 knocking bills out like crazy. Okay, so we started having brainstorms about using some CARES money to cover individuals with hardships in paying their property taxes and you were going to look into that. Yes. So, so I probably should have sent you the document but in the Corona Virus Relief Fund frequently asked questions updated as of May 4th. I took a look in there and I'll just review this provision as the first one that looked promising and it said, may recipients use fund payments to provide emergency financial assistance to individuals and families directly impacted by a loss of income due to the COVID-19 public health emergency. The kind of thing we were talking about when we last testified and the answer to that is yes, if a government determines the assistance to be a necessary expenditure and it may include assistance to individuals with overdue rent or mortgage payments to avoid eviction or foreclosure. And to the extent administratively feasible, it needs to be necessary assistance. However, although that sounds promising further down on the same page in this document, this is may fund payments be used to assist impacted property owners with the payment of their property taxes. The answer is fund payments may not be used for government revenue replacement including the provision of assistance to meet tax obligations. So the distinction is that, yes, you can use this money to help individuals that have been adversely affected but you cannot use it to help them pay for their property taxes. Okay, so if I get evicted, I'm homeless. If I don't pay my property taxes, my home goes up for tax sale and I'm homeless. But all right, and I can use it to pay my mortgage but not. Okay. Well, nobody's got a property tax bill or a school tax bill to right now because we haven't figured out what the rate is. So I'm wondering if that provides some opportunity for a workaround that would allow us to provide some relief but just keep it out of the tax bills or the tax sphere. So Ways and Means has been working on this for like the last month to find a way to make this work and the one thing we're working on right now that it's not an elegant solution at all but it would appropriate some of the $1.25 billion in COVID money into a separate fund and school districts would be able to comply through the Agency of Education for a portion of those funds for any costs that they can identify as meeting the criteria. And in fact, right now on the school superintendents is working with seven superintendents to try to identify some of those costs in their own budgets. I think we're going to hear back from them next week. But to be honest with you, we've gone over these guidelines with a fine-tune column and they're written pretty tightly. It's pretty difficult to find a way to get around them. They seem to be limited to expenditures that are directly related to COVID-19 that were not anticipated and prior to the outbreak. And it specifically prohibits them to backfill any revenue that we've lost as a result of the outbreak. And the problem we're really having is Georgia revenues, not so much COVID-19. Right, not the added expense. Yeah. Unless we could build the whole first quarter of the year to remedial caused by COVID expense. The whole quarter of our bill, but it really is loss of sales tax revenue. That's what we've lost. So far we haven't, we're assuming we're going to get the property tax revenue. And if we don't, it's just going to further dig the hole. I think what the house, as of this morning, is thinking about is just passing a tax rate based on the budgets that were passed, not dealing with the deficit at this moment. Just a tax rate to fill your budget and assume that the normal revenues are there. And then kicking the deficit down the road. Pretty much the same thing we're doing with the budget until we find out how DC is going to deal with this. It is getting closer to an election. And I would assume that probably 40 plus states are in the same or worse circumstances than we are. And it is an election year. So that might move. The president says we're open and everything is fine and he doesn't see any need for any more aid, but that could change. I know there is a bill in the house, but that doesn't sound like it's revenue replacement either. Do you know, Mark? I don't know about COVID-4. I don't know how much money there is for state and local government in there, but I do know that Treasury Secretary Mnuchin was quoted as saying that they may be willing to consider more flexibility for state and local governments for the money that we already have received. In other words, not getting new money to address these things, but saying out of that 1.25 billion that we already have, we're going to loosen it up a little bit so you may be able to use it for some of these other needs that you've identified that don't meet the guidelines right now. I think that's the hope. And the way you characterized what Ways and Means is doing I think is exactly right. They're going to, I think, set the property tax rates where they would have been prior to the outbreak, which is slightly lower than where they were on December 1st. And then allow that, allow that to flow through. It doesn't cover all of the spending that we need to cover in FY21, but it leaves the question as to how we'll fill that gap to down the line with the idea that by later on this year, we're going to have a much