 We're going to hear from Joyce about S163, is that right? No, it's on herself. Oh, yes. Speaking of S163, did anybody know that that was going to go back to... I do. I'm ready. Not a quote. Me either. I'd like to comment that some things had already passed. Well, that shouldn't matter. It would have been nice to know. We had an amendment on it. Oh, we did. Okay. So, does anybody have anything they want to... You want something? Hi. We're here. You're on board. Yes. Bill. Can't feel the family has expanded. Baby Mary came on December 10th. Everybody's happy. Fantastic. In the pictures, you're going to... He shows his pictures all the way through. I've got no one to see. That'd be good. Awesome. That's yesterday. We're just... We're just... Oh, we don't know who else. She's completely finished. You know, where they're all red or whatever. Yeah, that's right. Which is beautiful. So... Oh, Abby's good. I stalled long enough for... Everyone knows the really sad news that Peter left. And hope everyone knows that really good news is that Abby is going to be joining us in the position that Peter had. So, I just wanted her to come in and say hello. I think there might be a couple of people on the committee who don't know you. Nobody? No, I have never met a high-level shy welcome. Yeah, right. So, Abby was here as an intern three years ago. Four years. Four years ago. And then went to work for the tax department. And now she's back. So, anyway. So, she'll be spending a lot of time with us. And I just wanted people to be able to say hi. Thank you, Abby. That's it. Thank you. All right. So Joyce, you've got some material. And what we're going to do is we're going to be reminded what we passed on paid leave. And we're going to look at what the Senate has passed over. And the report on the floor is going to come from the general committee, not from us. Although people want to know what we think will share that. But basically it's going to come out from the general committee. And my understanding is that there's going to be a conference committee. That's sort of the point. So, this will not be the last time we look at it. Thank you for the record. I'm Joyce Menzies during the Joint Fiscal Office. And it's great to see everyone in 2020. So, I think we're going to start with the April fiscal note. I sent you the more recent one that I just finished this morning. So, we'll want to talk about that. So, Joyce, you're going to have to speak. I know you're talking with her. You have to speak up a fair amount because there's a blower back. It's not this one, Joyce. That's the April one. And I sent you one this morning. I do have it. Okay. So, we'll first do this one. Okay. And then we'll just want to talk about you two. Great. Thank you. So, you may recall that the House passed H107, paid family and medical leave. This fiscal note is dated April 9th. So, I thought that I'd just run through this quickly to remember what the House passed. And then we'll move over to the Senate proposal of amendment, which happened at the end of May. And it's a little bit different. And we'll talk about how it's different. Okay. So, this is a family and medical leave insurance program. The leave weeks are as follows, as passed by the House, up to 12 weeks of parental or bonding leave. And remember that applies to births, but also adoptions and so forth. And that's 12 weeks per parent. And then we'll see a difference when we get to the Senate version. Up to eight weeks of own medical leave or family care leave. And again, we'll see a difference in the Senate. They made the medical leave voluntary. So, each employee... And then medical leave is what we sometimes call TDI or only or whatever, just to make sure of disability. I had this opportunity to have a meeting on this yesterday, so I'm remembering some of it, but I'm guessing there are people on the committee who are not remembering any of it. Sure. So, feel free to ask a question. Yeah. So, the maximum leave is 12 weeks in a 12 month period. And that's if bonding is involved. Then we would have the 12 weeks. The benefit amount, remember the benefit amount back then was linked to the Vermont livable wage. And the Vermont livable wage comes from JFO. So, every two years we sort of estimate how much it would cost for different households to live in Vermont. So that used to be what we tagged the benefit to. And we'll see that there's a difference when we get to the Senate version. But this was 90%, a person would receive 90% of their average weekly wage up to the Vermont livable wage, which was about 533 a week, 27,700 a year. And then 50% of the employees' average weekly wage over that amount. That's sort of tiered progressively. And the maximum weekly benefit amount that any person could receive was 2.5 times the Vermont livable wage, which turned out to be about 13 and 34 per week. All right. How did the funding work? We had payroll contributions based on wages up to the Social Security Taxable Maximum, which was 1329, 132,900 in 2019. That's increased a little bit, and we'll see that in 2020. 0.1% of wages for six months before benefits begin to cover the administrative costs. And then 0.55% of wages once benefits begin to cover 55 million in FY 2021 and 76 million in benefits over a year. So just to remind people, so there was a transition payroll tax of 0.1, right? And then it was 0.55 for the fully implemented program. Is that right? Right. Right. Yes. And the employer had the option of paying some or all the contributions due. And that's still going to be true in the Senate version. Mechanics of the funding of the employer would remit the payroll contributions quarterly to the Department of Taxes. The legislature would set the contribution rate annually. So the legislature would get a report every January about the financial status of the program. It doesn't expire at the end of the year. It's just it doesn't change. The rest of the legislature comes in and changes it. Correct. Okay. What about the administration? The Vermont Department of Financial Regulation will issue a request for proposals to select an insurance carrier. So remember we were using the third party administrator. An insurance carrier would run the program, a program that meets the goals of the legislation in a more cost effective manner than a state run program. Remember we were seeing quite large administrative costs coming out of the Department of Labor and also out of the Department of Taxes in order to set up the program and then keep it over time. There were also employer opt out rules that had to be written. So if an employer already or proposed to offer a pay family leave program that was equivalent to or better than the state run program, then the employer could just opt out and the employees would not have to pay this contribution. Great. Okay. The Department of Vermont Department of Labor would write the rules regarding the appeals process. So if your benefits were denied for some reason and you didn't agree, you could appeal that decision. They would carry out marketing, which means letting people know about the program and making sure that people could sign up if they were eligible and handle any appeals to come to the state. That's redundant. Oh, handle the appeals to come to the state. Okay. The Vermont Department of Taxes will collect the payroll contributions from the players on a quarterly basis and remit them to the FMLI special fund. So all the contributions go into the special funds and then the monthly premiums paid to the insurance carrier come out of that special fund. I just said that. The special fund would earn and retain any interest on the balances. Okay. What about state budget impacts? Are there any questions? You're just going for the house version. Yes. This is all house. Yeah. And then we'll move to the set. Okay. Expenditures in FY 2020, the Department of Taxes asked for a million dollars to develop software for collecting contributions. The Department of Labor, 217,900 for rulemaking and administrative tasks. So that was all calculated. So when you say fiscal 2020, that was assuming the bill passed last year. And so everything would move up. Everything is going to move up, no matter what. No matter what. Okay. For state employees beginning in this fiscal year, FY 2020, the maximum all fund appropriation need if the employer pays the entire contribution is approximately 158,000 in FY 2020 and 226 million in FY 2021. So the program was supposed to start in April of 2020. So there would be just one quarter in FY 2020. At 1%. At 1%. And at 1%. Right. Right. And then FY 2021 would be the full year. And about 40% of that cost would fall in the general fund. So in addition to those direct costs, there may be costs to replace state workers who take longer leaves or costs associated with leaves with relatively new employees who haven't built up their sick leave or paid time off who might be eligible for longer leaves. So there could be additional costs. HR, the HR department couldn't tell us exactly what estimate that may be. Other indirect impacts, any employer contributions for public school employees or contract workers, home health and hospice workers could indirectly affect the state budget as well if they're taking leaves that they didn't use to take. Okay. What about effective dates? This was effective on passage back in May, I guess, 2019. Rulemaking, meeting on passage, favorable contributions were to begin April 1st, 2020. Benefits were to begin October 1st, 2020. And again, as we're all being pushed out. Any questions on that? That's the house passed version. Okay. Now, we have a choice. We could move right to the brand new fiscal note, which is based on the Senate proposal of amendment. And we can talk about using the statewide average weekly