 This is Houseways Mains on May 14th and the subject this morning is education finance broadly. We have in addition to the committee. Kitty toll is here on behalf of the appropriations committee and both Kate Webb and Larry Cookely are here from the education committee. And we have invited Dan French who I see is here. And I'm question is here and I don't yet see Craig bullio but I believe that he's also going to be joining us and what I'm hoping to do this morning is have a discussion with the legislators here including the, the non ways means committee people about education finance and sort of attempt to share ideas and information with the administration, which I said before I know it's been busy, putting out a lot of fires up until now but really hope to have them engaged in this discussion on how we are going to go with education finance so before I'm going to begin with Mark has got a couple of documents I'd like him to present to us just to set the table from our perspective from anyway, and before I do that, let me just see if anybody has any comments that they want to make. Like I said, look to both Katie and to Kate to see if you have a order to that you'd like to share. We're working through our own budget with the general fund in the special funds and we're seeing the same type of pressure. The education fund obviously has a good deal of pressure and as we do our work it's going to be influenced by the work that's done in education and in ways and means and. So I am here mostly just to listen and learn about alternatives for the education fund. But I am anxious to see where we're going to go to resolve these issues and and so for me today it's really a learning exercise to hear more about what your committee is thinking but also to learn the direction that the administration would like to take to address this this challenging time within these revenue funds, especially the ones that educate our children. Thanks kitty about you Kate. I think we here are also interested in hearing the discussion and the progress that you're making on addressing a rather large hole in the education fund going forward, compared to what we had anticipated spending and looking for an equitable and fair way to distribute the unallocated funds in a way that that's going to help our students as they're returning to school. Thank you. Mark, you want to go ahead and I know you've got a couple of documents and that's where we'll start and then we'll switch to members of the administration. Good morning everybody. So she could you pop up the education fund outlook first. Okay, can everybody see that and hear me okay. Yes. Okay, so I'm going to walk you through an education fund outlook. I know this this will be some of you have been through part of this before others of you haven't so I'll walk through it. It's fairly slowly and we're going to cover where we think we are in FY 20, and then show you three scenarios and FY 21 they'll give you a sense of what the problem is. And then I have a one page of it outlines one of the potential ways to deal with this is addressed using some CRF monies. So, starting with FY 20 which is this column over here on the left. So we'll remember that prior to COVID-19 outbreak, FY 20 was actually in pretty good shape. We had a full stabilization reserve a full 5% stabilization reserve with $37 million in it. And we also had a $12.9 million surplus that we were expecting to end the year in subsequent to COVID-19 outbreak we had a revenue downgrade of $54.1 million dollars in FY 20. That was solely attributable to the non property tax monies that come into the education fund, primarily the sales tax that $54 million revenue downgrade wiped out the $12.9 million surplus, and the stabilization reserve. And there was a little even a little bit left over a $3.7 million deficit, which is going to carry forward into FY 21. So can you page down to the bottom of the sheet. I can just show people that some of the sheet. So, you can see down here on line 27 current year stabilization reserve is actually in the hall. So, no stabilization reserve, no surplus left and we're down to $3.7 million deficit which will carry forward into FY 21. That's these lines here for the prior year stabilization reserve that we have to make up in FY 21. So, can you page back up. So, for FY 21. I've got three scenarios here sort of show you what's going on. The first column right, I guess you can't see my cursor the first, the second column on this page which is labeled current law tax rates assumes that everything goes forward as normal under current law based on an additional $113 million downgrade compared to January and the non property tax revenues and a $74 million increase in voter approved spending. So, with those two pieces in place, if everything was normal and what happens normally is everything in the education fund gets set, including the spending and the non property tax revenues. And then the gap in the education fund is then filled by adjusting the tax rates. So in this scenario it assumes that there's a full reserve in FY 21 of $38 million that we've reflected the $113 million downgrade in revenues. And we've left education spending where voters approved it, which is a $74 million increase. When we put all that in and Chloe does her magic with the calculating the tax rates, you can see up at the sheet that we would have a really significant increase in both the homestead and non homestead property tax rates basically 21 pay the 299 right. I think that might be a question. No, I think it. I think somebody was just unmuted. Okay, so anyway, so you can see that there's a really substantial tax rate increase built into this scenario 22 or 23 cents for homestead non homestead property tax payers. That's the that would be the biggest increase I've ever seen. So that that is just nobody wants to be there. That was that's just to illustrate what the problem is. So then if we move over to the next column, which is the pre COVID-19 rates. Hardly reason I went over FY 20 is ways and means committee I think is in general agreement that for FY 21, they would like to see the tax rates set where they were anticipated to be prior to the COVID-19 outbreak. So the difference between the December one tax rates, and these tax rates is that these this tax rate right here this 154 to, and this 1628 reflect the fact that school districts reduced their spending from where it was initially anticipated to be I think 5% out of 4.2. And what was the other part of it. Whether it's some additional money came in, I think, not a lot, but maybe some money on the. I can't remember what they're called, but I think it was the adjustment. I was just blank and sorry. It's that it's a $12.9 million surplus. So the reduction in spending, plus the availability of that $12.9 million surplus met that prior to COVID-19 outbreak. These are where the tax rates, but these are where the House of Ways and Means Committee we've been setting the tax rates so this one we've set them at that level. And so if you can page down to the bottom of the screen, you can see that all the way down. Yeah, you can see that that would leave the education fund about $167 million in the hole. So the difference between the two columns I've just shown you are one keeps the tax rates at their pre COVID-19 level and it would result in $167 million short ball. The entire column shows you what would happen if you made up that short ball simply by increasing property tax rates, which is what we would normally do under current law. Everybody with me clear on that. I just want to make sure everybody's with us. Okay. It's a lot of information. So let me know or ask questions if necessary. column three represents just one example of what we've been looking at and kicking around ideas about how we might be able to close this gap and the background here is that the state got a substantial amount of CRF monies 1.25 billion statewide that could be used for addressing problems that have arisen with COVID-19. However, it cannot be used to backfill lost revenues, which is a real handcuff in terms of trying to address any of these problems. If that money could be was more flexible, we could just put it into the education fund and solve this problem with that money. But it's pretty clear from the CRF guidelines that that would not be a permissible use of those monies. So we've been trying to figure out how we might be able to work around those restrictions and still use some of the CRF money to close the gap in the fund here. So in this column, first of all, what we've done is we've assumed that the tax rates would be where they would have been prior to COVID-19. So those those tax rates are the same. Can you pay page down a little bit, Sorcha? All the way down. And I think I'm just trying to see if there's a reserve in here. Yes. And it's assumed that the reserve would not be fully restored in one year. So in this particular example, left $15.2 million in their stabilization reserve, which is about 2% compared to the 5% we would normally have. So that's significantly short of the $38 million that we would normally have. But it's something in here. And then can you page back up a little bit, Sorcha? And here is, we've done, on line 11, which is the education payment, which is the lion's share of the appropriations, we've assumed that even though voters have approved this $14.895 million in education spending that we could basically claw back a portion of that money. In this example, it's about 5% of the total. And then use the CRF money to backfill the difference for districts so that districts were held harmless. And the education fund would end up being balanced or, you know, close to balanced in this case with the 2% reserve. I have another sheet that goes over this last proposal in a little bit more detail, so it might be easier to follow. But are there any questions before we move off of the outlook? No. And the next sheet, though, I want to, I should have mentioned earlier that very late, we invited Jeff Francis and Sue Siglowski and Jeff Vannan to join us this morning. They obviously, because I wasn't exactly sure how this was going to come together. So the invitation went out late, and they had