better idea. First of all, we'll know whether we're getting any more money or if it's going to be any more flexible. And we'll also have a better idea about how fast we're coming out of this. So they will put the surplus, they'll keep the reserve and just put the $12 million surplus into this year's tax rate. Yeah, I'm not talking about FY20. FY20 is a separate issue. That's pretty much if they do have additional costs that they did not budget in FY20, that'll be that'll be CRF eligible. The problem is in FY21, we already have budgets and trying to identify money in those existing budgets that meet these guidelines is difficult. If they have additional costs on top of what they would normally have, that will be CRF eligible as well. Yes. And that helps the districts, but it doesn't solve the problem of the gap in the education fund that's based on money that was already budgeted. Okay. So we aren't making a whole lot of progress. Senator Pierson. Well, it's my observation that the right wing running Washington does not believe in government. So I think it's very foolhardly foolharded to think that they are suddenly going to let us spend this money on the government. There's been a persistent hope for the last month and and I've yet to really hear anything that should give us confidence. And I really, I'm very concerned that we're setting ourselves up to inflict significant pain on our schools in August so that we're, if we're, if we're going to punt this question, we're, we're leaving the decision to the opening weeks of the school year when, when we're going to be very pressed to finish our work and adjourn for the year. So if it's just me, I'll, I'll, I'll take my complaint elsewhere, but I, I think we're, we would be better off to perhaps have some contingency plans. If the federal government loosens the restrictions, that will be very easy. And if not, the decisions will be very hard. And I think we should get to them sooner than later myself. I think we probably, I know the houses had some minor discussions about raising revenue, but we might, I mean, we can cut, we can raise revenue or we can go into debt. I mean, those are the three solutions we've got. It's going to be difficult to cut when schools are in fact seeing more expenses. And I suppose next year, any additional expense, but you know, we, if there's no more money coming, we've got a really, I mean, 1.25 billion sounds like a lot of money, but it's getting spent very quickly. And if you're talking about air exchangers in schools and remedial classes and extra teachers and supplying safety gear and all of those other things, there's going to be a lot of, a lot's going to get tapped in that, in that reserve. So I'm just, I'm Senator Pearson's question. Yeah. So I think the way the bill is going to be coming out of houseways and means it does not rely exclusively on being able to use the federal money. It leaves open the possibility of all the options that the chair just went through borrowing money, raising revenues, moving money from other places. So it doesn't preclude any solution. It's just saying at this point in time, we need to move a tax rate to get that machinery going. And we're going to come back and we're going to address this problem. So we're not in this, so schools are able to continue to function through the year. But I take your point that it's, it's, it's risky not knowing where you're going to go at this point. And it's not, I mean, I can't imagine the circumstances in which the federal government gives us, in mind all the states, enough money to cover all of our deficits. So we're going, but I do get a little worried saying, well, we're not going to deal with the deficit, but we've got to pay the bills. We can't print money. So I would assume we're going to have some mixture of all three. And Senator McDonald. The bill we're discussing that's coming from the house, this address is just the school issue. Is that the question? Is that the case? It sets the tax. It's the yield bill. Okay. That's sometimes it wasn't a greater discussion. For miscellaneous tax, I think miscellaneous tax is on its way to us. It's pretty sparse this year. We're not going to get to decorate it. So Madam Chair, while we are discussing sort of the federal government and the role and the interplay, when do we ask ourselves questions about what we in finance can do now? For example, the transportation fund, which is, could we put a tax on gasoline, a surcharge on gasoline, until we get the amount of money we would have gotten before Covis or the price of gasoline goes back to $252.50 a gallon and begin to recoup some of our and raise some money from the few people that are driving and currently employed so that we don't fall farther behind? Or when do we get a chance to discuss those sorts of things? Which is probably not now. That's going to be probably what we're going to do for the next few weeks because we're going to need, we're going to need to have some fallback and some, if we get back here in September and we're running $150 million in deficit in the Ed fund, I am not sure how we're going to make payroll or make that December transfer to the schools. So if the decision on schools is going to be put off for several weeks, are we going to continue not to address things that we could do now and perhaps should have done? No, we are not, Senator. We're not going to do that. Okay. We're going to start working. We've