SmartTranscript of House Education, Senate Education, Senate Finance - 2025-01-15 - 1:30 PM

[Zoe Saunders ]: And could you copy who are on their way? And you are live. [Chair ]: Alright. Welcome. We are in a joint hearing here on January fifteenth twenty twenty five. This is a joint hearing of house education, senate education, and senate finance. This is part of an ongoing series of, sessions of testimony to get everybody grounded in some background in our education system, both from the finance point of view or the policy point of view. So they that continues with, education law and education funding, and we have, up to three guests from the administration, maybe even more, to to give us our presentation. Many of us have worked in this world for a while. Some of us just had a presentation from JFO. So we all kinda come out of different areas, but we look forward to sort of further grounding. As I tell my committee, I've been hearing presentations on this every year for eight years. I always pick up something new that I forgot about or didn't know about. So it's it's very helpful to me. Anyway, gonna turn it over now to our guests to introduce themselves, and the floor is yours. Thank you, and welcome. [Zoe Saunders ]: Thank you. Good afternoon, everyone. We really appreciate this opportunity, to testify and provide some background on education law and education funding. I'm Zoe Saunders, the secretary of education, and I'm joined by two of my colleagues. I would love them to introduce themselves. [Emily Simmons ]: Sure. Emily Simmons, general counsel at the Agency of Education. [Hart Gold ]: Good Good afternoon, everybody. I'm Hart Gold and Tax Commission. [Zoe Saunders ]: So as we start this, presentation, I think it's really important to emphasize that education funding, governance, and program quality are all inextricably linked. And so as a recap, before we get into the details of the funding, I wanted to reflect on what we've shared previously from the listen and learn and also from some of the data reports that we have shared. What we've heard clearly from the listen and learn is a need to have their direction and guardrails around budgeting. School boards are often placed in a really challenging position to have to cut budgets, and sometimes there aren't really clear parameters around how they can make those choices and how to prioritize to ensure, that we're delivering educational quality consistently across the state. We also heard very clearly a need to focus on equity. As we traveled across the state, that has been described in ways that are very concrete, really ensuring that every student in every school has access to an array of programs and elective and experiences to enrich their educational, time in our school. We've also heard a need for additional support, around special education students. So we think about both cost and delivery, and expanding career and technical education. Additionally, we've heard clearly that our students are facing, more mental health needs, and our schools are doing more than providing instruction. They're really meeting the overall needs of students. And so I think it's important to put that in context because when we're making decisions about funding, it's all around thinking through how we can really reinvest limited dollars in ways that are going to best support student outcomes and address the needs that our students are are facing in our schools. As we talk about data, we shared a presentation yesterday, and there's a couple key highlights that I think are important to call out, as part of overall framing. We see that there is tremendous teacher pay disparity, across the state, and it's also creating challenges if we are competing with our neighbors in New England. We know that our ed fund is designed to really think about equity, and and we'll talk a lot about that in our conversation today. And so this is some things that we're gonna think about in practice, What's occurring, in terms of ensuring that every student has access to the resources that they need, to be successful. So we'll continue to go back throughout this presentation and, connecting, some of these considerations to what we've heard our priorities through the listening and learning tour and what we're seeing in the data, are challenges in order for us to meet, our shared goals as a state. So today's presentation, we will provide the legal context, because that's really important for your policy consideration in this form. A lot of of how we fund education in the state of Vermont, and then we'll walk through an explanation of our current education funding system, and we'll spend some time comparing our system to other states and identifying opportunities and strategies to further strengthen our public education system. So, yeah, I'll turn it over to Emily. So [Emily Simmons ]: the information I'm gonna present you today is really just at the highest level. And realizing that my audience is the general assembly, I'm presenting two sections of statute that I think really under ten the way that Vermont currently approaches education quality and education equity, but reminding me that the general assembly is in control of this statutory provision. So we'll start first with the state constitution. [Hart Gold ]: I feel [Emily Simmons ]: we need the next slide, though. Thank you. So the right to education in Vermont is enshrined in the state's constitution. We call that the education clause. It is not a unique education clause. It's a little older than any of the other states in the United States, but it is not really an outlier in any meaningful way to our state constitutional provisions. Our provision or similar one to have the existence of adoption of the very first remote institution, And I always like to call out that education is the single government service to ever be included so specifically in our Vermont constitution, which I think really speaks to the importance that the state's founders placed on education. So the snail case interpreting the educational clause, like everyone, I'm sure is familiar, is that state b b r g a case from nineteen ninety seven. Here is where you have Vermont Supreme Court interpreting about the Constitution of Education Clause and stating very clear for the first time that the state has the constitutional offered obligation to provide its students a public education. The emphasis I would like to bear is really on the state. And so I pulled out one of the quotes from the decision where the court gave us the guidance that although the state may delegate to local town with the the authority to finance, administer the system within their borders, it can never abdicate that basic responsibility for education. It can't truly pass on that fundamental obligation to the local governments because they themselves are creations of this stage. The Supreme Court held that the education funding system challenge that was in place at the time that was the subject of the lawsuit had substantial dependence on local property tax and resulted in life disparities. And everything is available to local school districts, and as a result, found that, the system as it existed then did deprive students of equal educational opportunity and therefore violated the constitution education mandate. The court sort of says on the other hand, right, as courts tend to do. So while that system was found to rely too heavily on local revenues and not equalize efficiency efficiently educational opportunity, they went on to say that they don't mean that the constitution really doesn't mean that we have to have absolute dollar for dollar quality of funding. It's not necessary. It's not a practical requirement to satisfy the constitutional commands. And then a system might very well, include differences among school districts that are related to a purpose of the system, a school district size, student needs, etcetera. So in other words, the equal opportunity does not necessarily, result in the need to look at price size dollar for dollar equity. And it does not permit fees in terms of spending more if they choose. But bottom line, the constitution does not allow a system where a student's educational opportunity is a function of the wealth of the district or location where they live. So we can't have geographic and wealth based distinctions in ultimately what students see and have access to. So I can pause there. I don't know if the chair wants me to take questions now, but that's everything I had to say about the Brigham decision. So I didn't wanna blaze past it if they were clarifying. [Chair ]: Anybody get a clarifying question about that? [Emily Simmons ]: Great. So next, I wanted to bring to your attention one of the statutory provisions that was adopted by the general assembly following a very individual as part of the new adjudication funding system. And I just I don't think that section one, first, is very important, the first section of title sixteen. And I think there are some themes in here that are really interesting. So while it says the I have very aspirational statement about the guarantees of education being necessary to exercising political and civil rights and success of students. There at the end of the quote, it also says, however, one of the strengths of Vermont's education system lies in rich diversity and ability for districts to adapt educational programs to local needs and desires. So there's a policy statement is, essentially, freedom and unity. The older my children will be afforded equal educational opportunities, although educational programs may vary from district to district. So I just I like to highlight that there is some tension in this concept, and we've had it right from the beginning of the current banking system's adoption. And then the only other provision of state law that I think it's a good level of importance is the place where our statutes give education quality standards. So the the minimum requirements for what students will be offered, what they will be taught, what they will learn in our schools. It's in section one sixty five, which directs the State Board of Education to adopt rules on the education quality standards. And then the section also lays out the minimum elements to investigate bridging those rules. More recently, the general assembly have added the requirement that the agency of education adopt district quality standards. And so among those rules, there's two sets of rules. We really have the foundation for what districts are required to offer to those students. [Speaker 4 ]: Yeah. Of [Emily Simmons ]: course, that's just before districts can make those local decisions