SmartTranscript of Senate Appropriations – 2025-02-21 – 1:00PM

[Olga Fitch]: We are live. [Chair Andrew Perchlik]: Okay. This is Senate Appropriations Committee. It's February twenty first. We're going over FY twenty six budget requests. And today, we're talking about two, the cannabis control board and your budget. So I'll let you introduce yourselves for the record. And do you know everybody here, or do you want us to do introductions? I know everyone, but [Olga Fitch]: I do not, so I appreciate quick introduction. [Chair Andrew Perchlik]: You wanna start, senator Watson? [Olga Fitch]: Watson from the Washington district. [Chair Andrew Perchlik]: Hello again. Hello. Sandra Bob North, Franklin County and Albert in County of Brandeis. Rich Westman, senator from Des Moines. Mhmm. Andrew Pertzuk, senator for the Washington District. Yes. And we're in the Washington [James Pepper]: Thank you for that. I'm James Pepper. I'm the chair of the Canvas approval. [Olga Fitch]: And I'm Olga Fitch, and I'm the executive director of the board. So if everybody's ready, we'll just go right in. Have our presentation up there. I think you have your own, maybe, copies on laptops Yep. If you need it. But I'll just try to walk us through it. So what we want to start with is our organizational structure to give you a quick idea of who we are, how big our agency is. We are one of the new ones. So I thought it would be helpful. Twenty five staff, three board members, the core of our work right now happens on the compliance and on the licensing team with more and more sort of attention being placed on the enforcement actions as we mature. We also have a section devoted to the quality control lab. As you could tell, that's the vacant sort of part of our agency right now. We have been authorized to get our own quality control lab a couple years ago, actually. But for a variety of reasons, we have not secured the lab space up until two weeks ago. So we now do have a lease at the space in Colchester where we'll be building this facility and hiring folks to do the work out of that space. So, again, this is up and coming, new development for our agency. But all of the sort of staffing is included in twenty twenty six already. So that's sort of a quick overview of who we are in terms of our staff [Senator Anne Watson]: structure for [Speaker 4 ]: what's to come. [Olga Fitch]: So now we'll look at the actual budget. It's pretty short for us again. We're not particularly large. What I was going to focus here, I've highlighted a few numbers. So, basically, where we see the increases year over year. So I could touch on that, but very much happy to talk about anything else that you may want to go for us to go over. So under the personal services section, salaries and wages and fringe benefits is where you're seeing an increase. We've seen decrease in other categories. So it's just the standard year over year increases in salaries for our staff. [Chair Andrew Perchlik]: Is is twelve percent standard or is there a new do you have more position? [Olga Fitch]: We year over year, there is one position built in, and that was our lab director that got added. You will see if you look at their personal services category, a significant drop, you know, thirty six percent. That's where we've coded our lab director before. So it's just that shifting of the resources. We didn't have position form we created. We've had to have that position tied to the personal services. Now it's up there with salaries. So that's sort of a change that you're seeing here. Other than that, yeah, not too much year over year on the changes. On that? Anything else on that section? Or I'll look down to the operating expenses. So on operating expenses, again, a few things that I've highlighted, other rental category, The twenty two thousand dollar increase is a cost of a lease. We are leasing an additional vehicle for one of our field agents. We we have six vehicles, seven agents. We are waiting on a vehicle for the CVS. You're also seeing twenty eight thousand dollar increase in other purchased services. That is where we budget for our lab services. So we are budgeting a little extra year over year because, again, we think that's coming in line. We don't fully know what that's going to mean for us. We've budgeted originally, last year, for example, a hundred thousand for the lab services. We currently have two private labs that we rely on to support our enforcement actions. We intend to continue using their services at least for the portion of fiscal year twenty six on up until our own lab is up and running. And then we are building additional twenty five thousand sort of that transitional phase. So that's, the change year over year. And then the property rental is where you're seeing the largest increase, and that is where we budget we budgeted for the lease payment for the space in Alchester for the lab. So we are under a ten year lease. So it's roughly between, you know, ninety thousand to a hundred thousand a year that we are going to be paying for that space to house our lap there. So that is a big one that we are seeing. [Chair Andrew Perchlik]: K. Yeah. Go ahead. [Senator Robert Norris]: Can I where is that? [Olga Fitch]: It's it's an industrial park in Colchester. [James Pepper]: No. Mountain View Drive. [Chair Andrew Perchlik]: Mhmm. Yeah. [James Pepper]: It's one of the it's in one of those new