SmartTranscript of House Appropriations 2025-01-10 - 10:45AM

[Chair ]: Good morning. This is the House Appropriations Committee. It is Friday, January tenth twenty twenty five, and this is our first, livestream of the, twenty twenty five, twenty six biennium. So welcome, everybody. [Robin Shai ]: We're glad you're here. [Chair ]: For the viewing audiences, I think we will go around the room, if we would, please, and tell introduce yourself and what, district you're from. So, Dave, we're gonna start with you. [Dave Yacoboni ]: Thank you. I'm Dave Yacoboni. I represent the Memorial Washington District, includes the towns of Elmore, Morristown, Worcester, Woodbury, and a small portion of Stout. Glad to be here. Thanks, Dave. [Speaker 3 ]: I'm John Gisenska from I live in Eastberg, from the I represent the Essex Caledonia District, which runs from Burke all the way up to Bloomfield. [Chair ]: Lots between. [Speaker 3 ]: Lots in between. [Chair ]: And Mike sits next to you. And, Mike, you're on Zoom, so why don't you introduce yourself there? [Speaker 3 ]: Sure. I'm Michael Nigro, and I represent, Bennington and the northern tip of Palo Alto. [Tom Stevens ]: Thank you. Tom Stevens from Waterbury. Represent Washington Chittenden District, which [Speaker 3 ]: is Waterbury, Bolton, Huntington, and. Good morning. Jim Harrison. I represent Rutland eleven, which includes the town of Chittenden where I live, Mendon, Killington, and Pittsfield, all Rutland County towns on the eastern side. [Chair ]: Thanks. And I'm Robin Shai, and I'm from Middlebury, and that's my town. I'm Seth Flowing. I represent the south end of Burlington, Chittenden thirteen. Yep. [Speaker 3 ]: Trevor Squirrel, Chittenden three, and I represent Underhill and Jericho. [Chair ]: And we're missing, Wayne LaRoche, who is, from Franklin County. I don't remember the town. Franklin, Highgate, Berkshire, and Richford. Okay. Franklin, Highgate, Richford, and Berkshire, and he's will be on Zoom this afternoon. Hi. I'm I'm Mike Marwicki, and I represent the Wyndham Ford District, two towns, Putney and Dumberstone. Hi. I'm Lynn Dickinson. I live in Saint Albans Town. I represent two thirds of Saint Albans Town. So here's the team. And our first order of business is to, elect a clerk. Do you have a nomination? Well, [Speaker 3 ]: I've had the honor the last couple years, the last biennium of serving as council clerk, but Robin says I can't do both. So I would like to see very experienced member of our committee and valued member of our committee, to be our. As most of you know, Burke's role is to record our votes and help us with our motions that go to the clerk's office. And I think Trevor is gonna do [Chair ]: absolutely Okay. That's Thank you. So Can you hear me? I don't know. Do we need a second? I would second that. Okay. And so unless there are other people who are dying to be clerk and haven't told me, All those in favor of electing Trevor, please say aye. Aye. Any opposed? I think you're unanimously selected as our clerk, Trevor. [Dave Yacoboni ]: Thanks a lot. [Chair ]: It gets busy at certain times of the year, and the rest of the time, it's not it's not too bad. So I just [Speaker 3 ]: And Aaron will be at the [Chair ]: Aaron. Yes. Yeah. And it's good because you can reach over [Dave Yacoboni ]: the computer to each other. [Chair ]: So I just wanted to tell you and and just a general arc of how the session is gonna work, and we'll talk about it again when at points along the map as we get there. But just just sort of a general thing. We're getting the budget adjustment today. That's gonna be our first bill. This is week one. The first couple of weeks, we're also gonna have various training classes that we are are required by the house. There's chairs and vice chairs training on Tuesday afternoon. They will have sexual harassment training and ethics. What are they at? What else, Kent? Anyway, a couple of other things. So that'll be happening over the first couple weeks. We'll be told when those are. So we're gonna spend the next about three weeks. We're starting a week late this year, so it's I'm feeling a little off on the dates. But the first three weeks are usually taken up with budget adjustment. What I do remember is I told you yesterday, my granddaughter was born a budget adjustment being presented on the floor. That was the first week of February. So that's my anchor into how I think about budget adjustment. So that'll be presented on the floor. So we're gonna be going through that the next couple weeks. We're gonna be talking to our committees. You will all get your budget portfolios. I'll come find you. I wanna have that sort of done by Tuesday. Still working on putting that piece together. So I'll I'll come or reach out to you possibly over the weekend, maybe Monday, but certainly by Tuesday, so that everybody will have their list of what their their budget portfolios are. So then based on what we learn about the budget adjustment, you could start talking to the committees and people on the committee about it if there are key things that we need to talk to them about. We'll talk more about that next week. So after the budget adjustment goes out or in while this is happening, the emergency board is gonna meet on January twenty second at ten or eleven or something late morning. The emergency board are the four money chairs and the governor. And what we will get then is the consensus revenue forecast for the next six months. So the e board meets in January and July. Our economist and the governor administration's economist get together, and then they set the consensus, and then we hear it. So we will know then sort of what the size of the sandbox is we get to play in for the f y twenty six budget at that point in time. And Tom Kavett will come in and talk to us. That may actually be our first day. We're looking at doing a joint meeting with senate appropriations when Tom Kavett is You know, try to do some more joint work where it's feasible. You know, the commit the senate set up different Monday morning and afternoon committees. The senate appropriations committee meets in the afternoon, so anything that we do with them would be an afternoon event. And then the governor will give his budget address. It's my understanding it's Tuesday, January twenty eighth. Is that is and then usually that's at two o'clock in the afternoon. And usually what happens after that is we have Adam Gresham come in from finance and management. You'll meet him this afternoon if you haven't already met him, and he'll start working on the presenting the budget then. So then we'll be working on the budget and getting testimony for quite a while till we'll vote on the budget probably the last week in March, maybe around the thirty first. It might be the previous week. Again, I don't know when crossover is gonna be, but it's after town meeting. It's usually at least two weeks after town meeting that the money the budget has to be done. We take a straw poll on a Friday. We will work as late as it takes to get to that straw poll on that Friday. That weekend, our joint fiscal office staff don't get any sleep, and they work really hard. And we come in on Monday, and we get a draft of the bud the final draft of the budget, and we all sit around and read it, and then we vote on it. So we may come in early on that Monday morning when that happens, and that's when we do our final vote. And then it'll be on the floor later that week. The exact dates, I can't tell you. But then so after town meeting, we're gonna have at least a couple of weeks where we're gonna have bills from other committees coming in, everybody wants us to pass their bill, take up their bill, pass their bill, and we're working on finalizing the budget. I'm gonna do my very best to make it not insane. Last year, we had dozens and dozens of bills that came into us very late that we were asked to take a look at. And I'm gonna do my best to try to minimize that kind of action because it really impacts our ability to do the budget, and the budget is the is our priority. We have to spend that now. So be prepared, March, to ratchet up the plan. Are we gonna hear from [Robin Shai ]: about the ARPA money [Chair ]: and the Yes. We are gonna hear about the ARPA money on Tuesday. I'll get to that. Yes. Good question. [Robin Shai ]: So after the budget gets out of here, then we present [Chair ]: it on the floor. Everybody's gonna have a role presenting it on the floor, your budget areas. And then it goes off to the senate, and then we have a breather. And that's in April, we have a couple of weeks where, we will do some maybe some deep dives in the topic areas that have come up along the way. We have taken field trips. We've gone to certain housing projects before, around here or walking tour with around tour, I think. [Robin Shai ]: Oh, yeah. Walking tour. So last [Chair ]: year, we did the whole flood the flood because we had so many other buildings that were closed because of the flood. And we got towards the [Speaker 5 ]: four of them, and then [Chair ]: we got to go over into the tax building and into the bowels of the building. And we didn't get to go in the tunnel because it was closed, but that may be on the list for this year. So we'll we'll have a little, briefing room. And then the, senate will do their thing, and then we'll form a committee of conference. And and by the end of May, we will close on the budget in the long run. So that's sort of really broad outline. Look. We also are likely to have a