Vermont Legislature SmartTranscripts:

[Sen. Brian Collamore (Chair)]: Good afternoon. Welcome to the Senate Committee on Government Operations meeting on the last day of the month, March 31, tomorrow afternoon. For technical hijinks with the April fools. We're gonna spend all day this afternoon with H five eighty eight, which is the OPR bill, and we've got different sections of that to consider. Not all of them will be considered today. We've got some other testimony later in the week. Well, let's start with sections eight through 10. Sadie Fischer, is that close?

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: Yes.

[Sen. Brian Collamore (Chair)]: Is with us. You could join us at the table if you'd like. Thank you. And Jyn Brault is also with us on the screen. And these two sections mercifully seem to be short and without controversy. So let's go around the room and just get you this because I see a lot of new faces here. Senator? John Morley. Morley's. Senator Alison Clarkson is not gonna be with us today. She's in the house general committee, I think, right now and doing something else. Represents Windsor County. Oh, Windsor. Yeah. I'm Brian Collamore from Rutland County.

[Lynn Jakobowski (Committee Assistant)]: I'm Lynn Jakobowski, the committee assistant. Hi. Nice to meet you. Nice to meet you. Tanya Vyhovsky, Chittenden Central District.

[Sen. Rebecca "Becca" White (Member)]: I'm Becca White and I'm in the Windsor District, so I serve with Allison. Oh,

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: great. Thanks.

[Sen. Brian Collamore (Chair)]: Well, welcome. And tell us about the CPA sections, if you will.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: Yes. So, for the record, my name is Sadie Fischer, and I'm the Executive Director of the Vermont Society of CPAs. Excuse my voice. Coming out of being a little under the letter. We represent over 500 of the CPAs and other accountable professionals in the state of Vermont. And there's a society similar to us in all the states. So we work very closely with our neighbors. Jen is gonna talk a little bit more about the pathways part of the bill specifically and what kind of impact she thinks that could have on our state. I wanted to just provide a little information and answer any questions you might have about the mobility section, which I know you had some questions about when you first discussed the bill. That's the section that really allows CPAs from Vermont to practice in other states and other state CPAs to practice here, much the way that you can drive your car if you have a driver's license in New Hampshire, if you have a Vermont driver's license, and vice versa. So it's really just an update to the language. It doesn't change fundamentally how it works. You're still under the jurisdiction of the state that you're in, that you're practicing in, And this updated language is important. It matches the universal accounting act, which is nonbinding, but which many states try to adhere to. And with the updated pathway, it just makes it all that much, cleaner and easier, for CPAs, who wanna practice in multiple jurisdictions. So

[Sen. Rebecca "Becca" White (Member)]: again, it's

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: not a huge change in the implementation, it's just a lot of change in the language. And it's important to just kind of think about, you know, 30 states, over 30 states already have either passed or are about to pass the pathway legislation and this mobility language together as a package. And so it keeps us in line and keeps our CPAs able to practice in other states and other CPAs able to practice here. So it really keeps us, especially with our neighbors, New York, New Hampshire, Vermont, Massachusetts, Maine, we're all on this Connecticut, we're all on the same trajectory and on the same page around us.

[Sen. Brian Collamore (Chair)]: For the benefit of the rest of the committee, five eighty eight, we're on page right at the bottom of page eight. And there's two sections here. This is section eight, and then we'll talk about section nine as well. I have definitely to the question about that, Sadie, at first blush, it seems like substantial equivalency and mobility are not the same thing, but maybe you can sort of explain that. In other words, I took equivalency to mean

[Sen. Rebecca "Becca" White (Member)]: Mister chair, do you mind do you just mind telling us what section you're on?

[Sen. Brian Collamore (Chair)]: Section eight.

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: Okay.

[Sen. Brian Collamore (Chair)]: Yep. So bottom of page eight. Right. It's here. Like, you know, certification or some sort of equivalency in terms of skill level versus moving around somewhere. Does that make any sense?

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: So the substantial accordance with equivalency language, when I understand it, I'm sure that OKR can even further clarify this, was really related to understanding that if somebody got their license in another state, that their licensure regulations has to be substantially equivalent to the ones that Vermont had. Right. What we're basically saying if we get that already, and there was a bot there wasn't a national administrative body that took on the language of substantial equivalency and started using that criteria for their own kind of purposes. Nothing nefarious. It just so what we're doing is removing that what most states are doing is removing just that length, that specific phrase around substantial equivalency because it is embedded in the mobility language. Okay. And it just makes it clearer and more straightforward about what we're doing.

