[Julia Rickards (Joint Fiscal Office)]: Yeah. I think that that's maybe a that's a little maybe next next week? Okay. I don't think.

[Sen. Ann Cummings (Chair)]: Alright, then we can wait till next week.

[Sen. Christopher Mattos (Clerk)]: And would it be as that data comes out with FY27, with what you have already might be easier just to plug and play in there, hopefully, hopefully, maybe?

[Julia Rickards (Joint Fiscal Office)]: Yeah. Yeah, absolutely. It, I think, I think I'll need to go back and watch this community discussion to fully understand make sure that you are getting what you're looking for, and perhaps this is the

[Sen. Ann Cummings (Chair)]: government I'm not sure we all

[Julia Rickards (Joint Fiscal Office)]: know what we're looking So what I'm hearing is a couple of different things. I'm hearing interest in understanding how education spending and per pupil weighted education spending have changed over time. We can do that for FY '25 and FY '26. Yeah. Because that's all we have for those weights. I'm hearing, wanting to understand if going back, not just the projection that Senator Mattos showed up, but me doing that projection again for an earlier year to see how it looked different to also receive a district by district printout of the districts and the allowed education spending under this proposal in comparison with what they actually spent.

[Sen. Christopher Mattos (Clerk)]: Okay. Poor Julia. It keeps going on that.

[Sen. Scott Beck (Member)]: Might be a question for you. Mhmm.

[Sen. Christopher Mattos (Clerk)]: What what's the value of that? Because it's already happened. What happened in 2020? Well,

[Julia Rickards (Joint Fiscal Office)]: I mean, I think it would be more ideal if we fuse this year's, but because we can't use confidential data, then having it be able to see on a district by district basis, we can see how it would happen. What would the impact be if this were in effect this year? And would it have? And we don't know what all the implications and what all the decisions that school districts would make or would have made, but applying the proposal to the real world, the data that we have in the real world will give us an idea of what the impact might be. And I mean, if you look through the list of districts, there are so many different kinds of districts in Vermont. You know, operating, non operating, K 12, K eight, k six, and and then weird things like the interest interstate district, etcetera. So the impact on varying districts, I think, is gonna be really fair. It it could be really different. Maybe not. Maybe what we'll see is, like, it's not big not that big a deal. And, you know, it might pinch a little bit, but it's not gonna be that big a deal. But maybe we'll see some anomaly that we wanna try to address. I just feel like making a decision in the dark is really Oh, no. No. A good process.

[Sen. Scott Beck (Member)]: I think FY '26 will be a good comparison because the education spending in FY '26 grew 5.7%. What we're projecting this year is when the tax sort of came out was 5.9%. So there there are some I mean, it's they're kinda comparable.

[Julia Rickards (Joint Fiscal Office)]: Yeah. And every district's gonna have a different thing. Like, they could, like, retire debt service or they could, you know, get a spike.

[Sen. Scott Beck (Member)]: That'll give us a rate. You know?

[Julia Rickards (Joint Fiscal Office)]: But I just yeah. I think, like, putting it in a more concrete analysis where we can say, oh, wow. I didn't expect that

[Sen. Ann Cummings (Chair)]: to happen or, oh, it's not

[Julia Rickards (Joint Fiscal Office)]: a big deal. I don't know. Seems like the responsible thing to at least see.

[Sen. Scott Beck (Member)]: Great.

[Sen. Ann Cummings (Chair)]: Do you have enough to rationally go forward on this? Senator Chittenden put together

[Julia Rickards (Joint Fiscal Office)]: a really helpful desk for me. Had he shared with you, madam chair. No. He shared it with me. And so I'm gonna use this to come back to the committee with analysis. And I do think that with respect to some of the tuition information, that would be good to bring in

