 It means on May 5th, and we are meeting on a couple of issues this morning. The first one is the proposal from the state treasurer on how we can support municipal, short-term municipal borrowing, and it's some language that the treasurer's office has put together that our legislative council has looked at and is going to review for us. And so that'll be the first piece. And then we're going to shift gears and talk about education, finance, and which will include a discussion of recent guidance from the treasurer's office, which I will give you the warning that it's actually not particularly helpful. So just talk about that when we get it. I think all the committee members have it, and it will be posted on our webpage as soon as Sorcia is able to do that. So before we get started, is there anything anyone wants to mention or announce or whatever? George? There are still a couple of people who aren't muted, and I'm getting periodic little bit of feedback. Could they please mute? Great. Good. Thanks. You want to name and shame? At some point, it will be every one of us. So, okay. Anything else? Good. So, Beth Pierce, welcome to the committee. Thank you for joining us again. We've had the opportunity to visit with you several times over the last week or so. And so if you don't mind talking to the committee sort of at a high level about what it is that the Treasurer's Office is suggesting, and then we'll have Becky go through the language in some detail with the committee. Certainly. So for the record, it's Beth Pierce, the State Treasurer, and I appreciate all the work that all of you have been doing. You've heard from me several times, but so many other folks have been doing this. So thank you for your service, and thank you for the attention that you're giving these issues. In terms of the Education Fund and the cash flows, as I said, we would be making the Act 68 payments on schedule on April 30th, and that was $163.4 million. The next payments are in September, September 10th, and December 10th. And on the other side, we're expecting that the bills have gone out by the agency of education, payments by municipalities with a due date of June 1st, and that's approximately $88 million, and we again expect that that will come in. And the next due date on that is December 1st. As you know... Beth, can I interrupt for just a second? I had thought those payments were June 30th. They're June 1st. They're June 1st. Oh, okay. I had that name correct. Thank you. Yeah. Okay. So many municipalities, as you know, are experiencing some cash flow impacts due to the delays or deferrals in the receipt of those property taxes. And the committee has been looking at different ways to address that and been very thoughtful in listening to all parties and appreciate that process. You had a previous presentation, I'm not sure from who, it was on your website that showed that the number of towns, that payments, number of towns is 259, that property tax revenues were received through 315, but left outstanding after 315 of about $132 million with, I believe, about 82 towns with outstanding payments. We took a look at that. We talked to you folks several ideas on municipal borrowing. And as a result of working with this committee, and I want to thank you for your due diligence on this, I think we looked at a number of options. There was something out there called the municipal liquidity facility that the feds had. Ultimately, we found that that wasn't going to work. They had a very high level of population that you had to make to satisfy that to do it directly as opposed to the state. You had to have a population of 500,000. Having heard from all the states on this, they dropped it to 250,000 in each city or municipality, so that's not going to help us very much. But the biggest issue is the Federal Reserve uses this authority as a lender of last resort. So they're going to tack on a penalty rate or premium to the market rate. And that does not appear to be an option for Vermont. So we took a look at other ways to do it. And ultimately came up with using a short-term borrowing through local banks to establish networks. And as we pointed out in our last presentation, and you heard from Chris Delia from the Vermont Bankers Association, the banks are willing to step up to the plate as they always have. They've been good partners through Irene and the May floods in 2011 and so many other issues. And we wanted to work through those networks. We've looked at other alternatives. The Bomb Bank, frankly, is something that deals more with infrastructure and not revenue, and it would also impact potentially the state's moral obligation. So we thought that using the local banks would be the appropriate way to do it. We hoped and we believe that COVID-19 dollars will be able to reimburse the cost of interest. So what we would be doing is saying, locals, you will do your own borrowing. There will be an interest cost associated with that. But the state will reimburse you for that interest cost. And we expect that it will be something that's reimbursable under the federal government. It's not in the guidance that we've seen to date. Do you want me to stop there? I heard a question. No, no, I don't think so. OK. Well, I mean, so. No. OK. So we think that it will be reimbursable. There were some conversations between the NGA and Nazbo on this issue. And we think that that that we have a high probability that that will be an expense that will be reimbursable. So hence, the material that Rebecca is going to go over in line by line. We try to line it up with the with the requirements of the of the the relief fund from the federal government. It's the intent of the state to, as I said, to the maximum extent possible to collect those dollars. We did have to form a new fund for this because when you receive dollars and you put it in that purpose, we thought that was the best approach. And I think that ledge comes to agreed with that approach. So we think this is a good short term solution. The long term or intermediate of five to 10 year if the community are continuing to have some issues with the revenue flow. The FEMA Community Disaster Loan Program, which has not been used in this state at any point in time, but it is out there. And I've noticed on the federal websites that they're actually hiring up for this program may provide it an alternative. It allows you to borrow and kind of smooth over some of your revenue losses over a period of five to up to 10 years. And if there's a cumulative deficit after three years will provide for some loan forgiveness or in whole or in part. So we think that that's a good once you get through the short term. If what you may want to opt and take a look at that as a longer term to address these issues. So what we've tried to do is come up with a continuum of options to assist the municipalities. And we think that this is a good approach. I want to thank the committee because a lot of this came from discussion with the chair and the members of the committee and the various presentations that we have. And we're we're hopeful that this will be something that you're interested in. And stop the questions and or turn it over to Rebecca, whatever you folks want to do. Thank you very much. And I don't see questions at the moment. So let's get the draft in front of the committee and start working our way through it and see see whether I'm sure there were things that committee can come up with that will make it better. And I also want to say that I'm not exactly sure, assuming that we come to a landing place with this idea, I'm not exactly sure what form it's going to take, whether it's going to be a committee bill out of this committee, whether we'll go, whether we'll