committee of conference for the budget adjustment. We'll find out as we go along, but that's often the case as well. So any questions about sort of the big picture of what we're talking about? If I miss anything, JFO staff, is that kind of enough? So The only thing, if I may Yes. [Robin Shai ]: That I would add is, I heard this question last year from not a member of this committee, but because the budget is different than other bills, like, we don't get these interim versions. You'll get the the version after you do the straw poll, but you won't get any, like, draft one, two, three, you know, like you do on some other bills. So I just for the new members Yes. [Chair ]: That's an important difference. Right. Right. You may be we may be doing straw polls on pieces of paper that have language, And we sometimes get a [Robin Shai ]: do we get any kind of an interim web report? [Chair ]: I don't maybe we don't. [Robin Shai ]: No. No. All of that is done by weekend when we're working, [Chair ]: like, jobs next door. [Speaker 3 ]: Yes. Exactly. The language part, those will have [Chair ]: You will vote on. Yeah. We'll have variations of the language. Yes. And so all of that, we'll talk about again. This is a whole lot to talk about now. It's a long way off, but I just wanted to let you kind of know the context, and then we'll talk about it again as we go along. So [Speaker 3 ]: And and if I may, in that area, depending on your respective areas, you'll spend a lot of time also with the policy committees because a lot of times, they're helping us with the language for their particular sections and may often time to propose language time and that you need to work with them to get it into a budget draft. [Chair ]: And so you'll hear more about that too. So I think that's the end of my piece. And now I'm turning it over to Catherine. That's how you say it. Great fiscal. Come on up. Come on down. [Robin Shai ]: Good morning. I'm Catherine Benner. I'm the chief fiscal officer with the joint fiscal office, and it's good to see all of you. I'm fortunately, I have to go because I have an eleven o'clock amendment. So I'm introducing myself and then Emily is gonna take it from here, but I just wanna, thank you. Well, welcome you and thank you all for taking on this, assignment. It's an important responsibility for the state and I appreciate your energy. And I'll let Emily introduce herself, and, I will sure. I will see all of you around. Thank you. [Chair ]: Thanks, Kath. Yep. [Speaker 5 ]: Great. So I'll jump in. We just thought it would be good to do introductions of some of the JFO staff on the budget team that you'll see coming in and out of the room. Just sort of a quick framing of, like, what JFO does and how we're here to help. So first off, congratulations on your appointment to house appropriations. You're gonna do an incredible and important work, and we're here to help you do that. Right? Balancing the state budget and prioritizing the use of taxpayer dollars is challenging, but it also can be really fun. And we try to be fun also. I know you're some of you are fun. [Speaker 3 ]: We try [Speaker 5 ]: to be fun. And, while all the bills that the legislature is doing right, this is the only must pass bill. Government effectively shuts down if there's no budget on June thirtieth, so [Chair ]: we have [Speaker 5 ]: to do that. So as you know, JFO provides nonpartisan fiscal analysis to the general assembly. We mostly staff the money committees, so appropriations, ways and means, senate finance. Statutory, we also staff transportation and the institutions committees. But as our as the sort of fiscal demands have grown, our staff has grown, and we support may know Nolan doing health care, other folks supporting all kinds of work of the general assembly. So real quick, just run through the JFO team. We've all met Erin. Right? She's on our third session. She's gonna keep her trains running on time. Maria, she's your point person on the budget issues. Right? She's gonna keep track of everything, for the committee. She gets her job to sort of stick with you guys. She's gonna keep track of all the details. I'm gonna introduce Chris next because he has to go up to ways and means, but Chris Rupp is the associate fiscal officer. He's in charge of the revenue team. So we work closely together. The extent his committees are raising money and you guys are spending the money, we make sure that those are the same numbers. [Speaker 3 ]: And nobody's [Speaker 5 ]: So That's the goal. Spend more than anybody. Exactly. And he's got a, a staff, Ted and Pat and James. James is new to JFO. They are, working on lots of different policies with the housing committees and the natural resources committees all over the place that money might be being raised. And they may be in here. They may not, but they're around buildings. [Chair ]: Chris, you can go up to nineteen ninety. [Speaker 5 ]: David Wells is doing Grady. You made more of Grady. Grady is in charge of the the words section of the bill. He makes sure that the language is correct, that it achieves your sort of goals, works closely with ledge counsel to make sure it's also in compliance with the law, and helps me and Maria and other folks make sure that, you know, we have good grammar, across things that we're presenting to you guys. And he and I, stick with the bill. We go we're gonna be in here sort of when you are are responsible to the bill. And then when it goes over to the senate, you will see less of us, and we'll be spending a lot of time in the senate. So think about Maria sort of in charge of committee, and we're in charge of the bill. And so similarly, we've got Maria on the house side. Amy Pope is the has the same role as Maria, but in senate appropriations. You know, we're a small team. We work closely together. She is helping them doing the same thing that Maria is doing, but as a group, we're all putting the budget together. So Amy may be in and out. She helps with different policy issues as well. And then similarly, l, Stanforth is in is the new committee assistant in senate appropriation. So you may see her on committee of conferences and other things. So she's big fan. Who else is on the budget team? We brought Jeremy with us. We don't know that we've ever brought Jeremy in, but Jeremy is our systems analyst. And Jeremy is responsible does the he did all of the coding and background on the web report, which so all of the sort of tech behind that makes that web report, which does two things. One, it outlines sort of the whole budget and the budget adjustment by section, shows you the changes from the gov to the house, the senate to the conference committee, and has all of that sort of details, like the little explanations. Jeremy built all the code and everything behind that that drives that, and that ultimately sort of generates the bill itself. So we thought it'd be good to introduce Jeremy. He probably won't be back in here, but he is back at JFO to do all women's work, to get the budget done. And then the other one we thought we'd mention is who's part of the budget team is Logan Moberry. He is the transportation analyst. So he is going to spend a lot of time with the transportation committees, and he'll be in once it's time once those the transportation plan that that committee adopts gets rolled into the budget, Logan will begin to present those changes. And then if there are any actual changes to appropriations, they are adopted in the budget to align with the T bill. So be able to agree for that. There are lots of other analysts. You may remember Scott, who does the capital bill. I'm definitely forgetting people, but JFO folks will be in and out. That's the group you'll primarily see. So, again, just going through Catherine's notes. Right? We're nonpartisan, pride ourselves on serving all legislators, providing objective analysis to everybody. And just a reminder, our conversations are confidential, so we don't share anything unless you tell us to share it. And please don't hesitate to ask us questions. Sometimes the appropriations language is a different language. It's you know, we'll be rattling off stuff about direct applications and reversions and carry forward, and that's a very specific definition. And if you're can you don't hesitate to ask us to, you know, what those, terms mean, what the rating agencies do, sort of what those sort of complicated terms are. We're a small staff. Staff. We can't do a fiscal note for every bill. We try to get fiscal notes for all the bills that hit appropriations. Don't you know, if you we sometimes we have to prioritize, so don't hesitate to reach out to Catherine or I. If you, you know, want a fiscal note on something, we can figure out whether or not it's within our ability to do it. So in summary, we're here to provide you the best information so you can make policy choices. Erin and Maria are gonna be your key people. I'll be the sort of contact on big picture stuff. And if you have any issues or concerns, you can always reach out to Catherine or I. Thank you for taking on this responsibility. You're not gonna be bored. You're gonna learn a lot, and you're gonna help keep Vermont a great state. So that's what Catherine wanted to present. Sorry. She had to run off. But if you have any more questions for me, I'm happy to answer them. And then we have Maria's teed up to do a sort of overview of the budget. [Chair ]: And I just wanna add one more thing. These guys work incredibly hard for us, and we don't want to, abuse