Tape No. 98-18, 98-19, 98-20, 98-21A only

LEGISLATIVE OVERSIGHT COMMITTEE

ON RESTRUCTURING EDUCATION

MINUTES

Meeting of November 17, 1998

The Legislative Oversight Committee on Restructuring Education met at 9:40 a.m. in Room 10 of the State House, Montpelier, Vermont.

MEMBERS PRESENT: Representatives John S. Freidin, Chair; Paul A. Cillo; Martha P. Heath; Karen M. Lafayette; Senators Nancy I. Chard; Helen S. Riehle; Cheryl P. Rivers; Jeb Spaulding.

STAFF PRESENT AT VARIOUS TIMES: Bill Russell, Emily Tartter, Anne Winchester and Rachel Levin of the Legislative Council; Steve Klein, Catherine Benham and Mark Perrault of the Joint Fiscal Office.

Representative Freidin called the meeting to order at 9:40 a.m.

1. REVIEW AND APPROVE MEETING MINUTES OF OCTOBER 8, 1998

Senator Riehle made a motion to approve the minutes as submitted. Representative Freidin asked if there was any discussion. The motion passed on a unanimous voice vote.

Senator Spaulding asked if he could address another topic. He asked committee members if they had received a letter from Doug Hoffer of Burlington, Vermont in regard to testimony the Joint Fiscal Committee had taken on the Vermont Economic Progress Council's cost-benefit model. The committee agreed that all members of the Oversight Committee would be provided copies of the letter which had been sent to Joint Fiscal Committee members. Senator Spaulding said that the economic incentive package was a work in progress and that the legislature would continue to look at it carefully.

2. UPDATE FROM TAX DEPARTMENT

Sean Campbell, Deputy Tax Commissioner, updated the Committee on the implementation of the "prebates," mid-year property transfers, local options taxes, the Gross Receipts Tax Study, the Definition of Homestead and Household Income Study, Current Use trends and tax delinquencies. The Deputy Commissioner distributed and discussed a document which listed "prebate" notices and checks written for the 1998 calendar year; a memo to the Oversight Committee addressing Act 60 and escrow accounts; the executive summary from the Gross Receipts Tax Study; and information on Current Use Hold Harmless Payments. Bob Gross, a Tax Policy Analyst, and Bill Snow, Director of the Current Use Program, joined the Deputy Commissioner in answering the Committee's questions.

Representative Freidin said he would like to take the opportunity, on behalf of the Committee, to thank Rachel Levin for her extraordinary work. He said that Ms. Levin had served the committee, the legislature and the state superbly. "Rachel has always been available, continually kept me on track and wisely kept thinking ahead about the work of the committee. Thanks to her counsel, the efforts of this committee have been far more productive than they would ever have been otherwise. Rachel's commitment, insights and effort could serve as a model for all."

Senator Rivers asked the Legislative Council staff to examine the "prebate" language in the statutes. She also asked the Deputy Commissioner to brief the Committee on what the Tax Department had done to prepare and train tax preparers.

Representative Freidin said that the legislature would want to look at any patterns in changes in Current Use. Senator Rivers said it was important for there to be public information meetings about the existing requirements of the Current Use Program and how towns are held harmless. Representative Heath talked about the importance of having local listers and town officials understand the program.

The Deputy Commissioner reminded the Committee that the Tax Department had been setting up systems to implement Acts 60 and 71, and that it was important to consider these preparations when considering future changes to the laws; this could affect the Department's capabilities to implement any changes.

3. UPDATE ON ASSISTANCE TO MUNICIPALITIES TO MEET LISTERS'

TIME FRAME

Bill Johnson, Director of Property Valuation and Review (PVR), and Steve Jeffrey, Executive Director of the Vermont League of Cities and Towns (VLCT), testified before the Committee. Bill Johnson briefed the Committee on PVR's efforts to inform municipal officials of ways they could meet the time line. Steve Jeffrey said that it would be accomplished if local officials take advantage of the fact they could start the process early. He said VLCT would work with PVR to get information to towns. Steve Jeffrey concluded by saying that if the payment date was made one month later and funds were borrowed from the Education Fund Reserve, the problem could be solved without causing a cash flow shortfall. Senator Rivers said that would work only in years the reserve fund was fully funded and there were no other demands on it. Senator Rivers asked Steve Jeffrey to let the Committee know what VLCT believes would be the best solution.

Senator Rivers also asked Steve Jeffrey if VLCT had heard many questions about the Current Use Program. He said he had, and that, although local officials were operating on an information overload, they do need more information on the Current Use Program.