[Sen. Brian Collamore (Chair)]: Senator White?

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: I guess on that point,

[Sen. Rebecca "Becca" White (Member)]: and I would wait, I think it's Tim I'll probably be talking to about this.

[Sen. Brian Collamore (Chair)]: But

[Sen. Rebecca "Becca" White (Member)]: is this change for principal place of business? This is where that changes. Is that changing it for it's for the whole chat, so it's not just for CPAs? Is that a correct reading of that, or is it just or is it licensure? I guess I have a question. It's because it says principal place of business that we're changing the definition. For CPAs. Oh, so it's only for CPAs. Yep. Oh, okay. Well then, I feel less Okay.

[Sen. Brian Collamore (Chair)]: Concerned. Yeah. Good point, though. Yeah.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: We don't wanna mess with anyone

[Sen. Rebecca "Becca" White (Member)]: else. Okay.

[Sen. Brian Collamore (Chair)]: Okay. Does anyone yes. Senator Murphy.

[Sen. Rebecca "Becca" White (Member)]: Yeah. Since we have you, I'll just start by saying it's hard to get your taxes filed in the state. It's hard to get any kind of financial professional support because there seems to be a limited number of folks. And it also seems like they're concentrated at the higher wealth range rather than at maybe where I sit, which is low to middle income. That's not you're the opposite of the problem. You're the folks trying to solve that. So I'm wondering if you could just speak a little bit more to if this will expand, maybe pulling some of our New Hampshire folks over, or is is there like an area that you could see maybe that we get to draw from for CPAs?

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: I think Jen is gonna speak to this exact point. All I will say about it is it's not intentionally trying to have more CPAs from other places. It is really because everyone's kind

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: of doing it this However,

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: it should open up the door. And I mean, live in Brattleboro where there are literally like five CPAs in the

[Sen. Rebecca "Becca" White (Member)]: whole I mean, you know. Yeah.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: So I definitely understand that. Understand that. And the hope is that, again, by making it easier removing some barriers that don't need to exist, keeping the quality really high, so making sure we're not watering down anything, and making it easier for people to hire and work across state lines that we will be able to eventually serve, you know, people more ex speaking.

[Sen. Rebecca "Becca" White (Member)]: Well, I appreciate that. And I would say I would love to learn more CPAs over here. So if even though that may not be You're trying to coach CPAs.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: I'm trying to coach CPAs. I think Jen might help. Oh, right. No. I'm just

[Sen. Rebecca "Becca" White (Member)]: trying to Well, I'll hold my question, but that was Yeah. Yeah. No.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: And she she, I think, is gonna speak precisely to that Why people leave question too.

[Sen. Brian Collamore (Chair)]: Yeah. I

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: think this bill were addressed, you know, this is going to help address one of the issues, the issues that you brought up, the question that you brought up. I mean, that's a problem that we are CPA firms are seeing all over The US. I don't know if this will resolve all of it. Don't think it will. It's just deterring kind of a fill, and we have more work in that. But that's definitely on our radar, and are going Sadie's doing her best to work on that.

[Sen. Brian Collamore (Chair)]: Jim, do you know now whether there are Vermont based CPAs that already go across state lines to work? Assuming these other states, as Sadie mentioned, already have this in place.

