Vermont Legislature SmartTranscripts:

[Sen. Ann Cummings (Chair)]: Mixed. We are continuing on H nine thirty three miscellaneous test. And we have testimony on section 21 through 23. Jason Batchelgers. Jason here on You're the here. On up.

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: Thank you.

[Sen. Ann Cummings (Chair)]: Fishing wild section.

[Sen. Scott Beck (Member)]: Mhmm. I'm

[Sen. Ann Cummings (Chair)]: looking from outside outside.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: No. I'm sure we have room

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: for general counsel as well. She's got a significant portion of

[Sen. Ann Cummings (Chair)]: that. I have hold you and

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: Hang on. Let know what? I'm make some electricity.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So I'm okay if I have a

[Sen. Randy Brock (Member)]: There's pretty much. So

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: good afternoon, everyone. Thanks so much for having us. My name is Jason Badshoulder. I'm official island commissioner. For those of you who don't know, I was also the EC commissioner for two years and then was mostly retired individual for that, and I was the chief of the warden service before that and the game wardens, regular game wardens. I've been with the agency a long time. I mentioned that because this is an effort, our area license, which is the sort of the the reason that we're here to talk about this this effort in September. It's been under underway for a long time, at least in in its idea form. And I just I just wanted to ask for maybe a show of hands as to who has heard the the area license proposal that we put out or who is aware of of what the ask is as far as our area license goes because it's important. Thank you, ma'am.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: But I if

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: you you know, I'm just gonna give you the

[Sen. Ruth Hardy (Member)]: He knows too.

[Sen. Scott Beck (Member)]: A quick

[Cody Keeler, Legislative Counsel (VT General Assembly)]: version. Yeah. Lightly a version. Okay.

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: So this this area license is essentially a license for for folks who don't already pay into our ability to have fishing access license or excuse me, fishing access areas. We have 205 fishing access areas around the state. They require kiosks and mowing and snow plowing and maintenance. It's expensive. Hunters, anglers, trappers, and motorboat users pay into a system. We get return from the federal government in the way of of financial aid. We keep these areas going, but we also allow these areas to be used by paddlers, stand up paddleboarders, kayakers, canoers, and we're we love to have them longer to sleep. No matter what you do,

[Sen. Ann Cummings (Chair)]: you go paddle out to an island and and have a picnic, 100% fine. Right?

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: But these places are are built for and built by anglers, hunters, trappers, motorboat, registration fingers. So our our ask is that this for paddlers to have a license to use these access areas, and thereby paying into this system that is getting more and more expensive. The Vermonters that we we see moving here aren't necessarily moving here to fish and hunt. Some are, but some many of them are are, but they're all wanna use the land. It's getting more expensive to manage this land. Our our budget, as you know, is to strengthen. And so looking to add funding to our base budget, which would be used in in some way to fund these access areas. It's it's a fairness piece. I don't see it as as a typically onerous ask. We'd be looking at something around less than the cost of a fishing license, which, by the way, would exempt you from this if you had a fishing license. Antihonic license, traffic license, motorboat registration would all exempt you. This would be for folks over 18 to be able to pay into the system. And so what could go wrong? Right? That's that's this was our ask, and we I I thought it thought it was wonderful. We were gracious to have the administration support to do this this year. And we have the authority through 10 BSA forty one thirty two to set these fees on our own life, our licenses on on our own life. And so this idea was not as wonderful to everyone as I thought it was, and and the House Ways and Means, I believed, is who started this bill, inserted language to repeal our ability to do that, and I'm almost ready to turn it over to general counsel. But we, looking at the language that they've introduced, would would suffer a lot of unintended consequences by way of this repeal than just this area license. And I think that's a good place for me to stop and

[Sen. Ann Cummings (Chair)]: try to Watch.

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: Oh, please please watch. Should love something.

[Sen. Ann Cummings (Chair)]: Dear, there's been some tension between the legislature and the administration fees and who has the authority to set fees. And I thought that the house had made two polls for this year and then said that the creation of a new fee should go through the legislature since the governor won't let anybody else raise the fees. I think it's the the tension that's going on. So you were not losing money this year. You are held in harmless.

[Sen. Ruth Hardy (Member)]: Correct. Yeah. Okay. Right.

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: That is correct. For the for the full amount that that come to fruition, we would need four to five years, and we are looking at upwards of of 250 to $290,000. I've said more in in testimony, so forgive me if you're listening for the third times. But I we're we're estimating that number at the moment. And and for clarification, this this law was passed by the general assembly in in 2004 and has been in existence for our for our ability to do this work for twenty years. And it and it and it is unfortunate to me that I'm I'm the commissioner of the day that's incurring this. I we we do not abuse this in in any way, and and and I completely understand that tension, madam chair. I completely get it, and I I wouldn't wanna leave any to give a fee. Yeah. Yeah. And and $50,000 the first year is a wonderful gesture, and and and it was made us whole even sooner than we both, right, for for one year. But we we feel that the the $250,000 in perpetuity is is at risk here by by having to come back with this ask year over year as there are no guarantees. Right? And and having the administration that we do, we we've looked at this ability to the charge of handler's fee, whether it be a sticker or a annual fee for a long, long, long time and would worry about future administrations not looking favorably on this ability for us to do this. That's just me. Okay. But I'd love to turn it over to Hannah.

[Sen. Ann Cummings (Chair)]: Someone who has put her kayak in, dear me, in more than one occasion. I wouldn't have a problem putting it in a series once it was waterproof and didn't fall off. I might I might try it.

[Christopher Rupe, Joint Fiscal Office]: Sure.

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: For the record, my name is Hannah Smith. I'm general counsel with Mission Wildlife. And I wanted to just take a step away from some of the policy discussion around the area license to look at what the bill language does in terms of administration of our current fee authority. Just from a purely administrative standpoint, the the department's perspective is this complicates things. If the objective is just to subject the department's ability to adopt an area license fee to legislative review, I think that can be done in a simpler way. What this does is it repeals the rule that we currently have that establishes camp tuition and rental fees for our Buck Lake And Keno facilities, as well as a there's a fee range for licenses and special use permits, which we use in a very limited way, which I can go into You more detail on

[Sen. Ann Cummings (Chair)]: said hunting and fishing license, right?

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: No, no. We don't. Oh, sorry. Yes. The legislature. Yeah. That's what I thought. Just moved it to that. Yeah. The legislature the fee authority that the department has exercised under 4,132 has been very limited. It's really administration of the buildings that we own Yeah.

[Sen. Ann Cummings (Chair)]: For the most part. And the state campground

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: fees. We don't do campground fees. That's up No, it's just It's just Keoh and Buck Lake are our two educational facilities. Okay. Camp tuition. Yeah. And then we issue licenses for utilities that put infrastructure on fish and wildlife owned lands. So it's like a long term use or construction access across fish and wildlife lands. And so the license is not we don't convey any property rights. It's simply an authorization for some sort of limited articulated activity that's also subject to conditions related to detection of threatened and endangered species, whatever the management objective is on the Department of And then there's a special use permit provision fee in this current rule that also allows us We issue special use permits for things like greeters that access areas. Again, very limited use of the special use permit. It allows us to authorize certain larger group activities that access areas that are not otherwise authorized under our rules. Let's just get into the fishing derby. This doesn't relate to the allowance for fishing. Good. It's a totally different permitting of the

[Sen. Ann Cummings (Chair)]: It's the destination locally. Been there, done this to the ocean. No, All about

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: these are not related to management of fishing game or hunting and angling. These are licenses purely These are fees just for use of a very limited subset of department facilities. So that's the way that our current, we have exercised our current authority, and that is what the rule does. And this bill language would repeal that rule and require us to adopt a new rule with the camp fees and different license fees for a limited subset of what we currently license. And then it would also require us to come back to the committees of jurisdiction next year with a report for any new fees related to the use of fish and wildlife lands. And I think, you know, setting up again, setting aside the area license, we would essentially be coming back to the legislature with the state in rental fees that we currently have in rule for our our our educational facilities. Like, that's what we use this rule for. So I think that we under we we understand the objective of having a full policy discussion around the adoption of an area license. But I as the person who does the rulemaking for the department, I just see this as being an administratively burdensome way of achieving that when we have not used the existing rule to do anything other than set limited fees for

[Sen. Ann Cummings (Chair)]: our facilities. Okay. So if this committee decided to keep the existing rule and then just say, you wanna do a new fee, come back to us next year, that would work better for you.

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: That would yes. That would certainly be from an administrative standpoint. And it would create far less, I think our business office and our education programs that administer the camp, the summer camps, are very concerned.

[Sen. Ann Cummings (Chair)]: People do reserve in advance. And so this would make it difficult for you to tell them what the fee would be.

[Sen. Ruth Hardy (Member)]: Thank you. But I'm looking on page 17 of the bill. Do you have it with you? I think that the language in a b and b two the language on page 17 does exactly what you just suggested. It says that they you can the commissioners can issue license, set the tuition for the Green Mountain Conservation Gants, and adopt by rule, peace, charge, court license, and tuition. Mhmm. So what what is it specifically that you don't think this does?

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: Well, specifically to that language, there is we currently also have the ability in the rule to issue special use permits, which are slightly different from licenses. But to to your point, this does preserve the important authority that we appreciate in order to be able to set camp tuition essentially based on the costs that we're incurring for managing the camps. Yep. What section 22 of the bill does, though, is it repeals that current rule. So then, yes, the bill maintains most of our authority, but then either repeals our rule and requires it to come back with a new rule that essentially establishes the safety.

[Sen. Ruth Hardy (Member)]: Okay, so it's specifically section 22 that you're concerned with. Section 21

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: retains the part of your For the most part, yes. I mean, I think, again, that special use provision has been really helpful in allowing us to authorize activities like bird watching at access areas where we don't somebody doesn't need a license. You know, they're doing the activity for

[Sen. Ann Cummings (Chair)]: a couple hours. But the public has been sending me emails about hiking, bird watching, and I wasn't clear as to where the entrance point was that you, yeah, that you charge a group of.

[Sen. Ruth Hardy (Member)]: Yeah. I mean, I think the the the term special use is really broad, and that's the that's the concern that people have about having commissioner retain special use. Yeah. You used it to create a new fee that hadn't been contemplated before. And so what what I heard you say and what I've heard you testify in the morning about is is you want you need the authority to set these the the camp fees for the the Green Mountain Conservation Camp, and these

[Cody Keeler, Legislative Counsel (VT General Assembly)]: are

[Sen. Ruth Hardy (Member)]: not campsite fees. These are for this Green Mountain Cancer Conservation Camp and the license and tuition. Mhmm. But so this retains that. I understand if the deleting the rule means you would have to publish a new rule, so that might be problematic. But I don't I don't understand what you're missing here.

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: Really just the special use permit authorization.

[Sen. Ruth Hardy (Member)]: But that's the thing that is causing the concern because you you you the commissioners use that authority to create a special use fee that the legislature isn't We haven't concerned about.

[Sen. Ann Cummings (Chair)]: We have not created any new fees. Well, you proposed one. Yeah. Yeah.

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: And I think that actually it was proposed to be a license fee. Currently in the rule, there's a a fee range of $50 to $10,000 for licenses and special use permits. That's all the language that's in there. Mhmm. And the special use permits, really have to use it in a very limited capacity. They're primarily group activities that somebody is like, determines. And the licenses are authorization to access Department of Lands. Yeah.

[Sen. Ann Cummings (Chair)]: I think that's the difference, especially you can probably use the $10,000 if they wanted to have a fish concert out on, like, something. That might be good. Yeah. I don't know. Give me the last one. But the fee to access an access area isn't a special use. It's a new license. It's a new creature. And I think what the legislature is saying is we know we every time you get a request to use something for a wedding reception, we can't be setting the rental fees, you know, or the damages fee or whatever. That you can do. You can manage your properties. But this is setting up a new license, like a fishing license, a hunting license. And I think that's where at least committee on ways and means seems to feel because this the governor also established a flood license plate, established a fee for said license plates, and appropriated the fees for such licensing plates, none of which are technically under his authority. That but it's very hard for people to just let you to push back. And you you know, I think that's made this kind of tense, and you unfortunately was personally free to come. But so we will work with counsel and see if we can make it clear that it is when you are setting up a new fee for a new activity that that's when you need to come to us. I think that would really

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: we are not trying to we're not advocating for some loophole for the legislature's review. I think that, you know, I had put together some potential language that could be added to the current forty one thirty two that would essentially prohibit new establishment of new recreational access fees. Just because I recognize that the current the way that the statute is currently written, yes, a license fee is civil person did. And it's not our intention to, you know, abuse that authority. It's really our intention to be able to, at this point, manage our facilities in a way that accounts for the maintenance and stewardship costs that we incur. Okay. If you could just email that to Charlotte and get it completed in our council.