ones. The same one in the online security offices. [Chair Andrew Perchlik]: Okay. [Olga Fitch]: So we got it's a yeah. It's a space that's been fitted up for us. So it's been [Chair Andrew Perchlik]: just a [Olga Fitch]: office space, I think. [Chair Andrew Perchlik]: You're this is the hundred percent, and you're also present in your other office space. Is that [Olga Fitch]: Yeah. It's included here. Yeah. So yep. It's in there already. [Chair Andrew Perchlik]: Yes. Senator North. Yeah. And and if you might, you may wanna just touch on as to why you need [James Pepper]: your own lab. Sure. Yeah. In a perfect world, we would just use the bail lab in Randolph because they're doing all the same kind of testing and maybe same capabilities that we need to do our testing. Like, they're not allowed to run Canvas through their machines because they're kinda they accept federal money and there's a we see a radical risk that they may lose that money if they have kind of a controlled substance in their own space. So, you know, to give him the kind of amount and frequency of testing this industry requires in order to stay compliant and make sure we don't have, you know, widespread kind of issues, We just can't rely on the two private labs to do that because we need to kind of always get to the head of the line when we have an initiative or ours in action. So our plan from the outset, and this is actually in the governor's proposal around kind of the marijuana advisory commission, was to have our own lab for us to just like in the agricultural context, you know, when we go out to a, you know, cultivator or retail inspection, take our own samples, and, you know, try and just do quality assurance testing more frequently than we can, just giving me capacity to do private labs. Yeah. And, also, [Olga Fitch]: we do license. That's private labs. Right? So they're our licensees. So it is a bit of a conflict of interest. Something happens with one of those labs. Right? And we don't wanna be in a position where, you know, we take we take them offline, and there is no capacity to doing the testing. So there is that other reason that we need to. [Chair Andrew Perchlik]: It will be cheaper in the long run to do it and ask them to pay the private line? Or [Olga Fitch]: We hope so. I think, again, there is, of course, an initial you know, we are paying a lot to get the place set up and get it out. But like I said, we budget about hundred thousand a year to use the services of private labs. We foresee having a lot more enforcement action that we could be doing. Right? So, again, I think, you know, because if because we are limited right now, we can only pursue things that are clearly on our forefront, and we have other things that we have to back burner because we are not doing enough. So I think overall, it's going to be an improvement now. We need to do the enforcement action, and I think this time, we'll definitely see the benefit of the cost the price tag. [Chair Andrew Perchlik]: Senator Bennett, did you have a question? I did [Senator Robert Norris]: just I was just curious about how many vehicles you actually have. [Olga Fitch]: Six. So we have seven agents. So we actually have agent number seven starting on Monday. Up until now, we've had six, and each one of them has at least vehicle that day. [Chair Andrew Perchlik]: Do you [Senator Robert Norris]: being a state entity, do you lease from central garage, or do you do [Chair Andrew Perchlik]: it on your own? [Olga Fitch]: BGS. We do everything through those folks, but we are paying for those leases. So those vehicles I assigned to the B jewels rather than, [Chair Andrew Perchlik]: you know But you use the BGS fleet Yes. [Senator Robert Norris]: Manager. The BGS fleet. [Olga Fitch]: Yeah. Okay. We do yep. That's cool as well. [Chair Andrew Perchlik]: All in other rental? [Olga Fitch]: Yes. It's all in other. Yeah. So and we slightly under budgeted because in FY twenty four, we actually spent eighty thousand, and in twenty five, we budgeted seventy. So we had to clean this up a little bit, and now we are looking at ninety one that we expect with seven vehicles. [Speaker 4 ]: Okay. [Olga Fitch]: Good? Okay. And then very quick last page here. The only thing I wanted to point out is this ten thousand dollars on the grants, and that is a memorandum of understanding with DLL that we executed in this last summer. We are relying on them as our partners for when we need to have some sort of high level enforcement actions. So one example might be, we need another cover, agent to go into a facility to make sure they're test they're checking for IDs. We've had complaints, and we don't have the staff. I mean, our our folks are very much well known, So we rely on them to send somebody in to make sure that our licensees are all in. [Chair Andrew Perchlik]: And who who you rely on? The Department [Olga Fitch]: of Work and Monitoring. [Chair Andrew Perchlik]: Yeah. So the same people that they use to go into the liquor store? [Olga Fitch]: Yep. Yep. And especially when it comes to minors, we had a complaint that the minor wasn't checked. Again, we don't have access to minors to do this kind of enforcement work. So, again, it's a pretty small tool for you how much, you know, this may grow, our cooperation with them, but that's sort of a new thing. We are working with them. Yeah. So overall, year over year, we are looking at we