Vermont Legislature SmartTranscripts:

[Senator Ann Cummings (Chair)]: We are live. Okay. Now we are back to committee with Kelly Murphy and Kent Gates with us. Come on up. Sit there. Bring one of the comfortable chairs. More comfortable than other bosses. Take a chair. Yeah. And we've been fighting too. We're looking at bill two twenty. We've been it's based on your per pupil cost that's it caps spending increases based either on your per pupil cost or your overall ad spend, and then those are appeals if something strange happens. But we didn't have the proposed new budget numbers. They continue that. We were told they would do on Sunday. I'm sure they all came in on Sunday. We're just wondering, you know, what were the numbers for this year? What are you seeing? Of course, we won't know what the final numbers are until the votes happen. Most of them will be town meeting, but there's outliers, so the floor is yours. Great, thanks for having us, really appreciate it. So as mentioned,

[Kelly Murphy]: Kelly Murphy, Education Body Director, and I've got Ted Gates here with us, our Senior Fiscal Analyst. And I don't know, I'm happy to

[Senator Ann Cummings (Chair)]: share my screen, but what

[Kelly Murphy]: I was planning to do is just kind of run through the memo that's available on the committee's page. Is it helpful to share a screen or it's Yes, it's helpful.

[Senator Ann Cummings (Chair)]: And then if anyone is at home, they can see.

[Kelly Murphy]: Okay, let me just see if I

[Senator Ann Cummings (Chair)]: can pull up the one here. Bear with me.

[Kelly Murphy]: So, as you can imagine, we Let me see here. We do have a lot of the questions, so that's the positive piece. We're at about right where we were last year at this time, but there are still a few stragglers. So, this is sort of a caution kind of preliminary review for today.

[Senator Scott Beck (Member)]: Are still Caledonia, you say we're about what we were last year this time,

[Senator Ann Cummings (Chair)]: what does exactly mean? Number of district number.

[Senator Scott Beck (Member)]: Number of district center report.

[Kelly Murphy]: Yeah, and so I'll go over that to you in the, just the topic today.

[Ted Gates (Senior Fiscal Analyst)]: Okay, it's about 90%.

[Senator Scott Beck (Member)]: Okay, so you know, talking about the rate of growth or Yeah, thank

[Kelly Murphy]: you for clarifying, I really appreciate that. It's for your patience with me while I get to share in here.

[Senator Thomas Chittenden (Vice Chair)]: On that same point, since it's about the same number reported as of now since last year, is there a common characteristic of these stragglers? Are they usually the smaller districts, the larger districts, other common?

[Kelly Murphy]: I'm not sure, you know, honestly, so I did take a look at, so a few that are out right now were in last year's time, and they're good sized. So I don't know if there's any rhyme or reason to it. I mean, I could certainly look back if you'd like me to, to see if, like, there's a, you know, common thread.

[Ted Gates (Senior Fiscal Analyst)]: There's there's a few districts that don't have their time meetings until May, so those districts probably don't have those numbers yet.

[Senator Ann Cummings (Chair)]: Yeah. They tried to get those master posts there.

[Kelly Murphy]: Yeah, so the third preliminary, although you'll see as we kind of get through the memo here, we do do a lot of the budgets in. Got 100 submissions at this point. I mean,

[Senator Ann Cummings (Chair)]: you pulled that up a little bit. Absolutely. Yeah. It might be a little easier to stay. What's that? That's great. Okay. Perfect.

