Vermont Legislature SmartTranscripts:

[Speaker 0]: We are live, and this is Senate Finance, February 10, and we're going to take up S205. This is the moratorium on AI data centers and report on construction and operation of data centers in Vermont. I've talked to a couple of the people behind this. I have two concerns I'd like to narrow down. One is, we have some data centers in Vermont, I'm told. I want to make sure that whatever we do, we craft it narrowly enough so we don't end up excluding what could be the economic drivers in some places, and I also want to make sure that we aren't duplicating what we already have in environmental laws. We've got a lot of environmental laws and ability to say no, so I wanna make sure, you know, just have that review to see if it's necessary to say no or can we already say no. So, because I don't need another patriarch of course. So anyway, we're just starting our review of this one, and we have Alec McGord from NCSL and Nicholas Miller from NCSL. And they are here. There they are. Okay. And Oh. Okay. Get the okay now. Oh. Welcome and the Senate Finance and just introduce yourself and then I've got you in an order but if you can do whatever works for you. So welcome to Vermont, and it's supposed to start snowing here by late this afternoon, so I'm gonna try because some of these people have a long drive, so I'm gonna try and get them out so they get home before dark.

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: Excellent, we'll try and keep it brief but thank you Chairwoman Cummings for inviting us to come speak today. My name is Alex McCord and I'm a senior policy specialist with NCSL's energy program.

[Nicholas Miller (NCSL, Policy Associate, Fiscal Affairs Program)]: Good afternoon. I'm Nicholas Miller. I'm a policy associate with NCSL's fiscal affairs program, and thank you very much for the invitation. We're happy to be here.

[Speaker 0]: Okay. So we assume we know nothing about AI data centers except we're being asked to ban them. So start us at ground level here. Help us.

[Unidentified Senator (Committee Member)]: Pause. It's not a band,

[Speaker 0]: it's pause. Pause. Band them for a certain amount of time. I assume that so we can get our house in order if we need to in order to control them. So we will see what we have in the way of control mechanisms and if we do need the ban or we can make some tweaks.

[Nicholas Miller (NCSL, Policy Associate, Fiscal Affairs Program)]: Okay. We're happy to and I'll go ahead and share my screen here and kick us off today, if that's all right. Well, good afternoon. And again, thank you very much for the invitations. I am Nicholas Miller, a policy associate with NCSL's Fiscal Affairs Program, where I cover economic development issues, including data centers. NCSL is a bipartisan organization representing the legislatures of all 50 US states and US territories. I'll speak first today on some of the economic and the fiscal impacts of data centers and data center incentives. And my colleague, Alex, will speak to the energy and the environmental side of things. And I welcome your questions, at the end of my presentation today and throughout as well. Okay. So to kick us off with a broad look at the fiscal landscape, and I'll I'll start sort of at the most basic level. So data centers are essentially big warehouses filled with computers, and they are the infrastructure behind the modern Internet. So anytime you send an email or you chat increasingly with an AI chatbot, that Internet traffic is handled by a data center. And so 37 states offer dedicated incentives for data centers. And in all 37 of those states, that includes at least a sales and a use tax exemption. 11 of those 37 states go a little bit further, and they offer exemptions on the electricity that the data centers are consuming. And as Alex will share, that's where there's been a lot of energy excuse me, a lot of interest in the energy of data centers. And so we saw last year Minnesota become the first state to actually partially roll back its tax incentive specifically on that energy piece. And additionally, five states offer partial property tax abatements. And frequently, we see states attach conditions or requirements to those incentives for data centers, including minimum investment thresholds or some number of full time positions created. And a question we often receive at NCSL is why are states offering data center incentives? What are some of the potential benefits and the emerging considerations? There are sort of three main benefits that we've heard of incentivizing data centers. One is employment, the hope that they will create jobs. And oftentimes that's sort of front loaded. So when the data centers are being built, they're employing up to 1,500 people during construction for the very large data centers. And then the number generally settles to somewhere between ten and fifty and often on the lower end of that range, 10 to 20 full time positions once the data centers are operational. There's also the capital. These data centers are often billion dollar facilities, and some of that investment flows to local firms. So if you are, for example, a local concrete manufacturer pouring the walls for the data center, that can be quite a big contract in local communities. And that's also often why these sales tax exemptions can be so lucrative for data centers. And then a less discussed potential benefit is the property tax base increase that comes from these very large data centers. We've seen in Virginia, which is called Data Center Alley. Northern Virginia is the largest concentration of data centers in the world. In some counties, the data centers alone are half of the property tax base now. And some of the emerging considerations, again, the energy use is a big piece of it. These data centers have tremendous energy demands. And also the cost of the incentives themselves is increasingly becoming a hot button issue, wherein again, Virginia, it's north of $1,000,000,000 annually. And in other states like Georgia and Illinois, it's hundreds of millions of dollars annually. So here is a map of those 37 states in Navy. Those are the states with incentives at the moment. And then that sort of teal color, those are the states, Arizona, Michigan, Pennsylvania, Maryland, Georgia, that are considering a full repeal of their data center incentives at the moment. And then in red, South Dakota, Colorado, New Hampshire, and Rhode Island do not currently have any dedicated data center incentives, but are considering legislation to create a new incentive. And something that has jumped out to me from this map is that with the exception of Connecticut, New England states are not really offering incentives to data centers in the same way as states in the South or in the Midwest, where every single state currently has an incentive for these data centers. And I won't go through each of these bills, but here is some of the movement we've seen just in 2,026 on data center incentives. And this list changes almost daily. There is a lot of interest in state houses across the country in data centers. The states that are considering these incentives like Colorado and South Dakota, they're often considering tax incentives as part of a broader framework. So in South Dakota, the bill actually just failed in committee last week. My understanding is it gets another chance. But part of that bill would require the data centers collaborate with local water utilities to ensure that they have the resources available to actually connect these data centers. And then in Arizona, we've seen a lot of movement to repeal the data center incentive, either to sort of repeal it completely or in the case of Arizona House Bill two four six seven, to repeal the data center incentive and require that incumbent data centers source their power from green energy, like solar and wind and things like that. So tying that environmental piece to the incentive piece. And again, I won't go through each of these bills, but another area where we've seen a lot of movement is with the conditions or the requirements attached to the data center incentive. And it's sort of a way for states to influence data center behavior with the incentive. So New Jersey was the first mover this year. The governor last month signed a bill into law that will require data centers pay the prevailing wage to contractors during construction. And in Wisconsin, they're considering some legislation that would require the data centers receive a green certification like LEED or ENERGY STAR. And that mirrors an existing requirement in Illinois. And another interesting trend is in both Illinois and Kansas. Lawmakers are considering measures that would offer compensation to property owners whose value has been affected by data centers. And those are still sort of being worked out. But that is another place where lawmakers are sort of considering how are data centers being neighbors to the property owners around them. And are there possible ways to ensure benefits to local communities? Another emerging trend we've seen is as state revenues flatten across the country as there's more revenue uncertainty, some states are considering ways to raise revenues from data centers. And I've grouped those into a couple of different buckets here. Property taxes, I mentioned data centers can face significant property tax bills and they can pay a lot to local school districts and municipalities. We've seen some measures that would essentially create tax increment financing for the data centers and use the increment created by the data centers for different priorities. So in Pennsylvania, that would fund a homestead exemption in Virginia that would fund renewable energy initiatives and reduce vehicle taxes. And then in Indiana, they are considering some legislation that just advanced through the state house last week that would require the data centers pay 1% of the sales taxes that they have had abated as a payment in lieu of taxes to municipalities. And in under the current statute in Indiana, municipalities can choose whether or not they abate property taxes for data centers. And the most recent data suggests that not one municipality in Indiana has done so. So this payment in lieu of taxes that the Indiana legislature is considering is a way to sort of I've heard it been called sweetening the deal for municipalities to reduce their property taxes on data centers. And an emerging strategy is in Virginia, where the lawmakers are considering a direct tax on data centers per square foot that would fund conservation and state parks in the Commonwealth. So that is a very quick introduction to the incentive landscape and a little bit to the economics of data centers. I'm happy to pause here if there are any questions or to move on to just some of the legislation we've identified that's similar to s two zero five in requiring studies and pauses on data center construction.

[Speaker 0]: We do have at least one question.

[Unidentified Senator (Committee Member)]: And maybe you're thank you, madam chair. Maybe you're gonna get to this in the second part of but you mentioned Arizona as a state that has several bills in play right now, And are they related to the water usage of data centers? Because I believe data centers use quite a bit of water, and there's obviously, water is a high priority in Arizona. Is that part of the conversation there?

[Nicholas Miller (NCSL, Policy Associate, Fiscal Affairs Program)]: Yes, ma'am. Thank you for that question. I think water is definitely part of the conversation along with energy usage more broadly. Yeah. And along with I mentioned, I think the cost of the incentives is increasingly an issue there. And we actually just heard, to my knowledge, the governor of Arizona was the first to come out and call for a complete repeal of that incentive. And I think her motivation from what I read was the cost in large part, how that's playing into the state budget. And I would have to double check the full list of bills because there are there's a lot of legislative movement in Arizona. But I do think it's sort of all of the above. It's the water and the energy and the cost of the incentive.

[Unidentified Senator (Committee Member)]: Yeah. Yeah. Okay. They've gotten sweet deals and now they're now the states are regretting it, it seems like. Thank you. Thank you.