been looking. We just have a larger scope of responsibility than the Ways and Means Committee and tax bills are supposed to start revenue bills in the house. So we usually let them take the lead. Once we see where they're going, we're usually prepared when their bill comes over. We got the T bill yet? We don't get the T bill, so I don't know. Usually do. I know miscellaneous tax has been voted out and is heading our way. I think it may be waiting floor action, but it is pretty sparse. And then the yield bill will probably be, I know they've looked at a surcharge on the sales tax, which is the money that's dedicated to the Ed fund. If we did a sales tax, we could, it has been, and we have a bill for sugary beverages and candy sitting on our wall. We could use that as a vehicle if we want to start talking about raising some revenue. We reported to be 180 million behind short in revenues in the three major funds. And justice one senator, it seems the simplest and more straightforward and timely one is to start replenishing some of our losses in the transportation fund and they don't, because they would pretty much fall on those people that were still working and then go check. I think we'll be told that in a couple of weeks most people will be working, but they may be working from home. But the transportation fund is not my problem. So I think we can start thinking about revenues. I think the last resort is to borrow, which is some form of bonding. We know that running, we could have a plan for paying down, if it looks like everything's coming back and the revenues are there and we're not in the middle of a major recession, we could have a plan for paying off the deficit over the next three years or whatever. The other player in this is the treasurer and our bond rating. I suppose worse things could happen than going down a little bit in that, but that does cost every municipal funding project significantly more money once it's played out over a 20-year bond. So Sandra Sirotkin. I asked Mark a question. Mark, you, I was confused by what you said the house was doing. It sounds like they're either kicking the can down the road or they're leaving open all possibilities and not making a decision now, which I guess is in the can down the road. But does that mean that they've made the decision that increases to the property tax is unacceptable, that one way or another they're going to find a way to keep the property taxes down level? In the bill that they, the draft of the bill they have right now, property taxes do go up on average by a little over three cents. That's a little bit less than was projected back in December, but they do go up by about three cents. But yes, they are sort of drawing a line there and saying that we want the property tax rates to be where they were, would have been prior to COVID-19 and we want to solve the problem of the deficit and the fund some other way. So it turns the normal process when it's head a little bit, you're right. Because normally we do an education fund outlook that has everything in there but the tax rates and then the tax rates are adjusted up and down until the fund is balanced and the reserve is full. This approach is saying we're going to set the tax rate first and then we're going to make the fund whole some other way, either with federal money, some new revenue sources that the state can raise or some other money. So I know this is not for you to answer, but it seems inconsistent with everything we're doing here in terms of prioritizing one spending program over every other one before we know where the dust settles. Well, I don't know that I think they, I don't know that anyone's arguing that we don't have to open school and we have to open, we have to provide education for the kids. That's the constitution. I understand that, but we're favoring potentially raising one tax over another without having all, we're setting up in a preferential state the property tax. We're saying, okay, you're going to state, we're going to hold you harmless or we're going to raise you no, we are three cents or 3% or whatever. We're setting that and that could lead to income taxes rates to pay for that or sales tax rates to pay for that where we've, we've set that one first in their bill anyhow. Okay, this would be, there's thinking in the other body that a, the schools did a 4% increase. So they're going to get a 3 cent tax increase that there's a thing that you should see what your vote did rather than have it hidden in the revenue loss 17 cents. And that's the, they've been talking about this for a while that the three cents you voted for, you can't blame this on the virus. This is yours. The deficit is caused by loss revenue. They're just raising the property tax to cover the budgets that people voted. How we deal and whose lost revenue gets dealt with first is still up in the air. No, we're just starting to be able to focus and the administration is just starting to be able to focus on what, I mean, the solution and actually the house talked a little bit about a surcharge on the sales tax to make up revenue and that finally got a response and that was, well, we'll just revoke the school budgets but did have to reduce 10%. And I don't think anyone sees that as any more viable than a 17 cent property tax increase. So, Madam Chair, what is the task that we're being asked to perform in the face of, we've got three funds that are short and