that. So, you know, we don't need to ask for things that we don't need or whatever. Just think about that. And also, sometimes staff is sitting at that desk, whether it's ledge council or JFO staff, presenting something, and there may be some policy. They didn't create the policy. They are making decisions on the policy. So, don't say, well, why did you do this? I don't agree with that. Well, that's the the staff is not the are not the people that have done that. We talk to our colleagues and ask them those questions, but not the JFO staff. So Can I [Speaker 3 ]: just add one thing? Because I that's what I do. Mhmm. I will add that Emily and her team rose to the challenge last year in terms of putting together a March Madness team for the joint fiscal office. Mhmm. And they started out real well. They faltered, but they did end up in fifth place. That's crazy. The only thing I would add is they nudged out they came in fifth. They nudged out house appropriations, which wasn't really the best thing to do. It's not it just became in sixth place in the team competition, but I appreciated the the team spirit that the office held. I think they virtually got every member of the staff to participate in it. I don't know how you threatened them, but of course, [Chair ]: in my [Speaker 5 ]: And my ways. [Speaker 3 ]: We had a lot of fun. [Robin Shai ]: So Yes. [Speaker 3 ]: And that's important. And it's Thank you. Great. [Chair ]: Thanks, Emily. Any questions for Emily at this point? Good. Okay. Thanks. Thanks. How are you? Thanks, Emily. Yeah. [Robin Shai ]: Morning. Good morning. I'm gonna go through some slides that we put together, and I think it just provides context for the budget. I think you've seen some of these already if you came to the all member briefing, but we thought it'd be useful to do a little review. So Erin is kindly driving this for me. So the two of us are gonna be nodding at each other. So this is a document that we just call welcome to the budget. So you could it's gonna be posted. You can use it for a variety of purposes if you need to, show it to a constituent who has questions about the budget. It's just a, a good overview. So first, as Emily noted, the budget is different from all the other bills. So, Erin, let's just move to this. Okay. So this is the Appropriations Act, and sometimes we refer to it as the big bill. And this picture sort of demonstrates how big the big bill is. You know, it's a really big chunk of paper. [Chair ]: Is that a grapefruit or an orange? [Speaker 5 ]: Well, I was gonna yeah. It's a It's a [Chair ]: Not an orange. [Speaker 5 ]: But, I mean, [Robin Shai ]: this is a you know, it's a it gives you an idea of how much information is in the budget, and it's a really important document. And that's why it takes, you know, so much attention from this committee to put together. And it provides okay, so it's, the legislature, as you know, has the power of the purse, and this bill provides funding for all three branches of state government. So, you're gonna be hearing from all three branches of state government, especially the administration, because that's where most of the spending occurs. Anyway, so, we can now move to the next one. Now as Emily noted, this is a must pass [Chair ]: bill, and, you know, this [Robin Shai ]: is where all the spending authority occurs. And without the budget, as Emily noted, nothing happens in state government. But I wanted to point out that because it's a must pass bill, towards the end, when we get to conference committee, sometimes things get added to this bill. You know, it's like the train leaving the station. So we've had a variety of different things added to the bill, but, like, pay act sometimes gets added to the bill. That's a sort of a common one. And then, you know, we'll see what happens this year. Who knows? But, you know, we try to keep it sane. But It's not it's really [Chair ]: the last bill that passes because Absolutely. Yeah. Has anything that needs to get through ends up in there. So [Robin Shai ]: That's right. And so sometimes that last night of the session, you know, after the bill goes through the senate, then you all are waiting for it to come to the house and it's the last bill, and then you can go home. And the staff is like, we did it. One more year. Last day for accountants. You should let me Yeah. Exactly right. So, we can just move to the next slide. Okay. So this shows you it's the budget, as was noted yesterday, it represents, it's a policy bill. It represents priorities. And, I think it was noted yesterday that a prior commissioner, Church Hines, said it includes values. It demonstrates the values of, you know, state government. So anyway, that's an important thing to keep in mind. And, anyway, we're gonna, we're gonna go to the next one. This is a nice picture of the whole idea that, you're looking at the entire bill, everything. You've gotta, consider all the little trees, but really what you gotta look at is the big the big forest, the big picture. And so some of the standing committees, you know, they're looking at their individual areas of interest, but they're, you know, not having to consider how it fits into the budget as a whole. So, that's a very different perspective. And sometimes you guys have to just do your thing and be tough and say, no, not going to work this you know, these ideas are not going to fit into our forest. And we have the next slide is just another depiction of this. It's like the Oh, yes. The next slide. I should actually have my own [Speaker 3 ]: I'm fucking [Chair ]: I should actually, like, step up to the [Robin Shai ]: plate here and be able to run my [Speaker 3 ]: own thing. [Speaker 5 ]: I'm not on. [Robin Shai ]: Aaron, thank you. [Chair ]: This is terrible. I'm just kidding. [Robin Shai ]: Yeah, this one Emily put this together. And, yeah, this is It just shows you, like, all the big the budget is all the jelly beans. And then, you know, sometimes you try to squish another one in there. So, you know, you will all make that decision and have those conversations. [Speaker 5 ]: No. The what we [Chair ]: the the one that needs to be in the middle is the one that has what every committee wants us to do. Oh, yeah. Like the size of this. Yeah. Perfect. And the next one is here's what we get in the appropriations act because we all have hearts and eyes and minds that are way bigger than what we have money to do. And so that's what ends up being our job is to decide how much can fit into that jelly jar. That's right. Jelly belly jar. [Robin Shai ]: Okay. So, so this committee, they think about things that other committees don't have to think about. So this is what you think about all day long. So, so when somebody comes to you with a suggestion, you've got to think about, you know, how is this going to be funded? Where's the money coming from? And you've got to also, you know, consider the cost. You've got to think about, well, maybe we can cut some things in the existing budget to make room for this. And then are these programs that are being suggested, are they is it a one time expense, or is it ongoing? Are there going to be staff required? You know, what's involved with this new suggestion? And, you know, how does it fit? And, yeah, so the future impact of any consideration is something that this committee spends, you know, a good deal of time discussing and thinking about, whereas, you know, some other committees may not have to consider all those details. So the next slide there we go. Thank you. So the other thing is when you have a a new proposal, you've gotta think about, you know, what problem did this proposal solve? Like and, you know, again, is this one time? And how does this proposal stack up against all the other proposals that are being put on the table? And, you know, that can be as you know, I I don't need to tell you, that can be challenging. But those are the sort of things you've gotta think about because, you know, we do have a fixed pie. We have, you know, just a given amount of revenue. And so let me try to fit it all in. Now we're going to talk about the state. Yep. Excuse me. [Speaker 3 ]: Are you gonna sorry. Yeah. Go ahead, Jen. Are you gonna talk about one time versus time zone? [Robin Shai ]: So we do. Differences? Yeah. We do have a slide on that. Yeah. And that's a really important distinction. That's an important thing. [Chair ]: That'll be good for the budget adjustment as well then. Exactly. Yeah. Before we go to that, can I ask about I remember one time a former chair of this committee down the line reminded everybody that all the new proposals and all the things that different committees want, that we may balance the budget with these things this year? But next year, because of the way budgets work, is it will go up. And then the year after that, it will go up again. So I think the issue of what is gonna happen down the road Yeah. You know, what impact does that have in the future is That's right. [Robin Shai ]: Really important. Yeah. That's right. [Chair ]: And I never thought of it that way, but she explained it really well. [Robin Shai ]: Yeah. Yeah. That's right. The entire budget, regardless of what you do, even if you do nothing, the whole thing grows. It's like a big animal just growing. Maybe that's a bad analogy because animals don't want more growing. But okay. You're right. You have to think about this future impact. Okay. So the state budget is a plan. The budget's a plan for the coming fiscal year. And, you know, this