[Speaker 0]: Okay. No more questions, so keep going.

[Nicholas Miller (NCSL, Policy Associate, Fiscal Affairs Program)]: Yes, ma'am. Thank you. So I'll go through this last part of my presentation a little quicker here, but we are aware of at least six states that are considering moratoriums temporarily for data centers. I'm not aware of any state that would permanently ban data centers. You can see those six states here. Something that stands out to me is South Dakota and Georgia, two states where we've seen a lot of movement recently in South Dakota of potentially starting a new incentive or in Georgia of scaling back their current incentives. We've also seen these moratoriums introduced, which is sort of the next step of not simply, you know, pulling back the tax treatment to data centers, but also pressing pause for a few years. And here is that legislation. I'll speak more to the studies in a moment. Oftentimes, these moratoriums have been paired with studies, including in Oklahoma, which would be a three year moratorium. My understanding of S two zero five in its current form would be a moratorium until 2,030. And South Dakota's bill, Senate Bill two thirty two, is a bit similar. It's also using this energy threshold to define what is an AI data center. I believe in South Dakota, it's 50 megawatts. So that is, I think, a bill that has a lot of similarity with s two zero five in terms of the way that they're defining what is a data center. And here is where states are studying data centers. Either they've recently completed a study of data centers and particularly data center incentive. Maryland and Washington have two ongoing studies. The study in Maryland was actually enacted over the governor's veto in December. So that will be a study to watch for in the coming months. And here's that legislation. Massachusetts and Ohio are both considering measures that would actually create a special commission to study data centers and their effects on the state. And my understanding of the other states, Nebraska, Vermont, Oklahoma, New York, is that those would be created, those studies would be conducted by existing agencies like the Public Utility Commission. And these studies are tending to be broad. A lot of the current studies of data centers that have been completed just focus on the tax incentive and the tax expenditure, the return on investment and the fiscal costs to the state. This bills for studies that we've seen introduced now tend to focus on, again, that sort of all of the above. So energy use and grid resilience, water usage, benefits to local communities, things like that. And I'll just end, I know this is a very busy slide, but these are some of the results from Virginia's Joint Legislative Audit and Review Commission of data centers. And I share these findings. NCSL doesn't endorse the contents of the report or its recommendations, but I share this report for informational purposes because it is a very complete look at, again, everything that data centers have sort of done in Virginia. And again, since Virginia by far has the largest data center industry, and the highest concentration of data centers, This is really a look at sort of what happens when a state has this mature data center industry. And the report considers impact on neighboring properties and noise, the cost of the incentives, and the economic ROI for communities. And George's Otter just published in December a comprehensive look at the economic and the fiscal impact of data centers. So some states that are, again, taking a closer look at data centers to make sure that they're sort of delivering to communities. And that is my presentation for today. Thank you very much for the opportunity to speak with you all. I'm happy to follow-up if you have questions later or to answer your questions now as well. Thank you.

[Speaker 0]: Okay. Just quickly, I haven't looked

[Unidentified Senator (Committee Member)]: at these studies, but generally, are they delivering for their, to their communities?

[Nicholas Miller (NCSL, Policy Associate, Fiscal Affairs Program)]: So returning to the Virginia study, their commission found that for every $1,000,000 spent on the incentive, it's adding 84 jobs in total. And the state is having a revenue return of about 48¢ on the dollar, which is actually a little bit better than the average incentive in the state of Virginia. But I think that is sort of more generally a question of legislative priorities and of the cost of the incentives possibly where else could that money have gone? So there are the property tax benefits and economic benefits, but there are also the energy use and the cost of the incentives. So it's not necessarily a question I can answer. And it's actually not a question that these studies often answer, but they do show the data that the incentives have some benefits, but they also have some costs as well.

[Speaker 0]: Thank you.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Thank you.

[Speaker 0]: Okay. Thank you.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Thank you very much.

[Speaker 0]: It's helpful.

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: Right. Yeah. Thank you for that.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: I agree.

[Speaker 0]: I have a question before we move on.

[Unidentified Senator (Committee Member)]: Just in terms of, various reports that many of the states have done about data centers in their areas, what have been the principal complaints that are not specifically cost related? What are the specific kinds of issues that have been raised in these studies that might be worthy of our attention?

[Nicholas Miller (NCSL, Policy Associate, Fiscal Affairs Program)]: Thank you for that question, Senator. I think, Alex will touch on this some in his presentation, but I think far and away it's energy, besides the cost and the fiscal impact. It is the tremendous energy demand that data centers have. And it's the stress that that might place on grid resilience and also whether or not those costs are being passed through to other utility customers. And so certainly Alex will speak to that, but the Virginia study looks a lot at the energy usage as well. And they find, I am paraphrasing here, but I think in this sort of scenario where Virginia has no data centers, they would expect about a 15% increase in energy usage by 2050. And in the current conditions with the data centers that Virginia has, they're looking at almost double the energy demand in the Commonwealth. And so I think how states are meeting that energy demand and again, the possible knockoff effects on grid resiliency and on utility bills, I think is by far the biggest concern that we've heard about data centers.

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: Thank you.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Thank you.

[Speaker 0]: Okay, thank you. I think we watch.

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: Great, well that's a good transition then into my presentation. So again, my name is Oxon Gordon, I'm a senior policy specialist with NCSL's energy program, and I'm going to follow-up on Nicholas's presentation by focusing more on legislative trends specifically surrounding the energy usage of data centers, which of course has become a major concern for a lot of policymakers over the past few years. So to start off with some background information, the increased use of new technologies such as artificial intelligence, cloud computing, and cryptocurrency mining requires construction of high energy consuming data centers, and data centers currently account for a little over 4% of energy consumption in The US, but projections show that this could more than double by the end of the decade, thus raising a lot of concerns by energy supply and increased costs for ratepayers. And we really started to see this emerge as a concern around the beginning of 2024, as states start to introduce legislation related to the energy usage of data centers, and this trend has continued to expand since then as we tracked around 70 bills introduced last year concerning the energy usage of data centers, and we've seen many more introduced so far in 2026. And so examples of introduced legislation include setting reporting requirements for data centers regarding their energy and water usage, tax incentives for

[Speaker 0]: Now, Chittenden, we've got a balance. We've got a

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: cost On that previous slide, what does the number in the circle correlate to?

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: That is the number of data centers in The States. Number of

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: data centers. Okay.

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: Yeah, so it looks like there's about three, and if you go to this resource data center map, so they track data centers obviously around the country, you can actually zoom in and it'll show you precisely where the data centers are located in the state.

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: Okay, thank you.

[Unidentified Senator (Committee Member)]: Another question, Alex, another quick question. In the 9% of electricity consumption that you've got there by 2030, is there any study being done on whether that 9% is displacing any other consumption or is it just on top of?

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: I believe that would just be so you mean like in terms of the general proportion of total energy consumption, would it be displacing? I think it would just be an extra it would just show that data centers are now a much larger portion. Don't think they're really replacing. Of course you know there are projection energy efficiency technologies are constantly implemented so you know energy growth has been relatively stagnant actually for the past few decades, but now data centers demand is growing. And so of course things like energy efficient technologies can drive down demand in other sectors, but for the most part it's just due to the increase in data centers overall. And so as I was saying, examples of introduced legislation include center reporting requirements for data centers regarding their energy and water usage, tax incentives for energy efficient technology, and then also standards to ensure equitable utility rates. And a lot of these issues are provisions that are discussed in House Bill seven twenty seven, which was introduced in Vermont this year and is currently with the House Committee on Energy and Digital Infrastructure, and I actually presented to them last week on that bill, and so I'll be discussing each of these policy topics in more detail. And so to start off, perhaps the greatest trend we're seeing right now is how states are approaching the cost allocation of interconnecting data centers to the grid. The significant energy demands of data centers is raising a lot of concerns about how utility rates will be impacted, so the expansion of data centers is going to increase energy demand overall, and that's going to require new infrastructure investments for interconnection. And so that means new generation facilities, transmission and distribution lines, These are all upgrades that are going to be necessary for a lot of proposed data centers, and traditionally a lot of large infrastructure projects have their costs recovered through increased electricity rates. However, since some of these infrastructure projects would just be constructed to serve data centers and are not directly benefiting other ratepayers like residential customers, policymakers are now looking to see how to prevent these costs from shifting towards unrelated ratepayers. And so we really started to see this legislation first emerge on this issue this past year, and states have taken a few different approaches to this issue, and so I've listed some key examples of legislation we saw enacted in 2025, but there are a lot more instances of legislation we've seen introduced both last year and so far this year. Is

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: there a question?

[Speaker 0]: Yeah, this is Senator Cummings. One question that's come up in my mind is that many states deregulated their utilities and their electric infrastructure. Vermont still has a regulated system. Is there any difference in states between regulated and unregulated utilities?

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: In terms of like how they're approaching data center interconnection?

[Speaker 0]: How far is their control over data centers?

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: So actually, mean a lot of the legislation I'm about to go through in terms of like specific tariffs and rate schedules, we see it in both regulated and deregulated states. And so as far as I'm sure a lot of the Northeast besides Vermont is deregulated, but we've seen similar legislation also introduced.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Okay.

