 Good morning. It is Tuesday, January 30th. We are almost finished with our first month here together. We are going to again, spend our afternoon on education spending. It's possible that we'll spend more time this week on education spending, but we're definitely gonna spend this time, this week on education spending. And we are joined by two members of the House Education Committee. Nice of them to come by. I believe that rest of the Education Committee is gonna start watching us on YouTube at two. And I know there are many other people tuning in from around the state eager to see us do our work well. And so after last week's hearing, which I think was incredibly helpful, at least for me and for those of you I've talked to about it, it seems like one piece of the puzzle, certainly not the whole piece of the puzzle is the transition mechanism. And so wanna sort of talk about that a little bit today. Also, we're gonna have Nicole Lee who's the new data person at AOE join us for sort of in previous years, Brad would sort of come in every week or two and we'd slowly get updates on warned budgets. The field was incredibly responsive to this first data ask and it seems we have almost all of the budgets and so Nicole will come in and tell us about that. We also have a request out to districts for a lot more information for next week. And so I'm looking forward to that. And then we'll spend the rest of the afternoon with Julia and ideally have some time just for our community conversation at the S to figure out what comes next. So, and then later this week we're gonna do some more on the wealth tax and on the personal income tax surcharge. We're gonna have another bill on climate funding, flood funding, infrastructure funding. I think this will be like the fourth bill with a slightly different mechanism in it that we'll take in and then maybe we'll have a chance to sort of think about how we might wanna design something like that. That's gonna be an ongoing project. If we have time this week we will pick up the flavor tobacco bill. I know we've all received a lot of email about that as well as many pop up ads and I think that sort of mostly covers it for the week. Next week we'll pick back up the telecom stuff and the tax sale conversation as well as I think we're about to get some other bills from other committees, such as REZ. So if anyone has any questions about sort of all that that's in the hopper please say something at some point. And with that, Kirby, can you just sit right in that chair and tell us about the actual language in 127 and what the mechanism does for transition? That chair right there. Thank you. Happy Tuesday. So we've all talked a lot about this transition mechanism but I don't know how many of us actually looks at the language since it passed. So I thought that would be a good place to start. Good afternoon, everyone. Kirby Keaton, legislative council. We are going to try to briefly walk through section seven Act 127 of 2022. We refresh memories about homestead cap change that was done. So my plan is to just read through it. It's a couple of pages basically and then kind of put it into planning and then kind of put it into plain language afterwards for the community's benefit. So with that, I will start. So section seven of Act 127 2022 changed the calculation of tax rates and created something called tax rate review for fiscal year 2025 through 2029. It says notwithstanding the chapter on education funding and the chapter on the education property tax and any other provision of law to the contrary if in fiscal year 2025 when applying the funding formula created under this Act which has to do with people weights and other things a school district homestead property tax rate increases if when applying the school district's homestead property tax rate increases by 5% or more over the school district's homestead property tax rate in fiscal year 2024. Sorry, can you slow? Can you go back a little bit? Maybe I missed it, but is there somewhere a definition of homestead property tax rate? Yes, and Julia, do you know the chapter that the definition would be? I do not. I can get that for you. I don't think you're right away. I was going to ask a line there. Sure. Where it actually says definition homestead property tax rate. Okay. Thank you. So resuming, so the property tax rate in the fiscal year 2024 then the school districts homestead property tax rate shall be increased by not more than 5% over the prior fiscal year in each fiscal year for five fiscal years from fiscal year 2025 through fiscal year 2029. In fiscal years 2026 through 2029, the subsection shall only apply if the school district's property tax rate increase was limited pursuant to the subsection in the prior fiscal year. So what this is saying is if a homestead property tax rate or a homestead property tax rate is capped at a 5% increase every year for these period of years. However, in subsequent years, it is only capped if the district hit the 5% cap in the previous year. And for an example, I understand that the average homestead property tax rate is somewhere between 1.3 and 1.4. But just to make the math easier for an example here, let's say you're in a district that has a homestead tax rate of 1.0. If it were to increase under this up to say 1.1, it would not, it would instead increase to 1.05. And then in subsequent years, you could have a 10% or so increase and you would only be capped if you were capped in the previous year viewing the district. For them to. This does essentially mean it has to go outside more than 5% in the first year for you to qualify for that, but it can't go up more than the last part of the sense where it says prior physical year, there can't be a prior physical year like in 2017 to 28 because 27 can't go up because 26 didn't go up because 25 didn't, okay. Yes. So after the first year, if a district does not have a 5% increase then for the rest of the years, it would not be able to use this. And if folks at any point want to look at the modeling that we essentially looked at when we developed this provision that is on JFO's website. So for the next subsection of section seven, in order to determine which school districts shall be subject to a tax rate review, we'll get into what that means after this. The Secretary of Education shall calculate the fiscal year 2024 per people education spending of each school district subject to subsection A of this section. As though the funding formula created under this act applied to fiscal year 2024, that has to be done because normally this treatment would not have applied to fiscal year 2024. So agency of education has to pretend as though it applied in order to compare the years. So then in fiscal year 2025, that the school districts per people education spending calculated using the funding formula created under this act increases by 10% or more over the school districts fiscal year 2024 per people education spending as calculated by the secretary into the subsection then the school district shall be subject to a tax rate review. And then in fiscal year 2026 to 2029, if the school districts per people education spending calculated same thing as before. If it's more than 10%, there's a tax rate review. And then upon request of the secretary, a school district shall submit its budget to a tax rate review to determine whether its increase in per people education spending was beyond the school district's control or for other good cause. Conducting the, I mean, I know I can the upon request of the secretary is that in addition to folks who are spending more than 10% are those sort of clauses separate from each other or is that sort of subsequent to if someone is spent as more than 10% increase in spending does the secretary have sort of purview over the whole Kittin Kaboodle? In this language. In this language, it would have to be more than 10% have to be that group. And then that group, it's up to the discretion of the secretary and I think they've been to ask for additional budget info. That's what I thought. And then when I reread it all of a sudden I wondered, so thank you. Can you go up just a little bit so I can see the top part of it? Here, I'm going to give you that sentence. Yeah. Good. Okay, thank you. Let me zoom in at all. That's what I just missed the top part of that sentence. No, I've got it. Thank you. Thank you. And I don't get less sentence in all of these words. I'll go over it more in plain language after we get through it. So we can actually stop there and I'll catch us up to where we are. So first step, agency of education calculates per pupil education spending for all the CAPS districts for 2024 using the Act 127 formula. Step two in 2025, if per pupil education spending increased by 10% or more, there could be tax rate reviewed. Step three, for fiscal years 2026 to 2029. There could be tax rate review if it's 10% over the previous year. And then step four, it's not really steps in this case, but tax rate review, if that happens means that the agency of education will determine whether there was an increase in spending was beyond the district's control or for good cause. Good cause is not otherwise defined. But put that out there. And then the fifth step here is the agency of education is to use three district business managers and three superintendents as advisors in conducting this tax rate review. So on page 15 of the bill here, the Act, we go through what tax rate review is required to consider, which is big A, the extent to which the increase in per pupil education spending is caused by declining enrollment in the school district, and big B, the extent to which the increase in per pupil education spending is caused by increases in tuition paid by the school district. And after that, I'll just put this into plain language. The district loses its cap rate, the cap 5% rate if the budget has excessive. Excessive is another word that's not defined. Good cause and excessive here, that means there's discretion per the agency. If there's excessive increases in per pupil education spending that are within the district control and are not supported by good cause. And that's section seven of Act 127. One thing I just wanna sort of highlight is I think people in the, I've heard a lot of people talk about sort of people being between the 5% and the 10% I just wanna like highlight while I'm looking at it that 5% is about tax rates and the 10% is about spending. And so it's not like a magical space between 5% and 10% they're referencing to different basis. I'm sorry, do you have a right? Do you have a right? That's all I have. What's your questions? Not a question, just wanna say it's quite clear to me that the, I think folks are absolutely from everything I've heard following the language of this law and what I've also seen is it's behaving very differently than we imagined it would when we passed it. Which happens, why we get to come back every year. Yeah. I mean to that point I did just put my own navigation go back and look at the general estimates about the number of schools that we expected to reach the cap and it's very different