plan authorized the expenditure, And it authorized expenditure from specific funding sources. And the budget is also not set in stone. So that's why we have the budget adjustment. And this the budget adjustment you can hear about this afternoon. You know, we're at the midway point of fiscal year. And so, you know, the administration has had a chance to take a look around and see what changes need to occur. And so they'll be presented to you this afternoon. And then, again, when you work on next year's budget, that fiscal twenty six budget, there'll be another opportunity in what we call the c section. We'll talk to you later about that, to make additional changes to the current fiscal year. Here is the idea. You know, I've been doing this for a really, really long time, and [Chair ]: I'm not [Robin Shai ]: going to talk about how many years, but it's always been I always think of it as a puzzle, you know, so you've got all these different, competing needs, and you've got issues out there that you are gonna have to address. Every year, it's different. Although the last few years, we've had some of the same recurring issues, but it's a it's a puzzle. That's what this slide is, trying to emphasize, that we just have to piece it all together and make it all fit. So now most of you know this, but just to, repeat. So the fiscal year is July one through June thirtieth. We're midway through the year right now. And that's what the budget adjustment bill will address, fiscal twenty five. That's the year we end. Yep. I'm sorry. [Speaker 5 ]: Yes, that was. Okay. [Robin Shai ]: And then next year, the the next bill that you work on is fiscal 'twenty six. You know, and so, you know, if you're working on this committee, like, you can be working on fiscal 'twenty six bill. And so sometimes, like, in my own world, I get the calendar year is all mixed up. I'm like, Oh, no, we've been working on, you know, twenty five. So, like, last year, I'm thinking it's calendar twenty five. But no. This is this is, the calendar for the budget and the subsequent budget. So the next slide talks about how the budget's actually organized, and there's we're going to have a bigger conversation about this, but we have had the budget organized by function of government. So there's all these appropriations and, you know, just a lot of different activities. And so we have them organized by what we call function of government. And these are the functions that we, have typically used, always used, not typically. This is what we use. So when you have a bigger conversation about how the budget's organized and who's got responsibility for each sections, we'll be referring to the function of government. And that's how, when we march through the budget document itself, that's how it's organized. And hopefully you'll become familiar with this, and it'll just be, second nature to refer to the functions of government. But for some people, you know, people that are not on this committee, that can be, somewhat confusing. Alright. Now we're going to go. So the whole the whole budget, the whole conversation about the budget is just a conversation about trade offs. And as we've already mentioned, you know, if you do one thing, maybe you can't do another. But we'll I'm not gonna try to turn my page because it just stops you. Okay. No. Here we go. [Chair ]: I got it. Okay. So so this I [Robin Shai ]: I really like this slide a lot because, you know, sometimes we forget, like, all the different things out there that, you know, this committee needs to think about, as well as the standing committees think about all these as well. So we have, you know, some unfunded liabilities, we've got the pensions and OPEB for both teachers and state employees. And then, you know, we had all this, these flood recovery issues that are incredibly important. And then as we all know, housing industry initiatives and the, unsheltered population, and then not to forget the opioid epidemic that we've been struggling with for, you know, many years now. And then we have things like, you know, the caseload pressures in human services. And we'll learn more you'll learn more about that when we get to the next Well, in the adjustment bill, you'll learn about some of them, I'm sure, but also as we hear testimony in the FY26 bill. But and, of course, you know, the biggest one that we've been hearing about is well, I shouldn't say the biggest. One of the biggest is the education finance issue. And then there's the cost of state workforce, how, you know, that has to be fit into the budget, IT projects, the federal MASH requirements for a variety of different programs. We've got inflationary, pressures, climate change, and then you know, what the governor spoke about yesterday about the, demographic and workforce challenges. And to put a plug in for the Joint Fiscal Office website, which is outstanding, there's a really nice issue brief that Joyce Manchester put together on demographics that's in that's on the website. If you ever have a chance, take a look at it because it does, you know, talks about these issues, and she does a wonderful job. [Chair ]: But again, that reminds me of Maria. Maybe somebody's gonna do it or Emily or I don't know who. Sort of a little tour of the joint fiscal office website and how that's coming up sometime. Okay. Yeah. [Robin Shai ]: That yeah. I love that. Yeah. [Speaker 3 ]: Can I ask you a question? Sure. Just as an example, the federal match requirements is DFO website. So [Chair ]: What [Speaker 3 ]: those things would you know? [Robin Shai ]: So you'll hear you'll hear about that in in the context of the budget and also the like, the transportation bill. That's a a one that, you'll hear more about. It well, let me think about how we can provide some information that'll help you. [Chair ]: Because it's really across the agencies. Right. You know, human services has opportunity to bid for tons of things, housing, you know, on and on. So there it's a cost, and that's good. [Speaker 3 ]: Thank you. Thank you. [Chair ]: So then yeah. So we'll [Robin Shai ]: get you we'll try to help you with that. That's a constant ongoing concern. You know? We don't generally wanna leave federal dollars on the table, so we try to find match money. So this other slide are is sort of, more areas of uncertainty, and I don't need to go through each of them, but, there are things that you're gonna hear about. Health care costs, actually, you know, that's one that we're hearing a lot about. That's a big one. Yes. Maybe we should put that on the other. [Speaker 5 ]: Yes. It's it's a it's [Robin Shai ]: a really big one, and it affects it affects everything. Yeah. Yeah. So so then there's some things that are just, like, typical budget pressures, not, not the pressing needs of the day, but just, like, typical things that we see year in and year out. And so the Pay Act Pay Act is, up there because you'll hear about [Chair ]: it when you're, when you're going through [Robin Shai ]: the budget. And, you know, each year, there's a Pay Act that is for the subsequent fiscal year. So in the twenty sixth budget, you'll see Pay Act appropriations for the twenty sixth, you know, budget year. But there's this other thing that's lurking, and that's the the annualization of the pay act from the current fiscal year. So whatever the pay act increases were that were given to state employees that were not built into their budget, they were in this separate appropriation. They now have to be built into the budgets. And so you'll hear some departments may I don't know what they're going to say this year, but they may say, well, you know, we, had a lot of pressure because we had to fit, like, whatever the what was it, like, five percent Pay Act increase into a budget that the governor is wanting us to limit to three percent. And so you've gotta squish everything into the budget. So you'll hear about the pressures from pay act. And so there's just a distinction between next year's pay act and the current year pay act that we need to fit into. Okay. Sure. And then, you know, of course, we have all the benefits, including, your pensions and OPEB. Health care, of course, is part of that, and then normal inflationary increases. And then there's we've mentioned caseload pressures before, and then there's always some other needs that come up. Alright. So this one. This number, eight point seven billion, that's a great number. It's a huge number, and that's how much our whole budget is. All funding sources. It's in this big pile [Chair ]: of money, eight point seven billion. That includes education, spending Yeah. Not not [Robin Shai ]: yes. Yeah. It's it's everything. [Chair ]: Yeah. Yeah. Education and transportation, not just Yeah. It's everything. Just so people under understand. And in fact, I I think we actually spent less last year than we did the year before. That was on one of the highlight sheets from last year. [Robin Shai ]: Oh, yeah. That, could be because we have a lot of one time funds. Yes. We yeah. [Chair ]: Yes. But the total dollars was actually less than the previous year. Not by a lot, but it was less. Does that include duplicated fund? [Robin Shai ]: So this is nonduplicated funds. So you're gonna hear that term duplicated funds, and I don't wanna go down a rabbit hole. But, some some things, like in Medicaid, that's a perfect example, we have, we have this Global Commitment Fund. And so, and we'll, we'll talk about that. But sometimes those, those funds are duplicated. So you have, you'll