[Kelly Murphy]: Just as you mentioned, the deadline for the submission and reflection was on the fifteenth, and so that was Sunday, followed by a holiday, so a few that we're looking to get in. We also are scrubbing the details a little bit. For instance, there was one district that is the same as last year, exactly the same. And while that may be the case, it might not be So, I just want to make sure that the information that we have is you know, what was intended. So we're gonna review that. But for comparison's sake, last year, this time when we pulled these numbers, we were at 105 districts. We're at 100 right now. And there are a few stragglers that have come in since, you know, Tuesday or yesterday. And so we're at about 103 right now. So it's pretty, pretty close. So I think we'll get a few more often. And as Ted mentioned, there's about, I think, eight or nine districts that have different town meeting dates, but I haven't done this cross referenced the ones that are not in to see if those in the districts that have not responded. So I will do that as we kind of look through sort of the final analysis here, as we're sort of developing the sheets for the yield bill. I'm happy to also note, which is not noted here, we do have long term weighted ADM numbers in, and they've been booked in the forecast. That's a piece that will certainly go into this. But back to the budgets. So, as we were talking about a 100 responses are in, I do want to mention on this first bullet that it's specific to the budgeted expenditures, offsetting revenues, and education spending. We did request additional detail this year to try to get sort of more of the line items so that we could take a closer look at the cost drivers. But really, we're not seeing a rate yet with that. It's still a little early. So some are submitting all their details, some are not. And so it's just very variable. We have these factors, you'll see in the tables how we pulled those in. It's an 84% response rate. I will also note, you'll see in the tables that we prepared to the December 1 letter and had an 80% response rate in that collection. We're kind of on par there. Out of the budget submitted, we compared here I did just mention that we do have the 27 long term weighted ABM, but when we started building the review of the budget, were just comparing to what the universe was in the prior year. So, we're at about 88%, almost 90% on both the waiting medium and the education spending in. And then in terms of just kind of like a bottom line best estimate at this point, the average increase of the budgets that I submitted is 4.3%. And so, it's not quite as much as we were projecting back in December, but I will say that it's still preliminary because there are a few stragglers that I really would like to get into the number just to see

[Senator Ann Cummings (Chair)]: how that looks. Thank you, Manager. Historically, is this first go around fairly accurate when you actually end up fleshing out all of the numbers at the end?

[Kelly Murphy]: As I understand it, it is a little bit variable because there may be adjustments whether a budget gets voted down, or there may be additional adjustments to offsetting revenues. So, this is a good estimate for this point of time, but it would change.

[Ted Gates (Senior Fiscal Analyst)]: I would guess it wouldn't change too much, though.

[Senator Ruth Hardy (Member)]: But I thought I'm sure it sounds

[Senator Ann Cummings (Chair)]: like no, don't have those. That's a

[Kelly Murphy]: That's a good question. Question. It would be nice to know. What I can say that it's pretty close is the long term meeting. I'm not coming in right about where we thought it would. Close to something, yes. This first table, we just sort of captured all the details. It was just total and aggregate of what was submitted. So, again, to get a sense of what those budgets were looking like, and that's where we got sort of the education spending 4.3% up. You'll notice that budgeted expenditures are up by 3.5%, and then offsetting revenues were actually down by 0.9%. At our previous iteration, this percentage was a little bit higher, so we did ask some of the districts why that was. They were using some of their fund balance to offset revenues from prior years that is no longer available. Then you can see that there's a decline in the revenue piece there. That's what we've got here in this table. We can talk through some of niches and changes.

[Senator Thomas Chittenden (Vice Chair)]: So one of the big questions I have, and I'm meeting with the school district budget manager tomorrow morning to just ask a specific example, but can you reflect on offsetting revenues volatility? The S-two 20 construct we have right now is based on education spending. But my concern is, I don't know, I understand what generally goes into the offsetting revenue, but if that fluctuates so much, as much as education spending reflects the property tax impact, I think that the districts have a lot more control of their total budget expenditures. What could you tell me about offsetting revenues fluctuations from year to year for districts?

[Kelly Murphy]: So I want to get back to you, Matt, for sure. And, you know, it can also say that, you know, we have been looking at the, you know, what wizards have on their bottom line through the year. So, what they might have as a fund balance or an assigned fund balance just to kind of get a gauge on what might be available. And while there is variability year over year, they need that liquidity to be able to manage their budgets.

[Senator Ruth Hardy (Member)]: And so I don't know

[Kelly Murphy]: that I really have a good answer for you in terms of the volatility, but in that offsetting revenue, that could be anything from sort of prior year carryforward. It could be federal revenues. I would wanna take

[Senator Ann Cummings (Chair)]: a look at sort of what's in there.

[Senator Thomas Chittenden (Vice Chair)]: So ESSER funds, when they were on, if the district used ESSER funds, that would count as offsetting revenue, correct? And if they didn't have that the next year all of a sudden their education spend jumped, which we saw that in many cases.

[Senator Ann Cummings (Chair)]: Except that ESSER funds were supposed to be treated as a one time and that's where the problem came in.