than the number of schools that we are seeing here. And so just that it's that we do our best and then sometimes what we think will happen it's very different than what does happen that we adjust. Sure. Okay, thank you for me. Speaking of what we think will happen and what will happen, Nicole, we would love if you joined us. Thank you. Do you have the Zoom to sign in to and all of that? From Sorsha? Not. Sure. Well maybe I do and I don't know it. Okay. I'm just gonna. Okay. I imagine you have something you wanna share in your screen for this. Or maybe you don't. I don't know if I do, so I might. Okay, before you got here, you think about that, I'll say a sentence and then we'll find our way. Before you got here, I mentioned that while in previous years Brad would come in and we'd sort of like slowly work our way towards a majority of districts having reported their warring budgets, it seems that this year folks have been significantly more responsive about sharing their warring budgets. And so you might have more complete information to share with us than usual. So I do, Nicole Lee, for the record. Okay. So the reason that I paused on sharing something is because Brad and I sent out a very different preliminary budget requests this year than we have in the past. So in actually, we sent out two, right? We sent out our traditional one which is due mid-February, contains a little bit of excess spending, threshold information that we collect just informationally. Different this year, last Monday we sent out a please just return to us this week your projected budgeted expenditures or your warrant budgeted expenditures and your offsetting revenue for 25. Just those two data points we're gonna collect them as fast as we can. We also said because of people voting late, there are a few budgets that don't are fully defined yet. And so we said, okay, send us a percentage, you expect your ad spending to increase. And so that's why I actually don't have something to share because I did not know typically we keep those percentages very close to the vest because they're not really official yet. Happy to share the warrant budget information. All of that to say, we got a really robust response. The majority of districts responded. We had 106 that responded with actual numbers. We know within those numbers, there are a few that are not warned yet because they vote late, but we got their numbers. Then we got a very small subset of five districts that provided us a percentage. And so that left nine districts not having responded or it's too early in the process. So what I did is took the 106 that we got. 122, which our numbers- I'm gonna keep that number straight in my answer. Our numbers include unorganized towns and boards. So that's, there are a few of those that always causes some, did you include them or exclude them? They are included here. So that is, I'm sorry, I said nine, but that's eight districts that didn't respond and three unorganized towns and boards. So 11. Then we took what we got from those that responded, what their percentage increase in ex spending was and applied it to those that didn't respond to give us a better estimate. And so that brings the ed fund up 14.3% compared to fiscal year 24. And that is a number, go ahead. I guess what I was wondering about sharing is usually Brad just has some like headline numbers for us, which is just sort of like what the total spending is, what the percent of districts reporting is and like what, and that's on our website. Great. It's slightly different. It was like by the skin picture just before. Cool. It wasn't here like 15 minutes ago, right? Okay, good. Sorry about that. Sorry that sort of I missed that little communication with each other. And would you mind sharing that from your screen? Yeah. That would be glorious. Thank you. And this is my first time sharing, so. And it's Zoom and I know you all use other products. So sorry about that. We will avert our eyes and have a silent moment while you navigate. I'm also going to copy out. I do not have the AOE templated one, although that is what has been shared. So mine is just a work document and I apologize. I'm sure it is tidier than Brett's. It's fine. And thank you for sending that. That's great. That's great. Thank you. Who I want to join with? No, Peter. No, I don't. Okay. Thank you. And your co-host now so you should be able to share. It rings on the bottom of the screen usually. Is that large? I know for everyone. That's lovely. Thank you. So there's a couple of graphics here. I've mostly spoken through the numbers at the top, the 14.3%. It's the numbers at the bottom, I think that the room probably wants to look at. And so I did. Can I ask a question before you get to that? The five districts that have the later votes, am I remembering right that those are much smaller towns that don't tend to have like a significant... Small smaller. They did provide information. They are smaller, not tiny, but represent a pretty small chunk of the pupils. Because one of the things Brad has sort of pushed is what percentage of our pupils have responded. And so if we think about the 142,000 long-term weighted pupils, 97.23% have responded. Great. Thank you. So the top is just discussing those districts that responded with numbers because that's a little bit different than the sense or the force per sense. And it also shows offsetting revenues. So the reason that I did this is we are seeing both an increase in expenditures, but also a decrease in offsetting revenues for those that responded. And that's something that we hypothesized about quite a few times. And so it's nice to see that it's the hypothesis. I mean, it's not nice to see the hypothesis true. It's sort of unfortunate the hypothesis is true, but reassuring from now. Yes. And so I, sorry. This is what I came to present. Happy to answer any questions. I can certainly, because the 106 are born, I can share that district information. I'll later... You don't need to go district by district. That was my hope. I'm sorry, middle and good thoughts of doing that. I wanted to be transparent. I should get a little lost in their own districts. People call us, wonder, it's not like it doesn't. It's good for us to look at the full state because that's our responsibility in this room. Yeah. Thank you, Nicole. Can you tell us a little bit about how many districts came in utilizing the cap and give us some information on that? Do you have that? I actually don't. I can anecdotally tell you that at the AOE, myself specifically, we're getting a lot of business manager requests about which yield to use because a lot of the reports during town meeting day have an estimated tax rate as that yield has moved more this year. I paused on the 5% work that I might be able to do only because the yield is moving so much. Now, maybe that's not the right answer, but as the yield moves, who is above or below would change. So no one really knows? No. Yeah. Can you show us table two? Sorry, I felt very small level. Okay, no. Sorry about that. And so it's... The reason I didn't do offsetting revenues in table two is I don't believe it would be accurate to increase or decrease the offsetting revenues for those districts that we forced a percentage to. That makes a lot of sense. Thanks. This is really helpful. Yeah, it's a lot of sense. Do we already talk about the rate review? Is that an appropriate term? It's about so many. It seems like the average increase is above the 10%. And so how are we handling the rate review and has the panel been stood up and what would that look like? It can answer some of those questions. And I just want to say that even though the statewide increase might be 14.3%, there are going to be districts in there that are spending less than a 10%, spending for people increase because in their specific case, maybe their budget did go up 14%, but their increase in pupils may have brought down their spending for people. I actually made a note when Kirby was talking, I need to go back and revise the model of who's over the 10%, but I have not done that with this new data. The AOE has stood up a workgroup for tax rate review. And when I say a workgroup, we have asked the field superintendents and business managers to volunteer their time to discuss with the AOE what if they were being reviewed or they were on the committee, what's important to them? And so we've come up with a list of expense types that they think are important. We've started to develop a form. And so using the Uniform Charter of Accounts, what do we want to get from the districts that need to go before tax rate review? But the actual committee members have not been selected yet. That's most of the update that I have. Can you, sorry, do you have another question? I mean, that's helpful to hear about the process, I guess. Like, it seems like some of these decisions and reviews would have to happen in a pretty timely manner in case the review decided that it was not a good cause. Or do you have a sense of what that timeline would look like and what would happen if a warrant budget is passed with a warrant 10%? And just generally, do you have any concerns about the tax rate review committee and the way we structure it? Whether this was a good thing? So I think the first thing I'll say is the law requires us to review based on voter-approved budgets. And so that, right? And when I think about voter-approved budgets, I think after the reconsideration period, because while there are very few, it is an option to have that happen. And so the 31st day, after town meeting day is April 5th. And that is when we are requesting that districts return their budgets to us this year. It is a very tight timeframe to try and turn around the reviews because we know that the yield bill depends on those decisions, but then those decisions also depend on what the yield is. And so one of the main trends, and I've heard it many times at this point, from both the people volunteering for the workgroup for tax rate review and just from the field in general, is what is the plan for districts that are 4.4% and then the yield changes, and then they're 5.5%, but they were not intending to go before the review board. That's been just continual. What are you gonna do with that? When are we gonna know? How much time are we gonna have to prepare our submission? I believe your question was, do I have any concerns about the tax rate review? Depending on the number of them, there is a very short window to complete them. That is a little worrisome. Do you think anyone's gonna want to be on the tax rate review? We don't want to draft power here. I'm also not rude, but I'm concerned that people are going to be asked and say no. One, it is reviewing your peers a little, not a little bit, it is reviewing your peers and that can be awkward. We've talked in the work group, the consensus is that they would like to provide a group decision to the secretary, certainly not an individual decision. So the six members would say the committee has recommended. So there's that. But for, I think my main concern is, can we get them done faster? Can we make a little