we have six million dollars just over for FY twenty five. We are looking at about six point five. You can see that we [Chair Andrew Perchlik]: are FY twenty six. I like the budget roll up report and the ups and downs report because it gives you the prior fiscal years Mhmm. And gives you the full budget instead of just the difference. Yeah. [Speaker 4 ]: And the percent. [Chair Andrew Perchlik]: And the percent on that, but yeah. Instead of just I mean, yeah, you can't even calculate it with that to them. [Olga Fitch]: So I could move on because we have a few more items here. So next year, you're looking at what's outside of the budget. So what we do have, we have one item on the agenda that is not included in our f y twenty six, and that is a one position. So we are looking for a attorney position to join our compliance and enforcement division, and this is currently in the cannabis bill. Sort of what we are looking for is truly an enforcement attorney to take on drafting notice for violations, all be, you know, representing us in the hearings all the way through the appeals process. What we have right now is a general counsel who is a standing on all of those matters, Where we need to get is sort of keep our general counsel focused on the policy work. Right? So I kinda listed legislative affairs, updating our rules, maintaining guidances, policy development. But right now, he's also doing everything else that requires representing us. And so it leads us in the situations where if we have a conflict of interest, there is no path. It's one attorney, and that's it. So we are a little bit exposed. And, of course, if we have a lot of rulemaking responsibilities, for example, four of our rules are open right now. And so our general counsel spent six hours yesterday, only a little bit less than that, going through the open public hearing on those, which means the enforcement actually have to take a back seat, which we obviously don't wanna see either. And vice versa, if we have a pressing enforcement matter, a lot of our policy work gets to put on on hold. So where we are at is sort of we've done what we could up until now, but we are and I pulled some numbers. We are kinda registering between twenty and forty complaints a month, and a lot of those lead to the notice of the violations here in the four appeals right now pending, which, again, takes up a lot of firepower from our general counsel. So that's sort of where we are at and why we are realizing that we do need additional support. [Chair Andrew Perchlik]: But you made that pitch to the government. [James Pepper]: Oh, we well, not exactly. We know we told them in our budget process that we're gonna seek this. He said go get the authorization from the committees and, you know, and then if the committees agree with you, government operations [Chair Andrew Perchlik]: in the [James Pepper]: house, then it becomes an appropriations issue, but it's not in his record budget. [Olga Fitch]: So that's do you have any questions on that? No? You're good. Okay. So then we can move on to the funding and revenue pages of our report here. Sort of a little bit of a backstory here. So through fiscal year twenty five, a portion of our SCCB operational cost has been covered by the excise tax revenue. Our cannabis regulation fund used to consist all of our application fees, licensing fees, administrative penalties, and Canvas excise tax revenue. So what would happen is that fund will first cover our expenses, and what's left will get moved into the general fund. So as of fiscal year twenty six, it's a sunset of the excise tax provision. [Chair Andrew Perchlik]: Can you remind me the excise tax? [Olga Fitch]: Fourteen. Fourteen. Fourteen percent. Yeah. So what that means for us is that cannabis excise tax no longer funds our operations directly. Instead, all that the cannabis regulation fund now contains is the fee and fine revenue. And the last page of this report will show you those numbers so you can sort of see what we are looking at. [Chair Andrew Perchlik]: And people pay the sales tax as [Olga Fitch]: well? Yes. [Senator Anne Watson]: Yeah. Six percent. Twenty percent total. [James Pepper]: Yeah. And local option if you have it. Yeah. Yeah. [Olga Fitch]: So when we when we now look at fiscal year twenty six, so our expected operational cost, six point five million as seen on previous stages. Our projected fee and fine revenue, so this is what we bring in is about less than a third or a little over. Yeah. Mhmm. Over a third. Yes. And so that so our plan is to rely on on the retention from that f y twenty five year end balance for to meet the difference. So that sort of is going to be a new process for us for finance and management in light of this sunset of that provision. [Chair Andrew Perchlik]: But is it not outstanding with sunset or it's sunsetting it and then just allowing you to care for this three point eight nine, [Olga Fitch]: you know, and The latter. Well, it means we'll have to have that conversation with finance management every year, sort of how much you planning to bring in in fees. Let's see what we need to set aside for you. So that's sort of where we are gonna be at rather than just knowing that there is an automatic allocation to our budget. [Chair Andrew Perchlik]: Right. What what do you think do you think we messed up when we thought that the fees and penalty would be enough? Like, what