[Ted Gates (Senior Fiscal Analyst)]: We could we could look into that statement too if you think. I would love to know,

[Senator Thomas Chittenden (Vice Chair)]: in general, what do we see volatility and fluctuations from?

[Senator Ruth Hardy (Member)]: I guess I wouldn't say that federal funds are offsetting revenues. I mean, they are usually given to school districts for a specific purpose. Title one, Title two, those are for specific types of students that need extra supports, whether they're EL students or students with low income students. There's also federal special education funds. So, they're not offsetting the budget. Those are those are meant to be for a specific expense for the education of those students. I mean, I think the only sort of quote unquote true offsetting revenues could be if there are could be if there are some gifts to school districts, but those are pretty small and far and few between and limited. And then there there can be fund balances, as was mentioned. And school districts use those, either to lower their, property tax rate by offsetting some of their expenses. So, those are what I mean by true offsetting, they use them to put into designated funds for specific expenses, whether it's capital expenses or specific educational expenses. So I wouldn't even consider those are usually reserved for specific expenses. So it's usually just the unreserved funds that are poorly offsetting funds. Most everything else is for a specific purpose.

[Senator Thomas Chittenden (Vice Chair)]: Agreed. Yeah. And I'm just curious how much from year to year does that fluctuate? Do those those revenues that are counted in the county context as offsetting revenues? Is there great volatility from year to year in most districts?

[Senator Ruth Hardy (Member)]: Yeah. I I think it depends on the district. I think there are there are, like, generally accepted accounting accounting principles for the percentage of those kinds of revenues that you should have in your school budget for any budget, just like a business. Right. You know? And so there are school districts that hold on to reserve in order to be, you know, fiscally responsible, and they're not doing it because they are, you know, for nefarious purposes,

[Senator Ann Cummings (Chair)]: it's for ours don't fluctuate much, I tell you.

[Senator Scott Beck (Member)]: On the tax sheet that every school district fills out and presents to their voters, offsetting, like offsetting union revenues are categorical grants, donations, tuition, surplus, federal, etcetera. So it's everything

[Ted Gates (Senior Fiscal Analyst)]: Or tuition too.

[Senator Scott Beck (Member)]: From like Tuition. Yeah. It's everything that's not education spending that's in your budget.

[Senator Thomas Chittenden (Vice Chair)]: If I may. So for districts that receive tuition kids, I I'm just trying to better understand if we use the education spend, which adjust for this offsetting, do tuition dollars fluctuate a lot? But you're what I'm hearing from you in in Burlington, you don't see a lot of fluctuation of offsetting revenues. It's relatively easy to keep that moderated. But there was a blip. Would we agree that there was a blip over the last few couple of years? Okay.

[Senator Ann Cummings (Chair)]: That's fair enough, Bob. Yeah.

[Senator Ruth Hardy (Member)]: And I think tuition revenue depends on circumstances and the location of, you know, they're in a place where there's a lot of nonoperating schools and they're getting a lot of tuition and that their their revenue may change because of of inflow or outflow of students. But if you're in a district that's not

[Senator Thomas Chittenden (Vice Chair)]: One thing, like, Colchester South, like, do we get a lot of Grand Isle kids, Georgia Fairbanks kids? So those are tuition kids. Like, you know Mhmm. I'm just wondering I'm gonna ask my budget manager, is that pretty variable? And then so I just wanna get a better handle on that. If we're gonna use if this goes forward and that your spending is using, I wanna know the volatility drivers. Mhmm.

[Senator Ann Cummings (Chair)]: You don't have that as a school by school breakout yet?

[Kelly Murphy]: No. We do have it we do have

[Senator Ann Cummings (Chair)]: some. The? Yeah.

[Ted Gates (Senior Fiscal Analyst)]: We had it by district.

[Senator Ann Cummings (Chair)]: By district, yeah. Okay. That's how we were looking at past revenues, so that would be helpful.

[Kelly Murphy]: We can certainly make sure we get you yeah.

[Senator Ann Cummings (Chair)]: Yeah.

[Kelly Murphy]: So, you can see here that moving on to table two in the highlighted line, are projecting what we anticipate the education spending would be if everyone was grown by 4.3%. The remaining districts, we just grew up from FY '26. That's what you can see here and see what the difference is between the December 1 projection and this current projection.