hand our work over, for example, to the GovOps committee or appropriations and ask them to include it in a bill. But I'm going to worry about that later. Right now, I just want to make I want to get to a place where at least we all are comfortable with the language. So, Becky, thank you for joining us. I had to unmute myself. So Becky Wasserman, legislative council, I think, Sorcha just pulled up the draft. So this as the treasurer just explained, this is just putting the proposal into bill format. But there's it's not a particular bill yet. It's just draft language. So if we can scroll down a little bit. Section one is the creation of the we need to go up a little bit more as the creation of the program and subsection A is an intent section. So this says that it's the intent of the General Assembly to establish this program to assist municipalities that are required to make a short term borrowing to manage the cash flow effects of property tax deferrals or delays in receipt of such taxes by municipalities as a result of the COVID-19 pandemic. And then the language goes on on line six to say that the program shall be administered in a way that is consistent with the CARES Act and any guidance or regulations that are issued pursuant to that section of the CARES Act five thousand one, which creates the coronavirus relief fund. And part of this intent starting on line nine is that the state is allowed to recover to the maximum extent possible. The short term borrowing costs payable to municipalities from the coronavirus relief fund established in the CARES Act as may be amended. And the as may be amended on line 12 is trying to capture if there's some additional federal guidance or legislation that comes out that sort of expands what can be provided to municipalities. OK, so subsection B creates some some definitions. So short term borrowing costs as used in this program means interest incurred for short term borrowing directly attributable to the COVID-19 pandemic, and this includes letters or lines of credit, revenue anticipation notes, tax anticipation notes, and bond anticipation notes. And then subdivision two on line 17 clarifies what it does not mean. So it does not mean the principal payments of any borrowing or any interest on borrowing not directly attributable to the COVID-19 pandemic. OK. So subsection C lays out the program a little more. The the program is established to authorize the state treasure to make payments to municipalities to cover the short term borrowing costs incurred directly attributable to COVID-19 and subsection D is an application process. So a municipality that has duly authorized a short term borrowing as a result of COVID-19 may apply to the state treasure for payment under the program and the state treasure will prescribe the application form, but at a minimum it has to include certain things. So starting on line nine, this is subdivision one is the amount and type of short term borrowing costs that the municipality seeks to have reimbursed. Two is the municipality's 2020 tax collection date. Three is an explanation with supporting documents of the municipalities under collection or delay in property tax collection that's attributable to COVID-19. And then finally, a certification by the municipality and supporting documentation that such costs meet the definition of short term borrowing that's defined in subsection B, as well as the eligibility criteria that are defined in subsection E, which is the next subsection. So subsection E lays out how a municipality is eligible. So the program is only available to municipality is that term is defined in one VSA section 126 and subject to certain criteria. And this is where it tries to line up with the language and the coronavirus relief fund in the CARES Act. So short term borrowing costs were not included in the municipality's budget or any amendment to the budget enacted on or prior to March 27th, 2020. The short term borrowing costs were incurred in the period March beginning March 1st of this year and ending December 30th of this year. The borrowing was made for the purpose of managing the cash flow effects of property tax deferrals or delays as a result of COVID-19. Subdivision four is the expenses must be consistent with the use of funds authorized in the CARES Act as may be amended. And then finally, any borrowing interests must be commercially reasonable based on published municipal indices or prevailing bank rates. Subsection F online 15 is the administration of the program. So there's some highlighted spaces here for, I guess, the the committee to to discuss, but the treasurer will specify the form of certification to the municipalities, not later than a certain date, and that needs to be filled in and then as well as the date for when the treasurer would begin accepting applications for the program. Subdivision two allows the treasurer to be reimbursed for any expenditure made in the administration of the program. And then finally, subsection G requires that a municipality keep records that are sufficient to demonstrate that the payments the amount of the payments going to the municipality has been used in accordance with the requirements of the program. So moving on to section two, this section establishes the fund from which the payments will be made out of. And this is created in the state treasury and I have highlighted here pursuant to 32 VSA chapter seven, sub chapter five. I added that in more as a question because this is the the sub chapter that deals with the creation of special funds. And I I just didn't know if this fund would be following those those rules. I don't know if there's something specific about the CARES Act funding that would mean that it should not follow those rules, but that's just a question for the committee. And the fund would be administered by the state treasurer. And then another question I have is how the money in the fund would be used. So right now it says it would be used solely for payments made to municipalities under the program. And then I've also added in and for necessary costs incurred in administering the fund. So in section one F, there's the treasurer is allowed to seek reimbursement for administration costs of the program. So if that doesn't come out of this fund, it would have to come out of some other appropriation, perhaps to the treasurer. So I just wanted to highlight that as well for the committee. And then subsection B says the fund shall consist of any sums that may be appropriated or transferred to the fund. And the state treasurer is also authorized to seek any gifts, donations and grants from any public or private source to be dedicated for deposit into the fund. Section three is the appropriation section. This is also left blank here, but it's an appropriation of a certain amount to go into the fund in FY 2020. And I've also highlighted that because I wasn't sure if there was there needed to be an appropriation in 2020 as well as 2021. And then finally, section four is the effective date. So this would take effect on passage. Thank you. Let me see if there's any questions. Anyone thoughts, comments? Robin, thank you. Thanks for this, Becky. I'm wondering with the definition of municipality and I did pull it up, whether there would be any whether it would be fine or whether there would be any unintended consequences because, for example, solid waste districts are considered municipalities and could they borrow under this? And so do we end up by using that complete definition creating something else that we hadn't intended? So that's correct that that definition includes school districts, fire districts, and I can pull it up and and let you know everything that's included in there. So I think part