MINUTES
Meeting of October 14, 1997
The Legislative Oversight Committee on Restructuring Education met at 10:00 a.m. in the Legislative Lounge of the State House.
MEMBERS PRESENT: Sens. Cheryl P. Rivers, Chair; Nancy I. Chard; James H. Greenwood; Peter E. Shumlin; Paul A. Cillo; John S. Freidin; David C. Hathaway; Martha P. Heath; Karen M. Lafayette.
STAFF PRESENT: Bill Russell, Emily Tartter and Rachel Levin of the Legislative Council; Catherine Benham of the Joint Fiscal Office.
Senator Rivers called the meeting to order at 10:00 a.m.
1. APPROVAL OF 10/7/97 MINUTES *
On a motion made by Rep. Heath, the committee approved the minutes of the October 7, 1997 meeting, as submitted.
Senator Rivers noted that the Administration would present a report to the Committee next week on the public information plan and budget.
5. UPDATE ON INFORMATION SESSIONS FOR LEGISLATORS
Senator Rivers reported to the Committee that a memo had been sent to legislators informing them that on November 1 and November 4 informational sessions were being scheduled in White River Junction and Montpelier and that an agenda would follow.
2. COMMITTEE DISCUSSION AND WITNESSES ON DRAFT LANGUAGE
RELATING TO MOBILE HOMES
Bill Russell of the Legislative Council distributed and discussed 10/10/97 draft language for proposed amendments relating to mobile home taxation issues under Act 60. He addressed the following issues: appraisal value and "double taxation"; proration of taxes on sale, transfer or removal; aggregation of taxes paid with rent constituting property taxes for homestead reduction; and attribution to homeowner of taxes paid by cooperatives. Attached is a copy of the draft language.
Senator Rivers invited Steve Jeffrey, Executive Director of the Vermont League of Cities and Towns to testify. In terms of the "double taxation" issue, he said there is no double taxation when you base everything on fair market value. On proration he believed the proposed revision would result in additional burdens administratively for local officials.
Senator Chard commented that the issue which needs to be addressed is with the existing law which was enacted prior to Act 60.
Steve Jeffrey said that the League takes no position on the issue of aggregation nor cooperatives because towns are not affected.
Senator Rivers asked Steve Jeffrey to put his comments in writing and submit them to the Committee as soon as possible.
John Barrows of the Lake Champlain Housing Development Corporation said he agreed with the draft language and had no further comments at this time.
Jack McCullough of Vermont Legal Aid also said he supported the draft language.
Ruth Pierce, a lister from Westminister, testified by telephone. She talked about the variety in valuations and the way valuation of a mobile home is established. She was not in support of the proposals for valuation or proration. She talked about taxing exempt properties and said she does not like the practice. She also said that the $15,000 exemption in Act 60 would result in some mobile home owners paying very little tax.
Senator Shumlin said it was never the intention of the House or Senate in writing the legislation to tax fire departments.
3. COMMITTEE DISCUSSION ON TAX EXEMPTIONS AND STABILIZATION
AGREEMENTS
Senator Rivers asked Bill Russell to review the issue with the Committee. Senator Rivers said that in reviewing letters from local officials, the issue of taxation and nonprofits has come up. Senator Shumlin said he would like the Committee to go on record to clarify the misunderstanding and that it was not the intent of Act 60 for volunteer fire departments and other municipal charitable organizations to pay school property taxes. Senator Shumlin made a motion which Bill Russell drafted entitled, Statement of intent regarding property of nonprofit organizations.
The Committee declares that: It is the intent of the Legislature that any property of a non-profit organization used for a public purpose which has been voted an exemption or reduction of property taxes by the municipality in which it is located will continue under Act 60 to have the same status for property tax purposes as it previously enjoyed.
The Committee voted unanimously in support of the motion.
Senator Rivers said the Committee should continue to discuss the issue of tax exemptions and that it should focus on the Committee’s charge. She requested that Bill Russell have staff articulate the remaining issues involved with reviewing existing statutory exemptions. She asked Committee members to be prepared to discuss whether the Committee should take up the subject of tax stabilization agreements.
Before the Committee recessed for lunch, Senator Rivers said she would be unable to attend the Committee’s afternoon meeting and requested that Rep. Freidin take her place. Senator Chard also said she also had a prior commitment and would not be at the afternoon meeting.
4. UPDATE FROM ADMINISTRATION
Rep. Freidin asked Kathy Hoyt, Secretary of Administration, to update the Committee. She said she had her first meeting as the Secretary on Wall Street and that it was very good. She said Act 60 is viewed as comprehensive and creates certainty and that the Education Fund was viewed as a responsible way to deal with financing, that the focus and commitment to communities in terms of debt service and capital construction was very positive.