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: And so California and Virginia both enacted legislation requiring their public utility commissions to assess the impacts of new data centers on unrelated electricity customers to determine whether action is necessary, and the most common type of action we're seeing is establishing specific tariffs and customer classes for large loads like data centers. And so electricity tariffs are structured pricing plans determining how consumers are charged for their electricity usage, and so creating a new customer class for data centers or other large loads allows specific pricing plans that are separate from other utility customers like residential ratepayers. And so we saw this in Maryland where they enacted legislation last year requiring utilities to submit a specific rate schedule for large load customers, and this rate schedule must require large load customers to cover the just and reasonable costs associated with any electric transmission or distribution buildout required to interconnect or serve the large load customer, and I want to note that this legislation does not specify data centers but instead uses the term large loads, which it defines as commercial or industry customers that have an aggregate monthly demand of at least 100 megawatts, and so of course this does encompass a lot of data centers, and we see this language in most state examples of this where they use the term large loads, but the legislation for the most part is targeting data centers, and so we saw similar legislation also enacted in Minnesota and Oregon last year, which both required the establishment of a new customer class for large loads and the creation of new terrace for facilities within that customer class. Then Utah also enacted Senate Bill 132 in 2025, which set clear rules for the interconnection processes of new large loads to the grid, and the bill requires large loads to pay for any interconnection or transmission related studies that are necessary as well as any identified interconnection upgrades such as transmission or distribution system upgrades. And like I mentioned, the bills I have on this slide are just some of the key examples we saw enacted. We have continued to see a lot more states enact or introduce similar legislation so far in 2026. So moving on, another trend we're seeing, and it is a provision in House Bill seven twenty seven, is demand side management programs or other measures to address data centers energy consumption. So we have a lot of different approaches. We've seen a lot of different approaches to this in the past year from states. One of the more significant data center bills enacted last year was Senate Bill six in Texas, which set new interconnection rules for large loads, and one of the requirements is that loads of 75 megawatts or greater looking to connect to the grid must participate in a mandatory demand management program, and this program mandates that large loads have shut off equipment installed as a condition of the grid interconnection, and utilities may disconnect eligible loads during firm load shed events, which load shed events are controlled power outages ordered by grid operators when electricity demand exceeds supply to avoid more significant outages. We've also seen states looking to incentivize the use of distributed energy resources along with data centers to provide power directly. Perhaps the greatest example of this was in West Virginia last year, West Virginia is very much looking to promote data center growth within the state, and so through this bill they created the High Impact Data Center Program, but the bill also creates the microgrid development program along with that to encourage the use of microgrids to provide energy to new data centers. And a microgrid is a group of interconnected distributed energy resources that can operate as a controllable entity, therefore allowing it to disconnect from the grid and run-in island mode. So that means that if there's any greater disruption to the greater grid, the microgrid can still provide power to local facilities. And so this bill also requires a designated liaison to serve as the point of contact for certified microgrid districts and high impact data centers in order to coordinate their development. Then I'd like to mention New Jersey last year introduced legislation that would have required all electricity for proposed data centers to be derived from renewable energy sources. This bill was not enacted, but it is an example of legislation aiming to mandate specific generation sources for data centers. And then this year, Colorado and Virginia have both introduced legislation requiring data centers to maintain certain energy efficiency standards in order to maintain the tax exemptions they receive for their equipment. And the Colorado bill would also require that after 2040, all new large loads must meet their energy demands through renewable or clean energy sources. And then we can move to the next slide, Nicholas. So we've also seen states consider legislation that would require data centers to regularly submit reports on their energy and water consumption to the state. While the requirements for the reports vary by state, for the most part, they include total energy and water consumption for the reporting period, and so they also include an assessment of power usage effectiveness, and then also reports may include the data center's energy sources and what energy efficiency and water conservation measures have been implemented. And now we have seen quite a few examples of states introducing legislation with these requirements. California, Illinois, and New Jersey all introduced legislation last year and Nebraska has this year, but we actually have not seen much legislation like this enacted. So these examples I have listed here were all introduced but not enacted, and I think there is some opposition to this kind of legislation due to concerns that it will set strict oversight restrictions that could drive data centers to locate in other states with less rigid requirements. And so in California, Governor Gavin Newsom actually cited similar reasons for his veto of a bill that would have required water consumption reporting. Then regarding the New Jersey veto, the governor explained that the decision to require reporting should be left up to the state's board of public utilities and that the metrics should remain confidential, whereas the bill would have made them publicly available. I also do want to take a minute to discuss data center siding. That is a provision that's included in House Bill seven twenty seven, which would require a need for a certificate of public good for a data center. For the most part, siding is left up to local governments, but we have started to see more legislation emerge, setting some additional guidelines regarding the setting of data centers. So this year, Florida introduced legislation that would prohibit hyperscale data centers from being located within 10 miles of agricultural, recreational, or conservation land, and the bill would also require local governments to hold a public hearing to approve the project before beginning construction on a hyperscale data center. And then South Dakota has also introduced legislation this year aiming to limit the nuisances caused by data centers, And so this bill would prohibit data centers from locating within one mile of a residential area and also requires their continuous noise level to be below 400 decibels. And so there was a question earlier during Nicholas's presentation about you know, some of the concerns and complaints about data centers, and Nicholas is right that energy and water consumption is definitely the number one concern, but I do think there are also loud facilities, which this bill addresses, and that's another concern that local residents have with data centers. And so we can go to the next slide. And yes, I think that wraps up my presentation for today. Again, I'd like to thank Chairman Cummings for inviting us to speak today. I know Nicholas and I shared a lot of legislative examples here today, but both our contact information is available in this presentation, and so do not hesitate to reach out for any follow-up information. But in the meantime, I think we'd both be happy to answer any more questions you may have right now.

[Speaker 0]: Sorry. All right, I'm isolated. Thank you. So the big concerns, a lot of states had incentives. They're now rethinking a cost benefit on the incentives and whether the problems are worth what they're getting. And then the other one is I've heard there's a lot of concern with noise, but impact on neighbors, and then the water and electric use. I know I've heard comments about Texas whose grid goes down when it gets cold. The electric use that these plants are taking, and I assume that they can't be shut off during a cold snap. In Vermont, it'd probably be a heat wave, but that you couldn't you can't just shut them down unless, I guess, you would shut down the internet

[Colin Robinson (Vermont-NEA)]: or

[Speaker 0]: something we wouldn't want to shut down.

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: Yeah, so I do want to mention, so that Texas example I mentioned earlier, Senate Bill six set interconnection requirements for data centers and part of it was that if there is you know a crisis to the grid, the utilities or the grid operators can shut down power to data centers. But you are correct in acknowledging that at this point because of the use of AI and everything, data centers are of our critical infrastructure and so most new data centers also have some sort of backup generation that they include that they can utilize in scenarios such as that.

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: I think I've read in a number of places, maybe a small number of places, that a lot of states are requiring these data centers that if they come in, that they have to also bring the power generation that's gonna be required. In other words, they have to add to the grid whatever they're gonna be taking out. That a strategy that's being adopted in a number of states or is it, you know, is it is it not really a strategy?

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: So I've actually seen that more kind of at the regional level by RTOs. So I think PJM, covers a lot of the Mid Atlantic region, is very much considering that. And it kind of that does tie

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: into PJM, is that electric? No. Electric generation?

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: So that is the regional transmission organization. Regional transmission. Yeah. And so that would be like for Vermont, I believe it's ISO New England.

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: Okay, thank you. Okay.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Yeah.

[Speaker 0]: And there's a whole deal where we all share the structure costs. So, if there's build out in Massachusetts, Vermont

[Unidentified Senator (Committee Member)]: pays share. Senator Hardy. Madam Chair, to your point earlier, I think, I don't think we've had the WC. We haven't had anybody. Yeah, because I wonder whether they think they have sufficient regulatory mechanisms to deal with it or not. And

[Unidentified Senator (Committee Member)]: similarly,

[Unidentified Senator (Committee Member)]: know, the brand new and everything, but the land use review board, whether they feel like they have enough regulatory mechanisms to deal with it or not.

[Speaker 0]: And I thought, I can't see from here, slide small, but I thought you showed that we do have two or three data centers. We have three according to that map. Yeah.

[Unidentified Senator (Committee Member)]: But the bill has a much higher Yeah. Definition of energy use that I think. So, we're talking like mega data centers, but and it's, to some people's point, it's probably unlikely that those next place things would cause a Vermont because of our smallness, but it could really impact our grid stability. So,

[Speaker 0]: this was our introduction, and the room is not filling up on data centers, it's filling up on teachers' health insurance, which is our next topic. So thank you, this has been helpful. It gives us some grounding as to what other states have learned, and hopefully we can learn from them and perhaps avoid some of the mistakes and make our way up. So, thank you.

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: Of course. Thank you very much for inviting us to come speak today.

[Nicholas Miller (NCSL, Policy Associate, Fiscal Affairs Program)]: Thank you for having us.

[Speaker 0]: Thank you. Thank you. Okay. I'm gonna move us along, and we've got Sophie, and Sophie, I'm sorry. You can't be here.

[Sophie Jani (Office of Legislative Counsel)]: It's my first time at this convention. No.

[Speaker 0]: No. I'm not. And we are going back again. We don't have a bill, but the part of our efforts to get a handle on school spending, we keep hearing that schools don't control the cost of their health insurance. None of us really do. But taking just this is just background information, what is that system. I was here, it was the governor's requirement before he signed the budget that we go to the statewide system for health insurance because at that time it was felt that unions could bring in national experts and all small schools were, you know, small districts, one town districts, were significantly disadvantaged in the negotiations. So if we went to a bigger negotiation, we could level the playing field. Whether or not we've done that, I don't know, but we're just trying to get some background information as to what the system is, how it works. We know we did a few things in health and welfare that helped, that increase in insurance costs and healthcare costs in general is impacting across the board. It's not limited to teachers, it's everybody's, and I'm just trying to This is a exploratory informational session, so floor is yours.

