 call the meeting to order, really appreciate people being willing to do the work we normally do in this really different way. And all the work that SIRSHA and the tech people have done to get this functioning because it is a lot of technology involved. And we're going to start. So just a couple of grand rules. I've been over this a little bit, but if you want to ask a question, you can do this. You can raise your hand. If you go to the bottom of your screen, there is a participant icon. And if you push that, you'll see a little raised hand thing on the side. SIRSHA and I are going to do the best we can, figuring out who's in queue to raise hands. I've watched some of these other meetings. It's not the usual free flow of questions and answers that we're used to just because the timing is a little awkward because we're not in the same room. We can't see each other. But it will work and we'll get everybody's questions answered. And this will have probably haven't quite figured out the schedule for the week. I'm sort of inclined to think that we'll meet every morning from 10 to 11.30 or at least plan on that. And maybe not try to do the afternoon meeting. This is a tiring way to meet. So I'm going to try to see how we do with it. I really appreciate people's feedback if you have concerns about whether you can hear or not, something like that. You can send SIRSHA a text. You can send me a text. And as I said, SIRSHA and I will do the best we can to keep track of who's in queue for questions. We are going to start with Craig Bolio, who has been doing a phenomenal amount of work with his team to try to make very quick decisions in a really difficult environment. And some of those decisions are administrative ones. Some of them are going to require us to act and we're going to try to figure out the difference between the two today. So Craig, why don't you go ahead and start and tell us what's been going on, particularly with payment dates and filing dates and so on. And afterwards Steve Kline is going to come and talk about revenue. So we'll have him give an overview. Happy to, Madam Chair. Am I unmuted? Can everybody hear me okay? Perfect. Okay. Craig Bolio, Tax Commissioner, thank you for the time. And I figured if it would please the committee, I'll start with the impacts to income taxes. And then I will move into the meals and rooms and sales and use tax and we can pause in between for questions if that works. It's fine. Okay. So there are a number of income tax due dates for the state of Vermont that have been moved automatically by a function of Vermont law. And they have moved in response to the IRS moving the federal due date. So this was something that was moving very quickly last week. Originally the IRS had issued guidance that only the payment, excuse me, only the payment date was extended for income taxes and that would not on its own move Vermont law. But then Friday, the IRS clarified that they do actually have the power under a national emergency to move the due dates legally for personal income taxes, corporate income taxes. And so they chose to do that. And so those due dates are now July 15th federally. So what that means for Vermont, because the due dates were actually changed is that the Vermont personal income tax tax year 2019 due date is moved from April 15th to July 15th. That in turn moves the due date for the homestead declaration and property tax credit claim also to July 15th, because the statute for that due date ties to the Vermont personal income tax due date, which has now been moved due to federal action. And it also changes the income tax due date for corporate income tax and fiduciary income tax or trusts from those who that were due April 15th to July 15th. So interestingly, what the federal government is currently silent on are, for instance, corporations that would have been due May 15th, if instead of their fiscal year ending at the calendar year end, and having the normal April 15th due date, if instead their fiscal year ended in January, and they had a May 15th due date, currently those due dates stand as they originally were. In addition to that, the IRS moved the first estimated payment due date. So tax year 20 estimated payment due dates that were originally April 15th. The IRS also moved those to July 15th. That does not automatically move those due dates from Vermont law, but I am intending to exercise the authority of the commissioner to forego penalties and interest for payments that come in for that first estimate before July 15th. Again, interestingly, what the federal government is currently silent on is the second quarterly estimated payment due date, which is June 15th currently stands at June 15th. So I just threw a lot of info. I'm happy to pause there if that's useful for folks. Let's see if people have questions. Sosha, can you tell me how to, I've got everybody's picture running down the side, which means, oh, good. Now I can see people. Great. Anyone, any questions? Okay. George. George, let me unmute you. I got it. I was just going to say, I found it incredibly distracting to have my screen changing when I wasn't doing it while Craig was talking. I just, you know, so I think I probably missed half of what he said because crazy things were happening to my screen that I wasn't doing. Yeah. So we're all getting used to this and we can, we can, we can ask Craig to repeat the presentation if people need it. I had the same issue because I had the everybody running down the side of my screen and I couldn't see what was written there. So do, do, I think, I think if you just give me a cue when you want me to share documents, I find it the same way, George, in other meetings, when somebody's sharing a document, I find it very disconcerting, but it may be the only way you can see the presentations. So just let me know when you want to change back. Yeah. Okay. I'm happy to go over it again, Madam Chair. If my screen was also changing, so I hope I didn't misspeak at all. Yeah, I'm happy to simply reiterate if that's useful. You want to hear it again, George? You're muted, George. What was up online was just Only if other people need to hear it. Okay. Robin. I'd like to hear it again. And Jim, so we've got a couple of people who'd like to hear it again. Sure. Robin, do you have a question? Can you unmute? So I didn't need to hear it again. What I was just going to say is, for what it's worth, I have my laptop I'm looking at with you guys, and then I have my iPad to the side. So that's where I'm putting the documents. Not everybody has two computers, but if you do, that would be one way to do it. Robin. I'd like to hear it again. And Jim, so we've got a couple of people who'd like to hear it again. Sure. Can you unmute? What that was was somebody's playing the YouTube video and it's on a little bit of a delay so you can mute the YouTube video if you have it up, please. You hear me? Yes, I can. I'm doing the same thing as Robin. I've got laptop and an iPad open side by side. So, I mean, it's fortunate if people can do that. You can listen and scroll down on Craig's presentation or anybody else's. So thank you for anybody who's posted their stuff in advance. It's making it very, very helpful. I guess I'll ask a question. George, I don't know other people other than George who want to hear Craig go through the presentation again. Well, and I can just very briefly reiterate, but essentially just for for personal link for due dates have moved from April 15 to July 15 as a function of Vermont law from the federal action. That includes personal income tax, corporate income tax, fiduciary income tax, and then the Homestead Declaration. This is a good opportunity as well. I mean, the Homestead Declaration moving is clearly a challenge that we'll have to work through over the coming days and weeks because many towns, I believe 70 towns, build their property taxes in July. And generally speaking from Vermont law, the tax department is required to have provided all the Homestead declarations and property tax credit claims to the towns by July 1st to help facilitate that process of billing in July. So if they're not due until July 15th, there's a logistical challenge that we're going to have to work there through. And also keeping in mind that, you know, if the department gets them on July 15th and gets many of them on July 15th, it's going to take us a little time to process those as well. So we'll have to work through that. I have been in discussion with VLCT to at least let them know that this is a function of Vermont law. And so we can start having those discussions of how to address that. But that is definitely an ongoing challenge. I will move to the meals and rooms and sales and use tax deferral. So I think this is going to be a good opportunity because we had put out a press release yesterday. You know, what you always try to do is make the information as clear as possible so that most people can get a clear understanding of what you're saying. I have heard a few misconceptions since we've put it out. So I'd like to talk about what it is and what it isn't. So what it is and what was announced was the tax commissioner utilizing the authority that is that is within my power to forego penalty and interest assessments on late filings for meals and rooms taxes that were going to be due this Wednesday and also April 25th for those businesses who are not able to meet those deadlines. So what it is not is an abatement or forgiveness of the tax owed. That actually is not within my authority. I don't have the authority to forgive or abate the tax once it's collected from the customer because remember sales tax and meals and rooms tax are taxes on the customer that are collected by the business from the customer and then remitted to the state. So once those taxes are collected from the customer I do not have the authority to forgive that tax and I do not have the authority to refund that tax to the business unless they can demonstrate that they are going to refund it to the customers. Now there are potentially other other stimulus opportunities that exist for these businesses that are challenged but that's a discussion that needs to happen with you folks in the legislature. The second thing that it is not it is not canceling collections of these taxes moving forward. So businesses should continue to charge and collect the tax as they always have been. The announcement was only for forgiveness of penalty and interest on those filings if they come in late. And the third thing that it is not is a blanket extension of the due date. So again I don't have the authority to simply move the due date for these taxes. I only have the authority to forgive penalty and interest. And so really to speak further to what that means practically is that there are some businesses that are in a place to file and pay by the due date now and those businesses should continue to do so. What we acknowledged yesterday is that there's a very real set of economic and logistical challenges that exist for many smaller and local businesses today that they are not able to meet these deadlines. Either they're not able to pay right now or they're not able to file and pay. And that we wanted to say if you are a business in that position who has been affected by the COVID-19 pandemic you don't have to worry about this deadline right now. But if you are a business who is in position to be able to file and pay you should continue to do so. If you're a business who is in a position to simply file and not pay right now you should continue to do so. And to put a little bit of parameters around that the larger corporations are the ones that we have a little bit of an expectation at this point should be in a position to continue to file and pay. And so we're going to monitor over the next couple of days to see how that shakes out as we pass the March 25th deadline. And I'm happy to again I've just thrown a lot of info out perhaps perhaps pause there and and offer any clarity or answer any questions if there are any. And let's see if there's questions raise your hand one way or another. I guess I'll ask one question if the one of the concerns I had was the fact that businesses are not going to be required to file but I can well understand the delay in the payment