[Sen. Scott Beck (Member)]: the agency for that. So,

[Sen. Ann Cummings (Chair)]: we've got using the contemplated 02/20 allowable spending growth, what would be the district by district implication this to have been applied in fiscal year twenty six. Total education spending by district for the last two years. Long term weighted average for people spending for each district for the last two years. What is the tuition being charged by both independent schools and public CTE schools? CTE okay. Because CTE, other than the public ones, are excluded from all of this. So, witness before says two years or more of announced tuition by schools including allowable tuition amounts. And so we'll see what you get on that, and let us know when you're ready. We will just keep holding a space until we're ready, but I can almost anything else out of. Okay. I think that's it. So do I have Do I have anybody else on the top and the foot? I'm

[Sen. Thomas Chittenden (Vice Chair)]: gonna talk through the appeal process, or do you wanna

[Sen. Christopher Mattos (Clerk)]: You guys wanna see what I have?

[Sen. Ann Cummings (Chair)]: Okay. Yeah. I don't know if you need. You don't

[Sen. Christopher Mattos (Clerk)]: have to. Alright. I'll be

[Sen. Thomas Chittenden (Vice Chair)]: with these kids. No. I need get

[Sen. Christopher Mattos (Clerk)]: to the parts store and get the part of my pickup truck so I can get back here. Senator Chittenden. Thank you. Okay. And and

[Sen. Ann Cummings (Chair)]: these go pick up parts for them.

[Sen. Christopher Mattos (Clerk)]: Car doesn't work on everything.

[Sen. Ann Cummings (Chair)]: Well, you

[Sen. Christopher Mattos (Clerk)]: know, I'd say let's drive together, but we can't.

[Sen. Ann Cummings (Chair)]: But you're not coming in here with one of those loud muffler plates. You never know. They're Kind

[John Gray (Office of Legislative Counsel)]: of local. That's the term. It is. Alright. John Gray on his bloodlet counsel. Screen share. Yes, I will. And this is posted. So this is the proposed amendment to S220. And we're jumping back away from tuition, just talking about allowable growth, and I'm trying to capture the discussions of yesterday. Initially some of this is gonna look happily simple, but that's because I've hidden all the complexity in the definition section. Spending tax, starting on line nine, for fiscal years 2028 and '29, the school board of the base school district shall not propose or present to the voters a budget that would result in education spending, so aggregate, education spending that exceeds the district's allowable spending. So what is allowable spending? We look at subsection B. I added a first line here, this isn't something the committee suggested, but I just wanted to throw this out as a concept with the complexity built into the calculations for allowable growth and also the fact that we're giving a greater of, and potentially applying an inflator. I was somewhat concerned that they might be applied at different times, that school districts might not know to what cap their budget is subjected. So first line is the Secretary of Education shall publish the allowable spending for each school district in the state, so just have a centralized mechanism that lists the allowable spending. That way they are also on top of having to form the budgets, figure out what the cap of pie spend is. A school district's allowable spending shall equal the greater of the following amounts: the sum of their ed spending in the prior fiscal year and their allowable growth, I'll talk about that when we get to the definition section. And the district's education spending in the prior fiscal year increased by NIFA. So it's a choice between do you get a higher allowable growth net spending, or do you get a higher NIFA ed spending? Whichever is higher, the district would have that set as their allowable spending. That would be their cap.

[Sen. Scott Beck (Member)]: What happened to the LTW ADM spending?