of it is I don't know. I don't know the answer to whether those districts would be incurring short term borrowing costs for property tax deferrals. So I don't know if they would actually qualify under the program. That might be a question for the treasurer to answer if that would perhaps come up. If so, those could certainly be exempt. But the full definition is a city, town, town, school district, incorporated school or fire district or incorporated village and all other governmental incorporated units. So there. So in addition to meeting that definition, they would also the district would also have to have incurred some sort of deferral property tax or delay of collection of property tax and as a result of COVID-19. So I ask I don't know if those situations would apply to districts other than, you know, municipalities or school districts. Emily, thanks. There's a line in here about sort of pursuant to CARES Act. The expenses must be consistent with use of funds authorized in section five thousand and more of the CARES Act as may be amended. And so I'm curious about in that context with how much we still don't quite seem to know what any of that means. If the liability or liability on that would sit with the municipality or with the state and or treasurer's office if it turned out that funds were not being used in accordance with that? Well, I think the program is a program that is authorized through this state treasurer. But I actually don't know the answer to that. I don't know if the treasurer's office has any thought on that. I don't know that the state would be guaranteeing the program if there are there's no money that is deposited into the fund. I think the way it's drafted right now is that sort of if there's money in the fund, the treasurer can make payments to municipalities that meet that criteria. But if there is no money in the fund and the state is not otherwise appropriating money into it, then I think the program wouldn't wouldn't be operating. But I think maybe the treasurer can can speak to that liability a little bit more. Madam Chair, would you like me to address that? Thank you. So I think there are a couple of things. One of the reasons we structured it the way we did is that rather than have us do the borrowing is that the municipalities ultimately have the credit on their books, as opposed to the state picking that up with any fund that's federal fund, typically, I should say they there's a requirement to to be involved in a single audit to have that subject to the single audit. And it would be what's called sub recipient monitoring of this, which the treasurer's office would have to assume in this particular model. But ultimately, if there was a non compliance, it would accrue to the to to the the municipalities in this process, which is why they have to provide substantiation and, you know, this stuff, excuse me, bad word stuff, but this this this would be subject to to review potentially by the inspector general. But, you know, again, that's the reason we asked with substantiation and certification at the at the local level. You know, with respect to the appropriation, our expectation is that we will be reimbursed by covid, but we would expect an appropriation to be done in in anticipation of that if we were to move forward, you know, at this point, June 1st is coming rather quickly. And we would we would expect that there would need to be an appropriation in place with the intent, as we said at the beginning, to to to to use covid dollars if they are deemed appropriate for this. Again, we haven't seen any specific clarification on that other than the the communication between the NGA and NASB the National Association of Budget Officers, I believe that's the title and and their meeting with the White House and in the Treasury Department. So I don't know if I answer that or if I need to step back and provide a different additional explanation. No, that's helpful. Thank you. I think I was thinking of a scenario where, you know, we do appropriate in an advance and the towns borrow and then expecting for us to pay the interest and then something changes in the guidelines of the CARES Act and sort of who does that mean? We will then at that point not be paying the interest. I think that's sort of but I think you answered it. So yeah, I would think that we would have to appropriate anticipation and there was a risk to the state if we do that. But I think it's the right thing to do the risk to the status is the is the cost of the borrowing. Correct. It's limited to that. Let me see if there's other question, Mark. Becky, would the language that you've drafted cover a school district in the event that had to go out and borrow because it received a timely payment from the municipality because municipalities are the tax raising entities and school districts are the spending entity, even though they're both municipalities. But would this cover a school district that had to go out and borrow to fill in temporarily? So a school district fits the definition of a municipality in one VSA 126. I think if all the other eligibility criteria were met, it does not exempt a school district in that situation. So it seems like it would cover cover school district. Even though they're not a taxing entity, it if there was. I thought it had to be the the taxing entity. But maybe I misunderstood. Was that your question, Mark? Yes. Yeah. School districts don't don't collect taxes. Let me just pull up. I don't have to pull up the language again. I think there is the language about either a property tax deferral or uncollected or delay in collection. But they don't they don't collect, right? So OK, so if they wouldn't if they wouldn't meet either of those scenarios, then it would not be covered. I think the only way we could if we wanted them to be covered, I think we would have to explicitly say that they they can be and that they don't have to meet those tax collecting requirements. I don't I don't know whether we want them to be. But but that is something we should talk about. Bill Canfield. Oh, Bill Talbot wanting to jump in. Bill Canfield, you go ahead and then I'll get to you, Bill. OK, section two, Small E. Subset one section. Let's see. Short term borrowing costs. We're not included in the municipal's budget or any amendment to the budget enacted on or prior to March 21, 20, 20, 20, 20. It seems in our committee discussions that there's maybe one or two municipalities that don't have their town meeting until May. Are we going to leave somebody out here? Mark or Becky, do you want to jump in? So this is saying that the costs were not included in a budget. So if if the budget has not been passed yet, then I think that it would it would qualify under this. I think it's saying if it if it was if a budget was enacted at, say, an early March and those costs were included in that budget, then it would it would not apply here. But first for a town that has not enacted a budget yet, then this wouldn't be a problem. OK, thank you. If not, let me just sit. There's other people with questions online. So I'll ask mine. Oh, no, Bill, Tabba, you wanted to jump in. You go ahead. The only thing about school districts being eligible, there are fewer of them now as of Act 46, but incorporated districts are taxing entities. There used to be 11, I don't know how many there are now. But anyway, so there's a few that still have the authority to collect taxes. OK, interesting. And something every day. So I'm sort of looking at the effective date. This is effective on passage by its terms. It seems to be limited to the pandemic, but there's no end date to it. And that was intentional, is that right? It would apply to both fiscal 20 and 21. And as long as we're in a