did what did we get wrong? Did we get No. [James Pepper]: So what it was and I've spoken with representative Shai, Byron, Kornizer about this, is back when we were originally proposing our fee structure, both JFO and the CCB came to the same conclusion that no matter how high the fees were gonna be, they are not gonna cover the operational cost of the board because you would either depress interest in getting a license if they were really high or, you know, keep them low when you have a lot of interest, but it's either way, they're just gonna fall short. So that was a legislative decision to cover a portion. There's a lot of kind of yeah. I mean, oh, there's a lot of people that are unhappy with that's regulated to begin with, and then any portion of the excise tax would, [Chair Andrew Perchlik]: you know, [James Pepper]: why can't it just be cell phone and through fees? So it's there. It was, you know, those three representatives understanding that it was a compromise. Like, let's put this sunset in. We don't know what the fee revenue is gonna bring in. This is all premarket. So let's put this sunset in. Let's have this check back in three years and see if we wanna continue supporting a portion of the Canvas Sports budget with x I Canvas access to x or not in three years. So we're at that point now where the sunset is set to go into effect on July first. [Chair Andrew Perchlik]: But this new percentage of seventy thirty, that that's not new. [Olga Fitch]: That's not new. Yeah. That's not new. [James Pepper]: That was in the the twenty twenty bill. [Chair Andrew Perchlik]: Yeah. And the misuse prevention special fund, that's what funds the actual program? [James Pepper]: No. There's a that's the sales tax. They get pardon the sales tax. They get the entirety of the sales tax, and that's all earmarked. Those are the agency of education earmarked for expanding access to after school programs. Mhmm. This this thirty percent is from the exercise status. And those numbers are on the next page if anyone [Olga Fitch]: wants to. Yeah. Yeah. And that we've got a little more here to sort of show you the historical data and the projections. So if you look at the fiscal twenty three and twenty four, those are actual numbers. So our p revenue is exactly what we collected, and taxable sales is what's been reported. And the projections for twenty five, twenty six taken from the JFO's January twenty twenty five forecast. So, again, we can kinda see that our fees are not growing, and and, you know, there's no indication that there'll be a time where our budget will be supported with the fees. And I kinda have a note on that that there's either way, our operations would need to rely [Chair Andrew Perchlik]: on a [Olga Fitch]: portion of the excise tax revenue, whether it's through the cannabis regulation fund if the sunset provision did not go you know, go to return or through the general fund. [James Pepper]: The house should have an opinion on that question because it's in the current miscellaneous claims. Indicated that it's probably a ways and means issue. So that that bill will go over there and they'll, one way or the other, have their their opinion about it. We'll have to resolve it. Okay. [Olga Fitch]: Yep. So that's that's what we got for you today. [Chair Andrew Perchlik]: Okay. Any other questions? And well, I guess this tells us what's going on. We're still projecting the increase in sales. [Olga Fitch]: Yes. You know, [Chair Andrew Perchlik]: we could pretty much a flat. Because you get fees both for the growers and the sellers. [Olga Fitch]: Yeah. For all licensed types. Correct. And there is always a renewal fee. [Chair Andrew Perchlik]: You're not seeing an increase in those either sellers or growers? [James Pepper]: We currently have a more target on those licensed types. So I don't expect more revenue there. And that [Chair Andrew Perchlik]: was a decision that the board manages for Marcus Dynamic purposes? So that's on the sellers. [Senator Anne Watson]: Do you moratorium on all growers? Yeah. [James Pepper]: K. Our our plan, you know, we have to strike kind of the supply and demand balance pretty closely so that we don't, you know, do damage to either the cultivators or, you know, the consumers. So we have an economic model that we created. It looked in all sorts of kind of datasets to create a demand structure. We reverse engineer a market structure based on that. We are under contract to update that economic model to see how much more capacity and and in addition to just compact capacity. And these numbers from JFO, I think, project a state the market not changing. Like, no new dynamics. Like, if you if you are able to capture more of the current consumers that are using the illicit market or using kind of alternative intoxicating products and capturing in the regular market, we may need more capacity. Or if there's interstate commerce, I [Chair Andrew Perchlik]: would say, you know, [James Pepper]: there's federal legalization, you know, that will dramatically change what's happening in the mind. We're undergoing that process right now, and we intend to probably open up tier one cultivators eventually when we can have a better grasp about some of the various dynamics in the market. [Senator Anne Watson]: It's just tier one small. [James Pepper]: It's a thousand square feet. And we we were given authority last year that we