have the federal funds, and you'll have this whatever the state matches, it can be a variety of different sources. But then you'll also in other parts of the budget, you'll see those same dollars appropriated. So that's what we call duplicated. So then we try to create this unduplicated number, which is actually you're right. That's the number that we need to look at. Now okay. Next slide. We're gonna just talk quickly about how these dollars were all spent. And this you've seen this before. We this is one of our charts that we use every year. But this shows you sort of, like, where the big areas of expenditures are. And you could see here so normally in the Agency of Human Services, we include Medicaid and corrections, but for this purpose, we separated them because there are, they're really big expenditures. So, you'll see, like we have, we start out with general government, small. This municipal property tax adjustment, then we have protection, which is fairly small. Then, you know, human services is everything except for Medicaid and corrections. So you'll see Medicaid is quite large and the federal, the blue is the Federal funds and the gray are the State match. And then if you see corrections down here, the one hundred and ninety two point nine million dollars that's all, it's all State funds, which is an interesting corrections is different than some of the other departments because it's all general funds. And then we've got labor, which is fairly small, but that's, and that's federal dollars, mostly. And then you get to the K through twelve education. And this includes, you know, the money that's going out to the towns, for the schools. It includes the, agency of education. It includes the tensions for state teachers. That's like the amount that is if you go to the budget, the function the total functions in each part of the budget, that education function will match this number. But [Chair ]: I think Dave had a question. [Dave Yacoboni ]: Oh, yes. Yes. Thank you. Would this be an appropriate place to talk about maintenance of effort? [Chair ]: Are [Dave Yacoboni ]: you going is that on your slide? [Robin Shai ]: Well, it's not. But you know what? There's a lot of issues like that that are it's up to the chair. Wherever you see fit to do it. [Chair ]: Do you wanna finish this slide, and then if you wanna loop back Sure. [Robin Shai ]: Sure. That's me. Okay. Yes. So so you can see we've got the higher ed and and all the other functions of government. Transportation has a lot of federal dollars in it. And debt service, debt service is an interesting one because we now treat the actual payment of debt service. We transfer that money. So it's in the transfer section of the budget. We'll get to that at another point. And then we have these other miscellaneous one time things. But representative Iacoboni makes a very good point that there's some programs and, I'm going to pick REACH up, even though that's not one of our biggest programs. But the federal government requires that we, don't spend less money, less state money than, you know, a given point in time. And in that particular case, it's a long time ago, but there's these requirements that each state, maintains their level of effort towards, a variety of different programs. Or else [Chair ]: what happens if we don't? [Robin Shai ]: Well, then, the, gods at the federal level do like, very bad things to see. I don't really know all the stuff. [Chair ]: We lose. We lose. [Robin Shai ]: Yeah. We lose. I'm sure we lose federal funding, but Special ed. Special ed. Oh, yes. Special ed. That's a great example too. So you can hear this maintenance effort, they come up, over and over again, and that's, a number that we really can't, change. We we have to maintain those MOEs. Is did I, like, get to what you're [Dave Yacoboni ]: Well, yes. What I found, depending what our sections of the budget are, but when I meet with the various business managers, I always ask them, do we have maintenance of effort? How big is it? Is it a nonissue? Move on. But if it's real because if someone outside of the committee or even a committee wanted to reduce something Mhmm. [Chair ]: We [Dave Yacoboni ]: need I think it's important to let them know about that concept. [Chair ]: That's true. If it comes at [Dave Yacoboni ]: a cost, you're gonna lose money. [Chair ]: Absolutely. That that [Dave Yacoboni ]: was my intent. [Chair ]: Thank [Robin Shai ]: you. That's right. That's right. Yeah. And we'll get it. [Chair ]: We'll do all this again when we actually have the budget. This is just a Yeah. [Speaker 3 ]: This is [Chair ]: just a overview. Lynn? Yeah. [Robin Shai ]: This is just a quick okay. [Chair ]: Quick question. I don't wanna get into weeds here. But on the k twelve, you've got two point nine three billion Yes. Etcetera. The budget for the schools was two point three. That did not include the pensions, OPEB. Is that That's fair to think that maybe six hundred thirty one million is the roughly [Robin Shai ]: Yeah. And it's also all the funds that are used, not education funds, but the the, state funds, let's say, that are used to support the agency of education. So if you go to the if you go to the actual budget document and you look at the education Yeah. Yeah. That's you'll see all the whole list of everything that's included there. But I love that question, because we just had this conversation next door, yesterday, and we all had to that was clarified for us. So that's a great question. [Chair ]: Thank you. Everybody's interested. [Robin Shai ]: Yeah. I know. I know. They are. Okay. So folks [Tom Stevens ]: question. It's just still in k k twelve. We heard a lot about how there's a lot of services that are being funded through the education fund versus a human service fund or something. Are those breakdowns clear in the documents that you may have in a deeper dive? [Robin Shai ]: So in the bud okay. Let let's let Emily take this. [Speaker 5 ]: So I think I'm Emily Byrne for the joint fiscal office, and you guys heard that as in terms of the conversation around human services being provided by the My understanding is that refers to actually public schools or otherwise picking up providing human services type activities to kids in all those schools. Because that service is provided at a local level. It's not actually in the state budget anywhere. It's in the local budgets. So there is no real way for us to sort of break that down and to in at the sort of state budget level because what the schools are spending their money on, to the extent it's a human services type service for the kids in the school, that's the local budget itself. We educate what's captured in the state budget is the education payment to the school district. [Chair ]: The problem would be helpful. One of my favorite little charts is the education fund outlook. Mhmm. And that breaks down, you know, all the sources and uses of funds, at a state level. So universal school meals are in there and special ed and transportation and a lot of the things that people like to talk about. So that might be a nice thing to review at some point. [Speaker 5 ]: Yes. We can have Julia Yes. And, you know, a new JFO staff member [Chair ]: that you can [Robin Shai ]: and Rob will tell you, Julia. [Chair ]: Great. So we have the two of them go ahead and because I think the whole body really needs to start to understand all of this more anyway. So [Tom Stevens ]: We were talking about it or it's talked about whether it's policy or Right. In the ether. Exactly. [Chair ]: So, Kevin, I mean, just even that little clarification for me just comp you know, that adds to the complication of the conversation, which [Speaker 3 ]: Right. [Tom Stevens ]: A lot of people don't like it when it's complicated. [Chair ]: And that's the way it goes too. Well, so how would I have been hearing, say, the figure of fifty four million dollars that is, that schools are spending on mental health services? [Speaker 5 ]: Fifty four million is twenty. That Yeah. Let me I will follow-up. [Robin Shai ]: Yes. Might have been fifty two. I thought [Chair ]: it would be four. [Robin Shai ]: But at any rate, a lot. There's a there [Chair ]: it's been used a fair amount in conversations recently. So Another good reason to have Julia and Ezra come in and talk to us about this. So okay. Alright. Sure. Good. Onward. [Robin Shai ]: Onward. Okay. So so this slide, so the whole budget, as we discussed, is eight point seven billion dollars And this shows you, you know, it's just the general fund is two point three billion dollars And so we have the federal funds, three point one, and then education fund. We've sort of been talking about that two point three. And then, you know, turn sideways, you can see the traditional fund is three hundred and seventy three, and then we have variety of special fund other funds that are six hundred and twenty four billion. So this gives you an idea of the of the scale of the general fund and, you know, the entire budget, how it's how it's divvied up that fund. Now you may ask yourself, well, how do we spend this two point three million dollars or billion, not billion dollars So we're going to go to the very nice slide there, right there. Thank you, Erin. So one time funds. One time funds are dollars that are available to spend on one time expenditures. So these are things that are not going to recur in the future. So we've tried to be very careful over the years. And, I mean, this committee has been very careful over the