[John Gray (Office of Legislative Counsel)]: I'll talk about how I address that, because I needed to compare Ed spending inflated by NIFA, it's the apples to apples comparison thing, have to compare Ed spending against Ed spending. So I'll talk about the way that I treat that in allowable growth, because there are measures included here to protect against, in this case, increase in enrollment, which would be the risk that you would have, is if your student enrollment and goes you were making a determination based on just ed spend, which of course wouldn't reflect, you're doing prior year ad spend, it wouldn't reflect your updated student count. But they're through the way that that works. So you're getting the greater of MIP inflated or your allowable growth as the cap. On page two, we have the spending review process. So under subdivision one, if a school board for a school district determines that the budget that would be necessary for the inspection of the school year would violate that spending cap imposed under subsection A, the school board shall submit its budget to the Secretary of Education for a spending review to determine whether that allowable spending should be increased. Under subdivision two, the Secretary of Education, with the advice of three business managers and three superintendents selected by secretary shall determine whether the increase in spending in each budget submitted for spending review was beyond that district's control or for other good cause. And then the new concept that I've included based on discussions yesterday related to capital expenditures is to build into the review process those increases. So an increase in education spending, this is on line 13, an increase in education spending attributable to voter approved bond payments toward principal and interest for capital construction to address, and these are the two concerns people identified yesterday, life safety or district consolidation is deemed to be for good cause. Practically, what this means is if your increases in net spending resulted, and that could be either that there's an increase of an existing bond, like there's higher payments in this given year, or you voted a new bond, so all of that would be an increase in net spending. Right? Those increases, if they are for capital construction to address life safety or district consolidation, they would be deemed to be for good cause, which would mean in Subdivision 3, if the Secretary of Education determines that there is good cause for the increase in education spending, which could be for other reasons as well, but that's a theme

[Sen. Ann Cummings (Chair)]: that if you were having to let go your entire advanced math program, that might be considered good cause

[John Gray (Office of Legislative Counsel)]: Yeah, bring up a good point. This is quite discretionary language. It's broad discretion to the secretary to make this determination. The only direction that this draft offers as to what constitutes good cause is one of the call out to things beyond the school district's control, which could of course be interpreted in different ways, but that's the kind of language that was used in Act 127. And then the real direct statement that you've taken is all of this voter approved bondings for capital construction for these purposes. So that would be subject to discretion, that would just be that is the case, but otherwise, if the Secretary determines there's good cause for the increase, the Secretary would amend the allowable spending or that submitting school districts would count the good cause increase. But yes, large discretionary element here, I cannot say what the Secretary of a fair increase in what does not. I mentioned this yesterday, but in Act 127 for the tax rate review, there were a couple of factors listed, but they're not really applicable in this case. You could pull in one from there, but I've just stuck with a more generic, make a determination whether or not this increase was beyond the district's control. This good cause language was what

[Sen. Thomas Chittenden (Vice Chair)]: was in Act 127?

[John Gray (Office of Legislative Counsel)]: Yes, use good cause language. And it had the exact language was beyond the submitting school district, but beyond the district's control or other good causes. So that is the, just to restate what the bill does and then I'm going go into the mechanics to address Senator Beck's question. A school district can't propose a budget that results in ed spending that exceeds the district's allowable spending. The allowable spending is the greater of their NIPA inflated prior year ed spend or their allowable growth ed spend. If the school board determines that what would be necessary would exceed that allowable spending, they can make an appeal to the Secretary of Education. The secretary does a check to see whether the increase was for good cause and you deemed that one thing that constitutes good cause is bond payments for this particular purpose, and once there's been a good cause determination, the secretary would amend the allowable spending to account for the good cause increase. So that's the high level of the bill, and then to talk about what the allowable growth actually is, in previous, just to address why I had to do this differently, in previous drafts we've talked about allowable spending as related to per people spending, And so that means that increases in pupil count would necessarily automatically be picked up, right? Because the per pupil spend, it wouldn't matter that you had an increase in pupil count, you're subjecting a per pupil figure to the CAD. But because we've moved to an aggregate figure, we need to get at it on the opposite side. So allowable growth is going to be a set of things, and the intuition that this is trying to capture is a school district that has an increase in pupil count, in weighted long term membership, should get an allowable growth that reflects what they would have received had they had that student count in the prior year, basically. Does that make sense? I'll pause briefly.