that we saw in section one to offer more or to differentiate those options, expanding on the standards. [Chair ]: Just a little bit of context, I might add. What a reference to particular quality standards of the legislature enacting those that did come at the request of [Speaker 5 ]: the agency of education. So that was [Chair ]: not a imposition. It was one of [Speaker 5 ]: the partnership. [Speaker 6 ]: That's it. [Zoe Saunders ]: That's it. It's a value add. Those [Emily Simmons ]: are my slides on the legal context, so that would be a great time for questions. [Chair ]: Anything on the, legal framework we just heard? [Hart Gold ]: Yep. We're good. Alright. [Zoe Saunders ]: So another would like to provide some additional context just to understand the current state, of our education system. So this is a map of our supervisory unions in school districts. This is representative of the twenty twenty two, twenty three school year. Since that time, we have had it added an additional supervisor union and district. So the total is fifty two, supervisor unions and supervisor districts that underneath which there are one hundred and eighteen school districts that oversee and govern two hundred and eighty seven schools, that support the public education of over eighty three thousand students. You can see as you look at this map that the organization of those districts varies greatly. Some have a large geography, others have a small geography. The number of students that are served also varies as well from about four hundred to about two hundred. Sorry. The smallest supervisor even serves students that are two hundred to over four thousand students. So just wanted to to share an overview of how we're currently structured. This map is also representing average daily membership. So this is inclusive of those students that are attending public school and students that are attending independent schools. So it does represent the entire student body that the school board is responsible for. The next slide is looking at change in enrollment over time. And so we have spoken about the decline in enrollment statewide. Over the past twenty years, we've seen about an increase of twenty percent decline in k twelve enrollment. As you're looking at this map, it's comparing the past four years. I mean, you can see, that there's a couple pockets in our state where we're seeing an increased enrollment, specifically looking at Bennington, White River Junction, and Saint Johnsbury. There's also been areas of our state that have had, a more dramatic decrease in enrollment. And as an example, you'll see that in the darker orange, such as Grand Isle. So just important to note as we're thinking about overall patterns of student enrollment in our schools. I'm gonna walk through at a high level just explaining our education funding system. Commissioner Bolio will get into detail around how it was actually funded. And I'm gonna walk through the overall timeline. So as a context for this, we wanted to share some key takeaways, before we get into the details and the nuts and bolts of the system. No surprise here. Vermont's education funding system is very unique and very complex. We have been partnering with, education funding experts, who have experience with many different states with them, and they will attest to the fact that Vermont is very unique. And the reason that it's unique is it's designed to promote taxpayer capacity in response to the Brigham decision. And as you walk through, that decision is not about ensuring similar resources for similar for students with similar needs. It's about ensuring that there is, equity in terms of tax capacity. In practice, we're seeing that lower income communities are are not taking advantage, of that additional, resource, and that's resulting in some of our higher needs districts spending less, and that includes two students in those districts not being able to benefit from the same level of resources. So as the governor signaled in his inaugural address, He's proposing a shift to a new funding formula. And the rationale for that is to really address and build upon what Vermonters value most about our education system and expand on that concept of equitable funding. So as we've operationalized that in terms of tax capacity, we'll be talking to you about that in terms of educational experiences and educational opportunities regardless of where our students live. As part of this process, it's important for us to think about those features of the system that may not serve as well or as they were originally intended. The our education funding system was developed over thirty years ago. The research around education funding and how it relates to equity has evolved in that time, and also our state has different pressures and different cost constraints that we did those many years ago. So it's an opportunity for us to really think about a better way to deliver education with our current students, to yield that, high opportunity for every every child. So it's notable that any change in a funding formula will require policy decisions about how we deliver, quality education, how we define quality, and at what stood up. And so those are all from assumptions that we'll need to think about as we are entertaining a new funding formula. I will allow Emily Simmons to expand on this point, but I think as part of that conversation over the years, there's been a recognition that there are different constitutional mechanisms to comply with the Bergen decision. And so as we're walking through, we know that complying with the Bergen decision is a necessity, and we're also looking to identify other ways to promote equity in terms of opportunities for students that they will observe and experience in their classrooms. [Emily Simmons ]: Yes. I I think that maybe what was not one hundred percent foreseen when responding to Brigham and adopting our current model, what and perhaps just over time, this is what happened, was that it our current system does ensure the ability to raise equitable funds to provide equitable opportunities, but it does not require that action. It leaves, at the discretion of local school boards the decision of what to offer, to what extent to use our our equitable ed fund to actually raise an amount of revenue that would place students on equal footing truly from an opportunity and educational experience [Hart Gold ]: with [Emily Simmons ]: it. So we might think of ways that we could tie tie up what what might be a loose end at the other end. What are the accountability or what are the requirements that would make the promise of equitable funding actually delivered to student experience? [Zoe Saunders ]: Any question? [Speaker 7 ]: I've got a question. I should've asked you before the bureau council, but the EQS, we have we have a standard. But do we have a process by which to evaluate that statement? And and at what level? [Emily Simmons ]: Yes. So that same section, section one sixty five and then b subsection does lay out a review of this where the agency conducts of all districts to evaluate not only delivery of the education quality standards, but equity generally would say it's it requires the agency to take the least intrusive step first, of course, and then have the escalating step that the agency takes that there's continued failure on those fronts. So, yes, we do have that accountability system built into one sixty five. I think it's a question of the implementation and the use of the levers that are in the law that we would like to look at. [Speaker 7 ]: Who so who's responsible for it? Jointly If everybody is responsible, probably nobody is looking at. [Emily Simmons ]: There there are, different responsibility role and responsibility of superintendents of school boards, of the State Board of Education, and the agency of education. [Zoe Saunders ]: We released a report to explain our education funding system, and we organized that to address commonly asked questions. So what we'll walk through now is how to respond to these questions that many of you also receive, I'm sure, as you're working with your constituents. So the first question we receive is how is the amount of money provided to each district determined? The second question is where does the money and the education fund come from? The third question has been, I think, a note recently is how is my education tax bill calculated and why do some people pay more than others? And then also another very topical question is how is it possible for my tax bill to increase even if my local school districts reduced their budget or bear the group. And so this these answers are all based on the complexity of our system, and what we'll walk through. So the first first question is how is the amount of money provided to each school district determined? The very simple answer is they received what they request subject to voter approval. That's very different than how other states fund their education system. Most states would determine upfront, here's the amount of funding that we have available for education based on an understanding of how to deliver quality, and then districts would operate within those budget parameters. Within our system, a school school district will create their budget. They will look at the data. They will engage their stakeholders to identify, how to build a budget to meet their needs. They will then take that to the voters. When the voters approve that amount, the state guarantees that funding. And so you'll see that different districts will make different decisions around their budgets and, also, that would translate into different per people spending, across districts. This is a very simplified, timeline, that Commissioner Volio will expand on, and I'll allow you to get into the details here. But the point here that we just wanted to identify is that as school districts are doing their budgeting, they're working on two cycles, they're implementing their current budget, and then we're also planning for the next budget. A key point to note is that we require our budget cycle to start earlier, and it also ends earlier. So that December one tax letter is a really important first input, and that is developed at a time when not all of the data pieces are known. And it it does, create some challenges if we're thinking about strategic budgeting decisions, and the school board's ability to do that before those budgets have to be warned. What is also unique about our system is that although the voters vote on that school budget at town meeting day, once those are approved, then the legislature gets that enough, and they have to set the yield the