intend to use. We have rules around right now. They will allow tier ones to scale up if they hit certain performance benchmarks. Alternatively, allow us to scale people down that are not hitting certain performance benchmarks. So that'll be a little bit more dynamic control than we have now. [Chair Andrew Perchlik]: Yeah. And that are there cultivators to set indoor, outdoor? And then [James Pepper]: we have one mixed here that allows kind of the outdoor cultivators to move inside during the winter months. [Chair Andrew Perchlik]: Or most I'm assuming most is still indoors. [James Pepper]: It actually is the we assume that too. It's actually the flip. It is sixty percent of our growers are outdoor. [Olga Fitch]: But there is a trend we've seen lately. Pops are moving indoor. Yeah. [James Pepper]: The start up costs [Chair Andrew Perchlik]: are less. So we'll get a year out there, [James Pepper]: get some money, and then so it is trending out right now. Senator Brown? [Chair Andrew Perchlik]: Well, I [Senator Robert Norris]: think I just answered half my question. The after school programs are funded with all the sales tax money. You might not know this, but does that cover the total cost of that program? [Chair Andrew Perchlik]: That's an education. Education. The big question. [James Pepper]: Know the answer to that. They're the ones that are responsible for the grant making there. Yep. And then the Substance Misuse Prevention Advisory Council, I think, is generally the ones that are dealing with the thirty percent, and it's, yeah, through the Department of Health. Right. I think it's usually funding their recommendations. [Chair Andrew Perchlik]: Okay. What [Senator Anne Watson]: are you thinking about stores and retail? You know? I know you shut that down. Yeah. You know, I look at communities like Morrisville and say, when you're getting five and six and it's a little much. [James Pepper]: Yes. Yeah. [Olga Fitch]: Well, James can speak to that. Yeah. We luckily have our rules open right now, and so deciding is part of our rulemaking. [James Pepper]: Yeah. So I my understanding was this was always meant to be a local decision. How many stores? Because you gave towns the authority to create a local cannabis commission, and they have all their traditional zoning and ordinance making authority. And, you know, I think that they could have easily and Morrisville said only in the only in area zones commercial or on or they can't or one Canada store can't be within a mile or another or something along those lines. It would have created a natural cap on a number of retail licenses. I think with the velocity that this market had to come online, and it happened during the pandemic as well, where towns are kinda scrambling to even know how to meet, no one did this. And he likes some confusion about how much authority they actually had. And and, anyway, it led to the situation that we're seeing now, just pockets of retail density that are just pretty unnatural and gonna, you know, have a negative impact on all the players in that in that region. So But the moratorium affects that as well. The moratorium will allow shops to move or be existing shops to move around if they if they so choose, but we won't be issuing new licenses at least in the immediate future, and the legislature is actually considering a full on two year return moratorium by statute. [Chair Andrew Perchlik]: How how do you [Senator Anne Watson]: Liquor control. There's usually only a liquor store in the town. Right. What did they do differently than Yeah. Because I I gotta tell you, when you're at five or six in one show, it's too many. [James Pepper]: Yeah. Yeah. So the legislature gave us zero authority over retail site, and all you said is you can open this ticket fully or close it statewide. And you can either accept applications or you can't. So we when we started when we hit, you know, eighty or ninety, we also started having this discussion about closing it. Mhmm. [Chair Andrew Perchlik]: And we [James Pepper]: did vote to close it when we got to ninety. And then but we have to give thirty days notice, And a lot of people kinda got their foot in the door during that thirty day notice period. And so we're at a hundred and one. And, of course, the the the clustering issue that you're talking about is, you know, influenced by the opt in, opt out discussion, We're only eight you know, only about thirty percent of the towns that we're not back actively allow retail. So, you know, you got fourteen in Burlington, you got zero in South Burlington, zero in Williston. It's because those towns haven't opted in. It's not that there aren't isn't demand for canvas there. They're just driving to south they're just driving to Burlington to get it. I think that's true in Warsaw as well. They're you know, those five are supplying kind of the regional. [Olga Fitch]: I don't [Senator Anne Watson]: know. There's two or two at least in Johnson. There's one in Jeff. [Chair Andrew Perchlik]: There's zero vote? They vote to a chest Stowe [James Pepper]: is not. Zero in Stowe. [Chair Andrew Perchlik]: Right? Zero in Stowe. But they had a boat the boat might have No. [James Pepper]: Must not have. Yeah. So [Olga Fitch]: But where we are now, last year, we've got that authority from the legislature to come up with the siting rules, which is why we are now in the middle of the rulemaking process where we