[Senator Ann Cummings (Chair)]: Okay.

[Senator Thomas Chittenden (Vice Chair)]: You know, it's premature, but we can say that's good news for the Vermont taxpayers.

[Senator Ann Cummings (Chair)]: Yeah. Definitely. Yeah. 85,000,000. 85 more than.

[Kelly Murphy]: It's it's favorable. Yeah. And, you know, I do like, again, it's preliminary, but it's a good sort of it's the best that we know right now. And as we get more in each other, will at the as the firm as a concept. We do anticipate that, you know, this will come into greater focus when we do the next collection after time meeting. So this is representative of the board voted budgets and likely what will

[Senator Ann Cummings (Chair)]: be warned. And then from there, we'll see what happens. Yeah. Because this is back to more historic spending growth. Problem is it's building on top of that record setting 18% and then 12%. And so it's it's a much higher base than it used to be, which means that property taxes are much higher than they were pre COVID. So the question yeah. How do we shape out that bump?

[Senator Thomas Chittenden (Vice Chair)]: I'd love the standard deviation of this 4.3% for the reported districts and also to compare that last year with a two year comparison prior years. I'm I'm anticipating, but I'd love to prove this out that we're seeing a less variation as we move away from the S or Cliffs. But if you give me that spreadsheet, I can do my stuff.

[Senator Randy Brock (Member)]: I would still wonder how far back in time, if ever, we could go to find an increase in education spending that was equal to or less than the rate of inflation. So in many ways, that's what we're really looking at. And we're kidding ourselves if we say, Hey, we're doing a great job because it's four point something percent when the rate of inflation is 2.7%. So we get further and further behind every year.

[Senator Ann Cummings (Chair)]: There's also wage growth in there, Jim.

[Senator Randy Brock (Member)]: Well, theoretically, wage growth is in the inflation rate.

[Ted Gates (Senior Fiscal Analyst)]: It should be.

[Senator Thomas Chittenden (Vice Chair)]: And we got a

[Senator Ann Cummings (Chair)]: more things. Here's healthcare costs as well.

[Senator Ruth Hardy (Member)]: Yeah, there are different types of inflation rates. Education spending is generally a different inflation rate. How

[Senator Randy Brock (Member)]: would we be in comparison to that now?

[Senator Ann Cummings (Chair)]: The NIPA rate was what, 3,400,000,000,000.0? Let's see. I think it was

[Kelly Murphy]: around 3.8.

[Senator Ann Cummings (Chair)]: That's right. 2.8, Well, not quite different from the rate of inflation generally. Decimal point. It's dust. So we are still We hadn't spent

[Senator Randy Brock (Member)]: And you project that ten years, how how big a gap will there be if we continue to degrade?

[Senator Ann Cummings (Chair)]: Well, I think that's what we're seeing is we're down, even if it is twice inflation, we're down to the start of growth levels. But we're halfway up the mountain when we start to level out and the taxpayers haven't made it up that cliff yet and I think that's what we're dealing with, no matter what caused the cliff. We haven't gone back anywhere near pre COVID spending, and I don't know if we know why. Are we doing it?

[Senator Randy Brock (Member)]: Well, that's why I asked the question, is I don't know that in recorded memory we have matched the inflation rate or lower than the inflation rate on the increase in education spending in a year. And as we look at, say, well, we blame this on COVID or we blame it on lightning, still is a trend. I bet if we go back and we match those numbers over a period of time, that education spending will still increase, has been increasing at a rate higher. And that leads us to say, well, where are going be ten years from now? Unless we do something differently than what we are doing and have been doing.

[Senator Ann Cummings (Chair)]: And the other thing, I'll move to Julia for correction, is that we got a major influx of funds when we did sales tax Mhmm. Because that was well, it was as equal as you can get to what the general fund transfer was, but we then we picked up the online sales, and there was millions, tens of millions. 20 is a lot of money that showed up during COVID or just prior to COVID that wasn't going in. So these increases, you know, the increases in the tax rates, there's also been a major revenue influx in there.