what are we being asked to do? And what is appropriations being asked to do and will there be, will we solve half of this with revenues and half with cuts? What are we being asked to do? Okay. And it depends. I mean, I was at the initial discussion on the budget this morning and the first question is they're doing essentially what this is. They're doing a three or four, they're doing a one quarter skinny budget until we get a better lay of the land. We have had all sales tax payments put off until July. So we don't even know what's like and rooms and meals, what may or may not get paid in. So we don't have that. We're at, we need to provide enough money to get school open. That's one of our tasks is to find the money so as to get school open. Wow. Yeah. Okay. The fund is short because of people not buying stuff and paying sales tax. I'm not, I'm not going to suggest that should the economy turn around and everything be hunky dory again, that Vermonters are going to rush out and buy all the things they didn't buy in May and June and July and August. Right. But Vermonters, forgive me if you're going back to transportation, which seems relatively simple that with the gasoline as low as it is, why are we not collecting a surcharge now when gasoline is a bargain from people who are driving and most of the people who are driving are employed and they're driving cheaper today. Those are the people who would pay a gas tax. Why are we not collecting that now and putting one of our problems sort of having a solution in place while we work about the others that we don't plan to solve right away? Well, I would suggest you ask leadership that. Well, or the transportation or maybe we'd like to take that money and put it towards education. We used to get part of the gas tax. I was doing suggesting something simple and less controversial. It is never simple. Except raising the, I mean, we normally what we would do if revenues went down, we would raise the property tax. But I don't think anyone thinks. I mean, five minutes ago we worried about people who couldn't pay their present property tax without raising it 17 cents. And we know there will be people for which paying that property tax will be painful, if not impossible. Agreed. There are people for whom paying property tax was very painful before this. And that's why there's been such a focus on it. So in this, it will take a while to work out those complicated things. And my answer to the question is we're not dealing with transportation, which is simple and we can do now because we haven't been asked. Then I'll accept that answer and maybe we'll ask leadership. If that's something that would be productive and we could help out with. Yeah. Okay. But right now. Thank you. We need to start figuring it out and the budget is equally kind of nebulous at this point. How much do we cut in that first quarter? Where do we cut it? I think the governor has proposed like two cents across the board. But somebody told the mental health agencies, the designated agencies to budget based on a 23% cut. When we know that there's going to be an increased demand, the schools know and the schools generally contract with those agencies that there's going to be an increased demand for remedial support. And some of these kids have been locked up in some pretty rough situations. Others have just been bored out of their minds, but we know that there's going to be increased demand. Humans are not, they're herd animals. They don't like being isolated and we're going to have some issues. So do we want to cut those agencies now? And who do we cut? And especially before we know the entire federal action. So right now we're, I think, treading water until we get the final lay of the land. Senator Pearson. To use your metaphor, I think we're treading water because we don't like the answers the feds have given us that hope they will change. There's really no reason, I think, to wait just with this hope. I think we should plan. And unlike the state government, schools are going to really struggle if we force them to make adjustments in the middle of the year, say the Christmas break or something. It's easy enough for us to make alterations to the state budget after the first quarter. I think a school is more unique in that it sets itself up for a school year. Right. So maybe it would make sense for us to plot out a list of questions that we would like to ask leadership or on all Senate call, try to get some direction from our colleagues of what they'd like us to do. I remain quite concerned that we would punt this question particularly with schools for much longer because they need certainty and it's not going to be easy and we would do well not to put off those hard questions, I think. I think, Mark, and you may know if not, but I believe the law act 60 requires that the state remit to the schools the amount of money that the schools voted. I don't think so because no, and because part of the solution that the House is looking at is to reduce the education payment to districts and then allow them to backfill that reduction with federal aid or some other sort of thing. Oh, federal aid. Yeah, but I do think that I mean it would be very difficult to reduce education spending at this point even if you could waive a magic one because you've got contracts already in place, it's late to be ripping teachers, you know, for all those reasons it would be very difficult for