wage, rather than- I think you should go through the Senate amendment first. Okay. And then go to the details. Okay. Great. So we now want the January 7th. Great. Excellent. Oh, you're doing the fiscal note. Okay. The fiscal note is better. Okay. Comparison. Okay. Comparison. Comparison. Well, I was thinking it would be helpful to go through the rules first. Yeah, I think it's great. And that was the only place I found them. Yes. Maybe they're elsewhere. Yeah. Okay. So let's first look at, as passed the house, since we just talked about all those provisions. So you can see, I've got this little short-hand description of the bill up at the top. So it was 12 weeks for bonding, family care, eight weeks for own medical care, sick leave. Wage replacement was the 90-50, 90% up to something, and 50% above that. Maximum benefit was 2.5 times the Vermont local age. Okay. So we've got the maximum benefit of 1334. We've got, according to the modeler, remember we had a modeling friend in Washington, D.C. who was helping us figure this out. According to the modeler, if people were offered up to eight weeks of own medical leave, on average they would take 6.6 weeks. So that's what we were seeing in the nationwide numbers. The bonding parental benefit across men and women was 8.5 weeks. So you can guess that women were likely to take more and men were likely to take less. The family care benefit 4.2 weeks, on average. And then we have the costs. And for this, we rely again on the modeler who tells us a person of such-and-such salary would likely take how many weeks, and now all those up, and you get the costs. So it was about $41 million for the medical benefit, about $25 million for bonding, about $4.7 million for family care. And that brings us to a total benefit cost of about $71 million. The administrative costs. And these are estimates, of course, because we don't know exactly what the third party would charge, but we have an idea. So the administrative costs are about $6.6 million, leading us to a total cost of about $77.5 million. For taxable earnings in FY 2021, we're projected to be $14 billion. That's the total wage base. Yes, total wage. That's taxable earnings. So that's under the Social Security maximum. That's still wages. Absolutely. We're not talking about not wages. Absolutely. Okay. It's all wages up to the Social Security taxable maximum. And cost, as a percent of taxable earnings, was 0.55%. Okay. And now we can move over to the Senate proposal of amendment. So we had... So the change here is that we had 12 weeks for bonding of parental leave, but a 16-week limit per couple. Okay, so if there were two parents with one baby together, they could take no more than 16 weeks. And in the House it would have been 24. Yes. And we now... Well, Damien tells us that that may be unconstitutional because it's treating people differently on their marital status. And when I asked the model board in D.C. to help us with this, he had never heard of this before, and maybe that was a clue. Okay. Well, I mean, the Common Benefit Clause is unique to Vermont, but it's a bit of a stretch in a way. Okay. But it's an issue we're not going to deal with anyway. Okay. What's a bit of a stretch? To say it's a problem? Yeah. Okay. Not going to be my decision. No, I just wanted to know what you meant. Yes. Right. So we stay at eight weeks for family care. And then the big change is that own medical leave moves to a voluntary benefit. So not everybody has to pay for that own medical leave benefit. You can opt in as an employee. And each individual can opt in. And if you opt in, then your employer has to support, you know, collecting the contributions and so forth for you. I assumed 40% participation. And that is based on how many people already have sick leave through their employer that is relatively, you know, similar to this or more generous. And also on some nationwide information about how many people opt in to this sort of program. The wage replacement is now $90,000. Stop you there just because I remembered it wrong. I thought the opt in was the employer. I didn't realize it was by employee. I just want to have that in my own brain. In the center version. Yeah, in the center version. So as an employer, you might have one employee that's in and another employee that's not in. Yes. And you may also be thinking that employer can opt out if they have... Yeah, that one I know. Right. So the opt in is employee by employee. Yes. So wage replacement is a little bit more generous. It's a little bit more generous above the cutoff. It's now not 55% above the cutoff rather than 50% under the house bill. And the maximum benefit has moved to be the statewide average weekly wage. So that is a number that is published by the Vermont Department of Labor yearly. And it turns out to be a little bit lower than 2.5 times the... from a livable wage. There's numbers in a minute if you'd like. So the Vermont average weekly wage is $964. And that was released in April of 2019. So that's actually quite a lot lower. You said a little lower. Yes. It's quite a bit lower. It's not going to catch up. No, no, no. No. It's going to stay lower. No. But our thinking was that it's probably more stable because the livable wage bounces around depending on assumptions and so forth. Yeah. Sam. So both versions have a rental bonding label taking average of eight and a half weeks so there's no actual savings from the 16-week limit. It's very limited because it turned out that the average was 8.5 and it wouldn't change much with the 16-week... Actually, I was looking at these numbers that were a 14-week maximum. It would have a squeeze effect but it's 16 weeks. It didn't seem to matter much. It's just administrative work. Yes. Thank you. George. I want to be clear about this maximum benefit. It's 90% in the Senate version and 90% up to what? It's 90% up to the employees. It's 90% of the employees average weekly wage up to 55% of the Vermont average weekly wage which is 530 per weekend. No, that's missing a piece. So ours was 90% up to the livable wage and then 50% of your salary beyond that. With an absolute cap. For those three cases. But on the Senate side it's 90% all it says here is 90% slash 55 max. Right. There are two 55s running around. Okay. So it's 90% 90% of what? Of your employee, your own average weekly wage up to 55% of the Vermont statewide average weekly wage which is a fixed number. So let's relate over there up to 55% of the yeah, right. It's 964. That's the maximum. That's the maximum weekly benefit is 1334 in our version and 964 in the Senate version under current under 2020. Right. 2019. Right. This threshold is about the same as it was using the livable wage. That's why we used the 55% of the statewide average weekly wage. So in the old days under the Vermont up to the Vermont livable wage it was 27,747 per year. That would be your average that would be your annual earnings. That's the 90% level. No, no, no. Yes, yes, yes. Sorry. Yes. And now it is 90% up to 55% of the Vermont statewide average weekly wage which is 27,582. So it's very, very close to the same threshold. Because this is the average weekly wage is 964 dollars. That's the maximum. Just a normal average. Yes. I have a page that will show you many numbers that might help you. I think we need to see the wage replacement in the House version 90 and 50 and of what and then the maximum benefit which is two and a half times of what and the same thing on the Senate side. We're missing a piece when we're comparing somehow. I don't know what we're missing but I know that one is three things and the other is two. Right. So in the House version it was 90% of your own average wage up to the Vermont livable wage. Two and a half times. Nope. Nope. That's the maximum benefit that anyone can get. But the 50% is The 50% is over. Any earnings over that Vermont livable wage back in the House version you would get 50% of your own up to the maximum. Right. There's three pieces. There's the 90% there's the 50% and there's the cap. And we need to see that both in the House version and in the Senate version. Listen, listen. It's right here. It's 90% of your own wages up to a different threshold which is now 55% of the Vermont statewide average wage. You're skipping the 50% again. No. And 50% of additional wages above that threshold until you get to the cap of $964 a week. It's the same. It's the same structure. It's 90% up to a threshold and 50% of your earnings. Yeah. So I think in the House version it was 90% up to the Vermont liveable wage. There was no other percentage in there. It was a straight 90% of the up to the Vermont liveable wage and then 50 over. But what you're adding is another percentage. You're saying 90% of the weekly wage but not up to the average weekly wage but you're saying up to 55% of the average weekly wage. That's the extra piece that's in that brings it down. No, no, no, no. No. It brings it to about the same threshold. Remember, I just offered the threshold. So the old threshold was $533 per week and the new threshold is $530 per week. It's just that we're using a different measure. But you're saying 55% of the statewide average weekly wage equals $530. So that's the threshold. So you get 90% of your own earnings up to $530. If you earn more than $530 per week you get now 55% of your own earnings above the threshold. But the maximum the problem is you're using the term up to twice and it's graduated up to a cap. Up to a cap, absolutely a cap. So there's 90%, then 50%, and then a cap. Yes, but it's now 90% and then 55%. I'm talking just the house we're just trying to get grounded in one of them. Yep. And so it's 90%, 50%, and the cap. And then the Senate version is 90% of something else or 90% of something, 55% of something up to a lower