conflicts, but they will be watching the video as my understanding. I'm just trying to work with them on this idea that Mark is going to talk about and sort of general outline. So they're familiar with it. And Mark, I haven't met with them, but Mark has. George. Yeah, thank you. Mark, in the last column, where you have a line 27, a stabilization reserve of 15.2 million. Yes. It seems like kind of a random number. Where did that come from? Um, if this is just an example we used, the idea was that you might not want to take the stabilization reserve down to zero. But that's something we can, we can discuss in the proposal. I mean, there are the last thing I think I'll touch on after walking through this one page is what monies are available to close this gap. And that 15.2 million dollars that's still in the stabilization reserve in this example, could potentially be used to close to close the gap, if you were willing to let the stabilization reserve go down to nothing. So there's nothing, there's nothing significant about it. This is just an example. Hi George. This is Chloe Wexler as well just that the 15.2 is is filling the reserve to 2%. It's not totally, I mean, it is random, but it's 2%. The idea being that maybe you do a, you slowly rebuild the reserve over time. 2% is the choice. Yeah, it's just, yeah, it's just right. These are all really placeholders. This is just an example to try to illustrate the idea and how we might go forward. One other thing I want, I want to mention before we move off with the education fund outlook is that we, this is FY 20 was a consensus revenue forecast and FY 21 was not just Tom Kovetz estimates. So my understanding is, by Friday of this week, we should have a consensus revenue forecast for both FY 20 FY 21 and FY 22. It's tomorrow, right? Oh, is that right? The last track of the day is. All right, so yeah. So don't be coming out then. So, okay, so if everybody's. Every estimate that we've done, we, the numbers have improved slightly. So we don't know that that's true, but, but these numbers are based on a non-consensus forecast. Right. And, you know, and there's the other caveats we've talked about before and they're sort of getting lost, but this, this assumes that some of the deferred sales tax and meals rooms tax is going to be fully collected and remitted to the Ed funds. That's an open question. It's only about it says 41 on here. That's a mistake. I haven't updated that it really should be 20 million. So there's a lot of risk out there that doesn't come in. And again, this doesn't reflect any use of the Essar money, the $27 million that's available. So let me talk about that. That's not reflected in here as well. So there's going to be ways to chip away at this. This particular example just shows you how the, how we may chip away at it with the CRF funds. So, can you pop up the word document? I do have a question before we go on. I do. Sorry, it took me a second to find my participant list when we were all sharing screen. I just want to make sure I'm understanding there's still a hole in this scenario of 50 something. Yeah, I should have touched on that. That's right. This, this doesn't completely solve the problem. I'm going to show you what happens if we were to basically claw back 5% of the property at the education payment. And you could pick up different amounts. It doesn't look like we have any problems with maintenance of effort provisions that are in there. So we could take down that education payment further. It's just a question of how much, how much of that money that we would be able to replace with CRF money or Essar monies or some of the stores. It's almost a $70 million hole in the funds still even under this scenario. You're right. But what you've done, Mark, is you really helped us see where the variables are, which is, which will be, you know, we can take them anywhere we want just so people know. I just got a note from Steve Klein, who must be watching that the estimate is going to be next Tuesday, Tuesday. Real time update here. Okay, so I'm so she can you put up the word document. So, again, this is this is kind of a general description of an idea for potentially using some of the CRF monies. Once I'm through this and there are other ways that we've been trying to kick this around I think of other ways to do it but this is one scenario and you'll get the idea I think of what we're trying to do by walking through here. So, step number one is the second normal tax rates which we've already talked about. Those are the tax rates that the Ways and Means Committee was looking at prior to COVID-19 and that FY 21 column that 154-2 and the 162-8. That's where those tax rates would be and that would represent a about a three to three and a half cent increase. Okay, even at those rates, and that brings in about $60.4 million into the Education Fund. Not nearly enough to fill that hole that we've identified, but it is bringing in some additional money. The second step would be to distribute to schools the state's allocation of the ESSER funds and the total amount I think was around $31 million. The agency would be able to retain about 10% of this and the remainder of it would go out to supervisor reunions. I'm not sure exactly at this point what plans are for using this money but one of the uses for it could be to offset some of the hole in the Education Fund that we've identified. And the one thing about this ESSER funds are is that it's got a much more lenient guidelines as to how the money is going to be used. When I look at the guidelines to me, it looks like it could be used for almost anything. So in some sense, you can conflate this and put the CRF and the ESSER money together. I like to think about them separately because I think that it may be possible to use them differently because the ESSER money is much more flexible than the CRF money. So this is the money that we talked about on Tuesday when this story was with us. Step three would be to an appropriate and as yet to be determined portion of that $1.25 billion that the states received in the CRF funds. And well, it's the reason we said, yeah, where am I? Yeah. And set up a fund in the agency of education. So you would take some portion of that $1.25 billion appropriated to the agency of education for distribution to school districts to backfill some of the money that we're going to pull back from them. So step four is to pull back part. It's the FY 21. We've reduced the education payment to school districts. Again, they can be determined amount, a uniform percentage that falls within the maintenance of effort guidelines and actually, I think that that's an error. I don't think we've done some more work and we've looked around. I don't think that the CRF money has any maintenance of effort requirements in it. So, yeah, it's weird. I think that we'll see at the bottom of the sheet what the requirements are, but there may not be a maintenance of effort part in there. In March, voters approved about $1.5 billion, $1.5 billion in education spending. So every 1% reduction in the education payment would save about $14.9 million statewide. And again, the idea would be that would be a savings for the education fund, but it would, districts would be basically health armless. So step five would be the money that AOE gets would be put into a fund that would allow AOE to provide grants to school districts for eligible spending that could be backfilled with this CRF aid up to an amount that the education payment has been reduced. That's what we've been doing a lot of work on because it's difficult to identify where we have such a huge system it's difficult for us to be able to identify how much of the budget expanding for FY 21 may fit within the guidelines to be eligible under the CRF money. One example that has come up that I think may have legs. It's for example, I think school districts were required to pay all their staff, even after schools closed down and in many cases those teachers are working. But my understanding is there are some cases in which those teachers have not been able to continue to work for whatever reason. Those teachers salaries may be something that you could use CRF money to backfill the cost of but this is that this is the hardest part of this and it's what we're working on. And just to give you an idea a little better idea why it's difficult to page down a little bit more social. So that the US Treasury got guidance is okay. In terms of us taking the CRF money and allocating it to some subunits of government so no problem with appropriating it to AOE and having them distributed to the school districts. But any of the money that's covered with the CRF funds has to be eligible so it has to be a necessary expenditure occurred due to COVID-19. We've gone through the guidelines has been there's been one major guideline issued a couple of frequently asked questions that have come out that actually seem to make it tighter as they've gone forward so there's an open question as to whether or not you can identify enough existing spending or budgeted spending to make this worthwhile to do, because it would require a lot of administrative work because both of the districts would apply for it AOE would have to I have to agree that it's a COVID-19 eligible expenditure, and then the money would have to go back to the district so it's it's not elegant. It would be much simpler if we could put the money into the fund, or just direct the money back to the school districts but given the guidance that I've seen so far, don't think that that's going to be a possibility. There are some other ideas floating around that we may be able to use, for example, simply a categorical grant that would be paid on a per pupil basis back to schools to reduce some of this cost if you use CRF funds. And the justification would be that under administrative simplification we can't, you know, do this down to the penny in terms of making money that's going out match COVID-19 related costs per district. I don't know whether that's a possibility or not but that's what we're continuing to work on. The chair mentioned that we had a meeting a couple days ago with the school superintendent's association and some super some superintendents