Good morning. My name is Jill Remick. I am the director of property evaluation and review at the tax department. We oversee the implementation with the municipalities, the statewide education, the grand list of majors, and the statewide equalization study, which sets the common level of appraisal and the coefficient of dispersion for towns for the purposes of tax rates. We also implement the current use program as it relates to property tax adjustments. That program we do in partnership with the Agency of Agriculture and the Department of Forest Parks and Recreation. And we also implement the tax increment financing program, where the downtowns that have received a TIP agreement through, I can't think of the agency that we're partnering with. Pepsi. Yeah, Pepsi. We work with the towns to ensure that they're collecting the proper amount of education tax revenue for that and help them with the withholding for the length of the TIP agreement. And we also have property tax hearing officers for independent entities that we appoint who hear property tax appeals that go beyond the Board of Civil Authority. So if a taxpayer is unhappy with their property assessment, they can appeal that to the Lister. They can appeal that decision to the Board of Civil Authority and then they can either appeal to he is the director, who assigns it to a hearing officer, or they can go to the Superior Court. And then from there, they can also appeal to the Supreme Court after it's gone through myself or the Superior Court. So lots of different programs, but all essentially related to working with municipalities for the purposes of tax rates. So we have an annual report we've been required to do for several years. It's become a bit of a key resource for throughout the year. I know, obviously, in my role, I look at it frequently. And that's why we still continue to find hard copies. But it is available on our website. It's on your committee website. And then on our web page, we also have a deeper dive into the tables if you're interested in downloading those. I also. So there's even more information than there is in the book. Yeah. And I brought Jake Feldman with me from the department. Obviously, folks probably know him very well in case you get into some of the technical pieces that I'm unable to answer without the good tag Jake in here. I also had a couple other just PVR related items I wanted to bring up. But maybe I'll start by just going through the report. Would that be helpful? I think what, since it's a great report, I look at it. I didn't realize it was more data online than it is in here. Nice. And I think what would be good is just getting people familiar, although we're missing one or two people, but they'll come in, getting people familiar with what's in here so that they know how much information they've got available. OK. Why don't you sort of just sort of hand it to me? Sure. So some of the key pieces that I think are pretty frequently used by folks in here. Obviously, there was a table of contents, but I did mark ones that I wanted to make sure you folks knew about. On page 7, so 6 and 7 is sort of the statewide summary of education and property tax rates and municipal tax rates. So our division is responsible for hosting the software program that collects the grand list information. So even though we don't set municipal tax rates, obviously, we do collect that. And then we use that information for things like property tax adjustments and for calculating the whole homeless payment for foregone municipal revenue due to the current UC moment. So we track municipal tax rates as well. So on page 7 is just sort of a good historical picture of education funding taxes, municipal taxes, the changes in the tax rates over time since 2009, and then also the effective tax rates. So what you find in this is the first several pages of the report are the sort of statewide picture. And then later in the report are county by county and then town by town figures for each of these different calculations that we do. So it's kind of handy to have the statewide and then the ones specific to the municipalities later in the report. Also, we wanted to draw your attention on page 8 to the information about the statewide common level of appraisal and just sort of what that means. So our district advisors, we have a team of seven district advisors who have regions throughout the state that they're assigned to. So they each have about 40 to 50 towns that are their coverage area. So they work with the towns throughout the year to maintain the grand list, to make updates, to provide valuation assistance, especially with complex properties. And then for several months after April 1st, we work with them to validate sales for the purses of setting the CLA. So they actually review every sale that goes through the town with the town, and then we do a separate review in-house so that we can ensure that we can set the proper and equalized value. So property tax or property values and the property transfer tax returns are showing us that the real estate market in that town is changing and we're capturing that in the study and adjusting the impact on the tax rate within there. Something we've been focusing on a lot at the tax department in the past couple of years is the volatility of the CLA, because what that does is it actually has a pretty significant impact on what the actual tax rate is after it's gone through that process. And so some towns may see their municipal and their education tax rate as one thing, and then once the CLA is applied, it's actually a very different figure. And obviously when that CLA adjusts up or down and that change happens, then that impacts taxpayers. And we've been finding the more and Jake has done significant evaluation of this that it definitely seems to impact smaller towns that have fewer sales in their markets, for example. And so we're trying to find ways in the study to sort of mitigate that volatility and also communicate with towns that are seeing that volatility and see how we can help them address that. Maybe it's time that they have a reappraisal, maybe they haven't done that for a long time. And there are resources we can use to help them do that. Just to be a person and explain where people are, I know that I've heard of that. There was a press conference on family leave and I thought Robin told me she was fine, but I'm looking at the people who were missing. I guess that's where the other house was. Joey's there as well. Yeah, and Sam probably, and George. So my apologies to you to be seeking to an empty room and they will come in. Okay, and I'm happy to come back anytime, as they come in and dig into it. So we actually, after the equalization study was over, it's due to folks beginning of January, and then we issue this tax rate, that information out to all the school districts and select boards and listers and so on, right after Christmas is usually when that's done. Then we actually send a specialized letter to about 15 towns who saw a great number of students. I just have one. On CLA, where can I go and see what the CLA's is for each town this year, previous, is it actually in here? Yeah. Oh, it's in this book? Sweet. But is it, would it? So year for year we could pull for you pretty easily. If that was something or two. This, for these tables, these are just this particular? Yeah, I thought you didn't have a question. Yeah, but maybe this year.  Okay, never mind. Great, thank you. All right, I was looking through here, I must have missed it. Yeah. Okay. There's just so much information. There's a lot. Yeah, there's a ton. There's a lot. This is a great book. Yeah, it's a recent book. They're like, wait a minute. What is COD in here? We saw that I have trouble keeping the COD in my head, so I have to go back and look at it. I think it's a great exercise for us too, because at this point we've been doing it so long that we can plug it in and review it every year. So it's been refined over the years. But yeah, I certainly use it frequently. So yeah, so we sent a letter to about 15 towns that saw a greater than 5% change in their CLA. You know, it's not an official action or anything, but just to sort of give them a heads up of what that means, and offer our assistance in seeing how we can take a look at the impact. It was definitely largely smaller places, you know, to some extent. Yeah, but if they're small, they haven't raised in a long time, or they, you know. Yeah. A large property sold for a very strange amount. Yeah. Right. For its value. So, you know, we just wanted to sort of try to bring that to their attention and see if we can offer some assistance there. There's other things we might want to try to do with the equalization study we've talked to. You know, I think we've come to this committee before. You know, even things on the other end of the spectrum, if you have an unlanded mobile home that sells for a really small amount compared to what is listed out, I mean, there's, yeah, and in a small place at one property. And certainly when we're going through the study, we try to sort of throw out those outliers and extremes when required to do that. But even so, that's still an impact. So we just wanted to sort of be proactive and talk to them about that and see how we can help. And we'll continue to try to see what else we can do to sort of help with volatility. Another factor that can play into that is utilities. So we're taking a pretty deep look at utility valuation and seeing if that's impacting the CLA, because those values can change here where you're depending on the calculations, because they're based on income and output and other things besides just purely property value. But at this point, we don't have any changes. But that's another thing that can. Rivertown's over my way, because of the dams, they've had a lot of fluctuations recently. Right, okay. So then on page 10, I wanted to just draw your attention to, this is another major piece that PBR does. So back to the CLA percentage. So we have statutory triggers for re-appraisal, which is that we have one on the CLA and one on the COD. But the change of 5% doesn't trigger anything other than a conversation with you. Not in and of itself, right? And is that good? I mean, should it? I think so. We do have a proposal in our miscellaneous tax bill to also require a re-appraisal of their CLA's over 120% for over the 10 years. For those, you know. That is insensitive, so it's not a small thing. Right. What is COD? Co-fission of Discursion. So within the different categories. I understand. Is it plus or minus 5%? So the plus or minus 5% was just our arbitrary, well, not arbitrary, but our parameter that we said that we wanted to reach out and just really draw attention to that. That was an outcome of the study. They get a letter that says what it is. It's an informal, you know, non, it's not an enforcement thing. It's sort of a, in case you've missed it in your study, yours fluctuated by 11% or whatever. And that's, this is what it will need for your tax rates.  Right. And that's what you think it has to do with? Yeah, and also just, I think it's pretty obvious that the really small, small, small places, and except for that one, regardless of whether they have a recent real tax rate. It's not asked about the coefficient. Right, so page nine has sort of a good explanation to see if you, but basically within the municipality it's making sure that the different types of categories of properties are also being assessed. Okay, you know, mounted to each other. All right, so on page 10 is a figure on the bottom and then obviously there's a table, I think on our webpage for short, it's not in the book of the breakdown by town. Property Evaluation Review sends out four different major payments to the municipalities every year related to maintaining the grant list and for education and property tax adjustments. So the current useful harness payment, you can see that on the bottom of page 10, that's the payment that goes to municipalities to make whole what they would have earned on their municipal tax rate income for properties that are current use. So we track the value of properties in current use and then what the payment was that we actually were to collect and then that payment goes out to municipalities. There's a deeper dive into current use that it'll get to in a little while. The pilot for state-owned buildings, so the buildings and general services department sets those values for state office buildings across the state and then we send a pilot payment to municipalities for hosting those because they're property exempt, they're tax exempt. The reappraisal and grantless maintenance payments are per parcel payments that go out from the Ed fund through us to municipalities for the purposes of helping them maintain their grant list. So software paying for their list or assessor, anything related to carrying out maintaining the grant list and updating those properties. That's the percentage of the grant list. What's that? I believe it's by parcel. Okay, there's a parcel. Yeah. I mean a parcel, most of the location, that's it. And so the theory being they'll get this reappraisal payment every year and maybe sock it away and so when they get to the point that they have to reappraise or would like to reappraise, they might have some money that sort of would cover all of it. They can do it, but they can do whatever they want with it. Yeah. And then related also the assistance with equalization studies. So like I said, there's that period of time where our district advisors actually go out to each of their towns and work with them to verify sales transactions that helps make sure that our studies are really using arms length sales to sub-taxery. And so they do get a dollar per parcel payment. That's what the 344,000 is for. Yes. So in the pilot program, state parks, that's that part of the pilot program? I think so. Yeah. They had our pilot. Right. And that actually is a send out through us. That's sent through a different agency. But it's the same same idea. They value the properties. Before we go too far away from the CLA discussion and section, I understood that you were calculating the coefficient of dispersion on properties by category. Did I hear that correctly? When there are enough of them to do that. They do the sample. Yeah. Right. If there are enough to have a good sample. Right. But what I had understood, and this goes back to the interrogation of either Chloe or Mark, when they were talking a bit about it, the Ed Fund, the CLA, apparently when the CLA is a sign to a town, there is no waiting or no differentiation across towns when the mix between residential, commercial, industrial is very different. I'm thinking of towns with a large amount of safe second homes, locations for lakefront property and no industrial base. Another town, big industrial base, very scant value in the residential or commercial area. Does that, does your sense, when you do the samples, you still nevertheless compile the result of the samples, but there's no waiting. So two communities that might have the same CLA, say 90 or 110, may have them for very different reasons in terms of where they fit in the taxability, contribution to the Ed Fund, et cetera. And the impression I got was that we don't refine it enough to fool around trying to make similar communities similarly situated or similarly assigned to CLA number because we don't weight the different categories of property. Do you have any? Sure. Thank you. So I'm gonna try to get you up here if it's okay. Okay. If you've got that stuff on. You can have one. Next. Well, I think it'd be great if you joined us at potential. Oh, okay. I can just see, hear you better and see you better. Sure. And we can take you and someone other in here. So, I think you can share your own body today. This one right here. Yeah. Yeah. It's found. Okay. Let's do it. How'd I do it? All right. Yeah. Peter, you have to be on the next speaker. I don't think that my answer is gonna be too long for you. Stand up and deliver it. Okay. Thank you. Jake Feldman, Senior Fiscal Analyst of the Tax Department. So the first thing about the CLA, it's a general correction factor and it applies to the tax rate, not to properties. This is indirect equalization. So PBNR never presumes to change anyone's property value. It's just an interest of fairness for the statewide Education Fund that tax rate is corrected. So it applies, once the tax rate is corrected, that tax rate applies to all those properties in the town. As far as waiting goes, there is waiting in the study. What happens is to arrive at the general correction factor, you have 15 different categories of property and each one gets its own ratio to equalize it as long as the ratio is statistically acceptable. So a town with a lot of commercial property will have the total, the CLA for the town, pulled in the direction of the commercial property's trend. So if the commercial property is selling for a lot more than it's listed for, then that ratio will move that commercial property category and that will feed into the eventual ratio for the whole town. That's, thank you, that's very reassuring as that's where you meet them. Towns are so diverse in Vermont. Thank you. For Joe, or for Seth, for Jay, come on and sit here. There's a view, don't mind. We will have to do that then. Extra chairs in the hallway, and the hall windows down. So my question, do we really ever see that where commercial properties go in a significantly different direction from your residential? Do we ever see that? Are your homestead and non-homestead? I'm not sure, I investigated that specifically. But generally, when I look at all the category ratios, they tend to move in the same direction. So like Burlington is hot right now. Property's selling for much more than it's listed for. And the ratio. Let's go for the mid-front. What do you think Joey's not here? Should be fainting. I'm not far away myself.  