cap. Yes, absolutely. Those are the I'm not sure what I'm multiplying by but that's really the cap. I mean it's really the cap. It's the cap that's doing it. The cap is the big difference. So when you're using the term up to a cap, that sounds like a cap and it's not. There's only one cap on each of them. Okay. I'm using or threshold for the middle piece. Yeah. Okay. I think I'm over on that. Are people getting it? No, I'm not sure they are. Are we good? Okay. I think I need an example. I still don't know exactly what they're multiplying by but what's key is the Senate version the absolute maximum is quite a bit lower. Right. And what that means is that people on the lower end of the income scale are getting a proportionately higher benefit. Correct. Right? Correct. Yeah. Even though they're not getting the own medical leave. Cool. But of what they're getting, they're getting a proportionately higher benefit. Questions? Any questions? Let me make sure that I understand. You want to hear it again? Vermont average weekly wage $964. That is currently the right average weekly wage. Yes. That changes every April. Okay. Yeah. That's your cap. That's the cap. That's the absolute cap under the Senate version. Yeah. And it is the weekly current weekly average wage. Yes. Sam. So how can it be how can that at $964. Sam. Is that a pretext? No. Let me do it. It would seem like it would be. No. Okay. Okay. That's the absolute cap under the Senate version. Okay. That was I remember we went through all the stuff about what's next. Well, that's why we went with the 90% number, right? But I just Yeah. The average weekly wage seems like that would be a pretext. Pretext. That's a pretext. You mean the the actual average weekly wage is gross aren't it? Right. And pretext always. People start to get I mean the thing that I don't really look at this is that it was better for lower by much by some and I don't see how it's better. I see how it's worse for people that are making more. It's 55% as opposed to 50. Not by much. Okay. But it's 90% of something smaller. No, no, no. It's 90% of your own your own wage in both cases. Until your own earnings $530 a week. And it used to be $533 a week. So that threshold is about the same. That place where it hits the second tier. Yes. Whatever you whatever you want. That's easier for me to think about. So first tier is 90% and that's your own wage in both cases in both cases the second percentage applies to your own wage. It's 55% in the Senate version, in the House version, in the in the Senate version is effectively lower because we've pegged it to something that's smaller. Correct. Is that right? Correct. Now to go down the column you can see that own medical benefit is fewer weeks because we're limiting it now to up to six weeks rather than up to eight weeks. So it's 5.2 weeks. The bonding is about the same 8.5 weeks. Family care benefit is the same 4.2 weeks. So the 5.2 in the Senate version is the number of weeks for the people who are taking it it's not an average of people who take it and don't take it. No, no. For those who take it it's 5.2 weeks. Yes. And that's the opt-in. Yeah. That's voluntary. Yes. Okay. And then we have the cost in terms of benefits so the own medical benefit turns out to be about $1 million. Bonding is $22.6 million. Family care is $3.7 million. Total benefit cost. You can see I've separated out now the mandatory benefits bonding and family care from the voluntary benefits which are the sicker. And then we have administrative costs. I've put all of the sort of setup and administrative costs under the mandatory programs because you have to have all that medical stuff in place in order to do the family care because family care is taken care of sick relatives. So you have to verify that they are seriously sick and so forth. So there are some running costs associated with the voluntary sick leave but the startup is all placed under the mandatory programs. So total cost comes out to be $29.7 million mandatory programs and two voluntary programs. And again we're looking at the same taxable earnings and the contribution rate would be .2% for the mandatory programs so everybody would pay .2% and if a person signed up for the sick leave they would pay .38% or a total of .58%. So the cost so I'm wondering why it's such an additional amount for the TDI when I look at the cost of the own serious medical benefit being .20.4 million but the parental is .22.6 is it just because it's just generally more expensive? So you can see let's you can see that under the house version where it was mandatory and everybody got eight weeks of sick leave it was and now we've moved down to six weeks and I'm assuming that only 40% of people take it take the sick leave but I'm also assuming that the 40% of take it are likely to use more of it. Well actually it's less I think they are they can only it's 5.2 weeks rather than 6.6 yes because we limited the max to six weeks right to the percentage of it's using closer to the 6 usage under the house passed you said 40% usage under the senate by usage I mean how many people opt in to paying for the benefit oh not usage not usage no so I have to rely on the modeler for help on you know how many people use it and there's an adverse selection factor as well will be more costly that's right yeah so there are two things going on they're more likely to use it and they're more likely to have longer sick leave no so it is more expensive per person who is enrolled to do it on a voluntary basis because of adverse selection questions anyone has good we're good enough shall we shall we look at the the new January 7th fiscal note okay here we are and I wrote this fiscal note based on the May 24th Senate proposal of amendment and these are again based on the old dates and the old numbers the 2019 numbers so this has not been updated to 2020 it's going forward or $23 I'm sorry what's not okay oh I'm sorry this is so at some point we'll update but not here okay yes yes this is the fiscal note for the Senate version that we just looked at correct correct so again we're at 12 weeks of parental bonding leave maximum 16 weeks per couple with no waiting period both family care and voluntary medical leave have a five-day under the Senate proposal amendment so that's a bit of a change you get up to eight weeks of family care leave but only after you've been out for five days okay and we had no waiting period in the house there was no waiting period in the house yeah do you recall their logic their five-day waiting period um say what it's like I was just saying it's not yeah understood do you recall the discussion um I asked that is that okay that isn't that's not okay she doesn't have to answer say whatever she wants uh there was discussion yeah and um thank you answer so so they felt that if a person is out sick for a day or two with the floor that shouldn't qualify but if they're out for thank you okay so the the waiting period the five calendar days waiting period you don't get the leave going back to that time no no it's unpaid that's un-leave-covered whatever you want to call not paid okay although you might have had 60 days or vacation days but this this program yeah right um and it's interesting um if an employee opts in to the minimum of three years and that's to avoid some of this adverse selection right after three years they can choose annually whether to renew or not yeah that's um and again the maximum leave for all types of leave in a 12 month period is 12 weeks okay here's the benefit amount written out so it's 90% of the employees average weekly wage up to 55% of the Vermont average weekly wage $130 per week and then above that threshold it's 55% of the own weekly wage up to the limit of the maximum weekly benefit which is $964 a week statewide average so the max that anybody could get is 964 okay so um this a worker earning at or above $73580 figure in the house to that 780 through the 580 uh I I think it was about $113 it's quite a lot it was more yeah it was around that if you remember $113 that okay we can do that but I think it's around that any questions anyone has okay funding payroll contributions again based on wages up to the Social Security taxable maximum which is now and it's sort of interesting that taxable maximum is indexed to average wages in the U.S. economy and those are growing faster than um Vermont's average wages so um so uh yes that's going to rise faster than the average wage in Vermont is going to rise um for the mandatory benefits an employee that was supposed to be getting the first 2020 and that amounts to about $29 million for the voluntary benefits that's the .38 percent of wages again beginning April 1st 2020 and that amounts to about $22 million for the 40 percent who are assumed to opt into the system the employer has the option of paying some or all so that's completely up to the employee I'm sorry up to the employer the employer does have to send the total payroll contributions quarterly to the Department of Taxes there is an option for the program administrator this insurance company to collect the contributions directly if they choose to do so and again the legislature may change alright now we'll move on to administration which is a little bit different here now we have more collaboration among various departments so the commissioner of financial regulation in consultation with commissioners of human resources labor and tax will issue a request for proposals to select an insurance carrier to run the program and that insurance carrier must run the program so that is in the bill and if no lower cost carrier is found then the state will administer the program and we'll see later that that decision would delay all the dates of implementation by a bit because it's going to take time to set up all