years to not spend one time dollars on ongoing recurring expenditures because all you're doing is creating for your for next year, you know, putting together any kind of revenue growth that there might be. You're gonna sop it up with this, requirement to spend, you know, to fund things in year two or year three. So it's really important that we make the distinction between one time and base funds. [Chair ]: So sometimes, for example, we may have a grant program, and we have, you know, we have used money, one time money for that. We wouldn't use it for people's salaries or staff Correct. Because that's ongoing, ongoing operations. [Robin Shai ]: Yeah. That's a great example. Just simple. Yeah. Yep. You'll hear a lot more about this just because, you know, we'll be in the budget announcement bill, for instance, if you're going to be hearing about, the one time versus ongoing. So, this next slide is really, okay, that's good. So, what your committee did, what the legislature did last year, was they appropriated sixty eight point five million dollars one time funds that were available. And you'll see this list. So, dollars twenty five million went to the Education Fund. And then we had, sixteen point four to the GA program for housing. And then we had eleven million to the state colleges for bridge funding for tuition assistance. And then we had some transfers to special funds, and then we had, there was about ten million dollars to other priorities. And then we had this other list. So, we don't always know exactly how much money we're going to collect, you know, because we're, you guys are creating this bill before the end of the fiscal year. So, there are years that we have additional dollars that flow into the state and, we, there's a formula for how the dollars are supposed to be distributed. But in this particular case, the general assembly created a contingent list to use any of these excess dollars that flow into the state in, in this order. And so, what this General Assembly did was they added twenty million dollars to the GA program for housing to bolster that amount. And then they added another ten million dollars for shelter beds. And then we had some FEMA match for the 'twenty three floods. That was his I'm sorry, twelve point five. And then we had, there's this Pension Plus payment of twelve million dollars And Chris Rupp, who's no longer here, but if you ever want to hear about pensions, from a staff perspective you could hear about it from Treasurer's perspective too. That's that's great. But Chris knows a lot. He's really great at, you know, explaining it. And then we had some other priorities, and we had some transfers as well. And that's what's listed here. So this is just a reminder of what the general assembly did, the last year with both one times and with contingent dollars. And all these contingent dollars did get funded. [Chair ]: So the reason we have this list is in case we bring in more money than the consensus revenue forecast said. So let's just say the consensus revenue forecast said, we're gonna have a hundred million dollars, and so that's our budget. And we say, well, if more than a hundred million comes in, we wanna spend it, and here's how we wanna spend it, and here's the order in which we wanna spend it. So if a hundred and, you know, we had if we got a hundred million, we got a hundred and ten million, then we use the ten million in that order to go down. And so, this year, we had enough extra over the budget that we could fund all the contingencies. Some years, we have nothing. Some years, we might have part of the first one, and we just we have no idea, but we put that together in the event that we have the model spent. [Robin Shai ]: That's right. Yes. Okay. So the next slide, this is, this slide talks about the base. So this is this, two point two six three million dollars well, two point two six billion dollars. And this is what we consider our base appropriations, and these dollars are included in the official revenue forecast that's adopted by the emergency board. And you're gonna be hearing about revenue forecast because we're gonna have an upgrade towards the do we know, Emily, when that board meeting is for the Twenty second. Twenty second of January. So you'll hear more about the revenue forecast. But right now, the base amount of money that we have in the budget for twenty five is this this figure. So these dollars support ongoing expenditures and operations of state government. And these dollars are, you know, very, you know, important to the budget because in theory, we can rely on them year in and year out. And so that's a case where, you know, state employees might, you know, might be funded with base dollars. We have programs the next slide. Yeah. This one here. Thank you, Erin. This shows where the base dollars are spent. And you'll see this big, blue, Medicaid junk. And this is just, general fund, by the way, just to be clear on that. [Chair ]: No federal funds are in [Robin Shai ]: this call. This is not [Chair ]: general funds. [Robin Shai ]: So this is where our general fund base money goes in 'twenty five. So you can see that Medicaid is a really big expenditure. And you'll hear more about that as we hear testimony on the budget. You'll also, I'm sure you're going to hear more about it this afternoon when you hear from Adam Greshen on the budget adjustment bill. [Chair ]: I'm thinking I expect at some point, Nolan will come in and talk about Medicaid. Yeah. [Robin Shai ]: Yeah. Yeah. Yep. [Speaker 3 ]: That would be good. [Chair ]: Yep. So [Robin Shai ]: so, Erin, if we could just go to the next the eBoard revenue forecast upgrade in July. Okay. So so approximately one hundred and seventy two million dollars in additional forecasted revenue, in fiscal twenty five was, adopted back at the, July eboard meeting. And so you're going to see some reference to that likely, in the bill for twenty six and also likely in the twenty five budget. I don't you know, we don't know yet. We'll find out. [Chair ]: Gloria, in this case, the fiscal we we adopted the budget, and then this happened. The e board met. And then this is sort of like now we have the first half of the f y twenty five budget. We didn't have a contingency in the f y twenty five budget for that hundred and seventy two million dollars. Correct. So that's where the budget adjustment really comes in to say, well, now we have things have happened in the budget that we didn't expect, and now it looks like we have more money, and here's how we're gonna propose to use it. So we will hear more about this. Right? [Robin Shai ]: That's correct. Yes. Yes. And, I mean, sometimes they'll sometimes money will be spent will be moved the next fiscal year to to address, you know, whatever issues need to be addressed. And then as, we just noted that those there's going to be another forecast in, on January twenty second. So you'll hear more about the revenues. And, yeah, we'll learn more, and that'll inform your decisions on the budget. And then, you know, some of these current year budget challenges, we can you can decide how to how to address them. So, you know, it's it's interesting. This is obviously not, the revenue committee, but it's interesting and, helpful to understand where the money actually comes from. So in the general fund, this is a list of, you know, the sources of money that goes into the general fund. And personal income taxes, that's the biggest one. And, so, you know, this is just as for a reference. And we could show you, as we hear about the, January twenty second revenue forecast, we will show you a document Tom Gabet puts together that really goes through in more detail, the different revenues that go into the general fund. But this is sort of a thumbnail sketch of what you're gonna what the general fund includes. Alright. So, can we move on or [Chair ]: let's go. Okay. Good. Good. Good. And so we have [Robin Shai ]: the same thing for the transportation fund. You know, it's again, I always like to remind myself of what's in there, because you hear about you definitely hear about different revenue sources as we go through this process. And, like, for instance, in transportation fund, two thirds of the purchase and use tax goes into transportation fund, and then a third of it, you'll see on the next slide, it goes into the education fund. There we go. Education fund. So the education fund, you know, has other sources of money aside from the non homestead and the homestead property tax. It's got, you know, all the sales and use money. It's got a quarter of the, meals and rooms. It's got a third of the purchase and use. It's got lottery proceeds. And then there's some smaller miscellaneous, sources. And you'll see that when we get more into education funding. You'll see the operating statement for the education fund, and you can identify all the different revenue sources. But, again, it's just like a reference point for you to, to see in general. [Chair ]: Okay. So the the non homestead is number one, forty percent. Mhmm. Sales and use, that's not does that include the sales tax? [Robin Shai ]: Yeah, that's it. [Chair ]: Yeah. Okay. It's different from the purchase the purchase and use. That's the cars. [Robin Shai ]: That's right. Okay. Well, that [Chair ]: Just to clarify that we have the word use twice, and I never really understand which use was what use, and why do we have that twice. So, you [Robin Shai ]: know, that's a great question. And you're and I actually have had that