of a report that's on our guidance on some of these definitions of excessive and, you know, when it was in there, I stood. Well, there's some numbers coming from the secretary of education saying, here's the guidelines you use in making your decisions on the review. More than what there is in staff divided. I don't know the answer to that. I think, and again, be knew I could be wrong, but I think we would look to the legislature for a definition of good cause because we can certainly come up with parameters. And I know that the AOE intends to be as transparent as we can about this, because if we deny someone and we don't have an airtight definition of good cause, that's problematic. Yeah. In the same with excessive, without a very explicit definition, what is the defense for the decision? And you're looking to the legislature for those definitions? Yes, you can say yes. Yes. Well, I think the question is like, if we decide to maintain this structure, which I again, I do not have anything resembling a complete photographic memory of any of the deliberations, which were thick and mighty leading up to this bill happening. We did not, I don't think we imagined that multiple districts would be going through this tax rate review committee. I think we imagined that the idea of the tax rate review committee would prevent districts from going near it. I think the timeline of it and the way it's set up means that it's not necessarily gonna have the impact or anything necessarily. It will just be sort of a, if a district does wind up sort of on the wrong side of it, there will be more punishment and less something that will help us in keeping the yield where we might want to keep the yield. So I think there are a lot of questions that need to be revisited about it, but if we did decide to keep it in some form, yes, I think it helps to add more language to what we mean by those things. My recollection is same as yours, that they could say a disincentive to screw up. Yes. We could do that. But I think also things, words like adequate or appropriate are very hard to define in statute. And would maybe be the purview of the education point and not the ways it needs. Other questions from Nicole. I think when Julia comes up we can compare what this is to what was December 1st and that will be helpful for migrating at least. Can you tell us a little bit more about the other data that is coming to us soon? Yes. So the AOE is sending out a survey to business managers that is collecting information. The legislature has requested on special education, both costs and funding. Essar, healthcare, FTEs, facilities, and mental and behavioral health. The survey initially went out yesterday. It has then retracted. There were a number of questions from business manager leadership and all along with this survey, we're working on the idea that bad data or rumor is not what we want. And so to get good data, we have to have clear questions, really specific acts. The reason for the retraction is the manager leadership wanted to provide some translation or some additional context because we all are aware sometimes the answer is that's information we can't get. So the revised survey is going out tomorrow morning and it is asking for the majority of the data is asking for budget data fiscal year 24 and fiscal year 25 to give us a basis for comparison. The mental and behavioral health supplement is more of a trend, what's happened in the last few years. Based on that conversation yesterday, we have also added a three column supplement because there was a lot of feedback that districts wanted to provide their primary cost driver if it was not already in the survey. And so we have sort of a choose your own adventure supplement meaning they will type in the name of the cost driver, their 24 budget and their 25 budget. If it is outside of the other things that we have requested, the primary item I've gotten back that we, I'm gonna use missed, but only missed because it wasn't already there is they wanna report out to you tuition information. A lot of them, I shouldn't say a lot, I shouldn't generalize because we're working on good data. I received feedback that tuition is a cost driver in districts and it was not on the survey. So there is sort of that, I don't know what I'm gonna be able to do with that supplement, but it's going to provide what the districts were looking for. Yeah, absolutely. Thank you. I just, can you say what the five things were there that were on the survey that you already can, just like, because I'm saying, I think you're referring to them again, so I wanna be sure I have. Yeah, so we have special education, costs and funding. We have facilities, which to clarify is capital improvements primarily, FTEs, health insurance, ESSER, the COVID dollars. And then, or I guess the impact of them going away. And then the remaining is mental and behavioral health. And I feel, I'm looking forward to seeing that data because I think we know that spending is up significantly. We know what we heard on Thursday is that, and what we sort of made all heard before Thursday is that that spending is unnecessary to each of the districts that's warning that spending. And if we're going to look at sort of long-term ways to make sure that we're meeting educational needs while holding spending at some level, I think we need to actually understand what that spending is instead of hypothesizing. So I'm really grateful that you're sending out that survey. I'm really grateful that districts are so responsive to it because I think we can't make policy decisions about what to do about spending until we actually know what spending is being spent on. So thank you. Yeah. A couple of comments on following your expenditure. This is all fascinating. When we were putting together Act 1.47, I don't think these things were on our radar or even a little bit, except maybe just, you know, so this is sort of a, when you see a little bit here, the adventure, this is a whole new adventure compared to where we were when we packed Act 1.47. The other thing is to say is this discussion is disgusting, it's fascinating because it's opening a whole new can of worm compared to where we thought we were when we passed the Act, the bill, it as much as the chair is suggesting, I think correctly, the review was a NSA policy. I stopped that. Yeah. I don't think at least I didn't put in a whole lot of credence as to how much would actually happen if there's budget, it's much of the view or Peter's or something like me. I don't know that we thought some of the correct me if I'm wrong, but I don't think there's a consequence, a specific consequence of budget's being reviewed. Other than the amount of expenditure, do we? You know, I don't think we, are people wrong? I don't think we had much of it. If it has the, you don't get the effects of cab, you said it wrong. Jim was asking about, it seemed like there wasn't really enough of a penalty attached to the tax rate review and Catherine points it out that people don't get that 5% rep hold anymore. Correct. Yes. It's very squishy, very squishy. Oh, representative, okay. Oh, actually it's actually kind of Anthony. Just, I'm asking myself as you listed the bits of information that you expect to come back. So now I know X pick one. Now what do I do with that piece of information? In some, I guess I could answer to say, well, that suggests that we have to find some money in a non-traditional way because there's really isn't an educational cost or et cetera. But in some of those, I don't know how I would answer because they aren't education costs. So I'm not sure that the answer to some of those leads me to a solution, so to say. Oh, for me at least when I think about, and I said this last week, but when I think about what we're gonna need to do this year, there's what we're gonna need to do about FY 25. And honestly, I think that data will be less helpful for tackling the immediacy of FY 25. But I think in this legislative session, we're gonna need to look at FY 26 and FY 27. And there might be policy tools connected to that spending that we can tackle on FY 26 and FY 27. And a lot of them again, it's gonna be the Education Committee which has now joined us via Zoom. If you want to, you're welcome to stay here. You're also welcome to go back. You're welcome to be on the bench. I just know your other chair might be more comfortable. And so I think that, you know, I think we're gonna need to be sort of mindful of we have this year to tackle with less policy tools than we have for out years. And we're gonna need to work on both this year. Thank you. Carol, Julia, and then I think maybe we will be done looking at this with Nicole and have Julia conduct us. Thank you. Thank you. What I wanted to add to what you were saying or to say also is I see that the, that we believe, maybe as being a pressure valve, we have a law, it's a new law, don't know exactly how it's gonna work out. And rather than saying it is this and that is it and that is applied, no matter what, it is a pressure valve so that there is a way to deal with outliers or people have extenuating circumstances. You don't know how many though that might do two, that might be four, that might be six and to have to be able to deal with pressure inside this system. I appreciate that. Thanks. Nicole, I think you had said earlier that you, that this is managers have asked you to add tuition as a cost driver. Could you say, I don't think I totally grasp what that means. Could you say more about it? So it's in the supplement and so they would have to, some may respond about tuition, some may put their transportation contract as the most impactful cost driver. It's an optional section. I added it as a response to feedback because I'm trying to get information so I'm trying to make it appealing. And so... So they're saying paying out tuition. I was just, for some reason in my mind, I was thinking in tuition and I was like, that doesn't make sense clearly. No, there is an impression, not an impression, there are districts that increasing tuition rates for maybe their high school, if they're an all tuition high school, that tuition bill is going up so much, that is what's driving their increase. Now, when it comes to tax rate review, that's certainly one of the components that's already mentioned in the law. However, it was something that came back as feedback that they felt was important to include. One thing I want to be really careful about when we're analyzing that data is extraordinary special education costs could be interpreted as tuition in some cases. And I want to make sure that as that data comes back, we're not calling extraordinary special education tuition. And I don't know if there's anything we can do about that, but just want to sort of... Well, tuition is its own legal, you have to find that it doesn't seem so near. I just want to say it's great that you got such quick responsive data from schools, it sounds like you're being really thoughtful about what you asked and how you asked, the streamline that process, and as such a volatile and complex topic this year, just