the software and all the but it wasn't a long it wasn't like a year's delay it's a big number the benefits would begin July 1st 2021 instead of October 1st so it's a nine month delay nine month yeah okay the commissioner of financial regulation will adopt rules for approval of an employer's alternative insurance or benefits plan that allows the employer to opt out so that's if they have an existing plan and it's equivalent or better than they can opt out the commissioner of labor will adopt this is all the same as in the hospital I think pretty much yeah yeah commissioner of labor has eligibility appeals education efforts yeah right and commissioner of taxes still does collection and remits them to special funds special funds can earn interest right same okay good state budget interacts so again to private taxes we've got a million to develop software for collection the department of labor would get the same amount 217,900 for rulemaking administrative tasks now here I gave an example for state employees beginning FY 2020 in April so the employer would pay .1% of wages so that's half of the .2 right so that would be 152,000 in FY 20 and 628,000 in FY 2021 and again those years would have to move forward if the bill were passed this session and it's still the case that 40% of the cost comes from the general fund and again there may be additional costs for additional leave longer leave and again we have other indirect impacts on the budget okay effective dates again effective on passage rulemaking can begin on passage payroll contributions begin April 1st or July 1st if there's no private carrier found and benefits begin April 1st or July 1st 2021 the next year if no private carrier is found and now on this if there are no questions so those are the same dates that we had in the house the bill April 1st if there were 1st now I'm thinking more if there's no private carrier I don't think the house bill was explicit about what happens yeah and the this would be a big stretch for them if there were no we think they're going to find a private carrier but they're denying the benefits for an entire year right I mean 90 months from October no I'm sorry right a year from what we had right yeah if anyone wants to see all the nitty gritty numbers I've attached the spreadsheets I don't think they're going to go through them unless there are questions but the the one thing you may not have seen before is in lines 7, 12, 13, 14 the treasurer's office was getting nervous about the cash flow coming in and out of the special fund and so I actually took the time to look at each month's premium payment to the insurance company and when the collection of the payroll contributions was coming in to find the months in which there was a deficit or a big surplus or whatever and the treasurer's office has scrutinized those numbers with some interest so that's all that business they think they can handle this they were worried about big millions of dollars in the red that would present a problem but they thought that this looked pretty good good yeah questions anybody is there one more sheet one more sheet is the detail about the different measures for setting the benefits so it compares the Vermont livable wage to the Vermont average weekly wage and it might be worth just taking a quick look so that I can point out the critical numbers here so if you look at the first line in the box it says Vermont livable wage 2018 and that was announced in 2019 right once they have the data so that is $533.60 so does that can announce January 15th, 2020 so I thought when I looked at it recently that it was announced oh yeah the Vermont no sorry I'm getting confused so that's the Vermont livable wage that's estimated by JFO and that's done every two years so it won't be updated until next January a good reason not to use it yes right and then if you go down below you'll see the Vermont average weekly wage in 2018 in the box still second from the bottom and you can see that that is $964.40 right so we wanted to get something close to that $533.60 and that's why we chose the 55% of the Vermont average weekly wage which turns out to be $532.42 pretty darn close so that's why the switch okay are there any questions about that the maximum benefit is the $964 just the straight average weekly wage statewide and other states use the average weekly wage is that right I'm just looking at the right on in there that's yes New York Washington Massachusetts and their upcoming family plan yes they are statewide average but they have a different set of percentages right 60 well they're around 60% 50% but isn't the real difference here where they put the cap because they put it at the average weekly wage you could have put it at 2.5 times if you want to be closer to the or two times or something that's the thing that's making the difference you're using a different measure of the wages but the thing that's making the center proposal different is that they're not doing 2.5 times they're doing they're just taking and in large part that's because they looked at 2.5 times we had a higher we had a higher livable wage and then we made it 2.5 times the livable wage was actually lower the livable wage was lower but we had it 2.5 times but it does make sense to use the average weekly it does make sense it does make sense it's updated every year yes that's not what's doing the work making it different it's the cap you could set a cap at 1.25 or you should set a cap whatever you want to do that was my point that changing if you're going to do this what's making the senate thing different is they have a different cap that's what's making it different it could go down though whereas the cost of living will always keep going up not necessarily you could have deflation right we haven't had it since 1952 but you could have it kind of theory the livable wage could go down that's right we had it going down I mean there are no good data really from the wage so we're sort of picking at whatever you can find so yeah it does come around okay are there any other questions? aren't you all glad that we're back working with this again? well I now understand the senate proposal which I yeah I'm slightly off topic but in the meantime the federal government has passed a paid family leave for federal workers did you look at that at all? they're just in terms of what they did I'm just curious so I believe it's 12 weeks for bonding is it more than that? is it I don't think so they already have sick leave and they already have the possibility for family leave so this is for their own employees for federal what is worth stopping for a second on is the state employee agreement that has been engaged not so that is by the legislature yeah but I understand agreed on right agreed to so that is 6 weeks leave I don't know I know we don't have very many but what would happen to federal workers that are residing Vermont we can't do anything with them anyway we can't tax we can't do anything with them I mean we I don't think that they can require the federal government to pay us taxes do you know the employees they have a program so they wouldn't be part of this so well right there is a question the state employee program is 6 weeks right and this program this program would be a little bit more generous they would have to show that it's equivalent or better right so so you raised a different question which is what's happening with federal employees yeah we've got a federal employee residing in the state do we have the I'm not going to make any difference in terms of dollars I assume but we can find out what the law is I don't know what it is typically they can't tax the federal government we can tax federal employees what's up here right here we'll find out we're guessing George so if it didn't save any money why did they mess with the 12 weeks according to law and they didn't save any money but they cut down the benefit you mean putting on the 16-month limit but the estimate expenditure was still exactly the same right so it didn't start out with a tighter cap it's 16 weeks per couple it was a smaller number of weeks per couple I mean there was pushback so it moved up to 16 weeks and it turned out in the numbers that at 16 weeks it didn't matter to the cost so why would you do a smaller benefit there's no cost saving it's a really good question again then there's that logic senate discussion you're not like language you're not recording yeah actually my question was going back to the agreement with the state employees and I know if the legislature doesn't fund it or there's a different program there was also something about employees would get a 0.25 percent salary wage increase wage increase right yes so yes what can you elaborate a little bit on what the so the legislature has to provide the funding which is what 2.5 million I think in that all part that's typical the pay act that's nothing unusual about that but this is 2.5 to pay for this new program the fact that we have to provide funding is that funding for this new benefit then wages would go up 0.25 percent but we'd have to fund that that's the nature of the kind of that's what the pay act does and if I were calling correctly if our program were to pass they would still get the 0.25 percent is that true did they I don't know I guess I was sort of asking that that's what I heard was true yeah because that's basically saying that their program is not as generous as ours and they would have they would fall on ours yeah ours so that would be another sort of indirect cost I guess to our program at least you're going to find out but it actually said right question federal employees questions state employees we'll get procedure yeah this was just delayed on the floor one day yeah do you know what so general committee is