will create sort of a path forward. How you know, tied to the dance tied to the population numbers in specific areas, for example, as a marker. But, of course, folks who are already in, I am, so they would be grandfathered into their existing locations. But moving forward, we'll be able to have a much better, I would say. [Senator Anne Watson]: But personally, the distribution of liquor stores is more extreme. Yeah. That it looks more rash. Right. [Olga Fitch]: Yeah. [James Pepper]: Yeah. And I think that that's you know, because the state is the wholesaler for liquor, I think that they take really [Chair Andrew Perchlik]: a close look as they [James Pepper]: is this store gonna cannibalize this one, you know, and I think that that if we had that control from the outset, it probably wouldn't look like a less than one. I think we'll get a more even distribution as more towns opt in as these retail signals go into place. [Chair Andrew Perchlik]: You don't want the dispensaries cannibalizing. You get one of those. Okay. Any other questions? Thank you for your time. [Olga Fitch]: Thank you. [Chair Andrew Perchlik]: Thank you. We know where to find you if we have other questions. [Olga Fitch]: Yes. Okay. [Chair Andrew Perchlik]: Thanks for the information. It was a good presentation. We should tell other people to do the role. Is that what's about the role of the future? [Senator Anne Watson]: Thank you for bringing money. Anything we can add? Thank you for bringing money. [James Pepper]: There's more money on the table. I mean, [Senator Anne Watson]: why can't you price [James Pepper]: money? Yes. [Olga Fitch]: Senator [Chair Andrew Perchlik]: Hovski has an amendment [Olga Fitch]: And put it safe. [Chair Andrew Perchlik]: To guard the BAA for Tuesday. You I assume you're gonna put it into the calendar regardless, or I don't know if you're waiting [Speaker 4 ]: We'll see. I'm bringing it to you [Senator Anne Watson]: first. Okay. [Speaker 4 ]: I'm told that's the right way to do it. [Chair Andrew Perchlik]: It's sixty pages is because there's a lot of changes throughout the thing, but I'll let you explain it. And I mean, there's the perp if you kinda read the first couple of paragraphs, you kinda get the sense of it. But why don't you tell us what you would like to kind of do? [Speaker 4 ]: Absolutely. For the record, senator Tommy Becholsky. So many of you know I have a significant concern with the humanitarian crisis of homelessness that is happening right now. I will say that two years ago, I came to this a different makeup of this committee with an amendment that would have spent about fifty million dollars. This amendment actually gives us money. It doesn't take it doesn't ask for money. So it's a different space that I'm in. What the amendment does so last year, we you know, in the pay act, put forward an average six point four percent raise and many exempt state employees who are that is nonunion bargaining, who make over a hundred thousand dollars a year received that increase to their pay. And in fiscal year twenty six, there is an additional five point two percent increase that, again, will go to many of those same people. It is my view that in the light of the type of budgetary space we see ourselves in in the humanitarian crisis that people making over a hundred thousand dollars a year perhaps don't need a six and a half percent increase or a five point two percent increase. So what this would do is it would freeze pay for those individuals, at the fiscal year twenty four rate, and that savings is to be invested in general house emergency housing assistance and conversion of state buildings into shelter capacity. In the remainder of fiscal year twenty five, the projection is that is about six or seven hundred and fifty thousand dollars. So it's not a ton, but it's not nothing. In fiscal year twenty six, it is over six million dollars that that frees up to be pushed towards housing people. The other thing that this bill does is it directs the secretary of the agency of the administration to take a position from the position pool. There are currently six positions available in the position pool and to assign that to an exempt limited service position to coordinate homelessness services at a state level. What I know from working on the ground is that people will often call two eleven, and two eleven tells them to call CVOEO, and CVOEO tells them to call Howard Center, and Howard Center tells them to call two eleven, and ultimately, they spend another net on the streets. And so this would create a limited service position to direct at the state level, so that's not happening. And we know where people are going, how they're going there. It is not incredibly directive as to what that would mean. I don't know that that I think that would really be more the purview of health and human services to figure out what's needed for that coordination at the statewide level, but there is a position available that would not cost the state money that position is budgeted for. It does not create another position. It simply takes it from the pool and directs it to the use for this purpose, and that is what the bill does. [Chair Andrew Perchlik]: And the position would be in in health [James Pepper]: and human services somewhere, probably, but [Chair Andrew Perchlik]: which department is better than? That. Yes. [Speaker 4 ]: That is the intent. This