date. Although I'm having an open ended seems challenging but and it seems to me that the press release made it open ended. But but the if we were to decide that businesses should file by date let's say April 15th or pick a date some sometime sooner the later. Do you think that's something that could be actually implemented at this point. Yes I do I do think so madam chair you are correct that the press release yesterday did not put a lot of parameters on on the relief. The message yesterday was meant to just be don't worry about Wednesday for now if you're a business that's affected. However the intention was to engage with a conversation with the legislature to see what we all felt might be appropriate in terms of business size in terms of timeline. The question about about filing and not payment is one that I've gotten a couple of times it's a fair question. So I do think that that you know if we agree that there are certain details and certain structure that we should put around this we can come out with with a subsequent announcement and try to and try to execute on that. You know one of the things that we want to monitor is to just see see what happens as things stand in a couple of days. Right. This may not materialize into a problem in terms of nobody filing or or nobody filing and paying. So we want to see what the impacts are right. Taxes are a voluntary system to begin with right and the tools that we have to help ensure that voluntary compliance are our collection and compliance efforts and penalty and interest provisions. So we're not quite sure what what will happen exactly given the state of of the businesses in the economy right now. But we're going to monitor that closely and see if and see if we do feel that we have an issue with that kind of information once we pass the due day here a couple of days tomorrow I guess. I'm looking around to see if others have questions if not I've got one more. Anyone else out there Robin is raising your hand Robin. Go ahead Robin. OK thank you. Would you just remind me Craig these are trust taxes and when people when businesses collect the taxes are is there any requirement to keep them in a separate account anyway or does it just get mixed up all in their regular checking operating account and they extracted and paid for you. I don't believe there's a legal requirement to keep it in a separate account. There's there's just a legal requirement if the money is collected that it must ultimately be remitted to the department. OK thank you. Anyone else there. Looking around let me ask my question then. So if if the decision were made to actually abate the tax what would happen with all the payers the businesses that have already paid. So let's say that the first of all that would require a legislative action to say that the tax is being abated. But let's say that the legislature made that decision. I think that your second decision at that point is going to be are you abating it in such a way that the businesses are allowed to keep the money or are you abating it in such a way that the businesses have to refund it to the customers. You know certainly there are logistical challenges with refunding it to all of the customers. I think that the legislature would have the power to to provide some kind of relief on the tax if they so choose and do it in a way that the business would be able to keep the money. But that would all have to be be in in statute. So wouldn't we then have to refund the money to the businesses that have already remitted. Correct. That seems like maybe a challenge. Okay. It's I mean it's not a logistical challenge for the department to refund it to the businesses. There's there's I mean there's about three thousand thirty five hundred maybe that paid monthly. So it's not a lot of refunds to issue and we have maybe today we've we've maybe got about a third of the of the payments. Okay. Any other questions anyone has. No. Okay. So just I think that the next steps for us and and discussions that we'd like to have with you folks over the next days and weeks are on structure structure for deferral on additional stimulus opportunities for these businesses. And then ongoing discussions about what's the best way to handle the homestead deadline moving. And then we're I'm not prepared to talk about any of these details today but obviously we're closely monitoring both of the federal bill that was passed before and ongoing discussions about federal stimulus to see how that interacts with with Vermont what's automatic what's not what our decision points are. So I'm happy to continue to engage in those discussions over the the next couple of weeks. Okay. Great. Let me just make sure everybody is everybody's raising their hand. Okay. Janet it doesn't look like Steve is on yet. Okay. So I think Graham is on. Graham are you here? Yes I'm here. Did you want to go to Graham or Abby then Janet? Um why not? Abby you've got a presentation on sort of I think why don't I why don't I go to you first and keep the two revenue presentations together with your Graham and Steve. Okay so everybody I would suggest going to the speaker view at this point because I am going to move to speaker view and share Abby's presentation on the screen and what should happen is we should only see the document and Abby's square in the corner until somebody else is speaking. So let's give that a try. Before we go too far away if you have a question send a text. Is that right because it won't show? No yeah you can send a text and I'll see if I can look in the tile as well. Taking me a moment to find where I was. That's not it. Okay hold on. I apologize I'm having trouble finding it. Abby hold on. Gorka? Yeah. So you know my connection keeps going out people are freezing on this big chunks of the presentation and I do not have the ability to text. Okay okay. You can call me if you need to. I apologize I'm not for some reason I'm not able to share this Abby. I'll keep working on that if you want to start and those that have the documents next to you Abby if you could tell us which one to pull up and I'll keep working on that. Sorry about that guys. All right go ahead Abby. Great so good morning everybody. I think just to follow on the commissioner's testimony it would probably make the most sense to go with the tax issues in COVID-19 updated March 23rd document if you can look at that on your own. I also have an iPad going and I'm looking to the side so I can look at my screen okay. Just to add on to the commissioner's uh what the commissioner explained about in terms of record keeping I just quickly to answer your question representative shy about um separate finance is separate um keeping taxes and you know their own uh revenue separate there are separate record keeping requirements and I'm looking particular at meals and rooms operators do have to keep separate books or records of their business they have to keep those records for three years. There isn't uh you know segregating funds requirement though I think that's what you were asking. So they pull up we go back to if we can just follow the order it's slightly different um than what we just went through I don't know if you want me to talk more about trust taxes first if we should go through in this order I think I'll just follow what's happening at the federal level. That's fine. If that's okay so as you're all aware the the tax filing and payment deadlines have now been extended to the 15th of July and it extends to income tax returns and payments including payments on tax of self-employed that would otherwise be due April 15 these have now um been extended to July 15th. This also includes um estimated payments but again it's only for those on April 15th so uh currently it's silent in the federal guidance whether the June 15th deadline still applies. I'm just going to look at my own screen that's subtracting um in terms of the Vermont income tax deadlines they automatically follow for personal corporate fiduciary so this includes pass throughs like S corporations or LLCs other businesses that would otherwise file personal income taxes. So this is an automatic extension it doesn't prevent individuals from filing earlier and I think there has been some um in reading the news there has been some emphasis on encouraging individuals to sell files so that if they are expecting a refund they can get it sooner um in my oh sorry was there a question? Here we go is there a question? Okay um so there are most of the income tax filing and payment deadlines do automatically follow the federal um deadline the only one that does not in Vermont's statute is estimated payments so that's why this paragraph got a little long it's just explaining that the estimated payment um deadlines did require the commissioner to um take action and in the guidance that was just issued um yesterday those deadlines were also extended so at this point filers can file by April 15th or they have until uh July 15th however again for estimated payments um the June 15th deadline still stands so this is only for those who would have filed by April 15th um next I can move on unless there are any questions to how this impacts property taxes yep uh go ahead is that okay um so I actually in this order I wanted to just point out before we get off of and the order that I set it up I wanted to point out that default yields and rates will apply if the general assembly does not take actions we're in talking about statewide education property tax and I listed the yields from last year for the homestead rates and the non-homestead rates but there are statutory defaults so if there is no action last year's rates will apply for the yields and $1.50 per one dollar will apply for non-homestead and I believe uh representative Till is waving at me sorry I'm trying to communicate with Steve Klein sorry go ahead George I was just gonna I can't seem to control the document and I was just gonna ask Sorcha to move it up to where we're talking about okay sorry George yeah you can't control the document um so Abby if you notice I'm off please let me know okay all right sure so well this is still on the first page is at the bottom of the first page and it explains what the yields will be if there's no action by the general assembly and that would be for fiscal year 21 okay that's what they're okay if we scroll down to the second page it starts with a bolded homestead declaration and as the commissioner mentioned this is an automatic extension along following the federal extension because to file a homestead it typically has to be filed on the date of the Vermont personal income tax return and that is automatically linked to the federal income tax return deadline so that has also been automatically pushed out to July 15th again filers can file now or before April 15th but they have now until July 15th I don't know if there are any questions there this obviously has a lot of impacts on this could have some impacts on property tax credit claims and then on town deadlines and as I go on this what I have spoken about I think Mark Perot may touch on this as well but I'm mainly looking at issues that have come up and questions I've been fielding and where there might be areas where the legislature could act I think we'll go into this in more detail when Mark speaks to us great I'm switching to municipal property tax going down thank you Sorcia one thing that the Vermont League has highlighted is that they anticipate an increase in abatement requests and towns are given authority to abate a fairly broad authority as given to the boards of civil authority to abate and hold apart taxes water charges sewer charges interests or collection fees or any combination of those and there's a particular provision for persons who are unable to pay as grounds for providing an abatement under title 24 there is also a general hardship where a taxpayer is unable to pay or is prevented from filing a correct homestead declaration and towns may also abate a portion of the penalty that's appealable penalty and interest that's rising out of a corrected homestead to non homestead so those that second type of abatement is not as broad but it is an area where because of later filing confusion just the change in all of the deadlines could lead to a greater increase