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: Yeah, so I would love to talk about what GFC is. I work for GFC, Gallagher and Flynn. To give you a little bit of what trends we're seeing, we are the largest CPA firm in Vermont. We employ over 100 employees. We've expanded services beyond tax and ANA, which is audit and assurance. And we have two offices currently in The US. Our largest one, we're based out of South Burlington, Vermont. We do have a office location in Lebanon, New Hampshire as well. Think what has kind of set us up for success is our pipeline, our goal for our pipeline for success is every year in October after the filing season, the extended filing season ends, we hire a minimum of three new tax and three new ANA staff members every year. In the past, it has new hires, we call them new hires, they have, you know, they have come from, you know, they're young college graduates in the past, it has been that. The trend is now there's less and less of them and these bright young college graduates are encouraged and motivated to move to the big city after they graduate to get experience working at a big firm. You know, we still try to make that connection, but because, you know, we've seen that later on in life they might move back to Vermont, they were born and raised here, whatever connection they might be, we're hoping to still build on that connection so that we can bring them back. So the trend we're seeing now is probably 50% or more of those annual hires, new hires that we get every year are no longer brand new college students, but people like myself who are in their second career. So they had a different career, went back to college, got their accounting degree credits and is going back into this field. We're hoping with this new pathway, it's gonna help, you know, Vermonters who are starting out in their CPA journey to give them a more attainable path to CPA license because I went through this, you know, I have a family, I have, additional responsibilities, know, like I still have to work a full time job while getting the credits that you need to be able to sit for the CPA and pass the CPA license. And then the current process or the current process is either there's two ways you can do it. You have to have 150 credits or you have to have a master's degree plus pass the CPA. The funny thing is the gap, the 150 credits, that gap can be filled with any credits. There's only 30 core accounting credits that is required to sit for the CPA. We're not asking to change that. So you can fill that 150 bucket with, you know, any unrelated credits, art, yoga, whatever it may be. My prior degree in this was fashion merchandising. So I luckily found a Johnson State College in the state here that was willing to work with me. I already had 130 something credits. They were willing to work with me and provide a certificate in accounting to meet the 150 credits by taking just the core CPA accounting courses that I needed. So I was very lucky thankfully, but I've seen colleagues, I have colleagues who who is waiting to pass with like they're taking of elective art class or IT class and something unrelated to the profession just to be able to fill that 150 bucket. So this kind of hinders their growth potential, because at our firm and I think many other CPA firms too, if you don't have credentials, you are unable to move past the senior staff level, like managers and above, especially those working in audit and assurance, you are required to have the CPA credentials. So that kind of limits their growth opportunities. And then what that forces us to do, which we have started doing, is we are because the pool was smaller of talent that we can hire from, we are forced to hire remote workers, so COVID made that really easy. We have a handful of staff members that are remote, and a trend in CPA firms is opening offices over India. We opened an office in Ahmedabad, India about four years ago, and it's kind of robust. The size of it is growing because they are encouraging their citizens to kind of go for this accounting degree, they are hiring and giving us the pool for that talent. So the mobility piece is important because a lot of my colleagues at GFC have their CPA license from many, many states, especially those foreigners, they have it in other states, but they are able still to practice in Vermont. So it's not changing kind of what we already currently do. We have lots of people working across state lines, back to that question you were asking. Of people Yeah, working we across state living it. It's here, it's happening. COVID made it easier with all the advances that we had to invest in. Now remote opportunities, why and far. Goal of this new pathway is to recognize that the steel is changing. I believe strongly that relevant work experience is much more valuable than unrelated core credits that we still have listed as the requirements.

[Sen. Brian Collamore (Chair)]: I would concur. Any other questions on section eight, seven, or what?

[Sen. Rebecca "Becca" White (Member)]: I guess my only question would be, so the pathways, if I'm understanding from your documentation, it seems like if you get a master's degree, you're kind of in a different path altogether. So do you see the change here potentially having fewer people get master's degrees or is this more for the group of folks who Yeah, I guess, do you see like, are people going to stop getting those? And I would look to both of you.

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: Yeah, do not. No, this is one of the major questions. UVM fully supports this bill, and we have talked to them, and the people, the students with the means and the ability and the drive to be able to get into the MAT program and go through another year of schooling, that still helps them accelerate their career, because they getting them ready to sit for the CPA and pass the CPA quicker. So that's not going to deter that at all. This is kind of just to help those that didn't go the traditional route.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: Okay, thank you. That's helpful.