same question. And I really, I would love it if we could ask Chris Roop that question because he might have a good answer for you. But I agree. It's confusing. It it is. [Chair ]: Yeah. Okay. So the next question is, then you had net homestead property tax. Can you explain that better? [Robin Shai ]: Okay. So That's [Chair ]: the that's the resident tax. That's Yes. [Robin Shai ]: That's for you [Chair ]: to live in a home. [Robin Shai ]: Yeah. And and, again, it's not my area of expertise, but that also is it is after the, income sense income sensitivity payment. So it's it's the net. Yeah. [Chair ]: And we have another question. Yeah. [Tom Stevens ]: Where does, at the end of last year, we added seventy five seventy or ninety million dollars from excess funding to make the education fund balance. But where does that show up? I don't know what the other [Chair ]: number was. [Robin Shai ]: So that's a great question, and it's gonna be on the operating statement for the education fund. And Julia Richter is our education person, and I think she's best to answer that unless Yes. Emily has The [Speaker 5 ]: two things I've mentioned was twenty five now at the end of last year that went from the general fund to the education fund. And then this is just sort of the the revenues into it, not transfers into it. So there are this is where get into the weeds. There are sources to funds that are not revenues that are transferred sort of moving forward in front. So that will that shows up as a transfer. [Speaker 3 ]: So if [Speaker 5 ]: you're when we're Julia does the operating statement for the education funds. [Speaker 3 ]: And You'll see it coming in. [Tom Stevens ]: Right. And so thank you for that. And then a quick question. When we when we finished last year, we talked about this transfer. We talked about starting this year in the hole by that much money. Can [Robin Shai ]: That's right. [Tom Stevens ]: Is there a forty five second explanation of that, or is that a deeper conversation? [Speaker 5 ]: Yes. So that was a one time so there was both the twenty five million dollars that was transferred from the general education fund with a one time transfer as it was outlined, in the bill last year. And then there was other one time money that was used in the education fund. When people talk about, I believe it's about sixty eight million dollars of one time money that was used to for in the education fund last year, that was a combination of one time funds. There were some fund balances, and you see prior year funds available, plus the general fund transfer to the education fund sort of made up that extra that extra one time money that was used to balance the education. [Tom Stevens ]: So we're starting our work that amount of money, in, quote, unquote, in the whole that we have to account for, which is what you were talking about when we use one time money for for what's an ongoing expense, which is Yes. Vacation. [Robin Shai ]: That's exactly right. [Chair ]: Yes. That's we we went against our principles, but we also had a bigger issue at the state level with property taxes and, you know, and all of that. So Mhmm. That was a very highly unusual situation where we did something that we wouldn't not normally [Tom Stevens ]: So our sandbox is gonna be empty on one end when we find out how much money we're gonna The education [Chair ]: fund is gonna be Correct. Okay. Starting that way. Yep. And we will have to see what happens there. [Robin Shai ]: Yeah. Of course. We're gonna hear a lot more about that. Yes. Okay. So so, Erin, if we could just go to the next slide. Okay. So then, you know, you'll hear about these other sources of funds, like, you know, so federal funds, you know, we'll talk more about that. There's a lot of, federal funds in this budget. And then this Global Commitment Fund, which is for, Medicaid and other related, investments, you'll also hear more about that. I mean, that's it's a bigger subject than I can just go into right now, but it's an important one. And then we have a whole variety of special funds. There's four hundred special funds, and there is a report that comes out. It's some it's submitted to the joint fiscal committee. And I think it's in September. And it's on our website. It's a point in time report, but it'll show you it's interesting because it'll just show you what all the funds are, you know? [Chair ]: And and we can find it. And if people wanna have copies of it, we can get copies made. I personally like to keep a copy because it's interesting to see what the balances are in some. And we they they show up in the budget over time. Unfortunately, they're not alphabetical. It's eight pages, I think in order of creation or some I don't know. I don't know, actually, if anybody knows how it got put together, but it's impossible. I mean, you have to go through all eight pages and just hope yours is on the first two. [Tom Stevens ]: And just to clarify, the special fund is, if something if a policy says we wanted to charge two cents per cent on the on the rooms and meals tax, especially for a certain policy reason. So childcare was been bandied about, but we never passed anything quite like that's where this would show up as listing? [Chair ]: Yeah. And it will be on [Speaker 3 ]: Lottery, isn't it? [Robin Shai ]: Lottery? Yep. [Speaker 3 ]: There's I mean, the states is self employed self insured for, like, workers' compensation and for other insurance. The premiums for that show up in the individual budget, but it goes into a a special fund. And if, you know, for example, on workers' comp, our claims exceed, you'll see a negative balance in there that sometimes the administration will come and say we can make a transfer to make a whole. So there there is a there's a wide variety of them. And a lot of them are used for very good reasons, but I think as a rule, we've been sensitive to just creating because you kind of lose a little bit of oversight control when you have a hundred different funds you're trying to look at. [Speaker 5 ]: Sure. More four hundred [Chair ]: in this case. Yeah. Well So where are people interested in getting a copy of that special funds? That's the board? Okay. That would be great. And we can probably put a website too. Yeah. Okay. Great. Thank you. [Robin Shai ]: Okay. So, so, Erin, can we go to the next one? Statutory reserves. So we do have these reserves. And, the main takeaway is that, you know, these are dollars that are not available for discretionary use. So at the close of fiscal twenty four, the reserve amounts that we had in the general fund, we had this three hundred and six point six million. The education fund is forty seven million, and transportation is fourteen point one. They are, for the general fund, is five percent of the prior year's appropriations, general fund appropriations. And so, in in if if you do any more spending in 'twenty five, as an example, then in the twenty six bill, we might need to add a little bit a little bit of money to the reserve because we gotta cover that five percent. And the types of reserves and we can talk more about this. This is, you know, a lot of stuff that we're giving you. But so we have the stabilization reserves. We have another fund called the rainy day reserves, and these are all in statute. Then we have the suit human service caseload reserve, and then we have this, twenty seven fifty three reserve, which, you know, again, we will talk more about this. But I just wanted to put those on some documents somewhere so that you could be aware of, but they weren't when [Chair ]: you see them again, you say, oh, maybe I that stuff. [Robin Shai ]: Yeah. Exactly. And you'll hear about them again, and we do put them on our operating statement for the, general fund. So you'll you'll definitely see it again. And can we, Erin, go to the next slide? This, is the Vermont's budget process, and your chair actually went over this earlier. You did a very good job of going through it. Okay. This is generally, what, you know, the schedule is for putting together the budget. And it starts with the, in September with the, governor's office going through discussing budgets with with each agency and department. And then, you know, they work on it in November and December. And, you know, they I guess they don't have Christmas vacations. They don't do anything. They just all come to the office and just stop the work. Work. Work. And, you know, so there's a lot that goes into this. And right before the budget address, which is coming up Emily, do you [Chair ]: know what I was I should [Robin Shai ]: not say The [Chair ]: twenty eighth is [Robin Shai ]: what I Oh, the twenty eighth. Okay. So that staff over there, you just gotta have some real, empathy for them because they're working their tails off right now to get that that whole budget put together. But in any case, this is the schedule, and we can refer back to it if you're interested at all. But the final slide is just a reminder, and you've heard this before, to fund base with ongoing revenue and strategic investments with one time funding. So if you have these one time things like IT projects, you know, you'll hear about all kinds of different one time potential expenditures, but just gotta keep base and one time separate. And we've gotta really pay attention to not only the current year revenue forecast, but what's gonna happen in the future. And we've gotta get into representative Yacobhan's point, maximizing federal funds. I mean, you didn't exactly say that, but