going to be looking at it this afternoon I think that's where Joyce is going to go when she's done with us they have Damien up there as well who sort of knows the ins and outs of the bill I didn't feel that we needed to have him come in and they need him and they are going to take a position on the bill most likely not to concur and get a conference committee and that will come up tomorrow and regardless they need to change the dates right no matter what dates need to change and there needs to be a updated fiscal node and so on Joyce pointed out to me yesterday everything changes so it's not like the wage base is going to change the cost of the benefits is going to change the average with the wage all those things will change and the tax rate will be surprising because the changes are small so that's but she's going to update the fiscal node before there's a final vote on the bill so assuming it goes to conference committee you know they'll meet they'll come up they'll work from the two versions probably more the senate version but they'll work from the two and come up with a compromise and we'll look at it and again I don't know if we'll take a position on it or not but we're not formally taking a position on this Peter just is it so that the conference committee would logically be comprised on the house side of folks from the general committee I don't think whatever the speaker decides to do I ask that because I remember a very robust discussion over what happens if in a couple of years we're unsatisfied with our choice of private insurance administrators and we talked a great deal about that I don't know that we have a result but it was an issue I think not just for myself some way to measure success so to say or not success and then decide do we want to take it over we being the state of the law yes there is a piece of the bill that very clearly states that after four years I was trying to find it it's towards the end I just wanted that perspective to be represented I guess it's the issue and that reminds me that I think there's the other piece that's in this bill is a study to determine how we go to mandatory TDI and self-employed and self-employed for yes a lot of people but not an issue we felt like we could resolve where we were right probably other studies in there as well great thank you thank you so this I think this is going to be up tomorrow I guess at least that's why we were asked to act quickly and not that we're acting here look at it thank you look at it yep so people need a two-minute break so I thought it would be good if we spent a little time on the summer first letter and um I've been very excited to have other side stand up and then you can do it and then turn around and pull out and shoot you right out maybe check to see if it's there better see check to see how big people see so Marcus here he's going to talk about she and teaching self insurance in the December first letter and Craig Folio who is now the commissioner of the Axis is coming in at some point and he had another meeting so he had a schedule issue and he will also have a chance to talk about the letter which is again no decisions we're just getting grounded when this is going on okay so good afternoon December 1st education fund outlook and um to be yes that's okay yeah that's a balance here I don't have a problem it's kind of okay shortly everybody else okay I'm going to use one because I need to I'm going to use that okay I have two I have two I have two I have two I have two I have two I have two what? yeah everybody wants one oh it's right yeah I feel the right I understand I need one back oh we need we need one more yeah I guess so coming I think it looks good she did okay there they are okay so I write January so I'm going to okay okay all right block us through okay so so I have to start out with the normal caveats we go through every year this is the first look at what tax rates may be for 2020 Brad Brad's over here I think he would agree with me that the primary driver of the tax rates on the sheet is education spending and at this point education spending is I would call an educated guess we won't actually know what board they're going to be presenting to their voters on the town meeting week until sometime in February there and at that point we'll have a much much better idea of what things look like so keep that in mind we're looking at these tax rates there's uncertainty around some of the spending things and I'll go over that when we get down to there and I'm going to ask a question but education spending is that the same as education payment yes so yeah and we changed the name we haven't changed the name it's called an education payment you know the terminology isn't great because education spending sounds like it could be budget it could be number of tax that is the same thing that's the same thing and so that education payment number on line 10 is what drives the tax rates so when we're referring to education education spending driving that's what we're talking about right there so the first thing that you notice is that the tax rates are projected given the spending assumptions that are built in here both the homestead and the non homestead property tax rates would go up by about six cents this year which is compared to what we've had for the last couple of years and the first thing I will point you to on the education fund is can I control this from here can you get on the bottom the first thing I want to bring your attention to is this number here which would typically not be there if you remember at the end of the session last year there was a disagreement between the house and senate as to whether or not all of the surplus money in the education fund in F1-20 should be used to or F1-19 should be used to do tax rates in 2020 and the compromise was to we ended up using a little over $11 million of that last year and then the agreement was anything left over on the bottom line in 2020 would be left there and used to reduce tax rates in FY-21 so right now we are estimating that there's about $8 million available in undesignated money so the full reserve with 5% with everything paid for in 2020 there's an additional $8.2 million right now available on the bottom line if you want to look down on line 30 you can see that in FY-20 there's $8.2 million left over that money would normally be have been baked into the tax rate for FY-21 but it hasn't been used to everybody so that's one difference so that was not included in the letter right so right from the get go even though we're talking about a 6 cent tax rate increase there's enough money there right now we chose to use that money to bring the tax rate down by a penny right off the stuff right off the stuff we almost have to unless we leave money for next year yes we can do the same thing the other thing to notice that agreement was done it was a one-year agreement so there's no there's nothing in the law it was a session law agreement that would be done this year because it was you know it was an unusually large surplus in FY-19 Mark can you remind me we're here a year ago and we were looking at the December 1st letter and the first first one of the is a year ago what was the projected increase in tax rates it was less than it was less than the 6 cent increase but I can't remember but it wasn't zero it wasn't zero I think it was like four that's what's in my head last year exactly a year ago we were in the same position 20 a year ago that we are right now it was pretty flat I don't think so it was three or four percent it ended up coming in three or four percent three or four percent spending increase I should like to know what was the spending actually that's you got it okay I'm guessing three point three point two four percent I'm talking about you the increase in tax rate oh that I don't know the increase in education spending was three point two as opposed to five percent this year so we're going to lower the percentage of the rate I'd like to know what the projected increase for taxes tax rate tax rate it was about flat what? it was about flat it was flat I don't think so I have to this eight point two was that conference committee at the end of last year this money money on the bottom line money not enough it was in the conference committee it was it's like it's like a it was like a scare tactic no it was it was I mean it's a difference of opinion about what you do when you have extra money on the bottom line and my feeling it's been given the way the ed fund works that you give it back to taxpayers that split the difference on this one does it help effecting up the tax rate from last year? I'll bring that bring it you think it's fine okay okay I've got it right here right here last year it was they were projecting it was a buck 15 FY19 they were projecting a buck 50 for the homestead okay the income was 2.49 and 19 they were projecting 2.45 and the non-homestead they were flat buck 58 buck 58 and then they spent a lot more than 3.24 percent and then they started to move around okay so I can just walk you through and explain to you what's driving is the non-property tax revenues that come into the education fund which is about a third of the total revenues is growing at about the rate of inflation so when the non-property tax revenues grow at the rate of inflation and education spending is growing at twice the rate of inflation you've got to make up that money someplace and I'm the system we have that bank falls to the property tax so that's one of the things so you're talking about the you said non homestead or non-property tax no so the sources on lines three to eight so it's the non-property tax non-property tax sources okay one third of the total roughly it's usually about one third that one third is growing