in homes and abatement requests there is no exact corresponding authority for the state to allow abatements of statewide education property tax there is a provision that when a town has abated under the title 24 section 1535 process the commissioner may make the discretion may use this discretion to allow a statewide abatement however it's under very limited circumstances which could potentially be triggered given the COVID-19 pandemic but again this is a very limited authority to where the commissioner is taken over billing because a town either hasn't assessed notices of the statewide education property tax being due before August 1st which again is could potentially happen under the extended deadlines or if a town has failed for more than 90 days after the town's installment payment deadline to collect the statewide education property tax so this is one area that has come up as a potential area of change or expansion that would need legislative action to be able to apply I'm going to pause there and take any questions looks like we're okay okay yep one other area that I wanted to highlight because again there's been concerned about taxpayers not being able to pay and what happens to the town that municipalities are required to pay their payments are due half in December half in June if towns are not timely and their payments of the statewide education property tax to the state they are subject to eight percent interest additionally there is an even stronger sort of stick if a payment is more than three months overdue any state funds due to the municipality shall be withheld so it's a requirement that whereas we're hearing that penalty and interest may be able to be generally abated under the commissioner of taxes general authority it's not as clear that withholding of state funds without a legislative mandate would be able to be prevented so there are some fairly strong deadlines and requirements and sort of sticks in statute when it comes to property taxes and if there aren't any questions there I can go to the last page which returns to the trust tax issues that have been discussed unless anyone has questions okay okay yep this lays out and I apologize there are some extra sites that shouldn't be in there some ends this explains the statutory basis for the commissioner only being able to waive penalties and interest and not actually abate the trust taxes so there is a broad administrative authority given to the commissioner to waive reduce or compromise the taxes penalties and interest or other charges or fees within the jurisdiction but in terms of trust taxes when the customer is the one paying the tax and the department is collecting it from a vendor or an operator or a restaurant the abatement does cannot go directly to that operator or vendor unless there were a different legislative intent and statutory action to allow that type of direct abatement the commissioner as he has mentioned and you've all seen is abating penalties and interest so that effectively delays the payment my reading is that collections are still required because the statute only allows for sales tax and mails and rooms tax only allows refunds or credits if they were erroneously illegally or unconstitutionally collected or paid for sales tax or erroneously or illegally collected or computed for meals tax so unless there's you know a sale that was not taxable for which till the tax was collected then that tax should be under current statute collected let me see if there's questions I'm kind of can see what's going on here anyone I don't see any Janet no I don't either okay Abby thank you for very thorough presentation so I appreciate it so I think if if there aren't any immediate questions about what Abby's given us let's go to Steve for an update on revenue okay thank you he so should you have the document should we put that up or do you want me just I can just talk from it either way because I quietly get organized here hold on a minute okay this is Steve Klein from Joint Fiscal and I just want to say I appreciate all the time and effort you're putting into this it's as you will hear again from all the presenters I mean this is an incredibly rapid changing world and one of the things I'm going to go over a document was created yesterday the revenues have changed dramatically since yesterday and we'll discuss that there's really what I thought it was first go over the revenue thing and then go over some of the appropriations issues and maybe I'll stop it several times in the chair or others can let me know if there's questions I don't think I have the screen to see hands so so maybe I can so I'm going to rely on maybe Sorcha if there are hands first of all there's five areas is that okay when you stop for questions I'll stop the share so I can see everybody's feed okay and then we'll go back to the document great yes so I think what you're showing is my document not Steve's is that what you asked for right right so that's correct we probably should show mine it's the yeah that's right the top one fiscal office COVID update yes great okay thank you and so what we've done is on this document I divide the revenues into really five areas because they were following and I just want to and we think about that as five areas because the solutions may be different creature those five areas the first is a sort of federal and state tax filing collection postponement the number and the value of this shift on this memo was about 145 million I think we think that number has risen since then as we do more work maybe closer to 170 but I'm not sure and Graham can go into that and this has to do with the money that's shifting from FY 20 to FY 21 the concept here is since it's a shift the response can be different it can be knowing that it'll come in do we use reserves and repay us and those types of things come up we can the solutions can be different the second issue I just want to find it mentioned is the this whole thing you having yesterday which the rooms and meals and sales tax that shift at this point and again Graham will talk more about that is internal to the fiscal year at current it's the assumption is that the money will repaid in May and June that's a an iffy assumption and we're going to let Graham talk more about that the second big category we talk about is revenue impacts on the three major funds for the remainder of FY 20 and the when this was written we had assumed to pretty much a the general fund was neutral it's now projected to be down between 50 and 60 million dollars the big change is we looked at corporate and we've there's now Tom and Jeff have done some work indicating that'll be down the look at the income withholding and that is another area where we're going to see some further downs and the whole thing about this 50 to 60 million or whatever the number is it's probably not down far enough because we haven't really looked at the provider tax and what's going to happen with that one even if we don't change the rules about what has to be paid I mean when we got it with electric when electric elective procedures are not being done that may affect the provider tax you haven't looked at cigarette tax as much and which way that'll go is unclear the budget is also built on a lot of direct apps and I think last year or year before you dealt with liquor control and we've given what's going on with restaurants and things like that we may not get the direct app and we thought we would in that area so there's a lot of pressure that the general fund number could be down further before I maybe I should take a quick break there and see if there's anything I just keep going through revenues good look and see if we see anybody questions I don't think so great well let me finish the revenues do you have a question oh Sam no I think he's just oh okay okay so I was just going to jump in and and emphasize the fact that all you're talking about here is fiscal 20 right and that was my next point I just you know as we go through the general fund which is and we're talking about this underline this down of 50 million or whatever it is 50 60 million that part of the reason it's so it's so low is we do have offsets we had 35 million of corporate offsets that are one time that are this year but but the larger point the chair just mentioned is this is all about three months you know when and when you think about that and I mean we can all do the math we don't know how long this is going to last the next fiscal year but the potential for this being way larger and FY 21 is is absolutely there and when we talk about the transportation fund being down 30 to 40 and the education fund 35 to 45 again we're looking at a three-month timeline the risk is huge I've been just warned that I have to mute something because you may be getting a double feedback I don't know is this clear to you all or you let me take a minute to figure out how I mute something I've been told to mute all right we'll keep going and then I will hopefully hopefully it won't be too bad so yeah so the general fund we talked about transportation fund down 30 to 40 million some of that is the registration fee postponement year over year some of it is rooms and meals I'm not actually purchasing use gas tax items like that the education fund and between Graham and Mark and the windowette the 35 to 45 million this year again it's going to be affected this whole question about the within the year transfer of not paying rooms and meals not and sales tax until May that's a major issue the other question is will come up is if they can't afford if people can't afford to pay it today in May or June will they be any better off well we lose some of that as we postpone it when the bill gets bigger and these are all issues but I think the overriding concern is whatever we do now um keep in mind that in a few months you will be dealing with a potentially much larger larger concern and we'll we'll talk about that more down the road going to and then we've just talked about the FY 21 picture sources if you want to slide up one of the key issues for FY 21 is it's going to be really hard to build an FY 21 estimate until probably late August September and that's a real issue we haven't really begun to think about normally what we do is we have a July estimate but given that the personal income filings are being postponed until July that we are now going to see a lot of revenue uncertainty throughout funds until July at that point the forecasters are going to need to have some time to work and even even the other problem is that we are we just don't know how long the sort of complete uncertainty is in place so we will have to as we build a a budget or an as we build a a spending plan for next year build in the flexibility to maybe postpone the forecasting maybe operate in a provisional forecasting mechanism and so that's another complication that we're all dealing with on the federal side I just want to flag state can I stop you there just be sure I understand what you're saying about the forecast normally so we built fiscal 21 we build fiscal 21 alpha January forecast right and then normally we come back in July and we update it is that correct and putting aside fiscal 22 I'm just thinking about fiscal 21 what I think I hear you saying is that we won't be able to update that January forecast until September I would you know I think it's late August September and the issue is that what we the big issue for updating and one of the big issues is that the normally in April we get all the filings and so we can close the calendar year 19 tax information so when you're building the forecast in July you're building it off of a real sense of what did happen in that year now that we're we're pushing the filing into F into July we really won't have that information to build our forecast on the second thing is there'll be a lot of uncertainty with the the payments of some of the well sales rooms and meals and issues like that while some of the money might come in early some will come in late all the sort of normal tracking mechanisms and payment trajectories are really at at sea at this point the third thing is just the point that the overall uncertainty between federal aid federal assistance what we what's going to be going on in the economy