grateful for schools that are doing their work to get us the data to be able to make some decisions and your efforts are aggregated, share it and ask the right questions. Thank you. I appreciate your having tuition in there as one of your criteria, because for particularly small school districts, you have fluctuations in their number, you don't have high school fluctuations in their numbers of high school students who are being tuition to another school, that can really make their budget go up and down. Thank you. Representative Lee. Thank you. You've added health insurance, or you have health insurance down, but I didn't see teacher compensation. Just wondered, there were some things that talked about being out of school districts control, some things that were pandemics related, expense increases, but just wondered about that. Within the FTE section, we ask for both account of FTEs and the salary dollars associated, the three breakouts that we have are teachers, hair professionals and administration to get consistent data back. The AOE has supplied job classes from our staff survey that we consider to be each of those three categories because the feedback received is administration could be defined differently in every district in the state. So to try and get some consistent information, we broke out the three we're asking for FTEs and salaries, and AOE is providing the job classes to respond using. Thank you. How about, it's still children needing to catch up academically in the aftermath of the pandemic. Did you have that? Can you just talk about that? I don't know that we explicitly ask that question. The mental and behavioral health survey, in the version that went out yesterday morning, we had a question about counts of crisis beds and the feedback we received is that's not available. It's a very hard piece of information to come by. And so the piece of information we are able to come by is students awaiting alternative placements, which does not answer your question, but is the one student count piece of information in the survey? Otherwise, mental health is more around who have you had to add to your employee or contract additionally over the last couple of years. So we don't ask for the number of students needing services. And this is not on the spot in the slightest thing. Let's just say a district says, well, you know, we have really, we really need to step up to have a teaching reading or math because kids need to catch up. That's academic. And the other things on this list are all, although influencing academics, if you don't have mental health or behavioral, then it's hard to learn, but we don't have academics actual, and I don't know about that. And I appreciate that feedback. To be very honest, sending out a survey with 85 questions per district and knowing that some business managers have five or 14 districts, I'm already a little bit nervous about the amount of responses I'm going to get because this is a voluntary survey. I appreciate wanting to add more. I'm sort of at a point of, if we add more, I think we're gonna get less if we add more than we already have in there. Again, I hear that. I also, just academics. Really, it'd be fun. Pretty close to it. To sort of temper that a bit, we need a whole set of 24 and a whole set of 25. So if there are 30 questions for 24, you then have to answer the same 30 questions for 25 to give us something to compare against. I think though, and I don't want to speak on behalf of them, but if I even consider putting myself in a business manager shoes, it's 85. It's not 30 and 30 and 25. It's a whole bunch of information. As one who receives a lot of surveys, five is about the match. Thank you very much for sending that out and for all the districts and for all you're doing right now to help us figure out what is happening. Thank you. Julia, Richter. You, we all have this amazing Ed fund outlook on our desks. Sideway. That people are really, really excited about and love you to tell us all the things you want to tell us about everything. It's the old version though. Yes. And there's a nicer version inside the internet. I think. For the record, I am Julia Richter with the joint fiscal office. Yes. So there's an outlook that's now. Horizontal. On the committee page under my name, madam chair, would you like me to pull it up on my screen as well. There. So as a bit of context, I was asked to. Do some modeling to help the committee understand what's happening in the education fund. So the updates that we're looking at here before we go into the different modeling iterations. Are. In large, I guess the largest difference is the data that Nicole just presented with the updated budget estimates. That's now been included in the modeling. We've got the frozen long-term weight. Also included in the modeling. And we have the house. BAA construct in the modeling as well as the governor's recommended FY 25. Budget when applicable. New, the governor's recommended FY 25. Budget pieces. I feel like we actually not talked about those here. Can you just name the. Sort of. Speaks that they cause. Sure. So maybe it would have been helpful. I didn't include the December one. Modeling constructs because I thought there were enough columns, but really the biggest change that we see. From the governor's recommended budget. To the December one modeling is the special education line. Is about 15 million higher than what was in the December one modeling. And that's due to updated estimates from the agency of education between. When we were doing the final modeling end of November. And when the governor's budget. Came out. Thank you. Sure. So. So those are the big. Updates we've got the change in changing budgets. We've got the house BAA and we've got the governor's FY 25 budget. That's in column D you're talking about right now. That's just the background. What has changed in the model since we last spoke. So now diving in deeper into the modeling itself. There are. Four scenarios have been asked to model. We'll start in D and then just move to our move to our right. So. Sorry. I just want to say one thing before we start. There are so many columns because none of these columns are the future yield. None of these columns are like. A recommendation from JFO about what we should do. None of them are my brilliant idea to save us all from our property tax rate. So. A wide variety of scenarios that help us understand the situation. Okay, thank you. Yes, we totally clear about. So, and really big caveat. I think that the. The, the, the term that is used a lot is pushing the balloon. Right. We, when we shift. To the property tax rate, we need to see an increase in the property tax rate. And protect one property class. Another property class needs to see an increase in its rates to account for the additional revenues that need to be raised. And so these are sort of different scenarios to highlight how pushing on the balloon shakes things up within the property tax space. So, so what we're looking at here. In column. Is including the governor FY 25 budgets and the updated spending estimates. And trying to solve it so that there's a uniform change for the average bill for homestead and non homestead. What we see in line H is that the, there's not a uniform average bill change. And that's because in this scenario with the updated budgets. And so, all school districts have hit the 5% cap. So the remainder needs to now be raised from, from non homestead. So 20 with the cap of 20.6% average bill. Increase is the maximum that we can have for homestead tax rates, because then all districts tax for equalized tax rates are capped. So that's why we're seeing the average bill change for homestead of 20.6%. And non homestead 22.7%. Everything is like the cap's not working in a way we thought it was. We thought it was. Thanks. Something else that's just, I think is interesting is getting to this, this property yield. Number in theory, we could set that property yield at $1. And everyone would still be capped, right? So whatever we set the homestead yield at, as long as it's below 7103, all homestead district rates are going to be capped. Given the current and spending. Projections and estimates that we're using. I'm not going to go through the rest of the average bill. I'm not going to go through the rest of the outlook, like scroll down further unless there's specific questions, because everything else in the outlook across all modeling scenarios is the same. We're really just talking about how revenues are shifting. I'll just draw your attention to lines one, A and two, because then you can see overall how much is being raised by these different property tax classes, right? Here in line eight, we're looking at the average bill change. Line one, A we're looking at how much is raised from homestead property tax and line two, we're looking at how much is raised from non homestead property tax. We also, just so we are looking at the same metrics as we go along. We see the average homestead property tax rate of 1.383. And on household income, 2.72% and the non homestead rate of 1.493%. And this average homestead property tax rate is an average, right? It's going to be different by district. Shall I move on to the next modeling scenario? Julie, is it safe to assume that in column B with that property yield way down there by 7103, at that point, every district's been pulled into the cap. Yes, every district has a cap. Okay. Thank you. And that's why with the cap, I cannot solve for uniform bill change. President Taylor. Can you say anything about whether they get the 10% of the other for people spent? So that is not data that I have access to because I'm, all of my modeling is focusing on what, what we're projecting to happen in FY 25 and what we knew happened in FY 24, but that would be a question for district budgets and AOE. And I did hear that AOE doesn't have access to that. Currently. So I don't know. So then the next scenario to model was column E, which is what would be a uniform bill, average bill change. And the only way to get at that is to remove, the 5% cap. So that's what we're seeing here in column E is removal of the 5% cap. And what would that look like? So we see that with removing the 5% cap, there's a uniform average bill increase of 20.6%. We see that the non homestead rate decreases. Because it doesn't need to pick up as large as share of the revenue. I know that's a few of you notice this. So I will speak to it. We see that the average homestead property tax rate and average tax rate on income is the same. That's not an error. That's just how the modeling shakes out. Coincidence of sorts. It's a coincidence. And we do see that the average bill change for homestead is quite similar. 20.6%. And we see that the average bill change for homestead is quite similar. 