pandemic, situation that would continue to be possible. Right, so there is no end date. That is something that I noted as well. And I also had a question about whether this appropriation would be made for both 20 and 21. But I think that since it has to be attributable to COVID-19, there is sort of an end date in that sense. But the committee could certainly decide to add in that this is like a one year program or however long it's appropriate. And I had one sort of more general question. This is, I think, for Beth. And Karen, I don't know if you wanted to jump in or not, but this came out of a conversation Karen and I had yesterday, it's just whether it would be possible for the treasurer to rather than have all the towns go out shopping for loans, whether it would be possible for the treasurer to designate a bank and an interest rate that all the towns would use so that we would have, you know, that would be easier, certainly for the towns. And it would be we would at least know what the interest rate is that the state is going to end up paying. So Beth, do you want to have you had any thoughts about that since yesterday? Sure, certainly. So I did talk to the Chris Delia from the Vermont Bankers Association and taking a look at our banks. I think that you need to spread this across several banks rather than one central unless you wanted to go out of state. And I don't think that any of us want to have an out of state bank doing this. Also, banks know their customers. So and they have a sense of their financials already. So it might make more sense to have a bank that has dealt with their customer, has an understanding of their credit history and has done these types of loans in the past to municipalities do that process. The only alternative would possibly be that municipal liquidity facility at the federal level that to me is not appropriate. Starting with it, you have to certify my understanding is that you have to certify that you you exhausted all other alternatives, i.e., a local bank and that there would be a penalty over and above the normal interest rate. We can work with the banks and we will continue. We've got a good working relationship with our banking community as do the municipalities to to to continue to provide some guidance. And if someone is having difficulty working out a a particular lending arrangement, I would say give you the Chris or I a call or me and then I'll reach out and find out what's going on. We want to make sure that banks do have that excuse me, municipalities do have some ease in this process. At the same time, recognizing the capacity to do this and the distribution of those banking resources. But I understand the desire to do that. I think there would be more impediments if we were to go out, for instance, and get a national bank, they would not be familiar with the credit profiles of our municipalities and what might make sense on one side would probably create some more delays as they as they're trying to get up to speed on on on those issues. So thanks, that's helpful. And Karen, I know you're on the call and I wanted to give you a chance to weigh in if you'd like to. I don't have other committee questions at the moment. Would you like to comment? Thank you. Thank you. I do have a few comments. So on the draft, if I may. Sure. With respect, and this is just going off the draft that I'm looking at here with respect to section one sub a, it talks about the care act, but we may want to also say something to the effect of any subsequent federal aid package for which the fund qualifies, you know, and just not to limit it just to the cares act. Um, and then, uh, in in section B, there on line one, sure to borrowing costs means interests incurred for borrowing directly attributable to the COVID-19 pandemic. And I don't know if the committee might be interested in including costs of administration at the town level as they do as is contemplated for the treasurer. Um, uh, the definition of municipality in in title one is I think about the most expansive definition that's out there. There are plenty of other places in the statute where municipality is limited to a city, town or incorporated village in title 24. In title 22, it's a town, city or incorporated village, not a school district. And in title 32, it's a city, town, village and school district. So there's, um, there's lots of ways that you could narrow the eligibility. And I think that, um, you may want to do that in this circumstance, um, with respect to the idea of, um, the thought about having the treasurer, um, work with the bank to establish a, essentially an interest rate would, it seems to me that it would just remove one of the variables from the loan fund. And maybe there's some way to establish the, uh, an interest rate or, uh, um, range of interest rates that, that towns could use and still have it be the banks in Vermont that are offering that, I'm not the financier here, but it, it seems like there might be, uh, uh, fairly simple way to put some parameters around that. And it just seems like it would be, um, a little bit easier to, uh, deal with, you know, reporting an administration and did it qual, did the loan qualify and all those kinds of, um, issues that we run into. But, uh, by and large, I, I think this is tremendously helpful and, um, we'll, we'll go a long way toward calming municipal concerns right now about what's going to happen in the current fiscal year. Thank you. Yeah, thank you very much. And thank you for your work on this. Um, and I looked at it over the weekend as well. Um, that certainly makes sense to me to, to redo the language so that any federal, um, app that's available would be used. Um, I'm wondering on the, um, I'll let the committee figure out about the, uh, costs other than interest costs. I don't have an opinion about it particularly. Um, but I'm wondering whether if we included some, uh, authorizing language, um, for the treasurer to, um, reach out to banks to negotiate interest rates, we're not requiring it, but we could suggest it. And I agree that to the extent that it sounds as though, um, the treasurer, uh, is, is ready to be as helpful as, as she can to the municipalities. And if we include some language that sort of supports that and encourages that, I think that might, um, that might be helpful. It's not, not telling you that you would be doing anything that you wouldn't otherwise be doing. Um, but it may give some reassurance to, um, to the towns and to legislators who are looking at this. Um, any other comments that people are, or comments to what I said, um, any other thoughts that anyone wants to throw out there? Looking for raised hands. Uh, Scott. Yeah, my only, only comment is that, um, I think it's, it's wise to let the municipalities follow the process as much as, as possible or practicable. And that includes, uh, using the banks that they're comfortable working with and have a history with. Yeah. Yeah. Um, other thoughts, uh, are we, um, do we want to see another draft with those changes, um, that we've talked about? Does that make sense? I think the more I hear about this, this really is going to have to go to, um, government operations should certainly look at it because they're more familiar with some of the issues. I like the idea of using the more narrow definition of municipality makes sense to me. Um, and it clearly needs to, um, needs to be in the appropriations committee. It's not really a revenue bill. It came out of the discussions that we've had. Um, so I think we were in a good position to work on it. Um, but I think what, um, if, if we can see another draft and we, um, even informally endorse what we've got here, I think what I probably will do is, um, check with the speaker