[Sen. Ruth Hardy (Member)]: I would like we perform with Brady to weigh in on this. Okay. He's the draft no offense. Michael is the draft It's in the area that And we have authority to Michael Brady. I think that I I hear you that you're not trying to find a loophole, but you did find a loophole and tried to exercise it with this new license fee. And that's what we're trying to prevent, and I just wanna make sure that we're doing that.

[Sen. Ann Cummings (Chair)]: Let's hope we can get Michael before June. This tends to be very busy, but we will if you send that in, we'll get it down to council and let him come in and help us. Okay? Thank you. Alright. And soon else.

[Christopher Rupe, Joint Fiscal Office]: Something that covers it? Thank you.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Thank you. Thank you also.

[Sen. Ann Cummings (Chair)]: Alright. Same subject. We have Christy, Chris, Patrick. Do you all have a?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: What I would have would be a draft committee amendment with the items that I collected so far.

[Sen. Ann Cummings (Chair)]: Kev with us and not on the agenda, representatives from the city of Burlington. And I know we had testimony yesterday. We're trying to I like

[Sen. Scott Beck (Member)]: I like talking to her.

[Sen. Ann Cummings (Chair)]: Trying to fix Do you? I'd like to. We're fixing it.

[Sen. Scott Beck (Member)]: She shared the language. No.

[Sen. Randy Brock (Member)]: You've had two or no. There's

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: there's no difference.

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: But it's still one

[Sen. Ann Cummings (Chair)]: who goes out and tells Lou what is going on. Alexa, What's that? What? Oh, you have what? Has a wall. The city has language. The city has language. It depends on Okay. Nope. That is. Okay. Cara. Well, it's under Cara. Mhmm. And we have the Burlington base value. Okay. So we heard from Tanya Morehouse yesterday. There seems to be a concern. The auditor's office feels that they need to make sure that the end fund is being reimbursed as much as they should be. The concern I heard was that the towns. We changed it, I think, two or three years ago, so the towns only get to have to send 35% into 30% into the they retain 30%. The old rules were 25. But in the Burlington language, if I'm getting this correct, and David, I don't know if you wanna come up or you feel free to

[Sen. Scott Beck (Member)]: to

[Sen. Ann Cummings (Chair)]: talk over there or Tara?

[Christopher Rupe, Joint Fiscal Office]: This is at Ashley. Yeah. Tara's. There's a fact that

[Sen. Ann Cummings (Chair)]: he's not here. I didn't think that's who he is. No. No. I'm happy to. Whatever works, The way I started it is, what are the concerns is that when we did the TIF extension in '16, we did not change the underlying TIFF agreement, which says that that split 2575. Right now, it goes through 2025. When we did the extension, we didn't change that date, which means that, I guess, if someone wants to hire a lot of attorneys, what that split is is not clear in the law. And so if nothing else, it sounds like we should make legislative intent better. We opted two years ago, couple years ago, where 30% 35, that's pays into the upfront, that pays 135. But the floor is yours. You. I'll be if I've gotten all of that from yesterday correctly. Very close. Okay. Close.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: Point of record, I'm David White. I'm president of White Brook Real Estate Advisors, consultants in the city of Burlington on both of its TIF districts. I actually work

[Sen. Thomas Chittenden (Vice Chair)]: with many other communities in

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: the state on TIF as well. With me is Ashley Parker, who is the director of capital programs for the city of Burlington. That's kind of something like that. From the city's perspective, we believe that the current situation is crystal clear, as I described a couple of days ago in my Zoom testimony, that all that 2016 did was to say you could extend for the three properties only that encompass City Place the existing circumstances forward until 2035. We think that's clear. The auditor's office thinks it's unclear, and we're not in the mood of wanting to fight with anybody about this, to be perfectly clear about that.

[Sen. Ann Cummings (Chair)]: You cut it out in 'sixteen when we did things.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: Yes, that's right. You know, the simplest thing you can do, frankly, there's it would be I heard Tanya Morehouse yesterday in her testimony, which I did listen to last night and way too late after after dinner. I was tired. But, anyway, I heard her say, look. The the underlying thing here is that the legislation failed to be explicit that the 25% payment would also extend from 2025 to '35. I think the legislation as written in 2016 that says you're simply extending implies that, that the city's been acting that way and actually paying those payments subsequently. The simplest thing for you to do if you wanted to accommodate that would be to simply say, Fine, we will explicitly say that that 25% payment for those funds from 2010 forward would get extended to 2030. That's really something. That said, will be saying a couple of things. First is that we agree with her. She made also the statement that the garage that was, she talked about the $847,602 value. There was this garage that was actually owned by the city, because it owned it, treated as nontaxable, but that they claimed should have been taxable right from the get go in 1996. The city agreed in 2023 that it wouldn't fight that. Originally, opposed it, and I'm I'm not here to argue one way or another, but the city did agree in 2023 to make that adjustment. She said that as of 2025, it hadn't been done. In fact, it has been done. We have a copy here of the updated certification that's signed by Jessica Hartleben from VEPSI and by PVR and the city that includes that update. It has been done. We agree with her, and the email that Cara Altsuari, the SITO director, sent earlier today shows the impact of that, which is to add that $8.47, but that's already been done. Doesn't have to be done. It's been done. We agree with her. The second thing is that she said that it would be similar to administer if we only had one original taxable value, whereas right now we have two. We've got a 1996 original taxable value and a twenty ten, she's right. It would be simpler to administer. Now the problems we had, and the city did have problems with this earlier on, but we have new staff, and they're doing a much better job. I think those problems are gone. I think PVR has figured it out, and I think it's all working smoothly today. I don't think it needs to be changed, but we agree it's easier, and so if you wanted to, the city would not oppose saying, Fine. We're gonna instead of having a split, because, again, to reiterate what I said a couple of days ago, right now, any increment and it's only a couple million dollars. It's not a huge amount of increment. I know that for some communities, that's huge. For Burlington, it's not. The incremental increase in value from 1996 to 2010 was only a couple of million dollars, and that one on

[Sen. Ann Cummings (Chair)]: the was current a really prosperous topic.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: Yeah. Under that period of time, according to current statute, as we understand it, the city is able to retain 100% of the education increment created during that period, thereafter 75%. If you wanted to, I believe I said this a couple of days ago, we're still there, say, Let's get rid of this split. Instead of 100% for that, give 75% for later, let's just go 75% the whole way. We're fine with that. It's only, as I think I said the other day, roughly an average of $17,000 per year over the next, between now and 2035. It's just immaterial either way, moderately easier, a little bit more complicated in the legislation to have that, but sure, we can do that. It's not going to have material impact broadly. It's slightly better for the education fund, but not material impact on the TIF fund. We're fine with that. As for the percentage, under just to correct one thing, under current statute, if you set up a new TIF district, municipality has to send 30% of the education tax to the education fund, but at the time that the Burlington District was extended, it was only 25%, and it would be a material change to reduce that, excuse me, to increase that from 25 to 30. We would request that if you're going to make changes, that you leave it at where it is today under current statute, which is the city only sends 25%, not 30%. Change it for everyone else? It was only changed for any new going forward. Everybody else was grandfathered.

[Sen. Ann Cummings (Chair)]: You don't renegotiate. No. Yeah.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: And that's where that's where we are. That's why, the 100% existed. It was grandfathered because that happened prior to the statewide education tax. But at the time the city extended it, it was new circumstance, and so that's when the new rule applied, and the 25%, and we think the same thing for tax today, to require the city to increase its payment from 25% to 30%, that would be a material impact. That would be very hard on the TIF fund and would, I think, put it in jeopardy.

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

[Sen. Scott Beck (Member)]: For Ted,

[Sen. Ann Cummings (Chair)]: Okay. Can I release David? Find us for a comfortable spot.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: I'm comfortable right here,

[Cody Keeler, Legislative Counsel (VT General Assembly)]: mister Ted.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: You like to trade places?

[Sen. Ann Cummings (Chair)]: Yes, David, we're trying to get a knee replacement.

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: That's fair. I'm happy to be in the sidelines, Deborah, at Joint Fiscal Office. Happy if there's a specific question or just talk more generally about the situation here, what would be most helpful for the committee?

[Sen. Ann Cummings (Chair)]: I think we've got two suggestions. One is we can take the they've got two base amounts now. We could combine them, which would make about $17,000 a year, might cost them that much to do the paperwork. And we could make it clear that extending that 25% payment into the end fund goes right now, it ends at 25 because no one thought to extend it. You know, it was missed when we did the extension of the tip. So if we extended just that day, it would take the ambiguity out as to what the payment is. Okay. The I may have made mistakes, but I think that's what's happening.

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: So all this to say, and I am going to channel John Gray to a small extent,

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: but I'm not a lawyer.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I don't wanna divine anything.

[Sen. Ann Cummings (Chair)]: Neither are we.

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: So Exactly. So generally speaking, I agree with David White that there is clarity

[Cody Keeler, Legislative Counsel (VT General Assembly)]: amongst folks who

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: are administering this, that even though it isn't the most straightforward, right, the 100% of increment from 1996 to 2010, and then the 75% from 2010 into the future, and the use of OTB in 1996 and 2010. It's not the most elegant solution, but it is certainly working and it is certainly being administered in that way. I think if the committee wanted to enshrine current practice going forward, I think some intent language to specify those retention percentages. I think any change to either if they can get consistent to use one OTB and one percentage percentages would be, although small, change again. You're changing the administration again, so you may be trying to simplify it one way, but then adding even another change to something that's been changed a whole heap of times. So I think that's a consideration for y'all, but if you wanted to

[Sen. Ann Cummings (Chair)]: Okay. I got the two people from I've got the rest of the committee. So I'm gonna start doing straw polls. And then, Cody, are you the one or John? Who would draft this one? John. John. John. Okay. And John is tied to a chair on the floor. John has already drafted some things, Okay. I think,

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I haven't received anything from John, though.

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: There is John did put together a whole series of findings and intent laying around the municipal increment retention piece. You could be got it. I don't wanna speak to

[Cody Keeler, Legislative Counsel (VT General Assembly)]: the drafting lift, but I imagine you could start there and

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: add a piece about it.

[Sen. Ruth Hardy (Member)]: Yeah. It

[Sen. Ann Cummings (Chair)]: was only for municipal. Was the Okay. Yes. No. I'm working on Let's see if he sent it over yesterday.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Between Ted and I, we can connect with John to to get that language. I'm just saying I don't have it at the moment.

[Sen. Ann Cummings (Chair)]: I don't have something from John.

[Sen. Ruth Hardy (Member)]: Maybe I dreamt it.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: If I may, I've seen a draft that I believe I agree simply addresses confirming the municipal the right the city to retain a 100% of municipal income. It does not address the issue of extent of the education tax. In fact, its cover note explicitly says that he did not understand that was in question, but it is in question. And so I do think that draft would need to be if you if you choose to do anything more than simply say, look. Let's explicitly say this all the existing extents to 2035, then I think that that draft would need to have language expanded.

[Sen. Ann Cummings (Chair)]: That's probably the most important issue. Yeah.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: May I add one other thing, which is not critical, but for every other district, any state that I can think of, there may be an exception, Vepsie has the authority under existing statute and rule to adjust the percentages that are retained downward if there's additional if there's excess increment. And because this, the Waterfront District, it's explicitly stated in statute, VEPSI doesn't give percentages. VEPSI doesn't have a wording.

[Sen. Ann Cummings (Chair)]: But see, you were before Pepsi or before the statewide tip.

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: Exactly. And so one thing you could choose to do, this is optional, it's not critical, but you could choose to explicitly, if you're gonna do something more than extended 23 to five, you're going do the self stuff. Just add a phrase that says, going forward, me, Pepsi has the authority to make a decision to lower those percentages of education and municipal tax retention if it's found that there is sufficient excess revenue. Because it does nobody any good, the education fund or the municipality, to simply retain more revenue than is needed in the TIFF fund until 2035 when it gets dispersed. I expect all the projections I've done, including what I testified on a couple of days ago where I said current projections say that I anticipate about $4,000,000 surplus at the end. That assumes phase two doesn't happen at all. That's the piece that still fronts on Church Street. And I've done that because I'm a conservative analyst, and I don't want to make assumptions about something I really know the details about at this point. But the reality is I expect it will be built sometime in the next few years, and that's going to generate revenue we don't need. It's not needed for the district. I think it would be less cumbersome to allow the city to go back to that city to ask, look, here are projections. We have this excess revenue and the benefit of both the city and the Ed Fund. We requested And to reduce these right now they don't have that authority for this district, do for every other.

[Sen. Ann Cummings (Chair)]: So committee. Yes. We agree with that.

[Sen. Ruth Hardy (Member)]: That sounds good. I think that's great.

[Sen. Ann Cummings (Chair)]: Alright. I'm looking I I need some dots in the far the vehicle or informal. Alright. It's something we can do. Now we need to get it drafted. So we will make it clear that the payment stays at '25 through 2035, and then that if you are retaining excess amounts and you're sitting on money, that you will pay it in. I assume it's a long Perfect. Alright. We need

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: It may not be excuse me, if I may. It may not be a a lump. It may be just simply going back and saying, you know, from this year forward, we will reduce the percentages

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Okay. That

[Sen. Ann Cummings (Chair)]: they can adjust. But

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: but we can go back to the vet saying and that out.