[Senator Thomas Chittenden (Vice Chair)]: And to Senator Rock's point, you have to acknowledge the other thing that's percolated in that all, I mean, it's under one of these discussions is healthcare, and it's out in control, and out in control is strong. It is incredibly expensive here in Vermont, and that is a cost driver, so

[Ted Gates (Senior Fiscal Analyst)]: if you take

[Senator Thomas Chittenden (Vice Chair)]: inflation and what they're also spending on covering healthcare.

[Senator Randy Brock (Member)]: But at the same time, wages. Wage growth in education has increased faster than rate inflation, significantly faster,

[Senator Ann Cummings (Chair)]: as it has in state government. I think the other thing we need to remember is the cost of healthcare for the taxpayers has also increased, which Yeah, I mean, are all pressures.

[Ted Gates (Senior Fiscal Analyst)]: In addition to wage growth, you've had an increase even though the student population is decreasing, number of employees in the system are still increasing. So if you compound the number of employees increasing with wage growth, then you get a higher bump.

[Senator Ann Cummings (Chair)]: And all those employees, not just teachers, are in the healthcare system. So despite declining population, we are still increasing personnel. And I've been told we are losing teachers. Teachers are going down but everybody else is So we're replacing

[Senator Ruth Hardy (Member)]: teachers with somebody. I I think that that indicates that we're actually shifting responsibility for those costs onto schools. And so the as we're losing, we're declining number of teachers because we have this high number of students. Both the students who are remaining are higher need students, and they are their services are being provided to them in schools by and being put on a school budget. And so, think it's also important to acknowledge that some of the things that we're calling education costs are all are actually mental health and social service costs that are now the responsibility of the schools. And we're also talking about, you know, all these security costs now and all of the, you know, requiring schools to protect kids from, you know, ice invasions and things like that. So, I mean, there are so many things that we're putting on schools that they have to do. And you mentioned the the influx of those those sales tax revenue that happened in one year and then became part of the education fund and didn't happen again. So the as the balance between the sales tax revenue and the property tax revenue leveled out, then the property tax level increased because sales tax had of leveled out as part of the fund. One piece of

[Senator Randy Brock (Member)]: analysis that needs to be done along those same lines is we start comparing Vermont's spending and Vermont's cost to other states. Every state does it a little bit differently, and what's in their spending formula is very often different. The real analysis that I've never seen done, maybe someone else has, is one that balances and equalizes the type of revenue and the revenue source for each state, so that you don't have a whole bunch of things that Vermont pays for out of its education budget, but somebody else pays for out of its human services budget, etcetera, etcetera. We don't have comparison, frankly, are valid. And maybe, I

[Senator Ann Cummings (Chair)]: work with NCSL has something that Or it could be a market share.

[Senator Randy Brock (Member)]: I've not seen it. I'd love to see

[Senator Ruth Hardy (Member)]: I mean, I think the revenue side is easy to do a comparison. It's the expense side. Yeah. How expenses are covered in school budgets. As far as I know, that kind of analysis is really difficult to do because of how you count things.

[Senator Ann Cummings (Chair)]: We're still learning, getting our schools all on the budget. Charter accounts. Charter accounts. And I wouldn't be surprised if some other states have the same issue. So, okay. Yes. This

[Senator Thomas Chittenden (Vice Chair)]: is great. Really appreciate this. Looking for this. On the Charter of Accounts or that, I think you referenced that you're expecting some more granular data that you don't quite have all now. In that, will you be so something Senator Gulick said, reporting on reserves that each district holds? And then, I, is a broader conversation about Act 73 and where it goes forward, but I'm just curious, districts start consolidating. Do those reserves all of a sudden get pooled with the larger districts? Then if a district gets in more money than they want to spend, do they, in that new foundation formula construct, are they going to be able to just create reserves? I'm interested in more reserves reporting to what is on in the reserves or different school districts out there and what restrictions that there are because I don't think they can just put anything in reserve. They have to ask the voters to approve certain. If there's reports out there that I should know about, I'm interested to understand more about what's being held at reserves.

[Senator Scott Beck (Member)]: One thing I'm interested in understanding is, and it's happening more and more frequently now as people are catching up to the excess spending threshold, is how districts this year behave that are above, at, or below the excess spending threshold. I think I had a number of districts in my area where it was an exercise to get down to it. I'm really interested to understand how that laid out over 119

[Ted Gates (Senior Fiscal Analyst)]: school districts. Even back in December, January, there was only six or seven districts that were anticipating that they might be getting stress on the mixer. They were working to bring it down, so they wouldn't get it. And I haven't had a chance to move. I mean, they are in my area now, actually.