and with, um, uh, probably with Kitty to see what sort of what the best way is to move it forward. Is, is that agreeable with people? Generally have not. No, no, no. Everybody's saying yes. Okay. Um, trying to figure out how best to move this along. And it would be really good to move something fairly quickly. So, um, I don't know, Becky, whether you'd be able to have something that we could look at tomorrow and kind of conclude our work on this. Yeah, I see that. Yeah. Great. Good. Uh, Beth, thank you very much for your help and, um, involvement with this and, um, Karen, um, you as well, you've done, um, good work with your members. And, um, it's been, um, it's been a good effort, I think with, um, you and the committee. Um, it does make me want to ask whether, and I realize that I probably should have warned you if I'm going to tread into this, these waters, but, um, at some point, um, you and I've talked privately a little bit about whether it's time to think about having the state takeover, the collection of the education tax so that we're not in this situation, um, again, and I don't know if that's a conversation that we should be having now, whether you want to make any comments about it or whether it's just something I'll drop on the table and then leave there, um, and return to some other time. Well, uh, this is Karen Horne again. I, I do think that, that the current situation has laid bare all the limitations of the current way we do things and, um, we, municipalities, I think would be far more interested in that conversation than they were, say 10 years ago whenever the last time was that we really talked about it seriously. Um, it, it seems like there are other ways to do this and we would welcome that conversation. I mean, it, it might be, it, uh, I don't know that it would be part of this bill, although it could be, I mean, I'm, I'm sort of thinking out, thinking out loud, um, that, that what makes sense to do now is, uh, some, something that starts it in, in motion so that we're getting a, a framework and a plan from the tax department about what, how it would happen. I know that there were, it takes, um, takes time to phase in a change like that. Um, so it's not something you can, you can, uh, flick a switch and have that happen. Um, so if we think it's something we want to pursue, uh, maybe it's something that we need to, um, take the first steps on. Um, committee members, anyone want to jump in? Uh, George? Yeah, I would certainly, certainly, um, agree with pursuing that and maybe putting something in this, this bill if we're going to pass it to say, you know, okay, we, tax department, we need you to begin setting up the, for the possibility of the state collecting these taxes. Robin, I agree with what George said. Scott, I think you're still muted. You think I figure that out after all these weeks? I think it's worth talking about. I think it's also worth knowing if the Tax Structure Commission is considering it as part of their work. And I also think that related tangential conversation should have, be had about, um, our rules concerning escrow. And, um, because I think that's the big pinch here too. It's not just at the municipal level. It's at the individual level also. Um, we've, we've had bills to change the way, uh, the property, the education taxes administered. Um, I, I don't think, uh, Abby or Becky have worked on them. I know Mark has worked on, um, proposals. So, and probably Bill, you probably have Talbot. Um, so I guess what I'll do is I'll, um, ask staff if they could, uh, dust off some of the old ideas, um, and see whether we can at least put something in that, um, that moves it forward, that initiates the conversation that begin at some of the issues that we used to have, we no longer have, and I bet there are issues that we didn't used to have that we do have now. So, you know, things have changed. Um, and so let's, um, let's look at something that would get us moving in that direction. Um, because this is, it, the difficulty, um, for the municipalities in the role that they have as the collector, um, has just been horrendous, um, and it really, um, it, it would be easier for them and certainly easier for, for the state, um, not easier for the tax department, but easier for the state as a whole, um, and to, um, make this change and have the state, uh, be responsible for not just setting the rate and collecting the money, but, um, not just setting the rate and paying the money, but also collecting it. Um, okay. Was that okay with everybody? Good. Okay. And Karen will keep you involved in that discussion as well. Thank you. Yeah. Uh, good. Okay. Um, so, so I think we're gonna shift, uh, to the finance discussion and, um, as, uh, new guidance from Treasury that we got, I don't know that staff saw before about seven this morning, I first saw something like that, um, so people have not had much time to take it in or digest it or analyze it, but, um, based on the plain reading of the words, um, it probably, uh, makes the discussion I was hoping to have, uh, moot. So I thought it would be good to lay it out there and, um, get the committee's thinking about sort of what our next steps might look like. So I don't know Mark between you, Mark, I see Mark, Becky, and Abby. I'm not sure who is gonna, um, introduce us to this gosh awful idea. Hopefully one of the two attorneys. I can step in. Um, you want me to just launch into it? Yeah. Okay, so, um, for the record, Abby Shepherd Office of Legislative Council, um, this guidance that we really first saw at about seven, seven thirty this morning, um, clarifies some of the CARES Act requirements for the coronavirus fund, um, allocation that Vermont has received. So just for a quick reminder, the CARES Act requires payments from the fund to be used to cover costs that are necessary. Expenditures incurred due to the public health emergency that were not accounted for in budgets, um, approved as of March 27th, and that were, they must be incurred during the period, um, that ends on December 30th of this year. So the new guidance that has come out. Can I stop you just long enough to ask Sorcia if she was able to get this posted on the, on the webpage? Uh, I think we believe that's what we're looking at. I'm sorry? Um, Madam Chair, I was not able, I was not able to get a posted to our webpage. They're having a technical issue with, um, the server, so I'll get it up as soon as they resolve that. Okay, so everybody has it in an email, though, is that right? Yes. Okay, good. Thank you. All right, I've been to interrupt. I should have asked ahead of time. Yeah, go ahead. Sure, so that, um, what I just went over were, was the original, um, requirements that were placed on this funding. In this new guidance as of yesterday, um, the clearest restriction that relates to some of the property tax proposals and discussions that have been ongoing, the clearest restriction is that, um, taxpayers cannot, um, funds cannot be used to help taxpayers meet their property tax obligations. Um, the language is that fund payments may not be used for government revenue replacement, including the provision of assistance to meet tax obligations. So I'm seeing on my screen, um, I'm not sure which page this is on. I'm sorry. Yeah, I'm having trouble finding the email, so, but it's coming. I got it. Okay. Has everybody, uh, because this stuff is fairly important, has everybody got it? Um, if you don't, could you raise your hand and let me know so that I can, um, make sure that people have it? Um, and as the, these are, this is guidance that Vermont requested, is that right? Or is this guidance that has gone out to all states? This is guidance that's been posted on the U.S. Treasury's website, so I don't believe