at like 2.8 percent okay you get spending growing at 5 percent those revenues growing at 2.8 percent you've got to make up for that so we've got any money coming in it's going to be the property tax so that's one factor driving it and then again the remaining growth that we have George but I thought with the weight fair we were expecting a more robust and it has and I think it's that the Ed Fund has done better than if we had the old system with the general fund transfer going at the rate of inflation but overall all those revenues together it's more than just sales tax I think we have a comparison between what the general fund transfer would have brought into the point and what we actually are collecting in terms of sales taxes. I don't have it with me, but I could show you all. So then in terms of spending, again, spending is the wild card here. This is an educated guess by the agency. We looked back over a few years, and I think in the last seven years, it's been a little high for four times, a little low three times. So there's no systematic error going on in there. It's just that it's very difficult in December to anticipate what schools are going to be spending or presenting to their voters in March. But there are some things that I can tell you about that we think are going to be driving costs. So the first one is school employees' health insurance costs. And there's two things going on there. One is the normal increase in premiums from one year to the next. And VE High has asked the Department of Financial Regulation to approve rates that would increase on average by about 12%, 13%, 13% this year. So that's a pretty big increase in one year. The second part of this is the statewide contract that was just negotiated by New York Way. Based on the terms of, and we don't know this for certain, but based on the terms of the contract, which included a change in eligibility, increases in benefits to support staff, changes in out-of-pocket mechanisms, and the first dollar coverage. All those kind of things you look at in terms of the healthcare. We think that it's probably going to be a cost driver. In other words, health insurance is going to go up as a result of that. And I think that the Department of Financial Regulation is going to be reexamining the rates that VE High requested for FY21 review of the new contract. So they may actually end up going up above the 13% average. So that's one big piece of things. I'm not an expert in this area. No one might look to my office to give you some more detail about it here, just a bit. That's one of the big drivers here. Another driver is special education aid. You know we passed a provision of law act 173 a couple of years ago that was going to move us from a reimbursement system to a census-based block grant and save money. That provision's been delayed for a number of reasons. This year the request for special education aid is up also about 5%. So where there was hopefully an anticipation that there might be some savings in that area in prior years, that's been pushed out a little bit. And again, I usually point out when I'm talking about this is just changing to a census grant from a reimbursement model doesn't necessarily save money. I think it would be likely to save some, but it's a federally-mandated expenditure school districts have to spend whatever they spend, regardless of what they get in terms of aid. But that was one area where we were anticipating some savings and that hasn't happened yet. And then the third area is school construction costs. You may have been reading about this. I've been anecdotally seeing a lot of evidence around the state that because of deferred maintenance, because of changes coming about because of Act 46, a lot of school boards are looking at issue of buys for school construction projects. I took a look at this over the summer and the Vermont Municipal World Bond Bank. I got information on what they had loaned out to school districts since 2007, which is the last year that state aid was available. Wouldn't be a moratorium into a place. We still gave state aid since then, but no new projects. We still gave state aid for emergency projects and that kind of thing. No, we had to pay off. And we had a large backlog of paying off. But nothing new. That's right. But from 2007 up to 2019, they had loaned out about $225 million. South Burlington is going to be putting the block for $209 million, just South Burlington alone this session. And our number of other districts including Howard and a few in the south are going to be putting pretty sizable bonds up for a while. And so that's likely to have an impact on spending. And it's always debt service that comes into the end of every year. It's not $209 million all at once. It's over time. But if this is a trend and there's going to be more requests for this kind of funding going forward, it's going to be a pressure going forward. Burlington and Winooski past mods last year. So am I understanding that when Burlington and Winooski and South Burlington, everybody passed the bond, we all pay into paying it back. It goes into the rate, the statewide rate. The debt service on a blind becomes part of your education spending for people. So your tax rate in the district that's approving the bond, but no district raises on their homestead tax, everything they spend. So yes, there will be a draw from the education fund. It's sort of varied between towns. Depending on the income of the town. And it's going to draw from the non-homestead payers too. And if not subject to the excess spending? If it's approved. Approved by whom? By the agency of education. So if the agency, you know, you can't go out and build a, you know, swivel and tax cuts or something. You may not get approved. In order to get, except for the excess spending, I don't think you have to ask for approval of it. And they subtract it out. Right? So what else on the school discussion cost? Do you have a question? No, there's the approval by the agency of it. Yeah. Not the state. The agency of education. Yeah. The voters have to approve it in any event. Yeah, the voters have to approve it in the first place. Yeah. So yeah. Again, that's, it's sort of like, it's not going to hit all at once. It will hit over time as they go. The days are 20 to 30 year bonds. So as they come on, it will accumulate. One thing I wanted to point out, because it's been a lot of confusion over in the summer, is to provide 30% state aid to districts that have approved capital spending. That money didn't have a limited impact on tax rates because it was money coming from outside of the education fund. There's no more money right now going in that way. There's no more money coming out of the capital bill or the general fund to pay for this. So it would all be within the education fund. But as I pointed out when I started, one third of the money in the education fund is non-profit tax money. So in a sense, you are getting aid. And when you pay for a school, it's just paid for within the education fund which affects everybody that's paying property taxes as opposed to coming from outside. But in a sense, it provides more help to a low wealth, low income district than it does to a high property wealth, high income district because one district will be paying a bigger percentage of that cost themselves. Yeah. So. Jim. Yeah. Just a little while back Mark, when you started this section, you talked about potential emergency construction aid. Is there, are we likely to see any of that this calendar year? I think there's some every year. I don't follow it very closely. But it's things like leaky roofs to your furnace. And this is like that. So this year, last year, year before, it's just kind of normal, normal. Very much being. Thank you. Yeah. I have those figures back. Yeah. No. Okay. If there's no radical changes. Yeah. No, no, no. Are those things that districts go into debt, who do, typically? It depends how big they are. They can. Yeah. Other factors. Cynthia's got a question. No. It's a question about one of the components. I don't want to stop you if you have a regular. Okay. Well, I just have a few odd things in there. The other things that come up every year, there was a significant amount of non-recurring money that was used in 2020 last year where it would get through to $11 million, which is basically has to be made up. So that's another pressure on the tax rate this year. There's nothing in this sheet right now for prior year reversions. It's the great, great, great area on the dollar sheet. So we should help them out. Oh, yes. Yeah. So right here. Yep. Usually, that's money that will be coming forward enough like 2020. Once the year is closed, the administration makes a recommendation from the budget adjustment from when you come back. So in this year's budget adjustment, we have recommended being there. I have an idea. Just a few points to the $1 million. We'll come back into the fund and be available. There will also be someone here. Usually don't book it this early, but I've taken a look at that and I think you have me coming in tomorrow to talk about the budget adjustment. So we went back and looked at reversions since 2005. Yeah. There's been a summer version every year. We've reached about $7 million or $8 million, although a lot of that has been driven by the last couple of years. But anyway, it's another factor that you can keep in mind that will have a downward pressure on the tax rate. So in addition to the 8.2 that we set aside, there's something that's going to be filled in on line 22 that we don't know what... Yeah, we all know that for a year from now, when the administration submits a budget adjustment in the following year, but there have been years when we've carried money there from the administration