is another way where we don't know when that's going to level off or stabilize so this I would if you were to have Tom on the phone he'd probably say September you know I think August, September is the period and this is a whole question I mean we always build the forecast and we've built it many years in times of where we've had to take levels of uncertainty but plug a number in but this is probably a year where we can't even do that it's there's too much uncertainty thanks okay so federal funds I just want to flag and this and this the federal action will also go to I don't yeah sorry at least like Sam has his hand up okay and also is the screen document I guess I'll come up later is it I know I'm just looking Janet Sam has a question yeah Sam I do have a question Sam no it looks like he took his hand down I think he's using the iPad yeah he had his little hand up now he has his hand up okay Sam no he doesn't okay no questions it looks like okay Steve okay yeah so on the federal side we we we're really into our third federal relief bill the first one was 4.9 million that really focused on the public health crisis telehealth testing and state preparedness last week's bill the big thing was Medicaid where we ended up getting 38 million for the remainder of FY 20 and then roughly 19 million a month a quarter after that for as long as this crisis is in place most of that money will be utilized in AHS to deal with those issues it's really helpful but given the size of the problem it's it's not a it's going to be it's going to make a difference but it's obviously not changing any of the trajectories the bill that's being considered right now we have heard one of the big issues is how much state assistance or if they provide state assistance and that's a huge unknown the numbers are from none to 300 million so for a month so we just as a range we just don't know that's going to make like a large difference in our ability to respond to the crisis so it's one of the things we have to follow is that it'll be you know our hope is today they settle on the bill and usually what happens is that several days before we really can move that to a Vermont number and then often way beyond that we need to deal with the federal agencies to understand the nuances of that number given there may be rules and regulations that are again put in place on how that that impacts us one of the things that I'm really not spending a lot of time on but is the whole issue of unemployment insurance and how that bill helps us in that area or how that bill helps people as you know the Vermont has a fairly high number of people who are self-employed and this is a huge issue they haven't paid into the unemployment system but their vulnerability is tremendous so will the federal government provide some sort of resource there that's one of the big questions does the state put money into that another question if we do I think the numbers are between close to 40,000 people or in that category and if you do you can quickly burn through what's right now it's a pretty well-funded unemployment fund so it's an issue to consider so what I'm gonna do is maybe I should stop there but I shift into the and then after we're dealing with one more thing which is we're dealing with the many bills that are being proposed now and the effect revenues and spending so that's another sort of revenue piece that I wanted to fly but at that point why don't I stop with the revenues before I move into appropriations okay let me see there's any questions anyone search on our looking no okay great okay so in addition to this revenue decline one of the things that's coming up is the one of the state needs the budget adjustment needs that that we're facing and the number that we're hearing about the number we should have thinking about from the administration and the legislative side is between 40 and 70 million dollars of additional appropriations that might be needed to address this COVID-19 again this is going to be tremendously impacted by what comes through in the federal level so what I hear is a list of just some of the things that have been talked about and it's certainly not inclusive yesterday the issue came up that the higher ed community has a pretty substantial maybe five million or more needs also so things are constantly entering it just to give you a sense of what's out there the unemployment insurance we pretty much talked about and job protections issues like that if people can't work because of family or medical need homeless protection homeless needs both for those who are homeless due to financial pressures and for those impacted by COVID-19 one of the difficulties is if one person gets COVID-19 in a family setting or an institutional setting what do you do how does that affect the what do you do with that person and many times they stay at home but there are other issues where things can come up child care and foster care systems among the many human service systems under tremendous press stress hospitals and other facilities are experiencing immediate stress one of the when we limited the elective surgery that's that's something where hospitals can use to create cash they provide an operation they get reimbursed for it when they have been keeping beds and keeping that elective surgery down that hurts their cash flow it actually may help on Medicaid and that your procedures are done and funded but for hospitals that already had a weak cash flow this is a huge issue one of the and you can remember I think it was last fall we had the issue of Springfield Hospital we have other institutions out there that are not in in great financial shape by a battle or a treat is one of those and the you know as this is this the impact should be institution by institution are going to be and I don't know how if we come up with solutions that are that way so that's an issue let me a couple more and then maybe I'll stop and let people ask questions there's some smaller need for emergency communication facilities and Hurricane Irene we had to provide funding for those types of systems the Department of Labor and Department of Health are both having staff issues to make sure they can process applicants 24-hour lines things like that and you and we all know that this is a ventilator securing ventilators is an issue you can switch the page up and we can stop here and just see if people want to jump in anywhere anyone have questions they want to jump in I I just have a quick one the the list that you're going through is all it's just general fund this is just general fund and then and at this point at the education fund or anything else so right and the and let me and I'll take a minute talk about the education fund and the transportation fund after I just said general fund list let me see if anybody wants to jump in I don't see anyone okay go ahead okay actually a week to come up I think we're pretty much through that list we when you slip down all that nutrition programs you've heard about one of the issues is while there is federal money for nutrition programs the timing of getting that money out is an issue and that from a food bank has asked for support until they get their federal funds um so there's and just just take a break one of the things when we have the shortfall of money in the transportation fund there's a lot of different states are going different ways of that and on that one is they have some states have said okay we're going to given the COVID virus we're going to curtail our activities because even working out sort of aside on roads can create risk other states and I think what Vermont is considering is a fairly aggressive using many dollars so we can muster on the transportation side to do work and a number of states have said hey this is a great time the roads aren't being used as much there's more flexibility let's get the money out it's important for the economy so how that plays out is unclear we have less money and there'll be different strategies to figure out what to do the transportation committees and may look at an issue the education fund I really want to save most of this from Mark is really complex because on the revenue side we see this tremendous reduction of revenues schools are being faced with past budgets some of the nutrition programs we think will be covered because of the federal funds we think that the child care preschool stuff there may be some federal money and state resources thrown into that but there's a lot of other interdynies just to give you a sense of that type of interactions go on the DAs which are the agencies that provide a lot of our mental health services a lot of that's done through the schools and when the schools closed down the issue came up is schools would pay DAs on their contract for providing the services well now that they're not operating what happens to the DA services one of those and so from a point of view of a DA they are seeing revenue loss and the administration's working with the DAs and with the schools to see whether those services can be provided remotely whether there's ways to continue them but there's a tremendous amount of interactions when one institution falls out of that that system other special needs services are the same types of things so you know I'll leave to Mark sort of the immediate education fund impact but it's it's totally integrated into the delivery systems of programs and that's going to be a big issue I'm taking a break then I want to move into the budget process okay let me see if there's any anyone wants to jump in don't see anybody great so where does all this put the budget process which is there's with revenue uncertainty for 21 and this big budget adjustment that we don't even know what it is because we've done what our federal resources are how do we move forward and I think that there's and again I'm just speaking this is really speaking as me because leadership are going to have to make a call and I've talked to Commissioner of Finance about this a little bit in many respects we are just not at a point where we could make decisions on either the budget adjustment or the budget there's just too much up in the air in a sense of the federal funds where that's going to be let alone what the needs are in different agencies and they're every day which are learning new ones so and again which is you're just hearing from me and I I don't want I don't control anything I think there's on the purely on my view I think that you're really talking weeks before you could even begin to you know know stuff maybe longer but that minimum not till April where you could do a budget adjustment or a budget the other thing that's happening is there's a lot of talk about given we're not going to even know revenues or spending needs until mid-summer do we really pass FY21 budget or do we pass three months or a four months or a six-month base budget built on maybe our spending as levels that were in the budget adjustment and then let that get us through this period of uncertainty and and then have another budget building process in the summer sometime or late early fall this raises all types of issues which are way over my pay grade which are your election year and you know adjournment and how does that affect people's campaigns things like that I don't know enough about that but I but on the purely fiscal thing one of the things we're going to have to think of it is how do we deal with revenue forecasting how do we build a budget in a time when we have this tremendous uncertainty should I stop there and there are a couple other issues I want to flag and then we'll be done sure that's been a lot let me see if anybody has a question um no so um I'm going to just give people my sense about what we're going to do with the rest of the day we'll finish Steve's presentation we will hear from Graham I think we will also hear from Mark now maybe go a little over our time slot and not meet this afternoon we'll we'll reconvene tomorrow morning if that's agreeable with people otherwise we've got this break and then come back and um I'm sort of creating a schedule for tomorrow morning that okay okay well yeah the last thing I just want to flag as I close that's an issue is um what type of the discussion the legislature offers to the