[Sophie Jani (Office of Legislative Counsel)]: Thank you very much. Sophie Jani for the Office of Legislative Council. I do have a PowerPoint. Is that okay if I go on through

[Speaker 0]: your chat? Yes, please. And please share. Wish the state house could look like that again. Green, sunny. Mhmm.

[Sophie Jani (Office of Legislative Counsel)]: It will. I keep

[Speaker 0]: telling myself all that white is good for the economy. The rest of the country doesn't have any stuff.

[Sophie Jani (Office of Legislative Counsel)]: I did also print problems out just sometimes people find it easier to have something to scribble on or whatever, so that's actually copies too.

[Speaker 0]: I think it's like scribble by me. It's alright.

[Sophie Jani (Office of Legislative Counsel)]: So, this is really looking at the Commission on Public School and Employee Health Benefits, and I know that the committee heard from, I don't know you say it, BHIM on Friday, and BHIM really is the one that works with Blue Cross Blue Shield on developing the plans. So the Commission on Public School Employee Health Benefits, they don't develop the plans. Once the plans have been developed, then they're working on sort of the negotiation end of things. So I'm just going to run through the background quickly, talk about what the statutory provisions are for the Commission, and then I'm gonna touch on proposed legislative changes. I know you don't have a bill, so this is just looking at what was proposed in 08/04/1980 draft 10 last session. And then there is a bill currently in the house that has not been introduced or walked through yet, but I thought I would just run through that so you get a sense for what some of the thoughts are out there. So this is just talking about how we got to where we got to. So again, it used to be that each individual school district would be negotiating directly, as you mentioned, over the healthcare benefits. VHI was created in the 1990s, and again, they continue to do what's listed here. ZHI, again, they testified on Friday. Their board has jointly divided three representatives from the Vermont NEA and three from the Vermont School Board's Insurance Trust. And then they worked with Blue Cross Blue Shield to come up with the plans. And then in 2017, there was Act 85, which penalized school districts whose employees didn't pay at least 20% of the premiums.

[Speaker 0]: And this is a self insured, insure, self insured system, it goes into the large boot market, right? Right, right.

[Sophie Jani (Office of Legislative Counsel)]: So the commission was created with Act 11, and it added a whole new sub chapter to Title 16, which is the education title, and it provides a statewide process for health insurance for school employees. It amended the Labor Relations and Teachers and Administrators Act, so that's LRTA. We have seven labor relations acts in Vermont, and this is the one that governs teachers and administrators, and it took out of that act healthcare benefits and coverage, health reimbursement arrangements, and health savings accounts, because before those were then all negotiated at the local level. And but vision and dental benefits continue to be negotiated at the local level. And so where we are today is VIHI continues to work with Blue Cross Blue Shield. They develop the plans. The plans are reviewed by the Department of Financial Regulation, and then the commission determines the cost sharing and eligibility requirements. So the plan's already formed when the commission looks at them. And then the commission itself currently has 10 members. They they serve in a partisan capacity, so there are five representatives of school employees, so four are appointed by Vermont NEA and one by AFSCME, and then there are five representatives appointed by the Vermont School Boards Association. And the appointees are, by statute, supposed to have an understanding of healthcare and employer employee relations, and demonstrate a willingness to work collaboratively.

[Speaker 0]: How does that play out?

[Sophie Jani (Office of Legislative Counsel)]: I'm sure you have other witnesses that can testify to that. And then just, again, there's a lot more material in the statute, but these were just some of the highlights that I thought would be helpful. So, the commission is currently chaired jointly by one school employee representative and one school employer representative. Commissioners can be removed by, you know, the appointing authority, whichever side appointed them, without cause. Decisions require votes of a majority of the school employee commissioners and a majority of the school employer commissioners, and then the compensation provides for up to 20 meetings a year. And then there's release time and, you know, other things, but I just was trying to hit

[Speaker 0]: the highlights off. That's So

[Sophie Jani (Office of Legislative Counsel)]: the duties of the So this is what the commission actually works on. So they determine the percentage of the premium that's paid by the employer and the employee for the different levels of coverage. They determine the amount of an employee's out of pocket expenses, and then who's gonna be responsible for those. They determine whether to establish an HRA, an HSA, or both. So that's the health reimbursement arrangement, which is employer controlled or a health savings account, which an employee has, you can have both. And they determine who will bear the first dollar responsibility for out of pocket expenses if using an HRA, and then whether the HRA balance will roll over from year to year. They also negotiate a statewide grievance process for any disputes regarding employee health benefits. But those, the top four, are really the four key bits that are related to actual, you know, who's paying what and how much. I've added on here dates just to make it a little clearer. What happened was there was a three year contract that was entered into back in '23, that went into effect 01/01/2023 that was scheduled to expire at the end of this year. And then there was a two year agreement to extend it by two years, and then in September, there was an agreement to extend it by another one year. So I put the dates in just to help you visualize what the process is for negotiation. So this is assuming the one year current extension, the current contract would then expire at the 2028. So contracts will be for not less than two years in duration. Again, the last one was negotiated for three years, but will be

[Speaker 0]: extended for a total of six. The soonest anything could be done would be '28. Right. Or Right. Tuesdays. Well, it'd

[Sophie Jani (Office of Legislative Counsel)]: be for 01/01/1929. '20. '29.

[Speaker 0]: But that's with the benefits and right, who pays what, how much. What if the insurance market gets restructured and that's outside an individual contract just So I think then that

[Sophie Jani (Office of Legislative Counsel)]: would be something, like, works on the plan end of things, so if there was structural changes there, would be there. Okay. And then the commission would then, you know, if if there was these the plans are being restructured. And, I it doesn't the current statutory language doesn't really contemplate going back and sort of reopening if if necessary.

[Speaker 0]: I mean, I suppose I could This is the large insurer market we can basically not touch. But we do some looking at the market as a whole, I think recent federal changes we before we get out of

[Sophie Jani (Office of Legislative Counsel)]: here, once the dust has settled, we'll be looking at the market again. So currently under the statute, again, it's the anticipation is there's really a couple of years of sort of building up the negotiations and then, before you have a contract. So, this is what the current deadlines would be, again, assuming no further extensions, so that each party would make information requests. Typically, that's gonna be on the employee end. It's gonna be wanting information from the employers, but it it can go both ways. So those would be made by October 1, and then any responses would have to be responded to by February year. And then negotiations would begin by April 1. And then the parties, interestingly, also selected fact finder at the start of the process, so by April, going into the negotiation. So even before they've reached impasse or anything, they agree on what who the fact finder will be at that point. And then the commissioners are required to meet at reasonable times and negotiate in good faith. And so good faith is defined in labor relations law as having an open mind and not being you know, that you've gotta be open to what another party suggests, but it doesn't require you to move necessarily. I mean, if you've got a position and we really can't move from this position, that's not considered bad faith. But you are supposed to you know, you are required by labor relations law to have an open mind as you go into negotiations. Which is interesting. And so dispute resolution, in my understanding, is there's really been two full negotiations to date, and they've gone through this dispute resolution process already. So again, if the parties are unable to reach agreement, then any matters that are remaining in dispute, because again, they may agree on some things, but not everything, then they would go to fact finding. And again, they, statute also provides that you agree on

[Speaker 0]: the fact finder upfront. So the This is all based on fundamental labor relations law. Right?

[Sophie Jani (Office of Legislative Counsel)]: Yeah. So under our labor relations laws, typically there are several steps when you reach in and pass in a contract negotiation. So you typically will go to mediation, then you'll go to non binding, fact finding, and then you go to arbitration, or binding arbitration, or final decision by the Labor Relations Board. So, it's a sort of multi step process. So, if you have any questions. Sorry, so on

[Unidentified Senator (Committee Member)]: your, you said August 1, and if you're looking at that timeline, is it 08/01/1927 or '28? It doesn't It's basically a year and a half. It is short, a little bit more.

[Sophie Jani (Office of Legislative Counsel)]: It doesn't explicitly state it in the statute. Oh. My assumption is that it is. It would be August first of of twenty seven because of how long it would take to negotiate the other matters and health insurance plans go into effect January 1. But I you know, Beth will call them, I have more information on that. But the statute, interestingly, it specifies on the others, like, a year before. It doesn't specify on this.

[Unidentified Senator (Committee Member)]: That's weird. And that's the same with the September 15?

[Sophie Jani (Office of Legislative Counsel)]: It doesn't specify on that? Right. I mean, I assume that would be the same year as following on from the August 1, but it doesn't specify the like, which year. So But I anticipate it would be you would start negotiating in April, and then if you hit impasse, it would by August 1. But, again, that's

[Unidentified Senator (Committee Member)]: But then there's more than a year before it goes into effect.

[Sophie Jani (Office of Legislative Counsel)]: Right. Because you've got these other steps coming up.

[Unidentified Senator (Committee Member)]: Okay. I see.