[Sen. Ann Cummings (Chair)]: Alright. So if we can agree to that, we will. Client Kirby, do you have another information to send request to John?

[David White, Consultant to City of Burlington (White + Burke Real Estate Advisors)]: I think Ted has something else to add.

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: One question I would have for the committee is at which point you would want that check-in on the education increment retention percentage to happen. In current statute, it's after ten years, I think, where they're supposed to adjust that percentage. So from 2025 to 2035, if you kinda hit the midpoint, could be a place to check-in. I just as as a explicit place to do that check-in as opposed to letting it

[Sen. Ann Cummings (Chair)]: Sit till the end. Yeah.

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: Yeah. Leaving it till the end. Alright. I That would be one piece. Can I chime in?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So Kirby Gulick, so the council as far as I know, I have not received from John Gray

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Any official version. He will have to review this further information and consult with Ted to make any change. John is also on the house floor

[Sen. Ann Cummings (Chair)]: Yes. We know that.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: For the education bill. I'm I'm missing that right now and just hoping they don't have questions about my parts.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So this is all to say, like, I wouldn't be comfortable adding anything without John.

[Sen. Ann Cummings (Chair)]: No. No. I would don't want you. I just want to if someone could send John an email.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: And I'm but I'm not sure the time at which that would be done.

[Sen. Ann Cummings (Chair)]: Okay. Oh, no. I don't I don't think we're gonna get it this afternoon. I would like it by tomorrow afternoon so we can between the two of you, can you just let John know what we need? Yeah. I hope that is agreeable. There is just so you have draft language from John on our

[Sen. Ruth Hardy (Member)]: posted on our website on Tuesday afternoon. On Tuesday. And I think it's just it's a bunch of findings.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Yeah.

[Sen. Ruth Hardy (Member)]: And I think it it's probably just for the municipal part.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So my understanding is that there's been a further request right now to adjust that language.

[Sen. Ruth Hardy (Member)]: Yeah. Yeah. Just so you know that that language is there.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Yeah. Yeah. I'm aware of it. I'm just saying that John has not told me this is good to go, so that's why I wouldn't

[Sen. Ruth Hardy (Member)]: Yeah. Well, it sounds like we have more changes to it anyway. Okay.

[Sen. Scott Beck (Member)]: Thank you for the final decision.

[Sen. Ann Cummings (Chair)]: No problem. Okay. I think we've got a resolution that might not make the auditor completely happy, but if that's possible, then this will make him a little more comfortable, think. At least has a clear path forward. But not with phase three.

[Sen. Randy Brock (Member)]: Thank you so much. I really appreciate your time.

[Sen. Ann Cummings (Chair)]: Okay. Kirby's you have some language from yesterday.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I I have technical changes mostly from the tech department, but also some electrical things to point out. I call them technical because it's very much drafting

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: related, but there's policy implications of the motion.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So it's just something that we need to go through at some point. And, also, it might give you an idea of where this committee's amendment stands now so you know what's in there and what's not at the moment.

[Sen. Ann Cummings (Chair)]: Okay. That would be Okay. A big caliber. And to say, maybe I did. It depends on your request. I meet with Jill from the tax department property valuation yesterday and convey our request that they sent a clarifying letter that at least to broadcasters, they, you know, they don't have anything that's in the law, and it's towers seems to be what's attached to the towers or maybe, but towers it's it's real property. It's not typewriters. That they would make that clear and that they would make it clear to everyone what they were obliged to report. Apparently, this is being done by a contractor who can be a little rough, but who has been upheld, I believe, in both New Hampshire and Massachusetts, so we are But What? This there's a contractor, I guess, doing this inventory and stuff for the tax.

[Sen. Ruth Hardy (Member)]: What do you mean can be a a little rough?

[Sen. Ann Cummings (Chair)]: Well, they they that technically, I think Massachusetts and other states are doing similar things, and there's been appeals by the industry. Yeah.

[Sen. Ruth Hardy (Member)]: But is the contractor doing something wrong? No. Okay. That's what it's found.

[Sen. Ann Cummings (Chair)]: I think it's just the tone of the letters that so Well We're going to watch it. I don't wanna put anything in law at this point because it's in law of what is taxable. And we will have to watch it, and I think the industry will let us know if it's a continued problem. But it is clear that the broadcast number was not ever It has been with the telecom, and that So we're not gonna do anything to the bill? Not at this point. It's kinda late that I know of. Somebody has some suggestions. We can look at them. Alright. So, Kirby, you're next. Oh, yeah.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Good afternoon, everyone. Kirby Key, legislative counsel. I'm just from the Zoom. Apologize for not being more prepared. I'll give you a summary of what I have so far and plan to show you language for. There's the items that the department covered yesterday. Committee has to be included. That's three parts. There are four or five changes within the federal decoupling language that are technical in nature, but I wanna make sure you understand everything that's going on there. One of them, as I mentioned, that the language we had did not quite match the intention from a form in the house, so we'll have clean that up. And then there's one grand list, or one effective date change relating to the communication property issue. That's the only thing I have on that so far that this I've received a request to be included. So the definitional changes for the statute on communications property valuation, I do not have language for it at the moment. There's been language bouncing around. We can get an update on that. I think the chairman just mentioned this, but just just wanna reiterate that I did I was able to connect to Maria Royal, who was the original

[Sen. Ann Cummings (Chair)]: drafter who worked on that bill. She did send us the

[Cody Keeler, Legislative Counsel (VT General Assembly)]: regional language. She provided a some clarifying language that basically just restates the plain language, that yes, two way communication is different than one too many communication, and that's pretty much what her language says. All the other proposals or language that were thrown around, she has said that there's problems with those things that could create further problems and had advised not to do anything like that at this point. So that's the update I have on that.

[Sen. Ann Cummings (Chair)]: Could we reference in here, it says on or before March 31, each communication service provider shall submit to the division as warning Victoria, all taxable communication property and in reference the statute where it lists or lists? Because it's not a long list of what they need.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: As it's written, that statute, from my understanding, was open ended on purpose.

[Sen. Randy Brock (Member)]: That there could be So It's not meant to be an

[Cody Keeler, Legislative Counsel (VT General Assembly)]: exhaustive list, and it wasn't meant to be an exhaustive list. My understanding of the issue is confusion between the Department of Taxes sending out letters that asked for an inventory if that entity has any of the dashboard properties to report it and a difference of interpretation between does this letter mean we must do an exhaustive inventory and provide that for a bunch of property that's not meant to be valued in the statute? Or is it okay to just reply that we don't have this property? And I heard tax testify that they would accept Yep. A return inventory that states simply we don't have any. And and and that's what I heard, and that's what I

[Sen. Ann Cummings (Chair)]: thought I think the confusion is that when you see telecommunications property, the tax department needs to send them what that is because they have been doing an inventory of all their equipment, and we may need at least least initially to tighten up that open endedness so that we can start out by finding out what we have that we know we wanna know about. And then if it looks like there might be something else out there, we can send it in.

[Sen. Thomas Chittenden (Vice Chair)]: Well, there's two things going on here, and I just wanna I just wanna draw a box around on them. So there's one which you're just speaking to, which is I received the same documentation from Maria Royale about how the period was added and how that's not an an exclusive or an exhaustive risk. That Maria Royale provided a side by side that really intentionally articulated that that was was the intent of the legislature. So the Scott Mackie thing, I don't I don't support making any changes right now.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I think they're working through that. That's part of

[Sen. Thomas Chittenden (Vice Chair)]: the intent. The the other piece is the broadcasters, and that's that's where we did receive this language from Maria Royale that it's not what the broadcasters asked for, but she thinks that it threads a better needle that I I don't know if Joe Remick saw this, but if if we would be willing to look at it, I I do like it. It's just adding one sentence that to the law, which says the term does not include property constructed or installed as part of a radio or television, one to many broadcasts that's conserving the general public and owned by operated by a licensed broadcaster. I I I sensed from Maria Royals that that would be less problematic for what the tax department is doing. I didn't speak to Joe Roy so I don't know. I just don't wanna get the two issues. They're conflated. I agree with Joe Remick on the the exhaustiveness and how that list was not exhaustive. But the other piece, which is not on the screen No. About fraud pastors, it seems like there might be something worth considering. Madam Chair

[Christopher Rupe, Joint Fiscal Office]: If you That's

[Cody Keeler, Legislative Counsel (VT General Assembly)]: what I was trying to say earlier, but, you know, we do have some language from Maria that she thought is workable for the issue that senator Chittenden just mentioned. It's not included in in your draft, but that's as far as I know, the language out there that Marie was comfortable with is that I just and I can I can share that? We can switch documents.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Further, I just wanted to I wanted to show you real quick.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: What we do have in the Senate Finance Amendment, now, is an extension of the effective date for the penalty provisions, which is that's why we're going to this in the first place because miscellaneous tax

[Sen. Ann Cummings (Chair)]: Everybody went into

[Cody Keeler, Legislative Counsel (VT General Assembly)]: What was thought of as a housekeeping change to to include some penalty provisions that were left out in the first place. So so that's what I do have now is that at least the penalties were are kicked out a year from what they would have been, and then we put them

[Sen. Ruth Hardy (Member)]: Is this amendment your amendment on our website? Did you send it? I

[Sen. Randy Brock (Member)]: get it.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: It's it's not because It's in red. It was being worked on as I was walking up here, basically. I mean but Okay. So it's it it's this the check-in that's in a space. I mean, I of course, I I will share it, and I I I will share it as we or after we go over it.

[Sen. Ann Cummings (Chair)]: Does anyone object to kicking this penalty out a year since? No. I don't. So that one's okay. And and I

[Cody Keeler, Legislative Counsel (VT General Assembly)]: think specified yesterday, but that was acceptable.

[Sen. Ann Cummings (Chair)]: We've got I think yes. We were making major changes when we did this bill. Mhmm. We were going from personal or business property to real property, and I can understand why we left it open, but it also seems to be causing some confusion because we say, you know, it's poles, wires, towers, etcetera, or anything else. That, I think, is what's making people yeah. It's just compounding the problem. And it for it's probably costing more in angst than would actually make in money if we pick stuff up. I couldn't be wrong.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Would you like me to share Maria's language right now? And and since we're talking about it, go ahead and tackle that. With that.

[Sen. Thomas Chittenden (Vice Chair)]: Biggest miscellaneous tax bill I

[Sen. Scott Beck (Member)]: think I've ever worked on. The other ones are smaller.

[Sen. Ann Cummings (Chair)]: Oh, you ain't seen nothing.

[Sen. Scott Beck (Member)]: We're only we got three more weeks.

[Sen. Ann Cummings (Chair)]: Okay. I think we have to pass it off. We have three more weeks.

[Sen. Scott Beck (Member)]: Well, this is.

[Sen. Ann Cummings (Chair)]: When Vince and I were here, this could be the most well decorated fill. And we are going to lose it because we're not gonna have a vehicle unless the house sent they're working on a wealth tax. I don't know what their what what would probably send them a couple bills that say tax.

[Sen. Thomas Chittenden (Vice Chair)]: This is the way I'm checking. So

[Cody Keeler, Legislative Counsel (VT General Assembly)]: this is a provision that Maria that says, if this could be included, if it's helpful to clarify things, it will not substantially affect the rest of the statute or implementation of this. May I ask a quick question?

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

[Sen. Thomas Chittenden (Vice Chair)]: Have you heard from Joe Remick on this?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Over his language? I don't

[Christopher Rupe, Joint Fiscal Office]: I don't think so. Okay.

[Sen. Ann Cummings (Chair)]: We should send this over. This is legalese, I guess, but should make the broadcasters feel better.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So my my reading of this is it's it's a clarifying statement that is is stating what's already there.