yields to be able to apply fully the education system. We'll talk about some of the more nuances of the other funding that commissioner Bogle will walk through. And as part of the cycle, we're showing that there's different, you know, installments of how those funds are paid out over the cycle. Another question is, you know, how is it that, if my budget stays the same, that my taxes could increase? And so this is a very simplified example where we're imagining, and this three districts we're looking at here. District one is increasing their overall budget by five hundred thousand. District two is staying flat from last year, and then district three is having a budget increase. So what many might expect is that if you're budget decrease, budget reduction. Thank you. So what we might expect is if you're in district two and your budget is staying flat, that your tax rate would stay back flat. And district three and you're reducing your budget, that your overall taxes would have a reduction. But what's actually happening is all of the funding is poor. So the state will actually need to raise in total an additional two hundred fifty thousand dollars in this example. And so for a variety of reasons, that could impact an increase in your taxes even if your school budget is staying flat or even decreasing. And there's a variety of reasons that would contribute to that, which gets into the complexity of our system. So I'd love commissioner, if you wanna expand on some of those factors that would contribute to the district that's saying flat or decreasing happening in this tax. Yeah. [Hart Gold ]: I mean, there's relationships between grand list growth and the local grand list capacity within a district. There's non property tax revenue. There's new construction. So all of those things factor into the equation that solves for the yield. But in, again, a simplified example, this illustrates sort of how you can have the statewide spending pressure or increasing pressure on individual districts even if those districts themselves are flat or reducing their margin. [Zoe Saunders ]: And the system is based on the per pupil amount, so it's based on your need. So if the need of your student population decreases, you're gonna have a a decrease in the number of students in that denominator, and so that could inflate your overall type of population as well. Do you wanna expand on that? [Hart Gold ]: I'll hop into that. Okay. [Zoe Saunders ]: We'll get into that. So this is kind of high level, and we did have to walk around some of these slides just as part of our listening in order to give some, level setting and understanding of the key components. Equity is a key consideration as we are looking at our budgeting process. And so, really, in an effort to increase equity, our current system allows for schools that serve more students with higher needs to spend more per pupil without triggering, oh, the greater tax burden on that local community. So it goes back to what Emily Simmons was describing. It gives the ability, for those districts to to raise those additional dollars. In theory, this makes it possible for schools that serve students with greater needs to have larger budget, even when their communities might not otherwise be able to afford that extra spending. Tax. [Hart Gold ]: Well, we [Zoe Saunders ]: didn't see a hold. I'll just get the tax rate done, mister Kelly. [Hart Gold ]: Tax nerd rejoiced. Do you pardon me? [Chair ]: That's a good question. Stop this with go to the previous slide. What you're really talking about here is largely English. [Zoe Saunders ]: That's correct. [Hart Gold ]: Yeah. So let's talk a little about how education tax rates are set and then how individual property tax bill will calculate. Right. So to set the tax rates, right, you've got a total up education fund expenditures. Right? So the the largest share of that aggregate expenditure are the aggregated and spending totals from all the district budgets. Right? So that school budget's less than offset by this category of late federal funding, reserves, other things. Those get all totaled up. Then you add in all of the other appropriations in the education fund that are statewide costs. For those familiar looking at the, ad fund outlook. Right? Those Those are basically all the lines under the appropriation section that are not the end payments. So things like universal school meals, transportation aids, special ed, those kind of things. You add all of that up, and then the education fund raises the revenue that it needs to meet those obligations. It was a little bit backwards from how to view budget in general fund. So there are non property tax revenue sources in the education fund. We can hop into the next slide, but the property taxes are the shopping center. Right? So it it like, the tax property tax rates are set to raise whatever the delta is between the non property tax revenues and the total in appropriations. And those are done by the legislature setting both a statewide non homestead tax rate, as well as the property and income yields, which are used to calculate rates for those who pay pay based on property and then also those who get credit based on their income. Yeah. So so let's talk a little about what those sources are. Right? So this is fiscal year twenty five. Again, a lot of attention gets paid on the property taxes that comprises about two thirds of the funding in the education fund. Actually, only about a quarter of the education fund is homestead property taxes. The largest share is nonhomestead property taxes, which was about thirty nine percent for fiscal year twenty five, and then the next largest share is actually a hundred percent of sales and use taxes going to the education fund. That was a little over six hundred million dollars forecasted for fiscal year twenty five and is the second largest share. There are also other revenue sources there in the nine percent slice that you see there. That is a combination of a number of things. That's a third of purchase and use tax when you buy a car, a quarter of the meals and rooms tax when you go out to eat, get a hotel room, and also some, the lottery proceeds. There's a Medicaid transfer. There's some energy taxes in there and also some bond interest. So, a little more than a third of the education fund is actually raised from, nonproperty tax sources. And, again, then the property tax rates are set to be those shock absorbers. And on the next slide, I would just give a sense of scales to the the education fund and the general fund. Right? So we're kinda looking at fiscal year twenty five numbers. So the general fund on the right, about two point three billion. The education fund on the left, about two point two four. I I would also flag, though, in the general fund, I think in fiscal year twenty five, it was about a little over two hundred million dollars for paying down the unfunded liability in teacher's pension. So if you include that in sort of the education expenditures, it would say that the the education expenditures are actually seeding the general fund expenditures at this point for fiscal year twenty twenty. But even in just nominal dollars, pre cap. So we're gonna jump into actual calculation of of property tax bills. Right? So how are the the taxes themselves calculated? We've really three different calculations that we're gonna look at. The first is for what's called nonhomestead. Now there's two different types of tax classification for property in Vermont, homestead and non. Homestead is owner occupied property as their primary residence, and those are declared every year by filing what is called the homestead declaration to the tax department. All other property that is not exempt is not is not homestead. So I've I've often heard confusion there. It used to be called nonresidential, which made people think that it was just commercial or just second homes or just whatever. But it's everything that is not owner occupied as a primary residence and not exempt is not homestead. So that's long term rentals. That's commercial property, industrial property, open land, short term rentals, second homes. All of that falls into the non homestead category. Then homestead, owner occupied primary residence, and then there's also, income based credits for those who are income eligible on homesteads. One of the elements of complexity here is that one property could be subject to all three rates. Right? So imagine that I live in my house and and my my income is eligible for an income based credit, but I have more than two acres. The property tax credit only applies to your house site, which is your home and two acres. So if you have more than two acres, you the remainder of your property will be taxed at the homestead. And then imagine that I have an ADU that I'm renting out on the property. That will be taxed at the nonhomestead. Right? So one property and one property owner could be subject to all three different classes in one property tax bill, which adds to that complexity. So I'm gonna start with the easiest one, which is the not oh, no. I'm not gonna start there. [Chair ]: This is always the way. You've gotta remember the CLA. No. No. [Hart Gold ]: Please go to the next [Zoe Saunders ]: slide. Okay. [Hart Gold ]: That's where I need to be. I just [Speaker 5 ]: forgot that we've gotta [Hart Gold ]: talk about that too. So because we have a statewide education fund, but not all towns reappraise at the same time, there needs to be a mechanism to equalize the appraisal assessments between towns to ensure that each town is paying its fair share in education taxes. Right? So the mechanism that we have here in Vermont is called the common level of appraisal. You'll often hear, as an acronym, the CLA, which gets applied to the tax rate. Because real estate market has been so hot in Vermont for the last several years, CLA's all around the state and the statewide CLA have been dropping precipitously. And that's created a lot of frustration. It's created confusion. It's created volatility for a lot of state owners. One thing that I have heard that I would say is I do think it's important to note that the CLA is not the reason that property taxes have been going up, but it's a very confusing element of the system, and there are ways that it can feel like the CLA is the reason the property taxes go down. I think part of that was why the impetus behind the legislature act one eighty three last year created what was called the statewide adjustment, which means for fiscal year twenty six and beyond, town CLAs will be divided by the statewide adjustment for what's the statewide CLA before applying it to