[Sen. Brian Collamore (Chair)]: Yeah. As I'm looking at the handout, the difference between what exists now and what we are hoping to pass in May is a more focused educational piece on actual accounting rather than hiring someone that can fix mufflers and kind of like knows a little bit about accounting. I don't mean to disparage any muffler fixers out there. And also that extra year of experience in the profession itself.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: There was research done that showed nationally that that extra year of experience actually leads to much more success in terms of longer work outcomes and CPA exam passage than thirty hours of yoga

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: and training might

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: and that's not to say that some of those people, like in Jin's situation, you know, those extra hours were where she took whatever degree she had before and turned it into got the expertise that she needed in accounting. But if you've got somebody who have was an undergraduate major in accounting, they don't need more classes in accounting. They need more experience in accounting. And that fifty hours can cost a lot of money. So on top of while they're already working really hard under Jen, you know, doing a lot of work at these accounting firms, then they're trying to take these classes hand paid for them. And so it just becomes a layered barrier. And this is something that did used to exist many years ago, so it's sort of beefing up what we've had in the past.

[Sen. Brian Collamore (Chair)]: So I think we've stepped into section nine, well, meaning true necessarily. Do you want to talk about that as well?

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: I don't think I have anything else to add on that. Unless you have questions, we're happy to answer them.

[Sen. Brian Collamore (Chair)]: Have folks read the actual bill?

[Sen. Rebecca "Becca" White (Member)]: No, this is just their test. Right?

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: Yeah. It's just your test. Just restates. Okay. And what's the how

[Sen. Rebecca "Becca" White (Member)]: many people pass? Like, what's the rate of passing the uniform exam?

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: Yeah. So that's administered by one entity nationally, the CPA exam is. And national passage rates, it varies. There are five sections. Correct me if I'm wrong, Jen, but there are five sections, and it varies by section. So the overall pass rate is somewhere, like, on your first try, kinda like probably a driver's license. I don't know what those numbers look like. It's not very high. It's like forty percent.

[Sen. Rebecca "Becca" White (Member)]: Oh, wow. Okay.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: But UVM's program, which is why people will still keep coming to get their master's degree at UVM, is phenomenally high. Oh. They have a very high pass rate. I wanna say it's oh, in the high eighties, if not in the nineties. It's an extremely respected program and hugely successful. So people who can and are motivated to kinda continue in that master's pathway are still gonna be really attracted to that, especially to a program like UVM, which is the only one master's program we have in the state. So Johnson doesn't it's just a bachelor's. And and many of the other colleges are changing to either have just an accounting focused business degree or

[Sen. Rebecca "Becca" White (Member)]: Well, that explains the new like, it can be a con

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: it doesn't need to be. Okay. Yeah. It doesn't have to be major because a lot of colleges are doing a legacy accounting major, not just in Vermont, but general.

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: No category Major in anything as long as you have that 30 core accounting credits.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: And those are spelled out in rule and we would not be necessarily we would not necessarily be able to change those because they're still fit within a regular bachelor's degree format.

[Sen. Brian Collamore (Chair)]: So is this in the pathway in line with the other states pretty much?

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: Yes, yeah. I think the number of states who have passed it is know it's over 20. I wanna say it's in the 25 range, and then almost all of us are in process. And, again, with our closest neighbors, they're all on this route. New York has already passed it, and and we're very close in the other states. Maine is a little bit behind, but that's because they can only suggest legislation every two years, and this is really quickly.

[Sen. Brian Collamore (Chair)]: This is third. Is that third?

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: Does it say we're in

[Sen. Brian Collamore (Chair)]: the 30 state? 30 states? Yeah. Yeah.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: Makes sense. Yeah. With her the like, every day, I feel like I get a new email. Like, we just packed

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: in the.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: And I'm like, great. So, yeah.

[Sen. Brian Collamore (Chair)]: Thank you very

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: much.

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: Alright. Well, you so much for the time.

[Sen. Brian Collamore (Chair)]: Thank you, Jen.

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: And thank you. Thanks, Jen.

[Sen. Brian Collamore (Chair)]: Okay.

[Jen Brault (CPA, Gallagher, Flynn & Company, LLP)]: Bye bye.

[Sen. Brian Collamore (Chair)]: That worked. We're ahead of schedule, is kind of unusual. I don't know whether we No. Next witnesses here or not. It doesn't look like it. Are you with the dental folks?

[Sadie Fischer (Executive Director, Vermont Society of CPAs)]: No, I'm not. I'm with OPR.

[Sen. Brian Collamore (Chair)]: Oh, okay. Yeah. I'm sorry.

[Unidentified OPR staff member]: The two dental ones are supposed to be- Okay.

[Sen. Brian Collamore (Chair)]: Well, let's take a five minute break, and we'll be back as soon as we touch base