[Sen. Ann Cummings (Chair)]: Yeah. The other one is, though, how much inventory are we expecting the telecom? I mean, how far down the list? Are we asking for how many typewriters and No. It's listed. It's listed, but the I think Maria said it was left open and says or anything else.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: The reason it's not exhaustive is that new techno New technologies emerge, and so having the ability to

[Sen. Ann Cummings (Chair)]: And the typewriter is not new technology, madam chair. True. But it doesn't say new technology, and that seems to be

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I think we should say

[Sen. Ann Cummings (Chair)]: what's causing the problem.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Objects. As in but but when we talk about real property, that's typewriters aren't bad either. So John Christ Kirby. Well, see,

[Sen. Ann Cummings (Chair)]: we were changing, though. We're defining these things as real property. That was the big change in this bill. They're going to be done under the property tax, and the real goal was it put money into the Ed Fund. The money didn't go to the general fund, which the personal and business property tax did. This made it real property, and I think it was $14,000,000. We I don't know. We raised money. This was an Ed fund, a way to get money into the Ed fund. And, yes, there may be things out there. I'm but So this initial go around, if it's causing so much angst, maybe we could close it for this year, then say in future years, any additional, however you refine it, telecommunications, real equipment will be. Because Jill said it's getting very complicated at the local level. It's you got a tower. What do you do with the land under the tower? Is that different than the land abutting that and

[Sen. Thomas Chittenden (Vice Chair)]: so I support that language Yeah. The broadcasting thing because I think that matches what I heard the tax department say. They are understanding what the intent is and how we've always treated these things separately, and that's how section two forty eight treats broadcasting different than telecom. The other piece that you're raising, I'm not opposed. It just seems like it's

[Cody Keeler, Legislative Counsel (VT General Assembly)]: a can of it could be

[Sen. Thomas Chittenden (Vice Chair)]: a can of worms that the tax department was less supportive of because they're they want it to be not exhaustive of a list because they don't know what's out there. So they're using this process to work through and identify what they think is happy to go down that path. I just don't worry about the deadline for tomorrow to to button that off because it seemed like there was the most opposition from Jill.

[Sen. Ann Cummings (Chair)]: Get Jill.

[Sen. Thomas Chittenden (Vice Chair)]: That's right. I support the broadcasting This afternoon.

[Sen. Ann Cummings (Chair)]: Clarity she's alone.

[Sen. Thomas Chittenden (Vice Chair)]: But the

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: other one, you've got So

[Cody Keeler, Legislative Counsel (VT General Assembly)]: am I hearing that I should add the provisions

[Sen. Ann Cummings (Chair)]: after anyone is sharing Is your broadcasters? Yes. There's no.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Okay.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So so that

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I do have some long lived explanations of some complicated federal income tax stuff. So just so you know. Awesome. Alright. Yes. There we go. I like, there is some time to to read that.

[Sen. Ann Cummings (Chair)]: Coupling, decoupling sections. Okay. They're all long.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I wanna make sure you're aware of like, maybe I'm the only one to swear that we're in for a treat right now. Communication stuff is simple on

[Sen. Ann Cummings (Chair)]: Remind everyone you're not supposed to be on your cell phones reading your emails during the week. Exciting.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So so with that, I'm gonna I'm gonna repeat the other anyways that we have. So okay. So there's a new section four a here that goes towards the the management reports issue that tax brought up yesterday.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Currently, it's still just statutes interpreted by them to require all owners to sign. We have language here that would work on only one owner or a force are working on behalf of one of the owners to sign those. So that's what I

[Sen. Ann Cummings (Chair)]: Results to get effect.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: That would be effective immediately.

[Sen. Ann Cummings (Chair)]: And you have had multiple property owners sign off on a sale.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So moving on, four b is added. This is also responsive to taxes testimony yesterday. This relates specifically to those objections to appeal that third parties can can make sometimes to extend the time frame for that to thirty days and to base it off of receipt of the appeal by the director as opposed to the more formal court rules that are currently on.

[Sen. Ann Cummings (Chair)]: Okay. Great. We did get a long yeah, long list email. I'm trying to find it from the tax department. Somebody asked what happens. How many days? And we got a long answer.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Now it

[Sen. Ann Cummings (Chair)]: wasn't this week. It was Wednesday. Was that today from Abby Shepherd, the objection It deal. Yeah. I it popped up on mine as somebody other than Abby, but then I think it came from Abby. Could they object about No. They this was remember, we were asked about what happens if when do you mail it? Do you take twenty days to mail it?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Oh.

[Sen. Ann Cummings (Chair)]: And it gets there. And so there is a long email. I'm still not finding it. I think I've it. 933, objection to appeal. And this came to all of us. Okay. So you do have that answer. I came in my cell at 09:30. Oh, gotcha. At 09:30. And, Charlie, you just sent it out to us. Right? I sent it to you. Oh, you sent it to me. Okay. It is on in your legislative email this morning. It's also a message. Charlotte is on. One. Just send it to you there. Whatever. It's okay.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I'm gonna have to Just do you I can I can give you more space? So you can help be you I'll be you.

[Sen. Ann Cummings (Chair)]: Yeah. And this basically extends the time and gives more of a date certain so that people know it gives a date certain and notification so that people know how long they have to be on. Right. They're all still pretty much housekeeping.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Section 4C is related to one of the things from yesterday also. What this does by itself is it repeals the change in activity relating to the grand list content contents when it comes to the continuous parcels mapping part. Yes. This repeal is also in the un reform bill that's part of the changes, I think, relating to RAS I think RAS classifications.

[Christopher Rupe, Joint Fiscal Office]: Yeah. So so we're

[Cody Keeler, Legislative Counsel (VT General Assembly)]: gonna have two repeals at both of these.

[Sen. Ruth Hardy (Member)]: Might not be in there anymore.

[Christopher Rupe, Joint Fiscal Office]: I know. Yeah.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: And that's part of why It's So we'll put it here. We'll put it here too, because the point is it was never a central part of oximity three there. It was a kind of thrown in adjustment. So we're appealing it here, and that's part of the tax that asked just like, there's other another part of this bill, section 20, I think it is Yes. That that makes that contiguous parcel change It it

[Sen. Ann Cummings (Chair)]: makes it clear that they're treated one way for taxing Mhmm. But they are treated as separate parcels when it comes to mapping. And this extends it beyond two. Right? I think what's in here

[Cody Keeler, Legislative Counsel (VT General Assembly)]: is The the change that the amendment's making effectively is to kick that out a year or two, I believe, '28.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: And so, originally, it was going to start next year, and I said they're not ready to start next year yesterday. So the the subset change here is to move that to 2028.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Yeah. Alright. And now I'm.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: number of changes here that relates to the change for domestic research and experimental procedures. If you remember, we've already walked through what the house did with that.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: There was a scenario the department pointed out that's very technical that we're trying to address here. So did you have any chance to understand me? I'm gonna have to walk through the process here. First, we're gonna start with the federal law change. The change was that, under Tax Cuts and Jobs Act

[Sen. Ann Cummings (Chair)]: Of 2017.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: When it comes to this one deduction for domestic research and experimental procedures, it was changed from allowing businesses to taxpayers to expense those expenses in one year was the treatment under was the treatment before Tax Cuts and Jobs. Okay. Tax Cuts and Jobs changed it so that actually you needed to amortize that over five years. You can't You can't get the full benefit of the deduction in the first year, gotta be spread over five. Then HR one came along and said, actually, we're gonna go back and we're gonna say you can fully expense those. And if you're a small business that is with gross receipts under 31,000,000, we'll let you catch up. You won't have to amortize like you've had since 2022. We're gonna let you catch up and expense all of those, the ones that you have been amortizing, we're gonna let you expense all that in the next tax year. So for the Vermont change, when Vermont went to decouple under that house version of this, a lot of work was done on this, and where they landed was, you know, for the small businesses, 31,000,000 of of gross receipts, we'll allow you to do the federal treatment. You can fully expense the birth year if you're in those types of businesses. But if you're larger than that, we're gonna say, we're gonna use the pre HR one treatment. You've gotta amortize those over five years. What we did not address we addressed a lot of things because there's a lot of scenarios that can happen. But what we did not expressly address and the tax was worried about if they had the language there to to handle it themselves was if you're a business that what we did address was if you were a business that that could catch up, if you're one of those small businesses that allowed you to fully expense, we addressed that scenario, but we didn't address what about the ones who chose not to? What about the small businesses that wanted to amortize over five years and keep doing it, not take the catch up option under HR1?

[Sen. Randy Brock (Member)]: So when we erode

[Cody Keeler, Legislative Counsel (VT General Assembly)]: our solution and the decoupling, we didn't take that scenario into account. So there's a reading of things if we don't make if we don't change the language a small business is chose not to catch up on the federal level, so they're still amortizing over five years, but we allow them to catch up in Vermont and there's a scenario and argument that they could double dip, that they could, in the next tax year, would expense all of the last five years' worth and they keep on doing it at the federal level amortized, which would flow through to Vermont, and they'd end up getting kind of double. Good. So that was the scenario where tax went well,

[Christopher Rupe, Joint Fiscal Office]: and the more we looked at this, more we

[Cody Keeler, Legislative Counsel (VT General Assembly)]: realized that's a possibility, so let's fix it. And so that is basically what a lot of what we're gonna be looking at is doing, is preventing the double dipping. Okay. So there's a reference, for instance, here to this reference is to HR one. It's the public law citation for HR one referencing a subdivision within that f two, which is the option to catch up for small businesses for what they're currently advertising. That's where the option lives. That's why there's that why we haven't included that citation. This is like the federal version of section law. So we're having to reference that to account for it. We do that in both of those places. This is where we're saying you have to add it back in, but then below where we're saying what you can take back out, we're we're allowing Vermont deduction. Language is being added to account for what the Vermont deduction allows, And so I think that this might be the most legally subdivision all of Vermont law. But it accounts for all the scenarios that I was just talking about. So in total, I don't know if you want me to read it, but for a taxpayer that qualifies medical taxpayer, you want me to? As defined under subdivision, I find the Subdivision 18 A, and it has domestic research and experimental procedures as defined under 26 USC. No. Yeah. I don't I don't think you want him to pass out. I tried reading this for Rick yesterday.

[Sen. Ann Cummings (Chair)]: If anyone's not scribbled out, we must sanitary. Okay. Kirby Mhmm. Prior to twenty sixteen, seventeen Tax Cuts and Jobs Act, small businesses based off $31,000,000 in proceeds could deduct this is the domestic research and development.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Experimental. Those weren't Experimental. Yeah. Can think of this. So deduction for R and D Yeah. And then there's a tax

[Sen. Ann Cummings (Chair)]: credit for R and D. Okay. They could amortize that expense all all at once?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Correct.

[Sen. Ann Cummings (Chair)]: Yes. Okay. Tax Cut and Jobs Act said

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Mhmm.

[Sen. Ann Cummings (Chair)]: That you could amortize it over You had to. To You amortize. So any r and d expense was being amortized over five

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Five years. Basically, it comes down to between 2022 and 2024 is a period where there was where all these businesses were advertising. Right. And HR one lets them fully expense for those the small ones, I hope.

[Sen. Ann Cummings (Chair)]: So the question is if I incur my expense in 2023 or '4 because if I did it in '20, I've advertised it by '25. But expenses that happened after that, I still have something to advertise. Then said, from now on, you can do it all at once, but you've got this group of a couple years that are in different stages of amortizing that expense.

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: Mhmm.

[Sen. Ann Cummings (Chair)]: And the catch up allowed them to amortize it?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: To to go at whatever's left that they haven't gotten the deduction for, to go ahead and take it all at once. They could. It was optional.

[Sen. Ann Cummings (Chair)]: Or they could continue to add, oh, this is making it even more difficult.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: And what the department learned when as we were working on this was all of us had assumed that if you could catch up and get that deduction now, you would. But for some, it wasn't worth going back and amending the return, hiring an accountant. It just wasn't enough money to be worth it.

[Sen. Ann Cummings (Chair)]: So our small business

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So what I was told from taxes that they think about half the businesses will not do the catch up. And so it's a so it's a pretty large So

[Sen. Ann Cummings (Chair)]: at least for five years, there's going to be some businesses at the federal level doing the amortization.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: And they're gonna be taking that option in Vermont.

[Sen. Ann Cummings (Chair)]: In Vermont too. Now this bill says okay. And this stops double dipping.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: This this stops the double dipping, and it also it also partially clarifies exactly how it would work like I described it, because without addressing it, there was there could have been some confusion about, you know, what do you want us to do, Vermont, or we or for my particular business, what bucket do I fall into? Am I empathizing here? What am I doing? And so we've we've now laid out all the scenarios for the catch ups and going forward and for businesses that are small one year and big the next. We think we've gotten all this legalese to cover the scenarios.

[Sen. Ann Cummings (Chair)]: Okay. And I think on this one, we're gonna have to take some more of our time.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Me too. And find

[Sen. Ann Cummings (Chair)]: out the shepherd. Right? Okay.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Abby and and all the All those.

[Sen. Ann Cummings (Chair)]: Alright. They haven't steered us wrong yet. Okay. So then we have another section in which because this is all R and D at the federal level. We then have a section this is in the section on how we're gonna treat R and D expenses in Vermont to Mhmm. Vermont based businesses, or is no.

[Sen. Scott Beck (Member)]: Corporate

[Cody Keeler, Legislative Counsel (VT General Assembly)]: income taxpayers in Vermont. And remember, that actually has nothing to do with being

[Sen. Ann Cummings (Chair)]: Vermont based. No. It does not. Okay. So we dealt with them. Now we go back and we change percentages of what you could deduct in Vermont.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: At the end of the day, the policy change around this is we we've coupled for for the small businesses, the 31,000,000 or less in gross receipts, we've coupled with the feds.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: For larger ones, they made the house made the call to not to not eat that as the price of revenue goes in the short term and to require the h r the pre h r one treatment that you have to amortize it over five years.