tax rates. Practically speaking, the impact of that should be that the pre CLA rates or equalized property tax rates should be closer to the actual tax rates that that people see on their tax bills. I I believe that the statewide adjustment this year is in is seventy two and the change, I I believe. If I got that wrong, I can correct it before the end of my testimony. Yeah. So now that we have the CLA under our belts, we can move to calculating actual property tax bills. So we'll start with the simple one in non homestead. Right? So in this example, the the non homestead rate for fiscal year twenty five is a statewide rate, one point three nine one for every hundred dollars of property value. You simply take that statewide rate, you divide it by your CLA, You've got your town nonhomestead property tax rate. Every nonhomestead property in your town will pay that rate. So in this example, on a five hundred thousand dollar property, you're paying just over seventy nine hundred dollars. Right? That one's pretty straightforward. Everyone work, man. Cool. Moving to homestead. Right? It starts to get a little more complicated. This is the one that moves with per pupil spending. And as the secretary said, right, per pupil spending is based on weighted pupils. Right? That's an acknowledgment in the system that certain students cost more than others to educate. Right? And you wanna make sure that you are providing equity between districts who may have different populations, different demographics of of, certain students that may cost more or less to educate. So the per pupil spending that we're talking about here is actually based on the number of weighted pupils in the district, which is another one of the ways that, your budget in a district could stay flat or or be lowered, but your actual tax rate could go up. Right? Because if you're losing weights or losing pupils, your per pupil spending is going to go up even with a flat budget overall for your district. But in this example, let's say the per pupil spending in that district is thirteen thousand eight hundred ninety. The in the property yield, excuse me, last year was ninety eight ninety three. So you divide those two figures. That gets your district rate, and then you've got to apply that CLA to your district rate. Right? So your district rate is about a buck forty. You, apply the CLA that we put in the prior, example still in eighty seven point eighty three. You get your actual rate of one point five nine eight five. So in this example, your tax on, a three hundred thousand dollar home is just under forty eight hundred dollars. Now you could have more than one town in the district. You could have more than one district per town, and that starts to get really complicated too. Right? Because if you've got more than one town in the same district, you're gonna have a situation where their district rate is going to be the same, but those towns are very likely going to have different CLA. So you're gonna have different towns paying different rates even though they add the same per people spending. It's more complicated even the other way. If you have multiple districts within the same town, it's a blended rate of, all of the district rates based on the proportion of students that go to each of those districts in your town. So, even though this one's pretty complicated, this is the simple version. Right? We're not adding any of these, odd situations where we've got multiples in there. And it's really difficult, not only for the stakeholders who are living and breathing this to navigate it, but voters and ordinary homeowners who are just trying to follow along. Right? So then we add on the income based credit. Right? The property tax credit program. So about two thirds of homesteads receive a property tax credit for their education property taxes. It's based on household income. It's calculated by the tax department. People file a a property tax credit claim with my department. We calculate what they are, eligible for, and then we communicate that to towns. It shows up on property tax bills on the state payment line. A really important part of this program and a challenge, with the the current program is that they are lagged, which means that they are based on the prior year household income and the prior year property tax amounts. This problem came up last year in the discussion because, average bills were going up just under fourteen percent statewide, but the property tax credits that those who are income eligible were going to receive this fiscal year were not going to be reflective of that increase. So the legislature put up a one time thirteen percent increase to the property tax credit, in in the bill last year, which is a very imperfect mechanism. Right? It was trying to respond to that problem, but not every community went up the same rate. So some communities were not made whole, some were more than made whole. All of those folks who are getting a property tax credit, it will now be reflected this coming year of that increase. So there's a double benefit there that others paid for. And it's all just, again, very confusing. Right? So so it's a challenge. But and even as the joint fiscal office does the yield model and and does the ad fund outlook, they essentially have to ignore that lag, you know, tossing out the property tax credit and then the average bill increase. It feels it's kinda impossible to do it any other way. So it's a lot of complexity there. [Chair ]: Senator, if you have a question We [Speaker 4 ]: ran out of seats up there, so I'd ask him for a year. Was it safe to see as to mister Volio that they would hold said that player or is not all Vermont resident that will be they're expected to file with my income taxes, and would it simplify this process if this wasn't done through the property tax bill, but instead at the time they filed their income taxes? [Chair ]: So [Hart Gold ]: part of what you just said is true. Yes. They are Vermont residents because a homestead has to be owner occupied. I think the one of the challenges that you might have moving into the income tax system is not everybody who files a homestead declaration has a requirement to file an income tax return. Right? So you could imagine somebody who is retired, who has just a modest amount of Social Security, for instance, that is completely exempt, may not have a requirement to actually file an income tax return. And we find that there there are a fair number of folks who are actually only filing the the homestead declaration and property tax credit with us each year. Mhmm. But I am very open to finding ways to simplify this program, and and and happy to participate in those kind of discussions. Okay. So let's jump into an example that actually calculates this out. Right? So this in this example, we're gonna use the same three hundred thousand dollar house seg value, the same per people spending, same district spending. In this case, so thirteen eight ninety is the per people spending we used in the last example. The income yield for last year for this year, I should say, was ten thousand one hundred and ten. It's multiplied by two percent because the income yield is reflected of the amount of per people spending that will result in a two percent, tariff income rate. And what that's really reflecting is the percentage of a household's income that they are expected to pay before a property tax credit kicks in. So in this case, you divide the per people spending by the income yield, multiply it by the two percent, that gets you two point seven five percent for the town income rate. You then multiply the household income, in this example, seventy five thousand, by that two point seven five percent, and that means that this family would be expected to pay two thousand sixty three dollars in property taxes based on income. From the last slide, we calculated that the taxes based on property for that property were just under forty eight hundred dollars. So the property tax credit or the state payment that will be reflected on that property tax bill is twenty seven thirty three. But remember, that comes next year, not the year that that is applied for. And, again, I've simplified this to a great deal. There are a bunch of complexities with this system. There are caps on the house site value that can be income sensitized. There are statutory, limits for clips within the system at forty seven thousand dollars in house of income and ninety thousand dollars of household income. It creates complexities. It creates misunderstanding. There's there's a myth that I've heard repeated so many times that's really damaging that people who are income sensitized have no skin in the game in in budget works, and that is not true. If you are under forty seven thousand in household income, it is true that the income rates are set in statute. And so one could make an argument that that maybe they don't have skin in the game, but for the fact that the property tax credit is lagged. But anybody above forty seven thousand, their property taxes are going to move as the income rate moves in their town. Right? So there's a whole bunch of complexity even baked into this that makes it one of the really challenging reasons it's difficult for voters to tie their their vote to their bill and why it's really difficult for schools to actually show voters what will happen to their bill when they vote on a budget. Because even if you have the the district rates figured out, which are all based on estimates because of the timeline that we showed where the yields are not finalized until after the bills happen, everybody's experience might be different based on what last year's income and this year's income was and how your property tax credit is gonna shake out. [Chair ]: So it it there's a lot [Hart Gold ]: of complexity in the system that makes it really difficult for, those who are living and breathing this every day to follow it, but just everyday Ramon is just loading trying to figure out what's going on. [Zoe Saunders ]: This is a good podcast. Yeah. Sure. Yeah. That's fantastic. [Hart Gold ]: But I think that's the end of my slide, so I'm happy to take any questions on those pieces. [Speaker 5 ]: Senator? So are they working on a new strategy on rather than doing this for billing, protecting our [Hart Gold ]: By day using [Chair ]: us? We're working. Yeah. [Speaker 5 ]: You. We are. Yeah. Alright. [Hart Gold ]: One thing that I would highlight specifically I mean, the governor laid out in his inaugural, he's he's gonna put forward a plan for an entire education transformation. This is just the one piece of this on the property tax