The CLA for Burlington actually is less than 80%. It's 77, yeah. Yeah, so they have to re-appraise by law. But when I look at their category ratios, they're all around that 80%. So everything, all categories in that town are hot and are selling for more than it was listed for. Thank you. Thank you. Did you have anything else you wanted to add? Oh yes, COD, the coefficient of dispersion, good analogy is if you hunt ducks or something, you use bird shot, it scatters. And if you, the shot scatters and you have, you could end up far away from your target. So what the COD is, is it's a measurement of the scatter in a town. For instance, in Burlington, if the CLA ends up being 80%, then you'd want basically all properties that are selling for generally being around 80% of what their eventual sale price is. You don't want some properties for selling way more than their fair market, something less. So that's a measure of scatter. And the scatter measurement over 20 suggests that there is an fairness, there is an equity in fairness within the town and that also triggers a re-appraisal. Okay, so you've got some areas of town that are doing really well and some areas of town that are not. They're all getting the same CLA. Right, okay. I thought it was a measure of distance from assessed value. This is a difference from the median ratio. So if the median ratio is- Ratio of what? The median sales ratio for all the sales. Ratio of what? Sales to assessed value. Just sale price. All right. So you want them all to be close. So a lower COD number is better. Better, okay. But a higher CLA number is better. Close to 100. Close to 100 is better. Yeah, CLA is wider to CLA. CLA, I know. Is that they go empty? Okay, thanks. Thanks, Chief. Okay, thank you. Where are we? So I was just referring to the municipal payments that we made to the house pallets each year. All right, so page 12 is just sort of a summary of another piece, a major piece of property valuation or abuse work. We're required by statute to provide training for listers and assessors for every town. We hold trainings across the state. As I mentioned before, we have folks that are actually assigned to regions. So they pretty regularly spend time in municipal offices helping them with this work. So we hold several trainings and we also have a certification program. So these two pages here are just sort of summarizing the types of offerings that we have and also the level of the certifications that we've done. We also have a small bucket of funds, which is actually incredibly helpful, that we partner with the Vermont League of Cities and Towns and with VALA, the Vermont Assessors and Listers Association. So whenever I'm here, you'll probably also hear from VALA to actually work with them to host additional trainings. So VLCT has a really strong program for specifically working with boards of civil authority, select boards on property tax appeals, for example. And so we do a partnership training with them. We do a mock appeal and folks find that really helpful and I think that partnership has been really good at getting more training out. They also, part of that contract with VLCT is they actually go to the towns that are doing the reappraisal and walk them through the pieces that they have to do for that and it feels related to that. So it's a really good partnership that I think has definitely helped us reach more folks and just, you know, eight of us in the R can do and they have a whole, you know, a great set of resources for towns. And then also our partnership with VALA, they host what are called the International and Assessing and International Association of Assessing Officials, IAAO, which is sort of the national program that Listers and Assessors are a part of and can get certified in. I've noticed more as I'm seeing, you know, towns looking for Listers and Assessors that they wanna have some level of certification for the folks that they're hiring, which is great. So VALA actually hosts three of those international courses throughout the year too, at a reduced rate and then we can also reimburse towns to participate. So we'll reimburse the towns for registration fee and their mileage and, you know, in some cases, if they're having to spend the night, it's three hours per hour. They can work with them to reimburse the hotel too because the whole idea is that listing offices in general are run on a pretty tiny budget and the work that they're asked to do is really complicated. And so we wanna do whatever we can to make sure that they get the training they need. There's a lot of turnover, there's a lot of folks who are retiring or moving on. And so every year we really need to try to cast the net while I can get that training out there. So when our district advisors aren't carrying out the equalization study, they're the ones also hosting our training. I did just wanna point out on page 14, we are, this is, I think, a new page in here or at least a little fancier than how we used to provide it to folks. If you're interested, you folks might hear now and then from constituents who have property tax appeals. So like I mentioned, they can appeal their valuation. They have a window of time to do that with their local liquor assessor. They can appeal that decision to their board of civil authority and then they can appeal to me if they like. So the fee for appealing to the director of PBR is a $70 filing fee and we have hearing officers, they hear those across the state. If they were to apply to a superior court, I think it's supposed to be $200. So it's meant to be a more affordable avenue for and a little less formal avenue for folks to hear their property tax appeals as a question. So when they get passed the board of civil authority if they're not happy, do they choose you or the court? Correct. They have a choice. They'll do you then the court. Correct. So they can come to the director of PBR or superior court and it's their choice.  If they're not happy with either the superior court or the PBR director decision, they can appeal to superior court. So it sort of goes like this. And we would say the vast majority seem to appeal to the director. I think in some cases, if you're talking about a commercial property or something like that, they might be more inclined to go through the court system but as far as the folks that we see, it's individual property tax payers who have a particular case. George. So you give us at the bottom of that page 14 and you give us the results of the appeals, you know, a number of appeals. Is there any difference in the outcomes based on where the appeal is, whether it's in court, founded court or a founded court, with you? Oh, this is only representative of the ones that we see. I see. So I don't know, I don't know what the outcomes are for the ones that go to court. We really, like I said, I think it's a very small number and they're probably new for commercial properties. Yeah. Sorry, we don't have that representative. This is just one thing from this. So we are always, I'll take this few seconds to make our plug for property evaluation hearing officers. It's really hard to retain these folks. Right now they get a $120 per day for holding the hearings and then we do pay them an hour with the rate and mileage but it's really hard to find folks across the state who can hold these hearings. And so we have about five folks now who do that statewide, which is good but it's a lot. So we're trying to find new ways to recruit folks who might be interested in serving as hearing officers. They cannot be a state employee, they can't be an employee of the department they have to pay for. So if you know anyone who's looking for some part-time property tax appeal hearings, let me know. So on page 15 is just the brief summary of the statewide software program that we have. So we host a program that's currently offered by Nimrick, the New England Municipal Resource Center. So there's a few components of that. The piece that we're responsible for is the Grand List Maintenance Software and then also offering CAMA. So CAMA is the Computer Assisted Mass Appraisal Program. So the vast majority of towns also use the Nimrick Microsoft system but there's lots of others out there and there are other towns who use different CAMA programs. So we are, that contract has been in place since 1995. It's been renewed several times. So in light of changing technology and needs and feedback from the town, we are gonna be issuing an RFP pretty soon, hopefully in February, to see what else could be out there to carry out this work. That would obviously be a couple year process and transition or if it continued to be a Nimrick then that would be, you know, that works too. But we just feel like we're out of point we really need to always see what else is out there and what we can get for any program. So you'll probably be hearing about that again. I'm happy to come in and talk about that more. You know, we really are sort of behind the time so when it comes to things like digital maps, especially for current use and tax mapping, there's lots of different tools out there that match with the Grand List. And I know that the data that's in the Grand List is obviously used for a lot of different decisions in this building. So whatever we can do to try to get the most information as easily as possible would be good with minimal disruption to towns. So on page 16 and 17 is a summary of the real estate transaction taxes. So these are not implemented by PBR anymore. They were up until a couple of years ago. They're part of taxpayer services but they're obviously pretty major informational points for you folks. And the results of the property transfer tax return are main source of data for the Equalization Study working with towns. So this summary has the property transfer tax revenue, real estate withholding and land gains summaries. So we figured rather than taking those out, we could keep those in there and have them updated for you folks just to have as a reference. Hi there, sir. Hi. Hi, Tim. Yeah, 18 is high, quite a bit. To what do you contribute to jump? I think it's a combination of a couple of really high value properties that sold. And this has moved into the online system as of the end of 2017. So I think that's also just a reference with compliance as well. Great. So you think we actually are collecting more? Yeah. Awesome. I like it. And this money goes? Let's see, so. Beautiful places. Yeah. That's okay. You don't need that. I know we have a little administrative cool back. That's the piece that I'm getting attention to, but. Oh, okay. There you go. Very good. Yeah. And land gains, tax, it seems to be increasing. I guess it's increasing as quickly as the chance for tax. And I'm not sure if that's come up in this context. I know that there are some considerations for changing what land gains tax, how it's collected or implemented. So that would be a question for our policy director, Doug Warren. Okay. So on page 18 and 19 is a really good snapshot of statewide of the current use program. So for those of you who haven't heard this field before, so the current use program is an agreement that is designed to protect Vermont's working landscapes, to provide equity and fairness for agriculture and forestry for taxation, and to encourage preserving and enhancing the natural resource, and also, you know, help sort of deter parcelization of parcelism, just try to keep them in large parcels as well as possible. So this program is an agreement. It's not an entitlement or any sort of just automatic, whatever, there are pretty rigid standards that folks have to meet in order to be enrolled in the program. And when a landowner enrolls their property in current use, the state actually, then if they, we established a lien on the property that's enrolled in the program. So, and if and when they decide to develop the land or remove it from the program and remove the lien, then there is a tax called the land use change tax that is due at that point. So I just think it's really important to sort of reiterate that this program is a significant commitment on the landowner's part to participate in it. And so as you can see, a huge portion of the state is enrolled in current use. So there's a breakdown of what's agricultural versus forestry on page 19. You know, when this started, it was a relatively small volume of acreage and now it's up to 18,000 parcels and 2.5 million acres in the state are enrolled in the program. So that's a, that we have four staff members and property valuation, food minister for use. And like I mentioned before, I think it's reiterated on page, oh, on page 21. So if you're enrolled in the previous program, then your property tax for those acres that are enrolled are at this use value that is set by a current use advisory board. So they meet in January and set these values. And so there is a difference between what your property tax liability would have been both municipally and education wise on your property tax bill. And so as part of that, the state pays out that whole harmless payment that payment I mentioned before. We actually calculate what the municipalities were not receiving for municipal revenue or for parcels that are enrolled in for use. So that's sent out to try to sort of make the municipalities whole for the enrollments of programs. With their million, but we may hold them back, we may not. Cynthia. No, I'm not going to hold back. So we, I see that on page 22, you have the show, you show the respective components of the municipal tax that's savings and the education tax savings and the 15 million for 2018, 15, five, that's actually paid to the towns to make up for the property tax revenue that they lose. And I think I'm correct in that. And that's shown in the regular budget. I'm on page 22. And then we show the education tax savings. To my knowledge, and this is my question to you, to my knowledge that figure of 50, 45, three for 2018, but this is the only place where this figure is listed. I have not found it listed anywhere else. It's not listed in tax expenditures. It's not listed in the budget. And I really question that. I think this is a tax expenditure and it should be listed as a tax expenditure. And there's a cost to it in the full-grown revenue. If it's not a tax expenditure, then it's something that should be listed in the budget somewhere. I mean, it should be listed. I don't think someone should have to find this document in order to find out that cost. The municipal cost is listed in the budget. So this cost needs to be listed someplace. It's not in the education fund outlook. It's not in the tax expenditure report.  