[Senator Scott Beck (Member)]: Yeah. I think a lot

[Senator Thomas Chittenden (Vice Chair)]: of them I had at least I had three or

[Senator Scott Beck (Member)]: four in my area that were Yeah. Never never sorted with that ever in the past, and this year, they're flirting with it.

[Kelly Murphy]: We'll take a look and see where we're seeing what the budget's coming in. And then Senator Chittenden just in terms of the review of the reserves. So we do collect that data and we also do get each of the districts' spots. And so we do look at their unassigned fund balance and what that might look like in terms of what they could potentially put into reserve. And so we do have a supplemental worksheet, which is part of our collection at the end of the year that we do collect data on the reserves that districts have. But I'm sure you can imagine that there's a little bit of variability in how districts are capturing those reserves and how they're assigning them. But we're happy to provide that detail as well.

[Ted Gates (Senior Fiscal Analyst)]: Additionally, I think the AOE is getting four new positions as part of Act 73, and one of those positions at least is going to

[Senator Thomas Chittenden (Vice Chair)]: be dealing with working with

[Ted Gates (Senior Fiscal Analyst)]: districts on how to consolidate bank accounts, including reserves, probably how they pool those things together, what the rules are about that. When we hire somebody to do network, I think

[Senator Thomas Chittenden (Vice Chair)]: we'll have a lot of information about it. So I don't know how familiar you are with S-two 20 and the construct that we're contemplating the allowable spending growth cash based on education spending. Would you say that if districts out there, if this were to move forward and it was in effect in that fiscal years '28 and '29 and districts have reserves for differing reasons, they're saving up for high school or whatever the purposes are, those are relatively restricted or can the boards in general use those reserves if they had to in order to just meet that cap? Would this force them and that would they be able to drop? Not that we want them to do that because that's not necessarily good practice, but what can you tell me about general reserves fungibility in times of constricted spending to be used for offsetting revenues?

[Kelly Murphy]: I wish that had a good answer, but it is variable between districts and again, what they're using those reserves for. Some of them have committed their funds, for example. When you look at their audit, you'll see that they've got, it's a larger district and they have 2,400,000.0 on their bottom, but they've reserved 14,000,000 for programmatic expenses. You know what I mean? So that kind of thing is happening. And so you could, you know, they could change that if they wanted to, but, you know, so you don't the districts are using their funding.

[Senator Thomas Chittenden (Vice Chair)]: To change that, if it was a voter approved capital reserve fund, do the school boards have the capability of doing so without holding a vote, in your experience?

[Kelly Murphy]: I don't think that's the way the statute is. There is pretty specific rules around what you can do with your reserves. There's either drops to the bottom line as sort of a fund balance. It would be reserved for a specific purpose, which you need to go to the voters, or there's the construction piece, then you would reserve it in that way.

[Ted Gates (Senior Fiscal Analyst)]: Seems like if it was if you had to get voter approval to put it into a capital reserve, you'd probably need voter approval to

[Senator Thomas Chittenden (Vice Chair)]: pay back out if you would have piece. To Okay. But I suspect just to make sure it's

[Senator Ann Cummings (Chair)]: Okay. Any other questions? Thank you, and if you can get those school by school, what you've got to us will more.

[Kelly Murphy]: Just for clarification on sort of the offsetting revenue piece, do you want many years would you like?

[Senator Randy Brock (Member)]: Would you

[Senator Ann Cummings (Chair)]: like it? Oh, I don't know, but you want offsetting revenue? No, we're looking for per pupil spending. Oh, okay. Yep.

[Senator Ruth Hardy (Member)]: Wait, no, but Senator Chittenden, you had a specific request.

[Senator Thomas Chittenden (Vice Chair)]: Offsetting revenue variabilities.

[Kelly Murphy]: And by that,

[Senator Ruth Hardy (Member)]: you mean reserve fund variabilities.

[Senator Thomas Chittenden (Vice Chair)]: That too. So those are the two threads of what I said.