on the receipt of the month of the following year. So it's something to keep in mind. And then the two things that go on every year, we continue to have a declining moment and that doesn't affect overall spending or how much total property tax money we're bringing in, their tax tax rates, and who's paying. So in other words, if you can shift the burden between pounds. And state-wide property values are growing again, they're kind of mean. They're growing at around the rate of inflation, not what we're going to see in a couple years ago. Yeah, less than three percent. And there's a very disparate impact across the state. So many areas of the state are actually declining in value and other parts of the state are growing. Sort of the same as enrollment. It depends on which part of the state you're in and how you've been affected by it. But I noticed in the last year's annual report there's a record number of districts that have CLA's that are greater than one. Which means that the value of the property on the town's books, their assessed value, is actually higher than the state has determined on the fair market value today. Thank you, Erwin. You know, St. John's was one of them. Yeah, we're the ones. So anyway, and again, that doesn't, you know, it doesn't change how much money we need to raise and how much taxes are paid. It does make the tax rate look better when the grand list values are growing. Right. When the base is growing and you're having to raise the tax overs and the tax rate at any given level of revenue that is going to be lower. And what, the grand list value growth was at about the same last year? Um, less than 3%. I think it's a little higher this year than it was last year. It's been picking up, but, you know, I remember... Not by a lot. I can look, no. I remember a couple of years ago, the, you know, the consensus forecast for property values, they were turning up and growing faster. It's been really sluggish. Yeah. So... Okay. Yeah. Yes, you may have. Mark, going up to line 1B, but, yeah, 1B, the under sources, which we are now calling the Homestead Property Tax Credit. Yes. My recollection is not last year, but the year before, when we made changes, we made a number of changes and my reflection is we changed some aspects about the, this property tax credit program and we were going to phase them in over a couple of years. And maybe this is something we did in here, and it didn't make it through the whole process. Just, I thought we changed something about the maximum payment that you could get. Am I completely off base? Almost. Yeah. The homeowner rebate. The homeowner rebate, yes. So the homeowner rebate was split, split up into two separate parts. It was always combined. The municipal and the outside. Right. No? No, finished that part. I have another one. Yeah. So it's basically, it was the same program and the parameters remained the same. It just split up into two components. So the education part that was capped, I think, at 5600 on the homeowner rebate. At least I read it on 8000. And the remainder of it, up to 8000 was capped on the municipal side. So it just separated them out so it's a little bit more transparent. What was going on with that? So the thing, I'm remembering is the, I don't know what it's called, but the people who are between 90,000 and 100, and whatever the ceiling is. And it was, we reduced the property value that they could take. From 500,000 to 400,000. Yeah, that's right. And that we phased it in over two years because the bump was too big. Yes. That's what we're talking about. Do you remember that? Yeah. You do. You do. Whether we do. Did we do that? But we did it in increments. Didn't we? Or we decided not to do the second increment. No, I don't think we didn't do the same difference that you just did. May. I'm just, I'm just like guessing. Sure, Chloe Wexler from the Joint Fiscal Office. In, two years ago, you did change both of those house site caps from 500,000 to 400,000 for the people who are under $90,000 and the people that are above $90,000, the house site cap was changed from 250 to 225. And there was no, and that has never occurred. We never went to 200. No. So that was the thing we were talking about. We went to two and a quarter but not to two and a quarter. Okay. So we did part of that but it actually did happen and went all the way through. My question is, did those changes in anybody's mind have any effect on the the cost of that program? And I'm just real saying, seeing it go up by, you know, 3 million, 3 million, 3 million, but I'm just, and it might just be a marginal change, but there was a significant cost, there was a significant cost reduction, yes, $67 million in the year of implementation. Okay. And then since then it's just been normal growth. Okay. Okay. And then you can see FY 18. 18. Yeah. I just couldn't remember. I couldn't remember. Yeah. The changes were done retroactively actually for FY 18. Okay. Because you're looking back. And then what Mark was talking about, the split out between I remember that. Yeah. That actually, FY 20 is the first year that that has actually been done on the checks that went out this year. Well, last year, 2019. But that didn't change people's benefit. No. That changed the general fund and the general fund. The other one did change what people got as an adjustment. I would actually like to see what we did and what it meant in some sense. Yeah. Because we spent a lot of time with Mr. Feldman. There was that wonderful chart that he had. And those charts and the tables would be different now because of what we did. And I'd like to understand how they're different. Even if it's just writing down what everybody just said because I wrote it down but I'm not sure I wrote it down right. So I would just like, yeah, that might just be for me. I just want to really get it straight in my head. I think in the house we went from 250 to 200. I know. And the Senate went to, we have to do that 250. I always forget about the Senate. I remember what we did but I can't keep in my mind what the Senate does. Good memory on it though. Other questions? Anything else that you want to go over? The sheet, I'm looking up. There's a lot in there. And last year's letter, is that somewhere that's posted somewhere in here, right? I pulled it up from last year's agenda. So like that to today. Yeah, I want to get this straight on. Mark, do you have other things for us? No, I don't have any questions. Congratulations. Thank you. Come join us so we have both letters. We have this year's and last year's of Pearson. I have almost the last year's letter is not going to attached to the committee. Mark, go through the balance sheet and the Swissville note and I'll be to hear from you. Sure. Yeah, Craig Bollio, tax commissioner. So we issued the letter as prescribed by statute. The results are potentially concerning for affordability in terms of the yield, the property yield to 10 883 from 106 48 income yield increasing from 13 396 to 13 396 from 13 81 which translates to five and a half cents on the average homestead rate and homestead rate of six cents I imagine the tax department just do a calculation based on the numbers and estimates that come from the agency of education. I mean you're just get plugging in what you're getting. Yes, that's essentially correct. Yes, sure, jake frightening tax department. There's numbers from the agency of education. If you're going to noted that we had not accounted for a potential increased cost from the teacher health care contract. So we would like to, I know that the Agency of Ed is currently working on getting new estimates. I'm hopeful that we will have updated estimates before the board meeting. So the December 1st letter doesn't have anything for increased health care costs? Or you didn't have that? I don't know if I would say it doesn't have anything, but I think that the Agency of Education, and I don't want to speak for them, but I think that the Agency of Education had taken the best information that they had at that time. Okay, so there's something, and we've got updated information. Right, so I think the ask is to go back out and see if there needs to be an update. I mean, we're going to have better information on the budgets that boards are going to submit in a couple of weeks anyway, so I don't know if it makes sense to do interim updates, you know, because we're going to have actually some good information. It's up to the committee that my sense is... Yep, either in by February 1st, usually, right? Yeah, oh, yeah. Yeah, cool. I mean, it's always a rolling process. We get some information, and then there's always some information that's missing, but questions for the committee members? Anything else you want to share with us? Thanks for having me. Great, thank you. Jake, did you want to come up and join us, or I don't want to put you on the spot, but if you have anything you'd like to add, you're welcome to come in and say it. If there's any technical questions about the letter? If you're going to speak once you come on up. Jake Feldman, senior fiscal analyst, tax department. If you have any technical questions about the letter, I'd be happy to answer them. Anybody got anything? Sam, you got your question answered. I feel like it was answered. Okay, very good. Good, thank you. All right, great. Great. Brad, did you have anything you want to add? You want to join us? I'll be happy to join you. I know we're the timing on all these things as well for me, so that we can understand what we're going to get. Brad James, agency of education. What we're talking about right now are preliminary budgets that we've asked business managers to send to us once they are board approved. The camera of the day we have on there is February 1 and February 15, so I can