that this is, I don't know if Vermont asked these particular questions, um, but this is available, this is for all states. It wasn't a response to Vermont. No, not directly. Okay. Um, so the, it's on actually page five is where the clearest, um, restriction is laid out where it says that fund payments, um, may not be used for government, government revenue replacement, including the provision of assistance to meet tax obligations, and that's particularly in response to property tax. Let me, let's slow down and make sure that people have the, are on the right page. Um, the page five, I guess the version of I, I had of this earlier just pulled out the section, so now I gotta find him. Um, so, um, okay. So that's, that's really the clearest restriction, um, that relates to the discussions that have been going on about, um, creating a new COVID-19 specific property tax and then providing a credit against it. So this language does, this guidance does seem to preclude that sort of, um, grant funding. There are several other, again, I've just started going through this this morning, so I really can just make a few high-level points about the guidance that's provided here. Um, there is also a discussion about, um, utility fees in particular about essential services that states, um, if a government is providing grants to individuals facing economic hardship to allow them to pay utility fees in particular and thereby continue, continue to receive essential services. That would be allowable, um, an allowable use of the funding and that will be based on more of a case-by-case basis, so for hardship in particular, and again, it has to be necessary, um, and related to the COVID-19, um, uh, hardship. So the, those are quite restrictive compared to what's been sort of debated in terms of property tax, um, relief. Just looking at another, um, yeah, so those are, those are really the high-level, there are, there is more guidance about transfers between, um, levels of government, um, whether a unit of local government receiving a fund payment, um, must or may transfer funds to other units of government, so there's a little more guidance, um, again, transfers have to qualify as necessary expenditures, um, so I could, I could get into that, but I don't know right now what the particular proposal would be, but there is, there's a little bit more guidance that's been provided. It's not, um, necessarily the news that we wanted to hear in terms of allowable uses, so I guess I'll stop there and take questions. Uh, questions? Um, anyone who has? So, so just to, uh, because it's a, there's a lot of, um, a lot of information, uh, sort of coming, coming out of left field, I guess I would say, if we're, so just to frame the discussion for this committee, um, if we're talking about the Education Fund, which is what we're talking about, you know, we have this idea that we're going to get through 20, we're going to end up with a deficit, we're going to, then we've got the list of, um, uh, money pressures in, uh, fiscal 21, which include restoring the reserves, paying back the deficit, paying for, um, budgets that have been approved and, um, and, um, finding a source of revenue to make up for the lost sales tax revenue, those are the four pieces. Um, so if we're looking at that problem, it seems to me that the, um, the only options that I can think of are put money into the Education Fund. So that's question number one. Is that allowed under the guidance? So the guidance that requires, I'm just sorry, I have some new windows up, like, um, my understanding from the guidance is that would be considered replacing a revenue shortfall, so it would not be an allowable use. Um, let me just read, I'm sorry to have to read this to you. Um, the requirement is that expenditures have to be incurred due to the public health emergency. Um, they can, expenditures can be used to respond to second order effects of the emergency, providing economic support. Um, from those suffering employment or business interruptions. Um, but I'll, although a broad range of uses is allowed revenue replacement in that case, putting it directly into a, a fund to make up for a shortfall is not permissible. So that, that first option is fairly clearly precluded under those guidance. Maybe the money to replace the law sales tax revenue is not allowed, but what about money to pay for the budgets that got voted? For example? Uh, that would be both, um, cut, I think captioned or whether it's a necessary expenditure incurred due to the public health emergency and whether, um, it was budgeted prior to March 27th. Um, I'm just trying to work through what I see as the possibilities and I'm not expecting your answer to be different than it has been. I just want to, I just want to be sure that we, we've worked through the, um, work through all the questions. Scott, do you want to jump in? Yeah, I mean, I think based on what I've just heard, I'm making a really strong argument that, uh, education has a lot of second order effects to health care, primarily that, um, a lot of our health care workers ever have their kids in school and how are they going to work if, I mean, I, I think I would pursue a second order of effects that, um, this has a, education has a really, um, close connection to health care and health effects and healthy communities and its ability to fight a pandemic. I'd be looking at that really closely. Peter. Um, I'm, I'm with Scott, especially with, um, the way I'm taking the, the language literally, uh, this is I guess a question for Abby, uh, the fact that, uh, most school districts already had their budget in place, uh, before the 27th because they met at town meeting, but nevertheless what was budgeted at town meeting was for teachers to be in the school, in the classroom, doing what they usually do. And what we have done, specifically because of COVID, is completely change the way, uh, the teachers are relating to students, including broadband, including computer, including, including IT. All those expenditures were not anticipated, not budgeted, unless you're reading it, Abby, uh, as if, uh, if a certain amount was budgeted no matter how it was to be used, we couldn't apply to, uh, receive support for that budgeted amount. And I'm, I'm struggling because I don't have the language in front of me at the moment, I just barely read it at 9 30 this morning, whether the argument could be made, as Scott I think has suggested, um, as for secondary, uh, effects, I'm saying because we rewrote the job description and consequently told the local school districts to continue or the agency to continue delivering education in a totally different way with very different costs, even if the total amount ended up being the same for, for FY 20. I just think there's an argument there, uh, that those expenditures had to be modified in light of COVID-19. Thanks. Can I answer? Yeah. Um, there is, and I, again, I apologize, I haven't really had enough time to digest this, but on the very first page of the new guidance, it does discuss online provision of, um, educational services and that, um, merely because it is provided from a different location or through a different manner, developing online instruction capabilities is not itself a substantially different use of public funds. So that, again, I haven't fully digested how that would, um, fit into your concern, but I, I think some of these questions have been put to the US Treasury and they are starting to respond to them, and it tends to be, overall, the tone of this guidance is more restrictive than, um, open. Well, and there is the 27 or 30 million that's available that goes directly to schools that is, is directly related to their additional, additional class of providing