administration they've asked for everything from transfer authority up to a million dollars between between items and current law says anything over 50,000 has to be approved by the emergency board made up of the four money chairs and the governor so one of the questions do we give added independent authority to the executive branch and that's something you all have to think about and decide upon and the second issue which is what type of flexibility do we leave during the times when you're not around the way or when you you can't act you've actually in the last week you put a lot of things in place quickly but there are going to be times in this process where just like we have the rescission process at Joint Fiscal there there's limited authority to spend on the part of the emergency board has never been used do we create some sort of ability to address a critical need while the legislature is not in session so that whole discussion about legislative executive flexibility roles and emergency action is is one that's also got to take place so that's pretty much the end of what I was bringing okay great thank you questions questions no I don't think so okay quiet committee okay I think stunned is maybe the right word but Steve thank you okay you're welcome thank you Graham I think you're next on my list here love there's a feedback of some kind sorry let me see it's okay go ahead nobody else here is that I'm fine um which um which document would you like me or what would you like me go over first as I have a document flushing out some of the revenue implications and then I also have some considerations of the committee regarding the tax deferrals I don't know what you think should go first or whether we should only focus on one or the other if you got enough from Steve on the revenue side up to you you choose I don't know I don't know if you heard this maybe I'll start okay I think I'll start with the revenue implications here just to take you back on to Steve's and maybe put a little more meat on the bone and on this story Graham yeah Graham if you have your phone near your computer it sometimes causes feedback that's what I'm hearing I think if you hold on okay it's in the closet they're in the bedroom is that any better yeah okay good yeah this is a document that that Steve and I have put together essentially flushing out a little bit more of the revenue impacts and so I'll begin by seeing this this sheet that I'm going to walk through is only the fiscal year 20 impacts on revenue so for the next four no yeah four months or so and that they're very likely to change and so these are estimates that Tom and Jeff roughly have made as of 8 30 this morning that we rushed to get into this document but every day we're getting updates from them and the changes that they they make are in the tens of millions almost every time and so you know expect these numbers to change on a daily basis as we get more information on the the curve of the outbreak some of the administration decisions but also some of these estimates don't include some tax types in them they haven't made estimates they're kind of going through each tax type one by one so as they do that and I would expect some of these revenue impacts to go in the more negative direction and so the third bullet point there is like I said these are not formal estimates they're more of a possible range of impacts at this point and the revenue impacts specifically from the deferral the meals and rooms and sales use tax they have built some of these into the revenue impacts so far however the statement from the Department of Taxes is that that deferral will only happen for two months so in theory that will not necessarily affect fiscal 20 but as Steve said that's the assumption is that this won't affect fiscal 20 but to the extent that those go on a little bit longer it could absolutely have a revenue impact so I will start with the general fund here we are looking at possible revenue reductions between 200 and 230 million dollars excluding or including the fiscal year transfers from the income taxes so to put a sense of scale on that that's about a 39 to 45 percent drop or transfer in general fund revenues forecasted from March to June it's about 15 to 17 percent of total fiscal year revenues that we're talking about here so very large amount of money but about 150 to 170 million of that is just due to the revenue shift on the personal income tax change in filing dates and payment dates from April 2020 to July I know that says 2021 but it should say July 2020 and so that includes any payments on personal income tax returns due in on April 15th but also any estimated payments due on on April 15th does not include any estimated payments due on June 15th because there's been no guidance about whether that will also be delayed and so a big chunk of this revenue shift or revenue reduction fiscal 2020 comes from that that revenue deferral from the from the income tax but then about 70 to 90 million dollars so far as Tom and Jeff been working is coming from just rate reductions and personal incorporate income tax revenue and meals and rooms taxes from just the change in economic activity so people are staying in hotels less or not at all they're not going to restaurants they're not going out to eat and people are potentially getting laid off for furloughed so lower withholding taxes and then some corporations will report smaller estimated payments for April and so that's 70 to 90 million dollar number is what you can we're sort of calling the economic loss in revenue from the COVID-19 outbreak the good news is that that loss is going to be partly offset by some unforeseen large corporate tax payments that were what we received prior to the COVID-19 outbreak and those were in the area 30 to 40 million dollars so some good news there that that sort of being offset of that 70 to 90 million is being offset by those large corporate income tax payments however I would expect the revenue loss and the general fund if for fiscal 20 the estimates to continue to go to be more of a downgrade because these estimates don't even include any estimates by Tom and Jeff on some smaller revenue sources for the general fund so Steve mentioned liquor taxes so we we have liquor taxes that go into the general fund on a monthly basis but then at the end of the year there's a direct direct app from the Department of Liquor and Lottery and it remains to be seen whether that will be the size that we expected it to be doesn't include anything on the cigarette or tobacco tax front and so it's likely that these revenue estimates will be even more down for fiscal 20 in the general fund so I guess I'll pause there and take any questions on the general fund let's see if anybody's got a question doesn't look like it go ahead okay I'm afraid I don't have any better news on the transportation or education fund fronts the transportation fund and the transportation infrastructure bond fund right now we're looking at a reduction in revenues of about 30 to 40 million dollars for just fiscal 20 that's about a 35 drop in transportation fund revenues estimated from March through June about 10 to 14 percent of total fiscal year 20 of revenues and that loss is mostly due to to sort of the loss of economic activity because of weakness in gasoline diesel taxes and purchasing use taxes you know people aren't driving as much they're not going out and purchasing vehicles at the moment but also because the administration's actions to defer payments of some motor vehicle fees during the outbreak and so that another significant potential revenue reduction and then moving on to the education fund just on the non-property tax revenues so the major revenue sources for the education fund aside from non-property tax are the sales and use tax meals and rooms tax of which 25 percent goes to the education fund and then the purchase and use tax which about a third of that goes to the education fund we're looking at a reduction just those revenues about 35 to 45 million dollars at the moment which is about 20 or so percent of revenues forecasted between March and June and about 68 percent of total non-property tax education fund revenues and again this is loss that's mostly due to the reduction in economic activity not anything related to a deferral and so my third bullet point here is to the extent that the meals and rooms and sales tax deferrals trickle over or end up or that deferral goes longer than what is currently stated by the Department of Taxes and Administration this could really balloon the revenue loss here so at the moment the payments for March 25th in April 25th are the only things that are delayed so in theory what will happen is we'll get those deferred payments in May but I think that might be a pretty strong assumption to make at this point in time but to the extent that we get that money then it wouldn't necessarily create a fiscal year 20 problem but if we do end up having to extend those deferrals a bit into fiscal year 21 we're talking about a revenue shift of over potentially 100 million dollars from the education fund so and that's something that I'll discuss a little bit more in my subsequent document about tax deferrals and then also just and Mark can probably touch on this a little more when he talks is just some of the the deferral of filing dates on the personal income tax side and the homestay declaration yeah can I interrupt you on the on the education fund first but just a second the 100 million that you're talking about with the deferral that's on top of the reduction of 35 to 45 million is that correct that's correct yeah and one other quick question is somebody looking at property values and is that sort of on anybody's radar at the moment and what might be happening to those not I'm aware of directly so it decreases in the grand list at the moment I don't know I don't know how much of a that would affect fiscal year 20 revenues at the moment but it's absolutely a concern to think about thank you and I know that Tom and Jeff have made estimates are looking at decrease in revenue on the property transfer tax again and one so yeah Representative Ansel I'm I'm going to be meeting with Tom this afternoon on that issue so okay okay okay great so yeah Robin has a question good Robin can you one I'll unmute you okay I'm unmuted thank you this whole rooms and meals sales and use what concerns me because we don't separate we businesses don't separate that money if they don't have the money now and they're shut down for the next two months why do we think we're even going to get any of that money yeah you're you're raising you're raising a very you're raising the same concerns that I have or even if they have the money right now and they're using it to make payroll or make expenses right now that money's going to go away right now right and then there's going to be no business in the next two months so why would they have the money in two months and they're using it right now and so I think there are there is significant there could be significant risk to to those revenue sources because I agree we have the same concerns in our office yeah so a longer conversation for another time is do we have businesses segregate these funds so we don't have this problem but that's not for today hey thanks let me see if there's other questions anyone let me jump in okay go ahead Graeme okay and then just the final bullet point here is that and I think Mark can better expand on upon these is that the delay of the homestead declaration in the household income form raises additional questions for actual property tax revenues and property tax credits that go out and I think Commissioner Bolio mentioned that there's a nontrugal amount of towns that issue bills in July and so if someone's not filing until July first it's unclear to me exactly how the credits get onto the bill and that raises questions of potential underpayment of property taxes or batements that might arise but I'm going to let Mark get on those questions a little bit more but I just wanted to flag it for the committee at this point thank you thank you I'm going to move on to Mark unless I see somebody with a question here and I don't so would you like me to talk about the tax deferral stuff first