Meeting of November 18, 1997
The Legislative Oversight Committee on Restructuring Education met at 9:50 a.m. in the Senate Chamber of the State House.
MEMBERS PRESENT: Sens. Cheryl P. Rivers, Chair; Nancy I. Chard; James H. Greenwood; Helen S. Riehle; Reps. Paul A. Cillo; John S. Freidin; David C. Hathaway; Martha P. Heath; Karen M. Lafayette.
STAFF PRESENT: Bill Russell, Emily Tartter, Anne Winchester and Rachel Levin of the Legislative Council; Catherine Benham of the Joint Fiscal Office.
Senator Rivers called the meeting to order at 9:50 a.m.
1. APPROVAL OF 10/28/97 AND 11/4/97 MINUTES *
Staff distributed the following documents to Committee members: a 11/10/97 memo to local officials from the Division of Property Valuation and Review on the determination of homestead; a 11/1/97 letter to Sen. Rivers from Alice Rydjeski of Barnard.
Rep. Heath asked that the 10/28/97 minutes reflect the following on page 4 under item 4: Jeff Carr agreed to provide the Committee with information about the index for state and local government purchase of goods and services and information that will help the Committee decide whether to annualize the index at the end of the second or third quarter for the purpose of increasing the general state support grant.
Rep. Heath made a motion to approve the minutes as amended. The motion passed unanimously.
Rep. Heath made a motion to approve the 11/4/97 minutes as submitted with the two grammatical changes suggested by staff. The motion passed unanimously.
Sen. Rivers asked the Committee to schedule future meetings. The following meetings were reconfirmed or scheduled to take place in the Legislative Lounge of the State House:
- Tuesday, November 25, 9:30 a.m.
- Monday, December 8, 9:00 a.m.
- Tuesday, December, 9, 9:00 a.m.
The Committee discussed the possible need for other meetings and decided to hold Tuesday, December 16 as another possible meeting date in the context of the work the Committee needs to complete.
Committee members discussed the tasks the Committee needs to complete, suggesting topics to address including:
- time for potential witnesses
- roundtable discussion on transition with invited witnesses
- escrow accounts and banks
- a report from the Local Officials Advisory Committee
- reports from study groups
The Committee also discussed the report it is required to make December 1. The Committee said that it would issue a preliminary report by that date and asked Bill Russell to present an outline at the next meeting.
2. TAX STABILIZATION AND TAX INCREMENTAL FINANCING
Bill Russell, Chief Legislative Counsel, distributed the following documents: a 11/4/97 memo addressing other states’ property tax exemptions for economic development. He summarized the memo by saying that information has been obtained from five states which have a statewide property tax, examining the mechanisms used by them to grant exemptions to encourage economic development. He reviewed information from Kansas, Montana, Michigan, Wyoming and Washington.
Bill Russell also verbally presented information he had gathered on Maine’s tax incremental financing statute.
Sen. Greenwood said that in making comparisons to other states, it is important to understand the tax stabilization policies in the context of their entire tax structure. Rep. Freidin asked Bill Russell to put his remarks on Maine in a memo format to the Committee.
The Committee discussed how to proceed, agreeing that there needs to be language establishing criteria for approving tax stabilization agreements.
The Committee agreed that land use standards should be part of the state guidelines for tax stabilization agreements and discussed other issues such as: the size and composition of the board and how it would be constituted (i.e. by gubernatorial appointment.)
The Committee identified issues which will require further work by the standing committees, such as: should there be a mandatory cost-benefit analysis?, should there be a requirement that agreements not decrease existing tax revenue? Other factors identified for consideration were: wages, health and working conditions, training and quality of life, and the desire to have a good match between the area and the jobs, that the local community needs to want it and that the community will need to vote to approve the agreement on the municipal side.
Rep. Cillo joined the Committee. Sen. Rivers asked him to relay his thoughts on tax incremental financing. He said that he believed that once clear guidelines were in place, municipalities ought to be able to retain the authority to set up tax incremental financing districts.
Rep. Freidin asked Bill Russell to research how criteria is set for other boards.
Sen. Rivers asked Bill Russell to have draft language ready for mailing to the Committee on Friday.
It was agreed that Committee members would give their suggestions to Bill Russell.
3. TAX EXEMPTION PRESENTATION OF DRAFT LANGUAGE - COMMITTEE DISCUSSION
Bill Russell presented and reviewed with the Committee with a 11/15/97 memo on the issue of Committee action on property tax exemptions and stabilization agreements; Draft #1, November 15, 1997 of proposed amendments to implement suggestions for grandfathering locally voted exemptions for nonprofit public uses, and for providing alternative mechanisms for future approval of of tax stabilization agreements, exemptions for economic development, and new tax increment financing districts, as well as a 11/14/97 summary of short term proposals for Committee action on property tax exemptions and stabilization agreements.
After the Committee took a lunch break, Sen. Rivers reconvened the meeting and announced that the letters to local officials had been responded to individually and presented the Department of Taxes and Department of Education with copies.
4. REVIEW OF STAFF DRAFT OF TECHNICAL CORRECTIONS
Bill Russell and Emily Tartter of the Legislative Council distributed and reviewed an Act 60 Technical Corrections Section-by-section summary of Draft 2.1 as well as Draft 2.1.
The Committee flagged sections to return to for revision and discussion at the next meeting.
5. UPDATE FROM ADMINISTRATION
Sen. Rivers asked Kathy Hoyt, Secretary of Administration to address the Committee. She requested that Sean Campbell, Deputy Commissioner of Taxes and Special Assistant to Secretary Hoyt on Act 60, join her. They distributed a copy of the Act 60 Primer which they said was at the printer and would be distributed the first week in December. They said that Marketing Partners is putting together a weekly schedule for bulletin distribution. Sean Campbell distributed a draft schedule to the Committee. He said he expected to be able to present a more detailed report at the Committee’s December 8 meeting.
Sen. Rivers asked Secretary Hoyt to provide the Committee with any recommendations from the Administration, particularly on the subject of tax incremental financing, economic development and transition to the Committee by the December 8 meeting.
Bill Johnson, Director of Property Valuation and Review reported that many meetings around the state had taken place for listers, that there have been good turnouts and that it may be necessary to produce additional bulletins responding to questions on the definition of homestead.
Bill Reedy and Jerry Cassell of the Department to Education reported that Marc Hull, the Commissioner of Education, was at another meeting and they would give a report on his behalf. They distributed and reviewed a 11/13/97 memo from Commissioner Hull to the Committee. It addressed communications, Act 60 and related studies and reports, as well as many other issues. They said the Department was working on technical corrections and would provide a draft to the Committee.
Rep. Heath said the Commissioner had told the Committee he was going to recommend the time frame for what can and cannot be done and by what dates. It was suggested the Commissioner address this question at the next meeting.
Jerry Cassell also reviewed a document showing effective tax rates for Vermont school districts over the past 20 years.
6. AGENDA FOR NEXT MEETING; SCHEDULING; CLOSING REMARKS
The Committee adjourned at 3:55 p.m.
Respectfully submitted,
Rachel Levin
* Please note that the numbers refer to agenda item number.