20.6% in scenario modeling D. And 20.56% in scenario modeling E. So when we think about rounding and when we think about the size of everything going into these. Few. Average numbers. Caught my attention. And I think. I think that. There's a broad sense, but we don't have the data on this exactly. That if we didn't have the cap. Spending behavior would also be slightly different. And so I guess that's just one of the names that like, while this says no cap, you're not projecting the future. You're just saying what happens mechanically with in the fund at the education spending that is. Now. So the budgets are warned with the cap and then you're modeling it without the cap at that same spending level. Yes. Thank you. I really appreciate that clarification. I was trying to remember to speak to that that we're really just talking about shifting and what happens when we do away with the cap. And the same holds true when thinking back to the modeling that was presented during the deliberations of act one 27. Was all of the modeling was saying, we're holding everything constant. We're only looking at the mechanics in terms of what's shifting. We're not projecting how school district budgets will or will not change with respect to different transition mechanisms. I remember you saying that over and over and over again when we were working on the bill itself. You're like, this is all this year's spending. I'm just holding everything else. I'm just going to go back to. Helpful. For you. Some of this myself included. Included the 5% cash. We found. For some districts where, you know, sending was going to be kind of hot and said, oh, whatever we're going to do. But it's been described in this room. In the past several years. In fact, it has turned out maybe. No harm intended to be incentive to spend up to that. You know, and so that's where we are. I'm just reiterating what I think I heard in the last few weeks. And it's, oh, what did you know what to do? No. And this is open. Thank you. Yeah. Thank you. I think I'll go a little bit further. Folks are making rational decisions. It has become an incentive to address some. Negative for maintenance issues. And that. Is maybe mitigating some of the benefits that we have to see around 207 where. Folks have had more tax capacity, but now the cap is sort of shifting additional costs back to those. We're seeing it in ways that we did not. It's just the way it's turned out. From an individual school distance perspective. Here it should have been. Harmless. And I think an interesting piece of all of that is that like making decisions about how to deal with the food maintenance is a particularly stressful thing. When I think districts have no faith that the legislature is going to act on school construction anytime soon. And so we are joining the house education committee on Thursday to hear the long awaited report from school construction task force. I think they did really good work and I'm looking forward to seeing what that is. And I think tackling a piece of that will be sort of a necessary part of tackling the rest of this as we go forward. So we're going to move to column E. So we're going to move to column E. We're on no cap. But we're spending the same as if there was a cap. Yes. So this is all of this is assuming same spending, same amount of revenue that needs to be raised, no behavioral shifts based on any of these different modeling scenarios. So we're going to move on to column D. So I think the piece that I'll just point out here is intuitive. We see that because non homestead. Does not need to raise as much revenue as in scenario D. There's less. Less funds being raised by the non homestead property tax and in turn more being raised by homes. Are we ready to move on to the next. So we're going to move on to column D. So we're going to move on to column D. Sorry. Represent back and then house education. If I can't see you because our screen is shared. So. Represent Conlon, please feel free to interrupt. With your voice. Sounds good. Thank you. But I'm wrong. But let me say that on your last sentence. But. This free turns us to the system where. You call me. All average bill change. Yes. Together. Okay. Yes. And that's what we're seeing here that uniform. Uniform change. Uniform. So. Got lots of stuff that we're trying to put on the sheet. So. Uniform is just saying they're all, all three classes are moving. Together. So that 20.56 refers to non homestead homestead and income. Okay. Okay. So. The next scenario I was asked to model was an example for what would happen if we were to maintain the average. Homestead rate from FY 24, just to get a sense of. We're really protecting. The homestead property tax class. What would that look like in terms of how does that shake out? Okay. So. The homestead rate, which was. $1, 3, 11. So we're seeing that corresponding here. Is it an issue that you can't see what each row refers to? So I think this is okay. Okay. So what we're seeing here is the. The average bill increase for homestead. If we maintain the average rate from FY 24. Is going to be 14.3 and that makes sense because that corresponds with the average grand list growth. That's estimated. That also means, as we talked about earlier, the non homestead property tax needs to make up more of the difference in revenues. So. Homestead is in, has an average bill increase of 14.3. Non homestead has an average bill increase of 27%. In this scenario. That's a lot. She's like, that's the point. That's the bubble. I think there's a balloon. This is the balloon. This is what happens when you push on the place in the blue. Yes. So. I know I keep saying the same thing, but all else equal, the revenue needs to be made up somewhere. And here we're seeing it being made up with non homestead. The final story. And again, the non homestead is not second home. It is commercial properties. It is rental properties. It is camps. It is everything that is not a homestead. Okay. Sorry. Thank you. So thank you, Mr. I appreciate it. Thank you so much, everybody. So I just wanted to say that I feel, feel free to like jump in with those random tip each time. I'm just aware that there are a lot of people paying attention right now and I want to make sure we have all the context. I appreciate the context. Being added also by people other than me, because I don't want to be. Too much of a broken record. I will point out one other thing. And. If this is, if this is too off topic, the property tax credit, which we're seeing here where my cursor is, is remaining the same. And that's really because, and we can go on a deeper dive on this, that's because the property tax credit is on a lag. It's based on last year's income. So we won't see the corresponding property tax credit associated with FY25 until FY26 tax bills. So that's really why the property tax credit in all of these different modeling scenarios remains the same. Your committee is actively inside the Zoom now. So that means that unless we change statute, which we certainly can do, folks paying on income are going to not have a credit that's sort of to scale with their new property tax bill, which is sort of a slight challenge in some years and would likely be a significant challenge in this year. But what would happen to the what would happen to the bubble if we did do something about it this year? Yeah, so so the property tax credit that we're looking at here, this is reflecting FY24. So it would show up in FY26. If you wanted it to be showing up in FY25, the way to do that would be to one of the ways to do that that comes to mind would be to increase the property tax credit on FY25 bills. Provide, as we keep talking, providing relief somewhere means that those revenues need to be raised. So if you're increasing the property tax credit that you're paying out in FY25, that increases expenditures out of the Ed Fund essentially, which then those expenditures, that increased property tax credit, further needs to be made up elsewhere. And if we're talking about the property tax being the only flexible lever that General Assembly is working with, that means increasing homestead property tax rates and or increasing the non-homestead property tax rate. We're going to have to dive deeper into that, but help, I know. Did you want or you could raise revenues in other ways? Yes, yes. You could raise revenues in other ways. You could decrease expenditures elsewhere. Well, that's why I'm trying to wave the flag of all else equal. If we're only talking about shifting the balloon within property taxes, that's what needs to happen. And certainly there are other policy levers at your disposal. It seems like a tough year for all of us. It does feel like a tough year for all. Was there an American that I meant back to you, Julia? Okay. There was one other modeling scenario that I was asked to do, which is very similar to what we just looked at in F, but instead of maintaining F as maintaining the average homestead rate of FY24, G as maintaining the FY24 non-homestead rate. This goes back to what we're talking about in scenario D, right? With the capped homestead rates, we can only raise so much revenue on homestead property tax. So in order to maintain the FY24 non-homestead rate, we also need to eliminate the cap just for the purpose of this modeling exercise. So this is the FY24 non-homestead rate and no cap, which has the mechanics of no cap, but doesn't necessarily correspond with any spending changes of no cap. So what we see pretty much the converse of what we saw in scenario F, the non-homestead is raising by 14.3 percent average bill, which corresponds with the average grand list growth and homestead average bill increasing by 27.8 percent to make up the revenues that need to be made up that aren't being raised on non-homestead. Questions there? Thoughts? Inspirations? Anyone on house education have anything? We're okay. We've been sort of chatting some of these issues as you've been explaining them, been helpful. I think then with that, maybe we should take a break and then turn back and tackle some more content. We are still the House Ways and Means Committee. We are joined by the House Education Committee. It is somebody near the end of January, but I don't remember anymore. Ah, it's the 30th, and we're going to finish up our day having a conversation. I think I framed a couple of times this idea of sort of short-term, long-term spectrum between short-term and long-term revenue options, spending options. Somewhere in the middle is like policy tools that just move, responsibility, toggle, the responsibility to some other buckets, taxpayers. For short-term options, I just want to name that budgets are basically currently being warned. As with the short-term options are more urgent because of that. I think I have some nervousness about sort of two different scenarios that I'd love to share with you all. Actually, let's just start with what did people hear on Thursday that is helpful to put on the room because we did not debrief the Thursday hearing with each other. I just said what I heard from Thursday hearing. Does anyone want to sort of share any reflections from Thursday? It was Thursday that we had the joint hearing, right? That was Thursday? Anyone? Okay, great. Emily, I'd be happy to start. Cool. Thanks, Peter. So I think what was interesting to hear was that, first of all, a lot of the stories were different, but that we hear a lot of mention of Act 