before we go to Mark or move to Mark first so I think whatever is better um wait no we've got you here and you've put your phone away so why don't you go ahead and talk about it and and I'm sorry I wasn't paying attention to how many documents you had so go ahead that's fine of course it's got to pull down yeah so I put together a little bit about this flag already so and from Abby exactly yeah these are more what I would call um I might as well made this presentation called things that keep me up at night um the sort of thoughts that that I've had and I talked over with Steve about some of the issues with some of these filing dates and so just beginning of um on the income tax for the delay of filing and payments we all know that this been delayed to July 15th that includes Homestead declarations household income forms personal income tax payments estimated payments for April 15th corporate income tax payments and also fiduciary income tax payments and as as Steve said the revenue deferral here from April 2020 to July 2020 is in the neighborhood of 145 million dollars so it creates this major cash flow issue for us as a state and fiscal year 20 but one of the things that I wanted to highlight on this slide is that the delay in the filing deadline somewhat important in addition to the payment deadline because it means that the state can't really use accrual accounting and fiscal 20 to solve this cash flow issue and if we had file people filing their taxes and saying they owed this amount of money then at least we could maybe book the money and solve our 20 cash problem and saying this is an accrual basis counting but because the filing deadline is also delayed that's not an option for us anymore and so at this point it's kind of unclear how that problem gets solved so do we do we borrow the money against ourselves should we end the year deficit well we don't have a budget balance budget requirement but it raises questions about where the employment come from and how it might impact our bond rating so lots of outstanding questions about how that cash flow problem in fiscal 20 from just that income tax deferral gets solved for budgeting purposes moving on to the next slide Sorsha these are other things that I think are important for the committee to think about the first one is would this deferral extend to the June 15th estimated payments that this deferral government is not a level prepared prepare saying that that's an issue can I interrupt here for some reason you're I don't know if it is for everybody but you're tuning out online looks like it is for Robin as well and others so I think it might be an internet connection issue my internet's been kind of going in and out today you know what I'm going to do Graham given that because I'm losing a good part of it I'm going to switch to Mark at the moment and then we'll get you back if not this morning we'll get you back tomorrow just to because we want to be able to hear what you're saying okay yep that's fine okay so now I'm on mark and I think I think Scott um had to get off the call because his wife I wasn't working as well am I right yes I I think he was trying to get it back on but was having internet net issues okay well um so I'm gonna I'm gonna ask the committee to help me out here are people do people need a break do you want to come back at what time do we did we have slotted to come back and back I'm okay to go straight through I am but I'm just checking with everybody yeah I'm okay to go straight through two okay so let's let's go ahead and continue and then we'll reconvene tomorrow before I lose anybody else though I want to mention that tomorrow one of the things that we're going to do is get training on Everbridge which is the remote voting platform that's being proposed for the house so um I think we'll probably do that first thing when we get together tomorrow which I believe is also at 10 so should nod your head or tell me yes or something yes yes yes okay so at 10 o'clock we'll get training on Everbridge we'll um we'll go back to Graham and I I can say with absolute certainty that we will pick a mark up again because I don't think we'll hear everything that we need to hear on this and I also ask people to let me know let's or should me know if there are witnesses that you feel we need to hear from this week I don't I don't know whether we'll be in a position to make decisions this week in any event but um I just want to get a sense of what what people feel that they need to have in the way of information so you can just do that with a text or an email or something okay not okay with everybody head nodding okay good all right I have my hand off can it can I have your hand up please I can't see you Cynthia so I'm happy to recognize you go ahead thank you I just see your feeling I expect to uh be in the state house tomorrow and I would assume I can participate in this meeting through the state house system would that be correct I don't know um I don't know the answer to that but Sorsha we'll get back to you about it or I will I will yep yep okay okay uh Sorsha oh I just wanted to say that IT just contacted me and said if we're having trouble with the audio if we shut off our videos that will help our IT connection not all of us but just the the speaker that's having difficulty with the audio they could close their video that's all so so if I'm having trouble hearing I should shut off my video no if Graham if we're having trouble hearing Graham he should shut his off got it okay okay I'm going to go to Mark anyway because I want to be able to get some of the Ed fund information in front of us so um so we'll do that okay Mark okay good morning can everybody hear me okay yes yes okay I am um going to walk you through some of the education finance issues that we've been wrestling with that are related to the COVID-19 outbreak and I'm going to start by picking up on where Graham left off and talk a little bit about the related losses of education fund revenue in FY 2020 first hey mark yes do you have a document that I can share I haven't gotten anything okay no I did not yet send you a document I have a draft I'm working on that outlines the issues that I'm going to go over now and I will get that posted and out to people as soon as I can thank you okay okay so um again starting with um revenue losses in um FY 2020 total education fund sources that we've been working with the sources that we thought we had prior to the outbreak were about 1.7 billion dollars two-thirds of that money are accounted for by education property tax revenues and the remainder of that about one-third of the total revenues are non-property tax revenues so I'll take those one at a time most education property tax revenues for 2020 have already been collected by municipalities and they're either in the bank or have already been paid to school districts however because we have a very decentralized education property tax collection system many each municipality has its own billing schedule and at present some municipalities still have outstanding tax payments due for 2020 we took a little bit of a detailed look on that and in total is about 73 municipalities that have between one-quarter and one-half of their education tax collections still outstanding at this point and fully let's see 21 of the municipalities have only collected one-half so whether or not that money is we're going to be able to actually collect that money I think is uncertain it's going to depend on you know COVID-19 related layoffs and business losses and how individuals are affected whether they can pay that last payments that are going to be coming due between now and the end of the current fiscal year and again we may be able to figure out exactly how much of that your revenue is outstanding but at that at this point we don't know exactly how much the non-property tax revenues that account for about one-third of the revenues are now based on information just got from Graham are expected to fall between 35 and 40 45 million dollars in FY20 those three taxes the sales and use purchasing use and the meals and use taxes account for the lion's share of non-property tax revenues in the education fund and in addition to that loss of revenues and again Graham already addressed this is the issue about the deferral of the meals and use tax for the next few months and whether or not that money is actually collected on June 25th when the administration has proposed the employers would make four payments of meals and use taxes on certain that also possibly raises another cash flow issue which I would address when I get to that part Janet? Yeah It looks like Jim has raised his hand Ah, Jim Right Go for it Mark question When you say most of the ed taxes are already collected but some are not Thetford for example our due date is October 15 are we in the category of not collected yet? Yeah I would say so Do you know how many payments you have? Just one Just what? Just one really? Okay I'm not sure Most districts have between one and four most districts that have one payment already have all the payments in the bank so you may have already made your Well we're an outlier You may have already collected 100% of your property tax revenue for the year but I can check on that for you Okay, thank you I just want to not confuse people who ask questions Okay then so unless there's any other questions I'll move on to COVID related spending by school districts in 2020 So the governor ordered the dismissal of schools through April 6th and during the period dismissal schools are directed to school employees are directed to continue to come into work either in person or remotely depending on the needs of the district and guidance of public health care officials but schools have been directed to continue to pay school all school staff including hourly employees and to continue making pre-kindergarten tuition payments to private providers so they're on going cost to continuing in addition to that school districts have been asked to provide some additional services that they don't normally provide during this dismissal period and I won't go into a lot of detail on these other things just to take them off in there district-based options for childcare for essential employees meal services for kids who need it continuing services for students with disabilities or special needs systems for ensuring maintenance of education for students and even cleaning and disinfecting school grounds so looking at those costs I don't expect an impact on the education fund in 2020 to be very large and in addition to that school districts remain eligible for federal and state reimbursements for school meals and the administration has also indicated that school districts that require supplemental funding for childcare services provided to essential workers will also be reimbursed but at this point I don't know what the source of the money is and I don't know how much money will be available if as now seems likely it becomes necessary to close schools beyond April 6th or even for the remainder of the school year school districts are going to be asked to provide more formal education services to students for the remainder of the school year schools are going to be required to create continuing education plans for all students and to continue to deliver educational services to the extent possible through various remote and virtual means so they have a full plate but for FY 2020 since school budgets are set since tax rates have been set since everything's basically done we're well into the school year at the fiscal year if any additional funding is required by school districts they're going to have to find it by reallocating existing funds they're going to use have to use reserve funds if they have any and word is that reserves are pretty thin at this point or they're going to have to run a deficit in FY 2020 running a deficit is problematic because that deficit then just rolls forward right into FY 21 and will have to be dealt with in that fiscal year um so in terms of cash flow issues to the Ed fund prior to the outbreak the education fund was projected to close FY 2020 with a full stabilization reserve of about 36 million dollars and in addition to that we were projecting a surplus of about 13 