[Sophie Jani (Office of Legislative Counsel)]: Okay. So the fact finding would, first of all, try and mediate between the parties to see if they can either reach full agreement or maybe knock some more of the outstanding issues out of the way. If that is unsuccessful, then the fact finder would issue a written report by September 15, and that's nonbinding. So, that's a recommendation of of what the fact finder sees. And typically, you know, again, the fact finder is supposed to be somebody that's neutral, a third party person. That would be a reality check for the parties, that it, oh, okay. We thought this was a really strong argument. Fact finder didn't buy it. They need to think a little harder about that argument. I mean, that's an opportunity again for the parties. After they receive the fact finder's report, they can continue to negotiate, you know, and sort of reevaluate where they're at. If they're unable to reach agreement within thirty days after receipt of the fact finder's report, then they go to arbitration. And so, again, there are all these provisions in there. So the commissioners can either mutually agree on a single arbitrator. If they can't agree, they can either go to the labor relations board or to an arbitration panel. If they go with an arbitration panel, then it's a panel of three. The school employee commissioners pick one, school employee commissioners pick pick one, and then the third arbitrator is appointed by the American Arbitration Association. And then the parties submit their last best offer to whichever of these avenues they go down on all outstanding issues prior to the hearing. So that's best offer is a mechanism that we have under state law. So we have that under the state and police labor relations act, and we have some of our others as well.

[Unidentified Senator (Committee Member)]: May I ask a question? Is that is that a missed type isn't there an arbitrator selected by one of each side from each side? Yes. Employee and then employer. Oh, sorry.

[Unidentified Senator (Committee Member)]: That was me. My brain not reading it. Got it. Sorry. Thank you.

[Sophie Jani (Office of Legislative Counsel)]: So last best offer is a mechanism to try to get the parties to to, again, to close the gap between them. Because, for example, under the state employees' labor relations act, each side comes up with its last best offer, and then the labor relations board or an arbitrator would pick one or the other. So you want to make your your last best offer as, you know, sort of what you can most tolerate, but moving towards the other party. So, again, the goal is to get

[Speaker 0]: the parties to move towards each other. I think it was one of the suggestions that was brought to us, and now I'm seeing where it fits in, that you take one or the other, you can't say, well, I'll take half of this and half of that, and,

[Sophie Jani (Office of Legislative Counsel)]: you know, we'll add a quarter or something else. It's either or. Right. And, again, under the under the State Employee Labor Relations Act, for example, it's last best offer, but we decide whether it's an arbitrator or the board. They can also pick if they're if they're not crazy about either party's last best offer, they can also pick the fact finder's recommendation.

[Speaker 0]: Oh, so the fact finder can make a recommendation of a third possible

[Sophie Jani (Office of Legislative Counsel)]: Right. On the the the Fact Finder That's not that's not part of this, though. This is just either or. And then there's a

[Speaker 0]: Okay. So this is specific to teachers. The other is general state labor law. Right. That would allow a third option. And that's something that's relatively new.

[Sophie Jani (Office of Legislative Counsel)]: It used to be it was either this party or that party, and then the allowing the arbitrator or the board to consider the backfinder's report is something that's come into the State Labor and Employee Labor Relations Act relatively recently. This this committee doesn't do it. I know. That's what I'm trying to provide a bit of extra background. Alright. And then so, again, yes, they would select one of the last best offers in its entirety without amendment. That's the current law. And then there there are a list of factors for the let's just say the decision maker, one of those three, for the decision maker to consider. And these are provided by statutes. So interest and welfare of the public, financial ability of the education funds and school districts to pay the cost of health care benefits and coverage, comparisons of health care benefits with similarly situated public and private sector employees in Vermont, the cost of living, and prior and existing health care benefits and coverage for school employees. And then the arbitrator or the the LLB, whatever, makes that decision issued within thirty days of hearing. And just quickly, Senator Hardy, I'm just gonna do it back. So the hearing's held November 15, and so if their decision is made, that would be the December. So, again, I don't know if that makes it more or less likely that it's The second year. The

[Unidentified Senator (Committee Member)]: second year.

[Speaker 0]: I don't

[Sophie Jani (Office of Legislative Counsel)]: again, those that have I'm sure you're gonna have witnesses that have gone through this that will tell you which way it is. Yeah. I just couldn't tell from the statute itself. Unlike the Labor Relations Act, the teachers and administrators, there's no right to strike for the commission. Right? So if people are unhappy with where their health benefits land up, there's a prohibition on striking on that. So I just

[Speaker 0]: wanted to point that out. That's interesting.

[Sophie Jani (Office of Legislative Counsel)]: So then this is what happened last session. This is what the proposal was in draft 10.1 of h four eighty, and this was to allow, again, the decision maker to select between the last best offer of each party on an issue by issue basis. They could pick and choose, you know, we like this bit from the employer side and this bit from an employee side. Okay. And then it also proposed adding two additional factors for the decision maker to consider. So those are those five factors we looked at before. And this would add the value of the health care benefits as compared to health plans available through Vermont Health Connect and adding the percentage increase or decrease in education spending that's likely to result from each party's last best offer as compared to overall economic growth for

[Speaker 0]: the state of Vermont. And April is the end where?

[Sophie Jani (Office of Legislative Counsel)]: Oh, that passed, but this language came out.

[Speaker 0]: The the dam drop. Okay. So it passed. That language came out. Alright. Yes. But then, I think, says where some suggestions may be coming from.

[Sophie Jani (Office of Legislative Counsel)]: So it's blocked out there on the end, but it was version 10.1 was Okay. It's the miscellaneous education.

[Speaker 0]: Yeah. Okay. So that's alright. And that that show that was probably the most controversial thing. Yeah.

[Sophie Jani (Office of Legislative Counsel)]: So then I this I'm just gonna run through. And, again, it hasn't this has not been introduced or walked through on the house side, but this is h eight forty two, which was just introduced. So what this is proposing to do is changing the compensation of the commission. So instead of having five partisan folks from each side, this would have three from the employee side, three from the school employer side, the secretary of education or a designee, the commissioner of taxes or a designee, and a representation of the state, which is the Vermont School Boards in the insurance trust. It would provide that the secretary of education or their designee would serve as the chair, that the decisions of the commission commission be made by a majority vote. So instead of that, majority of the employer side and the employee side. And that the commission's determination regarding first dollar responsibility for out of pocket expenses shall not increase the actuarial value of the health plans above 88%. And then it lists out factors for the commission's consideration. So right now, those factors we looked at was just what to look at when you get to last best offer. This would be those same factors, but they would also be factors for the commission's consideration, adding in those two additional factors that we just looked at that were in

[Speaker 0]: H four eighty. Is, I'm thinking, silver plant, is that a natural, you may not know, value Like 80. Yeah. You know, a ring

[Sue Seglowski (Executive Director, Vermont School Boards Association)]: with Sun Council. Yes. It's plus or minus 80 is the is silver. 90 is no. I'm sorry. I'm gonna get the number wrong. Platinum is 90. Gold is 80, silver is 70, bronze is 60.

[Speaker 0]: Okay, so this is a high, this is a high gold, low platinum, low platinum. Okay. Upstairs.

[Sophie Jani (Office of Legislative Counsel)]: And then this would provide that the decision maker would have the option to select one of the last best offers or to modify the last best offers.

[Speaker 0]: So that would also be a sort

[Sophie Jani (Office of Legislative Counsel)]: of pick and mix approach or to come up with their own version of what the outcome should be. And then, again, adding those same two factors back in, and then also providing that the agency of education will contract with a single third party provider, it's honest about all school school employers to oversee any, again, health reimbursement or health savings accounts. Okay.

[Speaker 0]: And that bill is presently in that?

[Sophie Jani (Office of Legislative Counsel)]: It's in house general and housing. Alright.

[Speaker 0]: In 1718, whenever this new system went into effect, it doesn't cover just teachers. It covers all school employees. So I know there was a never saw what the impact was on rates, but I know some schools got hit because they weren't covering Right. All school employees. They were just doing educational or educational administrative staff, probably varied by this time. But we did pick up everyone, pretty much, into this system. Okay. This one.

[Sophie Jani (Office of Legislative Counsel)]: Which again, that's a little different, because some of the health, some of the school employees are not covered by the Labour Relations Act for teachers and administrators. They're covered by the Employer Relations Act. Okay. So, yeah. They only get a little, The only the only folks not covered, so it covers teachers and administrators, supervisors, confidential employees, certified employees of the school employer, any other permanent employee of the school employer, not otherwise covered above, and it excludes superintendents. But it does include school support staff who otherwise covers. Exclude superintendents. So

[Speaker 0]: where does superintendents get?

[Sophie Jani (Office of Legislative Counsel)]: Alright. Okay.

[Speaker 0]: I have a feeling they can take care of themselves, but it's probably a separate negotiation. Just FYI, one of if not the only thing the Commission on the Future of Education could agree on this year was that there was a problem with negotiating benefits, and this is the benefit apart from wages or salaries. The recommendation was they get put back together, but we could not agree at what level they got put back together. It is a difficult discussion to have, but that is one of the things that the commission think it was our third set of charges that we got in our two year and three year existence, but that was one of the few things that we actually there was unanimous agreement on. System was problematic for, say, a lot of people, maybe it probably isn't for the employees who are, you know, receiving a good benefit, but it did cause concern at other levels. No. The employees were on for several. I on the commission, but that's just floating out there. Anyone has read three, at least two, final reports of the commission. Okay. Any questions? None. Thank you. Okay. And I've got still the Martine Gulick and Rebecca's tools are quite I Yeah. No. I agree with that. But I just wanna make sure you all are going to be testifying, and there's no set order or anything. Would like to do first. Let's do kind of his first come, first serve. So Okay. Thank you. You two were yeah. We're good go. Okay. That's what I'm hoping you didn't know. Alright. That little whistle. I'm watching for the snow. Yes, we are too.