127, specifically the weighting and how that's affecting tax rates. Yet, we heard from folks who basically said, we're kind of neutral, we're kind of in the middle. For us, it's all about ad spending and the things over which we don't have a lot of control, including sort of the student need that continues to exist without the federal funding to make it happen. So it was educational for me to hear that it's many factors. I'm not saying anything that we have all said before, but that so many districts, for so many districts, it was much more all the other factors than it was pupil weighting that was affecting their tax rates. I think this is aligned with what Peter just said at the risk of being really basic. It seems like the unifying factor was that everyone's kind of in a similar boat, but that different districts feel the reasons they're in that boat are different and the solutions are therefore different. I was excited the districts could hear from each other. I didn't go into the hearing with anticipating that. I went into it anticipating what we would hear and then I really appreciated that they could hear from each other about sort of how different the causes might be though we're all in that same ed fund boat together. Yeah, I agree. I think it was really good that we could hear from each other, but even that said, I think the cap and I wasn't here, as you know, Emily, when this plan was put together. So it's difficult for me to even make a comment, but what seems obvious to me is that that cap, that 5% is not working the way it was intended. In fact, it's being embedded, so we ought to ditch it. Yeah, I agree that cap is not working the way we intended it. Yeah, Scott? I'll take it away with the, and I completely understand why, just the districts that disconnect between, you know, they got, they received their waiting change and it has been overpowered by the increase in spending and they just can't, they just don't understand how one is taking away what they thought was an advantage and I don't, I understand why it's really complicated, but they, not only they don't seem to understand it, but they seem to me like they're starting, they're putting their foot in the bucket of, they don't trust it, like the whole thing. I feel really nervous about that idea that like folks are the, I think we spent a lot of time last year or two years ago talking about the relationship between sort of that's educational equity, simplicity, and voter decision making, like local control and how hard those three things are to balance and we sort of always lose one of them and what we lose is simplicity generally in our system. And I feel scared about that sort of eroding the voter decision making part of the puzzle right now. Yeah, two points about sort of the value of having all that testimony together. I know I heard people could sit down who was listening to testimony and she was like, wow, I've been so immersed in our own little ups and downs and challenges with our own school budget that it like, it's staggering to kind of hear our challenges and the exponential sort of size and scale of the challenges and they haul it up together, which I think, you know, it's just one of the inherent tensions of the system where there are local decisions made or a yield is even set and try to have a whole system that works together, but it's really hard at the individual level to sort of see how your piece fits into that broader piece and it creates such complexity and it gives us very limited tools at this point to address some of the system wide challenges that are driving masks. I'm going to try not calling on people and see what happens and we'll just act like we're having a conversation. Let's try it. I heard a little bit of, okay, we get how the weights are going with equity across the board and then we got all the spending decisions and then, okay, we can almost bear this and then CLA is coming and that's equity from town to town across the state. So the two, I heard more of the CLA concern on Thursday than the other and I think close to what I think you were saying, which is when you have equity in a formula, it can feel stressful because it doesn't seem as straightforward and so then it's tough. It's tough to explain, it's tough to debate. I think there are two pieces of that. One, I think it's sort of that we have these two pieces so many pieces that are making things confusing. I'm nervous that we're going to have an instinct to do something with the CLA to appear politically responsive to people's concerns about the CLA that at the end of the day are going to be sort of mathematically the same as if we hadn't done anything and I just have like very mixed feelings about behaving that way and I just sort of want to name that for you all, hopefully. And so that's sort of one piece and I think maybe we could tackle that when we're thinking about FY26 rather than FY25. The other thing is I think we haven't spent that much time, like Julia said it's a nonlinear relationship to us about people waiting about the 5% and spending and tax rates and how the 5% creates a nonlinear relationship between spending and tax rates and I don't think we've spent a lot of time talking about how like it's not just nonlinear it's actually like circular and iterative and how unbelievably confusing that makes it for anyone trying to make those local decisions that Catherine described and makes it almost impossible if we wind up in a situation where districts budgets don't pass and they need to lower their spending in order to bring their rate down. It's very possible that we have a lot of districts in the state that actually would not be able to bring their budget down far enough because of this circular nonlinear relationship to ever pass a budget which would then default to last year's spending because that's what we haven't statute which would essentially be what they're already spending this year and is in the failed budget and so taxpayers would have taxes essentially imposed on them that they had rejected that's one biggest concern I think that's next year fall that's one of my top three concerns yes can you run through that paragraph again that started with the what happens if they all fail yeah okay so I think I think there are two scenarios that I'm like top line nervous about right now one is we have a lot of budgets fail around the state because tax rates are anticipated to be really high based on the December first letter and we know that actually if we don't act they'll be even higher than the December I mean if we act just in a total linear way based on this outlook without doing something else if we just set the yield that's in the outlook tax rates would be quite high there's a high likelihood that they might fail if budgets fail that's really like incredibly difficult for communities especially communities that don't wrestle with it all that often you know the distrust that you then start to build between voters at schools and how teachers then feel not like it's just a terrible emotional experience but mathematically because the five percent threshold isn't linear districts could cut a huge amount from their budgets in an effort to be responsive to taxpayers and still not actually lower their tax rates very much and so voters won't feel that those school boards and superintendents are being responsive to their rejection of a budget and if that keeps on happening we haven't statute that budgets default to last year's spending that's sort of in statute that if a budget can't pass they default to last year it's that last year last year's uh educational spending is last year's budget basically which would make their tax rate still which would make their tax rate like essentially just as high as the budget that failed and we might be in a scenario where a school given the cap and all the other factors might cut one to two million from their budget and still not move the local tax rate or even half their budget right half their teachers decimate a school and still not see relief but didn't right yeah and i want to point out there is time between town meeting and july 1st for revolt yes yeah yeah um i um start back where carol stoneman started with the cl a it's clear to me listening to it a number of people that a lot of folks don't understand how cl works at all but don't understand that you can't have act 16 without some sort of implementation so we can pull it out and expect anything to change goodness this legislative or whatever you want to call it statutory impossibility so um the other set of complex comments as we heard had a lot to do with um the five percent cap and your typification of it is circular is exactly the phrase i was looking for i mean that's exactly where we are you know so um so here we are for chance you know i also think there's a scenario where budgets can pass with those fairly high tax rates and what might could happen in that scenario as they pass and then we wind up actually having to set the yield we've set tax rates related to the yield higher than in the december 1st letter because as we saw today spending is actually coming in higher than it was in the december 1st letter and so then budgets pass but wind voters wind up at the tax rate that's well in excess of what they voted for and again like distrust um you know and folks really struggling to pay their bills this is probably just the wildest ridiculous question oh i can't wait and what if we look this this doesn't work i don't even want to ask you but what are we going to set the yield before town meeting day based on what would we base it on i don't know i'm just i just want to throw out here's what you get risk running a surplus or deficit that you make and then we could wind up not raising enough money to cover costs well i'm i'm also concerned that there are many taxpayers who are oblivious to all this they're not watching us yeah and what's going to happen is they're going to get a tax bill and then they're going to say what happened and they're they're not going to be paying attention all along they're not going to understand it and what happens then and they react to that i'm not i'm not sure especially with a lag issue that's flag two right if i'm still here so like not only is there the potential potential for a huge increase this year but that the income sensitized payment isn't even in line with that and so the haven't been paying attention all of a sudden stick a shock and it's lack of relief so it seems like figuring out maybe at least that's one thing that we can work to address this in anyway we can definitely address up this here um yeah here go ahead i what resonated with me and puzzled me at the same time numerous of our um guests uh last thursday said i understand well it's the point behind act 127 i agree with it i just don't like how it worked and i guess i'm reflecting on an observation i made i don't take particularly pride of ownership namely when the legislature had to grapple with um brigham it worried more about taxpayer equity in the sense of parity of effort that's why the tax capacity enters the whole discussion