This is coming from legislative direction, but I just would solicit any comment you might have as to the appropriate way of conceiving of this program cost. That's fair. I would say that the difference is that we actually are statutorily required to do that whole harness payment for the municipal revenue that's not collected. And there isn't any requirement to sort of capture or account for that other piece. But we've been tracking it for quite a while, but it's revenue not collected. So it's...  That's a budget item. It was a budget line item and it was under the budget because it had to be paid to the towns, because of course all of the property tax went in the town. So not only did you make up the municipal, you had to make up the education. So the whole thing was paid to the towns. And once there's an education fund and this is treated as foregone revenue, there's an accounting entry, but there's no tracking of it. It's not considered a tax expenditure. It's not considered in the budget. I think it's a tax expenditure or it's a program and then it should be in the budget. So I just think it's a lack of transparency that people have to know to find this booklet, to find that number. So just to interject, I think that's really a legislative problem and a legislative solution that there is... Are you soliciting her comments? And I'm not going to comment. I don't... She didn't have any. That's right. So we will probably have more discussion in here. I just wanted to get around to her, but she already had no comment. That's fine. I'm not shutting it off and just moving on. That's all. I'll definitely pass on along to her as well. Yeah, just... But if it's to be listed somewhere, I think the legislature can say so. No, I'm going to put her in a bill. I just wanted to get her the heads up.  I'm going to put her in a bill. Yeah. So because I know you folks often hear from individual landowners about different pieces. I just wanted to just signal two pieces. The land use change tax that I mentioned earlier, the calculation of that changed pretty significantly in 2015, statutorily. And so that is a formula based on valuing whatever the changed piece of the parcel is as a standalone parcel. And then there's a 10% tax on that. And like I said, folks can withdraw their land from the program. And the leave remains and they're not having to be liable for that land use change tax. But if at any point they develop the land or want the leave removed, they do have to pay that land use change tax. So you may hear folks asking about that and we're happy to explain that. Well, there's a proposal in the miscellaneous tax bill to change the underlying statute on that. Well, it... The contingent needs. Yeah, the contingent needs. Yeah, which would help because a lot of times we're holding up large decisions based on those liens. What about with a sale? If I had property that I hadn't used and I withdrew it from current use, but I didn't develop it, and the lien is still on it and I went to sell it, is the lien still on it? Yeah, if the owner wants to develop it, they would have to pay the land use change tax. No, they could continue to, they could just enroll it and it would be in current use. But if they developed it, or wanted the lien on it. So we actually have set up in our software, so when someone files a property transfer tax return, and answers, is this currently in current use? Does the new owner wish to continue it? It triggers a letter that explains that to them and gives them a period of time in which they can, because they have a third day they know, I think that they can signal that they're transferring it. So it's actually a transfer of the property and so they don't have to actually pay the land use change. Does the lien show up in the town offices? So if you're enrolled in current use, under your property and those big books, there's gonna be the lien as your mortgage holder or whatever and then the lien is okay. Which is why we're so militant about maps. Because it's a lien, the state has a lien on the property. So it's both within. And it might affect the negotiation on the purchase price, right? I have a property with a lien. That's why you have to do a title search. Just back to my curiosity about the accuracy of assessment. Have you folks found that the town which would assess property that's enrolled in current use, you find that that, either dispersion or however you wanna look at it, is any different from the accuracy of other parcels? Just wondering whether or not that local listers or the assessor literally treats enrolled property identically, methodologically. Well, they certainly are expected to and we are required by statute to do an annual audit of three towns of their current use parcels, specifically for that sort of, is there a disparity in their being value? We find errors and we work with them to fix those things. And definitely our current use staff is there renewing applications and if there's any change to enrollments, they are looking at those values and if they see anything that doesn't look right, they'll ask our district advisor to reach out to the town and work with them to fix that. So I think we're in our third or fourth year of doing the audits where we actually select three towns a year and we'll be coming, actually, to this committee, if there's more somewhere. I was gonna say, we get a presentation on that. It's pretty soon. No. And yeah, that's what we're finding, is there's not some sort of, and this is probably true in general, there's not some sort of nefarious or strategic issue that seems to be happening, but there are errors. Right, absolutely. Yeah, and we do pay. How did you do this? I knew, I should have known you would ask, and I am sorry. We did a place field, Sutton, and Sudbury. So yeah, we'll come back to that. Oh, so the other piece I wanted to just signal if you have constituents who are calling you to complain about things, is we have an annual agriculture certification. So property that has forestry, there's a forest management plan they are required to implement and submit activity reports on that is done through the Forest of Arts and Recreation, and then they let us know. So there isn't sort of a similar examination or audit of agricultural properties. And so a few years ago, as part of some of the changes to previous legislation, the legislature has an annual agriculture certification. So it's a very simple process where we mail a letter in a pre-filled form of what our system has on record for that agriculture property. It was about 7,000 a year. Asking the folks to review that, sign it and send it back to us, or if it's incorrect or they have changes to park that up and send it back to us. And it is an enrollment requirement, so we work really hard to make sure that people respond to that and we follow up because if they are not certified annually, and they don't respond, then they can theoretically be withdrawn from the program, which is not insignificant. So the first year, you may have seen in the news, we did several iterations of telephone and outreach. We worked really closely with the agency of AG to really try to get folks into compliance. And we're largely successful. There are still a few of those that have a PO that are being heard, but it's a small figure of that original 7,000. This year, we were a little better prepared to send out forceful letters, and including more certified mail. And so already out of the 7,000 that were due November 1st of this past fall, there's only less than 200 that we have to go back from. And in some cases, they might be a transfer, in which case they don't need to do it because the new transfer application counts as a sort of occasion. So, just added. Just added. Yeah, that was another confusion. Yes, it certainly was. Yeah, so, yeah. So if you have any questions, if there are any context, you've got that please let us know. I think the more we do it, the more sort of normalized and habitual it become. I do think, I generally do think that we try to make it as easy as possible for folks to do. And I think this body might hear some folks bring up the idea of staggering it or doing it on a routine cycle. Definitely not opposed to that. But that being said, there is something about sort of having an animal thing that you don't want to sort of wait a couple of years and forget about it. It might actually end up working against those circumstances. And at the end, it also is, you know, there's always a handful of properties that are no longer eligible and so they're not in the program anymore. So it's carrying out what it's meant to do. Is there a recapture when someone defaults or leaves the program involuntarily and doesn't renew? Because obviously it's almost as if it's a withdrawal. Only it's a forced withdrawal. Right. So is there a recapture of some of the prior benefits? I don't think, I think we have found that we do not have the authority to recapture benefits received in here. But the land use change tax would apply. Great, great. But yes, in that case, even if it's our action. And you're at a higher level. So when you withdraw, there is a recoupment, you know? No, no. The involuntary withdrawal will be treated the same as the voluntary one. Okay. But in order to get the lien off. Okay. Yeah. So the state would still have that asset. Okay, so that that's where the recapture comes. It's not a recapture. It's not. I refer to it as penalty, but it's basically the land use change tax of functions like a penalty. And it's treated the same for everybody and it's not related to the amount of tax that you didn't pay. It's related to the value of the withdrawn lien. Wow. But the other penalty, if you will, is the pay at the higher pay. From that point of low to no. Julia, do you want to? Yeah. Are we doing on time? Not good. Yeah. It's okay. We're on page 20, but you're doing great though. It's really, it's good stuff. And it's really good for us to go through it. But we will, you're on page 25. We have someone coming in at 11 at the auditor. So it's going to be shifting gears completely. Okay. I've been trying to get people to break between presentations.  But why don't we get through the current use? Just tell us where the charts are. Sure. So right after that section I was discussing starts the town by town tables of current use. So that the taxes without the rate and so on and so forth. So that goes through into the 30s. And like I said, at any point there's data that you're not seeing here that you think are reasonable for you to have to do that. On page 33 is a summary of the equalization study. I think I've already sort of covered that. And then immediately following that are the CLA's and COD's by town. So it's first by county and then by town. So it's in a county and then the town's there, so on and so forth. It's good to see where you're on my town is. Yeah. Yeah, we guys shouldn't point that out while I'm sitting in the front seat. Yeah. The CLA's, they start on page 34. And right now the window is open for towns that are appealing their equalization study results. They have until the end of January to repeal those results. Like I said, we've published those right after Christmas. Thank you. Thank you. Thank you. Nice to see you too. So quick question. Yeah. So I have this question, Middlebury. We're in the middle of a reappraisal. So, in fact, I thought I would hear in a moment what my new appraisal value of my house is. So is this what they have to use for FY20 using that assumption for the grand list or will it change if we get the reappraisal done in the next few months? Right, so once the reappraisal is complete and certified and approved, then that's when the values are set. So it could go into effect for FY20, for July 1st. I think so. Do you remember that? The grand list. The grand list. On April 1st, yeah. So it's whatever is in effect. By April 1st. In towns that are actually in the middle of a reappraisal, their equalization study process is a little different because of that exact fact. So there's a different methodology for setting errors. Yeah. That's right. So why don't we just go through the, get up to the statutory exception. Yes. Perfect. So let's see. That's on page 51. But we won't do those. We'll come back to those. Because it's gonna be longer than a three-minute discussion, I think. Okay. But there's the summary of listed values and category which I think is interesting on page 49. It says though you knew where my tabs were. So I don't know how to make sure. So in the grand list, in the software that we use and then in what we collect and what we analyze, there are multiple, as we talked about earlier, those categories that different parcels fit into. So on page 49 is a count of those. Yeah. Is there a description of what R1 and R2 that I may have missed out on? Not in the book there. It's not in the book. How do we find out what's wrong? Single family, basically. That's a good one. I should do that first. Yeah. Great. Thank you. What the age might be on there? Right, in different, you know, for example, the UEUO, there's different utilities that fit in those two different buckets and then there's a separate one for cable. Yeah, so that's a good answer. So we'll go. Thank you. Thank you. But it just gives you a sense of sort of where the values are in the state. The bulk of it. The bulk of it. And that's also shown in sort of on page 48 in the chart that just sort of breaks it out. Yeah. Yes, with real words. Yes, I see. That's a good one. That's a good one, right? Good. So shall we jump up here? Just does the use mechanism, use value appraisal, bump up against, in any way, the growing increase in conservation easements on parcels in Vermont? I assume one could have a conservation owned lands that was subject to conservation easement and that value would still be higher than the use value appraisal. And so one could enroll in that as well. And I just don't know if you know how many acres are subject to use value that are also in the conservation even approach. No reason you would because it's, I assume, run by a different. There is a lot of overlap for sure. There is. Okay, I'm just sort of curious because it seems like a natural. So I'm going to give us five minutes on Doug Hopper's coming in at 11, so please come here for him. Okay. Thank you. And we'll please go for the rest of the recording. Okay, great. Thank you. I don't need to get out, but I do enjoy saying my name's Doug Hopper and I'm the state auditor. It's being recorded. It's being recorded. This is your mic. Yeah, those are the speakers. Those are recording. The report, to answer your question, by the way, thank you for inviting me. Covers more ground than just the business and centers. As I think you know, some of you know, I've been working on these issues for many years before I became state auditor. But part of my job now is to assist you by researching various state programs so that I can help you make good resource allocation decisions by knowing which programs work well, which ones don't work as well. Economic development is a challenge for many reasons. Even the best design programs, but we do have some programs that present serious problems for my office. One of them is, of course, veggie, because the bug for can't be validated. Auditors need evidence and the decisions made by the private entities who are applicants are made in boardrooms. That information is not available to me. There are others that present. Just briefly, and there are new members of the committee. There are four people who did serve on this committee last year who have varying levels of knowledge about these programs. So it might be good if you talk a little bit about what the program is, that's your critique. The program is now 12 years old. Its predecessor was 97 or 98. The person was a tax credit. This is not quite the construction, but basically the predicate is companies come to the entity, the Economic Progress Council. I think 11 members are most accounted by the governor. And say, we understand you have an incentive. We're thinking about expanding here as opposed to elsewhere or not at all. And if you give us this incentive, we'll get it done, but we need your help. They're basically saying, effectively, if not for, or but for this incentive, we would not create these 27 jobs or make this million dollar capital investment for the case may be. And that is the foundation of the program. Everything after that is mechanical and they run it pretty well. But that is the point. That can't be verified. Now, that's not the only challenging economic program from my perspective. Another one is tourism and marketing. The private sector, according to the Economic Census, spends between $80 and $100 million a year on marketing and advertising. They have to do, that's their business. The state spends a little more than $3 million a year. There is no methodology, none. And I've talked to Kovet about this for years.  How could we possibly measure the impact of the state's contribution to that marketing and advertising total marketing and advertising budget? There is no way. So I can't tell you effectively what we're getting for that $3 million. Now, as you may recall, a few years ago, tourism and marketing came in with a proposal that you dedicate a portion of the growth of rooms and meals taxes to that program. The inference was that if it grows, it's because of them. They provided some data, but it wasn't all the data. And I caught it, Tom caught it. He had a fiscal note about that and some related matters. And it showed quite clearly that as you guys for a variety of reasons had been decreasing the appropriation for tourism and marketing, the rooms and meals tax revenues were increasing. So there was no direct correlation at all, let alone causality. In fact, it was going the other way. So, and that is their primary performance measure, is rooms and meals tax, as if what they do is a direct contributor to that outcome. And I don't believe you can prove that. That's not to say these things are bad, but the question that I was confronted with is, how can I help you and your colleagues across the hall and others make better decisions with better information? Well, there's a rich literature out there about economic development, has been for decades about all of these subjects. So we spent a great deal of time reviewing the literature and providing it to you. And it's pretty dramatic. The fact is business incentives have been a subject of research for a long time, mostly since the late 70s, early 80s when it's really ramped up for a variety of reasons. But there's something that came out this summer, which was just after the report was published, which is very, very powerful for a lot of reasons. The most important is that it's done by Timothy Bartik, who is the godfather of this stuff in America. He works at the Up John Institute, very well respected, totally objective. I can't even tell if he likes business incentives. I was going to say, how can you become a godfather of this stuff? You do good research and you get cited hundreds and hundreds of times by people who respect your work. So he decided, he felt, I presume, that there was enough research on this core question, which is the but four. For him to do a meta-analysis and look at the 34 studies that he found that he thinks are reputable and work through all of them and come out at the end with what he did. I can send you the abstract of the full report if you like. He basically said, based on good research and he evaluated all of them and acknowledged that some have positive and negative biases and so forth, that somewhere between 75 and 98% of all of the economic activity supposedly incentivized would have happened anyway. And in fact, Tom Covet and myself and others have been saying that for years.  And I will share the report with you. I'm sorry, I think I sent you my report, but not this one.  And we also have it on our website for anybody who wants to load their. So the bottom line is, when you learn information like when you get information like this, it should make you think, well, whatever we're spending on that program, we should think, what else could we spend it on where we could actually know and measure the return on investment? Because we all share the same goal of doing everybody wants more and better jobs and a healthy economy and liberal wages and all that good stuff. The question is, we just don't have that much money for economics. So we need to make the most of it. So what the report does is provide you guys some information about the other strategies and what the research says about it. Some of it's just a no brainer. There are some things that are not typically part of the economic development conversation that I think should be about affordable housing. We hear business people, your colleagues, the governor, everybody and their brother saying, we need more housing. We need affordable housing. But somehow it's not part of the economic development conversation. In fact, affordable housing checks off a whole bunch of boxes right away. It creates jobs instantly. And if you made a 10 year commitment to this for the whole time, you're going to create a lot of jobs.  Second, it creates a hundred year asset. Third, it provides an answer to this difficult challenge that people are telling us. We can attract people to live here, to a sense of so forth. I think that varies around the state, of course. But so there's a lot going on with housing and it should be obvious, but it's not for some reason. And furthermore, when you do it, I know you collectively with the governor a couple of years ago, devoted some additional resources to housing. If you're going to do more of it, I would encourage you to talk to the people at the Champlain Housing Trust and learn about perpetually affordable housing. Because the way it's typically done, in fact, not so much BHTB, they get it, they've been in this business a long time. But if you just say we're going to build housing that's affordable to middle income folks, that's great. So you buy the house with your family, look 10 years later, you decide for any number of reasons to move out. You're going to want all that appreciation. So the house is no longer going to be as affordable as it was when you got it. What the Champlain Housing Trust, the old land trust model does is retain some of that appreciation in the property. So the next lower mother to come family can afford it. It's brilliant. And there's an incredible report by one of our great natural resources, John Davis, on this thing about eight years ago that I've sent you. It's really well done about the history of the program. Other strategies or approaches to economic development that make sense and are measurable are also well known to you. Small businesses, you might start a business and have a great idea. You were well wrapped 30 years ago. But the thing worked so well that five years later you got 28 employees and you don't know anything about HR or all that stuff. You need help. Maybe the expansion requires some financing. That's not your thing. Technical assistance for small businesses is very good, a very good investment. Obviously, workforce education and training, fantastic. And I would argue that one of the other programs that's difficult for me to evaluate, and I wrote a memo on this a few years ago as you know is about training program. That program basically is rewarding companies that are growing and paying them to train their new hires. But that's the cost of doing business. If you're dealer.com and you're hiring people like crazy, you got to train them. Everybody's got to train new employees. The statute says very clearly, you can train, you can get a grant to train new hires, but it has to be supplemental training, not replacement. The point being, taxpayers shouldn't pay for training that you would pay for anyway. Yet, if you look at the numbers from the DTP on where the money's gone, it's gone to 10 or 15 companies year after year after year. Hundreds of thousands of dollars. Where did you put the training money? You said where? I didn't pay any training. But what's the problem that we keep hearing about? There aren't enough bodies or bodies with the right skills in the right places. So if you've got to focus on expanding the pool, all the money from the long training program goes to people that already had jobs. Now, I'm happy for them and I'm glad that the companies are expanding. But is that the best use of your training? Limited training programs. You only have 1.3 million for DTP. So that's an issue to me. Other things that make sense, I'm sorry. No, finish your sentence. That's okay. Okay. On affordable housing, I think I heard a story on DPR a while back. Late fall or something like that, to the effect that all our millions of bond money wasn't necessarily going where it was most needed or wasn't going, and I've been trying to find that story and ask about it. And I wonder if you were aware of it or a member or anything of that effect. The subject is of interest to me. It's so recent that I'm not sure it's right for an audit. Yeah. But we can certainly make inquiries. Yeah, no, I'm not asking about an audit. Just if you've heard this story. I know the call. Okay. I'll think I'll put an inquiry out and I'll see if I can find out. If the money was directed to BHCB then without doing an audit or an investigation, I would feel comfortable. They're very capable. I understand a tremendous track record but I don't know where all the money went. It's something to the effect of, I don't think anybody was breaking rules but somehow in areas or something where it was most needed, where we most needed affordable housing it wasn't appearing, something to that effect. That's the other box that affordable housing can check if you choose to. Bennington County distressed community, direct the money there. Northeast Kingdom. You know, the other stuff is pretty diffuse but for things like affordable housing, you can say we're gonna do it there and there and there. Period. You can do it as long as it takes to solve their local problem. Another, I'm sorry. I've got a question. Sure. Just one comment, Jim. I spoke to Tate Brooks of the administration. They're coming out on Friday with an updated report of how much of that bond's been spent, where it's been spent, and I see it on board or two. Yeah, please do. But it's a question for you and I've asked a lot of different people, a lot of different levels of government about this and it goes to affordable housing and don't have to give the answer today, we don't know it, but I'm curious to find out about this in the future. We have these affordable living that's, we're paying in St. John'sbury upwards of $300 to $350,000 for an apartment to be renovated, renovated for an affordable living situation. And I don't know how we, I mean, that just kills me that we're spending that kind of money for an apartment when we could be providing a lot more apartments for the same amount of money. Do you have any insight as to why that is so expensive? No, I don't know anything about St. John'sbury, but I do know. Well, I hear this in other towns too. It's not just particular to St. John'sbury. I do know that if you want to have a petually affordable housing, which not all these projects do, you have to have a built-in subsidy at the front end. There's no question about it. Right, I get that. Those dollars, I don't know what housing costs in St. John'sbury, but it sounds crazy. Oh, I could build an apartment or a group of them for $100,000 a piece. Well, they're not that cheap anymore. First of all, second, I'd have to look into it. I'd be happy to do that. But I encourage you, the people who are expert in this are not only BHCB, they're just down the street, I think, but CHT, those people, Brenda Torpe who you know, Mike Monty, these guys know their business and they're straight shooters. They will not BS you, they'll tell you exactly what they do and why and what their results are. I have great respect for these guys. I didn't bite them in. Now, this isn't really your family record. Well, I was going to say, we're not the housing committee, but if the housing committee is being funded with tax credits or something like that, or we're being asked to put tax credits into something which we're convinced doesn't work and it ought to be diverted to housing, it's helpful for us to know about it. You do, the housing credits are used by banks and insurance companies, as you know, so you have a little bit of that. We have a funny part, there was a program that was proposed last year that was a housing for a rehabilitation program that really was not ready and I can't remember what was wrong with it, but it really has been making sense to us. Peter. I looked into it because Barry is one of those communities that has a very large vacancy rate, partly because we have a lot of junk and it was age 766. It was died here, I think. It was not ready for prime time, as you say. I suspect it may be an ideological issue because it was propelled by credits, there was no appropriation associated, but it was to recover properties that had been vacant for a while, were limited to single and duplex to get home ownership going and property that would be rescued. My understanding, because I asked my colleague, Tommy Walls, that the administration does intend to reintroduce it with a slightly different funding mechanism. I'm not sure, we'll see it, because I warned them that it died here. I wonder if we have Joe Mark. There was something other than the use of the tax credits that was problematic and it had to do with the way it was targeted. And it didn't seem like a good use of money to us and it really wasn't advocated very aggressively by any other committee either. No other committee really wanted it that much. I mean, commerce approved it. They just said we don't care. We're moving it out of here, letting you guys do what you want with it. I don't know if you see what it's like. Jim. I wonder if you wanted Joe's project. Wonderful, that's just wonderful. So there were some other things that the literature suggests. Is there a question? I was, yeah, I was recalling what you were recalling. I just don't remember the details. Well, there were some things that didn't seem to be very well thought through. I'd be interested in looking at it if it came back in some form or something. It felt like it was attacking the right problem, but it was supposed to be getting in the right way. Agreed? Can I see it again? Or some person? Some of the other approaches that I thought literature suggests provide a better return or certainly a more measurable return include energy efficiency, which also can be targeted just like money for affordable housing. We spend a lot of money on that right now. There's some questions in the community and I hear this frequently. Because I think efficiency remark doesn't tell its story very well. Having said that, they may be right for an audit. I looked at that last year, but they were in the midst of their tri-annual financial audit, which did not bother them. But I mentioned our conversation that there are a while back to a fellow who I would invite in. Of course, then again, it's not really your bailiard. It's a lot of money. Unless we're looking at the efficiency charge, which we've got this month. We're at system. Another good one is something that I talked about in a report almost 20 years ago called the Leaky Bucket. And that is, we buy collectively both as state government and as individuals and businesses a lot of goods and services from outside Vermont. Some of which can be produced here and are. And some of this can be done by anchor institutions that have to buy a lot of goods and services. A number of years ago, we worked with some people that then fled around because they produced 5,000 meals a day. It's ridiculous how much food they put out to the big user. And they had somebody at the time who got it and said, yeah, we will put the timing to trying to buy more locally produced food. And they do. And they have. It's significant. And now it's become sort of a national model. There are hospitals all over the country doing this. It makes perfect sense. And colleges should do it. The state does something when they can. But we did an audit a while back. You have phones that bring in the earphones, right? The red phone. So another one is energy, which is something I discussed in that report. And we did an audit a couple years ago about the state agency energy plan. And this is about 20 years ago, the state decided that they should walk the walk. And you guys periodically over time have said, this is our goal. The last one, I think, was 09 or 11. Instructed BGS and others for the state to reduce its energy consumption 5% a year. Well, they haven't done that for a variety of reasons. But to their credit, BGS now has some good professional staff. So they're beginning to make some improvements. But efficiency is so obvious. It reduces costs of all these ancillary, environmental, and other now learning health benefits as well. That's a good one. I mentioned technical assistance. Or did I not? Yes, small businesses. Another one that gets a lot of play is childcare. The labor market doesn't work without childcare, period. All in my generation, I had one parent that worked. And that was the case in the 50s and 60s. And that's not the case today. And it needs to be affordable and available everywhere. But you don't hear much conversation about it as it relates to economic development. You hear it as a social infrastructure piece, which is important, but not directly related to the labor market. About 20 years ago in New Hampshire, they did a study and asked the business community to come and say, let's figure out what the costs are to having insufficient capacity and unaffordable childcare in terms of low morale, people coming in late, having to leave, the kid who's sick. All that stuff is just life. And it was substantial, billions of dollars. And there's no hiding from that. But that's an investment. It's different than veggie. I mean, veggie is sort of a faith-driven thing. Yeah, yeah, but for the most part, veggie rewards companies that are already successful, they wouldn't be coming in saying, we're going to create 27 jobs if they didn't have demand for that in their business. You know, you don't create jobs because of incentives. Be gentle. So I understand. This isn't, or just I'm curious what you think. And I'm not advocating this position necessarily. But I understand that the Bucford test and veggie is kind of a net that we all have decided to buy out. But the reality is that states do compete. And there's a bidding war that goes on that has nothing to do with the Bucford test. It's just a bidding war. And I just, you know, I can understand what policymakers are not willing to step out of that bidding war. Because if you're always worried about jobs, you're always worried about the economy, that's kind of just part of why we're here in some ways. And so do you have a comment about that bidding war? I certainly do. OK. First of all, that statement, your assumption, is predicated on the belief that interstate movement of businesses is responsible for the creation or destruction of a lot of jobs. First of all, there is no official data on that. The only data I've ever seen suggests that that is not true, not even close. That at most, 2% to 3% of all the jobs created and destroyed in this country are because of interstate business moves, 2% to 3%. Yet the veggie program is one of the most significant cost of all the programs used to support it. And it's tiny compared to other states. It doesn't matter what those states do if nobody, if their businesses aren't really moving around that much. You hear about it in the context of BMW and Boeing and hundreds and hundreds of millions of dollars. That's just not happening in Vermont and New Hampshire. It's just not. But I mean, the recruitment of Amazon is a classic example of a bidding war that we, fortunately, couldn't even have gotten to the pre-part of it. Yeah, but when you look at where they went, they didn't go where they went. For the tax incentives, they went for the workforce and the ancillary efforts of being with. I mean, maybe, but I don't think you can base. Yeah. But that's the problem with this. So there is this myth out there. If everybody believes it, then it's like it's true. You don't have to make policy based on myth, if you choose not to. And we do that quite a bit, frankly. And partly, this report, there's a section at the end. There's deer and me. That's a data section. It addresses charts, graphs, mostly. Could you walk us through the report a little bit for those of us who haven't been made it last night? Sure. Last night? It was only 73 pages. Just saying. But as I say, basically, I point out in the cover memo that there are some major programs in our economic development basket that I can't evaluate. I can't auto them. Right. So I then say, because of that, I'd like to share with you our summary of the literature on many of these other approaches, including business incentives and tourism, for that matter, tourism and marketing. And just see what the literature says about them. Yeah. And this is the cover letter. You mentioned, I think you mentioned all of the RECs and tips. Actually, veggie and tourism. To be clear, I have a mixed mind on TIF. I live in Burlington. I love my city, but I don't think we need it at TIF. It's the biggest city in the state. It's on the lake. It's got the hospital, the university. You know, we're going to develop the downtown as we have over the years. Smaller, distressed communities around the state, as it makes more sense. I don't like the fact that it takes a bite out of the headphone for the moment. That's unavoidable. But anyway, those are the five. Yes. TIF, RGC, VTP. So the rest of the report basically has chapters, for lack of a better word, on various approaches to economic development and what the literature says about them. The last section is a data section. Just speaking of myths, where I address the myths about Ramon and taxes, the myths about the business climate, and the myths about migration, is a high-risk data. Should we talk about that? If you like. All right. At the very end. It starts around page 15 of something. 59. People may have won a hard copy. Is it page 58? I just want to say, while they're getting this up, that I thought the grass would be wonderful.  Of course. Okay. We paid for it. Yeah. That's the point. The tax stuff is not news to you, so we'll skip that. Oh, don't skip that. I don't even remember the sequence. Business climate is a first myth. That one drives me crazy. Because typically, you have media outlets, everything from the local weekly to national networks. And if Forbes or the Tax Foundation or somebody else puts out, and they do every year, the latest report on the business climate and the rankings of the states. But nobody bothers to dig in and say, well, what's their methodology? What questions are they asking and what data sources are they using and so forth? And not surprisingly, since most of these are driven by business funded and business oriented organizations who have a mission to lower taxes on them and wealth of new people. That's one of them, of course, to drive out unions. Because one of the measures they almost always look at is whether it's a friendly state or whether you have those nasty unions and things like that. So if you dig into the methodology and people have done this, and I cite one of them in this report. It's a wonderful study by a guy from Minnesota, I think. And it's called Grading Places. And he reviews. You've seen it. Yeah, I've seen it. And he reviews five of the big ones. They're anchors. And basically, you know, just shreds them because they're not predictive. They're a joke. There's someone I've seen one that I like. And my state is actually pretty good. So I pretty much agree with what you're saying. The fact is that people like soundbites, they hear it. They're not going to dig into the methodology. They're not going to read that. And so what happens is they say, look what Forbes said. Forbes is respected. They don't go into all of that in depth. So it's kind of difficult to fight this when that's how people are. And they're not going to spend a long time looking at this. And so then the word gets out and then it becomes the truth after whether it's the truth or not. Well, part of the problem is that. So they have a bigger problem than just the data. And I think that the most recent strategic plan by ACCD includes a section that refers to these things and says, some people believe them and rely on them. So I guess we have to. I could not disagree more. If I were Mike Shirley, and I like Mike, he's a good guy. He gets some of this stuff. But if you see this stuff come out and you know it is not an accurate characterization of our state, then I would stand up and say so. And I would say, I'm the secretary of this agency. And this is below me. And here's why. And the day is easy to find. And I believe some of it.  They say, well, these are the top 10. I said, okay, let's see how Vermont fares on some standard metrics because they were ranked 46th. Well, in fact, we're right in the middle of their top 10 on these metrics. And you see that up and down the line. So I would expect that the governor and I've been around long enough and almost every governor tips his hat to this stuff. It says, boy, you know, because of this, we've got to do this, this, or this. Well, no, we have a mission collectively to make improvements in the economy on behalf of the Monarchs. But don't buy this stuff. It's below me. They're very good at getting it into the media. Very successful. It's everywhere, all the time. And it doesn't serve this discourse at all. It bothers me. So if you watch, I'll send you grading places. It's a little bit of a read. Yeah, I just thought maybe Sorcha can get a link to it. Tell us. I've read it a while ago. He updates it periodically. He updates it, yeah, a while ago. But, you know, one of the responses is just to say that people could generally question the way these rankings are done and not do it on the detail because nobody's going to cover it anyway. So the other one was, I think the last one was migration. And we hear a lot of talk about that. So I'm sorry, you didn't do taxes. You skipped it. Oh, I'm sorry. This is an interesting one because many of these rankings efforts talk about taxes. But what they talk about is the top marginal rate. That's all they do. Now, you know the ones who've been around, maybe the new guys haven't seen it yet, but JFO over time has done a number of reports that dig into this. And the most recent one was very interesting. A lot of them have all been interesting. And they break it out and say, What is the burden so-called interesting? They're better at messaging too. They call it a burden as opposed to your responsibility. And they break it out by income class. And Vermont looks, and I have some of that here. In fact, if you scroll down a little bit on public graphs, it's very dramatic. For the lowest quintile and the second quintile, we look really good, frankly. Which is the whole intent of a state that tries, as best you can, to have a progressive tax structure. Now, we suffer a little bit because of the property tax. Even though we've done good work on the education side, the initial property tax is terribly progressive. But anyway, this stuff blows up the commentary about how terrible Vermont is. Do we have a comparatively high so-called burden on well-to-do people? Yes, that's a conscious choice. Policymakers in this state for many, many years. Although the information that we got from Iran about sort of what the effective, or this choice, the effective rate of, you know, $200,000, AGI were actually pretty good. It's like 5%. Yeah. It's been that way for years. But, you know, forms won't tell you that. They'll just tell you what's 8.95 or what the heck it is. Well, we actually reduced the top marginal rate we brought in the base. So the tax part just provides some data to debunk or help begin to debunk some of these myths. That's part three of the report. It's one that matters to us. Oh, and the last one, of course, as I mentioned is migration. You know, you see news accounts of the United Bandlines study. Well, that's fine, but give me a break. IRS publishes good data on migration, and it gets better over time. Now they break it out by age and income, which is very cool. And some of the graphs I put in, maybe even in the text, make very clear that some of what we hear, which is typically very dark, everybody's leaving. Vermont sticks, right? All those old people are leaving because of our tax burden. So we're like, well, here's one for you. We're not getting too old. That's migration. We want to keep all the old people here, but we're complaining because we're old. You look at the data on the number of percentage of folks over 65 that left New Hampshire and Vermont. New Hampshire is about twice the population. Don't want to surprise, because they're twice the population. But wait, we've been told that Vermont is horrible, and New Hampshire is this paradise of no tax, which is true. And why are they losing elders at exactly the same rate as we are? Because people age and go to the sun for good and sake. It's not complicated. Also, all young people are leaving. Well, first of all, young people are leaving the Northern tier and rural areas in this country for 100 years. That's nothing new. So I looked at the data from IRS on people under 26. Vermont's loss rate was 9.5%. New Hampshire's was 9.3%. I mean, really. Is it a problem? Yeah. But then if you go to the last table, it's very interesting to me, and I've done this a number of times over the years, take a bunch of occupational types. Common ones. Keep going if you can. Yeah. 72, 73. 73. I just don't want to make you dizzy by scrolling. Yeah. This one? Yes, ma'am. So if you take a bunch of occupational types and ask yourself the question, first, what is the median wage for that occupational title here and in New York in Boston? It's for comparison. And as you can see, this is no surprise to most of you, you can make 15 to 40% more if you move to the city. Yeah. Yeah, but the city costs a lot more.  Not as much as you think. I'm just saying I think you need to... The fact is, young people are not buying homes in Manhattan when they come out of college. They're getting an apartment with friends. So it's not as if yet. For the moment, they're not living in Manhattan, for sure. So they live where they can and they do what they can. But if you come out of undergraduate school with a lot of debt, you don't have the luxury for the most part of saying, I don't mind. I love Vermont. I'm going to give up on the job that pays me 65 grand to stay here and pay 30. Look at the number in the far right column of each one. Those are the annual openings for each of those occupations, both from growth and replacement. It's almost nothing. So part of the problem and it is a problem is that we're small for goodness sake. We're a tiny little place and we can't absorb all the young people who come out of college. Period. It can't be done. A lot of auditors. Why are there so many nurses? So we're getting old. That's a growing health care. I'm focused on the carpenters. It's pretty low. Other engineers. I know that maybe you just picked electrical because they're small. I know the businesses around this say, they need engineers. I've got the wrong kind. I don't know what the right kind of engineers are. There's a huge gap in the history of engineers. The Econ 101 says if you pay them, they will come or stay. So now that's not easy necessarily but our wage structure in the private sector is a problem. But isn't it interesting that almost no one ever talks about that? They would rather us have our neighbors believe that the policies that you create are responsible for all these outcomes and they're not. They never talk about the private sector. We used to talk about it at my own board meetings where members would say people didn't have to pay more because they think living in Vermont is worth something a whole lot more so we don't have to pay them so much. It's a problem. This data comes from this data? It's from DLS. I've kept hearing DLS. Sorry. So the data section was fun. I do enjoy creating graphs. I'm worried about the libraries. I'm going to get two librarians putting out of them. I agree with King Lauer that two librarians is kind of a lot. That's what I wanted to pay when I was in grade school as a librarian. It's an honorable profession. So anyway for those who've been on the committee and certainly the chair my views about veggie are not new. I think the report by Timothy Bartek is very, very powerful. I'm sorry. The report by Bartek is very, very powerful. Yes. We can continue on the path around for another 10 or 20 years. Admittedly, states have very limited ability to affect the economy in the short term. We are a speck at the end of the tail of the beast and the federal budget and it's going to exchange rates and it's trade agreements and interest rates. We have no control over any of that stuff. Even more reason in my view to spend every precious dollar in ways that you are as certain as you can be is a wise investment either in people or infrastructure. So one of the other things that I've heard to you and I had a brief email exchange about it but our employment rate is really low somewhere I was looking at that and thinking when your employment rate is low why are you putting money into creating jobs? Why aren't you when you don't have enough workers why aren't you putting your money into training or recruiting workers? It's not low everywhere. It's not low in Bennington County. Okay. But we, veggie is that's a good response but the money that we allocate to veggie is not going to Bennington County. Because that's where the growing companies are so it's the growing companies that ask for an incentive to subsidize the growth they would have done anyway. But we're creating jobs where we have jobs. On the labor side so that's the point. Move from unemployment to the labor market we hear from many people in the last couple of years about the labor market it's complicated and it's easy to get lost in it people misuse the information data but our labor participation rate is pretty good by national standards it's about 70%. And a lot of the people that have left the labor market what a surprise are just my age for retiring. It's no big deal. Do we have enough people going forward? We could argue that we could use some growth but what I'm getting at is some members of that cohort that are not in the labor force don't have to work, choose not to work whatever but some of them BLS measures this through the current population survey when asked if you're not employed have you looked for work in the last four weeks and if you say no then you're not even considered in the labor force but you might say actually I do want to work but I've been home taking care of a sick relative my car is broken my skills are not valued around here I can't find a job within 100% whatever it may be and they're referred to sadly as the marginally attached. There are more than a few it is, it's terrible. Sounds like a novel title. So I'm sorry I was depressed. That sounds like a DSM. Diagnostic marginally attached. But those folks some of them really do want to be in the labor market and obviously employed they're here right now so why should we even have a conversation about spending three million dollars to get Vermont to get other people to move here before we have enough affordable housing by the way then provide the assistance to the monitors to take those jobs that are being vacated by all of our high age cohort that are retiring and leaving those jobs open so there's so much more we could be doing but it's we're not really... It really requires some strategic thinking about what is actually happening in our economy as opposed to what have we always done and how can we tinkle with this? And even for those I think Mike Shirley would admit this I think he would that it's appropriate to pivot begin to pivot. The question is you only have this much money and to say we're going to move some of that money over here this room will be filled with forgive me the shiny shoe crowd that will come and say you're taking away my program and without my program I'll leave or if I can't grow and succeed there's got to be some political will it's a really hard issue Just hear them Just what? I'm just curious I was once a census taker and I worked on CPS Is the data as it's presented publicly available is it geographically sensitive? I'm sorry yeah current population survey and it does ask I was would you join the labor force but for the wages are low blah blah blah how many marginally attached folks are in Bennington County for instance is it geographically sensitive I don't know how the data I generated it but I don't know It's very challenging because the sample size for Belmont is so small you can't slice and dice as much as you would you get that at the national level but the whole sample in households in Belmont is about 1200 and it rotates as you know people are in for three or four months and then they're out so forth so you wouldn't know essentially where they're located we kind of know where the distress there is to me I think this whole economic development discussion the dichotomy between some of the faster growing areas and the rest of the state is key because the parts of the state that have the higher unemployment that are losing population that's where the resources would go which is what you were talking about earlier is how to pull down the fast growing areas and unfortunately I see the reverse even with things like affordable housing because housing prices have accelerated so much in Burlington area that's where they're going to build more housing as they should but that means that you're investing resources in the areas that are already growing quickly so we have to figure out a way to reallocate and it's not happening naturally you went to affordable housing small businesses, workforce training energy efficient child care and to try to do all these things in a way that can be measured that you're actually accomplishing things one of the ways I think about economic development is if you do the basics really really well like wastewater drinking water child communications you do the basics really well and you could include child care you do those really well then the private sector will do the economic development that you want and that that's a more reliable way to do it than to try to you know hand out little bits of money to particular companies because of all kinds of problems about distribution and equity and problems of verification that you're actually getting something for that money but somehow the shiny object of oh if you give this money we'll do such and such attracts people every time this to me this is like being healthy you know if you're going to be healthy you have to eat right and exercise and get your sleep there's no shortcut you got to do the basics so if you want a healthy economy you have to do the basics and you can't just do it for part of the state you have to do it for the whole state and to me your report is really it's debunking some of the myths the shiny objects but to me you're really pointing at those basics and I think that's a very useful it's very useful what you've done doing the basics doesn't lead to ribbon cuttings quite as often as the others do but it works but it's worth what you want you want ribbon cuttings or you want something that works elected officials often I know but I'm an economist so I want something that works I agree well we don't have any ribbons in Calis so can I ask you just to repeat the colorful name you used for for marginally attached something about shiny shoes shiny shoe crown I think he kind of thanks so much for hearing I meant the lobby it's not you yeah we have sold all over do you give this same presentation across the hall to I did this year I was there on Tuesday that's interesting there's a whole bunch of new people over there that doesn't mean too good so who knows the point about it was the pivoting you're going to have to take money from something that's going to upset someone and it's not likely to be any new money or any substantial amounts of new money so it requires a lot of courage well you know and there's this tradition of getting an economic development which typically originally spoke out some senate everybody's good idea and everybody's worst idea all ends up in it and it ends up in here and you know there's always this intention between this committee which has to actually come up with the money effectively and the economic development folks if it's a pivot it's a very slow pivot it's not going to happen quickly as a practical matter you benefit from close contact with and access to the resources of JFO the economic development committee is development it's rare but on occasion they will ask for a fiscal note from top for that and that is so valued now it depends typically on whether there's a whole bunch of new programs being proposed or not it's just a continuation that most likely Steve would and I'm not being critical and I think that this fitting war really the competition between the states is more significant I don't think it's as easy to dismiss as you I wasn't dismissing the fact that people believe it only that I don't think it's real there's a whole industry of businesses all the states sat down and said we're not going to do this anymore the world would look very much the way it looks right now but you've got to get everybody to join in there's no risk for us unilaterally disarming because it is almost meaningless in terms of job creation in this state and we can't compete anymore so we might as well compete based on our assets and our strengths and the people that want to be the people that are already here rather than bribing people to come because if you bribe someone to come as soon as they get a better bribe they'll leave there's a great podcast I recently on the $4 billion that Wisconsin gave Foxconn and it's really like con is in the name laugh good one good one in addition to the basics as you described we know what people want they want good quality of life they want good education for their kids and you and your colleagues have spent 30 years talking about how to pay for education and how much if you all collectively all three parties and independents said we're going to get together and commit to making our public schools the best in the country and not by a little but by a lot and we're going to have a 20 year commitment to this and we mean it they'd be lining up at the border we shouldn't have to bribe people or market for money to do what we know they want and need I just don't see that happening it makes me sad as our tweeter and chief would say sad poor me other questions for that or other things that you want to cover that you have a chance to appreciate the time though we are back on budget adjustment and we're going to be talking about the health care resources trustee I'm sorry the employer assessment right great for the record Noel Langlois I see we have some new people on the committee thank you for acknowledging that because I've had to remind everybody else so I appreciate that I will stay away from acronyms but also beg the question well I can do a high level what the employer assessment is the employer assessment is an assessment tax whatever you want to call it on employers it's basically there's categories of when an employer has to pay this employer assessment it's for employers who have employees who do not offer to pay any part of their health insurance or they're not eligible for their health insurance or an employee is eligible for their coverage not to go on the insurance or their employees on Medicaid and it's a way for the state to sort of capture some money to help pay for Medicaid for employers who don't offer or for various reasons why people may not have health insurance that money is deposited into the state health care resources and employers of small number of employees are exempt right yeah it's measured on FTEs there's a whole formula that is a worksheet where employees employers have to fill out on how to calculate what an FTE is based on hours and other stuff the first four FTEs are excluded but after that you pay the assessment what I have up there is just a historical how much is paid quarterly and when it first passed in 2007 I believe it was assessed as a dollar a day or $365 a year or $9150 per quarter that's how it was initially done and then what happened was each year it's indexed it was done during catamount health and was used to help pay for catamount health and how it was indexed was if catamount health went up by 5% the premium the employer assessment increased at 5% so it was tied to it was indexed to the increase in the underlying premium catamount went away and we did exchanges as part of the formal care act we moved the index to the second lowest silver plan in the exchange the second lowest silver plan people go why the second lowest silver plan that's how the federal government ties their federal subsidies to so we tie the state's subsidies so it's just sort of a benchmark that the feds use so we've been using it as a benchmark you'll see here these are the quarterly assessments from 2012 per FTE per quarter and it raised $189 2017 it went to $158 $63 in 2018 went to $163.20 last year we did this we've got this box last year we did this thing many people were here to remember it's termed silver loading and what happened is the formal care act there's this thing called cost sharing reductions and it's to help people up to 400% actually up to 250% of federal poverty with their cost sharing if they're on the exchange in the individual market it helps them it basically lowers the actual value which basically reduces their out-of-pocket exposure the formal care act required these subsidies and what they did was the federal government reimbursed the subsidy by executive order last year the federal administration said we're no longer going to be funding these cost sharing reduction programs but by federal law the insurers were still required to do these so in other words the insurance companies had to absorb the cost so what happens when the insurance companies absorb the cost they pass it on in the form of increased premiums so what a lot of states started doing is there's also this thing called premium tax credit and what it is is it limits if you're up to 400% of federal poverty it limits how much your premium you'd have to pay it's basically a premium subsidy and that's tied to the second law the silver plan that's how the subsidy is calculated so what a lot of states started doing is instead of taking that 3% I believe it was a 3% or whatever it was but instead of spreading the premium increase across all the plans in exchange which would include small businesses people who don't get subsidies etc states started doing this thing called silver loading where they would take that all the premium increase and push it into the second law of silver plan so that the federal government would actually want to pick up the increased cost of the premium through the advanced premium tax credit so in other words the federal government took away the funding the states came up with a mechanism to just to make the federal government still pick up all the costs so when we did that we decided to allow for silver loading as well what we did not realize when we did this law is that we're tying it to the second lowest cost plan in the exchange in the language in budget adjustment you'll see it says inside and outside the exchange right now it's tied to the second lowest silver plan in the exchange while the second lowest silver plan in the exchange is the silver loaded plan which means that the premium will now jump 23% which means that the underlying assessment will jump 23% and which would create an additional $945,000 that employers would pay for this just one quarter in 2019 it's only one quarter of collection in 2019 then annualized it's $4 million more so this was something that oops we didn't realize we didn't anticipate it so what the budget adjustment language does is it says it just adds the word and outside the exchange so it ties it to the second lowest silver plan and the second lowest silver plan outside the exchange would just be 3% what does it mean to say we're tying it to the second lowest plan inside and outside how does that work so it has the plans that are outside the exchange to the menu of plans you can tie it to what we did as part of the silver loading is it used to be the individual plans you could only use to be able to buy them on the exchange and so now what we've done is they created this sort of outside the exchange so people who do not have subsidies can buy a plan that is not silver loaded you can buy the exchange that only saw a 3% premium increase so if you didn't have a premium subsidy and you're buying an exchange you're not forced to buy the plan with a 23% you can buy the plan with a 3% that's outside the exchange so we also allowed you to buy it outside the exchange still buying it through the insurers I just don't understand how you can have a marker that's in two different places which one is it I get the outside I completely understand what you're saying and I thought about that too inside versus outside this imaginary wall why don't we if it's inside and outside why don't we just stop that the second lowest plan period you could do that too then we don't have this question about which we're choosing it just seems weird to me that they were tagging it to the lowest plan the second lowest plan outside if they're different then how do you know which point you're going to go to purely grammar not what you're doing do you understand what I'm saying I believe Jed Carby was also involved in the language of that so I would recommend talking to her about the linguistics to completely understand the point I could just I guess I understand the gaming part of the phrase to get the premium increase for those uncovered down to 3% clear about that I thought however that once you asked insurers to essentially offer those plans the benefit to the subscriber deteriorates in the sense that some of those plans begin not to look like ones that the affordable care act was approving of that is to say that I deductibles are my copays or whatever and I worry that state policy is following an unfortunate unraveling if you will of a good quality plan I understand the premium issue you're quite as well taken and I think there's still there's still like regulations about what the outside those change plan would look like in order to be considered the silver one and if I remember the way the only difference between the inside the exchange and the outside the exchange plan had to do with like the copay for ambulance services it was a very small benefit to not allow people to use I don't remember exactly what it was but the difference between those two plans is very minimal if I may interrupt what the gentleman just said that we would be wise to reconsider jettison the words over so let me just get a stat to what we're talking about here what we're talking about here is how we're going to decide what percentage increase there is in the employer assessment there's nothing to do with the validity of these plans at all and so we're trying to pick the right so anchor whatever accelerator and I guess I think what you've done is weird because it's two different things whole different question about whether you know what you want to take to what do you want to take to plans outside the exchange yeah it was basically it was just the intent is for it not to be to the silver loaded plan so like I said I looked at what the second lowest cost silver plan is and we're getting to whether it's I think the whole idea between using the words on the exchange or outside the exchange really just has to do with making sure that the tax department is clear on what well everybody needs to be clear cause this may seem really clear to us while we're talking but the figure is down the road we're going to look at and think about it about like how do we I completely understand the question I could talk to her about I think we're good with finding a different anchor anchor but I just want to be sure that we know what the anchor is and that it's going to last I understand I'll work with Jen on clarifying and that the health care committee may want to weigh in on it because they know a little bit more about it but it is our decision about whether we want to dial back on that revenue and I get the feeling everyone says yes we didn't plan to have four million dollar increase so we should do what we can not to have it but I think we want to be sure that we're not revisiting this next year is that fair any other questions anyone has about it the only other thing I would add to this is that Jen is working with Maria to come up with some language about about an implementation date she came up with some wording to make it clear about when because she just added language it's very specific so that it's very clear that there's no ambiguity for the tax department when they go to implement it so she just has some suggestions on that I've got moved to tax yeah yeah so if we agree the faster we can advise employers to wait because we're going to enact this by the time the first quarter of this year's bill goes out if it passes one house that would be a really good indicator it's hard to know when budget adjustment is going to pass but budget schedule that I understand the budget adjustment is that many is hoping to implement it sometime this is why we're it's April 1 right yeah so it takes effect January 1 but the collection would be I think the collection dates like April 15 or April 30 and the tax department as far as I know they sent out their first notice which said it's bylawed this but the legislature and the governor are working on it stay tuned so that's what they told these lawyers so you'll be back be back and I'll work agenda cool we are now okay are we going to be next yes okay so this afternoon the episode of the discussion is continuing on the budget adjustment is on this movement of the health care resources fund most of it back into the general fund and that's sort of what we're talking about proposals in the budget adjustment so that's what I thought actually we have a lot of people here to present on that so what I'm going to start off with a context-type thing and then we're going to turn it over to Stephanie who's going to do a balance sheet and then as I understand it the commissioner and the deputy commissioner may comment on this and so the first cheeto in a point or two is this one this was in the budget that we that we did last May they had two provisions one is one d 108 which says that they may include the governor's proposal a recommendation draft language just to transfer the revenues and expenditures to make up the health care resource fund of the general fund by the close of 2019 and that's what we're talking about is this proposal the second language 20109 really brought a second piece of it in there which is we already talked this morning about the education fund is to look at the reserve implications $100 million out of the general fund and so those are the two language pieces that were really and we don't have those but these are in the budget bill these are the what passed in May this is currently what was involved and so this is the context for the action that you're seeing in the budget adjustment and so the next chart on the bottom just to give you a flavor of why we were all thinking about that last May is the general fund total if there had been no education fund restructure would have been at 5% with a spending of $1,595 the general fund current law post the education fund restructure we left the $7,818 in there but given that the general fund is now down to $1,294 it's actually at 6% and so that raised the question we need to look at the whole question about reserves because one possibility would have been to just reduce that down to 5% and give that money back another possibility would be to raise the stabilization to 6% it was an issue safe health care resources fund has no reserve $291 million worth of reserve and if you move the health care resources fund back in to make up for the taking out of the education fund we get back to about a 5% reserve so that's sort of the some of the concepts of the moving pieces that are being talked about here some of the downsides of moving it well I think there's only upsides but there are some concerns and they came up in the discussion now one of them was the agency human services wanted to make sure because some of these revenues that we're talking about are revenues like the provider tax and wanted to make sure that they still were kept in a world that you know that was health care so what happened was when the administration gave you their proposal in the bill you'll see some language saying the accounting has to be done like it was before so it'll be in the general fund it'll be in a separate area it'll be separated out and kept in tracking in a way that does preserve that sort of piece and that was something the H.S. could so basically their concern was we don't want to lose the fact that these were raised for a bigger purpose one could say no we want to kept separately because we wanted for a bigger purpose but I think after discussion with the H.S. this concept of keeping it inside the general fund but accounting for it separately was acceptable to them it's a balance that's one that was the only downside that came up and I know about that I think that Matt Riven and you know the others can bring up other downsides if they can think of them and the upside the upside is really important and there's another document I want to just come back up if we could put on the one that is the bond rating issue and one of the things about our stabilization structure and I like that at some point we'll have reserves Vermont has a number of reserves we have a stabilization reserve what we're talking about is the primary reserve it's a cash flow reserve and it's 5% of prior general funds spending then we have rainy day funds and other reserves so one of the things that happened this summer or this fall and you probably all remember this so you know about it we had booties downgrade us in bond rating and the reason I bring it up is our general fund with this change the way it is now we just double checked it is and partially we're a small state but also it is the smallest general fund in the country if we were to add this back in there we'll be number two because Wyoming is that'll get us about Wyoming it's a fairly small general fund but but the point is that part of it this is the fund that's supposed to cover general expenses and so it's one that stands out to Wall Street as does this reserve stabilization reserve for the general fund you know we've had sort of a bad year on bond ratings if we start pulling 13 million out of this even if we can justify it because the general fund's gotten smaller it's not a good optic basically so part of it is the optic of keeping the general fund stabilization reserve at roughly the same level. The second thing is currently there is no reserve for the healthcare resources fund and what happens is when the healthcare resources fund doesn't have enough money the general fund picks up the bill and it's a direct it's the most direct it's really not in itself a fund of any value and it's just a way to it's a money flow and so to us it seems like the correct thing to do is be to merge it in I mean the alternative would have been to maybe create its own reserve move that 5 million in the healthcare resources fund keep it separate have a reserve but but invariably what happens is literally every year every budget adjustment the impacts are direct on the general fund and you're going to see that in the budget and you'll see it again and we've had years in here where we needed to raise money that's basically needed to cover Medicaid but we've done it with non-Medicaid money and shifted money around or the other way around you know we've had to cover short calls and the general fund I don't remember which way it usually goes but we treat those funds as though there's no real wall but in any way and just you know maybe the concern would have been this is going into a speculative land but a number of years ago there was a pretty strong movement to a single pair in the state and at that time there would be an argument of let's create a healthcare let's start to set balkanizing healthcare put it over here create a fund it's not the environment we're living in right now and it's and so I just think from a management point of view and part of the problem you have to realize as a budget person and I know this is a terrible thing and you hate it I would like all funds to be in one big puddle but they're not you know this one is one that is the most I would say easy to do it helps to counteract what we did with the 300 million and it will keep our reserves relatively flat so that would be the end of what I would start off with and I wanted to go into this because I just want to take a hold of this and can you switch down let me see if there's questions I did you have one actually might be a better question for Roland but there is a bit of a push now not to single payer but to universal primary care fund this does that play into this one way or the other at all I'll give you my answer if you develop a new proposal to do universal anything you're going to have to figure out a whole new financial system and so I would recommend you build the world to the fiscal line we're thinking of now and then if that does happen if you set up a new system think about it because you'll have transition costs all the things you'll I think keeping something that is probably not physically logical in place just the options to do that even if you I don't want to speak for the people maybe it'll pass but I think it's something you should do in the context of that but I don't want to know I agree let me just flag one thing in this document this is what the Moody's told us about their downgrade and you know they talked about this is on page two it says factors of the lead to an upgrade improved demographics, economic trends the track the nation we're working on that getting more people to move to Vermont moderated leverage especially unfunded pensions retiree health care or reasons relative to the state GDP and that's what we talked about a little bit this morning it's obviously in the top legislature in the administration's radar screen there's a lot of attention unfunded liability factors that can lead to a downgrade and sustained growth in debt unfunded post employment liabilities and that's what we talked a little bit about that this morning a slowdown in the economic development a revenue growth and the last thing I just want to really flag is a departure from the strong fiscal management practices one thing Vermont has always sold itself on is we are I would say given them a small size we're a fairly nimble state in fiscal issues and this is an example about another part of that adjustment this cleans up our fiscal situation it seems to make sense from that and I think we'll be able to tell Wall Street we did not want that reserve to fall we moved concentrated funds in the process we've taken something that has no reserve and moved it in the way it does so I view this as sort of if anything a good story for the Wall Street one do you know why our general fund is so small I realize that we're small but you need a certain amount of government no matter what size you are do we have more special funds we are way up there in special funds yes there's Tom Kovett told me he'd never seen a state with more special funds and dedicated revenue for this and dedicated the most days just put it all in a big pot and fight about it right but people like to have the fights when they have their own special fund so I thought what I do now and we could do this is definitely take the coins and go to the Donald Street piece of this and then turn it over to the administration and we can actually go over the direct language the money you're involved is every time we say this revenue shall move to the general fund we're taking it as a tax and we're saying the tax now gets paid the general fund rather than that healthcare research fund so just on the fact that we're touching tax law it's a great direction yeah it's nice to know about it yeah thanks thank you thank you it is a different group a little bit different than what last year before I go into this the general fund balance sheet which is one of my sheets with lots of numbers on it just to show what Steve said I was asked in the committee of stairs yesterday before I can't remember now but I felt like there was any risk about doing that and because it's moving from a fund that currently has is part of the forecast in July and January to the general fund which is it has an emergency board forecast process around it that's a very powerful process and to me it's the we as a staff group do the state healthcare resource fund that will move into the whole general fund picture that the economists put before you so that's it to me and it's intended to have a very transparent subtotalling of the healthcare taxes within that fund and so that to me it's just what piece of paper does it show up on the one called general fund or the one called all the processes around it stay the same right so general fund balance sheet is operating statements this gives a couple years of information column A top side of the sheet rose one through 13 of the revenue into the general fund the middle section rose 14 through 23 of the spending and then below the operating position of the fund are the transfers in and out of the fund column A is FY18 that's a closed year that closed at the end of June and that's the picture of the general fund as it was when it ended in June and you can see if we just go across we'll take line one $1.55 billion and then you see in the grade column column B same line one that was where we were in May $1.568 billion but go to the next two lines below and you see two negative numbers you see nearly a $30 million number that was the personal income tax changes that you made last year and then the negative $300 million which was the restructuring of the ed fund with the dedication of the sales news tax to the ed fund and so when you go over to the next column in July when we updated the revenue on line one you see that substantial drop to $1.27 billion and so that was in terms of shrinking the size and so when you come over to column D which is the column for last Friday when the administration put its housekeeping budget adjustment on the table the next line down you see the 272.67 that would be the change of the revenue coming into the general fund within the budget adjustment in FY19 and so you bring that total revenue in the fund back up closer to 1.6 billion 1.57 so that's how you see it on the revenue side go down all the yellow pieces are the pieces of change that are within the budget adjustment but if you go down to line 22 in line D you see the exact same amount as additional spending in the general fund because you move the revenue over so if you were looking concurrently at a state healthcare resource sheet that would be a negative on the spending side in the state healthcare resource just the same way that the revenue would be negative and so that just gives you the clear picture of how that change would happen over time the only other two things I'd point out on this sheet if you come all the way down to the bottom you get the picture of the full reserves the stabilization reserve which is based on 5% of prior year appropriations so it's going to always be based on the prior years total on line 23 of this sheet and that's what Steve just walked through in the previous presentation but you see we also have a rainy day fund human service caseload reserve fund and then we have our dedicated 27 and 53 reserves which are have very specific purposes to them but the some people find confounding so and we have it's been a tremendous amount of progress in the very recent past you know part of it is the luck we had of you know building up the global commitment fund and being able to sweep it into the general fund but there is a stabilization reserve fund in the ed fund which this committee is well aware of and there is a stabilization reserve fund in the transportation fund which is equal in size to the state healthcare resource fund currently and I've been probably a harper in front of the keyboard a little bit about having reserve in the state healthcare resource fund I don't know if there's any questions on this sheet if people have any questions it's very helpful that you want to address sure I'd like my colleague and there's a chair you think there's not very much here this one's from the hall oh yeah do you get one from the hall near the that's the update that's on the website yeah that one's from so I have to say it's nice to see you it's great to be here room has changed a little bit I told when I walked in I asked the music a coincidence that the employer assessment actually was up on the board when I walked in was that purely a coincidence were you torturing me even more and we're just going to lay that forward yeah anyway Adam Greshin commissioner of finance management thank you Madam Chair for inviting me so as always the Joint Fiscal Office was more than thorough but I thought I would maybe add one component to the discussion really more from a budgeting standpoint and so we this is just one section of the big bill the 300 section is typically for human services and the 301 is the global commitment section and the reason I put it there is to illustrate kind of where the healthcare resources fund sits relative to other funds within our global commitment section but if you look you can see how much we put in but if you look at the source of funds you notice there's quite a few other funds there and you know there's this sense that well there's this truth that the money that we put into the healthcare resources fund goes to pay for Medicaid but it's not the illustration here will tell you it's not nearly all that we put towards Medicaid we put quite a bit more money in there and the way and I think Steve alluded to this earlier if for example if representative Till gets his way and everyone in Vermont gives up smoking and our tobacco revenue goes down then the source of funds general fund will go up so we've looked at it in that way and I think it's important to realize that just because we're merging the funds together doesn't mean we're going to think about the use of our allocation to global commitment to Medicaid any differently it's going to be the same and the general fund has always in my vast career in budgeting has always been the backstop for the healthcare resources for when it runs shy so I just think it's important to know I mean we consider it as one component to a much larger commitment to healthcare so if we did this special accounting that we're talking about what would this look like would this just have a larger general fund figure the healthcare resources fund would disappear and somewhere in the back of the book the most of us would look at it would be clear that this would money from tobacco or from one of the provider tax or something like that and you know admittedly trying to be balanced I mean I think someone asked why wouldn't we do this and you know the only thing I can think of is you know some people think it's nice to know that for example when you pay a tobacco tax that that's going directly to healthcare and that's perfectly traceable so yes it's true we lose that although that's still going to be a special account though still going to go for healthcare and if we need to raise money for healthcare we're likely to look at some of the what we look which would be tobacco tax for example so other questions so where did the money for tobacco cessation programs come from are they coming out of the state healthcare I don't think so there's a separate tobacco fund having just to be clear some of the tobacco cessation stuff we do through Medicaid so it's a combination of tobacco and federal funds and things like that and then some we do purely estate funds we do tobacco funds so we leverage Medicaid to the greatest extent we can around all tobacco cessation and but the origin of it all is the origin of the state funds is all tobacco funds yes you may have questions for Adam anyone else nice to see you nice to have you back yeah nice to have you back are people feeling okay about doing this we have to have reservations about it I'm sure about my colleague Matt I don't know if it works just a couple technical things from the deputy finance commissioner just a couple technical things from the budgeting and accounting side we already do have account codes for each of the fund sources that Stephanie mentioned so we don't have to create anything new we already know exactly where those where the provider tax is not just total provider taxes but by category provider tax so we have that all that detail already and we will preserve it one thing to emphasize on Adam's slide is that that is the only appropriation where state health care resources funds are used is entirely used in the Medicaid to provide as a fund source to Medicaid there is no there are no other appropriations of state health care resource fund and as Adam mentioned in addition to the 283 million dollars of general fund that we put in which we adjust depending on the estimate of the state and the last piece the technical piece is that there will still be a small portion of the state health care resources fund related to member premiums and that would be more typical of a special fund where if a program involves collecting premium you know participation from the people in the program then often times that's a circumstance where we would use a special fund to make sure that those collections from the individual participating would be isolated in a special fund so there will be about 15, 16 million maybe the special fund has just got a different name same name it will be much much smaller so it will be I think in the neighborhood of 16 million dollars for state health care resources fund and all the rest of it will be in the general fund and that is reflected in our BAAA so I have a question when for whatever reason maybe it's universal primary care there's some need for us to raise money for health care and we often start with well what are we doing now you know we want to have a sheet that shows all the sources of revenue and how much money is coming in that's dedicated to health care or that's allocated to health care are we still going to be able to get that is this change going to make it more difficult to get that information no so if it goes into the general fund as we're jointly proposing it will still have that accounting detail from where the source from what is coming and then if you moved it back out we would in all likelihood use the same account code just credited to a different special fund or what's more likely to happen is tobacco sales go down and so we're running short on one of our sources revenue and then we want to understand exactly what money is coming in from sources that we had identified as health care yeah I just want to be sure absolutely and the comments do that now with the general fund where when they're looking at total general fund performance they're isolating out the pieces that are up and the pieces that are down this is an obvious question but was the reason for creating the special fund in the first place is because it had a dedicated use it was for Kat and I'm pretty sure yeah Kat was tended to grow into more of a single pair of light program and ACA came in and did it so I think it was really, I think it made sense when we did it but I agree it's outgrown its purpose your answer and Stephanie's answer on I can't remember what your words were Stephanie but the account codes being the same and the transparency stuff being sort of yeah yeah very helpful thank you