million dollars so all all told about 49 or 50 million dollars is available in either surplus or reserve funds at that point so without additional funding coming into the fund first of all with surplus we'll get we'll get used up as a result of that loss of revenues and since that's only 13 million and we're looking at a 35 to 45 million dollar shortfall the education fund would run a significant operating deficit and the stabilization reserve would have to be tapped in order to get out of FY 2020 whole so that is basically all the information I have for 2020 I'm going to go on and talk about the problems that we're likely to face in terms of trying to set education tax rates in FY 2020 but are there any questions on FY 2020 at this point? George has a question Hi Mark, thank you for that I think but when you talked about the 35 to 45 million dollar decrease in non-property tax revenues yeah what was the time frame for that? that that's Tom Kovetz estimate of the revenues that we would lose in FY 2020 through the three sales taxes so current year it's in the current year right and so that's what I'm saying because spending is set tax rates are set everything's basically locked in for 2020 any revenue shortfall that we faced that wasn't anticipating is going to fall away to the bottom line that will use up the existing reserve we have that will also require tipping into the education fund stabilization reserve okay James also has a question go ahead Cynthia has a question oh Cynthia go ahead okay I just want to reiterate what Jim was saying Arlington collects property taxes in November one collection my understanding is that that collection is for a year past because the town borrows against that expected revenue of financing until then so I'm not quite clear about Mark saying well everything's been collected I need to have clarification maybe that for an Arlington are the complete outliers but if there are other towns and have not collected their tax revenue I think we should expect that they will not collect everything they would have anticipated in prior circumstances so I really need to have clarification in this whole planning issue okay I'm not sure I caught all that but we have taken a look at that a little bit there and for more detailed information we have 21 municipalities that collect only half of their education property tax seven municipalities that collected have yet to collect one third and 45 municipalities have yet to collect one quarter if it would be helpful we can probably estimate the amount of tax statewide that's still outstanding if that would be helpful haven't done that yet so Mark it stands to me as though there is a need for some information about which municipalities are where and unless I'm misunderstanding I think if your due date was last fall you've collected the money for fiscal for the fiscal year that we're in already you wouldn't be one of those municipalities that has yet to collect but if you would so that so both that for Arlington have already done all their collecting they would worry about next fall for fiscal 21 but if you would clarify that for people I think that I think it would be useful I think that probably there are a lot of questions statewide about the timing yeah and we have all the information because we know the number of installments districts have and what their due dates are okay okay I can do that yeah okay no more questions okay so then moving on to FY 21 actually Cynthia has her hand up again good okay Cynthia I'm sorry I'm just getting so confused about budget years, calendar year, fiscal years when we collect the tax revenues what year they cover or something is like sliding underneath my feet so I'm not questioning what Mark is saying but there's a big confusion here that has to be straightened out in terms of the timing issue because what you guys are saying is not consistent with what I understood so we really have an issue here good but we'll we'll get information out that will be good okay so anyone else want to jump in have a question no okay go ahead okay setting tax rates for FY 21 normally prior to adjournment the legislature sets property and income yields as well as the non-homestead property tax rate for the upcoming fiscal year this year at least right now it's going to be very difficult to do that for a number of reasons but first of all I want to point out that voters have already weighed in on education spending in FY 21 in most in most communities I think that 94 school districts were approved earlier this month those voters approved education spending increase of about 62 million dollars and there's an additional about 11 million dollars in payments out of the education fund in addition to the education payment so well told we're looking at an increase in spending right now of about 73 million dollars next year I don't know how you can undo that at this point since school boards have already gone out and voted another complication is that there were nine school districts that had budgets defeated their school boards are going to have to reconfigure their budgets and resubmit them to their voters and I don't know how soon that can happen in the current environment and in addition to that there are I think five school districts that have not yet voted they normally don't vote during cow meeting week they vote later but again they're going to have to deal with the social distancing and all that stuff when they go ahead and vote third thing COVID-19 related revenue losses are expected to be significantly significantly higher and that's like 21 than they are now I don't have any estimates from Tom Kovett or anybody else that would indicate how much they are but if we're dealing with 35 to 45 million dollars in the current fiscal year it's likely to be more severe next year for the non-property tax revenues that come in and whether schools whether municipalities are going to be able to collect the education property tax that they need to remit to the state is going to depend on you know how deep and long the recession lasts and to what extent individuals that are facing you know unemployment because of layoffs or businesses that are having losses are going to be able to make those payments in a timely fashion let's see what else so as Abby mentioned earlier this morning there are default yields in place in the event that the legislature decides to adjourn without sending them for this year those default rates are for the non-homestead property tax of $1.59 which is lower than the tax rates that we've been looking at so far but I mean but you get the opposite that's been going on in terms of the homestead tax because last year's yields are lower than the yields that we've been looking at for FY 2021 so far so what would happen is non-homestead property tax payers would see a lower education property tax but homestead property tax payers would see an increase net the fund would be down about $14 or $15 million if those went forward so that's about all I can tell you about FY 2021 at this point if there are any questions on that I can just touch on touch briefly on the the last issue that grand rage which is the tax department's proposal or plan to leave the filing deadline move the filing deadlines for the homestead declaration and the property tax adjustment claim until July 15th I know the tax department is working on a proposal for it and I also know that they recognize that a potential problem with it is getting tax bills out in a timely fashion in FY 2020 or not actually getting the bills out but getting the property tax credit information out to municipalities early enough for them to get that information on the bills that they send to taxpayers on their various schedules I don't want to really spitball at this point but if that if that solution does not work for some reason I know that we had a different different protocols in place for both the homestead declaration and the property tax adjustment claim in the first few years after the accident passed at one point in time homestead declarations did not need to be filed annually we used a prior years homestead declaration and people only required to file in the event that their classification changed during the year and we also made property tax adjustment property tax credit claim payments to individuals by sending out checks which I know is probably an awful lot of work for the tax department but we did do it and by what those checks were sent out later in the year much later than we need to send them now in order to get them on the tax bills and those checks were sent directly to taxpayers I don't know if that's a possibility or what but anyways and it looks like Cynthia it looks like Cynthia has a question and if Cynthia doesn't mind I'm going to pause your video feed to see if it improves the sound but yes my question is when Mark said that if we went to the default rates there would be a net decrease to the education fund of 14 to 15 million but he may aside from any other losses do the other revenue sorts of going down I'm sorry I didn't I didn't catch all that I'm sorry when you said that going the default property tax rates would lead to a decline in revenue of about 15 million dollars did you mean aside from any other revenue decline yes that would that would that would be yeah that wouldn't that wouldn't reflect any defaults on education tax payments or any non-property tax revenue shortfalls and again I just could say it's a very preliminary number I mean we're looking at it it depends what you compare back to and there's there's different ways of doing that and we're working on some scenarios right some scenarios that we can show you right now but you can just look at the education fund balance sheets that we've been looking at and you can see that the yields in fy 2020 are lower than what we've been using for 2021 and the dollar 59 for non-homestead tax rate is actually lower than the tax rates we've been looking at for fy 2021 now it would be nice to have a new education from Outlook yes we we can try to work with that but part part of the problem with coming up with an outlook is I don't know at this point what we're going to be closing fy 2020 with if we use all of the surplus in the education fund stabilization is there to get through 2020 we're going to be dealing with sort of an empty covered in fy 2021 in other words we'd have no reserves declining revenues and increasing revenues so I mean increasing spending excuse me Danit Peter has a question yeah go ahead Peter he's still muted yeah I'm trying to unmute him Peter can you unmute I'm sorry can you hear me now yes okay it's my question is a bit more global than just for Mark it seems like one of the challenges for us and for you folks as well as Steve Klein is the unpredictability uncertainty was his word I'm just wondering whether or not in an effort to try and impose a little more predictability whether we are really stuck as it were that is to say we're impotent in the face of the change of all these dates coming from the federal government to July 15th I can imagine a date that's after April 15th but before July 15th if we were able or willing to chart our own independence in these very uncertain times thank you there anyone else has a question who wants to jump in okay go ahead Mark you done oh I am pretty much done I think I think representative Maslow has a question oh gosh I didn't see him I'm keep scrolling through here and I missed him go ahead Jim no you're muted me unmute my sit there we go okay I just want to compliment Peter on wearing a tie today but okay let's go back to work thanks be sure you mute mute again when you're done any other questions anyone has I'm going to make an observation which is probably the most difficult issue that we're going to deal with this year is they're all going to be really hard but dealing with the education fund and the property tax rates and school spending is I can't quite even pull all the threads on it no all right Mark Jim I'm sorry go ahead you're still muted yeah um throughout all of these presentations it's occurred to me and probably everybody here that how we tell taxpayers in our towns how we're handling income sensitivity property taxes ed taxes all that sort of stuff is as Janet