MINUTES
Meeting of October 21, 1997
The Legislative Oversight Committee on Restructuring Education met at 9:44 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; 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 9:44 a.m.
1. APPROVAL OF 10/14/97 MINUTES *
On a motion made by Rep. Heath, the committee approved the minutes of the October 14, 1997 meeting, as submitted.
2. ACT 60 PUBLIC INFORMATION PLAN AND BUDGET
Sean Campbell, Deputy Tax Commissioner introduced Pat Heffernan, Peg Devlyn and Rich Maggiani of Marketing Partners, Inc. Sean Campbell said Marketing Partners would be presenting the Committee with an outline of the program, timeline and budget for public information on Act 60.
Pat Heffernan distributed a 10/21/97 memo outlining the Act 60 public information program. Peg Devlyn and Rich Maggiani joined Pat Heffernan in reviewing the memo which contained an Act 60 key message triangle, a summary strategic plan, a timeline and a budget.
They explained that the key message triangle has three components: better education, lower property taxes and fairness; that the strategic plan focuses on the audience: the public, elected officials and education, the information needs, and tools and methods. A timeline was presented with detailed information on the planning process, initial tool preparation, an information bulletin series, speakers’ packet development, a town meeting plan, a software guide, web site map and development, a low inco me taxpayer information program, and a series of public service announcements. For each area, budget allocations were made.
The Committee discussed with Marketing Partners the need for information to be factual and accurate and to have the appropriate level of review before being disseminated, as well as the
need for a mechanism for Oversight Committee input.
Deputy Commissioner Campbell said that layers of proofing slows down the process and that Marketing Partners are experts in communication.
With regard to a primmer which the Times Argus is printing which the State may purchase for additional distribution, the Committee and Secretary Hoyt agreed that the deadline of Monday at noon for whether the State was going to purchase the primmer, would allow for review by Leadership Group members as well as Senator Rivers on behalf of the Oversight Committee.
The Committee and Marketing Partners discussed the need for Property Valuation and Review to provide information needed to commence work on information for listers.
Marketing Partners discussed a tool kit being prepared for presenters. The Committee asked them to shorten the timeline for preparation so that some materials can be ready by the time the Committee holds informational sessions for legislators.
Rep. Freidin asked that when publications are made available, that legislators be informed of where they can obtain them and get an explanation of what they are. He also said it was important for legislators to see materials which are being provided to local officials in their communities.
3. MOBILE HOME TAXATION ISSUES - COMMITTEE DISCUSSION
Bill Russell of the Legislative Council distributed and discussed 10/21/97 proposed findings and recommendations relating to mobile homes under Act 60. After Committee discussion, Senator Rivers recommended incorporating the language into the Committee’s final report to the legislature. (Document attached.)
Senator Shumlin made a motion to adopt the above proposed findings as a recommendation from the Committee to the legislature. Rep. Cillo seconded the motion which passed unanimously.
4. COMMITTEE DISCUSSION ON TAX EXEMPTIONS
Bill Russell reviewed a 10/21/97 memo with the Committee on property tax exemptions under Act 60 in terms of mandatory/statutory exemptions and limited/locally voted exemptions. He discussed the status of current exemptions under Act 60, the problems including equity and timing, and process.
Senator Rivers asked Committee members to come to the next meeting with suggested options for dealing with the problem to add to the list as well as suggestions for witnesses.
Bill Russell said that there is no rationale in distinctions in statute between mandatory and optional exemptions and that the Committee might want to begin by understanding the statute and get an expanded presentation which would include reviewing the statute along with appropriate court cases.
Committee members suggested that witnesses who are members of the bench, who are familiar with the statute and case law be brought in to testify, as well as the Vermont League of Cities and Towns. The Committee agreed to request that Legislative Council staff define the existing problem pre Act 60, identify ways Act 60 magnifies the problem and assist the Committee in outlining for the General Assembly options and recommendations for a direction to take in addressing the problem.