[Sue Seglowski (Executive Director, Vermont School Boards Association)]: So thank you very much for having us in to testify today. I am Sue Seglowski, I'm the Executive Director for the Vermont School Boards Association, and joining me today is Mark Koenig. He's the SBA's Director of Policy Services and Legislative Affairs, and I asked Mark to join me today because he is a former member of this commission that you've just been learning about. And he has firsthand experience with the statewide bargaining process. So I thought that it would be helpful for him to join, and he's going to provide some testimony on our proposed changes to the process and why we think those changes are needed. Legislative council laid out the process very well. One thing that I would add is that in our experience, the dates that were talked about are all, in the same year. So it starts in April and it ends up, with the arbitration in November. So it's quite a Nine months.

[Speaker 0]: Yeah, a

[Sue Seglowski (Executive Director, Vermont School Boards Association)]: very structured process.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: The main reason for that is, so if we were to start negotiations April 27, you'd finish negotiations with the arbitration decision mid December, now school boards know what it's gonna cost. So when they start budgeting in early twenty twenty eight, they're ready when it rolls over and starts in '29.

[Speaker 0]: Okay.

[Unidentified Senator (Committee Member)]: Yes.

[Sue Seglowski (Executive Director, Vermont School Boards Association)]: And I would also add that you were told about the last best offer requirement. So in the first round of bargaining, there was one arbitrator, and that arbitrator selected the employee's last best offer. In the second round of bargaining, it was an arbitration panel, and that panel selected again the employee's last best offer. And as this committee well knows, school employee health benefits are a major cost driver in school district budgets, and the process that you just learned about as currently structured has not been successful in slowing the rate of growth of the cost of school employees' health benefits. We believe cost containment and really just bending the curve of future increases in cost is needed to avoid further jeopardizing educational opportunities for students and also for maintenance of our school facilities. So the VSBA's legislative platform and our issue brief on the cost of health care and its impact on education, outline our position on reforming the commission on public school employees' health benefits, and we recommend the five steps that are in the bill that were reviewed with you by legislative council, H eight forty two. Okay, that's still in the house. Yes, yes. Is that again here in the next three weeks? At this point, I'm gonna turn it over to Mark so that he can talk to you about the rationale behind those recommendations.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Martine's quiet comment there. It was supposed to be introduced last week. The committee was in, went over on what they've been discussing in the morning, so they bumped four bills that they were going to be introducing. So it hasn't gotten on database of Caledonia yet, so it should be, but we're just waiting. So like Sue said, I'm with the SBA, but I was also on commission for Senate run negotiations, and then following that, I became the chair of the employer side, along with my co chair Mike Campbell, who's on the employee side. In early twenty twenty four, the two of us sat down and said, There is so much going on within education transformation. It would be kind of crazy for us to try and negotiate a contract, we have no idea what's happening, at healthcare or in education. So let's, I said, Let's do one year. And Mike went to his team and they came back and said, We'd rather have two years. I said, That's great. And then this past September, we said, Nothing's been settled, it's all still in the air, let's go for another year.

[Speaker 0]: Okay, so that's the extension?

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: So we're in our, so if nothing else changes, either with how this commission, you do statewide, statewide, local, local, if you keep it, if you don't, if everything stays as it is right now, the negotiations would start April 2027. At the very latest, an arbitration decision that goes that far would be December 2027. School boards would then be able to put the budgets together for FY '28, and the plans, because they run into calendar year, would go into effect in January '29.

[Speaker 0]: So if the legislature wants to do what it thinks, we need to get our act together.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Right. This rebounds

[Speaker 0]: It's a long time frame.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Yes, and to your question earlier about what happens if the plans change, first of all, takes a couple years for a plan to change, because we need to develop them, go back and forth, how that all works. Hopefully they would They're actually doing that right now. There's consideration that they'll probably find great estimate of two plans they're trying to do, as opposed to the four that exist right now. Hopefully those would be in place, in theory, by April 27, and those would be what are negotiated on.

[Speaker 0]: Okay, and age 42 introduced, that means it's being sent to committee or the committee sending it out?

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: I believe it's being sent. To

[Speaker 0]: committee. And they needed to get it out in reform weeks, if something of this magnitude will be challenges.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Well, it's mostly changes to existing statute. Yes. So, it's not creating anything brand new, it's just an attempt yeah, it's not nothing, but not Okay. Starting from the ground That's where we are in that process. As Legis Council walked me through, start with the most confusing one that's gonna make all our heads explode, with the actuary value. The idea that we would cap it at 88%. That is the cost of the plan plus the HRA that is on top. About 85% of school employees use the gold CDHP. It's one everyone likes the most. There is an HSA within the silver plan, there's also a standard gold plan, and then there's a platinum plan. But the vast majority of employees across the state use the single CDHP gold. That has an HR A on top

[Unidentified Senator (Committee Member)]: of it, and it is What first does CDHP mean?

[Colin Robinson (Vermont-NEA)]: To the direction house point. Like

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: I know some of the words. So the idea is it's a high deductible plan that has lower premiums, but higher deductible, but because of the way that the HRA is structured, the first dollar is paid by employers. So, the employee has very, the employee pays the 20% of their premium, employers pay 80%, that was negotiated. For the vast majority of people, when they at least the second round of negotiations, that was already sort of set. Today, there are a handful of support staff that are still under 20%, because they were maybe at five or 10 when this started, and it seemed like too much of a jump to hit them with that big. So there's a 1% increase each year. So in the next few years, everybody should be at 20%. I believe it's only three or four districts in the state that are still below a 20 split. So we're pretty much set there. It becomes the HRA cost where once the premium has been paid, you are covered for a lot of general wellness. Going to see your doctor for an annual checkup is covered by that plan's premium. I can use the HRA to get those co pays, you know, that Basic prescriptions, insulin, high blood pressure, cholesterol, but kind of general things are all covered there, so that's not getting into any of that. But you get into something like a hip replacement. It might be a $20,000 Something big if it's been possible. The first, if you're on a two person or family plan, it's a $5,000 HRA, 4,000 is paid for by the employer, the next thousand would be paid for by the employee, and then the remainder would be paid by the job. So if it's a $20,000 procedure, first $4,000 the school district would pay, the next $1,000 the employee would pay the next $15,000 the HEI pays. The HEI being the insured? The insured, since it's So when Bobby Joe and Mark were here last week and they were talking about needing to rebuild their reserves, that money's coming out of the reserve. They're saying they pay a million dollars a week.

[Speaker 0]: Okay. This is similar to Blue Cross Blue Shield's You gotta have the reserves Yes. Other than and we don't want you to be in danger

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: of And then when Bobby Joe when Bobby Joe had mentioned that it's actually becoming a higher actuary over time because that $5,000 between the two parties is a flat number. It doesn't change. But the cost of his replacement might go to $30,000 over the years. So it's still 4,000, 1,000, and now 25,000. Or the insurance cover. Yes. Okay.

[Unidentified Senator (Committee Member)]: Do you have this do you have testimony that's submitted?

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Yeah. It has. Okay. That and then we have a couple of little slides and we'll pause for now. And because it is all written out, I'm not written right

[Speaker 0]: now. Okay.

[Unidentified Senator (Committee Member)]: I couldn't tell if you were written or

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: me.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Yes. Mean, I have notes, but rather than just read straight to you

[Speaker 0]: This committee is more familiar with health insurance than it is with labor relations. So you're closer to speaking our language.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: So the idea would be that the plan itself, as it exists, the CHP, is at an actuary value of about 87.5, so it's below that 88. When you layer the cost and the impact of the HRA on top of it, it's between 9698% actuary value. And in layman's terms, that's, if you pay, if you're talking about $100 worth of healthcare cost, that number, the 88 or the 98, is what the employer side would pay, and the other remainder is what the employee pays. So if you have an actuary of 88, then it's $88 for $800 comes out of the school district, and 12 comes out of the employee. If you're at 98%, $98.02 dollars

[Speaker 0]: So the

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: idea of setting actual value, looking at the total cost of healthcare, not just the plan itself, is what we're trying to So bring into what you're saying is it's the plan itself

[Speaker 0]: may be in the gold, but when you add in the value of the HRA, you do these in platinum platinum. Okay.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Another thing we are looking at for changes to the current commission statute would be making it more above a commission. Right now, you have union versus school board. It's just a straight negotiation. We go through steps. But at least in my thinking, do you have a commission, have a number of different stakeholders who have different points of view, who have different ideas, and you can have a conversation that's not adversarial, which is the idea of bringing in someone who knows the state's finances and taxes, so we could have somebody from the tax commissioner's office come and talk. This bid creates these plans and understands the insurance market. As much as the statute currently says that the commissioners will have an understanding of insurance and healthcare, we're volunteers, or we're teachers, or we're support staff, and we know enough to be dangerous, but we're not experts. We bring in experts, we rely on experts, but it would be nice to have somebody at the table who really lives and breathes this stuff as part of the ongoing discussion. And then bringing in AOE, it would be nice to have a neutral chair. I fully respect and I like the toe chair I work with. Mike is a great guy. But trying to find a time that you can meet when you have the five commissioners of five commissioners plus two alternates on each side, trying to get that is difficult when you're trying to just do a shape and then add the sterile roll, whereas if you've had a neutral chair come in and saying, Okay, so does Wednesdays at 08:00 work for everybody? Good. That's what we're doing. And you can move along.