to get them to start thinking about this and asking for their help and trying to identify costs within their budgets that they think might meet the criteria. Good. So I'm going to get clarifying questions I don't want to debate the proposal right now because I want to, we've invited the administration to be here with us and I want to give them a chance to talk about their ideas but I see Emily and kitty and then, and then just make sure that people understand what Mark's put on the table. I think you're. Thanks. I'm sorry you're waiting. Oh wait. Kitty. Thank you, Janet. I think this is a clarifying question and mark you may not have the answer to it but can you just on the surface of things do we feel that there's systems in place that we could turn around this proposal and get the information back that is needed to determine what's going on with COVID COVID so that if an when if when an audit is done that that what we receive from the school districts actually meet the criteria so that we don't end up with a hole in the end. I just don't know what systems are in place from school to school to school to get all this information quickly to do we and and maybe I just don't know that answer. I don't really know but I think what I was thinking about this proposal. I was thinking that we wouldn't have to do that in advance. So you know we know in other words we would take down the education payment by a certain percentage and then allow districts to apply for that money. If a district couldn't identify enough money to make up for that loss then that would show up in their budget as they would have to find money within their existing budget to cut. They would have to use reserves and they would have to run a deficit forward into FY 21. I don't think given the time we have we're going to be able to identify all of the spending that might be eligible. We're trying to find out we're trying to get a ballpark number to find out if it's even worth doing it because if there's no money out there for them to do this it would be not a valuable exercise. That's a lot of work for a lot of money. And I think that's why we did not on the example I showed you on the balance sheet. We didn't assume that this is a mechanism that's going to solve the entire problem. We're thinking about it as a piece of a broader proposal that incorporates a lot of different money from different sources to close that hole. Thank you. Okay. I just just want to clarify that I understand the options that you're talking about. You're looking at a property tax increase of about 3% for both homestead and non homestead. 3 cents. Yeah. 3 cents. Yes. Excuse me. Using COVID-19 money that currently the 30 million that's available. That's more flexible using CRF money potentially which needs there's more accountability required than clawing in a sense would lack of a better word clawing back from the districts to make up for the money that they're they're getting from the districts to apply for for grants. Is that have I got this or not? Yes, and drawing down a little bit of money that's enough. Not a little bit drawing drawing down the stabilization reserve 15 million dollars. Yeah, all those pieces and you still have $70 million a whole left. So, I think though on your spreadsheet that that far right column doesn't include the 27 million. It does not. So that so you would if we were to do that that would be subtracted off the. If that money could be used for this purpose. Yes. Yeah. That's a but but Kate you're right those are sort of the variables that we've we've got in front of us. Other other questions. So the work that Mark is doing is in the end with the committee is still evolving, still developing. And so I'm not certainly not expecting people to say that they're ready to do it or that they don't want to do it at this point. I think, given the discussions we've had in the committee, it's one of the more it's sort of what's left on the table that may allow us to get some federal money into this into the into the school finance system. So we'll continue to explore this and we'll continue to explore other ideas as they as they come up. But Robin, and then I'm going to switch to Adam. Just a quick question and I don't know who would know about this but I heard something on the news a couple of days ago that rather than do a new package. Before whatever the bill is five, that there's some talk in Washington about relaxing the restrictions on this particular bill, which is so prescriptive right now that states can't use it. And I wonder if anybody's heard anything or mark if you've heard anything more about that at this point. I haven't heard anything more I mean there's been talking about a code for, but the latest I've read on that is not to expect anything before like the end of June, which may be too late for us to be dealing with this stuff. I hadn't heard that they were talking about more flexibility with the existing CRF money but that would that would help a lot, and we could craft a much more elegant way to close this gap if it was. And this this. If, if we created this fund in the agency of education, and we left some flexibility, and it turned out that this was more flexible money, maybe, maybe that gives us the mechanism to get it out to the schools. You know, late in the day, I'm looking at Dan French who has to administer this but but anyway just so we we we also jump in we may also have a much better idea about the potential for this on the school superintendents who has agreed to, I think, survey their members, and with a list of questions that would ask them to reply to any what to if they think of if they can identify any expenditures that would qualify this is a list of things that we think might be possibilities that they could respond to. So we would have an idea. Hey, thank you. I know that there's 1000 questions and I'm kind of get off because we because we asked the administration to come in and I want to be sure that their thoughts are also in front of us. But, but we will, we'll have plenty of time to do all the questions that we need to do. I'm looking at Adam and Dan French and Craig Bolio and I don't know what order you all want to go in so just somebody tell me how you would like to do this. I am happy to tee it up. Madam chair, if it suits the committee. Okay. Thank you for inviting us to speak to your committee this, this should be fun. And thank you to joint fiscal office Mark Perot for the discussion earlier. I guess if you've got 1000 questions cheered up. I'm here to add to that questions cheered up. You know, just to start it off I, you know, I would say that you've asked the budget guy to share ideas so as the budget guy, I tend to think in budget terms and by that I mean if faced with this challenge in the work that I do for the transportation fund under the transportation fund what would I do. So that's kind of the way I'm approaching this. And in that regard, I've enclosed for your reading pleasure at a future time the budget instructions that my office sent out Tuesday evening. At this point, I think we posted them. So for those of you have the chance to peruse them. You know the instructions will give you an idea of where I'm going. I would note in there that there, we do mention the Education Fund and we assume that the Education Fund for first quarter of FY 21 would be funded at 30%. And that is meant to comport with the kind of three education payments that go out, roughly a third a third a third. So that is, is not meant to change what is current practice. I didn't want to confuse anyone there. You know, for contact and looking at those instructions. I would say that. So, I submitted an FY 21 budget on behalf of the governor in January, and we use the revenue estimates that were adopted by the board in January, which is what we currently do. And that was the most current information available. Come April, maybe come mid March. We all knew that those revenue estimates and, in fact, the budget that I submitted on behalf of the governor were obsolete. The instructions you see before you that are based on more updated revenue estimates. And we're asking in those instructions we're asking departments and agencies to submit to us a first quarter budget that spends 23% of a full 20 budget. And that was during the first quarter of fiscal 21 and by kind of another way to say that is that if departments and most departments will spend their budget kind of a quarter, another quarter, you know, in a relatively even format so what we're saying to them is normally spend 25% of your budget in the first quarter. Instead, please spend 23% of what the FY 20 spend was. So, annualize that would be 2% a quarter or total of an 8% reduction over the year from the FY 20 level. And based on a revenue estimate that we have that forecast of 15% drop in revenue over FY 21 so we're not being particularly severe in our asked to departments and agencies but we are acknowledging that it's early yet and we're trying to do this in a pretty serious case. So with the legislature's approval we're hoping to lock in this Q one what we're calling a skinny budget, and then come back in a few months when the picture is more clear, and adopt a full fiscal 21 budget. And we would agree that this is a responsible path giving the circumstances. So, you know what I would say is, you know, in many ways. In fact, in most ways school budgets are in fact they follow a similar process in that school boards work on them in the fall which is when the governor's and the administration put them on the budget for the state school boards use the tax commissioners December 1 letter as guidance on the likely tax implications of their work and they both their budgets in January, put them before voters in early March town meeting and in virtually all cases the information used to construct those budgets before voters is accurate in that the tax commissioner is using information that he has at his disposal at that time. There are changes as this committee knows and sometimes you know that that requires some adjustment to tax rates but the changes in almost all cases are very minor. And, you know, I think we would all agree that that's not the case this year. And I think