[Julia Rickards (Joint Fiscal Office)]: Can you say it again? Yeah,

[John Gray (Office of Legislative Counsel)]: I'm just stating the plain English rather than looking at the language. The intuition this is trying to capture is that, maybe I'll start out with the problem I was trying to solve. If you have an allowable spending that's just set on your education spending, and then you have an increase in the next year in your pupil count, you're not getting the same kind of increase that someone who has a stable or declining pupil count had, right? Your budget was based on a lower pupil count than the prior year, so you need to account for that growth in pupil count in some way. So the way that this proposes to do it is to generate your permissible growth, your allowable growth, based on the increased student count that you have in this year. The way that it does that is it says, what was your per pupil spending in your prior fiscal year? Multiply that by the increase in your student count. That would give you what your education spending would have been last year had you had the student count you had this year.

[Julia Rickards (Joint Fiscal Office)]: That's the first time that you've explained it that I've understood it, Chuck.

[John Gray (Office of Legislative Counsel)]: I'm sorry that I've taken so long to achieve this. That is what I'm calling the education spending adjustment. It's how much more money you would have needed last year spending the same amount you spent per pupil for the new students you have this year. That's your education spending adjustment. And there's, it's even more complicated than this, there's two things you need to do. So one is, you need to make sure that you can get that amount outright in your allowable growth, because you should be getting that to reflect the student count you have. The other thing is that you need to ensure that the allowable growth percentage, your 9%, your 3%, whatever it is, is not applied against just last year's ed spending, because that doesn't account for the increase in pupils. It needs to be applied against last year's ed spend plus your education spending adjustment. So you're getting a growth, a 9%, 3%, whatever that percentage might be, determined on the basis of that growth. So the intuitive thing is you're getting what would be the allowable growth had we used a per pupil concept, but that accounts for the growth in pupil count that

[Sen. Scott Beck (Member)]: you've had.

[Sen. Randy Brock (Member)]: Could you define education spending adjustment again?

[John Gray (Office of Legislative Counsel)]: Yes, and I can actually scroll down to show you what that is, because I do have that built up. Education spending adjustment for a school district is the product of the last year's per pupil education spending and any increase in the district's weighted long term membership in the prior school year. So the intuitive concept is how much more money would your Ed spending have been had you spent the same, and you would include it in the pupils that you have.

[Sen. Scott Beck (Member)]: So if you had no increase, then you had no

[John Gray (Office of Legislative Counsel)]: Exactly. So the way to think about that, just to flip back up to the allowable growth, it'd be a classic kind of allowable growth. Would be a more into and actually that's a simple way to understand it. Allowable growth for a school district that had no increase in pupils, you wouldn't have A if there's no education spending adjustment. Right. You would just have and you wouldn't have this here on line five, it would be the product of the allowable growth percentage and the district's education spending, which is the intuitive concept I think people have of what the allowable growth is. So this just builds in that education spending adjustment to ensure, to protect against pupil count growth. Exactly. We had the opposite problem in the prior draft. On the per pupil spend, we were concerned to mitigate against harms if you had any decrease in student count. We switched to the aggregate figure with the assault for the opposite.

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: Same with you. I apologize, I had to step out. I'm wondering where we ended up with the debt service.

[John Gray (Office of Legislative Counsel)]: I will scroll back up. That is built into the spending review process. This is on page two. And the way that it works is the secretary reviews each submitted budget that the school board thought, we need higher than this, we can't get within our allowable spending cap. If the secretary determines that there was good cause for the increase in education spending, they would amend the allowable spending to account for it, so the new language that's added is lens 13 through 15. An increase in education spending that's attributable to voter approved bond payments toward principal and interest for capital construction to address life safety or district consolidation is deemed to be for good cause. Practically, what it means is the Secretary has to amend the allowable spending for that district to account for that good cause increase, which is a result

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: of Okay, so this is a faith end of the formula, just has

[Sen. Ann Cummings (Chair)]: to be a grievance kind of situation.