4. UPDATE FROM BLUE RIBBON COMMISSION ON SPECIAL EDUCATION

COSTS

Stuart Savage, from the Department of Finance and Management and staff for the commission,

Dennis Kane, Director of the Family and Educational Support Team for the Department of Education, and Jan Westervelt, Commission Chair and Business Manager for the Caledonia Central Supervisory Union, updated the Committee on the Commission's activities.

Stuart Savage noted that the Commission would be meeting the next day to agree on its recommendations, and that he would be able to give a more thorough report at a later date. He

said the Commission's charge was to look at Special Education funding for FY2000 and that in its report due July 1, it was to look at the entire issue of cost effectiveness of Special Education. Jan Westervelt said that there were important contextual issues to keep in mind, relating to shifts in the economy and civil rights law and that there were dynamics that surrounded the rising costs of Special Education. He said it would take time and involved administration, finance, information and systemization and that changes were needed in all of those areas. He said he had learned to focus on the good ideas and carry them to the next step, and that whatever changes were made would have ramifications.

Dennis Kane also updated the Committee on the Special Education Fiscal Review Panel which the State Board of Education had been charged with putting together. He distributed information for both the Fiscal Review Panel and the Special Education Commission, including a brief history, the meeting schedule and the members. He said there were currently 14 requests from schools for a review and that it would not be possible to carry them all out before the end of the year. Senator Chard said it was important to give school districts a model to enable them to carry out self-evaluations. She also said there was a changing climate between Special Education and Medicaid. Senators Chard and Rivers asked for a memo on the subject from Dennis Kane.

5. ACTION ON APPROPRIATE LEVEL OF GENERAL STATE SUPPORT GRANTS

Bill Talbott, Chief Financial Officer for the Department of Education, and the Committee discussed the setting of the General State Support Grant amount. Representative Heath made a motion to set the General State Support Grant at $5,101 per pupil for FY2000. After Committee discussion, the motion passed unanimously.

The Committee recessed for lunch and then reconvened.

6. UPDATE FROM THE USE VALUE APPRAISAL COALITION

Representative Freidin invited Ed Larson, Executive Director of the Use Value Appraisal Coalition, to discuss the manner in which the Coalition addressed the need to be more proactive in explaining the Current Use Program. Representative Freidin asked if Ed Larson now better understood the way in which Current Use affected local tax rates. Ed Larson said that he had an

improved level of understanding after the last Oversight Committee meeting. He said the Coalition had met and the Current Use Program had been brought up for serious discussion. He said the Coalition had limited resources and VLCT and the UVM Extension System could assist in providing information to the public. Representative Freidin thanked Ed Larson for coming before the Committee, and said the Committee was disappointed the Coalition had taken no action in response to the Committee's October request that the Coalition try to educate municipal officials about the financing of current use.

7. DISCUSSION OF OVERSIGHT COMMITTEE'S DECEMBER 1 REPORT

The Committee agreed it would provide one copy of the December 1 Report to the Clerk of the House, one copy to the Secretary of the Senate and post a copy on the Legislature's Web Site. The Committee also agreed additional copies of the report would be available for General Assembly members and the complete set of meeting minutes from the 1998 Interim would be available from the Legislative Council. The Committee requested the next draft of the report be mailed to the full Committee and any feedback be provided to Representative Freidin.

The Committee discussed the amount of time it would need to finish reviewing the report. The Committee thanked Chris D'Elia, Executive Director of the Vermont Economic Progress Council, for the briefings he had given the Committee. Chris D'Elia distributed VEPC's Application Forms to the Committee.

Senator Spaulding said if the Committee was not going to have another meeting, the issue he had wanted the Committee to discuss could wait until the General Assembly convened.

Bill Russell, Chief Legislative Counsel, reviewed draft 7 of the report with the Committee. The Committee discussed the content of the report and requested staff note the changes the Committee requested as the report was reviewed. Emily Tartter and Anne Winchester of the Legislative Council also answered the Committee's questions and provided information.

Committee members unanimously supported each of the Committee's recommendations in the report to the Standing Committees. The Committee requested staff to note, at the beginning of the recommendation section of the report, that individual members of the Committee may have other recommendations and other valid concerns which would be brought by those individuals to the Standing Committees.

Senator Rivers made a motion to approve the report with the revisions. Representative Freidin asked if there was any discussion. The motion passed unanimously. Senator Rivers complemented Representative Freidin for the good job he did serving as chair. Other Committee members also thanked him for his good work.

The Committee adjourned at 4:10 p.m.

Respectfully submitted,

Rachel Levin