[Sen. Ann Cummings (Chair)]: Okay. Because if they did it all in one year, it would be a it could be a major financial hit to the state.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: And it would be it would be some hit, and then I would defer to Pat about We

[Sen. Ann Cummings (Chair)]: don't have a lot. Right. Yeah.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: So so that's the way that that they sorted it out. So it's a partial decoupling that applies to those larger businesses. But because of all of the options and the going back and forth with the amortizing stuff, This should have a lot of lot of law, a lot

[Sen. Ann Cummings (Chair)]: of drafting to have to deal with. It's tax law. Yeah. Okay. Alright.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: These

[Sen. Ann Cummings (Chair)]: larger businesses that this bill increases

[Sen. Scott Beck (Member)]: it went

[Sen. Ann Cummings (Chair)]: the percentage you could deduct?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: The what what can be deducted hasn't changed. So what The the amount of money altogether percent of the really.

[Sen. Ann Cummings (Chair)]: 50%. What's that? There was a major I think Sandra Chittenden asked. There was a major percentage change. I thought it was in

[Cody Keeler, Legislative Counsel (VT General Assembly)]: That's yes. You're thinking of the change in here for the Vermont r and d credit.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: what I was thinking. Was increased significantly. It was increasing annually as far as the the percentage of credit allowed as far as the actual revenue impact. I don't know if you can call that significant. But, there's that change. And I don't have any don't have anything in your mind that relates to that.

[Sen. Ann Cummings (Chair)]: No. I just was wondering, refresh our memories, why they did that.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Part of it was with some of the corporate decoupling, it was quote unquote revenue generating. I don't know if that's the best way to put it, but you you I think you know what I mean. And so so to put some tax benefit back into the income tax, that was an area that is something to target to be more generous with that credit, which would cost for the bank. Okay.

[Sen. Ann Cummings (Chair)]: And, actually, we and because that's our ID that's done in Vermont, so we'd encourage

[Cody Keeler, Legislative Counsel (VT General Assembly)]: That credit is Research and

[Sen. Ann Cummings (Chair)]: experiment to be done in Vermont. Alright. Okay.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Okay. There's more. There's three places where, clarity, I've put the word intaxable years.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Without that, there could be some confusion about what the 01/01/2025 date means.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: There's a I I may have passed it already, but there was one of the subdivision references which was off by one, and so there's a correction for that in here.

[Sen. Ann Cummings (Chair)]: Scrivener. So Scrivener. Scrivener. Sure. But that Scrivener has trouble. And

[Cody Keeler, Legislative Counsel (VT General Assembly)]: then we have one more that says dilatantine's one. The first one is here. This is a correction. This is the correction I was talking about related to on the house floor, there previously, there was language that was that expressly did not allow Vermont's current 40 capital gains exclusion to be applied to the gains from qualified small business stock. And that was partially drafting related in the first place because their Vermont, I don't know this language, is decoupling from allowing the federal exclusion of qualified small business stock gains from being taxed at all. Federally, we've gone over it, but often those gains are not taxed at all federally. And so Vermont is decoupled from Dash. So at the same time, there was some clarifying language that you couldn't use the capital gain exclusion for those gains either because Vermont was taking a position not to not to allow the federal exclusion for that. But on the house floor, reps Kimball and had said had realized that, oh, well, we're not sure whether you want that treatment, so they wouldn't wanna correct that on the floor amendment. And so I took out that express language, press the that wouldn't allow it. I should've I should've looked at it more closely because for the 40% exclusion cannot be used for I'll show you the language. It cannot be used for stocks or bonds publicly traded or trade on exchange or any other financial instruments. And this QSVS stuff is so complicated that at this point, the department and I, we can't quite figure out if it's stocks, bonds, other financial instruments, or all of the above. So but but what is clear is that you you can't use the 40% exclusion exclusion under current law for this. Okay. And it's not relevant under current law because that federal exclusion of these gains doesn't flow through to or it flows through to Vermont. So currently, Vermont's not taxing at all anyway. But under the decoupling change Right. We would be taxing it, but the intent for the house after that, based on that four amendment, was to allow this 40% exclusion. So Okay.

[Sen. Ann Cummings (Chair)]: So we're taxing it, but it would have the 40%

[Sen. Randy Brock (Member)]: exclusion.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Usually yeah. And then that's and that's capped at 350,000, though. Okay. So here is our I was still working on this a few minutes before I came up

[Sen. Ann Cummings (Chair)]: here to sit down. Okay.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: It's some language stating that basically, that for the purposes of the 40% exclusion, we'll allow this for all of our small business updates. We'll we'll allow that exclusion to be used.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: a plain language part at the beginning, and then there's also, for the accountants basically, some info So getting into the

[Sen. Ann Cummings (Chair)]: this is the section where we are saying we're taxing them, we're not passing through that federal, you're not taxed, but we are going to allow them to be covered under our capital gains exclusion. Is that what this paragraph is doing?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Our capital gains exclusion could be used for those gains. That's what it's doing. And just so you're, like, aware from a policy sense, this would be the only type of financial instrument or stock that our 40% exclusion could be used for. Right. Because current law is that gains from stocks are not something that you can use that 40 exclusion for.

[Sen. Ann Cummings (Chair)]: Okay. So what just begs the question, why did the house decide?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: That's why I'm owning onto it, because it's like, I I told them a 40% exclusion would be allowed, and I didn't dive into this part about this box and bonds are actually something you can use it for. But I I did let representatives know about it, and I and I let them know that I'll be this is what I would be saying to you was because they believe they were gonna allow this partial exclusion for qualified small business stock. So that's what this language for your amendment is doing. This is the four amendment situation. This was a quick turnaround. I think, you know That's a good thing. Is excluded. But

[Sen. Ann Cummings (Chair)]: is it 40% is They

[Cody Keeler, Legislative Counsel (VT General Assembly)]: they they believe the policy outcome is gonna be what these words are here.

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

[Cody Keeler, Legislative Counsel (VT General Assembly)]: And so so that's what I have for you. Alright. They believe that the policy outcome is these words here. Yes. Whether whether whether knowing knowing that under current law wouldn't be allowable whether that bit of information would have changed the policy outcome they wanted. I don't know.

[Christopher Rupe, Joint Fiscal Office]: This clears it up. Okay.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Right. Clears it up. It clears up the tax treatment and the department will be able to do what it needs to do with this. Perfect.

[Sen. Randy Brock (Member)]: Sounds good. Okay.

[Sen. Ann Cummings (Chair)]: Let's see what the test one looks like. A

[Cody Keeler, Legislative Counsel (VT General Assembly)]: lot of things, and I'll give you a heads up. A lot of these, they're so few taxpayers. It's a it's it's in those Yeah. So so what you're saying about that. And then we have some things in the effective dates. We've already talked about pushing back communications property change. I have a note to also add the clarifying language from Maria, And then we also have here the effective dates, the pushing back for the grand list, partial change, or mapping, and that's all. Those those are the things I have so far for you. No tips up in here at the moment.

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

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: No fish and wildlife feed stuff

[Cody Keeler, Legislative Counsel (VT General Assembly)]: in here at the moment. It's still the house version.

[Sen. Ann Cummings (Chair)]: With that. Chris and Patrick, do you a fiscal note? I've got you all on the agenda. Do know what if you have anything that might enlighten us?

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: So, join fiscal office. The fiscal note, which you saw when we first walked through all of this, this clarifying language does not actually affect any of the estimates that are contained within it, so it's still what you saw previously.

[Sen. Ruth Hardy (Member)]: Okay.

[Sen. Ann Cummings (Chair)]: We're on the border. Committee, Senator Hardy. Come.

[Sen. Ruth Hardy (Member)]: I'm assuming your intention is that we vote this out tomorrow. Ah.

[Sen. Ann Cummings (Chair)]: I could jot it out today, would make me very happy.

[Christopher Rupe, Joint Fiscal Office]: No. Are we waiting

[Sen. Ruth Hardy (Member)]: for John to have to draft something on the TIF? Yeah. Need to have yeah.

[Sen. Ann Cummings (Chair)]: So it won't be until the TIF.

[Sen. Ruth Hardy (Member)]: Unless we do it as a do the TIF part as a floor amendment because I'm sure that's under if you

[Sen. Ann Cummings (Chair)]: like these under Sure.

[Sen. Ruth Hardy (Member)]: She would love to do that. But

[Sen. Ann Cummings (Chair)]: Sorry. It's gonna

[Sen. Ruth Hardy (Member)]: be Okay. Well, can I just ask? So one, if we're if we're voting this out so quickly, and I usually, we have more time with the miscellaneous tax bill to decorate the tree or put more candles on them or whichever. But

[Sen. Ann Cummings (Chair)]: There was Rewrite the tax code that I'm Or rewrite

[Sen. Ruth Hardy (Member)]: the tax code, whatever you wanna do. But there was a bill that I introduced earlier this year that was a rewrite of a bill that I introduced last year that I was hoping we were gonna have a chance to take testimony on in the context of the miscellaneous tax bill, which is the the tax credit for unpaid caregivers. And there was just a report that came out. I'm not suggesting we try to put it on this bill. Believe me, I'm not. But I was hoping that we could at least take some testimony on it so I so we could get some feedback from the department because it's different than it was last year, and it would be helpful to hear from them on it. Okay. Especially since there was just an AARP report that came out that underscores the data and provides more data and might be more helpful stop when you

[Sen. Ann Cummings (Chair)]: do that. I don't know that we can set it up. I understand that

[Sen. Ruth Hardy (Member)]: we don't have time with this bill, unfortunately. I was hoping we might, but I

[Sen. Ann Cummings (Chair)]: understand we don't might send us a tax bill.

[Sen. Ruth Hardy (Member)]: But exactly. So if if we have some time next week for some testimony on that, I would appreciate it. Yeah. I think it might be nice for you.

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: I just let Charlie

[Sen. Ann Cummings (Chair)]: know who you need. Okay. Thank you. Okay. I'd like to go through this section by section just to see where we are. Do you have some

[Sen. Thomas Chittenden (Vice Chair)]: I was just gonna mention section eighteen and nineteen that you vote for the. You probably wanna give Mitch Council direction on before we go to the.

[Sen. Ann Cummings (Chair)]: Yeah. Yes. That is I have two red flags. One is section six. I think we've got some clarifying language and we'll modify it and hope that that gets to be a little more opacetic. The other one was eighteen and nineteen, and I don't That's all. Got routine things, so research and development tax credits. The downtown village center tax credit, we wanna fight that battle again.

[Hannah Smith, General Counsel, Vermont Department of Fish & Wildlife]: It takes

[Sen. Ann Cummings (Chair)]: it up to 4,000,000, and it came over to us in 4,000,000 in a senate bill. We took it 3.5. It increases it by a million. It's hanging on the wall across the Across

[Sen. Ruth Hardy (Member)]: the hall it's 3.5, because that's what we said.

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: They

[Sen. Ann Cummings (Chair)]: stripped it, yeah. That was told That's on their wall. Money chairs that they added up all the requests on the wall and that they are at $10,000,000 more requests than the house budget. So they're having less fun than we are over there making those decisions.

[Sen. Thomas Chittenden (Vice Chair)]: Well, I think I just go ahead. No. Sorry.

[Sen. Scott Beck (Member)]: I didn't mean to jump in. Have respect for our colleagues across the ball. He said 3.5. Yeah, we already have voted that,

[Sen. Ruth Hardy (Member)]: but then that would be another. So

[Sen. Ann Cummings (Chair)]: we're gonna go 3.5 in the tax credit on Page 53. It's in section 53.

[Sen. Ruth Hardy (Member)]: So it's section 59.

[Sen. Ann Cummings (Chair)]: 59, that's right though. Alright, so 59. Income tax code to the federal.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Okay. So I I recorded that as mean, you want change? Second check? K.

[Sen. Ann Cummings (Chair)]: The the yeah. It's only increase it by 500,000. Yeah. The RNP Read the latest major 500,000. Days.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Oh, we can figure out what.

[Sen. Ann Cummings (Chair)]: Okay. The other one we need to talk about, this is the statutory distribution of meals, rooms, purchase, and use. This is in this bill, This not in the is the session. Issue is that the Transportation Committee sees money. The governor has proposed transferring $10,000,000 in general fund this year, but from now on and in next year, as I understand it, the EDS Fund, purchase and use tax, will transfer 20,000,000 the next year, 30,000,000 up to $15,000,000 out of the EDS Fund over five years to transportation fund. At 12,000,000 plus or minus dollars of penny, that comes to 4 to 5¢ on its own. I'm not sure what transportation is doing at the moment. I know they're doing that. Well, I

[Christopher Rupe, Joint Fiscal Office]: can tell you that. I'm sure If, if you Christopher, if you want, I can put a few slides up that shows you what the Transportation Committee voted out this morning along with Oh,

[Sen. Ann Cummings (Chair)]: they have voted.