The Committee also agreed to invite the Director of Property Valuation and Review to provide to and discuss with the Committee information PVR collects from towns listing tax exemptions, as well as the Executive Director of the Vermont League of Cities and Towns to explain to the Committee how exemptions are handled on a local level.
5. TAX STABILIZATION
The Committee discussed process and noted that there was no specific charge, but that it is an area that legislators have been hearing a lot about, especially relating to economic development. It was agreed the Committee would begin by identifying the issues and looking at the range of options.
Rep. Freidin suggested that staff collect information from the two states which have a state-wide property tax, Michigan and Washington. He asked staff to contact the National Council of State Legislatures and/or the states directly to obtain information. He added that the bigger issue is how tax stabilization decisions are made and what guidance is given in making the decisions.
Sen. Shumlin outlined three options for the decision-making process: the executive branch, the legislative branch, a board appointed by the governor or the legislature. It was also suggested that it could be a local decision-making process.
Sen. Shumlin asked staff to review the four options discussed and write a memo to the Committee.
Sen. Rivers distributed 10/21/97 testimony addressing the issue of taxation of mobile homes from Steve Jeffrey, Executive Director of the Vermont League of Cities and Towns.
Sen. Rivers reviewed the draft agenda for the legislative informational sessions with the Committee and asked for input.
Senator Greenwood said he would not be able to attend the afternoon session and the Committee recessed for lunch.
6. UPDATE FROM ADMINISTRATION
Kathy Hoyt, Secretary of Administration reported that Moody’s Investors Service had given the State an Aa2 credit rating and noted that only one other New England State, New Hampshire, received the Aa2 rating. She said Moody’s instituted refinements to their credit rating system and that the Aa2 rating is the equivalent of the AA rating from Fitch Investors Service. Secretary Hoyt said she would write a memo to the Committee regarding Wall Street and Act 60 and provided a copy of the press r elease to staff to have copies made for Committee members.
Secretary Hoyt said the Administration would make a presentation to the Committee at its next meeting outlining the Governor’s budgeting process and the assumptions being used.
Sean Campbell, Deputy Commissioner of Taxes and Special Assistant to Secretary Hoyt on Act 60 said that Bill Johnson, Director of Property Valuation and Review, was at a prior commitment and would attend the next meeting of the Committee and that Gerry Cassell would address the Committee for the Department of Education since the Commissioner was at a State Board meeting. He distributed a draft tax booklet for the Committee to review entitled, Equal Educational Opportunity Act of 1997: How it Works for V ermont Taxpayers, as well as a 10/20/97 memo from Bill Johnson, Director of Property Valuation and Review, to Sean Campbell which listed training dates for listers.
Sean Campbell said that the tax booklet had been reviewed by Marketing Partners and invited comments from the Committee. Rep. Freidin said that on page 4 the $15,000 homestead exemption should be subtracted from fair market value of the homestead and that this correction should be made.
The Committee continued its discussion of the Legislative informational sessions.
The Administration then continued its update. Gerry Cassell from the Department of Education distributed and reviewed a 10/21/97 draft "Detail Calculation" printout which showed the estimated impact of Act 60 on a single town. He explained that the intent is to provide each Superintendent with copies of the printout within a week, to fill in the three columns of data and update and redistribute the printout as new data becomes available. The detail calculation showed state and local educatio n spending per equalized pupil, the statewide property tax, the local education property tax - sliding scales, the local education property tax, capping the increase in total tax rate and summary payments to and from the Education Fund.
Gerry Cassell said the intent is to provide towns with a vehicle they can use for budgeting and believes this presentation provides that tool. In response to a question by Rep. Heath, he said that he would write a memo explaining the sliding scale verbally as well as graphically.
Rep. Cillo asked about the 1998 rule-making process and the Department’s plans and suggested that the process be expedited.
The Committee reviewed testimony needed and adjourned at 3:15 p.m.
Respectfully submitted,
Rachel Levin
* Please note that the numbers refer to agenda item number.