credit. My department did publish a report last month that speaks about this program and some considerations on it and another way to do this Sure. That that I think may be part of that overall transformation package. Thank you. Sure. [Zoe Saunders ]: So as commissioner Bolio indicated, the system is really complex. And I think we've heard that, traveling our list and we're unsure. It's really hard for voters to understand how their vote will impact their property taxes. And it's also really hard to make these tough decisions around how do we invest dollars in ways that are gonna bend for both educational opportunities for students in each district. Overall, there's a lack of budgeting control for the state. So as we described, your property taxes can go up in a district that has made significant cuts or has relatively low spending just because of how the spend the dollars are pooled took on the entire system. At a local level, it's really hard to make these tough choices and there's limited incentives to to do some reduction in spending as enrollment declines and tax rates can increase despite budget cuts. And so we often have this conversation of, you know, school boards are in a position because of a lot of the budget constraints and the larger cost pressures of having to make a choice around cutting when we really now have the opportunity as a state to think about how do we reimagine our education system in ways that can actually deliver on the goals that we share. So what we did is that we kind of talked a lot about and we'll send this to share, you know, the the thought and the research that went into our education funding system was really designed to promote equity and to give each individual community the ability to be able to fund at a higher level regardless of what. But it's important for us to look at how that's playing out in practice. And so our team, over the last couple of months, has done we've done some deeper analysis and looking at expenditures. So as we look at expenditures, we see this as peeling back layers of the onion. And so we'll walk you through different definitions of expenditures and explain, the the revenue sources behind that. So when we talk about total expenditures, we're looking at all sources of funding. So that would include also the federal funds that our districts receive. When we're talking about operating expenditures, we're looking at both the state funding, federal funding also is, but we're excluding those expenses that are related to capital or those things that are not on an annual basis. So we actually understand and can isolate what it costs to actually run, the building, in a year to year basis. And then when we're looking at education fund and expenditures, this is really focusing on what the state contributes to fund our schools. And so as we walk through this, it's really interesting to see the dynamics. We wanted to analyze this in relation. We want to analyze really the the spending in relation to need. So the the intent of our funding system is to really promote equity. And so as we've described, you would expect that students some students will be more costly to educate because they will need different resources. And our system is designed to give communities the capacity, to deliver on that. So what we would expect to see is that our our higher need communities are actually spending more and that they're taking advantage of the fund. What we're seeing here in this slide, we're looking at a comparison by size and also by need. The top charts are looking at, operating expenditures. And so what you can see overall, so the the lighter is less than one thousand. So that is our smallest group. We are seeing that is a lot more costly, as we're talking about, expenditures for smaller supervisory unions. And, also, you're looking at the education fund, and you can see that. I think what we were really zeroing in on is how this relates to need. So what you can see in the charts below is that when you're looking at operating expenditures, so that's including state funds, federal funds, we certainly are seeing that there is higher spending in our higher need communities. But when we isolate just the funding that's coming from the state, we're not seeing a meaningful as meaningful the difference. And so we would expect that we would expect to be. I'm gonna pause there just to see if there's any specific questions around this slide. [Speaker 5 ]: Okay. Several weeks. Yeah. [Speaker 7 ]: Thanks, sir. So I'm [Chair ]: just curious the acronym FRL. [Zoe Saunders ]: Free and reduced lunch. So it's an indicator of student poverty. [Chair ]: So just so I'm oriented correctly. We're really looking at [Speaker 5 ]: the red here to show [Chair ]: that federal dollars are making a difference in some places, but tax capacity isn't necessarily making a difference. [Zoe Saunders ]: Yeah. So what we're seeing is that our our lower income communities are relying a lot on the federal dollars to be able to supplement and provide additional resources and support. And so this is important as we're thinking about the fragility of our system and a lot of unknowns when you think about federal funding around how do we as a state ensure that those students that have higher needs are benefiting from those resources. Because when we're just isolating from the state funding source, we're not seeing that that that relationship, that higher need communities are being funded at higher levels. [Hart Gold ]: I [Zoe Saunders ]: would do wanna note that, this is, prior to, act one twenty seven with the new weight. And so, it is important to look at, some of the analysis that JFO did around fiscal year twenty five. So in fiscal year twenty five, the new weights have been adopted. And so we would, but that trend is still holding. And so what you're seeing here is that there's an inverse relationship between spending and Mhmm. Because that's the opposite of what we would expect to happen. We're talking about equitable funding system. Pause. That's the end of the section around walking through the expenditure. Any questions around this? [Chair ]: I I do have this actually go back to Krishna Goldwyno's presentation. So one thing that I've always sort of felt was true, but Donna, [Hart Gold ]: as you know, now it [Chair ]: was true is that sort of pre COVID, let's just say, if your district increased spending significantly, there was a stronger relationship between that action and your tax bill. And [Hart Gold ]: it [Chair ]: it wasn't perfect. It wasn't a dollar for dollar. We weren't that close because of our statewide education fund, but it was, I'd say, better felt than it is today. Perhaps it was over the federal funding. I'm not quite sure, but it seems like that I would only call it true because it only felt true to me. Kind of has on in an era of higher education spending, higher need, a lot of federal dollars. Am I feeling that wrong? Well, always risky [Hart Gold ]: to just opine, but I think maybe what from from my standpoint, I mean, I think what you may be sensing and and I think could help explain that is is that the CLAs have become much more volatile since COVID. And so I think that speaks to some of that. That's how it feels like they are driving things to be different. Even though the CLA is not the driver behind taxes going up, again, everybody's CLA is dropping fairly similarly, which is not means it's not showing in their opposition. But it does mean, you know, districts are budgeting to an equalized tax rate, pre CLA tax rate, and then they're getting their CLA later. And it's much more volatile than it used to be, and that feels worse than it did pre COVID. I think maybe it's the the phenomenon that you're you're referencing is explanation. Sure. [Speaker 6 ]: It Or is it isn't it that the excess spending threshold was suspended [Zoe Saunders ]: as part of co one [Speaker 6 ]: of the COVID sort of [Chair ]: It's true. [Speaker 6 ]: Right. Sort of access spending threshold. So absolutely what you're saying, and there's a policy reason and rationale for that. [Hart Gold ]: Thanks. That's very good. [Zoe Saunders ]: Thanks. Yeah. [Speaker 6 ]: Because you're the [Speaker 8 ]: thank you. Listen. The CLA [Speaker 6 ]: is you're right. It's not driving taxes going up, but it is driving the rate chain going up. So the rates are higher after you adjust for your CLA. So it feels like the taxes are higher. Even if it's the same amount being raised, it's a it's a higher rate. [Hart Gold ]: I'm not I'm not certain of that. So the way I like to think about it is let let's just say that you had just one district and one CLA for the whole state. Right? And then you held everything else constant in the education fund. So per people spending stays the same, all the other appropriations stay the same. In that case, if your if just your CLA is changing, right, your equalized rate is going to go down, and then the denominator is gonna go down as well and then push your actual rate back to exactly where it was. But, again, because it's not isolated in the system, because all of those other pieces are happening with it, I think that's where it's giving that illusion that it's doing that. But, like, for instance, if if for people's if education spending didn't have the same pressures that it's had over the last few years, like, the CLA wouldn't be pushing the actual rates higher on its own. [Speaker 6 ]: But the CLA is [Zoe Saunders ]: like to do math and other things. [Hart Gold ]: I did too. It was real risky when I did a second ago. That. Probably got it right. [Speaker 6 ]: Maybe I'll talk to you afterwards about it and [Chair ]: then Sure. [Hart Gold ]: Yeah. But but but that I I like to do a a thought experiment where I isolate everything else. Your actual rate is gonna end up the same. All that's changing is your CLA, but it's not the only thing changing in the real world. All of these other things are changing with it. And so I think because it's one of the last pieces that comes into the puzzle, and it's also one of the things that feels most distinct even though it's in an in refined system. I think it it it has the illusion of making it look like it's doing that on its own, but I don't think it is. [Speaker 6 ]: The CLA, and this is where I'm gonna risk saying this in public, is the denominator. So when you're [Hart Gold ]: That's right. [Speaker 6 ]: When you're dividing by a lower number, you're gonna get a higher result. [Hart Gold ]: That's true. [Speaker 6 ]: And so that drives off the rate. That's true. [Hart Gold ]: But your equalized rate before you divide by that is getting adjusted by all the other factors in