just implied is going to be absolutely crazy so when it is possible to tell us something concise or reasonably well consistent with with what we know so that we can tell something to people in our town that would be very very helpful I'm already getting inquiries about income sensitivity payments and property taxes and school budgets and I'm sure everybody is so I'm sure my inquiries aren't aren't special but anyway when when y'all collectively can tell us something it would be very much appreciated and that's it for now thanks um I can address that a little bit it raises a good point that I didn't they didn't address when I was walking through my outline and that is that property tax credits for FY 21 will be based on household income in 2019 so any impact on household income due to business layoffs or business closures is not going to be reflected in the property tax adjustment that people get next year it will be reflected in their FY 22 education property tax bill I think you've got I think you're you're confusing fiscal years and tax years and that may be confusing for people the income you had in fiscal 19 is going to affect the credit you get in this current year not this current fiscal year but this current year no your your your income your household income in calendar year 2019 right what is going to determine your property tax adjustment or your property tax credit in FY right about 21 you're talking fiscal year and tax year so this just to be really clear for people the income you had last year is going to determine the credit that you get in the in the current calendar year which is going to be fiscal year 21 but it's it's the calendar year 20 so like we were skipping a year so just from taxpayers perspective when they get their tax bill next year even if they've lost their job or have business business losses they're not going to see that an adjustment in their tax bill to account for that their tax bill this year yes not next year this year what's your this year 2020 or is here is the is the calendar year we're in right now calendar year people are going to get bills hopefully in July and it's going to be based on the fiscal on the on their income in 2019 yes yes and I know you're I know you're talking fiscal year and you're right but that's not how people are thinking about it yeah yeah yeah okay other points that you I don't know if you're through the your presentation I want to see if there's other questions that people have Jim I just want to go back to your comment you're right we need to be letting people know as early as we can I think some of it is information we're going to get from fiscal staff and others some of it at some point is our decisions we're going to have to make Janet Cynthia has a question yeah Cynthia go ahead thank you could you lay out for me what you are planning are you planning sessions every day what what is our plan for the rest of the week well so I think what I'd like to do is to have people hold this time slot the 10 to 11 30 we ran over this morning and we may need to do that so rather than do a morning and an afternoon session so plan to be available at 10 o'clock the rest of this week and we things are happening so very rapidly that I can't I can't give you a much more a much firmer schedule what I did say before though and I'm not in case you weren't at a point where you could hear it tomorrow morning we will get trained on Everbridge which is the remote voting system which may get used in the house we're not sure about that yet and we will go back to Mark and maybe try to wrestle through some of these issues that he's laid out for us and I also would like people to let me know if there are people you want to hear from do you want to hear from the league they've certainly got issues on municipal taxes you know the superintendent's association the agency of education is one that I've thought of but send me a text or send me an email if there's somebody that you feel could give you would give us information that would help us navigate through this okay I will hold that time but you should also know that I do not find this method of working satisfactory at all I know it's what we have to do now but I don't believe I'm going to be able to fulfill my obligations as a representative working this way and even voting this way I don't believe that's going to work so if we can't get together yet then we're just going to have to wait and not do anything until we get to can get together so I'm willing to try I'm willing to work with it but this is very hard with the connection going in and out and other kinds of problems and I don't think it's going to work well I I appreciate that and I under I I so much appreciate that people are are trying to do it it is hard for all of us I find it tiring I can't you know you can't move around and you're not it feels very different so I'm I hear what you're saying we're going to have to figure out ways to get our work done and we will tweak things as we move forward as best we can are there anybody else want to jump in George and Bill and I can't tell if Sam is raising his hand he is okay George Bill and Sam George you go ahead okay the frightening news today that may have some effect on whether we can actually get back into the state house was that they've discovered on those cruise ships that the COVID was staying live for up to 17 days in those in those cabins you know previously we thought three days was a was where we were but it was up to 17 days with live COVID and so that that may make it much harder for us to actually get back together physically thanks Bill yes any documents the source that could send us ahead of time I printed off a couple today that were most helpful and Cynthia said an outlook would be really good so thank you good Sam am I live can you hear me yeah okay my question is more kind of a committee discussion thing I mean how and I don't know how our yield bill I mean normally we have a crossover but I mean are we going to pass anything or just so that the senate can think about it or do we just wait until we have more information I mean that was I didn't have a ton of questions today actually I had a million questions today but it's just I mean what what can we do and I don't even know that there's an answer to that so just process wise I'm just trying to think about what we should do yeah I think we all should be thinking about that I go back and forth between doing nothing letting the defaults control waiting for more information doing you know what we thought was going to happen and then I don't know what the right answer is so I think it I guess I'd ask everybody to be thinking about it between today and tomorrow and we'll come up with the we'll come up with something that the committee can support and I'm not sure I know what the path is others want to weigh in Peter seems to have a question Peter go ahead I think the the more certainty we can impose the better and I'm just wondering if the tax commissioner couldn't repeat publicly what he told us namely if you're able to file and you can file now's the time to do it regardless of how the dates had moved and I can't help wanting to get an answer one way or the other whether we are stuck with those dates that the federal seem to have transported on us or whether we do have any independence of judgment because I think particularly for the towns and the homestead versus home site or non homestead this is really problematic to go to July thank you anyone else yeah so I've got one Joey yeah go ahead I'm not clear I think I heard that the if we go to the default rate we decrease our money by $14 or $15 million but I was wondering how much do we have in the reserve fund mark do you want to answer let's see if mark's still there mark I'll sorry the education fund stabilization reserve currently has about 37 million dollars in it and in addition to that we had a $13 million surplus this was all anticipated prior to this you know COVID-19 issues so there is almost $50 million in there Cynthia has a question as well can I just ask you got a clarification from mark on that last thing though that if that that we also are losing $45 million of sales tax revenue right or yes that's right man that was prior to any of this COVID-19 issue so that that shortfall of $35 to $45 million will be partially offset by the surplus that's in the education fund to $13 million the remainder would then have to be picked up by using the stabilization reserve unless we have some other outside source of revenue coming in I didn't I didn't hear who it was who has had a question sarsha it's Cynthia Cynthia go ahead thank you yeah two things one is going back to the question of the trust taxes and the question of the deferral of the collection and would we ever collect that would we abate it and the equity issues in terms of companies that already paid what was due I think that's a very difficult issue because money actually doesn't belong to the companies and abating it just I just think we really need to be careful about that I think Janet you raised some issues about that and then the other thing just to keep in mind is that if you're in a recession which is what we are likely to be in the worst thing to do is to raise taxes so I think we may have to deficit spend or do some creative things until we can bring the economy out of the coma that it's going to be put into but raising taxes is the worst thing to do when you're in a recession and that includes property taxes other comments or questions anyone has before we close for the day I know this I just to state the obvious this is really really tough stuff so we're we're sort of circling around at the really hard issues Jim it looked like you wanted to jump in am I right Jim yep thank you um early on in the you know first talk about but whatever stimulus from whatever you want to call it COVID money from Washington DC there was mention in the president's press release about money for states when might we know if one if whatever that might be and how it might be distributed and I understand there's probably no answer for a while but at some point in time it would be nice to hear something about that when there is something concrete to tell us and I'll wait until someone knows so I also thinking about time I think I think we're going to have to sign off because of our tech support and so on I think I had one more question there was it you Bill yes okay you go ahead and then and then I'm going to end the meeting and we'll pick up tomorrow morning at 10 go ahead Bill okay this is probably unrelated but I'm getting a lot of calls about essential businesses who would be who should I direct them to businesses that would like to be included in the essential business list um I'm going to take a stab at this at the moment that the notion of an essential worker is only the child care school you know thing I I don't know well I shouldn't say that have them talk to somebody in the administration somebody got a better answer than I'm coming up with there he could use the form but I mean thank you yeah the form is good good idea yeah things are changing so quickly Bill that I don't I might have known the answer yesterday and I don't know the answer today um but the form is a good idea thank you Kendall um Kendall yeah Joey will we have a new call-in number of tomorrow or will it be the same uh I'm I'm Sorcia is going to push out an invitation just the way she did today and then she'll also have a call-in number thank you it'll be the same every time we meet actually um but I'll keep sending it out before every meeting that's very wise she'll do a reminder and it's 10 o'clock tomorrow um and um and Sorcia has been doing a ton of stuff and so I know she's available because I've been taking advantage of it um so any actually we're gonna let Sorcia set Joey's alarm remotely yeah all right um it was great seeing all of you guys it was great I'm glad you're in San Francisco and I wanted to um I wanted to tell George that I went to the the geezer hours this morning at Price Chopper and they had peanut butter stuffed pretzels on sale so I bought a jar that's lovely you can eat them with us I'm gonna we're on YouTube still so I'm gonna I'm gonna uh end the meeting and uh we will see you all