make it February 1 because I don't think it's going to out yet. I think it goes tomorrow. Usually, usually we get maybe 25% to a third right around that time period. Sometimes some of the bigger districts and then we continue to get new budgets in board approved budgets as time progresses. That's what keep coming back to you and saying this is where this group of districts were last year versus where they are this year and we get a better idea of what's happened and we start making better projections. Right now, the numbers that Mark was referencing came from my discussion with business managers as to what they anticipated their budget would be back in November. So it was pretty early in the process but a lot of them were looking at construction costs, renovation costs. There was the healthcare thing. Some built in the potential for the settlement to go, the way it went. Some did not in the numbers I saw. I had received numbers from 23 districts. Some of them fairly sizable. I recall when I got them ahead, those 23 districts represented 40 to 45% of the education spending. So it was a sizable piece and that's where that increased probably 5% from the education on December 1 letter. And again, as Mark pointed out, it's an educated guess at the moment and we will start hunting down that little bit more as time progresses and so we should be starting to see numbers in three or four weeks to get a good idea of what's going on and those numbers will have that healthcare settlement built into it. I did talk to some business mayors. Some business mayors said it's not going to impact them because of what they've already done. Others say it's a big event. So it's kind of all in the police. So that's kind of the timing on the preliminary budget. So the earliest that you'd have something for us would be first week in February? Or early February, yes. Again, typically it's 25 to 30% of the districts. But some of them are the larger districts. Yeah, that kind of gives you an idea of whether the educated guess was... Yeah, well, even close. Yeah, right, hopefully close. Yeah, good. Other questions? Anyone's got a comment? I was with my seatmate in the City of Barrie invited to come to the merged school district board meeting recently and the superintendent stuck a bit of fear into both of us because I understand the agency was changing or proposing to change. This goes back to Special Ed essentially. The way in which schools may account for any kind of special treatment, the percentage of folks who are on IEPs or in the category called Special Ed. And he said if that change goes forward, the City of Barrie is going to see a significant reduction in the portion that the state picks up of that cost. And then there's the revision of the meaning of an equalized pupil that is also on top of that. And I'm just trying to struggle. I don't want to poach in terms of policy issues of another committee. But at the same time, it's going to affect, I assume, the figures I see here in my role in Ways and Means. And I have to try and sort out how much is because the accounting of heads has been revised and how much is actual increases in resources even if you didn't change the rules of counting. I'm not sure it's the counting of heads. If it's what I'm thinking of, there was a discussion as to what cost per student was eligible when they were sent to an outside of the school district because what the law says is that part of your tuition rate, which is what we reverse on, is general education. That's not reimbursable. And there was a lot of discussion about that. That may be what your reference may be. Where the law says this and we weren't necessarily doing that and districts weren't doing that. And there was a whole big pushback over the course of the summer where had that gone forward, then what would have happened is that the district costs would have stayed the same. District costs, but the reimbursable portion would have decreased. I think that's what you're referencing. I think that's what you're after. That was pulled back by the secretary because he wanted to focus more on other things as opposed to having a big battle about that right now. The other part was this is with the waiting status. I believe you all are meeting with Tammy Colby tomorrow. Basically, what they're looking at are changing the waiting factors of current statute plus adding in some new ones. One of the things that happens when you do that is a lot of people tend to think that if you change the number of equalized people with more money that's not the way the funding system works. You get whatever your district votes on, that's what you get. The pupil count drives the tax rate. If this goes through as they're talking about and you're in the district that gets more equalized people because they've changed the waiting factors, that means your tax rate goes down but that means somebody else has gone up. So it's a zero sum game basically. I remember what I heard on the radio driving it that maybe yell at my car. No! You're going to blame the messenger. I was pounding on the steering wheel. Forza was on my back road. I just got in the car. But if your equalized people count better changes to increase and it doesn't mean that you get more money as I said, what it does do is the idea behind this is to decrease your tax rate so that you increase your taxing capacity so you can bring in more money to apply to these different categories of students that cost more. That's the concept behind these additional weights that they're looking at. And it did come across wrong on the radio. That's Peter Hirsch on VB. I missed it. It was Friday and Thursday morning last week. It's a big study. It is a big study. They spend a lot of time on this but a lot of time getting the information. I have not read the whole thing yet. If I wanted to understand more about the health insurance settlement which is a factor in this what report would I look at or who would I go to? Would that be Nolan? I think that would be Nolan. I know very little about it. I'm not asking you. I think it would be Nolan. He said Nolan. Thank you. Other questions for Brad? This is not so much a tax question in the first instance but it becomes one. The issue of changing from per pupil to census based. Special education. Special education. You alluded to reasons why that's not going forward yet. But I'm curious outside of the jurisdiction of this committee whether there's serious thinking on whether it's a good idea after all based on educational outcomes. I'm just curious if that's part of the discussion and we can anticipate waiting for a while before that. I think can be called to discussing this because part of her charge was to look at special education. My perspective is that there were a lot of districts that wanted block grants. Then once they saw what it had they started getting cold feet. That's a big thing. It's true. One of the things is the block grant is going out based on your average daily membership through your average. So it's going on your total student account. So if you have a very high percentage of special ed kids versus another issue that has a very low percentage you're not necessarily going to have enough money whereas they would. There are issues with that. We're going to see how it works out. I think she will be addressing this. That's a good explanation and it's understanding. Thank you. You're welcome. He says with a smile. Anyone who has up to one charge accounts that's pretty well I would need to check exactly where it is but that's pretty well pushed out there now. I think not everyone is using it but I think they have to cross walk to it. I don't think they're using it quite yet. You can explain what it is. I'm sorry, chart of accounts. The uniform chart of accounts was set up for it's not really my area. It's quite a few years ago. It took a while. It was a charge and it was a group of business managers who worked with some of our folks in the agency so that all the districts were hopefully saying the same thing but at least they were using the same system whereas they would hit four or five different ones people use and this is not the accounting system. This is the chart of accounts how they coded things. It's pretty well impact or pushed out there now at this point. All that human discussion about well is this or is it this and you may get different things but it's much better than it was. We're not at the point yet where we can reach out and do it. Not everybody has fully implemented with the new accounting system. The power of the SS and DDMS. All those letters are hurt. No idea what that is. It's long. But that's what those folks are working on now and I think probably roughly half the schools have either implemented that so they're in the new system now along with the new chart of accounts and they're working on implementing it right now and the others are just about to come in in the next year. Next year being 222. I might be off by year maybe this coming year. Is it accurate to say it's going to be better? So long. Give or take a decade. Give or take a decade. Is it going to make a difference? I think ultimately it will. I don't think it will right away and this is just from what I'm hearing and seeing from folks. Some folks are having issues with it but they're figuring them out. There's been more help coming into it. I think it will be easier for us to reach out and get information a little bit more and this is what I think will help everybody else out in the field after they go through all the laborious hours of getting to the point where they can use it smoothly I think at that point we'll start cutting down people's work so we can pull things in as opposed to having to fill out individual things. Are there questions anyone has?