the [Speaker 6 ]: Yeah. Yeah. But the actual rate that you're taxpayers are seeing at the higher rates because even if the the actual rate before the CLA adjustment is getting adjusted for everything, the the town itself is gonna see that the the CLA is gonna be the denominator. You're gonna divide by it, and it's gonna be a higher rate on the tax bills because the CLAs are dropping. [Hart Gold ]: Not if everything else in the education process is. [Chair ]: Alright. Well, we can [Speaker 6 ]: we can talk afterwards, maybe. I've only heard [Speaker 9 ]: I was just gonna say, but the tax bill itself [Hart Gold ]: will not change necessarily, [Speaker 5 ]: but the rate [Speaker 9 ]: Correct. Ex exactly. Really what is important to understand that people see a rate change, but it won't necessarily reflect in their tax bill. The CLA is a self balancing mechanism to create. [Hart Gold ]: Yeah. And I I think I think even in that case, if everything else was the same, I I don't think the actual rate would change. I'm happy to walk through some examples online. Sure. [Chair ]: But there's certainly supporting evidence that we have a complex system. [Zoe Saunders ]: Complexity will be the buzzword. Right? Only a discussion. So I think just to to wrap up this particular section of our presentation, there's a theory of action of our education funding system. Right? And that theory of action is that we are giving, community the ability to be able to meet the diverse needs of students. Right? And so they can raise additional dollars without a huge tax burden. And so that we would assume that through that, we would see our our higher need communities spending more to meet the more acute needs of their students. But as we peel back the onion and we do the analysis of spending, we're actually seeing an inverse relationship. And I think we play that plays out in a very clear way last spring in the budget session where we saw some of our lowest spending, highest needs, and we struggle the most to pass their budget. And so in order to pass their budget, there were a lot of really difficult conversations around cutting that happens. So I think it's just important to think about what our intent [Hart Gold ]: is to [Zoe Saunders ]: be equitable. But in practice, what we're seeing playing out, is that our lower income communities are actually spending less. And so we know that that's going to be a challenge as we think about meeting the diverse needs of all of our students across the state. So as we get into the next section, we'll we'll talk more about governance and scale, of our system. So Vermont's, system is quite complex. We started by showing our supervisory union structure and our district structure. We tend to have, when compared to other states, significantly more school boards overseeing a a smaller number of students. The supervisory union in and of itself is quite a unique construct. And so what that can mean is you could have a superintendent that's supporting to multiple reports. And that can be, you know, a real challenge as you think about just timing of being able to appropriately meet with every board and share information. It's also challenging to create consensus when you have that type of a, you know, diversity and complexity of your government structure. On average, supervisory unions have one board member for approximately every seventy five students in Vermont. So that's a very, small ratio. Another consideration is that our, of course, tends to be very local, hyperlocal, and yet our spending is shared. Right? There's one pool of thunder. So that creates a real challenge as you're thinking about making decisions that are important for your local community and also for the shared community of all Vermont students. So what are some of the implications of Vermont's governance structure? As a result, it's also in the description of you know, we're instead of administering a system of schools, it we're overseeing very individualized schools. So really, it creates some fragmentation and really thinking about the overall system and creating alignment. And that plays out in terms of, different, curriculum and different requirements, which can be challenging when students are moving from one district to the next or even one school to the next. It can be challenging with our current governance structure to reach agreement on common policies and programs and practices across grade levels and making sure that there's an efficient, effective use of resources. It can be challenging to respond effectively to the needs and wants of each school board, and we talked about that in terms of the superintendent's time of being able to to manage those expectations when you are reporting to a number [Speaker 6 ]: of boards and a number of school board members. [Zoe Saunders ]: And as we said, if you think about this, it does challenge our ability to think in system wide around where there should be alignment and continuity to promote consistency in terms of educational quality and programming. So with our current government structure, it can be really challenging to moderate spending, to increase achievement, and to ensure equity for all Vermont students. As we, talk to the listener and learn for, there's a lot of conversation around, local control, and we continue to hear the needs of balance, Vermont model of unity and freedom. We certainly, as a state, wanna make sure that there's that local ability to customize to meet the needs of every student. But in certain areas, it's gonna be important for us to have more unity, and we're hearing that from the field pretty consistently. Because in areas that we don't have unity, it creates more burden on the local districts and also more challenges on the school board to be able to make some of the tough decisions that they're faced with. So local control really requires a very key set of conditions to be really not only effective, but also equitable. It requires communities being very willing to invest heavily in education. It requires consistently high property values, tax capacity. We also know that there are a lot of external cost pressures that are outside of the local board's control. And so it can be really challenging to really make those decisions at school board level position limited ability to make adjustments to the budget, such as health care costs and things of that nature. For local control, it's really effective. There needs to be more of our community wellness to share resources, particularly, in our smaller supervisory unions or an area of our state. We're really struggling, to hire qualified teachers and and specialized staff to support the needs of students. And then it also requires an ability for all members of the community to understand how the system works because the system is certainly designed to support local decision making. But because we're calling from one statewide fund, it does require an understanding of the overall statewide needs, in order to, to make decisions that are gonna be equitable for every student. So what we heard from our listen learned for was they need to balance the consistency of statewide requirement and key policy areas. And we've often heard this from school board members of, you know, we we have a really tough decision to make as it relates to budget, and there's not really clear parameters from the state, that are helping us to make these difficult decisions, with our community. And how do we prioritize, making cuts here or making investments here? That all goes back to having a very clear understanding of the state of what we, are defining as educational fire quality and prioritizing. We did hear a lot in our listening room tour that local control sometimes feels like a myth just because we're doing local budgeting within the statewide context. And for all the reasons that we described, even if a local school board is making some of those decisions based on best interest of their community and they're holding their budgets flat, they can still have an impact and increased tax rate for a variety of factors that we explained. So sometimes it can feel really stressful, I think, at the local level to be able to make these decisions because so many of the statewide factors are influencing their ability, to to implement their, desired programs and to invest their resources in what they think is most important. So we'll talk also about tuitioning. That's another unique aspect of our overall system. It's all out and we send us to very expand on a lot of their nuance within the rules and laws governing tuitioning. But, basically, a student who lives in a town with no public primary or secondary school is provided the opportunity to attend another school through the process of tuitioning. That can occur, tuitioning to another public school or tuitioning to an independent school. And then we'll walk through some of the details around how that can play out. On the next slide, we'll actually show you a map of tuitioning so you can see that the overall patterns of how the tuitioning occurs throughout our state. So, Anurag, allow me to expand a little bit more on the practice of tuitioning. Sure. So, first is the announcement tuition. [Emily Simmons ]: Right? So in a tuitioning school district for, all grades, it looks like all tuition system or for those grades where the school district does not operate a public school for that very bad and instead made the tuition. The student is entitled to attend a school of their choice among public schools, including women with schools that reside in outside of Vermont. And the amount of that tuition, the value that they have to attend, was based on a default that has three major exceptions. So the default is the average announced tuition. That is, a number that is generated by the agency in education that is based on union high school's tuition that they charge across the state for that school year. The three exceptions to that average payout's tuition are, one, for our increment schools that are designated as area career technical centers. The second is for schools that are designated as they've been found to make education quality standards. And the third is left up to electorates and school districts who have the ability to, at our meeting, approve a higher amount that they will pay above the average announced tuition, which can include the full tuition charge by main schools, [Zoe Saunders ]: approved in the middle school for college schools. Public schools receive that full tuition debit charge. [Emily Simmons ]: The extent of tuition really occurs around the state. Every pocket of our state have from school districts that