[Christopher Rupe, Joint Fiscal Office]: They voted it this morning. No. Alright.

[Sen. Ann Cummings (Chair)]: I'm getting things on the mileage for electric vehicles, the mileage fee.

[Christopher Rupe, Joint Fiscal Office]: I just sent my very short slide deck to Charlotte Chittenden, I can walk you through it very quickly if you Okay.

[Sen. Scott Beck (Member)]: Could contemplating expanding the mileage base usage for everybody. Or by your thought. Eventually Okay.

[Sen. Ann Cummings (Chair)]: Anyway, what the bill before us does is it decreases purchase and use tax by 10,000,000. It increases the rooms and meals percentage, so the Ed Fund gets 10,000,000 and is whole by taking money from the dues and meals tax, we put a $10,000,000 hole in the general fund. But if we pass this federal coupling, decoupling sections of this bill, we end up raising $10,000,000. So it holds the general fund harmless. It gives transportation a guaranteed 10,000,000 going forward where who knows what future legislators might do. This wouldn't preclude future legislators from doing anything, but it would give them some surety going forward and does not leave us with a $10,000,000 goal this year or up to 50,000,000 this year fund in future. Each year in future years as well. In future years as well.

[Christopher Rupe, Joint Fiscal Office]: So, madam chair, to your point, I have three slides that I can go through that compare the gov rec, what is in miscellaneous tax, and then what is in the senate seat bill. You all will be getting tomorrow. Okay. The first one, I mean, you this a few days ago that the gov rec you know, $10,000,000. Just remember the number 10,000,000. 10,000,000 is the amount that needs to go into the t fund in f y twenty seven. This year. Correct. So the governor had proposed a transfer of $10,000,000 from the general fund into the Ed fund to offset the impact to the Ed fund of shifting $10,000,000 of purchase and use out of the ad fund into the t fund. And then moving forward, he had proposed an additional ramp down by 10,000,000 a year of purchase and use tax over a five year period. So by, you know, the end of by f y thirty one, all of the purchase and use tax would be going to the t fund. So that opens up a hole in the end fund beginning in f y twenty eight that grows over time that all else being equal, would be filled by property taxes. My colleague, Julia, has told me that a penny with lots of her caveats, a penny translates to about 14,000,000. That's the government proposal. The alternative scenario that was in the miscellaneous tax bill gets you to that $10,000,000 number by shifting the meals and rooms allocation to go up to 83% into the t fund and instead of the current two thirds split and ramps down the share that goes to the ed fund from one third down to 27%, that shakes out to be roughly $10,000,000. That would be a shift that would recur in future years. That'd be a change in revenue policy until the legislature decides to make another change. To avoid creating a hole in the Ed fund, 4% of Meals and Rooms revenue would shift from the general fund into the Ed fund. So when you see how all of that sugars off, the the T fund would keep roughly $10,000,000 a year of additional revenue, so you all make a further decision. But the Ed fund is essentially held harmless by shifting that around, so that does not an impact to property taxpayers. The senate transportation committee, h nine forty four, you're gonna get this bill for several reasons, but one of those reasons, this they voted out an approach that is a little more like the governor's approach, where in f y twenty seven, there would be a transfer of 10,000,000 from the general fund to the t fund and leave purchase and use of the ed fund out of it for f y twenty seven. But then the phase down and purchase and use tax would begin in f y twenty eight. So that phase down actually goes through f y thirty two where the full phase out would occur and the t fund would get all of the purpose and use in f y thirty two. Why that's not on here is because the revenue forecast that we're working with doesn't go that far out yet. But you'll see that this had this has a similar impact of there'd be no impact on the Ed Fund in 2017 since it cut out of the process and the money would go straight to the T Fund from the general fund, but moving forward in future years as that purchase and use gets phased out and start creating, for lack of a better word, a hole in the end fund that is filled with property taxes by default when all else is equal. Those are the three different options you all are gonna be looking at. When you get the T fund, there's obviously a conflict or the T bill, there's obviously a conflict between that and what's in miscellaneous tax. So this committee is gonna have to decide what to do to harmonize all of that. It would probably make sense to have the tax policy ride in the miscellaneous tax bill since it impacts all the major funds rather than continue to ride in the T bill once it comes over here. You all are gonna need to reconcile this, and that's also gonna be needed to add clarity to your colleagues across the hall as they're trying

[Cody Keeler, Legislative Counsel (VT General Assembly)]: to close the budget out. And

[Christopher Rupe, Joint Fiscal Office]: that's the proposal. That's their proposal. Yes.

[Sen. Ann Cummings (Chair)]: Next year, we will have a new legislator. Maybe we'll have a new governor.

[Sen. Thomas Chittenden (Vice Chair)]: You're running?

[Sen. Ruth Hardy (Member)]: I don't know.

[Sen. Ann Cummings (Chair)]: I got enough trouble. There is no guarantee in the house proposal that money will be ongoing, and it won't be, you know, you won't be losing, they won't get as much, but you won't be getting it by losing it in the Ed Fund and I think we know how that's

[Christopher Rupe, Joint Fiscal Office]: And it's not a one year transfer. Right, it's perpetual

[Sen. Ann Cummings (Chair)]: transfer of borrowing. And as long as tax gets paid, the tax should go up with inflation. But if the economy crashes, then all of it. Thank you, Madam Chair.

[Sen. Ruth Hardy (Member)]: Chris, I know you're nonpartisan, I don't wanna ask you to do something here if you're not comfortable with, but can you summarize what the Transportation Committee, why they chose to do a different approach than the House other than just keeping the general fund as whole as possible?

[Christopher Rupe, Joint Fiscal Office]: You know, I think some other concerns, you know, my scenario, Gabriella, I don't speak for any of the committees, but I think concerns have been raised about wanting to have a multi year plan in place. There's not a lot of easy options to find the revenue, and I think that was the overriding concern was trying to think through what things look like beyond just one year. There's also obviously the concern that many people on the appropriations committees always have about giving up general fund revenue on an ongoing basis. Know, it's it's difficult to raise revenue for the general fund.

[Sen. Ruth Hardy (Member)]: Didn't the House proposal have money going into the T Fund?

[Christopher Rupe, Joint Fiscal Office]: Yeah, but it gave up revenue from the general fund. Right. It was perpetually giving up roughly $10,000,000 I think what the transportation committees tried to juggle a concern of giving up general fund revenue on an ongoing basis with their desire to see a longer range plan for transportation. But other money will be coming out of the Ed Fund, yes.

[Sen. Ann Cummings (Chair)]: Correct. And not 10,000,000, it will be between $5,060,000,000 in five years. The miscellaneous tasks

[Sen. Ruth Hardy (Member)]: proposal, it's just a one year fix. I wouldn't say

[Christopher Rupe, Joint Fiscal Office]: it's a one year fix. It is step one of the transition. It is not and I'm really glad you asked that because it gives me another chance to

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

[Christopher Rupe, Joint Fiscal Office]: Opine you know, clarify this because I've

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: heard it well, I've heard

[Christopher Rupe, Joint Fiscal Office]: it described inaccurately elsewhere in the building, and it's it's not like just transferring $10,000,000 in y twenty seven and then, like, what you do in f y twenty eight. It is until they change or until you all change revenue policy, that shift of purchase and use and meals and rooms would be perpetual in future years. So it's sort of like taking step one of the five steps and hanging out on step one until you all make a decision to go to step two.

[Sen. Ann Cummings (Chair)]: It go they will get 10,000,000 tax revenues holding Mhmm. In perpetuity until we change it. Right. We'll get that percentage. If we pass the miscellaneous taxes they did, there will be $10,000,000 to replace that in additional revenue put in along with covering the 25 so we don't lose 25,000,000. They're raising 10 so that the general fund is held harmless. It does I know the chair because he has talked to me on more than one occasion, wants an ongoing source of revenue for the for the transportation fund. It has traditionally been the gas tax. The governor's been very clear, he's not raising the gas tax, and I doubt given the price of gas any of us would like to do that this year. They are looking at a mileage, I don't know. But this the whole nature of transportation is changing. Purchase and use is targeted because the biggest source of personal use taxes are you go to New Hampshire and you buy a car and you don't pay a sales tax, which is purchase and use in New Hampshire. When you register the car in Vermont, you have to pay purchase and use. It's a big item. It's a big amount of tax, and it this was originally there was an increase to the gas tax and an increase to purchase, and when we took purchase and use for we we didn't touch purchase and use. When we did act 60, we raised the gas tax as part of the entire financing plan for act 60. At some point, somebody came to us and said, you know, this is just difficult to administer, and the transportation fund is getting all the rest of the gas tax, and the amount of the gas tax and the purchase and use are about the same. So they got the additional gas tax and had that purchasing use. Now they would like purchasing use back, which since we haven't changed the funding since act 60, puts that additional cost of education back on to the education funding if we can't find another $50,000,000 worth of revenue that over five year period will let us pave a whole lot more roads, but it's going to leave us with a really big hole in that fund in the. Shall

[Sen. Ruth Hardy (Member)]: we? So it's the VIP tax. Yeah. It is. It's about this amount. Do you need? 50,000,000. What's

[Sen. Randy Brock (Member)]: the ending?

[Sen. Thomas Chittenden (Vice Chair)]: So I have a question and then a statement, if I may, just to clarify the vote was filed. Out of senate transportation.

[Christopher Rupe, Joint Fiscal Office]: That's my understanding. I wasn't there for the vote, but that's what I saw on the paper.

[Sen. Ruth Hardy (Member)]: What was the question?

[Sen. Thomas Chittenden (Vice Chair)]: The vote out of senate transportation was was five o. So I just wanted to overlay that with I would interpret what you just presented that we're going get presented transportation as more likely the the Senate position on this funding formula and what we're seeing in H nine thirty three is what came over from the house. So with that, I think I also heard you say is it would be nice if we reconcile needs and almost hold that that position, that revenue stream into this miscellaneous tax to keep this thing flowing in the right direction?

[Christopher Rupe, Joint Fiscal Office]: I think I said you have to reconcile it. It would be ideal to do it in the miscellaneous tax bill, and I'm trying to respect committee jurisdictions when I say that. The Senate Finance Committee has jurisdiction over revenues of the state, particularly if you're dealing with all three major funds.

[Sen. Thomas Chittenden (Vice Chair)]: So that was the question, that was the statement I'm gonna make, and I'm very transportation biased just because I served on there. I also just want to remind us, I hear other states have one fund. We have three, the general fund, the Ed fund, the transportation fund. My understanding of why we have a separate transportation fund is the benefits principle of taxation where you drop revenues from activities and those revenues are meant to support that activity. Purchase and use, I'm under the impression, I'm gonna look exclusively from the purchase of vehicles that use our roadways. Yeah. So it it has been years past when we were taking in more money, and there was rationale for it to segregate or send some of those purchase and use transportation dollars to education. We're no longer in that because we have more efficient vehicles. We've got declining gas tax. We got EVs. All good things when you're looking at climate emissions. I do support making whole with the transportation fund gradually over time as contemplated in the transportation bill. I know that creates a hole in the education fund. What I would expect this and future legislators to continue to do is to use general fund dollars and additional tweaks in order to fill those holes. We call them buy down wherever you want, but it's really just figuring out the right amount of allocation policies. But I see the Ed fund general fund dollars as a lot more fungible. And so I think what the Senate Transportation, which is the it was unanimous vote, the appropriations chair is on there, is a rational

[Sen. Ann Cummings (Chair)]: very clear that he might not vote the same way as a member of appropriations. He was kind of put on the brat on the money chairs committee.

[Sen. Thomas Chittenden (Vice Chair)]: All that being said, I still also do support a gradual and it's gonna be revisited next year. We can't bind the hand of next year's legislature, but setting on a trajectory to bring purchase and use dollars back in the transportation fund looking at the five or ten year outlook. So I support just putting it on the table, taking the senate transportation framework into this not miscellaneous bill so as to move these bills forward in a way that So

[Sen. Ann Cummings (Chair)]: in order you're supporting in order to make transportation whole, you will raise property taxes by at least 5¢.

[Sen. Thomas Chittenden (Vice Chair)]: Setting that on the trajectory for years out for people to evaluate it later on.

[Sen. Ruth Hardy (Member)]: Well, that's what you're setting up. You're setting up increased property taxes.

[Sen. Thomas Chittenden (Vice Chair)]: That's Not this year. It would be next year absent additional revenue funds from So why don't why

[Sen. Ann Cummings (Chair)]: don't we the funds. Yeah.

[Sen. Ruth Hardy (Member)]: We raise the funds now so we're not raising property taxes next year. We have we have a proposal that we've looked at in this committee, and we we priced out. We have analysis and language for. I I I I don't wanna put the p fund in a bad position. I wanna make sure that we can fund our roads, but I also don't want to raise property taxes and put our schools in a bad position because we're taking away our revenue source from that fund. And as the chair explained, the history of it was swapping the gas tax for purchase and use. It wasn't like there was this funding for source Exactly. You raised the gas our predecessors two decades ago, three decades ago.