[Ted Gates (Senior Fiscal Analyst)]: Sorry. So offsetting revenue,

[Senator Thomas Chittenden (Vice Chair)]: one piece of question I have is I want to compare this year's offsetting revenues used by districts and that volatility to the last three or four years. And then even if you had it before the pandemic and the federal funds that came from heaven, I'm just kind of trying to understand the bets. I'm trying to understand how much volatility there is in the offsetting revenues before I feel comfortable using the education spend as the cap as as opposed to using a total unbudget spend, which is a point you raised

[Ted Gates (Senior Fiscal Analyst)]: early on with this discussion.

[Senator Ruth Hardy (Member)]: Well, I mean, the way that it's modeled right now is my understanding, Julie, correct me if I'm wrong, but it's it's education spend per pupil, like, the long term weighted average versus total education spending. But it's still education spending, so it does not include federal federal. It doesn't include reserves. It doesn't include, you know, gifts and special funds. It it only includes the narrow, mean it's broad but it's narrowed education spending, it does not include total spending. So if you wanted to include total spending that's a different number altogether.

[Senator Thomas Chittenden (Vice Chair)]: That's what I'm toying with to understand that offsetting revenue makes education spending a much more volatile from year to year. I feel like these spending caps could be even more unnecessary.

[Senator Ruth Hardy (Member)]: Well, I mean, if you it wouldn't I don't think it would be fair to to include, for example, federal revenues in any kind of federal in any kind of spending cap that we would impose because school districts, like I said, get those for a specific purpose. And the and these are those are usually federally required purposes. So if you put a cap on them and include them and say you can't grow those above a certain amount, that's that's really punishing mostly districts with high numbers of low income kids or high numbers of special education or EL kids, and that is problematic in its own right. Yeah, offsetting revenues.

[Senator Ann Cummings (Chair)]: If your voters have it's pretty hard when you're looking at getting your budget passed to be sitting on any amount of revenue. You have to get voter approval. Sometimes you've gotten voter and there was a some money sitting around that had been put aside for a track that never got built. So that money's sitting there, but you could use it to offset taxes. You could use it over three years to offset taxes, but that's on a school by school. I don't it's not like somebody comes in and endows you with $20,000,000 one year and then nobody endows you for the next ten years. It it's part of your budgeting process, but I don't have a sense that you're swinging tax rates that way. I mean, quite, he couldn't talk to you.

[Senator Thomas Chittenden (Vice Chair)]: To Senator Hardy's point, I'm kind of, that's why I want to understand offsetting revenues more in the guts of meetings this week because if it makes sense, the federals are, federal monies are assigned for kids with certain needs, I completely agree that should be part of it, but are there things in there that shouldn't be, necessarily considered? Because if they do have greater volatility Like tuition, if the offsetting revenue.

[Senator Ruth Hardy (Member)]: Oh like tuition revenue? I mean

[Senator Thomas Chittenden (Vice Chair)]: does that swing a lot? I don't know.

[Senator Ruth Hardy (Member)]: Yeah I think it depends on the district and where it is.

[Ted Gates (Senior Fiscal Analyst)]: In the budget collection process we collect the three numbers total expenditures local revenues or offsetting revenues, however you call them. And then the difference between those two is education spending. So we do collect all three of those numbers by, know, they're required to warn those numbers. So we collect those. So that's the offset.

[Senator Thomas Chittenden (Vice Chair)]: That's the offset that you could give us. Your for the volatility.

[Senator Ann Cummings (Chair)]: You wouldn't lay out what if this was money that got put aside to fix the roof, and then you can fix it. But it would tell you the offsetting revenue and how volatile it was.

[Senator Ruth Hardy (Member)]: You

[Senator Thomas Chittenden (Vice Chair)]: don't have that local revenues more granular, it's just one bucket. But

[Senator Ann Cummings (Chair)]: that wouldn't be added revenues.

[Senator Thomas Chittenden (Vice Chair)]: Those would be the offsetting.

[Senator Ann Cummings (Chair)]: That wouldn't be federal revenue coming in.

[Ted Gates (Senior Fiscal Analyst)]: If they to the extent that they include any federal revenues in their total expenditure budget, then yes those be us, they would be considered offsetting. It depends on you know what your purpose is, how you define offsetting. In the numbers that we collect offsetting is anything besides money comes from the spending thing.