I I know where you're coming from because I've worked with you before. And we've got to understand the status of our investments. And we've gotta assess and understand. So when, you know, this committee makes investments, you know, we wanna make sure that we ask the commissioner and secretaries in subsequent years, well, how did that go? Like, we don't wanna just take all this really valuable money, state dollars, and give it to a program and then forget about that program. We need to, you know, keep track and hopefully understand. [Chair ]: And, in fact, thank you for saying that, Maria, because I'm gonna be working on revising our letters to the agencies about their budget presentations. And I do not wanna start with what we call the ups and downs and the changes in the previous year. You have absolutely no context about what's happened. I want them to start with, how did you spend the money you had? How was how successful were those programs? You know, the whole, was anybody better off? Yeah. Why did why did we do these things? Do we need to keep doing them? Can we do them differently? So that's the conversation we need to be having so that we are ensuring that we're spending our state dollars in the most effective and appropriate way. So you'll hear more about that later. Yes, Tom. [Tom Stevens ]: How does a program that's been started with one time funding graduate to base funding? [Robin Shai ]: So, that's a great question. So you'll hear, well, sometimes the governor might include, like, year two funding in the budget. Sometimes. Sometimes, you know, if it's a grant program that gone out to nonprofits, you'll hear, some, advocates will come in, and they'll ask you for funding for the next year. So, I mean, generally, that's how you hear about it. It doesn't, you know, one time funding is just that. It's it it is it is absolutely for one year. As noted, though, sometimes, sometimes we'll see it in the subsequent year in the governor's bill, but mostly we'll hear from advocates if it's a grant program and, you [Speaker 3 ]: know But [Tom Stevens ]: at some point, some programs get baked in [Speaker 3 ]: to the Oh, [Robin Shai ]: then they get baked in, but you okay. That okay. So so let me just go take a step back. So in in the budget, when we go through the actual bill, the way it's put together, there's, these the sections of the bill, the b sections, are all the our base sections. So if you, wanted to have a one time appropriation from twenty five and put it in the twenty six bill as a base, like, if if, let's say, the governor did that, he would put it in these b sections. But at the bottom of the b sections, this is where it gets confusing. We have all these b numbers, like b eleven hundred, that are all one times, but it's a different numberings. I mean, they're they're it's a list of one times, and it says on, like, one time appropriation. That's where all the one time appropriations are. But all those other ones above it in the individual department budgets, those are that's base that's a base appropriation. So, you know, you'll hear people will say, well, we wanna move, you know, money for whatever the program is into the base. And so what they're really asking you to do is go to that underlying, department or agency budget and add it to their to their base budget. Otherwise, it'll be on that long list of one time appropriations that are [Chair ]: So the governor can do it. We can have something going for them. The governor could choose to do it. We could choose to do it Sure. [Robin Shai ]: And put it put it in base. [Chair ]: There are always consequences, and that's the part we have to think about because the whole notion of future costs. And and and we wrestle with that every year. Yeah. [Robin Shai ]: So now I'm out of slides. We're gonna have on [Chair ]: the web. [Robin Shai ]: Yeah. It's gonna be [Chair ]: It's on our committee page now. [Robin Shai ]: Page. Yeah. [Chair ]: It'll always be on our committee page. And I wanna I don't know if, Mike, you have any questions there on Zoom? You're good? [Speaker 3 ]: I'm good. Thank you. [Chair ]: Okay. Great. Does anybody else have any questions from Oregon? [Dave Yacoboni ]: Dave? Tax expenditures. [Robin Shai ]: Oh, yes. Yeah. So when that's a great question. So Representative Iacovone is asking a really good question. We have this, concept of, you know, tax expenditure budget. And so when, there are, issues or items that are note that do not get, that there's no tax paid on them, that the there's a value to the tax that's lost, you know, that the tax that the state does not collect. And when you add all these things together, that's the tax expenditure budget. And the governor will give you on the twenty eighth, when he, you know, proposes the budget, he'll give you this little small book that's bound, you know, it's like a spiral notebook kind of thing. And I believe at the very end of it is the tax expenditure budget. So it has all the things, you know, that are exempt from taxes at the state level that, you know, actually cost us money. So that's It's big. Yeah. It's big. Yeah. [Dave Yacoboni ]: Three hundred million? [Robin Shai ]: So, yeah, you're asking me to do this from memory, which, you know [Chair ]: Yeah. [Robin Shai ]: I can look at it for you. [Chair ]: It's a lot more we'll get more information about that. [Robin Shai ]: Yeah. But it's a really important thing to to keep in mind. Yes. [Dave Yacoboni ]: If if I may, someone, you know, wise, thoughtful person might say, boy, I'd like to exempt Social Security taxes for some cohort of Omanis. That's really it's a tax expenditure because the dollars will no longer be available in the budget to spend on other causes. It's it's it's an exemption, so to speak. [Chair ]: Work on revenue. That's right. [Robin Shai ]: That's that's good. [Dave Yacoboni ]: And there's many, many of those that are policy decisions usually made by ways and means and absorb kind of in the budget. We don't we don't have somebody come in and we don't go at least historically, we haven't drilled down on those and said, gee, that's a source where we can get some And that's [Chair ]: what Ways and Means has done. I mean, when I was on there, we did look at it occasionally because we would have people saying, let's stop exempting degree beverages, for example, or candy bars and, you know and then they could get into streamlined sales tax and how we work with other states, and we're not gonna go there too. But it's just to be [Dave Yacoboni ]: aware of. [Chair ]: Representative here. It exists. [Speaker 3 ]: No. I I just clarification. I mean, a lot of that's also put in your fiscal [Speaker 5 ]: books. Oh, the fiscal fact book? [Robin Shai ]: Yeah. Yes. Okay. [Speaker 5 ]: That's a [Robin Shai ]: great thing. Yeah. We have on our website. And when we go through the web page for the fiscal office, we can point out the fiscal balance. Tax [Speaker 3 ]: clothing, for example. [Robin Shai ]: Exactly. Yes. Value is a value. [Speaker 3 ]: So everything was taxed. [Robin Shai ]: Foregone tax. [Speaker 3 ]: Value to that just like there is for groceries. We don't [Chair ]: Exactly. [Speaker 3 ]: Groceries, regular food. [Robin Shai ]: That's right. Yep. [Chair ]: Yep. Great. Any other questions? Emily? I was gonna [Speaker 5 ]: say there's also a report JFO does every other year, the tax disaster of work. I said that when it's due, but it's soon and Okay. We've been working on it all false. [Chair ]: And it's quite a big report because I found my three ring binder that had it in it from twenty twenty three. And I thought, well, maybe I won't bring that to the statehouse. Good. So I'll just leave it at home. Okay. [Robin Shai ]: Any other questions for Maria or any or Emily or JFO staff? Thank you very much. You're welcome. [Speaker 5 ]: Thank you. It's great. [Chair ]: And you will see a lot of Maria. She is glued to this desk. So, Katie, we are going to be breaking for lunch, and we'll be back here. Ad aggression is gonna start at one thirty to look at our budget adjustment act of getting our first bill this afternoon. We'll I'll remind you at the end of the day, but we're gonna go through at least the spreadsheet. He's gonna bring everything. We're gonna go through all the spreadsheet information. Matt, he thinks will take at least a couple of hours, and I'm sure he'll have lots of questions because it's a learning experience for all of us. I have not seen it. I don't have any advanced knowledge of what's going on. And he'll bring the language. He may say a couple of highlights, but he won't get through all the language today. We decided, that we're not gonna meet this Monday. This is kind of unusual, but it's really difficult for Aaron to find people to come to committee when it's four o'clock on Friday afternoon, and can they come Monday and be prepared to talk about the budget adjustment. So you'll have a chance to bring this all home with you and take a look at it, take a look at the language, get ready, you know, start to try to absorb it. Adam will come back, on Tuesday morning. I'll go over at the end of the day what the agenda is gonna look like for next week, but he'll come back and go over the language in-depth then. So You'll probably go to four? Today, yes. I would think so. Probably. K. Yeah. Yeah. I can't believe that this committee will be completely quiet and have no questions on the budget adjustment. So I think that's it, and, we'll

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