language, to be clear, has not actually this is I wanted to get this to you as quickly as possible, so this is not finalized language. So if there are changes that need to be made, I'm happy to either ask for the changes or release it to the committee to make the changes, but that's the intent. But rather than get all the language perfectly set, I wanted to bring it to the committee with time to consider. And it is certainly a strange place for me to be sitting and not asking for money, but telling me, look. I found some money. [Chair Andrew Perchlik]: Yeah. Can you remind me when we passed the bill? We passed it on a on a ledge pay increase two years ago when we were gonna pay legislators more about that percentage month, Kieran? [Speaker 4 ]: So we were going so the but the percentage increase or the actual monetary increase, because I do think the numbers matter. [Chair Andrew Perchlik]: Okay. Yeah. The goal goal. [Speaker 4 ]: So we were going to raise the and legislative pay is interesting because we actually don't get a salary. We get a weekly stipend, so it's dependent on how many weeks we are in session. And it was going to increase that. So currently, the average or two years ago, the average legislative stipend for a year was a a little under thirteen thousand dollars a year, and we would have aligned the stipend from what it is now to the average Vermont wage, which would have increased the average. Again, it still would have been a weekly stipend, but it would have been raised to align with the average Vermont wage. And I think it I'm I'm really digging back, but I think it would have raised the pay to just under twenty six thousand dollars a year. Right. So certainly not a hundred thousand. [Chair Andrew Perchlik]: Okay. I just remember this executive page that came up when we were talking about legislative pay because we're being criticized for increasing our pay and executives didn't take getting their own pay increase. [Speaker 4 ]: Yes. And we did not so we do get the percentage wise increase, but I this is why I think the numbers matter. Like, we were talking about an increase [Chair Andrew Perchlik]: in the rate of [Speaker 4 ]: twenty twenty four thousand six hundred and something on in an average year provided we work sixteen weeks, whereas, you know, some these executives that got that six and a half percent raise are are already making over a hundred thousand dollars a year. Yeah. [Chair Andrew Perchlik]: I appreciate that. [Senator Thomas Chittenden]: So just a question that on page one, you have the description of the limited service position, the coordinator position. Is there any other language except for that [Speaker 4 ]: Not at this time. And that is again, this bill is this amendment is still in in drafting and can be edited, but I didn't wanna wait until the last minute to present the idea. So if there is suggested language that you'd like in it, I'm more than happy to include it. But I consider you the expert in this area. [Senator Thomas Chittenden]: Well, we'll our committee will, you know, maybe have time to look at it. I don't know how much time we'll have before Tuesday. We don't, but we'll look at it. And you you do know, of course, that the house is deeply embedded in a comprehensive look at the GA work that goes on. [Speaker 4 ]: I do know that, and I think [Senator Thomas Chittenden]: it's really idea of having a coordinated position isn't a bad idea. Yeah. [Speaker 4 ]: No. I absolutely know that, and I think the work needs to be done just as you pointed out. And we also need to do this sort of long term work to keep people housed and prevent people give people more sustainable long term solutions. But in the interim, you know, [Olga Fitch]: we have got probably close [Speaker 4 ]: to twelve hundred people living on the Bronx when it's cold. And so I I feel like there is an a real urgency to act now while we do the longer term mortgage over to work. [Chair Andrew Perchlik]: Thank you. Any other questions? At the very least, you get a good list of all the salaries in the state that are over a hundred thousand dollars. [Speaker 4 ]: So this is not an exhaustive list of all the salaries in the state that are over a hundred thousand dollars. These are simply the Okay. Right. These are the names. So in the pay act, there are named positions with named salaries, and then there are sort of generalized positions. So if I were hired to say the a manager at in a particular division. [Chair Andrew Perchlik]: Classified employee could be over one hundred thousand. They wouldn't be [Olga Fitch]: impacted. [Speaker 4 ]: But there's also people that are not named in this bill that would be impacted. So if I were hired to, say, be a manager of a division at the Agency of Transportation, I'm not a commissioner. I'm not an executive director. I'm a manager. Let's say I make a hundred and twenty thousand dollars a year and I am an exempt employee. This would still impact me even though I'm not named in the bill. [Chair Andrew Perchlik]: That's all exempt employees. [Speaker 4 ]: Yes. But we do have in in our pay act some employees that are explicitly named, like commissioners and state's attorneys and, that are explicitly named. Although state's attorneys are in an interesting space, and I believe there's a supreme court decision about this that they're both state employees and council employees. And so they are