[Senator Ann Cummings (Chair)]: So we get into the if there's a big swing in your population, if ICE comes in and removes half of your English language students, then yeah you're going to get less money with them less cheaper.

[Senator Thomas Chittenden (Vice Chair)]: Well that's on the per pupil side which I think we adjusted for with that backstop, but what I don't think we that's what I'm struggling with is on the flush volatility of the offsetting revenues if there's components of that that is similar to backstop on the small districts that are affected by it. I just don't know enough about school budget broadly. They are susceptible to great swings offsetting revenue that would make disallowable spending growth. Yeah we

[Senator Ann Cummings (Chair)]: probably need them I have business managers

[Ted Gates (Senior Fiscal Analyst)]: talking to one tomorrow

[Senator Thomas Chittenden (Vice Chair)]: morning but

[Senator Ann Cummings (Chair)]: well we probably need that one school. If you wanna see that, we probably should have business managers representative business managers talk to us. Okay. Any other questions for the witnesses? Thank you. Thank you. Can

[Ted Gates (Senior Fiscal Analyst)]: you send your emails with questions? Of course. Yes. Maybe you sent them through the communications team. Think

[Senator Ann Cummings (Chair)]: they're all I'm not dialed out if they can answer you. Okay, We'll try and get the manager's in. We'll try and get other people in tomorrow. Okay. Julia's gonna let us know what update on the Ed Fund tomorrow, right, with the latest numbers that we have as best as we can do it. We're gonna get, we hope, an update from the league on property tax delinquencies and are they seeing any up tick there. And then we have Senator Gulick's literacy programs over the BAA, what that money is going for. And maybe we will ask them if they have if they're ready, if they could talk to us about the school assessment or report card. I'm not sure what they're calling yet. I think it's just individual school assessment in general what they found. I don't know what to tell you on Friday. I'm gonna be watching the weather. I'm not I will cancel. I I will stay. I did that the day we got 34 inches because the league stayed, and it was league day.

[Senator Thomas Chittenden (Vice Chair)]: I thought we did a Zoom if you would let us

[Senator Ann Cummings (Chair)]: go home Sure. Yeah. I don't know that I will oh, I guess I can launch you. Yeah. But that means I have to stay. No. We will we've got two Zoom folks. We will just play it by ear. There's nothing the early college experience, it is the McClure Foundation, they're here for the day on Friday, so I will stay to hear from the students. Okay. I'll stay. But yeah. I mean to drive a little bit. If say not. Well yeah. Where the snow is starting and when, I don't know. But and what part of the state it's hitting, I don't know, but I will try get you out. We could all change between now

[Senator Ruth Hardy (Member)]: and Friday. It's it looks like it's hitting more in this so where I'm going It's not Oh.

[Kelly Murphy]: Middlebury's getting hit more than Montpelier apparently. So I probably don't stay. Yeah. There are a couple

[Senator Ann Cummings (Chair)]: that are get southern part of the state. Don't know how far north the line is going. So we'll play it by year. Yes. Thank you, madam chair. Are we going to do the s two twenty numbers with twenty twenty seven numbers? That's what we're yes. That's what we just asked to get laid out. Tomorrow? Whenever they get it to Okay. That's what his was about.

[Senator Thomas Chittenden (Vice Chair)]: That's something key that I wanna see.

[Senator Ann Cummings (Chair)]: Right. I know. Okay. So, like, next week or we don't know? It is on for Friday. Oh, for this Friday. Got it. For the possible vote. Oh, okay.

[Senator Ruth Hardy (Member)]: That will be booked. Wait. The s two twenty is on

[Kelly Murphy]: for Friday as a possible vote? Yeah.

[Senator Ann Cummings (Chair)]: It was on for last Friday for a possible vote.

[Kelly Murphy]: Well Yeah. There it is. If we're if we have a snowstorm and I have the Oh, yeah.

[Senator Ann Cummings (Chair)]: No. No. I appreciate it. I'm not I'm not doing a vote with people not here. If I were going to do that, I would have done it last week when everybody laughed for a press conference. I left four of us here. I don't play those games yet. I asked if anyone would like to make a motion to pass June 20. So far, we are an honorable committee. Okay. That's it for today.