the tax consequences of the approved budgets are radically different from what they were when voters went to town meeting. I think I'm going too far out on a limb to suggest that the budget votes would have been different or the budgets themselves would have been different if voters knew then what we know now. And you know I'm aware this committee has spent significant time trying to find ways to adjust revenues to take the edge off the tax consequences of voted budgets and you know I know you've come up with some good ideas worth pursuing, some of which we heard this morning. And I'm the same in the administration. But you know I'm also here to say that looking at revenues alone. You know I simply, it's just not the answer, you know the gap is too wide, and I get it you guys are the revenue committee and that's the lever you have. And again, as you know the budget guy I would say that I just see no way of avoiding looking at the spending side, I just think you, we have to consider that too, which in leaves really two broad options. I'm not going to consider the spending side and, and you know I recognize each of these would require some statutory adaptation, statutory changes. First, you know it's Commissioner of Finance I could set the education payment. You know that would have the state for FY 21 determine what we will send to districts. And you know that's the model that's used in many states in one form or another. I know it's not used in ours. But that is one possibility, or I would suggest the more democratic approach and one more aligned with Vermont system of local control over education is we could ask districts to re vote their budgets later in the summer, as the state is going to do with the general fund. Once the dust settles, and we have a better handle on the revenue picture and frankly the allowable uses for the coronavirus relief. You know, using the skinny budget model that you see in our budget instructions. We could adopt or mandate a q one budget similar to last year's q one spending levels to get through the summer, and then districts could lock in a full year budget late summer or early fall. And the tax commissioner could provide an updated letter and district school boards and voters go to the polls with eyes wide open. So, I'm not suggesting that anything I've said is easy or ideal. These are extraordinary times and they call for extraordinary measures, but at a minimum I am suggesting that we can't go on viewing this from a revenue perspective alone. I'm confident that for monitors will understand the challenges we face and I think they'll appreciate the initiative to let them participate in the solution. So, Madam chair there you have the first suggestion and something the administration believes we should consider. Okay. Thank you. I suspect there might be some questions once people absorb what you've said, George. Thank you. So the CRF money that 1.25 billion. You know, how much statewide, we have identified as COVID expenses to be that which could be covered with that money. So far, we've identified in terms of expenses we have already incurred or expenses that we have more or less obligated roughly 170 million or so. And are there other anticipated expenditures, which would qualify for use that money to be covered. I think. Yes, we haven't come forward with a list of our suggestions nor am I aware that the legislature has I know there's been in the budget adjustment a few suggestions here and there but I don't think in any case, there's been anything that would go, it would be more than in total, something like $200 million. Are you in agreement that with the analysis that we've heard that we cannot use this money directly to go to the education fund or to the towns for education for property taxes or that don't come in. Does the administration agree with those analyses. We are as suspect as others we're looking very carefully at the language and we have not come up with a failsafe way to make us comfortable that the coronavirus relief fund language or funds could be used in the education for more than a few education expenses. That's not to say that's not the case but it is to say that we're not convinced that there's an easy way to get that money in. You know, we're looking at you know I also want to acknowledge we're looking at this very seriously because you know the state is the grantee, and if we do, for example, as we heard earlier, sub grant this money to districts, we ultimately are on the, you know, it's ultimately our responsibility to make sure that it's spent wisely. The last question is, do you have this administration have any more information than than we do about covert for or relaxation of the the requirements of use around the utilization of the covert three money. So that in legislation that was drafted by have the US Congress that there is one stipulation in there that would allow far more liberal uses of the money, but where that stands to get through the full Congress, I don't know, but I know that there's virtually every state for monta included has asked for greater lenience with the use of that money, and virtually every state has received the same answer of no but you know, there's always a chance. You all set George. Robin and Jim. Thank you. Adam, your notion of asking the districts to re vote their budgets, you know about 75% of them, the cost of budgets is probably locked up and how would this work with contracts with teachers and staff. I might call on my colleague, Secretary French who's probably more equipped to deal with that question. Great question. We're not hearing you at all. If you, if you turn off your video, we might be able to. Can you hear me now. Okay, there's a blue tooth issue there so it's going to. Thanks. The, yeah, the complexity of how that would play out is not so clear, I guess that's to Adam's point about putting that in the context of local decision makers and one could expect those dynamics to be sorted out locally, based on each district, their contract scenario at the moment we know up to a few weeks ago there were a large number of teacher contracts in particular that were not settled I imagine many of them have been settled subsequently. But that would, you know, this, this kind of context would, would note out force locals to come to the table and to find the problems based on their context. I won't not clear what your answer was is, is the existence of the contracts a significant issue in terms of re voting. Well, as you know 80% of the costs are personnel related. So I don't think districts would be able to navigate the issue easily without getting all stakeholders on the table to come up with a solution. Jim Emily and Kate. Yep. Adam, hi, how are you. Nice to see you Jim. Okay. In your last little paragraph or so. Here's just question you are indicating a couple of things that I'm not sure about one is it sounded like you've identified some uses for the COVID money already. And it sounded as if, according to your work through that much of the money is encumbered or at least allocated somewhere already. Is that so. And where I'm going is, if, if we follow that logic what would be left for education if we could use it for education. No, I may not have been clear. We've in the emergency response and the governor's initial month or two. We needed to stand up the emergency operation center of the health operation center. We needed to purchase equipment and gear and the like that in total has encumbered I would say about $170 million. But there's, you know that leaves the remaining over $1 billion that we have not encountered. I wasn't sure what you meant but thank you. I am hesitant to get into the spending versus versus revenue conversation. But you opened it up and so I'm going to step into it a little bit. When I look across state government, I imagine, including the educational system, I imagine that spending needs would be quite different. In the context of COVID from one department to another some departments would have much higher sort of COVID related needs and would have a much higher need for spending above and beyond what we might have even expected without this. And I see the education system as one particular place that that's going to play itself out. What's fortunate is that it seems like the opportunities for revenue related to COVID are also much more increased in departments or locations that have those needs because that's what the federal money is for. And so I'm trying to understand better how you're asking the departments that you're working with to accommodate that increased need, which you will have an increased possibility for spending because I'm thinking maybe we could apply that same framework to the Ed fund. That was a little circular I'm hoping you followed it. We have asked departments that have needs that they believe are COVID related to represent them to us to code them in their expenses appropriately. And then our intention is to reimburse them with COVID money subject obviously to the budget process. But so we've asked departments to let us know what their what their needs are. And our intentions, again, subject to the budget process will be to reimburse them with COVID money. And so you're keeping that sort of the most out of the budgeting process is that what you're saying. We anticipate that would be part of the budget process as it always is. In other words, the COVID money will need to be appropriated going forward so anything that we would spend of that fund, as well as general fund and so on will be part of the normal budgeting process. So I have a question. If it is the purpose behind so as I understand your proposal. It's to have the tax commissioner do an updated letter and then have districts revote their budgets, but sort of wipe out whatever decisions were made in March and basically say you need to you need to vote again to set a budget and my I realize there's a transition issue but that's essentially the proposal. Yes, and it would have districts adopt a so called skinny budget a q one budget to get them through the summer because they will need the authority to spend money. But yes. I guess the. So the question I have is the purpose behind that to reduce education spending. Or is it to figure out a way to solve the problem that we have and the reason I'm asking the question is if, if we suddenly got the flexibility to put, you know, 160 million or whatever the number is that we're looking for federal money into the Education Fund. The U.S. Treasury in Congress says yes we're we're good with you all doing that. Would, would you support are doing that or are you do you do you have as a goal reducing education spending. That would take precedence over using that federal money that way. Well, we have, I would say two goals. The first goal put simply is to extend the time period essentially to buy time, while the dust settles on a revenue picture, as well as guidance for the use of the coronavirus relief fund so you know until we know better what our revenues will be in FY 21. And until we know better, whether what we heard this morning about putting 5% of the coronavirus relief fund into the education budget, I mean, I would call that the definition of aspirational budgeting and we don't know whether we can do that or not. So, you know, until we know both what we can use the fund for and what our revenue is. It's really difficult to make decisions. And the second goal is to put before voters, all the information so they can make decisions on that. I mean I'm not going to pretend that school districts are going to change their mind. Some districts may want to vote the same budget they had in March, but at least they'll know the consequences of doing that, and all the revenue available at their disposal. So let me ask my question again because I was I asked it in a very convoluted way and I want to be really clear. If the, if we got guidance from the US Treasury next Tuesday that said that you are okay, putting as much money as you want into the education fund to make up for loss revenue, would you support our doing that. The administration has dealt with that. I don't think we have a strong opinion but I will tell you that we would certainly consider it. We're not here to stand against the use of the coronavirus relief fund to help in education. So if we can find ways to direct federal money to the education fund, whether we do it by way of schools or the taxpayers or directly into the fund, you would be supportive of that. We are certainly considering all options Madam Chair, where, you know, again, my point is not to X out the use of that fund for education. My point is more, we're not sure what qualifies and as the grantee we have to be absolutely certain that what qualifies we use and not a penny more. I would, I would guess that absolute certainty is going to be tough for a lot of this money but Kate and then Robin. Thank you. I think in the process of being asked for ideas, we do put all ideas on the table but that does not mean that all ideas really are going to solve the problem that we're addressing and as chair of the Education Committee one of the things that we are observing is the need for some kind of stability for schools going forward we've had incredible chaos this year, we have, you know what the situation is I'm sure you're hearing us. So, the concept of sending voters back to to revote budgets sounds like instead of stabilizing contributes to even more chaos. Looking at the 19 districts without budgets right now. The amount of chaos in those districts is palpable as they're trying to figure out how they're going to deal with voting. What they would do if they ended up having last year's budget and needing to cut 20 teachers 45 pair educators all of the sports programs and foreign languages those are the things that are coming up in the face of collective bargaining agreements so. So I guess the question for you is in considering this, are you looking at the chaos that this could create the complexity of everybody needing to revote when it's incredibly challenging already. It's also the cost of revolving money that could be better spent some of the than some of the amount that we've heard from districts concerned about spending that amount of money to vote under covert 19 condition. We are aware of the challenge of revoting, but I would argue that the chaos that we have at the state level is no different than the chaos you were referring to the local level this as I said earlier these are extraordinary times and they require extraordinary measures. The voting system that we have or the education financing system that we have in front of us requires the state to raise whatever money school districts determine they need. At the moment we were a curveball, we have substantially less money than we thought. But voters when they went to the polls in March were using incorrect information our view is that they would like better information and the opportunity to revote their budgets based on that better information. Like I said before, they may decide to have the exact same budget, but at least they'll know the consequences of that when they vote for it. Can I just jump in because Dan French also wanted to answer that question and I was going to direct your question to him. So, do you mind if we get an answer from him first. Sure. No. Okay. I was just going to echo Adam's perception is a summary of the context that is going to say chaotic it's it's been very chaotic for everyone involved and, you know, at this point on the uncertainty to the earlier question. I was very much uncertainty and I was just going to follow up on some observations mark made because I think it is, we start talking about the revenue side I think it's really useful to draw a distinction between the CRF and the answer funds because they have different parameters attached to them. As Mark mentioned, apparently there's no maintenance effort requirement with CRF but there is a maintenance of effort with us or that's one of the assurances that we've had to provide. That that comes into play in districts have have you know as we've launched into this emergency we've been asking them to make expenditures that were not in their budgets, but they've done so coding those expenses understanding ultimately that they would see some revenue coming in and as that became more clear to them that the guidance they've sort of a navigating is the answer guidance which is much more flexible than the CRF guide. The districts have been proceeding with the understanding that they're going to have some broad flexibility with federal revenue coming in. But as we, we contemplate, you know how how the answer functions relative to CRF I think the maintenance of efforts issue, but also the timing of those funds we know as her has a longer trajectory than CRS. The answer goes through to some or excuse me, September of 21 or my understanding of CRF is that timeline ends in December of this year. And we know a better part of the expenses, the districts will see are not necessarily the ones they've incurred from March 13 to now. We're going to see significant increases and expenses related to special education and student services as the crisis winds down and we begin entering into a recovery phase. So I think, you know, when I add all that uncertainty up on the revenue side right now. And once again, I think it points to the issue to have, I would say the skinny budget approach but to have some time by which we can understand and our system relies on voters making those decisions so that we can understand certainly what the context is from a spending perspective but also what the revenue perspective is because I'm not confident right now. As much as I think it's it's it's useful to think about using yes or funds to offset a liability to the Ed fund and bringing in the CRF to backfill. Those those assumptions are going to be are problematic to a certain extent because we don't know how much of the expenses districts have incurred will qualify under the CRF. And we also don't know if they'll be able to qualify them in the finite timeline that CRF requires, which is a much tighter timeline, especially considering that the bulk probably of the expenses districts will see as a result to the emergency are yet to be and probably won't be figured out until the next school year. So, all those things, you know, just to point out the complexity of the chaos of the situation. My instinct as a manager that is to try to break that down into smaller parts and to suggest that this would be a good time as representative of acknowledge this is a challenging dynamic in terms of engaging local decision but that's that's a better part of how our system functions so I don't see how we avoid that, particularly since, even in the models we've looked at this morning which are based on some assumptions of using revenue that still leaves us with a sizable gap to address. I interrupted. No, just, it's very clear that the challenges that we're facing now may well need to be reconciled in FY 22, and perhaps FY 23. So, and that is a time where folks are going to have a whole lot more time to think about what the impacts are. In addition, it's my understanding of current law that that communities can already petition school boards to ask for a remote. I don't have a lawyer in the room so. Oh, you got one. Oh, that's right. I think there's a time limit on the remote. You know the mechanics of that I'm not a lawyer but the boards can certainly do that on their own authority but you know our, I think our model is just coming at a high level to suggest that the understanding legislature has broad authority. And certainly it's probably going to be necessary and I guess it's, you know when I, when I look back on the decisions we've had to make in the last several months. The decisions that are before us relative to the state college system relative to our hospitals relative to virtually every aspect of our society and economy in Vermont. It knowing knowing and getting a better handle on the federal revenues is useful and it certainly takes some pressure off to a certain extent but I can't help but think that we're at a moment in history where we the system is going to have to have a better handle on the federal system. I don't understand how we could maintain the trajectory we are. And in the case as representative web pointed out with master agreements where teach some teachers and employees of school districts will be receiving raises at the precise of the time where we're going to have some of the highest unemployment rate since the Great Depression, where education spending decisions were made based on assumption six that were made six months ago. You know, the idea that two years from now or a year out from now we can fix this as I'm not confident that's the case I think we have an emergency right now and we need to, you know, as difficult as that is we have to put our best thinking on the table and try to try to move the system into a position to help it navigate this emergency. Robin. Now I have another question before I asked the one that I was going to ask a few minutes ago so Secretary French are you suggesting that school districts need to reopen their contracts and negotiate them now. I think that very well could be an eventuality but I think that's really, you know, in respect to the local decision major making I would I would defer to locals to navigate that I know there were a number of contracts that were open up to a few weeks ago I'm not it's not clear to me how many of them have been settled. But certainly if they were settled they were settled with the understanding of the coven 19 emergency and the fiscal uncertainty of the near future and probably the longer term view. So that's that's certainly wouldn't surprise me if this context puts pressure on on locals to revisit those decisions but I think you know from a state perspective are our role would be to just share the information so folks can make those decisions and right now to pretend that folks made those budget decisions in March with a full understanding of the context I don't think is necessarily accurate so you know our thinking as we, as you are struggling with the various different dimensions of this problem we're coming back to that issue that if we need to share the information with the folks who have a role and skin in the game and the decision making. So I want to go back to my thank you I want to go back to my, my first question which was under the proposal to have the tax commissioner redo the December letter with an updated letter now and then have districts rewrote the budget and follow the general fund budget of sort of doing a skinny budget and then another I'm going to go back to the next in a general fund budget but now we're talking about. We're talking about towns and sending out tax bills and tax rates that are going to change partly through and, and, and representative web talked about chaos and I'm going to add uncertainty to that on the part of all of our, our neighbors and friends and our suddenly sorry I have a lawn mowing in the back who are now going to get different bills and what are they supposed to do about that. There's creating more chaos and more uncertainty and I'll meet myself. So I don't know how you're going to deal with that. Yeah, I think, but the alternative is to send them a 20 cent tax increase, you know, or, you know, to maybe embark on a general revenues in a way that leaves us exposed later on to further issues, and we just don't have all the information at this point so it's, that's, I think we're, we're starting to admire the true complexity of the problem in front of us and there are no easy answers. I'm happy to jump in there as well representative that challenge of towns needing to bill a second time is one that we had identified as we were discussing this. It's, it's a fair challenge right and it's again one of the reasons that any any idea that's going to be presented on this topic will be imperfect. One of the things that that I've heard from this committee and also heard this morning was just everybody talking about what we don't know all the answers yet right we don't have all the guidance yet, which to me I think fits into the why don't we give ourselves a little more time, even though it will have some additional challenges that it lays out. I do think that, you know, if we're talking about costs of rebuilding and things like that. Those may be appropriate to use some of the federal money for we have to research that a little more so so hopefully that's one avenue of relief but yeah it was it was a challenge that we identified it's a fair one but we think it's worth the cost in this case to be able to provide that or get better information and then provide more certainty moving forward. Yeah. Good morning everyone. So I've been listening to this and I'm trying to figure out what really is the timeline that you're talking about. You know, it's kind of been traditionally, we at least try and get a budget by July, or June 30, so we can send out tax bills. I want somebody to lay out the timeline for me of what, like, what, how we're going to have schools or school districts revote their budgets in the next month and a half and get tax rates or we just like postponing that or we're putting in a little bit of money for the meantime, somebody lay out how this is actually going to work, because it seems pretty vague and it seems like time is pretty short wants to do that. Since I kind of presented it maybe I should take first go at it and Secretary French can reel me in if I so our feeling and was that first we would using the skinny budget model. There was legislation that would allow districts to fund themselves based on some call it FY 20 level of funding for the first quarter and you know keep in mind that the body is already talking about this for districts that haven't voted their budgets yet. So this would not be a topic that would be out of the norm, even based on conversations we've had in the past couple of months. So that would get them through the summer and then once we have better revenue picture, once we have better guidance on the use of the Coronavirus Relief Fund, either through additional federal legislation or for additional guidance from the Treasury with school districts can go to the polls again I mean they, there's a primary coming up in August right. So that could be a time that actually might get turned out for a primary, but you know, there's any number of days or weeks they can choose kind of like the state is doing. We're going to leave in June, hopefully, with a first quarter budget locked in and then we're going to come back late summer and deal with a full year budget. I don't see any reason why districts can't do the same thing. Sam did you get the answer you were looking for. Sounds like it's the answer I'm going to get. Mark and then Kitty George up here at some point, but did you back off. Okay, Mark, I just had a question for Adam as the secretary pointed out about 80% of education spending the salaries and benefits. We have a statewide teachers contract that's closed. We have the dates that schools can implement a reduction in force has passed. Teacher salaries have largely been set to contract negotiations. So, are you suggesting that contracts be renegotiated with the with the teachers union. During this, during this time in order to come up with a different number because the school boards are going to have the school week you can present something to the but to the voters. But if the school boards unable to make substantial reductions in their budget. What, what is the point of going through that that exercise. And it seems like there's very, very little money that school boards could cut from their FY 21 budgets, unless the teachers union is willing to come back in and completely start from scratch in terms of negotiating budgets for 21. Are you going to answer. I can. Yeah, go ahead. Sorry. For me. I guess so. I don't know, Mark. I think the, the dynamic would be, you know, once again, to put the information in front of the voters and my experience that manifests itself. Sometimes with, you know, the board asking to reopen negotiation so it would be a voluntary basis for them to pursue that locally. So why would the teachers union agree to reopen those contracts at this point to help sustain the viability of their system. You know, and that's, that's, that's been my experience with other economic downturns that sometimes you know it has to be sorted out in the local context because the difficult choices are going to be could be something to the extent of, you know, we've seen conversations and a lax six months or so with communities where they've avoided making difficult decisions about closing a school. The choice becomes closing the school to navigate a budget versus salary increases and once again giving the voters that information to make those difficult choices that's that's the nature of our system and I don't, I don't think we. Yeah, so I mean just to once again it gets to the point about making sure the voters locally have a full understanding of the context because they clearly. But again, what are the voters have to do with it. I mean they can't go back in and change a contract. Yeah, but they can certainly you know the political process locally is to put political pressure on that dynamic and at least come comfortable locally to say look we're going to take 20, we're going to have a 20 set increase in our tax rate because that's, we support the construct as it is and maybe this will get better but you know, I think that that political dynamic is powerful locally. Go ahead. I'm sure I apologize I had to step off for a phone call so if this has been addressed I'll catch up later. I wanted to follow up with Sam's question I'm just thinking of the logistics and, and what the administration has thought through about logistically trying to get information out. We're not voting on it we're used to town meetings we're used to going in when school boards are meeting and if you don't have access to zoom and you have a town meeting type group of several hundred people, all on a zoom screen. Logistically, are we really going to hear the voice of voters in this in this time that we're working in now with social distancing and and trying to hold meetings remotely and getting questions answered how would all this information get out to voters and how would we ensure that their voices are actually heard if we can hold the town meeting in the school gymnasium with three or 400 people. And how would voting also happen because we haven't really come to an agreement with how voting is going to happen in the primary. And so I just see a lot of unanswered questions and maybe decisions made by a handful of people, and not truly by the voters that we keep hearing about. I would, I would just argue that's that's typically the case anyway but yeah obviously the, you know the details of doing this are pretty significant. I think our point today was to, you know, as in the spirit of brainstorming to bring the issue of spending on to the table because I think we, you know even acknowledging in the models have been presented earlier it still leaves us with a gap. I think that there wouldn't be a spending reconciliation somehow in this sector of our economy or society where every other aspect of our society is learning how to navigate this I think is unrealistic. You know there are alternatives as Commissioner Greshin mentioned something could be done, perhaps at the state level in terms of giving the Commissioner authority to set us at spending amount. So I don't know if we, if we dug into the complexity of doing that but I think our point today was to put this on the table, the spirit of brainstorming to see if it would be interested in working on. But our, our link the analysis like yours is that we're at some point going to have to address the spending issue as much as we're, we're admiring the complexity of how the federal revenues might help us. I appreciate that I'm just really concerned about our democratic process and can we with those large numbers with so many school districts really do that in the environment that we're living. Thank you. So what I'm hearing in those last comments are going back to the question I was asking is this really an effort to reduce spending at the school level, or is it an effort to solve the problem and what I'm hearing I think in those last comments is that the commission at this point wants us to look at and wants us to set the stage so that voters can look at spending and and spend less. And please tell me if I'm wrong, but that that's what I'm hearing. So, yeah, we think it should be on the table as an option at this point. Well, it said it, you know, basically saying whatever you didn't March is now void and we want you to do it all over again is I think pretty much a guarantee that spending will get reduced. Well, you know to your observation earlier like if, if the federal government were to announce Tuesday we'd have greater flexibility, you know we wouldn't probably be looking at this, these kinds of solutions but it's not clear to us how we're going to close that gap. You know, it's a tricky need to the thread because we know we're going to have to service requirements and from the system and particularly for most vulnerable students, and their families at the same time. You know with the unemployment rates and you know these assumptions that somehow revenues will continue to come in and so forth that just, you know, I think the broader contraction of many of these pieces of our infrastructure are going to have to be contemplated. And then Scott. I appreciate putting this on the table in the spirit of looking at as many ideas and options as we can get. I will however say that I am extraordinarily skeptical about about the possibilities of this being even feasible between the fact that market brought up with 80% of the spending. I'll be being set in contracts already the timeframe that we are dealing with here for the 2021 budget. There is absolutely no way in my mind that we can get these things re voted get contracts reopened and settled at a different rate that we have no idea when we will actually have good guidance from final guidance from the federalese. So, all these things combined for me to say that, you know, thanks for the thoughts but I just don't see any way shape or form that we could successfully. And I agree with Kate is going to add infinitely more chaos to our system and we have right now. Scott. Yeah, I would just throw in here that whether the forecasted deficit this year is solved by CRF for borrowing or by an increased tax rate. Regardless, districts are going to try to save every penny they can this year as a hedge against the December 1 tax letter and FY 22. Yeah, go ahead. I'm sorry. I was just going to say I appreciate that that thought representative back you know we've been talking about that as well not to try to look past the situation that we certainly have to address right now but fiscal year 22 can be another very difficult discussion right if rates spike and and incomes are down and that increases pressure on our property tax credits. It will be another very very challenging year. And I think I think Kate touched on that earlier that that the whole discussion that we're having about information voters having information and having a chance to actually use that information to set budgets is absolutely going to be true next year. And so I think the question I have is does it make sense to force that decision right now in the current environment, or should we do the best we can with this year. We're going to do fiscal year 20, but do what we're going to do in fiscal 20 do something in 21 to protect property tax payers, but also to protect schools and then understand that the kind of debate that we're having right now about about contracts and about budgets and so on are going to be on the table for voters in next March, no matter what. We jumping back in other things, one from the point of view of the school boards, asking them to do two more budgets. Is the incredible amount of work for the people on the school board, asking them to do a three month budget and then a long budget. And I, you know, you're asking volunteers to do way more than they signed up for at that point, because it really is substantial having done that for 15 years. And I guess the, the other thing is I really agree and think we need to be looking at this as a three year issue. 21 2223 and not jump into something right now, which is likely not going to really solve any problems, but instead had additional problems. I think we need to be real cautious about not doing things too extreme too quickly that end up being instead of positive in the end and end up being negative in the year. Anybody want to respond to that. Peter Anthony, just to point out that if, and I basically agree with George to have a two or three year through to at least probably three year glide path into the new world so to say, I would, I would only add an overlay to the new world. We were poised in late February early March, having heard the results of the study originally encouraged by the Education Committee but because it obviously bears on finances. We had the pleasure of Dr Kobe coming in and showing us how the present system had very little logical or policy support in the data. And I think we can I concluded that as a, as a matter of fact it probably was the current system is probably subject to legal challenge never mind. The ethical and equity moral issues behind it. I guess I would hope if following George, if there is a multi year to three for transitional guy. I think we can take that path into the new world so to say, I really hope we also can incorporate transitioning to a student waiting system that would be in the future, supported by data, which I gather. I think that report correctly, the current system simply cannot be sustained by the evidence at hand. So I would hope a trajectory, given the upset miss that we didn't invite but we have any way that we incorporated some sort of trajectory to write a situation which according to the academics is indefensible. Thank you. Any comments anyone has, George. Sorry to speak so much but I also just want to say that we're live streaming on on YouTube to maybe a number of constituents. And I want to be clear that the Ways and Means Committee of the House in no way is going to endorse a 20 cent increase in the property tax rates. I'm not sure about that. And I don't want to present people that kind of false idea of how we're approaching this. Thank you, George. We have been really clear and it's worth emphasizing again sort of the two parameters that we've been working on is that property tax payer, the increase in property tax payer should be based on the COVID the pre pandemic world. And that's what our committee has endorsed. We talked last Wednesday, a little bit about, or Tuesday, about moving a bill that would do just that and leave the 21 problem for a separate bill. And that's exactly to make it clear that the solution to 21 isn't going to be increased property taxes we're not sure what it's going to be but it isn't going to be increased property taxes. And the other thing that we've talked about in the committee. And maybe maybe with I don't know if there's been quite the same consensus on it so I'll speak for myself the other thing I've talked about is ensuring that schools have sufficient money to manage what we know is going to be a very difficult situation. We, you know, we know that kids are going to come back in the fall if schools open in the fall, having lost significant time this school year with challenges over the summer. We know that the challenges in teaching remotely are just we're just learning what they are just beginning to explore what they are. And for me anyway to talk about something which may leave schools with insufficient resources to do the job that we've asked them to do is just unacceptable. Anyone else want to jump in. Yeah, if I could just follow up on that I think, you know, right I think that's what makes the use of the SR funds relative to CRF so fraught with risk because we're not sure how those funds can be applied because they're the flexibility of SR is significantly greater than CRF and there's different timelines involved. But I would also to your point about the continuity of learning. This is a brave new world for our schools and it's not going to end at the end of the school year. And there's we've relied on the partnership of all the stakeholders the teachers union the administrators and so forth to navigate the first phases of this crisis. But there's going to be interest in looking at issues of working conditions, for