tuition rather than operate. The vast majority of students are in school districts that operate schools. So we have a large number of schools that, get tuition, but most of our students attend a larger district that operates on grades. So, generally, we found this as a historic practice that benefits rural areas, where there were not schools historically, and so the practice of tuition popped up to not build a school in that very small rural people. We find that particular in many districts, the tuition, but particularly in the pattern of school districts that operate an aluminum school that pay tuition at the secondary levels, it's very challenging to have no control over the tuition and cost in the upper grades. And you see the common pattern of cuts taking place at the elementary level where we do operate in order to make room for those tuition payment that the students are entitled to and the school district is off of [Zoe Saunders ]: it as well. So [Emily Simmons ]: our last bullet is to keep in mind that less less than one percent of students from tuition. [Hart Gold ]: Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait. Wait [16 seconds of silence] [Emily Simmons ]: in the next school. [Zoe Saunders ]: That would be less than one percent of students who tuition. That was one percent of all students in Vermont. [Chair ]: Could the average announced tuition is the a rate set based on, union high schools setting their tuition number. So that gives us a number. Let's call it eighteen thousand dollars. Does that apply to the students who are in elementary school going in a choice town, going to a private elementary school? We can follow-up. Private elementary school charge that full amount? [Emily Simmons ]: So the tuition to private elementary schools is limited in other ways. So I need to follow-up with you on that because the real common use of the number is for the upper grades. [Chair ]: And and so with upper grades, if a a school a an independent school can have a tuition rate that it charges for everybody, but they can have a higher they can have a they can charge up to the average cost tuition for a sending town. [Emily Simmons ]: Yeah. At the default, yes. That's not one of the three exceptions. You can also have a further complication of a student who resides in a tuition paying town, and none of the three exceptions apply to them. And so they're entitled to attend at the average announced tuition even at a school who charges more. And so you can have a gap that, the family would need to take to support that student's attendance. [Hart Gold ]: Okay. [Chair ]: Okay. So remember this separate center party. [Speaker 5 ]: So is there an average tuition that and it is that tuition? Is that is that showing a quality to where do they go? That is it based on that? That so that money that you're that for which you're given includes, as we try to do in the state, in quality, in an education. And if they if they answered yes to that, then why doesn't the state why haven't we at the state said eighteen thousand dollars? That's what the state will give. Doesn't matter which school it is. That's what the state will give you because that's what we give tuition for this child to go other than your school district. [Emily Simmons ]: I think my answer to your question is that the word average and the label average and that's tuition might be a very misreading use of the word average because it is only of certain high schools, and it is only of certain of their costs. So while a huge function of that number is the amount of money that those high schools as a group spend to educate their students, it's not a direct relationship between what they're spending to educate students at that system. It's we have several exclusions from that number and an annual true up process that the schools are required to participate in before the agency announces that amount. [Speaker 5 ]: Thank you. Senator Hardy? [Speaker 6 ]: Thank you, mister chair. The on your slide, the the bullets about the number of school districts is ninety five out of a hundred and nineteen correct. That doesn't sound right because you're saying ninety five out of out of the hundred and nineteen school districts pay tuition for all high school students. There are more school districts that have that operate high schools than pay tuition. So how are you measuring that? [Zoe Saunders ]: So it's interesting on this next slide is we're actually mapping that and understanding the tuitioning pattern. So on this next slide, you will see in blue are those districts that are fully operating a k twelve. In green, you are gonna see a hybrid. So that's gonna be a lot of what you just described where they might operate through elementary or middle school and then tuition to high school. The yellow on this map is representing all of those districts that tuition only. So they don't operate any school, and it's fully tuitioned if those students live in towns. And then in the kind of reddish color is looking at the overlapping classifications where, they would have a district. They would have a tuitioning that also feeds into [Speaker 6 ]: another school district pattern. So these public So what are you based on that explanation, there are only there are only twenty four school districts that operate k through twelve and don't tuition anybody. There should be only twenty four blue districts, and I think there are more than that. [Zoe Saunders ]: We can double check. [Chair ]: I I think that ninety five refers to the number of towns Oh. And not school districts. [Speaker 6 ]: Okay. You [Hart Gold ]: guys will check that, but I think it [Zoe Saunders ]: That makes sense. That yeah. So I'm going back to when we were editing that report. So all this is coming from our education funding report. And so in that section, we were talking about the thank you very much, and they're they're talking about the decision that towns make, around tuition. And so within the context of that, that's absolutely right. But there's Okay. [Speaker 6 ]: You might just wanna clarify those two points [Hart Gold ]: because it's [Speaker 6 ]: It's always helpful in oranges. [Zoe Saunders ]: Yes. It's always helpful to clarify. I appreciate I appreciate the question. So it is you know, when we start to look at these massive is an interesting interplay as you talked about the towns and also district decisions within the overall way that we decide to educate the student. So I think in just looking at this map, you can see that there's a lot of complexity. You can also see that there's more regional patterns in terms of tuitioning. Any questions before we move into implications for teaching and learning? [Hart Gold ]: Well, actually, oh, that's cool. Yeah. It's okay. [Chair ]: Just to make sure I understand this, what is the difference between high [Hart Gold ]: to it and overnight? [Zoe Saunders ]: Yes. So if you could get this as a big example of, like, the region, for example, in case one, then come out with another. So they would have you would have one, like, a high school that is overseeing multiple towns that are leading into it that have their own school boards and districts. So you need to go in for a duration. [Emily Simmons ]: I don't know if I need to work on that. Okay. I know I'm asking. [Speaker 6 ]: Okay. Okay. [Zoe Saunders ]: Yeah. So part of when we're starting to do this mapping, and this is another layer that we can do, is we can show tuitioning just for grade levels. And so there's some complexity here too in terms of how we're defining grade levels. So is an elementary k five? Is it the k six? Is it in middle school? Seven, nine. How are we defining the union, middle, high school? So some of this was an attempt where there were some of those complexities in terms of the grade configuration also to do some of that overlapping. So what we can do is, a next series is actually produce maps that are more refined by, the grade levels that are tuitioned. And I think that might be helpful for this conversation because it does get, complicated when you're having different patterns of where students are are eligible to attend. [Speaker 6 ]: So, yeah, [Zoe Saunders ]: may I ask Hi. Yeah. For, like, all [Speaker 6 ]: on this room. Yeah. I also we can have to do some more if I'm gonna mask. I also would direct folks to the appendix of the end funding explained report that we put out. It's many pages long, [Zoe Saunders ]: and it's literally district by district, what is their tuition for each district. So and and then organized under the FD or FD. [Speaker 6 ]: And that will help you to interpret this map [Zoe Saunders ]: a little bit, particularly in places like Southwest Vermont for it. It's like the red. It's you have these smaller, say, a a k three [Speaker 6 ]: five, and then over you have multiple of those, and then [Zoe Saunders ]: over that is a unified high school district. So it will help, [Speaker 6 ]: and you'll also see, again, complexity at [Zoe Saunders ]: the bottom of the day. So you actually be able to see how [Speaker 6 ]: complex it is. We also include so what grades they tradition, and then the number of board members in each district. So [Chair ]: I'll do a time check. We've got a house members have a hard stop at three. I see that there are a few slides left to go. [Speaker 5 ]: What is that? Just what is the grid? In the center. [Hart Gold ]: That's linking. [Speaker 5 ]: That's linking? Yeah. Okay. Thank you. [Chair ]: I'm like, [Speaker 5 ]: I don't [Speaker 6 ]: have to have [Zoe Saunders ]: And that was the the the additions that we're there. That's the new, yeah, district that was added in the past year. [Hart Gold ]: Yeah. [Zoe Saunders ]: So we'll kind of breeze this because this will be part of much broader conversations. But every time we talk about funding, we wanna really center that around impact on teaching and learning and those best practices. So, you know, within the Vermont context, we shared that we tend to have very small schools. We tend to have very small classes, compared to other states. And so there's, you know, research that we've been looking at that small classes do not necessarily equate, to better student outcomes. There's also the opportunity when you have larger classrooms and, more classrooms within a grade to support teacher planning, and sharing best practices and things of that nature. But one of the there is what we call an opportunity cost due to our small class size. There's there's a challenge to be able to find specialized teachers that can provide support to all students within the school or within the district. Also, because of that, you know, there's