meals, and, um, I assume also, um, online teaching. So, um, that, that money is not under these, these restrictions, um, so they have provided some money, just for my own thinking, I'm going to go back to my, my list of questions I've set out for myself. So if we, to, to, uh, deal with the fiscal 21 problem that we've defined, we can put money into the fund and we've had some discussion about whether that's possible or not. I'm not taking it off the table, but you could, one, that would, that would fix the problem if we had the money and were allowed to put it in. We can direct money to taxpayers, which is what we were talking about and it seems as though this is not allowing us to do that, but I'm not taking that off the table yet either, um, and we can direct money to schools. I don't, I don't know what the, we're, what else we, I mean, those seem to me the only three avenues. And we have not talked much about what it would look like to direct money to schools, although I think that's a little bit of what Scott and Peter are talking about. So that's the framework I'm using to think through this. And, oh well, that's, that's assuming that we're, you know, the other things you can do is you can cut spending and you can raise revenue. I mean, those are the tools that we have. I don't think there are others. So, um, George, you were on my list, but you decided not to speak. Oh, George. Yeah. So, um, I was just going to say just before that piece at the bottom of page one going on to page two, that Abby was talking about, that it's not substantially different. But they are clear that the cost of diverting educational support staff or faculty to develop online learning capabilities, such as through providing information technology support would be as long, would be coverable expenses. It just, it feels like it's going to be, there's going to be some very careful slicing and dicing that we need to do to, you know, to disperse this money, use this money. You want to respond or no? No. Scott. Yeah, I kind of, I mean, I don't see this any different than the broadband conversation. I mean, the reason monies are being allowed to funnel to broadband is because we're coming to the conclusion that from a health standpoint, broadband infrastructure is very important to the health and well-being of our communities. It's the same argument for education. Our schools are very important to the health and well-being of our communities. And we should be able to put COVID dollars towards the education fund to support that. I'd make that case. I'd make them say no. Other other comments in? I guess I'm hearing it a little differently. I mean, broadband is a completely new use of money. And so it's not like we're replacing lost revenues. In the case of the education fund, we're very clearly replacing lost revenues. And I think it's actually quite a bit different. Not that it's not a worthy purpose. And I'm not the lawyer here, I'm hearing that we're going to be in trouble if we use the money for that. I guess even if we want to try to make the case, I think at the same time we have to assume that we're not going to be successful in making the case and be thinking about two or three backup plans. I wouldn't want to put all the eggs in that particular basket and then end up with not just a deficit at the end of fiscal 20, but a much worse one at the end of 21. Robin here. Or just really a comment. I feel like, Janet, you're really laying out all the possibilities that we can do on our own. And they're all awful because we don't have money. And so I really, I have to say, who does the CARES Act care about? I just feel like we're not, the federal, it really is about the federal restrictions and inability and seemingly lack of desire to actually help out the people who need it. So I'm very, very frustrated by this and I appreciate all the work to try to figure it out. But unless we get the federal government involved, I don't see how it's not going to be very painful for our citizens. Well, even the three things I was laying out, you know, money into the fund, money to taxpayers or money to schools. The question is, can we use CARES Act to do one of those three things? And I don't know whether we can, but it seems like we can't put money into the fund, notwithstanding Scott's argument, which I agree we can pursue, but I don't want to do it to the exclusion of other thinking. Sounds like we can't give money to taxpayers. So then the last one, my list anyway, is there a way to put money into schools in addition to the 30 million that somehow buys down the budgets that they've adopted. But then if whether we can do that or not, the only other places we can look is to cut spending or raise revenue. That I think that's the framework. And I went just so you know after I read this at 7.30 this morning, I went through the same thing you went through, stomped around the house for a little while frustrated. Using our vacuum when I feel like that I didn't today, but you know, and then I don't know, at some point you've got to, we have got to find money for the schools. We can't let schools fail. And we can't ask taxpayers to pay 22 cents additional. I don't think so we're going to have to figure out solutions. And I think, you know, recognizing Scott's argument and Peters, I think we need to look at all the all the possibilities. And that just makes our work harder. One, because it's hard and two, because there's not a clear path. Usually when there's a clear path, we all get together and we figure out sort of how to how to walk down it together. But this one there isn't. Peter. If I may take on the role sort of pex bad boy, I have tried to put out feelers to find out whether new revenue sources are at all on the table from other branches of government come up empty, as I'm sure you have. But we were very close to coalescing around some new opportunities. And I really think, as you've laid out, not following up on that conversation leaves at least one of the four or five opportunities unexplored. And I think we should resume that conversation, not necessarily before we've closed out 2020 because that's a sort of first job is to close out this current year in as good a shape as we can do. But I'd hate to see us abandon the revenue discussions that we had going right up to early March. Thank you. Are there people anyone want to weigh in on that on any of this? I mean, the two revenue pieces that we were looking at were candy, which always seems so, I don't know, that doesn't feel very weighty to talk about candy, but candy was one of the issues. And the other was what I'll refer to as the cloud tax because it's too many words to talk about vendor hosted software. And I have had an exchange of messages with Graham about and a conversation with Sam about just thinking about zoom, for example, would zoom the text if we moved in the direction of vendor hosted software. I think probably it would be. And you think about sort of where is economic activity moving? That's a place that it's moving. Those are not those, I think, are on the table still. They're not a lot of money. They're not not enough money. And and they're certainly not instant. And the economy is not a great time to be doing this. So but I agree they stay on the table. I mean, the other the other areas to look at various tax expenditures either in the property tax area or in the sales tax area. So those are, I think, also things we need to talk about. Robin. Well, the tax that we had tossed around theoretically was a clothing tax on items over say $200. So that people could buy regular clothes without paying any taxes on that and necessities and many things. But luxury items over 200. I'm making up a number. We would tax. Not an easy time to be raising revenue. I'm still left with these. These, you know, we have to fund the schools and I don't think we can raise property taxes by 22 cents. Have to do something. Anyone else want to weigh in? Peter. I don't I don't know that anybody said it if they did. I apologize. We were also entertaining a revision of the limits. That is to say the pardon the phrase eligibility for a minimum tax on the theory that they were there were lots of business or some business models out of these days, which emphasized asset growth and at the expense of tax liability. And so they were several firms that were fairly well healed, but they were spending their money on eligible items, which essentially reduced their tax exposure. But nevertheless, did did wonders for their balance sheet. Yeah, of course, the corporate tax doesn't go into the education fund. So that would be a general fund discussion rather than a fund. Are you still only to speak? Peter, your hand is still raised. Are there other Mark, you want to use some good ideas? Well, I just came across an article in the Washington Post that suggests that the federal government, the Congress doesn't have the stomach to let states lay off police and fire and school teachers and that kind of thing and anticipating that we may get another package coming. So there may be another bite at this in terms of additional federal aid. Other than that, all I can think of is borrowing. And that's not a great option either. So, yeah. Right. Borrowing is a band aid. I mean, it is not a solution. Yeah. Right. Anything else? I hate to end on this note, but I mean, we can, George, if something positive. Well, no, it's positive it could be in this time. And it was like that. But it seems to me that there are going to be some expenses across state government, which don't happen because responsibilities or assets were moved to help the COVID-19 response. And it seems that those things could all be funded with this CARES Act money. But and so, you know, that conceivably are some monies out there that were not spent, which were budgeted, which would be nice to be able to redirect to the schools where we can't use this CARES money. But I just, I don't know. It's going to take some really deep digging and some really clever people to figure out how much of that exists and where it exists and can we recoup that money to, you know, to aid the schools. I mean, it may take a general fund appropriation again to the education fund. But it feels like there are so many things that we can use the CARES money for that there should be some savings of things that weren't being done or people who are working differently now. And so, you know, what was budgeted for them might be available. Yeah. That kind of a solution is so complicated because it's many tiny little pieces that need to fit together. But it's part of what we need to be looking at. By the way, I just got an email from Graham who says that he thinks Zoom is already taxed because it's a telecommunication service that requires a subscription. And when he pretends to do an order, an upgrade, the order shows taxes on it. So we should, when our problems are solved because we're going to have money flowing in. And Zoom ought to be paying a whole lot more than they were then. Yeah, exactly. Although I did the free one myself. Madam Chair, I think I made the... I'm sorry. I'm not able to confirm that, but that's just my rudimentary way of figuring out whether things are actually taxable or not. It's actually... Right, I do. ...the service and the sea of taxes show up. In the case of Zoom, they did. So because it is subscription, I figured maybe that was the case, but it looks like it might be. Right, already done. Yeah, thank you. I didn't realize you were here. I would have just got... I just recognized you. So, interesting. George, you're muted. You have to unmute. There are also some documents from Mark. Update on the education. We'll do that. We'll look at those. Yeah. That'll be a cheerful note to end on, right? Maybe not. Mark, why don't you go ahead and let everybody sort of mull over some of the rest of this for a bit? You're muted too, Mark. You want to go over some of the balance sheets we were working on? Yeah. Okay, so I have one that shows you where we are under current law. I also did another one that has a couple options for FY21. And I think sitting here, I found a problem in it. So I'm not sure it's ready for committee to take a look at yet. Okay. I'm sorry about that. I just love sitting here. Yeah. So I'm sorry, I was looking at something while I was listening to you. So do you have something to go over or not? Because there's a mistake in it. Let me take a look here. If you don't, that's okay. We're going to, so committee, we're going to meet tomorrow as well. So we have time to, you know, think about all this and staff will have some time to, you know, do a little more analysis of what the guidance is showing us. So we'll come back to this tomorrow. But if Mark has something, we'll present it now. I need to, I need to be fixed. I'm sorry. But that's okay. That's fine. Don't worry about it. Peter. It's the, what drew my attention this morning among Mark's documents was the one where he actually parsed out COVID related property tax and segregated, essentially expenditures. And I guess my general question is whether an inference I drew from that is all of a sudden extinguished given Abbey's interpretation of the question and answer between the U.S. Treasury and all of us who want to know how to use care money, or there really are property tax values that are directly attributable to COVID. They were labeled like that. And it, it, it certainly gave me a warm feeling temporarily. Yeah, if we, if we ask the question of Treasury, the question isn't can we, can we replace property taxes with COVID-19 funds? It's, can we replace consumption taxes that with COVID-19 for the support of schools that make our communities healthy? It's not a property tax replacement. I'm not sure if I were Treasury. Maybe I'd be convinced, but well, I just think we, I mean, we got to ask the question. We got to make the case if we don't, we know what the answer is. Yeah, I don't know the process. I'll find out the process for answering, you know, for getting a state specific question answered. So that's something that we should find out more about. I mean, maybe this is, maybe all of this is just an argument for CARES 4. Yeah, right. Yeah. Well, yeah. Anyway, Robin. Thanks. I think that's revenue replacement no matter how we look at it. I guess I'm just not optimistic. And yes, I would hope for a CARES 4. Yeah. But in the meantime, we will plan for life without a CARES 4 because we got to, hopefully we wouldn't have to do it, but I think we need to plan for it. All right. It's good to see everybody today. Unless anyone else has questions or something they want to offer, we'll see you tomorrow. I can't remember what time, Sorcia. It's 9 o'clock. 9 o'clock. Yes. And what I have on the agenda is the miscellaneous tax bill. I wanted to get to a place where I think now that the floor is moving a little more easily, we can, I don't know if it's all that easy, but it's all that easy, but things move. I think it would be time to move that bill out of the committee. And so we can have a discussion tomorrow about whether we do just the most critical pieces that we sort of isolated a couple of weeks ago or whether we want to do the whole thing. And so that will be the gist of the discussion, but we'll also spend a few minutes on this subject just so, and assuming that staff has had time to do a little more analysis. Thank you, everybody. See you tomorrow. Okay, I'm ending the live stream now.