explicitly named in the pay act so that we can pay them through the pay act because the Supreme Court decided that without naming them, they weren't really included. Okay. [Chair Andrew Perchlik]: Well, my my reaction is that I think the the welfare committee would walk away in on a coordinated position and just the other things related to the housing program because that's your jurisdiction. [Olga Fitch]: Yep. And [Chair Andrew Perchlik]: I'm not sure if government [James Pepper]: operations [Chair Andrew Perchlik]: would wanna look at this with a [Senator Thomas Chittenden]: Pay Act. [Speaker 4 ]: Well, the pay act didn't come through the government operations committee last year. This is why I actually wasn't able to amend this in the pay act. It's it never came to senate government operations and instead was put in the budget conference committee report, which is unamendable. [Chair Andrew Perchlik]: Okay. Yeah. [Speaker 4 ]: But I'd be happy to take a look at it and if if that was but we we do have a precedent for doing pay act work without it going to go and not work. Right. [Chair Andrew Perchlik]: Yeah. Yeah. Okay. Well, we will talk about it, I guess. Awesome. See what the committee thinks about. [Senator Thomas Chittenden]: One last question. So is the intent here then to have this position be in place until June thirtieth? [Speaker 4 ]: The intent I I mean, I if if that's enough time to establish a more permanent position, yes. If it needs more time, my intent would be to have it there until a permanent position Oh, [Senator Thomas Chittenden]: the reason I asked the question is that, you know, is there time for someone in that position to gear [Senator Anne Watson]: up and [Senator Thomas Chittenden]: and actually have an effect? Yeah. [Chair Andrew Perchlik]: And the [Speaker 4 ]: like I said, those positions are already budgeted for and held. And so my intent is to have that position in place until we have a permanent Got it. Okay. Alternative. Or perhaps it gets converted into a permanent position through the work in the house. Thank you. [Chair Andrew Perchlik]: And would these this changes to salaries would happen in FY twenty six? [Speaker 4 ]: The change to the salary would happen when this passes, and then it would be frozen through twenty six until we readjust readdress the pay act in next year because we do the pay act every [Senator Anne Watson]: two years. You would have [Chair Andrew Perchlik]: you would have it take effect on the passage, is that what you're saying? [Speaker 4 ]: When when this goes when the budget adjustment goes into effect, yes, that is when it would take effect. [Chair Andrew Perchlik]: But it wouldn't be just whatever date the next pay period can. That would [Speaker 4 ]: that would probably be something to ask legislative operations about how that would or or DHR about how that would work. I'm I don't feel strongly tied to, like, it must be this date. Like, I would want it to be a smooth process and transition for human resources. And [Chair Andrew Perchlik]: One question is, is it if we're gonna if we're gonna succeed in extending the winter rules, is it a BAA question or a FY twenty five's budget? [Speaker 4 ]: Yes. And and there one piece of this is affecting FY twenty five's budget. One piece is affecting a bill that was passed as it it's a little tricky because the pay act is it affects two fiscal year budgets, and we would not have another pay act until the next pay act would be impactful to FY twenty seven, which is why it made sense to do it here because there's not another bill in the interim that would impact So, yes, it has a piece of FY twenty five, but there's not another bill in the interim to deal with the FY twenty six question. [Chair Andrew Perchlik]: Other than the big budget. I should put it in the FY twenty six budget. [Speaker 4 ]: That's fair. But there's not another pay act. [Chair Andrew Perchlik]: Yeah. Yeah. Right. Okay. Alright. Well, I'll pick her up, talk to some other chairs and Perfect. I mean, yes, you know. Well, and [Speaker 7 ]: thinking about how this affects two years [Chair Andrew Perchlik]: and [Speaker 8 ]: wondering how you would feel about, like, if we dealt [Chair Andrew Perchlik]: with just the things that affect FY twenty five in in an amendment and then deal with it by twenty six separately. [Speaker 4 ]: I'd be certain to look at that. I brought it to you as a package because I think that the payout was a package, but I certainly know you work in a in a different world. And I'm I'm certainly happy to [Olga Fitch]: be flexible with with doing it in two [Chair Andrew Perchlik]: pieces, if that makes more sense. This is part [Speaker 4 ]: of why I brought it to you still in drafting. Yeah. Yeah. Yeah. [Chair Andrew Perchlik]: Actually, we appreciate you giving it to our attention and not just having us to, like, take a recess on the floor to figure it out. [Olga Fitch]: Absolutely. [Chair Andrew Perchlik]: That is that's appreciated. Absolutely. Thanks for your time. [Olga Fitch]: Yes. Thank you. [Chair Andrew Perchlik]: And we have we have a fish and wildlife. [Speaker 4 ]: They can't come out. It's a little bit here too. [Chair Andrew Perchlik]: Are they coming in person? [Olga Fitch]: Yes. Okay.

Play Clip Play Full Video Pause

SmartTranscript of Senate Appropriations – 2025-02-21 – 1:00PM

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