[Unidentified Senator (Committee Member)]: I do. Thank you. Thank you, Chair. You like the proposed change of the commission in H-eight 42? Yes. Okay. That

[Speaker 0]: is a house. So Yeah. And I have a feeling anything like that with postdocs to economic development. If not, that would be where it goes. Because relation with the changing relation. The

[Unidentified Senator (Committee Member)]: last time this was changed was it was in education. Yeah. It went went to education committees. I was on education. Think

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: it was in 2019.

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: Yeah.

[Speaker 0]: So unless it comes to changing insurance structure, that's not coming.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Well, it's likely to be open to

[Unidentified Senator (Committee Member)]: the house general. That's where the

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: house is supposed to go out to the next be And then they will

[Speaker 0]: probably our Houston senate general, and now it's become housing economic development in general. So whatever doesn't go anywhere else ends up there, but it does handle the labor issues, so that's rarely what we want.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: And then legislative council kind of covered the other two quite well. There would be two additional factors that the arbitrators would consider, plus we would have all five or seven factors that the commission would specifically have to look at. Those factors in current statutes are only required by an arbitrator that you must consider these factors. The Commission itself on its own doesn't have any specific factors that it has to consider, and then the idea that it begins to an arbitrator or arbitration panel. They could pick one, they could pick another, they could meld them, or based on testimony during the arbitration hearing, they could create their own award. That point being, at least in the second arbitration round, the decision reached towards the end, the arbitration panel wrote that would consider the statutory factors and review the evidence and testimony you make from this final decision. As stated at the outset, this Panel's statutory authority is to award either the employer's last best offer or the employee's last best offer. It cannot accept portions of the employer's or the employee's taxes. Perhaps the separation panel would have reached a slightly different conclusion than the five year facts as there are no as there clearly no right or wrong answers to these weighty and complicated issues. So, I painted that they might have done something different had they been allowed.

[Speaker 0]: I remember when it was determined we could go to a statewide system of. But I totally unfamiliar with how we got there. I assume at some point there was a bill passed that set up the system for them and probably in a veto.

[Unidentified Senator (Committee Member)]: I said it was something on June 28.

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: Think the bill was because it was statewide, and then I think the final rule of renegotiation were through some rule making.

[Speaker 0]: The rule made No. I'm getting to know about it.

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: That's a no? Okay. I don't get notes.

[Sophie Jani (Office of Legislative Counsel)]: It was Act 11 of 2018, it

[Sue Seglowski (Executive Director, Vermont School Boards Association)]: was the budget bill where this all occurred.

[Speaker 0]: Where everything goes when there's There's no special session. Was a veto session. Yeah, it was the veto session because this is what the veto gets It's really special, so. Yeah, It was a long, special session. Okay. So that's so, yeah, it just kind of happened, I don't think. Yeah, alright. That just fills in some history for me. Exactly. Thank you. I'm

[Unidentified Senator (Committee Member)]: the just looking at what Sophie's provided us. The the various options that the arbitrator could choose. Why not why wouldn't you wanna just go with the what's already in labor relation law, the either one or the other or the fact finders report? Is there that's an existing kind of concept. This sort of gives so many options, and it kinda makes me wonder, like, why would you negotiate at all? Because that arbitrator could just pick something brand new, like, that's never been on the table in this language. As long as

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: it's somehow related to the testimony they've heard.

[Unidentified Senator (Committee Member)]: But it says design their own decision.

[Alex McCord (NCSL, Senior Policy Specialist, Energy Program)]: Mhmm.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: I mean, like That's actually sort of a paraphrase of

[Unidentified Senator (Committee Member)]: That's their a paraphrase. But it it it there a concern with the, going with the fact finder's report as

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: a Well, at least for the quote I just read to you, they say perhaps this arbitration panel would have reached a slightly different conclusion than the finder of fact. So Oh, I see. Okay. So, it just The finder effect found for the employee's last best offer or their their proposal, but then the last best offer was written and booked in sort of what we had presented with the finder. The arbitration panel ended up going with the, in the second round, the employee, or employees.

[Unidentified Senator (Committee Member)]: Okay. And is that

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: what Which was that might provider.

[Unidentified Senator (Committee Member)]: See. Oh, I see. And then my other question is contracting with a single third party provider for HRAs and HSA. I don't know. Like, what is the how does it currently work?

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: The school districts retain their own third party provider.

[Unidentified Senator (Committee Member)]: Each school district has their own one. Why wouldn't the agency why shouldn't it be Beehive that does it?

[Sue Seglowski (Executive Director, Vermont School Boards Association)]: Beehive's not really involved with the HRA piece of it.

[Unidentified Senator (Committee Member)]: Okay.

[Sue Seglowski (Executive Director, Vermont School Boards Association)]: Yeah. That that is funded completely by the school districts.

[Unidentified Senator (Committee Member)]: Okay. I'm just really reluctant to give the agency of education more duties right now. They just don't want

[Unidentified Senator (Committee Member)]: to keep up

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: with the current All current they would do is hire that person or company to do the work. They wouldn't be doing the work themselves. Yeah. I mean, it could be You to hire somebody. You have a different group out of the state that would be better suited for I'm sure there

[Unidentified Senator (Committee Member)]: could be other ways than just putting more

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: The main idea is to have

[Colin Robinson (Vermont-NEA)]: minimum wage

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: cost savings, but it would take a lot of burden off of individual school districts, and it would have similar results across the state as opposed to, well, this TPP in Virginia decided that such success were over in bridal verbal, but the same question was asked but a different-

[Unidentified Senator (Committee Member)]: Yeah. No. I totally understand that sort of it's just the is that the right entity to do it as

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: All of you can have that discussion and make sure

[Speaker 0]: that you isn't going to make that decision. This is just our understanding of how we got where here is and how we got here as we look at the cost of health insurance, and it's across the board. I mean, this is a good plan, but it's not it doesn't cost more than other plans in the same factorial category. So this was helpful, we're gonna have to move it along because I wanna In give you the

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: your documents, there is one slide that shows cost rising over the next ten years, and that this would have to eighty eight years. You're gonna look at the bars and say, this isn't a whole bunch. It's about a $125,000,000 over ten years. The scary part is that in ten years, we're gonna be looking at health care costs in the range of $1,100,000,000. So just to scare you a little bit. I think that this is a bigger picture than just what Yeah. We're

[Speaker 0]: It is across the board. When we first started health insurance discussions and changing the system, I said this is asking us to take an ocean liner at sea, strip it down to where it's barely floating, and rebuild it and not lose anyone over the side. And that's a very difficult system, but I think our healthcare system, just the cost is reaching the breaking point across the board. And I'm not sure what we're going to do about it. It'll probably have to be at a national level, but this is at least helping us understand the dynamics of what's going on here. Okay. Thank you. You. Okay. Then we're going to go The

[Colin Robinson (Vermont-NEA)]: chair Cummings is

[Speaker 0]: up and you're Okay. And after this, we're going to go wetland zoning and Hard getting it. That used value appraisal. So we're having another very day. Good.

[Colin Robinson (Vermont-NEA)]: Well, for the record, Con Robinson, Vermont, NEA.

[Unidentified Senator (Committee Member)]: Rebecca Brown, also Vermont, NEA.

[Colin Robinson (Vermont-NEA)]: And we just prepared, we did not prepare anything just because we weren't sure exactly where the committee wanted to go.

[Speaker 0]: We just did backbinding.

[Colin Robinson (Vermont-NEA)]: Yeah, so to that end, I'll start with a few comments and then pass over to Rebecca. You all heard from Dee High on Friday. Two of you currently serve, three of you have served on health and welfare, and understand kind of the systemic issues going on. So that's why fundamentally we have seen the collective bargaining process is just that, a collective bargaining process, not a way to solve what is a crisis for all firm honors. And, you know, to that end, right, I remember you heard Mark speak to the fact that all teachers are paying 20% of their premium, the vast, vast majority of school sports staff are paying 20% of their premium, and 20% of the bigger number is a bigger number. So when it goes up for everybody, it goes up for everybody. Another, just, you know, I know you all know this and Chair Cummings, you've spoken to this, but we are talking about obviously teachers as well as school support staff here, and I appreciate sort of the points made earlier about sort of recognizing that those folks are in a different financial position, especially the support staff. And the final thing, just as you sort of consider and explore this conversation, if it does go continue, you know, last year there were about 400 education positions that were lost. You know, school boards are doing a lot of hard work this year and figuring out where positions won't continue to exist anymore, and obviously conversations and decisions you are gonna be making are gonna substantially impact school workers, where they work, whether they or not have jobs, and recognizing that this conversation about how they receive their benefits, the way they receive their benefits, what portion of those benefits they receive, adds to a significant amount of concern, anxiety, and the dynamics of challenges that are going on in their lives every day. So with that, I'll pass it back to Rebecca.

[Rebecca McBroom (General Counsel, Vermont-NEA)]: Hi, again, Rebecca McBroom, General Counsel. Nice to see you all. So, I have more experience with the collective bargaining aspects and for the two rounds of health care, the statewide health care negotiations that we've had done. I've handled both the fact finding hearing and the arbitration hearing for both of those, so I'm familiar with that and I can speak to that if you have any questions. Just to talk about sort of the collective bargaining process when it comes to the statewide healthcare, because you did raise I some would sort of describe this, and for collective bargaining, the overall negotiations, as the relationship between two parties to collective bargaining agreements often referred to as a marriage without the possibility of divorce. The idea is that these parties work together, they have to get along, and it's a long standing process. Even when the individuals change, the parties remain the same. So as that relates to collective bargaining, it's sort of a funnel that you go through when you start with bargaining, fact finding, and then the arbitration. At every step of the way, the point is to get the as Sophie stated, point is to get the parties closer together and to negotiate and to work it out between themselves. And even having buying arbitration at the end of this process is a little bit different than what we have for other teachers' contracts, where we don't have someone making the final decision. So, what I can tell you about this process is that the idea is to get them closer together. As was discussed, you start off the process with exchanging negotiations and then you reach impasse. If you can't resolve an impasse, then you have a mediator that comes in as an outside party in house. If it's not resolved at mediation, you have the fact finder that comes in. And the fact finder actually drafts a fact finding report. It's someone who's mutually agreed on as a labor expert by the parties, and that should usually really be a turning point in the negotiation. The parties look to that, can we make an agreement on the fact finding report? And I can tell you, during the last round of negotiations, that's exactly where the employee commissioner has landed.

[Speaker 0]: Let's go with the

[Rebecca McBroom (General Counsel, Vermont-NEA)]: fact finder's report. It's been heavily vetted. I believe, just for fact finding loan, we have three days of hearing. I think the union side or the employee side had maybe 10 witnesses testify. The employer commissioners had somewhere along the framing. This is very well vetted. The fact finders and the arbitrators are experts in this area of law. I can tell you that there is much consideration that's given to all facts. Do believe that parties have an equitable and equal playing field, which is presenting their information and having their evidence heard. We had several witnesses testify. Unfortunately, in both of the rounds and negotiations, we ended up at arbitration. The arbitration hearing, can imagine, is even longer than the fact finding hearing. I think we had five days of arbitration, and this is where we landed. So, as Colin mentioned, it's not the collective bargaining process here that we have itself that's the issue. It's the spiraling cost of healthcare, and that could not be, I would argue to you, controlled the collective bargaining process. The other thing that Pfizer

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: and

[Rebecca McBroom (General Counsel, Vermont-NEA)]: I would say is that members are coming to us daily saying, We cannot afford increasing costs of our health insurance. All of the increases in wages are now just being eaten up by the cost of increasing healthcare costs. We've got ourselves in a nasty sky. And that's not unique to, I mean, that's the

[Colin Robinson (Vermont-NEA)]: case for everybody. I mean, you're an employer, employee, know, the cost of the cost. And I will just say on the teacher side of it, you know, it was mentioned by Mark, but or actually, but about support staff, but there were some teachers up in the Northeast Kingdom before this agreement went into effect that were still ninety five five, and they jumped from 5% to 20% overnight. That wasn't the case everywhere, but for the teachers, there was a significant jump in that one year. So, you know, it's been a process to get where we are right now and everybody's feeling a pinch.

[Rebecca McBroom (General Counsel, Vermont-NEA)]: I was reviewing some of the exhibits for the last arbitration, so this was back to 2021. And for our median support a median salary support staff worker, the family plan would be 25 percent of their salary, and that's just for premium alone. And I believe last time I did those numbers, it was 33% when I gave testimony instead of education last year. So that's the cost. That's percentage of salary for a support school worker just for their premium loan. We spoke a little bit. I mean, one of our concerns about what's being proposed is that, again, going back to this last best offer and changing that, the idea of the last best offer and this funnel that I'm talking about, is to get the parties to agree and come closer together. You need to come into that arbitration hearing with your last best offer. What's the best proposal you can give? By allowing an arbitrator to mix and match or choose different options, you're not really forcing the parties to negotiate. And the idea of collective bargaining is that you engage with a phased negotiation. So I see that very much as a as a hindrance to the process of what it's trying to do, which is push the parties closer together and come up with the reasonable negotiated agreement. Again, it's it's I find it a little surprising that we're here, given that we have rolled over, as was mentioned during the previous testimony for the last three years. The perception of when you're able to roll over a contract and not renegotiate is that you agree to those terms and that they're working for both sides. Especially when we negotiated in 2021, we were just coming out of COVID and having incredible shortages for teachers and teacher retention. That was the climate that we were bargaining in in 2021. And so it's interesting to me that we're here instead of at the bargaining table. Haven't been at the bargaining table for the past three years in a process that, you know, like all the factors, all of them have been assessed, it's been forced to be negotiated. Wait. Can I can I

[Unidentified Senator (Committee Member)]: ask about that a little bit? It's But then it was rolled over, meaning that both parties agreed to continue with the same terms that have been negotiated in '21. Right. And that is supposed to go through '28 at this point. So

[Rebecca McBroom (General Counsel, Vermont-NEA)]: It was rolled over twice. So the first time it rolled over for two years, and then the second time most recently, it was rolled over for another year.

[Unidentified Senator (Committee Member)]: So your point is that if people quote unquote whoever people are, if people don't like what the current plan is, then the way to change it is by negotiating it, not by changing the negotiation process. I mean, that's a fair point. It it's been rolled over a bunch of times. They haven't tried to go back and negotiate new terms. It could be a different completely different contract if they negotiated it. So under the current auspices. It could not be. Maybe it would be better or worse depending on your perspective, but it's a fair point that it has been negotiated for a long time.

[Speaker 0]: Right. But I think the reason they gave us was we're messing in the system and nobody knows what it's gonna be by the time something went in, so why?

[Unidentified Senator (Committee Member)]: Well, that's true, but we're still messing it. We're still up. Messing

[Speaker 0]: And we probably will to leave land somewhere.

[Rebecca McBroom (General Counsel, Vermont-NEA)]: I would argue with collective bargaining as well. You had mentioned something, what happens is the structure changes and laws change, and you deal with the impact of that, you keep bargaining, right? Our local school boards and our local associations will keep keep bargaining. They don't stop bargaining, maybe something might change. Something might always change. It'll be a landscape that doesn't

[Speaker 0]: mean to don't continue to bargain. Use

[Unidentified Senator (Committee Member)]: the analogy in your five and five configuration as a marriage without option for divorce. And my if one party in that marriage without option for divorce is asking for a neutral chair, I'm in a very happy marriage. I've never been through this before in case you're watching this, Kim, but it seems like it seems like you might wanna seek marriage counseling, and you would usually look for a neutral middle ground person to serve as that chair. Do you see the the argument for that?

[Rebecca McBroom (General Counsel, Vermont-NEA)]: So what I would say is that right now that you're all the other precept of labor law, that's really important and major principles. So you're equals at the bargaining table. Right? That's why the construction now is you have five employees who are bargaining and five school boarded. You're equals there at the table. And you get to you bargain as far as you can with working with each other, but then you do have a control. You have a mediator that you choose if you get to impasse. You have a fact finder that so I'd mentioned you choose at the beginning of the process. So before you've even gotten into what the positions of the parties are, you've already mutually selected your fact finder. The arbitrator is selected as a panel that was mentioned where the employee side selects one arbitrator, the employer side selects an arbitrator, another arbitrator, and then those two arbitrators mutually select a neutral. So there is neutrals at every phase of the process all the way through that have to be agreed upon. Saying So that it's imbalanced at any point, I think it's

[Colin Robinson (Vermont-NEA)]: it's not accurate as it stands now. The the other thing I would just say is that as a fundamental principle, the current process is collective bargaining. Mhmm. What I believe is being proposed with the addition of these three other individuals Okay. That's the house bill. Correct. Okay. Would remove healthcare from collective bargaining for school employees. Okay. Because you don't have two parties, as Rebecca's been describing, negotiating, it's a different construct.

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Yeah.

[Speaker 0]: I wouldn't give that a whole lot of stuff.

[Unidentified Senator (Committee Member)]: Yeah, and I also think that it called the I question what is mean, you know, is the Secretary of Education neutral, is the Tax Commissioner neutral? Like, they have jobs that they're supposed to do and they work for an an individual who's, you know, elected. And so I do think that there that they might not be what one would consider neutral. They might be they might have experience, etcetera. Okay.

[Speaker 0]: I'm gonna move that discussion out of the committee because we aren't having it in here. We don't regulate labor. I'm gonna need to wrap this up unless do it. Jill is here, and we're going on to wetlands, which is I'm also not in our donate.

[Colin Robinson (Vermont-NEA)]: Always happy to be with you all and appreciate the conversation and the work you're doing, and if we have additional questions, or you

[Speaker 0]: have additional questions for us, it's fine. Thank you. Okay, thank you. Alright. We're gonna go on.

[Unidentified Senator (Committee Member)]: Let's see.

[Speaker 0]: Neil Remick at s one sixty five. It's an acclimating. Grand List Valley. Madam chair?

[Mark Koenig (Director of Policy Services & Legislative Affairs, VSBA)]: Yes. What are the

[Unidentified Senator (Committee Member)]: odds like a little five minute breather? Real quick and kill.

[Speaker 0]: She witnessed that she could give.

[Sen. Thomas Chittenden (Vice Chair, Senate Finance Committee)]: That would

[Speaker 0]: be fine. Thanks.