[Sen. Ann Cummings (Chair)]: It wasn't Did it then.

[Sen. Ruth Hardy (Member)]: So it was it was a swap of funds then. It was not education stealing it from transportation. And so if if transportation is going to take that revenue back, then I understand the nexus and I understand the problem. We can't leave education fund in a hole.

[Sen. Ann Cummings (Chair)]: We have to be responsible and fix the whole This committee has a fiduciary response. Yes. That's what the And keeping the fund that fund. So Hey. Yeah. I'll ask Scott.

[Sen. Scott Beck (Member)]: So, Luke, kind of the way I understand this is is we're we're setting up for a return of the general fund transfer. From build to build. No.

[Sen. Thomas Chittenden (Vice Chair)]: But how are we gonna fill the hole?

[Sen. Ann Cummings (Chair)]: This year. Well, if we do this, we're if we do the decoupling thing Yeah. We're raising $10,000,000, which now would fill the hole in the general fund if you do the house transfer. If you don't, the $10,000,000 will come to Ed. You won't have a hold this year.

[Sen. Scott Beck (Member)]: This year? This year. This

[Sen. Ann Cummings (Chair)]: year. Year, you will have a $20,000,000 hold because the 10 from this year will be in transportation plus another 10, and it will go up by $10,000,000 increments until all 50 to $60,000,000.

[Sen. Scott Beck (Member)]: I'm looking at that schedule here on Chris's number five. It's Mhmm. 10000028 and twenty one point seven and twenty nine. Am I looking at the right

[Christopher Rupe, Joint Fiscal Office]: You you are, and it's just I don't have 32 on the chart because

[Sen. Scott Beck (Member)]: we don't Okay. Have Yep. Right. And so what I'm looking at that is that effectively, in order to make the education fund whole in those years, there's going to have to be a transfer from

[Cody Keeler, Legislative Counsel (VT General Assembly)]: The general

[Sen. Scott Beck (Member)]: fund. The general fund.

[Sen. Ann Cummings (Chair)]: That is not in any of the bills nor

[Sen. Scott Beck (Member)]: No. I I know. I know it's not, but I it seems like that's kind of where we're setting our that's that's the table that's being set.

[Sen. Ann Cummings (Chair)]: The governor has not said that. Oh, no. The appropriations bill has not said that. We could also transfer 10,000,000 additional dollars a year into transportation, which is right now, we are doing so much to education funding and asking. There's so much uncertainty and angst out there to I can see the headlines of the Saint Alphins and the Times August and the Burlington Free Press the Caledonia, you know, senate votes to put $50,000,000 hole in the end fund. I just don't think any of us wanna go home today.

[Sen. Scott Beck (Member)]: But the only thing I guess and the point I'm trying to make a

[Cody Keeler, Legislative Counsel (VT General Assembly)]: I think I'm doing a great

[Sen. Scott Beck (Member)]: job is that if we don't do anything

[Sen. Ann Cummings (Chair)]: How long is your

[Sen. Scott Beck (Member)]: The ad fund is short. Okay? Which means that the only way for the Ed fund to be whole and not have a discovement property tax is to transfer money from somewhere into the education fund. So I think and I'm not saying this is what we wanted to do, but it seemed I mean, the old days of we fought over the general fund transfer every year were miserable, to say the least. So we got rid of

[Sen. Ann Cummings (Chair)]: it in 2018. Well, was miserable in appropriations because earlier in the century, they had to hatchet safety net programs to give an increase to

[Sen. Scott Beck (Member)]: That's right. And we just fought over the general fund transfer for years. So and I'm not saying this is what I'm supporting as a proposal or but the only way to avoid that fight and to make sure the education fund is full is to change the distribution of the consumption taxes, not the purchase and use because I think that's one of the, so we're talking about, and, and we've got 100% of the sales tax. So the only thing left is meals and rooms. Just create a whole in the

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Ed Fund?

[Sen. Scott Beck (Member)]: No. I'm just saying to

[Sen. Ann Cummings (Chair)]: to fill

[Sen. Scott Beck (Member)]: a hole in the Ed Fund. If you're not gonna do a general fund transfer Right. And you're not gonna put it on property taxes, the only thing left is to increase a consumption tax that's coming to the hedge fund. Now that creates a hole across the hall.

[Sen. Ruth Hardy (Member)]: Right. So in order to not create holes in any of the

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

[Sen. Ruth Hardy (Member)]: Funds and and to have a longer term fix, we have to raise revenues. And and if we do nothing, the revenues we're raising in property taxes because that's

[Sen. Scott Beck (Member)]: If we do nothing.

[Sen. Ruth Hardy (Member)]: If we do nothing, if we don't if we don't raise revenue. So that that's why I'm suggesting we look at how do we raise revenue in order to fill the hole in the Right. And that's do nothing.

[Sen. Ann Cummings (Chair)]: The property tax is what it is. There's no hole. There's Sorry. The budget is whatever the budget is, and I somebody is transferring $10,000,000 in in a one time shot.

[Sen. Ruth Hardy (Member)]: That's what that's what this does.

[Sen. Ann Cummings (Chair)]: The This? House proposal. The house proposal. No. The House proposal transfers a portion of the purchase and use, not all of it. Yeah. $10,000,000 worth of it. It it doesn't raise it raises the percentage of rooms and meals, not the tax that goes in to the Ed Fund by 10,000,000. So the transportation fund is up 10. They don't have a long term plan. Right. No. We don't have a long term plan to replace a $50,000,000 hole in five years in the Ed fund. So it's it's trading the hole. This bill this bill with the decoupling raises $10,000,000, which goes into the general fund.

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

[Sen. Ann Cummings (Chair)]: Mhmm. Transportation's getting 10,000,000. Right. Everybody else is helping. No. I understand that.

[Sen. Ruth Hardy (Member)]: That's awesome. Just I'm just saying. Saying that we either do we either do what's in H nine thirty three, which doesn't create any holes. Right. But it's only essentially part of what the T fund needs. My understanding, Christopher, if

[Sen. Ann Cummings (Chair)]: I'm wrong. But it

[Sen. Ruth Hardy (Member)]: doesn't build up on the T Fund. And what I'm hearing you say is that and what the governor's proposal also did is build up revenue in the T Fund by taking it from the Ed Fund. And if that is what you wanna do, we need to fill the we need to fill the hole in the education fund. Otherwise, the the default is that we're raising property taxes. And so we need a revenue source. And that's why I'm suggesting if we if we're gonna do something that Yeah. Create a hole in the ed fund, we need to fill that hole this year. That's the responsible thing to do. And we've talked to it, and we have estimates on what was called the wealth proceeds tax, but it's narrower or the in Vermont investment proceeds tax, which is a narrower tax. And we have estimates that could fill almost I think it's 50,000,000 and there's you know, we have a scenario that could give us 48,600,000 and the timing could work out to do so because there was that one year lag. Remember, madam Chittenden could start at next year by the time that But that was the

[Sen. Ann Cummings (Chair)]: year was That's also income tax. Well, but it could be deposited because

[Sen. Ruth Hardy (Member)]: of the dedicated tax it could be deposited into the

[Sen. Ann Cummings (Chair)]: the Ed funds.

[Sen. Thomas Chittenden (Vice Chair)]: If I may, what I think I heard Senator Beck say and to your point rather than create the hole in the Ed fund since I'm seeing us have a general fund transfer debate anyway with this buy down, what if we shifted the revenues from the general fund towards the Ed fund to covering the 50,000,000, effectively creating a hole in the gen general fund, which has many other revenue streams. And just the income taxes just the income tax. And that's what you're advocating for, those who go into the general fund. Do not

[Sen. Ann Cummings (Chair)]: This is a zero sum game. If you unless you raise new revenue Income

[Sen. Scott Beck (Member)]: tax currently So

[Sen. Ann Cummings (Chair)]: what are you Unless you raise new revenue, then if you're moving $50,000,000 out of one fund and into another, somebody is going to have a $50,000,000 hole. The Ed fund is whole. The the there is an ongoing problem in transportation fund. We can get them relief, and that's all they're gonna get for one year if we do all the transfers. I don't think we have time right now to rewrite the entire end fund, general fund, and transportation fund. I understand their need for a long term plan. We are working a long term plan for education financing, trying to get the cost down. We have spent several very painful years moving in that direction. This would just throw a huge hole in the middle of all that planning. And

[Sen. Thomas Chittenden (Vice Chair)]: And you're saying the transportation fund structure would create that hole. That's what you're

[Sen. Ann Cummings (Chair)]: This trans if you take the money out of there, it will create that hole. And trans we this will give transportation $10,000,000 to all things being equal going forward. If we're gonna do a why are we getting into a transfer from the general fund to the Ed fund? You wanna do a transfer. The fund that's in trouble is the transportation fund. Yeah. Do a transfer to the transportation fund and cut other student programs. But if you wanna put more money in, you've gotta raise more money because there is no extra money right now.

[Sen. Scott Beck (Member)]: Yeah. I think it's simple. Either a general fund transfer, which creates a whole in the general fund, or you cap off a consumption tax that's currently going to the general fund, and you direct it to the education fund. They both create the same hole in the general fund.

[Sen. Ann Cummings (Chair)]: We are raising money in this miscellaneous No, know.

[Sen. Scott Beck (Member)]: We don't. But I'm saying it here. If you do a general fund transfer, there's a hole over there. If you cap off a consumption tax, there's a hole over there. The difference is if it's a general fund transfer, you're gonna fight over it every year.

[Sen. Ann Cummings (Chair)]: Yes. Well, not well, no. It was written every year that it will, and it will go up, I believe, by the

[Sen. Scott Beck (Member)]: Right. And then then they fought over it.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Right. Yeah.

[Sen. Ruth Hardy (Member)]: Yeah. So we we can do we could do the the s or h nine thirty three, which is a one year fix. This that that It's what's in this. Yes. And it raises the $10,000,000, and it does the swap. And Mhmm. Chris can tell us about it. A million times more. And then and then we could do the permanent switch of purchase and use out of the ed fund over to the transportation fund. If you want the nexus of, you know, we're buying cars and so the revenue is gonna go to the t fund. And then I don't know. I mean, that's one of the arguments. But then we could that we need then we could do the s two eighty two Vermont investment proceeds tax and raise sense. And the it's and raise the 48,000,000 that we is essentially the same as the purchase and use tax. And it needs a year to get it up up and running. And then that can go into the Ed Fund and the purchase and use can go into the T Fund. And it's a more permanent fix.

[Sen. Ann Cummings (Chair)]: It doesn't get If it doesn't get vetoed

[Sen. Ruth Hardy (Member)]: at all of that stuff, that's the caveat on all of this. But, I mean, it it it seems totally irresponsible to not have a long term fix if we're gonna and I don't wanna be back into fighting over the general fund transfer and figuring out what we're gonna cut from the general fund every year. That's not fair to all the programs that are from there. It's not fair to raise people's property taxes. And we need we need to fill the hole in the the T fund and especially we don't want to leave federal funds on the table. And that's one of the things that happens when they don't fully fund the transportation fund. The VIP tax could also go directly to the t fund and fill up in it, and that would make the t fund whole very much more quickly than the five meter ramp up. Yes. We could we could just do it directly if people don't care about the the nexus thing of the buying cars go into the or the t fund. Committee.

[Sen. Thomas Chittenden (Vice Chair)]: Let's talk about gas taxes. Guys wanna raise the gas tax?

[Sen. Scott Beck (Member)]: That's you

[Sen. Ruth Hardy (Member)]: sound really not. Didn't talk about that.

[Sen. Ann Cummings (Chair)]: It was really not fond of tar and feathers. And that's six months ago, I would have talked to you because I've been looking at the gas rates around New England. Right now, it'd be suicide.

[Sen. Thomas Chittenden (Vice Chair)]: So then going on with the transportation bill, I'm sensing that there's not gonna be support for, but this September construct seems to generate new revenues with the realignment of decoupling. So that fills in a way this whole for this year doesn't meet the transportation funds whole years out. That's a problem for next year's legislature, whoever's sitting around the stables.

[Sen. Ann Cummings (Chair)]: That's what this is getting up.

[Sen. Randy Brock (Member)]: It's been three years now? Yeah.

[Sen. Ann Cummings (Chair)]: It's it's the one year.

[Sen. Thomas Chittenden (Vice Chair)]: I'm giving you ten years. To next year's legislature. That's the point.

[Sen. Randy Brock (Member)]: But, you know, we all seem to spend all of our time talking about raising funds as opposed to stopping spending.

[Sen. Thomas Chittenden (Vice Chair)]: That's that committee.

[Sen. Randy Brock (Member)]: That may be their committee, but it's something that we all ought to be thinking about, because we can't continue to do what we're doing indefinitely, and this five year plan seeks just like that.