example, particularly as we aim towards the fall. And a better part of those master agreements are language around the working defining a working day and so forth and the conditions upon which educators engage in that work so there's a lot of a lot of variables that have to be reconciled as part of the near future and the financial element is certainly just one of it one aspect of it. Any other anything else anybody wants to put on the table. It's a tough discussion you know every year we talk about education finance and it's a difficult discussion. And this year. It's multiples of difficult. And I appreciate the members of the administration. And the discussion and, you know, being willing to put ideas out there and get questions and question the ideas that we've got. Because that's the only way we're going to get to the end of this. Jim muted. Yeah part. apologize for my absence in the last little bit I had to go to another committee, which I did. But here now I'm back. So, I'll try to catch up on the last whatever it's been 15 or 20 minutes or some which I think was probably very important but I had to be in Sarah's committee for a little bit so I'm back. Thank you. Anyone else. Anything. So for the committee. I think the question I have for us is of the work that Mark has been doing I want to go back to the proposal that Mark put on the table. And where's Mark is he here. Yeah, still here. I just sort of cut off the discussion because I wanted to be sure that we had a chance to hear from the administration. But I want to go back to that and see if people have questions comments about it ideas, things that they would find it helpful if Mark and Chloe did some addition and bill tablet who's with us did and quote, Chloe I already mentioned. Mark, I don't know if I can dial us back to where we were when we shifted gears but that's what I'm trying to do. Mark you want to get it up there again and So I sure so I should can you pop it up. Yeah, we'll take a couple more minutes here just to see where we are. So does anybody have any questions that I can I don't know if it's a question about this or not let's not go ahead. Yeah, hey Mark, I just want to make sure I understand this correctly so if we did I'm looking at the fourth column here if we did this proposal, we'd still be looking at a $69.5 million deficit. So this is just this is just an example. So you know we had we had to just pick some parameters to plug in. But you know you could reduce the education payment more if we were confident that we could restore more of that money from CRF funds. And we've also there's also a decision point down on the stabilization reserve whether or not you leave any money in there at all. So this particular run Chloe left 2%, which is $15 million in there. So that money could potentially be used but no this this third column is the fourth column is it's just an example of how we could do this. The parameters are there's a number of parameters that you could play with. So, that's that $69 million is just it's arbitrary. If we club at the $27 million, which we've talked about and be interested in hearing what committee members think about it. That reduces that $69 million, a chunk of it fairly quickly. That right mark. I think that's right in the 27 is what we think is left over after we take south of 10%. Right, but I'm also aware now that private schools may be eligible for some of that money and so I haven't gotten down to that figure out how much might get siphoned off. But it's it's still a significant chunk of a significant chunk of money and it can be used I think for pretty much anything. Yeah, so the, so the question that we were talking about the other day was to, and I think, I think we ended up sort of in agreement was to ask the agency of education, not to push that money out until we've had a chance to talk through whether how it gets how, how it is used to adjust the education payments. Yes, and we will not be sending this out until my thought so so that money is at least set aside for the moment so that we can, we can continue to, because it is more flexible money. And so it is money that we can net against education payments maybe more easily than CRF. Robin. Thanks. And thank you Mark for, you know, laying out all these different options and what the variables are. I mean, to me this and I like that, that final column as a, as a concept. Our big question is what's actually going to be eligible and when are we going to know it. So, you know, and then so that means sort of how long do we have to wait before we have to decide on these things. I don't know usually tax rates are set before June 30, so that all the machinery involved in getting tax bills out to people is done. But again just just for clarification on the other point one of the thoughts we had on this is that you may not need to know in advance how you know we need an idea but we don't have to know to the down to the dollar. Yeah, how much money schools have that may be eligible. It may be that some districts don't have enough to recoup all that money. And again that would put them in a situation where they may would have to use existing reserves, find savings in their own in their past budget, or carry a deficit board into the next year. When we had a conversation yesterday or the day before with the superintendents, some of them indicated that they have some reserves in place that could deal with some of this stuff so you know every year the budgets and estimate. And at the end of the year you figure out how much you spent and some years schools have surplus and some years they have deficits. So it would be one way to address it. I think you'd want to be confident that most of the money that we clawed back could be replaced with CRF money so you're not hurting the schools but I don't think it has to be down to the penny and I don't think we have to have all that work done in advance. Well and I certainly don't expect it to be down to the penny but I am concerned that just as as in the general fund everything that we're doing, because we don't know what's actually going to be eligible we are taking the risk that there's going to be, you know, a bigger deficit than we thought or put people in a worse position that we and we don't want to do that either so. I know we don't have the answers yet but that's that's clearly the huge risk with doing it the way we're doing it. The other risk with which the Secretary raised is that, you know, this deficit in the education fund is looking at existing budgets, if they're spending the districts and I think there are expenses that they're having above their budget at this point, that's going to eat into that $27 million because and I don't know how much at this point. But in order to solve $167 million shortfall on the education fund, we have to identify money in existing budgets past budgets that are eligible for funding. So this is two different piles and that's why I wanted to keep on the presentation I wanted to keep the answer money and the CRF money separately because it gives you some flexibility there. Right. Thank you. Thanks for your work. Yeah, I mean the, the, the one bit of information that we'll have Tuesday is better. It is an updated consensus forecast right. It's going to be consensus. That's my understanding yes on Tuesday. So, so that'll be useful hopefully it's it's not worse news hopefully it's slightly better news but whatever it is it'll be useful that it's a little a little more fixed and it's a little more current. You know, we continue to hear what we hear from Congress which is not a lot and the Treasury which is not been terribly helpful but at the same time, we, if we wait for certainty. Well, nothing will happen. Well, what one of the things just occurred to me if I could just jump back in for a sec. The distinction between the CRF money and the and the ESSER money. It seems to me that the new expenses that are different districts are incurring as a result of COVID-19 right now would likely be eligible for the CRF money because they directly related to the CRF. I think we'll use all of the ESSER money that's available for the purposes of backfilling the reduction in the education payment. Jen. Thank you, Mark. This last few sentences in particular were helpful. I like this, the proposal that you put on the table earlier this morning. And I would say I was not at all encouraged by Adam Greshan's testimony, particularly where he seemed to be going and I was a little concerned about Dan French's testimony to so I thought I heard a movement towards encumbering some money that I thought maybe should rightly go to education. So we'll just have to see how this sorts out. And I missed a few minutes, as I said, maybe not as long as I thought, but I like the proposal in I certainly would want to work to see how we could make something that like that are similar to that work. So other committee members arcade or kitty Larry want to jump in. Or anyone for that matter. Thank you. So question for the committee. Do you want Mark to continue to work on this idea. What, let's see, so we're going to have the updated forecast on Tuesday, we're meeting again on Tuesday, I guess we can probably hear that on Tuesday and and continue to work in this direction. The other thing I want to say that if there are other ways of putting federal money into the education fund or into this big system where it goes directly to schools or however we do it. We will explore them. This is the best outcome for for Vermont taxpayers and for kids is to get as much federal money into the system as we can. So that's at least for this year that's, that's probably the best outcome that we can hope for. So, Kate. I just want to say that I really appreciate that this has multiple resources to solve a very complex problem and it's not just looking at one way of solving this such as as tax rates so I appreciate this and I'm very interested in seeing where you go and continuing this conversation and also bring it to the Education Committee as well. Great. Anything else anyone has a chance for one morning. So, okay. So I will see everybody tomorrow on the house floor and Tuesday in committee. I will end the live stream now. Thanks.