The Committee requested that when Secretary Hoyt has the report from the rating agencies that she write a memo to the Committee on the State’s fiscal health and Act 60.
Kathy Hoyt reported that Deb Brighton will be working on the State’s database with the Joint Fiscal Office and the Tax and Education Departments to get ready for determination of the income-sensitive checks, that Marketing Partners is meeting with the Leadership Group and that they will be ready to report to the Committee soon.
Sean Campbell, Deputy Commissioner of Taxes and Special Assistant to Secretary Hoyt on Act 60 was asked if work on FY 1999 estimates and the calculation of the August 1998 property tax reduction check would be completed in a week. He said they would do their best, but a week was a very short period of time. He said the Administration is working on the tax booklet and will get copies to the Committee, is trying to set dates for training sessions for listers and may update the Committee later in the day as to the dates and that he has been on the road at many public meetings.
He said that Bill Johnson, Director of Property Valuation and Review, was at a prior commitment and would attend the next meeting of the Committee.
Marc Hull, Commissioner of Education distributed and reviewed the following documents: a 10/14/97 Education Department update memo; a 10/8/97 op ed piece entitled, Getting Act 60 Off
to a Strong Start: Three Points on School Budgets; a chart showing Comparison of Service
Plan Estimates to Actual Cost FY 90 to FY 98 for Special Education; a working draft of a proposed plan for A Statewide Professional Development System; an article from the Stowe Reporter entitled, New Information Changes Act 60 Debate; a 10/14/97 memo from Commissioner Hull and Lieutenant Governor Doug Racine entitled, Tool Kit for Presenters; an index for due Dates by Agency from a database created to demonstrate responsibilities under Act 60; a sample printout from the database sorted for municipalities and an agenda from a 10/16/97 meeting presented by Vermont School Boards Association and the Vermont Department of Education entitled, Preparing School Budgets Under Act 60 at all Vermont Interactive Television Sites.
The Committee asked Commissioner Hull to report at a future meeting on how and where the Department of Education would make available access to the electronic calendar by computer.
Commissioner Hull said Jerry Cassell is estimating what next year’s tax rates are going to be. He said there was an issue of interpretation of Act 60 with respect to the 40% cap and that Deb Brighton and Sean Campbell were going to be having a dialog.
Rep. Freidin asked how he will know when he has the right interpretation. Commissioner Hull said that Jerry Cassell is putting together a profile for the 1999 calculation like he has for State Aid. He said he is going to need the Oversight Committee’s insight as well as the executive branch’s on this issue.
The Committee invited Jerry Cassell of the Department of Education and Catherine Benham of the Joint Fiscal Office to join the discussion.
Rep. Cillo suggested that the appropriate people look at the legislation as well as the estimating process that legislators used to write the bill. Commissioner Hull replied that he would like the Committee to designate one person Jerry Cassell should get feedback from on this issue. Rep. Freidin suggested Rep. Cillo and the Committee agreed. Jerry Cassell told the Committee he thought he could complete his estimate of tax rates prior to the VIT presentation for school officials the evening of October 16.
Rep. Freidin asked Sean Campbell to begin the discussion of what should be on the agenda for the information sessions for legislators. A discussion ensued about what should be included in the agenda.
Rep. Cillo said there should be an implementation time line for next year for school and select boards and what they need to do and a calendar with dates when information such as, student counts and the equalized grand list will be available. As well, he thought there should be basic
tools which assist with understanding Act 60, work sheets, budgeting and that it should be focused on tax payers.
Sen. Greenwood said the format is important. He said there should be a facilitator and suggested Sen. Shumlin, the Speaker or Sen. Rivers and he suggested that the Tax and Education Departments each get 20 minutes.
The Committee suggested that Secretary Hoyt give a brief review of fiscal issues as she did for the Committee.
Rep. Cillo said the sessions should focus on the results of the work the Committee is accomplishing.
Rep. Freidin said the presentations should be organized around handouts and asked Sean Campbell to bring a draft agenda to the next Oversight Committee meeting.
Rep. Freidin distributed information for the Town of Georgia entitled, Budgeting Under Current System and Act 60 and Town of Rockingham Income Categories as examples of handouts which might be used at the legislative informational meetings.
The meeting adjourned at 3:50 p.m.
Respectfully submitted,
Rachel Levin
* Please note that the numbers refer to agenda item number.
The Committee declares that;
It is the intent of the Legislature that any property of a non-profit organization used for a public purpose which has been voted an exemption or reduction of property taxes by the municipality in which it is located will continue under Act 60 to have the same status for property tax purposes as it previously enjoyed.