when we're talking about overall teacher pay, while we're one of the highest spenders in the country on education, we're not seeing that translate into high teacher pay, and we are seeing some challenges across our state and being competitive in recruiting and retaining our teachers. It also does make us rely on the more traditional teachers with provisional licenses or emergency licenses and also on on parent professionals as well to deliver with our some of our current models for our staffing agencies. So some of the things that we've been providing support on as it relates to budgeting are related to how can we be more strategic with budgeting. We've identified some patterns in the education funding report, that there tends to be a phenomenon rounding up. And so that can be, challenging as you're thinking about doing precise staffing to meet the unique needs of your student population in your building. We do see examples and really great examples of schools that are doing shared staffing within their district and and across grade levels. Honestly, those are practices that you can look at, as we move forward. But we have in the this past December, we did a training series, to really, help, districts and school boards, to maximize their staffing and be more precise and strategic and also give them some resources and best practices to share with their communities as they're engaging in those really challenging conversations. And I think it's important to note that a lot of these really compelling strategies emerge through innovation in small rural communities and their practices that can be replicated. So this is a really key point, and we've kind of peppered this in across the presentation today is, you know, how do other states fund education system? We've already called out that Vermont system is very unique. Forty eight other states do some version of a foundation formula, and so we're we're really unique and and being different than that. Most other states will calculate a base formula, and they will do that based on a variety of ways. We'll go through some of the methodology, but all of that's built into your understanding of what what funding you need to provide a reasonable education, to your students. They also identify upfront the amount of money that the state will fund. And so the state would say that we pay amount of money we have. District is what you have to work with. In the state of Vermont, the district will determine this the funding amount and then ask the state to fund that, and that's what we would use to raise that that yield. So school systems build budgets within the limits of the money they're going to receive in most systems. So that's a little bit different here, and we talked about the need for additional budget parameters. They can also be supportive of school boards and districts making those tax efficient as well. Right. And then in some states, there is the ability to have additional spending, above that, funding formula. And there are a number of mechanisms that are in place, to ensure equalization and that equity in terms of tax capacity. So what are the different types? And we can we can weigh into this. I think tomorrow we have a presentation on the foundation formula, but there are there's a variety of things that states approach this work. Some look at the available revenue and and take it as a math problem in in terms of deciding, what we could find for students. Others are using a foundation formula that establishes a base weight based on an understanding of what high quality education will be and then weights, which would differentiate based on needs. So assuming that certain students are require additional resources to educate, such as those students living in poverty or English learners, there'll be a weights to adjust for that. Other systems will be more specific in terms of just determining that funding based on the number of teaching positions and staff available and these operating costs. So that doesn't typically doesn't provide for as much flexibility within the district, but certainly is establishing some parameters around around quality. There are some states that are looking at a hybrid model where they do a combination of establishing a foundation with base weights and then also understanding what does that represent in terms of the position and the staffing you need to be able to deliver on that. And those staffing are typically defined in terms of ratios. [Hart Gold ]: And then [Zoe Saunders ]: there are state specific systems that are very unique, including, Vermont, and and Michigan. And we can we can unpack a little bit more of how these states are approaching their work. But I think it's, you know, as we dig into this deeper, it's important to look at, you know, what other states do and and what part of those practice could work the best serve Vermont and where we're gonna we may need to have home customization. In our education funding report also in the appendix, we have a breakdown of the different ways that states approach this work. So this is an example of that. And we also, in the appendix, provide more detailed description around what goes into developing a foundation formula, how additional allocations are defined, and the different variations for these hybrid systems in other states. So I think that's an important resource as we engage further and talk about that thing. So key takeaways from this presentation, that funding, governance, and educational delivery are all of it. And so as we're approaching conversations around how to fund our system, it's really important that we do that in the context about how we define student success and the and how we define equity, for our students across the state. We've, I think, hit it home that Vermont's education funding system is unique, and it's really complex. That is shaped by a very well intentioned to provide taxpayer equity and to promote that local decision making. What we're seeing in practice is that there is inequity in terms of district's ability to provide a well rounded education and to guarantee that students with the same needs get the same resources. The current funding system is very confusing. And it's also very unpredictable to the taxpayer. And because of some of the existing challenges, we inhibit strategic budgeting at that district level to promote financial solvency and academic model months. So at every presentation this week, we've been leaving you with key considering key key consideration that we've been contemplating and that really are informing an overall recommendation around policy. So one of the questions is how can Vermont reduce the inequities in per pupil spending to ensure that students with similar needs receive similar resources? How can we align funding and resources with student needs to drive student outcomes and success? How can we create more meaningful opportunities for students and support a whole child approach to reduce absenteeism and improve student engagement? How can we support effective and cost efficient delivery of special education services in all districts and schools? And how do we ensure that every student has a highly qualified teacher in a safe, healthy, and welcoming school environment? So all of these considerations are feeding into the governor's education transformation proposal to think about how we do that through multiple mechanisms. I think as we've all discussed, this work is very challenges that we face are really complex and will require a massive faceted solution. And so when we talk about funding, it's not just about funding, but also making decisions around how do we deliver education and what scale is important, what guardrails do we need to be in place, and how are we ensuring that there is a consistent level of educational quality, across our state, to give every child in Vermont, exceptional access to, education. So I'll leave it there. I know. Good questions. [Chair ]: Sarah Lou? [Speaker 6 ]: Thank you so much [Zoe Saunders ]: for that presentation. That was enlightening. [Speaker 8 ]: The word equity was used [Speaker 6 ]: a lot in the presentation, and [Speaker 8 ]: I really appreciate that. At the same time, it's a word that can become kind of hollow if it's we don't attach specific examples to it. So one question I have is around and it's connected to cost, but let's say class size. Mhmm. In terms of equity, I look at some of our private and independent schools that receive tax dollars. Yeah. They brag about the fact that their classes are only fifteen students to one teacher, and they're very proud of the fact that they have, you know, seven kids for one staff member. Whereas my sense is, from observations, anecdotal, but the public schools are almost ashamed of calling out low class sizes. They're scared to talk about ratios in that way. So my question is moving forward in in light of equity, how will the governor handle that that dichotomy that we see in our system? [Zoe Saunders ]: Yeah. So a fifteen to one ratio, we we actually have a lot of schools that have well below that. [Speaker 8 ]: But my sense is moving forward, you you want that to be higher generally. [Zoe Saunders ]: So I think what we're seeing is that there's a there's a variety of factors that will play into that in terms of establishing, you know, what are the right ratios, to deliver education. We know that there's a lot of limitations. We talked about the challenges. When you have that small of a class size, you will often it's really hard to hire teachers. So I think there's another consideration where we're talking about we don't have right now the the workforce to fill the positions that are open. And that's why you're seeing a real increase in the number of teachers that are on provisional and emergency licenses. So there's an opportunity for us to really think intentionally on how do we ensure that every child has access to a higher quality teacher. Think to your point, there's a broader conversation around accountability and really ensuring equity in all settings. And I think that does need to be part of the conversation. [Chair ]: Given that the bell is ringing, I think we'll wrap here, but just with caveat one, we have to go to the floor. You all wanna use the room and continue to chat it formally after you break that. Just say so [Zoe Saunders ]: that has taken fifteen minutes of him. [Speaker 5 ]: Right? [Zoe Saunders ]: And then

Play Clip Play Full Video Pause

SmartTranscript of House Education, Senate Education, Senate Finance - 2025-01-15 - 1:30 PM

This is useful for seeing what happened at the meeting without wading through the whole transcript: