committee. You're live. Thank you. This is Senate Finance, Wednesday, May 20th. And thank everybody for being here. We're gonna take some more testimony. We did the walkthrough on 237 and 256. And those, we're gonna do the walkthrough on, we went over the two bills yesterday from Gov Ops. This morning, health and welfare took testimony on the first one, which was titled, yeah, educating various people on energy standards. And that was just the vehicle. It was the OPR bill. The Health and Welfare Committee has some concerns about the section that allows pharmacists to do some limited prescribing. And they wanna take some more testimony on that. So I told them we wouldn't take any action until they had time enough to take a look at it in more detail and perhaps come up for a, with an amendment and how we'll deal with that, we'll decide then. But so we're gonna pass that one over for the time being. Today, we're going back to the Economic Development Committee's bills. I know I've expressed my concern to the committee about doing any kind of tax credits or expect tax credits essentially right now while we are looking at massive deficits until we see our way through and start dealing with recovery and see where we can best use our limited resources. But Senator Sorotkin wanted to give the administration who's been proposing these bills a chance to come talk to us. Perhaps dissuade me. I have not spoken for any of you. So we're gonna start today with 237. And we have Josh Hannaford and Josh, there you are. Okay, the floor is yours. Madam Chair, if I could just. Yes, Senator Sorotkin. I just sent, I asked legislative council to do a section by section, very short summary of the bill because it's their long and their varying provisions. And I know you sent out an email this morning to try and stay within finances. That's my intention. Okay, so in front of you, you'll have or on the website or website, finances website or in your email, you'll see on this bill, there's a two and a half page bullet summary on the next bill, one page summary that may make it easier for people to follow. I just want to. Okay. I am actually gonna print mine out right now. Madam Chair, I don't seem to have a copy of the S237 summary from Senator Sorotkin. I'll post it.  I had 156. Faith, are you in the committee link when you sent to Senate Finance? Are you included there? I am not. Okay, I'll send it to you right now. Thank you. I'll post it. Faith, I sent it about 15 or 20 minutes ago. Oh, it's yours, Ellen, not David's. Okay, I might have it, but Senator Sorotkin, send it again and I'll make sure I get it up. Thank you. Thank you. Okay, I've got one under an email from Senator Sorotkin. I sent two emails right after the other. Okay. Thanks to Ellen and David for pulling to this together on short order. Yeah, this will be, this will be very helpful. Okay. So Josh, I think the floor is now yours again. Okay, thank you for the record. Josh Hanford, Commissioner of Housing and Community Development. Thanks for hearing from us this afternoon. My comments will be pretty brief. And then Chris Cochran, who's the Director of Community Planning and Revitalization has a short presentation to go over that drills down into the parts of this bill that we wanted to talk to you about. You know, I'm just gonna say that right now we need every tool in the toolbox we can have to recover and thrive from this pandemic and that the Downtown and Village Tax Credit Program has been one of those programs all along that has helped reinvest in our own communities and by adding the neighborhood development areas to that and providing an expansion, we think this increased investment is needed. It has a return on that investment in the form of increased property values and increased property revenue and taxes over time. And, you know, if folks are aware of the housing situation made even more challenging by the folks in homelessness that are being temporarily housed all across the state and the unsustainable nature of that, it provides even more reason to give property owners, folks that are gonna create rental housing tools to do that and to do that in short order. And this is an effective way to do it in our view. And so we hope that the committee would continue to discuss this and think about this investment as you look at and make tough decisions about other budgetary concerns, but we don't feel it's time to sort of can this this increase at this time, it makes for a good investment that's needed now and into the future. So Chris, are you ready to jump on here and kind of dive into the mechanics of this a little bit? Yeah, I'm here. And I'm sorry, I can't share my screen. The internet callus is not what I'd want it to be, but I'm sure you're gonna fix that. I'm hoping, if all goes well, I can share my screen. If Despaceth have what she'd like to show, can see through the problem with this. She does. You let her know. Actually, the internet in Colchester is not what it needs to be to share his document. I can't pull it up. Chris, I'm hoping you can. Too many meetings. Have we lost Chris? I don't see him on the screen anymore. We have lost Chris. Well, I'll try to fill in here. As you know that the governor proposed a fairly significant increase in the downtown and village tax credit program this year. Chris is back with us. You're back. Okay. You're muted. Was this in the proposal he made yesterday? Was he making today? No, he made this proposal before the session started. Okay. He made it so. Again, his present recovery proposal. The present recovery proposal is for Corona relief money only, and does not include this, but this was part of the administration's proposal from the start of the legislature, building on a successful program and expanding it to neighborhood development areas to strengthen the neighborhoods around our downtown. Little known fact in the midst of our affordable housing crisis and tremendous need there is the latest housing study in Vermont. There's more than 19,000 units of substandard housing in Vermont that need reinvestment, that could be serving the very folks we need to serve the most and at a tax credit, providing tax credits to them is a pretty efficient way. It returns and reinvesting ourselves provides increased property tax value is a pretty efficient way to leverage that and to gain more housing units. So that fact hasn't changed. And Chris, are you ready to kind of jump in and add on a little bit more? We're trying. I can't share my screen. Faith said she can. So I'm hoping that will happen shortly. Nope, there it comes. Here. Chris, is that what you're looking for? Yes, perfect. Can I just ask you to advance slides when they come? Yes, you may. Okay, perfect. My first question is, where is that came from? That picture is in Shelburne. Shelburne, okay. It was a neighborhood development area project from probably about seven years. Yes, it was affordable housing. Yeah. So I'm here to talk to you about S237, but also S, what's the other to the economic development bill? Because part of the policy changes are in S237. The funding for it is in the economic development. Okay.  Is that any better? It could be just be my internet. It's a little better. All right, I'll lean in. Next slide, please. As Josh mentioned, I'm the director of community planning and revitalization. And what we do is focus on creating strong and vital downtowns and village centers, creating these walkable areas that people like and enjoy. Next slide, please. The kind of work we do, what we call it place-based economic development. Vermont's walkable centers with the authentic deal and variety of employment and residential opportunities are attractive places for millennials, our young families and empty nesters who seek an interesting and safe place to hang out. And well, as we all kind of carefully begin to venture back out with our masks, I do believe our downtowns and village centers will continue to be important. They have kind of been the hotbeds of investment, commerce, adaption and creativity for generations. They define Vermont and its brand. And while online retail and COVID has not been terrific for our downtowns, I am confident they will come back stronger than ever. It will take time, there's no doubt. And building owners and business owners will need some help to adapt to the next normal, which is why I think it makes some sense to support the proposed changes to the downtown and village center tech. Next slide, please. This is Bristol in the late 1980s. And when the downtown program, this is why the downtown program was created, many of our towns looks like this. Our communities were struggling. The state, the entire state of Vermont made the National Trust for Historic Preservation most endangered historic places list. Most of the downtown suffered from deteriorated buildings, vacant upper floors and shuttered storefronts. Rapid development on the outside of towns and shopping malls made matters worse. So this is why the tax credits were created. They were created in 1999. The program started at $300,000 per year and was limited just to downtowns. Since then the program has grown significantly. Now it's at 2.6 million annually and now designated village centers can qualify. Over the past 20 years, 370 projects have received over $30 million in tax credits to help bring existing buildings up to code and put under used or vacant buildings back into productive use. And certainly the program has leveraged over $800 million in outside investments to strengthen our community, a quality of life, our sense of place, our economy and brand. The proposed $1.4 million increase enables the program, a program that's worked and proven effective to do more to support rental housing and flood resilience in our centers. As I mentioned before, the tax credit policy changes are included in S-237. The funding increases in 256. And before things came to a grinding halt, house commerce was strongly advocating for the tax credit. Our initial testimony in ways means was quite favorable. And while COVID, I certainly has changed the way we look at many things. I would argue that COVID makes investments to keep our community strong, increase, affordable housing options is even more important. Next slide, please. And here's Bristol today. As you see, it's a lot's changed. I can't say the tax credits had everything to do with it, but it certainly played a big part in fixing up these communities and restoring the vitality. I asked, you know, when I look at Bristol before and after, which community do I want to come to? Which community do I want to visit? Which community do I want to raise a family in? I think all of our downtowns have done tremendous work with these downtown tax credits. Next slide. The chair's favorite building, of course, is the French blocks. Got a boost with the downtown and Village Center tax credits. That building had been vacant. It's upper floors vacant since FDR was president. It's nice to see the lights on back there. Brooks House in Brattleboro, Putnam Lock in Bennington. Governor is here last year in St. Johns Berries with a big award for a Project New Avenue hotel in St. Johns Berries.  A lot of our village stores get a boost with these tax credits to kind of make the improvement to keep open. In my community, Calis, the Maple Corn Community Store has been a lifesaver trying to get supplies and food and drinks during the COVID outbreak. Next slide. While the work of our revitalizing our downtown and Village Centers will never quite be complete, we've begun to turn our attention to the neighborhoods. And I think having more people living and working in our downtowns and villages is critical to keeping young Vermonters here and drawing new families and businesses to Vermont. I think the investments we make in more active and attractive community not only improves our quality of life, but it helps expand the tax base and make Vermont more affordable. And despite the incredibly successful $37 million housing bond and the work of many partners to improve and increase the supply of affordable housing in Vermont, the gap between the need and availability of housing certainly persists. COVID made that worse. Chris, I can't hear you at all. I'm sorry. It's probably my internet connection. No, I can hear you now. I think you just... Yeah, speak up. ...looking down. Okay, I'll lean in more. So despite the success of the housing bond and the work of many partners, there still remains a huge gap in the amount of affordable housing that we need. COVID has made that worse and without a sustained and increased investment in housing, we're going to continue to lose ground. DHZ and its partners also identified several permitting barriers that limit housing opportunities and choice in and around our downtowns and villages. And while these changes are not under the purview of the community, I think just some quick context on why they're important and how they support and ensure we get more bang for our buck makes some sense. So I just wanted to just take a moment to quickly set that up so you understand the policy rationale for why we're asking for the increase. Next slide. Part of the affordable housing challenge, the biggest part is always money. But the other part is that many of our Vermont communities adopted kind of 60s and 70s style auto-oriented regulations. This zoning favored single family homes for the types of households that are increasingly rare today. The common characteristics of these regulations were excessive parking requirements over the wide streets, large lots and deep setbacks from the roads. As a result of this auto-oriented zoning, many of Vermont's traditional development areas are compact downtowns and neighborhoods are legal. You have to get a variance if you want to add on to your historic building. And even more vexing to me is several Vermont communities with suburban style zoning have minimum one and two acre of residential lots within their sewer service area. Well, I'm sure there may be good reasons for this. It doesn't make a lot of economic sense given the high cost of maintaining these systems and the fact that the residents often complain about their high sewer and water bills. I think one of the ways to make these systems more affordable, reduce the cost of housing and make our communities more sustainable is to allow more smaller lots and more connections to these sewer and water systems. Next slide, please. This is what Vermont families look like today. We are aging and family size has gotten a lot smaller. And our existing housing supply or our large old buildings in our downtowns, our large suburban homes, it's not, there's a mismatch between what Vermont families need and what we have built. Next slide. Communities across Vermont share our anxieties about our challenging demographics, shifts in our housing preference, funding constraints and the hurdles to creating more affordable housing. But Vermont can do more to support workforce housing by aligning our state and local regulations with new funding to create more and better housing opportunities close to where people work, go to school or shop. Next slide. This last summer, we did a quick survey of the planning and developers and the affordable housing community and asked them, what are the most needed housing types in the state? Okay, Chris, I'm gonna take a book from Senator McDonald's playbook and ask you, when you talk about affordable housing, you started out talking about the need for housing for the homeless population. When I first started in this, when the state didn't allow the city of Montpelier to size its water filtration plant for growth, affordable, they talked about worker housing. So when you're talking about affordable housing, can you define, are you talking about subsidized housing? Are you talking about worker housing that your average working person or family could afford? All of the above. And I have a slide in a few forward that kind of talk about what we're trying to do here. So if I could answer your question with that slide, can you hear me? I can hear you. Okay, so the proposed changes, modernization to regulations is going to help more middle income people find more affordable housing for them. And I'll show you a graph in a second, but quickly, it's a couple of slides from now. The downtown and village center areas were noted as the areas where people really wanted to live because it was close to where they worked and then we went to school. Next slide. We asked them what the biggest barriers to housing was. It's limited housing stock, limited land, high construction costs, reluctance to change and state and local regulations. When you look at these four, many of them are related to regulations. The lack of... Senator Pearson has a question. Yeah, I guess, I don't know if others agree and if I'm the only one, then that's fine, but I don't feel like I need the sales fit that I would gladly support policies that get us more housing. I would really appreciate the question that you asked yesterday in the context of a $400 million budget shortfall is the governor and the administration still supportive of this and how do we afford it and the value is really clear to me and that to me though is the central question that we've got to wrestle with at this moment. Yeah, I don't want to speak for Josh, but the administration, the governor is a big advocate of the downtown and village center tax credits. We've had an ongoing need for housing in and around our centers. We don't really know what the federal funding is going to do for our budgets. We're kind of, you know, every week I feel like we get additional guidance for how the CARES money may be used and there's talk of a future funding package that would help balance local and state budgets. So yes, we're supportive, but how we pay for it is a little uncertain to me now. It's very fluid and I hope that picture will get clearer in the coming months. Okay, the guidelines we are working under at the moment. The one thing that has been consistently clear is that we cannot use COVID money to replace lost revenue. The budget deficits are due to lost revenue. So we may replace some of that if we have extra expenses, but we still are looking at hundreds of millions of dollars in lost revenue. A 17 cent property tax increase to cover the deficit in the Ed fund that's what we're looking at is not going to help anybody get, maintain or buy housing. So where, I've never voted against a downtown bill. I voted for the original neighborhood bill. I've always voted for downtown tax credits. I wrote my master's thesis on downtown redevelopment. But this particular moment in time, the question is what kind of commitments do we make with what little revenue we may? I don't think anyone's talking away with doing with is it 2.6 or 2.9 million that we've got? Yeah, 2.6, but the proposal is to up that to 400 or to 4 million, not 400, 4 million. That's the most significant increase that I've ever looked at. And so I think that's what the committee is struggling with. Nobody is arguing that I know with with the efficacy of investing in downtowns. It's, if we invest in downtowns, what are we not going to be able to invest in right now? Yes, I'm sorry. So I mean, that's just where I am. Senator Campion. I'm sorry to have interrupted, Madam Chair. I just wanted to add that I share the concern that you and Senator Pearson just outlined. It seems just that the timing of this, and it's almost, I don't want to quite say wait and come back, but it's a little bit how I'm feeling. Wait until we really understand whether or not this is actually doable, given the circumstances that we're finding ourselves in. If the federal government comes through with additional aid that says we can use it to backfill, then we can all breathe a sigh of relief. But the president this morning announced that the economy was open, everything was fine, and he saw no reason for additional aid to states. So that could change by tomorrow, but it's not guaranteed at this point. We also will be back here in the fall. We're only doing a budget for the first quarter. We're just trying to close the books on this year and then we're coming back. So we don't have to do everything now. There will be other opportunities in this biennium, which may be the longest biennium in record, but we're not going home in a week and stay there. Madam chair, we're sort of drilling down on the one finance issue that's in this bill. Go ahead. I can't hear you. Huh, I don't know why it says I'm okay. You're better if you're closer to the mic. Okay. So we're drilling down on the one finance committee issue in this long bill, quite frankly, going from 2.6 to 4 million. And I think I may have mentioned to you before, one of the reasons why I think this is important, other parts of the bill that deal with policy realistically open this program up to neighborhoods, like we're moving out to 50 from neighborhood development. So when people came to me from the administration and said, we want to do this and expand it to neighborhoods, I said, I was all for it, but I was concerned that by expanding it to neighborhoods, we were going to dilute the 2.6 that could otherwise go to downtowns. And they made me feel a lot more comfortable. They originally said they were doubling the size of the program. They came in with a budget of 4 million. So that's my thinking. However, I fully understand the situation we're in and I'm wondering if maybe there, but I want to send some highlight out there that we're expanding the scope and breadth of this program and thereby potentially diluting the help we can give to our downtowns that if money becomes available, whether it's another bill or some other mechanism that we would like to see this program increase. So I don't know how we do this. I could perhaps work with legislative counsel for some contingent language. There's another appropriation section in this bill that deals with VHCB. That's this contingent language there saying you get more money if the property transfer tax goes up and they're not going to get that money. So maybe there's a contingency language if people would otherwise support this that would make it sure, at least as you say, in September, if we come back, there's a highlight on this program to try and get more money for. Right. I think there's a lot of ifs. If more money, if we find a way to fill the deficits so that we can support the, you know, the safety net programs and everything else that's out there, including the present housing programs. The increase, the downtown tax credit is kind of a capsule in itself. It can be added to any economic recovery bill. And we can state, you know, that if money becomes available that that would be at the top of the list. But I'm not even sure at this point till I know what the list is. And I'm not pitting that against food stamps or some other program. I don't know how we do it. We don't know what the list is going to look like. We could ask for a report back on August 15th as to what the status of the fundings is and what the administration suggestion is for this added funding at that point. I'm with you. I mean, I understand we can't, the option is not to do major increases in programs but I've asked the department, they think there's a slow startup on the neighborhoods. So I'm still hopeful the rest of the bill will go forward. So I'm still hopeful the rest of the bill will go forward with the policy changes and we can get some language in there to revisit the chance for an increase. I'll leave it to you to work on that. Okay, thank you. Okay. So Chris, Chris, what is the status of the downtown tax credit? Do you expend them all every year? Yeah, there's usually, usually there's more than adequate demand and competition for the existing funds. Okay. What does it look like this year? We just sent our announcement out just to check in with everybody to see if a lot of projects that we expected are coming in. Preliminary interest appears good but you kind of, you don't know what you have until the applications are due and they're due the 1st of July. We hosted a webinar last week to just re-engage and reconnect with folks and there was I think some 70 people came out to participate in that. So that's a good sign that people are still looking to make improvements in their properties. They're still relying on this program to help them. But what that turns into in actual applications you just don't know. Okay. Madam Chair. Yes, Senator McDonald. I can't see anybody. So you will have to holler. I have always been reticent to support tax credits which are basically paid for by revenue that's forgotten. And I've always supported the downtown tax credits for some of the photographs that we looked at showed Bristol, for example, the second and third floor buildings that have been vacant for decades. And those tax credits through banks and conservative investors have made progress along those lines. I applaud those members of the administration pushing this program but you got a $400 million shortfall and you're asking us to forego to increase that shortfall and revenues by having tax credits to do more stuff. But we've come up with a way to deal with that 400 million whether it's whatever it is that might be the time to talk about this and you've given a spirited presentation today. If you're gonna go on a road with it you could leave the one, the first one from Shelburne and maybe one or two others out of your example and get some from other towns. Bristol was good. So yeah, Bristol was good. So was the one above the mule bar in Winozki. But we're digressing into a travel log here. We've got $400 million to solve and more tax credits doesn't help us do that and probably isn't the time to do that. So thank you. Okay, and there has been discussion about putting a hold on all tax credits. So far that hasn't changed. Gotten any traction, but it's been thrown in. Okay. Madam Chair, I just wanted to comment that this isn't a hard push. This is to do exactly what you and Senator Schrock and just talked about, keep it on the table. When you come to your final numbers and you're trying to figure out what's gonna re-spark our economy and help people get going, consider this program. It has a 17 to one return. It brings housing online and invests in your small businesses and Main Street which are hurting in a very efficient way compared to other programs that rely 100% on public support. This is a small percentage and it's one of the few programs that helps private businesses and private rental property owners reinvest and provide housing and services for homeowners. That's all we're trying to make sure that this stays alive. You're preaching to the choir. I can show you Elm Street and Montpelier that three private investors tried to do. And it wasn't until we did, okay? I think Senator McDonald and I have been there since the beginning. Tax credits are public support. Please don't try and sell a program that doesn't say it doesn't require public support. It does. You're using tax credits. Senator McDonald, that's not what I was suggesting. I was suggesting that this one is a small sliver compared to some of the other publicly supported projects particularly in a subsidized affordable housing world where those tax credits are 100% of the project and this is a small percent. Right now, everything seems to be at risk. So we're trying to work our way through not make commitments that would decrease revenue which will then you could end up with more cuts in other housing programs which I don't think any of us wanna do. So Chris, have you got anything else? Cause we're only gonna deal with the finance issues which is revenue. No, I mean, I think we're all in the same place and I think I don't wanna speak for the governor but he's equally concerned about the budget and we're all gonna have to look at our priorities and see what's available. I think our interest is just to try to keep this in play. I think it's an important program. I think many of you agree. I think our downtowns are gonna have to, they need tools to figure out how they're gonna adapt to a new environment. Many of our buildings may be empty for a while and this may be the time that we wanna figure out how we can support people making investments to adapt their building to a post COVID environment. So I think we're all in a similar place there and if that could be the way forward that would be a terrific solution. Okay. And just one last pitch for the policy changes in here that actually reduce costs, the Act 250 and so forth where we don't need people that have been hurting to be paying double permitting fees and being paying a fee to redevelop the downtown which is where we're telling them to go. So, we hope those can keep moving because that'll save us money. I've been trying to get rid of the duplicate water hookup fees for 20 years or more. If you could finally do that, that would be nice. That is in there as you know. I know it is. Okay. All right. So I think at this point, unless any of the committee members have questions I'm gonna move us on to 256 which is the employee incentive program. And again, I'm going to try to keep this focused on tax related issues. We're not doing planning, zoning, any of those questions. I'm not sure where this bill is going after this but I'm trying to keep us focused. So I'm gonna start with Mark Latterny. And Mark you're here, you're from Westford. You're muted Mark, we need you to unmute. Yep, there you go. Okay. Good afternoon honorable senators. My name is Mark Latterny and I serve on the Westford Planning Commission. And I really appreciate this opportunity to testify before you in support of project based tips. And the vital role this finance tool play for a community like Westford in a revitalization of its village center. I've lived and worked in Westford for 42 years and I've served on various boards and various capacities in Westford's government since 1991. And that's the same year our chair of the select board at the time, Miles Jensen first began corresponding with agency of natural resources on the need for Westford to have a municipal wastewater system. So we've traveled a long, long road. It began in earnest with one of our first miniature planning grants in the early 90s. We teamed up with a Montpelier engineering group Stone Environmental and hired them to locate and inventorying suitable soils in our town common area. The study proved very discouraging. There were only a few small areas with potential requiring pre-treatment. Six years later, we again secured another small grant to explore those areas. And we began working on a plan to handle our four public buildings in our village. Are you talking about a septic based system? This is a wastewater system, ma'am, yes. But it would be a municipal septic system, not the kind of water treatment facilities that larger communities have. Correct. The big tanks and the mixers and- This is actually what I'm getting to is how we evolved into a conventional soil based system. I just wanted to demonstrate our need for it. We are like typical Vermont villages located next to a water resource with unsuitable soils. Our four public buildings all have compromise or questionable systems. An example is our town office. The Leech Hill is under the parking lot. And it's shared with an adjacent property. There's no possible location for a replacement and it's over 50 years old. So we have a real situation. And parallel to these wastewater issues, we've been trying to advance our economic development plans in other ways. We've gotten together and had numerous public surveys and public outreaches during events like 4th of July, common, that sort of thing. And we've learned that there's a huge desire on Westford to preserve its rural character and to create a vibrant downtown village that felt central to our community. And I'm not describing random commercial development. It's a village center that offers essential services like a store, a post office, a cafe, places to connect with neighbors. We learned a lot, the outreach was rewarding and it feels like a true unified community goal. Unfortunately, all the while as we're slowly working towards creating this community vision, our population in Westford is declining. Our young people are all leaving, unable to afford a home or land or the taxes. We simply don't have the grand list to support wastewater without using a project tiff as well. So where we are right now is, and just to give you a list of the stuff that we've accomplished is in 2015, we achieved a village center designation. In 2016, we adopted form-based code in our village town common area. That way we can control our streetscape. We also require two-story buildings. The idea is that there would be commercial on the bottom, residential on the top, mixed use, there's no density cap. We have streamlined the application process, making it very applicant friendly. Also in 2006, a large parcel adjacent to our town common came up for sale and this had unbelievable suitable soils. And it was a huge undertaking for us with a lot of public effort, a lot of volunteers combined with private donors, the Vermont Land Trust and the Vermont Housing Conservation Board. We were able to finally purchase and conserve this 130-acre property for recreation use and our municipal wastewater. This property allows us to put in a very simple conventional system that will serve our entire village with considerable expansion. In 2019, we achieved neighborhood development designation. And I believe Westford is the smallest Vermont town to receive this designation. Again, the idea is to make it easy for development. The Act 250 issue, I'm an Act 250 veteran, I wear the scars, is relieved. So that means there's a quicker application process time. It's more inviting to various developers, et cetera. Also very important, last year in 2019, the cornerstone property of our village, town common area came up for sale. This was the old pigeons bus garage, just approximately 3.2 acres. And it abuts our town, it's adjacent to our town office. It's across from our town common. It's just a really beautiful piece of property, perfect for mixed use development and affordable housing. The property location also offers us solutions to our stormwater management in our village and public access to the Browns River in a really ideal spot. And this was a very popular survey request from residents. So another way for us to make it easier for us to gain public support with this project. And we're shortly after that that we learned of the project TIF. I personally headed up the Planning Commission subcommittee to look into the feasibility of purchasing this property and combining it with the wastewater and the results are very, very positive because instead of just bringing wastewater to our village we were bringing real economic development with immediate payback. At present we're working with Green Mountain Engineering and Stone Environmental to complete our preliminary engineering report. And last week we submitted our step one application for the Clean Water State Revolving Fund. So we've brought this to the goal line. And we're well aware that it's gonna require more than the TIF, but the TIF is the most critical component. And I want you to understand that we're currently working on grant funding and securing development partners. However, without a tool like the proposed TIF our community is unable to overcome the resulting funding gap. The reality is even with a 50% grant funding our option to pay back a bonded loan is with increased property taxes and user fees. And it just doesn't work. Westford is much too small a community our projected costs at a 50% grant funding put the average user fee up to $1,000 per year for each village property. Our residents can't afford that. We wouldn't even bring it before the voters. The advantages of the TIF have for our town are numerous and it would allow us to develop this 17-0 property almost with immediate return to the grand list. And once this property is connected to our village wastewater system the limits on bedrooms and homes in the village area is immediately lifted. That means all the residential properties will be able to add bedrooms, additions, accessory apartments. It will really free up the potential to expand our grand list. And allowing for social, I'm sorry allowing for associated development throughout all of our village common. With available affordable housing young people are most likely to stay and raise families in Westford. And this is a very important piece of our plan. I can tell you from personal experience my wife and I own a business in Westford and we employ 30 people during the COVID crisis this pandemic. We lost every single one of our employees under 33 years old because they're all living at home. Now we have a profit sharing program and a 401K program that after a year you're eligible for and one of the most popular things our HR person works with these young people is saving up for their home. It's just not gonna happen if we can't use a tool or have access to a tool like TIF. I encourage you on the project TIFs to kindly make it simple, easy to manage for small towns and think about the long-term contribution it's going to make to the education fund because I know there's an argument about that. We've spoken to administrators in towns that have done large TIFs and the complication of large TIFs is absolutely beyond a small towns administration. We understand that. What we do understand is that Westford's population and school population in general it's declining and this investment in Westford will pay back. This will never happen without it. If it could have happened, believe me it would have happened by now. I've been working so hard on this and other members of the committees have been for years now. Every option you can imagine. We've talked to every housing partner and every private contractor and anybody that can get involved with our town common they all say the same thing. Great, real exciting. Let us know when you have wastewater. We have very convincing public response to predict that the majority of the commercial space and the housing we create in our TIF revitalization will be occupied by Westford residents. These are people that are commuting into Burlington and South Burlington and Essex and wherever. That saves on our road infrastructures but it helps build community in Westford. And I appreciate you taking the time to listen to me. Okay, thank you. Any questions for Mr. Attorney? Senator McDonald. So, Mr. Chair, I'm, Madam Chair, I'm trying to, is the town of Westford seeking to borrow money or to get someone to subsidize their interest rates on bonds or what's the ask here? Well, I think we, Senator Sorokian asked if Mr. Attorney come first and we haven't been through the details of these many TIFs. So I think it might be helpful before we, he's asking us to pass the many TIF bill. I think we need to go on to the other residents to understand the details of that bill. In the past, towns have gone, went to the institutions committee to ask for appropriations to do such things. So they've done competitive grants to do such things or they've reached down and dug up the money to do such things. And they, I don't think this, this is any different than many towns in the state. This, where is the money to come from to help subsidize the interest rates or whatever it is that the town is, won't have to pay for itself in order to make this work. Okay, I think we'll go on to the next witnesses and that we will get that answer. Thank you, Madam Chair. Megan Sullivan is next. So, Megan, talk to us. Good afternoon, committee. Thank you, Madam Chair for the record, Megan Sullivan, Executive Director of the Vermont Economic Progress Council. I really appreciate Mark, you coming in and talking about Westford's story. So what we've found and some feedback that I got last year when talking just generally about the TIF program from legislators in rural areas is that the TIF program works great for our regional hubs and it's done some incredible things. If you look at what's happened in St. Albans, if you look at the Renaissance in Winooski, what's happened in Hartford, there's, it tells a great story of how this tool can be used by a large community to be community driven, place making change. But the program for districts is more than what our small communities need, both from the administrative side and from the scope size. If you ask a town like Westford to bring us 10 years worth of projects that are going to amount to tens of millions of dollars, the capacity for planning and for execution for a lot of our small communities just isn't there. But that doesn't mean that these communities don't have a desire to have that sense of place to turn their village center into a center. If you drive through Westford now where their village center is, you can see there's a common green but there's not much else around it that really gives that sense of this is where our community comes together. And I think even more so now in light of COVID-19 that folks are going to be looking in those rural areas for that small town experience where they can't necessarily be in large gatherings, they can still come together in smaller communities. And our communities need to have the infrastructure there to provide for the private development to come in and provide the resources that create that village center. So what we are proposing is a alternative to the district program. And I say an alternative because our districts would not be eligible to participate in this project-based economic development program where a community would identify a single project whether it's wastewater coming into their village center whether it's a brownfield remediation that will clean up a site in their downtown to allow for development whether it's a transportation enhancement, a single project where a very limited number of parcels are identified. So another difference between the district program and the project-based program is that we're looking at instead of between 100 to 500 parcels it would be up to 10 parcels would be identified as where the expected development will happen and it would need to be in a designated area either in a designated downtown or a village center or in a industrial park. And the tax increment from those few parcels that come from the private development after the public infrastructure is finished would be used as the gap financing. So Faith, I don't know if you can pull up the document I sent. Like those. Thank you. Can you scroll down? So there's text there to really tell the story but what we're looking at for this project is that the communities are working hard to identify how to get these projects over the finish line. So in our example of Westford, they've looked at the state revolving loan fund they've identified part of that cost to bring it or part of that fund to bring down the cost they've identified money from the Northern Border Regional Commission and other sources of capital are still needed. So they're gonna have to go to their voters and bond but as Mark was saying, there's a certain level of bond capacity that voters can take on and what is leftover is too high. And I know we had the town manager from Highgate speak at the governor's press conference on this that they tried to bring the large bond to their voters and the voters said no, they can't afford it. So what this tool would do is look at what the gap is, what's leftover, what can the voters afford? What can we get out of grants and that percentage that's remaining if we isolate a few parcels where the increment can be used to repay that financing, then this project can get over the finish line in Westford's case it's a project that was their first priority in 1991 and has not been able to come to fruition yet. And then the added benefit there is that you now have a wastewater system that is serving so many parcels outside of these few that have been isolated for the financing that can benefit. And with those parcels going the increment from property growth in those parcels going directly to the municipal and the education fund you have robust benefits from that system that I think really challenge the question of is this costing the Ed fund? I mean, I think this project wouldn't happen anyways it hasn't happened for 30 years and if it does happen there will be other benefits of the education fund and the municipal fund will see in the areas outside of these few parcels that are being identified here. So that's the gist of what we're proposing faith if you wanna scroll down I can show a little bit more of how it looks. So in the example above of where we show the different costs that user fee of $1,200 per user is out of reach. But if we can bring it down to 700 and then use that 67,000 of annual TIF costs which would be paid with the increment that comes in and some of that coming from the education fund increment from the 75% because it would only similar to the TIF district program. It would be a 75, 25 split or I'm sorry a 70, 30 split and 85% of the municipal increment going in. That project suddenly becomes viable and if you go further down faith so this shows you how that works so that original taxable value is frozen. So the education fund will never get less than the original taxable value plus 30% of the increment and then 70% of the municipal fund increment and 85 or more percent of the municipal increment until their retention periods ends which would be up to 20 years. Now if the increment was coming in and they were able to pay off the debt faster then it would end faster because unlike the district program this is one project there's only one occurrence of debt there's one bite at the apple and that gets to how we deal with the administrative piece of this. I think a lot of the complication in TIF districts come from the fact that you have three or four projects going on at once you have multiple debts that have been incurred and you really have to do a lot of accounting and financing of where all those monies are going. In this we're looking at you can only incur debt once you're paying your related costs and your improvement costs for the project and then you're just paying debt service. So within the smaller scope it immediately becomes much more simplified. What happens if the development doesn't happen or that if the increment isn't what it's anticipated if it doesn't happen those same taxpayers I believe we're still on the hook or on the hook they are on the hook. I think one way that this the... So the taxpayers are still on the hook one way that this is addressed is that because you're going for one project you're not gonna come for approval from Vepsi until you have this project pretty well lined up until you know what that gap is and you're gonna move forward with that knowledge of here's what the development's gonna be we know what our increment is gonna look like we know where the gap is and that's it's going to be more solid than again a 10 year plan where you're really looking out what is our long-term development plan and that works well for our regional hubs but our smaller communities it's got to be that shorter timeframe where we're really looking at the one project that they've been focused on for years that they know what's going on and I think you also have a different type of developer I know in middle sex the can't need property these are folks who live and love that community people who wanna see that area thrive and I think similar in Westford and other areas that we've talked to it's people who live locally that are the developers they have a commitment to doing development there but they can't take on that public infrastructure piece themselves. Okay is the public infrastructure essentially wastewater? Not necessarily. So for the middle sex project it's transportation enhancements in West Rutland it's similarly a transportation enhancement that they can't have the senior transportation enhancement grants though. Right you do but there's the gap. That's why this isn't TIF in the same way that the district TIF is where you're paying for the pull project. There are a lot of grants or whether federal or state have match requirements and if you have to match between 50 or 20% coming up with that match in small communities can be incredibly challenging. This allows communities to leverage those local funds. Northern Board of Regional Commission funds require between 20 and 50% match. It can be very difficult for small communities who have projects that are just as valuable as larger communities to be able to figure out how to pull that off. Okay, Senator Pearson. Megan, just to clarify what you mean by the gap are you talking about because there's the short term increase to the local what the municipality gets to hold? Is that what you're talking about? Maybe just describe it. So if it's a $2 million project and someone's identified a million dollars worth of grants and at some point there's the match that's required that you can't necessarily match more federal money with more federal money with more federal money. So you've gotten all of the grants you can get. It's a $2 million project, you've got a million dollars and you're saying we know that our small community whether it's wastewater or our user rates if it's brownfield or transportation if it's a general obligation bond we can take on $500,000 worth of debt our community can support up to this level that leaves a $500,000 gap in getting this project over the finish line that can stall a project for years. So this is looking at using the increment from the parcels that have been identified for private development no more than 10 parcels that can fill that the increment that can fill that gap in financing. Okay, okay. So this is really tips which were originally set up to redevelop and revitalize downtown districts that had fallen into disuse and disrepair. It's part of the undoing urban flight. This is saying there's towns that could develop but for a water plant or wastewater or something. But we're making them a loan from the Education Fund. I know Senator McDonald from the Education Fund. From the Ed Fund. That's where we are rather than setting up another form. We have a revolving loan fund for wastewater. We used to have federal grants for wastewater plants. We now have a revolving loan fund. We used to have the deli section in the capital bill but I've never heard, yeah, this is definitely, this is definitely, it's loaning money without loaning money. Can I get some from you, Madam Chair, on that basis? Can you what? No, I don't have any. You won't need some money without me actually having to. Yeah, no. It's only loaning money if you think that this would have happened anyways. And I think if you look at the letter from Westford from 1991 that says, this wastewater is our number one priority to do economic development in our village center. And it hasn't happened. And there has not been economic development in their village center. There's no question I think about a but for in this situation but for a tool that helps them close that gap, they can't get there. And without this development, the education fund is not gonna see even that 30% increase that they would see, let alone the benefits that will come from all of the other properties that now have wastewater capabilities that can add additions that can add housing that would not have happened otherwise. I think that's the other piece of this is that because it's such a small, it is that gap financing. We're only freezing a few parcels. The other parcels that can be developed because of this, 100% of the increment will be going straight into the funds. But if... Madam Chair. Let me finish. Okay, then you can have apoplexy. Cause normally I might like this but for the $166 million deficit in the end fund, we don't have any money to loan. But are you saying that you're gonna take these, the building they wanna put a restaurant and some apartments in. Now you also understand by the previous bill, you're gonna be required, if you have multifamily zoning to put in eighth of an acre zoning, which you may or you may not like once you have a public wastewater system. But are you saying, cause you are within commuting distance of Chittenden County, the one or in Chittenden County, the one major growth area, I believe. Are you saying that other developers could come in, hook up to your wastewater system plant and benefit from, so we could end up being supplying wastewater for some fairly high-end homes? I mean, is that part of what could happen with this? That it's not, this infrastructure isn't limited to your downtown core that you could hook up other development to it. Our village area is, it's relatively small, our town common zoning district. Larger homes seem to be more popular on larger parcels. We don't have any large homes in our village center area. We are talking to another developer who would like to also develop property in the village district area of the town common area. And he is talking about smaller affordable homes as well. It seems to work better in that village environment. So personally, I'm not aware of anyone entertaining the idea of building larger luxury homes or... Right, but you're building homes and will he be asked to contribute to the cost of building the filtration plant or the wastewater plant? Well, there'll be a connection fee and there will be a user fee. The idea is that both these fees will be economical enough for normal families to be able to afford. Nothing special for, I'm just thinking of the Act 250 model where if I'm putting something in the next town, I've got to pay for traffic improvements in the surrounding area. If I'm going to be able to put in a development, it seems like traditionally I would have been asked to make a contribution to the cost of the public infrastructure necessary for that development. That's usually what happens in a planned residential development in Westford as well, as far as the actual infrastructure particular to that development. Yes, that's all pretty much standard development policy for our town as well. And I think what, so the Village Center for Westford is larger than these few parcels that have been identified for real development. And I think that gets to the question of what if the development doesn't happen? So these are the parcels where Westford has said there are developers who are interested who have said without wastewater, we can't do this. Without wastewater, we can't put housing on upper floors. We can't do X, Y and Z. But once it's there and once those few parcels are developed and this community starts to show a Village Center, I mean, that sparks the growth of other folks who want to become part of that that now have the infrastructure in place. I think that's part of the purpose of TIFF, regardless if you're talking about project-based or district-based, but that benefit and that development improvement really generates more interest in the area. Okay, no, I'm not arguing that. And I think it's important also. Any other questions? Senator McDonald, did you have a question? Yes. Madam Chair, in the beginning, this was something that was gonna be good for the small town. And at the end of the presentation, it was something that the Ed Fund should be delighted to have because it was gonna help the Ed Fund. If that were the case, the banks would be in elbowing the Ed Fund out of the way to get the business. And they're not. So I'm missing something here. Who is the person who stands in place of the bank loan officer that approves these applications in this bill? Is that what Debsi does? Debsi would be the approval for the applicant for the TIFF funds. And we'd look at just like in the current TIFF program, we'd looked at viability of a project at the development that's being proposed in the increment. So it would be in similar application process though, a much smaller scope. And if, but in a bank, if you approve of such a thing and you make a mistake, then that's on the banks. The bank takes the hit, isn't that right? What is the, what's Debsi's skin in this game as the people who are making the loan or are they someone else making the loan and they're just okay. Well, it's the town has, puts the full faith and credit of the municipality behind the bond or the debt and currents. In which case they should be able to get it from the bank, should they not? If it's, why is the bank not recognizing what you're proposing as to be as wonderful and profitable and beneficial as you and the gentlemen from Westland have said it is. All right, it's the question and it's probably not fair to just pick on Westford. We've got a certain amount of grant money. We've got 24 more. We've got a gap. We've got 24, 25 of these things total and I'm trying to understand where the money's coming from. Okay. There's up to 15 with a limit of, is it 15 million? No, five million a piece. It came out to about $20 million risk. Total to the Ed fund as I remember initially. I think Senator McDonald's question is why can't the towns, if this is such a good deal, why can't the towns go to the bank and take out a loan and pay the loan back with the increase in the grand list? So the increase in the grand list doesn't happen but for this project. And the way that the property taxes in Vermont are divided just using a municipal increment is not going to close the gap. You can't get the votes for it, is that? No, no, the municipal, I'm assuming that the municipal budget in the town, in any town, generally it's one third of the school budget. So you're saying that the town's increment is not enough to pay the... Right, municipal TIF currently exists. So the municipal TIF program currently exists in state statute. I'm not aware of anyone who has set one up. A municipal TIF? Yeah. All TIFs were municipal when they were the law first passed. Okay, Sandra Brock has a question. To answer, I think Senator McDonald's question is that private lender cannot come in to cover the gap because the funding source under the TIFs that would be used to repay the lender would then go to the taxes. It would not be able and would not be available to be paid back for the private lender. That's why they can't go to the bank to do it. Okay. Okay. Thank you. Megan, do you have anything else at this point? I would just say that this was a priority of the administration before COVID-19. I was gonna say we've got BV, so... It remains a priority, especially as we're looking at our village centers and our downtowns trying to reimagine and recover that we need all of the tools we can get to get communities there and that gap existed before and it will continue to exist. And I think our small communities, we've put a priority on downtowns and village centers and giving our village centers the chance to become what they wanna be and a place for their community is still a priority. Okay. Sandra Pearson. Thank you. Megan, we've covered Westford and you said there was a few other towns in West Rutland maybe. What remind us in the bill there's a limit on, is there a limit on the number of towns or just on the money? So Senate economic development put a limit on both of those, a limit on five per year and that each, I think 1.5 million in total. That's not necessarily our proposal, but that's what was passed out of Senate economic development. And then how many communities are you aware of that would are exploring this right now? So we have had conversations with Westford, West Rutland, Johnson, Highgate, Middlesex. So we know that there's interest and then we've heard anecdotally from other folks who are intrigued and wanna wait to see what happens. I think it's one of those things where we can ask towns to spend too much time doing the amount of projections that Westford has done. If it doesn't go anywhere, that's, there's staff time involved. And it is 15 projects at 1.5 million. I knew I came up with it. But five per year. Yeah. And I think for the 1.5, I think that could be a little challenging if there's a way to not include the municipal increment in that so that there is some flexibility for projects when you're looking at the related costs that come along with projects. A little more flexibility there would be great, but I think the ability to get this program off the ground and work with some communities through a pilot program like this would be a great opportunity. Okay. We were just talking about downtown tax credits. Can these towns not use downtown tax credits? Regs in front of me. So I don't know. Yeah, I don't have. That's not your area. Well, maybe we'll move on. This is Chris Cochran. It's fun. And, Joan, maybe you can talk about it. Well, I was just going to say, if you're talking about a public project, you know, the public infrastructure, the tax credit is really more for the private property owner. This is Chris Cochran here. The tax credits can only support the existing buildings. It doesn't support new buildings. And it only goes for the building improvements. It doesn't go for the underground utility infrastructure. Okay, thank you. All right, Joan, back to you. Okay. What would you like me to focus on? I think what we're all, there is this program. Right. And merits and or dismerits and the committee may vary on. I have always been a supporter of TIFFs. I think I put in the original TIFF legislation. I am struggling with $166 million deficit in the ED fund and the timing of this. The looking at additional costs that we're all looking at. And I think that's, it's the timing. And in the past, if we wanted to help towns put up, you know, infrastructure and especially wastewater infrastructure, clean water infrastructure, we've had grants and loans. And we're suddenly going to the ED fund for a grant or I guess it's a loan. So. And this is not redevelopment.  This is new development. Yeah. I think that's, I'm just looking through the, at this point in time, the rationale for doing this. So I think what we've had to do in our entirety is to sort of look at what our original asks were and figure out whether or not those help with recovery. And what we've come to is that clearly many TIFF does because the situation is dire, right? We know that the economy is hurting, but we can't neglect the idea of trying to incentivize and plant seeds for additional investment into these towns, especially the smaller the town. So even though we have grants and loans and all kinds of activities available to municipalities, we all know that there are small municipalities that cannot meet the gap. And this will help meet that gap. So I know that we're struggling with the idea of additional costs, but I think that that analogy would be relevant if we felt that the, you know, the total amount possibly to be collected stays the same. I think in this case, we're raising that ceiling. We are saying that there's incremental property valuation that would, you know, that increment will pay back that debt. If we're considering it that that project would happen anyway, then I could see it being considered a cost. But I think it's fair to say that in these towns, this has not happened.  If they have to do any project, the amount of user fee would just be prohibited. So I think this came about with the critique that the current TIFF system only helps large cities, larger cities and towns in Vermont. And we needed something and a tool to help rural economic development and to help all the towns and villages of Vermont and not have these tools that take so much sophistication level that you need professional staff and all the rest of it. I mean, when we know lots of towns are working with sort of minimal professional staff, but having said that in order for them to survive and thrive and have economic development, they will need some infrastructure improvement. So I think if we look at it in the context of long-term recovery, we would understand that we're not risking, there's almost like the risk of doing nothing is probably greater than the risk of allowing these districts to occur and to encourage incremental, to encourage additional investment that we so sorely need. And even though it was a pre-COVID ask, post-COVID, it's still extremely relevant. Okay, so how did your town of 100 users put in a septic system? So what's happened is they, so way back when, I guess in the 70s, there must have been some federal grant that came in that lots of little towns were able to put in some sort of wastewater system. And they did this wastewater system, right, of 100 users. And what happened is they didn't put into consideration the maintenance and everything that was necessary. And so our village had to go into debt to just do the kind of maintenance, not even expansion. Expansion would take on a whole other ball of wax. I'm not sure we would have enough to actually even contemplate that. But for towns and villages that have done the work to figure out that there would be additional private investment that could help kind of grow their tax base, they've done the work, they haven't had the development. And now more than ever, the complexions of our downtown villages and town centers might be changed for a very long time as a result of COVID. So I think anything we could do to have more tools in the toolbox to encourage that level of investment would be helpful for Vermont. Okay, Sandra Sirachin. Just briefly, is there sort of a pro- Yeah, I hear you, Michael. Megan, is there like a pro-former you could chart out for us using Westford as an example of how much the Ed fund would suffer if there's no resulting development and how much it would gain if in three years there's the full development that we anticipate and maybe some example somewhere in between, can we see the dollar figures? I mean, people are concerned. I happen to be a big fan of TIFFS as well. I think we should use this creative financing to grow our economy. But I'd like to, for the people who are so concerned that the Ed fund is gonna lose money here, can we see the worst case and the best case scenarios as to how much it's gonna cost the Ed fund? Because I have a feeling even in the worst case scenario we're not talking about very much money. Maybe it multiplies several times over five years of this pilot, but at least using Westford as an example. I mean, I assume this is what you do when you approve these grants. And I know we saw it from Burlington when they came in and said, this is how much we're gonna yield in a game for the Ed fund. Can you do this, do that in quick order for us? Yeah, I mean, we've done, in that handout we've done some of the modeling. So we've already done some of it of what the increment will look like. Based on the property value, increased projections, what the increment will look like on the education fund side and on the municipal side that will go into paying for this. So we have those numbers and... Show us, show us. Okay, yeah. Show us a bad case scenario. Okay. Not only a good case, show us a bad case scenario. I am sure Ken Jones will be able to whip that up for us. But I do want to clarify that this tool is for redevelopment, the camp need properties. It is in middle sex, looking at the redevelopment of those buildings into a new community center. So there may be some areas in the village center in our Westford example that would be taking one parcel and making it into a few parcels to develop. But largely I think our village centers would be looking at redevelopment opportunities. Okay. Is this is middle sex applying as a town or I know there's a group that's interested in... The applicant would be middle sex, the town for improvements in order to allow for that development, the developers that are there to move forward with the development they're projecting because they can't move forward with that project without things like traffic easing solutions and sidewalks and crosswalks and parking to make that an area that people can visit. Okay. I mean the other major state routes so they should be eligible for some transportation enhancement grants. Right. I'm sure they will be. I mean Camp Mead is an old, I don't know was ever an army camp or it was just it belonged to the guy who collected army vehicles and they're using a kind of an artsy area right now. But I'm not sure how would lend it's, unless we're just talking about expansion area for businesses that are there because of which is Red Hand Bakery, which has expanded... I'm happy to have those folks get in touch because they gave a presentation to House Commerce as well about what it is they're thinking but what the public infrastructure needs are in order to make that happen. Okay. Senator Ballant. So I just want to be clear that this was a strong vote on this out of economic development. So the chair does, he speaks for the group. We really feel like this is a tool for rural areas. And I do think that we need to see the data that it feels like we talk about this over and over and it starts feeling like a red herring. Let's see the numbers and let's do something for these smaller towns. Okay. Joan, do you have anything else to add at this point? No, I don't. Thank you. Okay. So I'm going to go on to Karen Horn because we've got two more bills to go through when some of us have a five o'clock meeting, which will probably be fairly long. So Karen. Thank you, Senator. And I've promised to be very brief. So I will be Karen Horn with the League of cities and towns. We had supported this before the COVID crisis got rolling. We are very understanding of the issues with the education fund deficit right now. We're sort of in the crosshairs on that whole issue. So we certainly understand that the one thing I would want to say with respect to these incentives is that we really need to be ready for efforts to regenerate our local economies when we move beyond the COVID-19 crisis. We're looking at, and I'm sure you can see it in all of your downtowns, really pretty dire straits with our small businesses. And even with things like parking meter revenues and stuff like that. So we are going to have to rebuild. It's going to take some time in a considerable amount of effort in a whole new world. And we're going to need some incentives and programs that are nimble and able to help make that happen. Okay. Committee, any other questions at this point? Plenty, but I won't ask them right now. Okay. I think we've got. There's a division on the merits, maybe not that big a division. And then on the timing, which will be something to be worked out. Okay. All right. So I'm going to take.


To improve the government's financial ability to equitably provide quality health care services to the public and reinforce St. Lucia's national security infrastructure, Prime Minister Hon. Philip J. Pierre, with the support of his cabinet of ministers, engineered the health and citizen security levy. The health and citizen security levy will be applied at a rate of 2.5% on the cost of a limited number of business services and imported goods. Gold items and medical products are exempted and will not be affected by the levy. The revenue generated by the health and citizen security levy will give the government the financial latitude to secure the resources, equipment and tools needed to enhance the operational and tactical efficiency of St. Lucia's protective services. We have bought 33 vehicles for the Royal St. Lucia Police Force. 33. We have bought 5 motorcycles. We have bought 150 ballistic vests costing $461,000. We have bought two sets of firearms and ammunition. One set costing $154,000 and another set costing $215,000. Firements and ammunition. We have spent already $246,000 on the regional security system to help us in our security issues. We are now in the process of recruiting 80 new recruits. We are now constructing the Gross Delay Police Headquarters. Prime Minister Peir's government will also use the levy to fund health projects and expand access to health care services at lower costs to the St. Lucia public. The Labour Party took positive steps towards universal health care when we removed the fees for high potential and diabetes. That's what we did, Mr Speaker. And now we are back, Mr Speaker. And the universal health care, the process continues. We have removed from maternal and childcare all these services will be free, Mr Speaker. And I want to make a point, Mr Speaker, that the removal, the progress towards universal health care is not targeted at making any individual person or any group of persons worse off. They are targeted at improving the quality of health care by making it affordable, making it accessible and a certain level of equality for all the population, Mr Speaker. The health and citizen security levy is expected to annually generate at least $33 million for the government of St. Lucia. From the office of the Prime Minister,


Olemme ymmärtäneet esim. vähän enemmän. Olemme keskusteltuneet nall-hypothisiin tarkoittamisen testin, tai NHST, joka on akronomia. Nall-hypothisiin tarkoittamisen testin on, että olemme ymmärtäneet... Olemme ymmärtäneet ymmärtäneet ymmärtäneet ymmärtäneet, ja olemme ymmärtäneet toistaan, olemme testin ja nall-hypothisiin tarkoittamisen testin. Olemme testin ja nall-hypothisiin tarkoittamisen testin. Olemme pitää kokemme ymmärtäneet nall-hypothisiin tarkoittamisen testin. Nall-hypothisiin, tai H0, on ymmärtäneet ymmärtäneet, että H0 on ymmärtäneet ymmärtäneet, tai H0 on ymmärtäneet... Olemme ymmärtäneet... Sitten pysyvät tässä, kun on kohtaa. Ymmärtäneekö testin...? Sirkyskyli tai ne on oikeudella uutistuttuu. Kalkoittamme samanlainen tilanteesta, ja voimme sanoa, että tämä area on p-valoituksia. Tämä on mahdollisuus ottaa testatistikin alha-hypo-tysiä, jossa on alha-hypo-tysiä. Sitten alha-hypo-tysiä, jossa on alha-hypo-tysiä, jossa on alha-hypo-tysiä, jossa on tarkoitus testataan. Tytäkin, tämä on tullut komputerin, jossa ei ole tarvita alha-hypo-tysiä, jossa on alha-hypo-tysiä, jossa on käytöksi understand, mitä on tapahtunut, elä-hypo on tahedut, koska kun me actingin niin koko alue juhlalla, niin koko alue teemme niin pallppuilla. The simplest test, perhaps using the null-hypo-tysiä, significance testing is, are the tea tests. And the idea of a tea test is that it assumes that the estimates are normally distributed over repeated samples. Tämä oli kuten on, kun kappaleet yksi tuntuu. Joten yksi tuntuu on yksi tuntuu, joka on yksi tuntuu, kun samanlaista tilaa on suurin. Sitten on tuntuu, että testaattistikin on tuntuu, kuten on tuntuu, kuten on tuntuu. Joten, ettei katsomaan, kuinka suurin esim. on ympäristysvaluus 0, katsotaan, kuinka suurin esim. on ympäristysvaluus 0. Ja tämä katsotaan student-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t-t. The idea of a t-test or this estimate divided by standard error is that we standardize the estimate. So remember standardization is subtracting the mean of the estimates. So here we assume the mean to be the null hypothesis. So we subtract zero and it doesn't really make a difference. And we divide by standard deviation in which case is the standard, estimated by standard error here. So the t-statistic tells us how far from zero the estimate is on a standardized metric. If it's more than two standard deviations from zero, then we conclude that that kind of observations will be unlikely to occur by chance only. Because 95% of the observations fall within plus or minus two standard deviations when we have normally distributed statistic. So we compare this area. In practice it often makes sense to compare both areas here. So we calculate this area as well. The logic being that it would be an important finding if the difference was to the other direction as well. And this relates to or is referred to one and two-tail tests. So what area we compare? So normally if we only compare one end of the normal distribution here, this is called a one-tail test. And if we compare the area, what is the 5% area here and here together. So this is 2.5% and this is 2.5% so there's some to 5%. Then that's called a two-tail test. Normally when your statistical software gives you a p-value from a t-test or some other test that uses something that looks like a normal distribution, for example a z-test, then it is two-tail. So you compare both ends. And it's considered cheating to use the one-tail test because what the one-tail test basically does, it gives you a p-value that is exactly half of the p-value of the two-tail test. Because you have two-tails here, the probability of the observation being in both either tails is twice as the probability here. So the probability here is half from what the probability here would be. The problem with one-tail tests is that the standard is to use two-tails. And if we observe a p-value in a research paper, we assume that it's made by using this two-tail test. Sometimes if the p-value is 0.06 and a researcher wants it to be less than 0.05, they switch to one-tail test which allows them to divide the p-value by half. And they present those as if they were tests from the two-tailed distribution, two-tail test. That's mislinear readers, that's unethical. There are basically no good reasons ever to use these one-tail tests because this is more commonly accepted and also if someone wants to have the one-tail test instead of the two-tail test, they can just divide your p-values by two. And that's the difference. The p-values are very commonly used in research papers. So you see papers, for example, this is from Heckmann's paper. You see these p-values behind statistics, so you see a regression estimate here. Then there's p-value less than 0.01, that is statistically significant. You see this ns, that means non-significant, or you can see p-value is greater than 0.05. So for some reason we have decided that the 5% p-value is the gold standard and if you have less than 5% then it's a good thing, if you're more than 5% that's a bad thing. So that's an arbitrary threshold. So a paper could have hundreds of p-values easily. So it's a very commonly used in research papers. P-value relates to two different things. So it relates to two different errors. And we have two things in statistical analysis. We have the population and we have the sample. We want to make an inference that something exists in the population using the sample data. So we calculate a test statistic. The test statistic rejects the null hypothesis in the sample. Then we assume that the null doesn't hold in the population. But that's not actually always the case. When you get a p-value that is small, it's also possible that it is a false positive finding. So p is less than 0.05 means that if there was no effect then getting the kind of result that you just got would be the probability for that would be 5%. So 1 out of 20 samples from population you would be getting a false positive if the null hypothesis doesn't hold. So it's possible that it's false positive but it's also possible that it's true positive. So the problem is we don't know. We have evidence that it would be unlikely that we would get an effect estimate by chance only. Then we conclude that maybe it wasn't by chance only. But we can't know for sure. So this is type 1 error. Then we have type 2 error which is false negative. Let's say that the null hypothesis holds in the population. Let's say that women-led companies are really more profitable than men-led companies. But for some reason our study couldn't find the difference. So that would be a false negative. And there is the case that we say that we can't reject the null hypothesis. We can't reject the claim that there is no difference and there really is no difference. So that's also a valid finding. So we want to be sure that we either have true positives or true negatives. The probability of false positives under the null hypothesis is we consider 5% or less acceptable. So if we say that the p-value is valid then it should behave as expected. So it's okay for the p-value to be less than 0.05. 3% of the time if the null hypothesis holds in the population. So that is we have a conservative test. That's okay. So we want to make errors to be too cautious. But if our p-value was less than 0.05, let's say 7% of the time, then you would say that it's too liberal and it's not the valid p-value for the particular test. Because it doesn't follow the reference distribution. It's important that when the null hypothesis holds, our p-values don't indicate the support too often. Then we have another concept called statistical power. So this is a false positive rate. And statistical power is something that once we have a statistic whose p-value doesn't exceed a false positive rate, we want the test to identify an effect when it exists as frequently as possible. Typically we are okay with 80% but there are studies with way less power. So 80% power means that when there is an effect in the population, then in four out of five studies we would actually detect an effect. The question is which one is more important. We are not okay with more than 5% false positive rates, but we are okay with 20% false negative rates because of 80% power, 20% false negative. Then the reason why we are so much more worried about false positives is that positive effects typically have some kind of policy implications. If we find out that a medicine doesn't do us any good, then no one is going to take the medicine. We continue research. If we find out that the medicine helps people, then people will start taking the medicine. If it's a false positive finding, then people will take medicine that is useless or could be even harmful for them. So false positives have policy implications much more often than false negatives, and that's the reason why we want to avoid false positives. We have agreed that it's okay to have a 5% rate, hence P is less than 0.05, but not more. So that's, of course, in some scenarios if you have a really like a life critical thing, then you could be using P-value threshold of 0.001 for example. So 0.05 is not the one correct value. That's just the convention in many fields. Some other fields use smaller values, and you can use smaller values in an individual study as well.