them the administration's proposal to revoke budgets was problematic in that way in that even if they had a chance to revisit their budgets they're locked into about 80% of their spending right now anyways. Yeah, and Madam Chair? Yes. I may just add so some of this might come up at our four o'clock meeting you know the COVID-19 transition group is meeting and the whole Senate is meeting or has the opportunity to meet with the administration so some of this may come up. Is it a whole Senate meeting or just an invitation? Oh no, it's just an invitation to the whole Senate. It's not by any means required. Everybody has a Zoom has Zoom information sent to them. Are you going to be talking about education? It's the administration, you know, it's a good question. I don't believe I saw Secretary French's... Don't bother with Secretary. Yeah, no I didn't see him listed but you know the financial piece may come up in a report. Okay, because they yeah they really don't have any idea what to do with this one either. Yeah, and this is but I think we all know that yes we have to come up with a significant amount of money that schools need that surety and you know normally we would just raise the property tax to get to the amount that the schools needed but this year it's too much so we need to enhance the revenues we may need to borrow which is it has issues but I think we need to be thinking about ways we can. I don't think anyone is talking about telling the schools you've got to cut 20% midstream. I think we know that we're making a commitment to paying the cost at least the cost that they voted and that if there are additional costs covering those with some one of the CARES money they are getting $27 million directly and then I know Senator Hardy is looking at a plan. I know the ways and means has looked at it in some way cutting the amount the budgets in the sense that the amount of state dollars that go in and then trying to find an equitable way to backfill with COVID but what's not at all clear now is that the schools have enough COVID related expense to make any real difference and the school superintendents are working on it. Any administration has proposed hiring a consultant that presumably would help with that as well in terms of identifying the COVID-19 related costs. Helping us set it up and make sure that when we do things it will pass muster and it won't get clawed back next year. I think our one hope at the federal level is that we're in good shape compared to other states. At least if you believe Moody's that we are not it's not just the little blue states that are in trouble. There are some big red states that are in worse trouble. There are swing states that are in very big trouble and so there will be some pressure on Washington to help those states because they're all in equal or worse shape than we are. Some states have no reserves. I think Indiana was one has no reserves. Madam Chair, Senator Hardy's got working on something. House Ways and Means is working on something. The administration is working on something. May I suggest that we would work on something? We are the revenue committee for the Senate and we ought to try to come up with some ideas so that we're not just reacting to other ideas that people are bringing forward. Right, so I think I will see if anyone here can come up with a different idea. We can ask other people to come in and tell us what they're looking at. That might be an interesting way to start some of it. Having Senator Hardy and others come in as well as I think Senator Pearson makes a good point. We can also all come back with our own ideas even before that if that makes sense. Okay, well we know the Senate has a revenue committee. We don't have a savings committee. No. I've listened to this entire discussion and it's all about increasing revenues, increasing taxes, increasing, finding another source of money and we're not talking in the least. Nobody ever seems to talk about how we can reduce the amount of spending we have, how we can reduce costs, how we can make government more efficient and work better, and how we can do it with spending less money at the same time. And we don't spend any time doing that and we should. Okay, I think that frequently goes to appropriations but I think if you can help us put something together there where we could save some money. Have a staff of ideas, Madam Chair. Okay, well bring them in on Tuesday and we'll take a look and we'll do some money savings. We'll do some possible revenue. I am starting to get emails on tax the billionaires so I intend to have a little email with the tax commissioner because I'm not even sure we have a billionaire in this state and if we do they probably aren't drawing down a billion dollars in income that we can tax so but that will that will most certainly it's it's comes up every time and the question is if we did some broad-based revenue enhancement where would that fall? If we'd done the Green New Deal we probably would have been taxing the doctors and nurses filing jointly that we're working overtime this year so I'm kind of glad we didn't do that because but that's that one is out there. There may be some elasticity at the top I we don't know right now because it's too soon there's a lot probably fewer wealthier people now than there were six months ago but we don't know the extent of that I don't know that the tax department does so I will send you home to