[John Gray (Office of Legislative Counsel)]: That's true, so there was three different ways I thought about doing this. This seemed to be the simplest, but you are correct that it builds it into a required reach out to the Secretary of Education. The other two ways that at least occurred to me intuitively to do this, one is to exclude these kinds of expenditures from the education spending that you're subjecting to a cap. The other is just to add them to the allowable gross, meaning that you treat ad spending as you normally treat ad spending, but the cap is increased to the extent of those dollars, basically. The difficulty I think in those is that you're requiring more math at the front end, but it is entirely a choice as to how you wanna approach it. I intentionally used the language an increase in education spending attributable to because I was trying to capture if your payments increased even though you already had preexisting payments, plus if someone has a new bond that they voted. I know that yesterday we started going down some of the path of, is there a cutoff date at which point you need to identify, So this is like the simplest way to

[Jessica Hartleben (Executive Director, Vermont Economic Progress Council)]: And do PCB contamination would be included in life safety?

[John Gray (Office of Legislative Counsel)]: I don't know. Mean, would guess that a school board would make that argument.

[Julia Rickards (Joint Fiscal Office)]: So on that language, it says district consolidation. And I'm I don't know. That's I don't know if that covers the cons so in one of my in several of my districts, they've closed schools not because they've consolidated districts, but because they've consolidated schools themselves. Okay. So and they to do work on the school they're sending the kids to.

[John Gray (Office of Legislative Counsel)]: So then I would change this to school consolidation And would

[Julia Rickards (Joint Fiscal Office)]: then what about a district that's using their reserve funds to do this? So if they have a million dollars in reserve and they're putting in some kind of new entryway that's more secure for students using that rather than a bond.

[John Gray (Office of Legislative Counsel)]: It's hard for me to know the answer to that, in part because I assume the reserve would constitute offsetting revenues, so it would decrease what they need to raise, I am guessing. It's true,

[Julia Rickards (Joint Fiscal Office)]: would be subtracted from their ad spending, It's revenues that would come out of their ad spending. So lower their ad spending, but then there would also be the offsetting

[John Gray (Office of Legislative Counsel)]: expenses. Yeah, I don't know. That's my quick reaction to that thought is that if the consequence of using reserves was to decrease education spending, then it would be the case that this would necessarily not pick that up. It would literally have a decrease in attributable to that. Of course, the option would be preserved for the district knowing that it has this measure in place not to use reserves to do this particular thing, but they still might have every incentive to use the reserves. So that's it. Yeah, I think that's a flexibly worth setting up. I can jump through the last of the definitions, but I think we've already kind of got it. The allowable growth is really the thing to wrap your mind around. The education spending adjustment is protecting you against student growth. Allowable growth percentage is exactly what you saw before, and it still references per people education spending. It may be uninteresting to you guys, but the reason you have to do that is because that is a meaningful way to identify the difference between your district and the highest visiting district. If you did it on an aggregate basis, just the largest district would have your highest rates. You'd end up with a wildly different set of allowable growth percentages, so you still determine AGP on the basis of the difference in prior year head spending, just like the last draft. And then a bunch of call outs to everyone's favorite chapter in title six and

[Sen. Randy Brock (Member)]: eight. And

[John Gray (Office of Legislative Counsel)]: that's it, effective date on 07/01/2026.

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

[Sen. Thomas Chittenden (Vice Chair)]: What happens in this situation?

[John Gray (Office of Legislative Counsel)]: Like, I was thinking about one of the schools in my district, Melton, has a 2.73% increase in ad spending per pupil, but they have

[Sen. Scott Beck (Member)]: to come up to three.

[John Gray (Office of Legislative Counsel)]: Oh, do they have? No, no. This is just setting a cap. This is just setting a and I think Yep. This is just setting a cap. So you have if you want to spend low, you have all of the flexibility. But to spend low, you've always had.

[Sen. Ann Cummings (Chair)]: Yeah. The danger is, as we found out at 01/27, was that once you say the cap is three or five or nine, that

[Sen. Scott Beck (Member)]: Yeah.

[Sen. Ann Cummings (Chair)]: They might spend to that, but they still have to get their budget voted

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

[Sen. Ann Cummings (Chair)]: By and I don't think there are many districts that are not under a severe impression that keep those increases down. Thank you all. See everybody tomorrow. Now let's take this off.