[Sen. Thomas Chittenden (Vice Chair)]: But in our defense, we're the tax committee, so

[Sen. Randy Brock (Member)]: we I realize we're the tax committee, but we're also people who have constituents. What? It has to be a point in which we have to say, Stop. That's what the private sector does consistently.

[Sen. Ruth Hardy (Member)]: Except

[Sen. Randy Brock (Member)]: When you don't have enough money to do something, you stop doing some things.

[Sen. Ann Cummings (Chair)]: Well, yeah, transportation roads have not been I mean, the roads are not getting paid.

[Sen. Randy Brock (Member)]: Well, again, that's pressure, obviously, prioritizing what we do, which, as a

[Sen. Ann Cummings (Chair)]: whole legislature, that's what we do. Well, we are moving towards a foundation formula, which will reduce Ed spending.

[Sen. Randy Brock (Member)]: Well, the issue is we have to move a lot faster than we're moving. We're moving in a sales pace.

[Sen. Ann Cummings (Chair)]: Well, next week, the education bill and funding will be here.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: It's I don't know.

[Sen. Ann Cummings (Chair)]: Put our honeymoon in. I haven't seen any. Yeah.

[Sen. Scott Beck (Member)]: Everything is.

[Sen. Randy Brock (Member)]: I haven't seen sign in every not committee room in this building that says stop spending.

[Sen. Ann Cummings (Chair)]: But we are working on that. This is I do think that I mean,

[Sen. Ruth Hardy (Member)]: to be to be fair, senator, I mean, I hear you. Mhmm. But I do think they're saying that across the hall a lot. And I do think in all of our committees when we're putting together our budget letters, they've been much, much more conservative, narrowed down, you know, compared to just a few years ago.

[Sen. Randy Brock (Member)]: Compared to a few years ago, but there again, the issue is thirty years ago isn't good enough of what we need today. We're we're at a crunch.

[Sen. Ann Cummings (Chair)]: Okay. We are getting off topic. We are not Pretty comfortable. In here. We are trying to hold everyone harmless, and we are actually putting some money into transportation. Jill Remig is available to talk to us until two 04:45. We're going to have to make a decision. I'm gonna give you a ten minute break, and when we come back, we're gonna start doing some straw holes. Okay. And then I'm gonna of all of this.

[Sen. Scott Beck (Member)]: Look at the.

[Sen. Ann Cummings (Chair)]: It we're gonna have to bite the bullet between now, or we can just let this pill die and nobody gets anybody. Can I ask

[Cody Keeler, Legislative Counsel (VT General Assembly)]: a quick question? I think we need to

[Sen. Randy Brock (Member)]: So put on the big

[Sen. Ann Cummings (Chair)]: I'm I'm gonna leave things on the.

[Sen. Ruth Hardy (Member)]: What's the benefit of just doing a one year fix other than expediency and simplicity at this point?

[Sen. Thomas Chittenden (Vice Chair)]: Seems likely feasible.

[Sen. Scott Beck (Member)]: I mean, if I

[Sen. Thomas Chittenden (Vice Chair)]: If just, I you know, there's been a solid this year and hasn't solved it out here. So if I take Randy's comments,

[Sen. Scott Beck (Member)]: okay, and I say, you know what? We got a plan here to solve for '27, which we seem agreeable to. Okay? And I say, you know what? '28 and beyond, if we're gonna do a whole general fund, then we're telling the administration, when you bring your budget next year, figure it out Mhmm. And your general fund budget.

[Sen. Randy Brock (Member)]: That's what the regulators of every private corporation in the world have to do. Yeah. Is you have to figure out how you're gonna deal with the revenues that you've got.

[Sen. Ruth Hardy (Member)]: By doing September?

[Sen. Ann Cummings (Chair)]: No. No.

[Sen. Scott Beck (Member)]: By telling the you know, they say, hey. We've constructed this. You know, if we continue to do this purchase and use order

[Sen. Ann Cummings (Chair)]: schedule. So that is what's in September. Yeah. Okay.

[Sen. Scott Beck (Member)]: Yeah. They do gotta

[Sen. Ann Cummings (Chair)]: well, the whole No. No. What I 933 is.

[Sen. Ruth Hardy (Member)]: You're you're making the argument for what the transportation committee has passed out. Yeah. So he he's making the argument to to create a hole and raise property taxes.

[Sen. Thomas Chittenden (Vice Chair)]: No. Was like, there's a create a hole

[Sen. Scott Beck (Member)]: and have it addressed through budget next year. There's a

[Sen. Thomas Chittenden (Vice Chair)]: t fund hole that we're just trying to

[Sen. Scott Beck (Member)]: fill, but by doing so, we're Yeah.

[Sen. Ann Cummings (Chair)]: Yeah. And that hole is they want $60,000,000, and that is coming out of the education fund, which is somewhere around 5¢ plus or minus plus all the incremental cost because their fuel oil is gonna go up this year. So you're probably you know? You're looking at this year's increase just by taking that money out. And we the education fund is our responsibility. To me, that is a violation of our fiduciary responsibility to start putting a hole in there and saying, let the governor fix it next year. Because what if the governor doesn't fix it next year?

[Sen. Thomas Chittenden (Vice Chair)]: Well, being a general fund.

[Sen. Ann Cummings (Chair)]: How would it be in the general fund?

[Sen. Scott Beck (Member)]: All I'm saying is if you set up a construct where, you know, and I don't know what, you know, if you if you whatever.

[Sen. Ann Cummings (Chair)]: Say that whatever gets taken out of here and purchased and used, they have to give us.

[Deborah “Deb” Brighton, Joint Fiscal Office (consultant)]: In reference

[Sen. Ruth Hardy (Member)]: make an argument for doing more

[Sen. Ann Cummings (Chair)]: of a going back to a general fund No.

[Sen. Scott Beck (Member)]: I'm not. I'm saying if if we're if we're looking at a situation where there's gonna be a hole in education fund

[Sen. Ann Cummings (Chair)]: Well, there isn't now unless we change something.

[Sen. Scott Beck (Member)]: Going to create or the fund.

[Sen. Ann Cummings (Chair)]: Right now, if we take Yes. If we commit taking purchase and use out of the education fund, we are creating a hole in education

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

[Sen. Ann Cummings (Chair)]: In order to fix a problem in transportation. That problem is not the problem of education. And so why we trans probably the most painful tax for people to pay is the property tax. So why are we putting the burden on the property tax?

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Well, I

[Sen. Ann Cummings (Chair)]: don't And taking it off.

[Sen. Scott Beck (Member)]: I mean, there's I'm looking you know, if if the edge I'm I'm not a supporter of making the education fund short because I don't wanna put on property taxpayers. But I'm looking at here, you know, there's a $185,000,000 of mills and rooms going to the general fund. There's $249,000,000 of corporate income tax going to the general fund. Yeah. If we simply calved off enough from those one or both of those sources, I don't know, to or it could take more mobile bills and rooms to fill the education fund so it doesn't it doesn't show up in property taxes.

[Sen. Ann Cummings (Chair)]: Well, then give it to give it to transportation.

[Sen. Thomas Chittenden (Vice Chair)]: Well, that's what you're effectively doing because we sign up. It's just creating a hole in the general fund rather

[Sen. Scott Beck (Member)]: than Yeah. So we are creating We should go on contempt. We are creating a problem by doing that. You're creating a problem for the

[Sen. Ann Cummings (Chair)]: general public. Yes. We're switching the problem.

[Sen. Scott Beck (Member)]: Right. And then where does that whole get addressed? Well, I think number one is the governor addresses that in his budget,

[Sen. Thomas Chittenden (Vice Chair)]: which could be including

[Sen. Ann Cummings (Chair)]: So it's just Cummings. Right.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Could be an income.

[Sen. Ann Cummings (Chair)]: That the general's fund shall transfer $10,000,000 a year into the transportation fund. Why are we getting the education fund involved at I

[Cody Keeler, Legislative Counsel (VT General Assembly)]: think what you're trying to say is we're gonna ramp down the purchase and use Ramp down the purchase purchase and In the Ed fund goes to the T fund. And to fill that hole in the Ed Fund, you're gonna ramp up rooms and meals tax, or which would fill the Ed Fund back up From the general fund. From the general fund. General fund will come down, and then there'll be a hole there signaling to the governor, who's ever there

[Sen. Ann Cummings (Chair)]: That he

[Cody Keeler, Legislative Counsel (VT General Assembly)]: will have $10,000,000 less.

[Sen. Thomas Chittenden (Vice Chair)]: Figure that out.

[Sen. Ann Cummings (Chair)]: You're It's not that's well, we're raising 10,000,000. We're not talking 10,000,000. We're talking 60 Over

[Christopher Rupe, Joint Fiscal Office]: the course of five years.

[Sen. Ann Cummings (Chair)]: Yes. Well, eventually. Still 60,000,000

[Cody Keeler, Legislative Counsel (VT General Assembly)]: Yeah. Mhmm.

[Sen. Ann Cummings (Chair)]: And so I am not I I will put this bill on the wall and not take it up if we're going to put a hold in the education fund at a time when property tax that would not

[Sen. Ruth Hardy (Member)]: There if there's a just wanna do

[Sen. Ann Cummings (Chair)]: do something, we will write that there will be a 10 up to an incremental $10,000,000 a year transferred from the general fund to the transportation fund. That's

[Sen. Ruth Hardy (Member)]: clean.

[Sen. Scott Beck (Member)]: And leave the fund out of it.

[Sen. Ann Cummings (Chair)]: And leave the fund out of it. Why are we getting the fund in it?

[Sen. Thomas Chittenden (Vice Chair)]: Well, I think we're trying

[Cody Keeler, Legislative Counsel (VT General Assembly)]: to purchase purchase and use and move it back to the end zone. Because

[Sen. Thomas Chittenden (Vice Chair)]: it's purchased, used, and drawn. Yeah.

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: They'll probably also try to spend the single

[Sen. Randy Brock (Member)]: for those who fund the education fund, that that is the one that has been boundary for so many years and has been just nothing but talk rather than action in terms of addressing it.

[Sen. Ann Cummings (Chair)]: The governors have taken any action in his budget either.

[Sen. Randy Brock (Member)]: They had a lot of great talk.

[Sen. Scott Beck (Member)]: Mean, our legislature doesn't want to purchase a yeast tax, then we're out of it. But they want to purchase a yeast tax.

[Sen. Ann Cummings (Chair)]: So doesn't the education fund.

[Sen. Scott Beck (Member)]: I know. And that's what we're that's why we're

[Jason Batchelder, Commissioner, Vermont Department of Fish & Wildlife]: here.

[Sen. Ann Cummings (Chair)]: So find me $60,000,000.

[Sen. Thomas Chittenden (Vice Chair)]: Well, my okay. I'm fine with h nine thirty three, solving it this year, solving just h nine thirty three from the house, solving just this year, probably not big at any this other stuff. I'm fine with moving that board. But to the point that I think senator Mattos just very clearly articulated, I'm not advocating for it, but I would support that only because the general fund is primarily sourced with income taxes as well as others. So a VIP tax would then go into the general fund. It may be next year's governor, governor Cummings, governor Richards, governor Scott would maybe propose one of those taxes to fill the general fund hole and keeping the transportation fund, benefits principle, drawing transportation dollars in the enterprise. But I'm fine with h nine thirty three as is. We gotta move it along. All I'm saying is I see merit in how they just articulated that readjustment in the line.

[Sen. Ann Cummings (Chair)]: I think we are talking we are getting them 10,000,000. We are arguably kicking the can down the road till next year.

[Cody Keeler, Legislative Counsel (VT General Assembly)]: We do that well.

[Sen. Ann Cummings (Chair)]: But I don't wanna go home and tell my constituents

[Cody Keeler, Legislative Counsel (VT General Assembly)]: that I don't wanna leave a hole in the head book.

[Sen. Ann Cummings (Chair)]: No. I I don't either.

[Sen. Randy Brock (Member)]: And whatever we do, and it may not be the we in this room, but whatever state government does, what the the legislature does before going home, is come up with a plan of how we're going to reduce spending as well as raise revenue, but reduce

[Sen. Ann Cummings (Chair)]: They can both be done. It's not an equal

[Sen. Randy Brock (Member)]: They both have to be done, not one. Always talk about how we have to get more money in. What we have to do is know how to get better results from the money that we got.

[Sen. Ann Cummings (Chair)]: Will we be overtaxed on passive income on the world? I'll get you go We are moving forward with the governor's plan for education, which is supposed to do exactly that. That's why this is the worst possible time to be supporting a plan that envisions removing millions of dollars from the education fund before we get there. Because remember, we know we've got high spending towns. We've gotta ramp down. We've got low spending towns. We've gotta ramp. I'm gonna give us a ten minute break, then we're going to come home, and we're gonna hear from Jill Remick on what were we hearing from

[Sen. Randy Brock (Member)]: Rochester.