as opposed to uh access to educational equity and and yet it's the educational adequacy that's in the constitution not tax capacity so it's sort of an odd change of direction if you will that we got we the legislature got and i think we ought to return to the idea of saying you know there's a certain uh floor rather than the ceiling if you're going to override local control you might do it on the floor side not on the ceiling side and say this is what you must do if you're going to run a school in the state of vermont and i think that's you know that's what the pica study did a decade ago i think that's what the report that 127 requested of joint fiscal that julia shared with us last week was getting at um i will name that in um 127 we actually did put significant language around education quality standards into that bill and sort of that side of this conversation really sits much more firmly with their colleagues downstairs um and figuring that piece of it out and i think you all are doing are you all doing work on sort of tracking the education quality standards and what that's how does that fit into all of this for you well first of all figure out an unmute but so we in terms of how the language of 127 it is not something that we have addressed um and and probably should take this as a reminder that we should um educational quality standards you know are that um the ability to enforce them review them is limited by the capacity the agency of education uh but i think you know you guys have taken a review of 127 from the point of view of the financing we should take another look at it from the point of view of those of those issues as well to make sure that the education quality standards portion is uh yeah is doing what it's supposed to represent right i think that's a question or not i would i guess just my observation and follow up from thursday is that what i heard i'm not sure if it was implicitly or explicitly on thursday but have heard very explicitly from almost every school leader and organization we've heard from this session is that um our educational system lacks any leadership or vision and um and we're in a really we're in a crossroads here and i think that was really clear on thursday and the lack of that vision compounded with where we are in time after a pandemic compounded with complex funding changes um is bringing our system of having a statewide education fund and local uh or the supposed local control over all the decisions into um into an extraordinary high level of conflict and i think i also heard some school leaders say and have heard certainly um over the past few weeks that there's perhaps less folks feel like they have less local control than we might say or think they do um i think everybody feels a bit out of control about the situation and so the thing i definitely heard implicitly not explicitly on thursday was that if we are going to do anything here um and and make any changes going into this budget season including budgets that have already been warned i i think we have to be having a pretty big hard open conversation about that bigger vision and future and signaling to the field some sort of stability um and some sort of sense of the path ahead so that we're not in this place again and again and again the next few years one thing i also heard that i don't i just want to make sure i say and i think everyone feels it's just like how hard all of those folks who spoke with us are working every day to navigate this from the very particular seat that they sit in um and how significant the needs are in each of those places for each of those people um and i'm grateful that they can like see above water enough to just even talk to us um so let's see um i hear that we need to focus on the income adjustment for this year i hear that we need to focus on some um efforts at new revenue this year i hear i think i hear people saying we need to change the cap for this year am i hearing that right okay um i just want to acknowledge that i think that's like really a significant challenge on hardship for districts and it's the best case scenario hardship challenge um it's all a hardship and a challenge um and in that we still want to be thinking about transition mechanisms for um districts that saw significant changes in what are people's diminished side yes absolutely some transition mechanism will still be needed i think just maybe a more um surgical yeah caroline peter uh is there anything that um that you have heard those of you who get on the committee for the last few years from schools that is burdening them down in addition to what we heard on thursday anything that we can get rid of to three teachers that were time-wise during the day to let them teach unless uh you know less swampy paperwork administrative stuff i think that's a good question for the education committee i imagine that you all over there in that room with those beautiful quilts are going to be spending some time thinking about sort of f y 26 and beyond bending and i don't know if that's part of it i don't know if you've heard what referendum brownigan said i don't i didn't hear it quite clearly we they were gonna say go ahead asking how we can reduce costs well and within the classroom with it you know the teachers of some of the burden the legislature is placed on schools that both of you see what would be some of the examples that you would provide that we should be discussing well i don't even know if they do this i guess they don't take the hot lunch account anymore do they because lunch is all free but whatever tasks they have to do during the day that take up time that takes them away from teaching because the way i see it and you know what i know this is true these people are not just new college graduates in on off the street they are highly trained professionals that have had tasks over and over again that really home their skills to make them good when they first entered the classroom these aren't just people who want to be with kids these are people who know what they're doing and and i believe that and and after the pandemic i know there were children who fell behind my little ones fell behind my grandchildren i had a second second grader who couldn't read yet and so there's probably a way to get around that these teachers know how to do it if we take some of their burdens during the school day away so whatever is is um waiting them down keeping them from teaching let's get rid of it at least for a year and do an experiment i guess to just to respond i'd say um i'm not sure specifically that what that might be i think uh what we have heard from the field is that the burdens that exist in schools is largely the burden of one lack of manpower uh unable to hire the people needed to provide the services to students and to the high level of need in those students i'm not sure what we can do to address either of those major issues what we need to be looking at here is if we're talking about trying to get a control of costs is what are the structural changes that we need to make to um get a handle on a two point one billion dollar system uh that would not only perhaps bend the cost curve but also provide better services and more opportunity for students and these are good these are hard decisions they're hard questions because in fact some of the local control that does exist is level of services provided um numbers of adults in schools for kids uh and um just sort of how each system operates district by district and you know i think if we're going to have a big talk about changes one of the big philosophies we're going to have to talk about is local control and how much control comes from the state how much control comes from the locals because we we operate a very expensive system there's no doubt about that and how we get a handle on that is is going to also raise a lot of conflict but in terms of lessening the burden on teachers in schools i think that does largely come down to adults who can provide the services needed for students and the high needs of students then i would ask the teachers in the classroom here in the community to correct me if i'm wrong no i don't i don't think so at all i think the dilemma that we're going to run into and if we're going to have big hard conversations is and i've been one to say it many times recently a tremendous uh shift of social services costs into the education fund and into schools um and but i think we also have to understand that and be serious about the path forward on that because schools are are often our sort of community place and they are the place you know in the pandemic they're the place still delivered food in a flood they're the place that's still open like they are still those so do we need to think about some of the funding differently um and and accept that schools are are are placing are playing a larger and larger kind of social services role and sometimes in very very thoughtful ways we've got awesome work happening in some community schools some big grant winners in our state that really i think show us sort of a positive model it doesn't answer your question um representative brand again other than how do we resource schools appropriately to deal with the children that they have they they schools have to serve the kids who are in front of them and that's what they're doing um and it's all hands on deck like you know i had a conversation over the weekend actually with a um constituent who's a teacher and we were talking about the community schools grant and she was like when are we going to get that down here um and i think it's really interesting like if most of our schools are serving as community schools unofficially what does it take to actually acknowledge that um and really be designing our funding around it in a more explicit way um but again that's your job not ours um isn't it both are okay yeah but you're gonna have to lead on that one on the design because you don't want us like deciding what a community school looks like you know i just would like to follow up on the community school thing because it's something that we have had little discussions and debates out here you know it's a great program it works it's showing great results but it is essentially giving schools money to provide social services that they ordered originally designed to provide so you sort of say well aren't we essentially by having community schools acknowledging that schools are the folks that have to provide these services because they're sort of the service of last resort yeah yeah yeah okay thanks um one of the things that julia reminded me uh one of the variations on if you push on the balloon etc etc uh reminded me of a um anecdotal observation namely um the uh differential uh effect of uh the cla room uh mirror a different classes of property in terms of their increase and i'm thinking about the difference between homesteaded and non homestead i doubt that they both have increased at the same rate of value in this rush in the real estate market and so i'm more attracted frankly to the version that uh julia presented which said you know we