think and then perhaps we will just or Faith what have we got on Tuesday? Right now Tuesday is completely open I was imagining that you might want to take testimony on S227. Let's do that probably won't be too short let's yeah let's do maybe an hour on 227 and then leave the rest of the day for committee discussion on property taxes and I'm not sure we've had the treasurer in but we've got to find Zender Brock is going to help us think through some savings ideas we're going to think through some revenue enhancement and maybe just between us we can go come up with a list of possible revenue enhancements last time we had a major downturn there were and before that there have been surcharges on the income tax or uncertain sections of the income tax we would have to look at the sales tax or find a new source of revenue so we aren't stealing it from the general fund so we might be able to find other things to put a sales tax on it would be nice if we could have taxed marijuana I do have a taxing um covis no what cannabis got it um if we um I've got a tax on hemp cigarettes bill floating around um that we might use as a vehicle but um just in all your leisure time this weekend think of things you could tax and things we could cut and then we'll ask the treasurer about how much can we borrow center ballot well I just I just want to be really clear that the numbers that we're looking at in these three funds are incredible they're enormous we cannot cut our way out of this mess it's going to be a yes and it's going to be a trying to find ways that we can tighten the belt but it's also going to be trying to find revenue so that our hunters have the programs that they rely on to have a safety net and so I just with all due respect senator brock I don't feel like anyone here is saying that we're not interested in saving money for vermonters but we're looking at a massive hit to these funds the likes of that we've not seen since the great depression and I think we need to get really clear on that this is what I think that and I agree with you that that is important but I also agree that if the discussion which it has been in this committee this afternoon is solely about raising revenue it's missing the boat we have to control our spending that's appropriations job mr senator brock well we raise all of our jobs yeah it's all of our jobs we can have the discussion if we can come up with ways that we think we can save then we can say all right we can send that over to a probe since I look if you do this this in this then we only have to raise that it may and that probably would work better when we were looking at a two or three cent tax increase than a 17 cent tax increase what I told the administration is just what senator ballad just said this is what the numbers are and we are not going to tax or spend our way out of it so all ends of the political spectrum we're all together because we're not going to you know be able to raise enough taxes and we're not going to be able to cut enough to do the 150 160 I don't know where the number is or the math yeah so we're gonna have to but we do have to provide education and we don't know if if school's going to open that's the intent but we don't know if school's going to stay open we just don't know at this point they may all get sent home again well ma'am chair and interesting exercise would be that is an exercise is that we've got 180 million dollars short that we come up with 90 million of revenues and then we come up with 90 million of savings and cuts as a starting point but we got to start somewhere to start somewhere okay and we're we're not doing that in the places that would be easier and don't take a lot of time to get started while we wrestle with the the more difficult ones I don't know that the easier ones are not in process because none of us are on that committee on transportation yeah okay so I I don't know that they aren't in process but I think we do need to you know and this is one reason I don't want to do any tax credits or anything else until we have been through every cent that we can find um in any place there's any elasticity in the structure in the you know in the system to hit and in the meantime we can hope the federal government sees the light okay good so some some of us will be there at four in 15 minutes okay I'm going to jump off soon yes no I think that's it don't jump don't jump are we not not yet it's not that bad I thought we had we're voting on a bill no yes you are at four oh what are we voting on I lost my agenda again yes that's 233 yes oh oh oh oh yes we are okay that's right this was only supposed to take us up till four so is our Betsy Ann and Lauren here no this one is not free until four but I just wrote her and said to join us as soon as she's free okay yeah is Lauren here I know we sent them off to think about um the liability if they told they did one of those free yeah you can get your license if you got convicted of cannabis possession in college and now you want to be an accountant and so I go through accounting school and come back for my license and they say oh we changed the standard and you're no longer eligible for a license um and you say I'm you know a hundred thousand dollars in debt getting my degree and you owe me and we I think sent them out to figure out if they wanted to put anything in here and they are not with us we've got about 10 minutes you want to take a 10 minute break