don't we did this by habit to have the two rates go up by the same percentage but there's nothing that frankly that would prevent us from saying uh let's see if the anecdotal it has any uh rigor to it and figure out what it is that the homestead rate went up higher uh in the last real estate boom compared to the non homestead and and sort of say okay well can't we mirror that in terms of the two rates instead of just automatically need your uh raising by the same percentage which uh i'm not sure satisfies anybody frankly yeah um we back a while ago before we settled on trying to move them up equally equally um there was a time when ways and means played with them back and forth to try to achieve one outcome or another but it was without a particular methodology was trying to achieve an outcome and that's what i would argue some more insight into the two classes in terms of how the clas move puts some rigor and and and the guardrails around that or otherwise if we had a rationale we'd come up with something different i think it's just really hard without the definition and non homestead rate that we've been looking for in why we've had stage 480 that you know we're going to dearly ask the general store and second home and and they may all move differently and it's hard to make generalizations because we don't have a level of specificity and so that does i think unfortunately that's not the tools right now excitingly the clas will actually be less of have less of an effect even if we don't do anything with it once 480 is fully implemented because we would be appraising more regularly right um i think you just um you were sort of summarizing some of the things that you've heard us say and i want to make sure that on that list is and you've said it a bunch i'm sure it's on that list we're talking about some immediate actions to address challenges that we're seeing for this year but we're also maybe really interested in this longer-term conversation about how do we and then make structural changes to be in better places in that difficult conversation so yeah so i i definitely heard but we still have to have a transition mechanism for the prior overrated districts and maybe a more surgical approach yes and but i want to add now that we don't know what more we might need to protect in addition to them and because we don't have enough data to know so i i still would think we would want to have a pressure valve for relief for school districts where we don't know fully that there will be needs so that they could still go to the tax rate review committee um interesting and then and i guess i would ask you to sort of think over the next few days what the tax rate review committee would do if we were making the transition mechanism much more surgical um something to the surgical list oh that's interesting it just maybe yes we don't know we have no idea i will say i think we're much closer to having some solid data um given that aoe recently freeze froze froze the um this year's pupil counts um also while i am talking just want to um i made a mistake in speaking earlier it's not a hundred percent if the budgets fail it's 87 um sorry so if budget fails you move forward with you actually i think it's 87 but we will have someone else everyone's nodding around the room who knows more than i do about this that's 87 thank you thanks team um thanks all for not jumping out and correcting me it's very light of you it's you're welcome to do it more strongly next time 87 percent and it's actually borrowing um until something can be warned until something can pass so if nothing ever passes it's unclear what would ever happen so it's borrowing because you don't actually have your voters have not ever approved a budget so you're borrowing towards 87 okay um we can look at that with legislative council instead of me just talking at the top of my head with support from the peanut gallery next time i'm sorry but i can you say said aoe just froze purple costs no counts yeah that's what they said so like the pupil counts the number of students who are in each waiting category well or imagined they were able to see that because one what was that artificial freeze or what was it it's like they finished counting and so the data set is frozen okay they finished yeah like they counted and then there was lots of like wait this number might be wrong from districts as people all looked at the data because sometimes lots of people have to look at data to have accurate data did i did i summarize that well nicole do you want to explain how you froze the counts i'm so sorry and you might have not been listening which i also find i was describing the process which led to you freezing the pupil counts um so the we actually worked till the last issue was resolved um with each of the districts and then froze them so because it's so important we um have a extremely small margin um it's actually less than five peoples otherwise we do not freeze uh even with the number only matter 42 000 so i don't know if i'm exactly answering the question so i think you are and it's that you froze the data set it's not like you froze the children right so people count as one point four children yes yeah yeah yeah we have an idea of if we go outside the education fund how much of an infusion it would take to reduce the tax rate by a certain amount is that a linear thing or is it a probably not the cap it is a deeply non-linear relationship and i think julia talked a little bit about that last week or the week before we could ask her to come sit back down and explain it again um there's also a report interestingly that jfo just released about um a few years ago um there was a little sort of swaperoo of revenue sources between the general fund and the ed fund um sales tax was attributed to the ed fund at that point um that was before brigham passed and sort of like hot take on the ed fund did really well from that swap and if folks want to look at that report it's an interesting one if you're really geeky ed committee whatever you want to say ed committees had to hand up for thanks uh thank you i think you first meant to say wayfair not brigham right yes i did thank you i meant wayfair excuse me uh representative williams has either a question comment well it's more of a comment but there is a question in there as i see it um we are spending a lot of money in the schools to help take care of our children that's not a bad thing we're spending a lot of money in uh daycare child care after school to take care of our children that's not a bad thing but what are we doing for and with the parents to help them be more involved now maybe this is at the local level but i think we need to own some of that responsibility to get them more involved and help them be more a part of the process so that they're not sitting at home saying well you took this away from us now what are you going to do about it let's bring it back and let's make it a united front for everyone that's my opinion appreciate that i often wonder uh if what we're doing isn't more a reaction to you know two parents working so therefore we need after school care uh two parents working so we need increased childcare and i respect that and yes and that's why it's okay to put money in these other places but i also hear parents feel like they have lost the ability to be a part of the process you know even if they can't um engage in the actual activity type thing hear them and have them be a part of the decision making or you know hear what they feel is isn't working uh i know they need to work not always in my opinion you know how i feel about that but keep them involved and i think we've lost that i think that's the part thank you representative awesome has a question or comment so um i'm under the assumption that this is not just a one-year uh issue agree and it's unsustainable you know it's just with lowering student population um i'm just wondering i know we have to like probably look at this year but i'm wondering what you know what is our vision for the next 10 years you know in public education in vermont so we can adapt to you know lowering student uh enrollments and and not have our costs continue to increase because i think it's for the public that you know they've been looking at our student enrollment go down and nothing has changed with the spending right i think you know that goes to um what representative brady was saying earlier that short term fixes have to go hand in hand with a long term look at the right about how we do this right and our role has always been to educate students academically you know and i know this mental illness and things that get in the way of a kid learning but i mean i don't know if we need to you know just look at if can we get you know a little bit back to what our original charge was in terms of education i think that um you know i sort of laid this out at the beginning we have short we have a short term project for this year um and we have a longer term and medium term project and in both cases we need to think about revenues and we need to think about what will it take to make sure we have a efficient effective high quality education system um so that you know we have quality schools and quality learning and resources are being used as effectively as possible and i think a lot of the time when systems whether that's a peer opportunity or an individual school or an individual family are under chronic stress and pressure such as the pandemic it's very hard to put your head above water enough to sort of restructure systems or even you know reestablish a filing system um let alone like you know have vision and so i think it it's very natural that we are in the place that we are in and very logical but it's still going to take a lot of effort to figure out what next steps look like together and i do think it's something that we're all going to have to do together you know the people at both of these tables and everyone sitting around the room and everyone at each school and district and town around the state as if we're going to make a difference on this so i'm going to go back to my summarizing activity for a minute so i hear folks thumbs up on changing the transition mechanism for this year even acknowledging how difficult that's going to be and we're going to need a more surgical approach possibly with a release valve attached to it of some kind we're going to need to look at the income adjustment for this year to make sure and we're going to need to look at revenue options for this year and we're going to need to make sure that's all packaged with um like a close look at how education is structured going forward how we spend on education going forward um and school constructions is sort of a key part of that that we're not going to lose track of and do more on this week other did i sort of miss any key highlights here okay um i think with that i'd love to end on a high note is that work for everyone okay low note whatever it is i'm just gonna end i don't need to grab the ending um thanks everyone um everybody we'll see you on thursday thanks for working together on this