Vermont Legislature SmartTranscripts:

[Matt Walker (Chair)]: Alright. Thank you very much. We are back here on Wednesday, January, whatever it is, twenty eighth, twenty twenty six. We have Logan from the JFO in the seat, and he has brought us our, as I recall, a former chair from Ferrisburg saying the budget on a page or the transportation budget on a page or something. Don't know if she started or it was before that. Our resident historian will probably have a comment on that. But with that, you should find a big handout in your seat that you should recognize from last year. And with that, I welcome you back to committee, Logan. If you can start walking us through these, I would appreciate it.

[Logan Mabry (Joint Fiscal Office analyst)]: Everything, for the record, Logan Mabry from the Joint Fiscal Office, I will share my screen shortly. I could get a link.

[Representative Candice White (Member)]: Perfect.

[Logan Mabry (Joint Fiscal Office analyst)]: Yeah, these documents are the same format as you saw last year. Those of you here before that, the year before and the past few years, at least just with new numbers. These numbers reflect what is in the white book and the testimonies that have been given from all the different departments as they've come in. Oh, this is fighting me.

[Matt Walker (Chair)]: Fighting you. Fighting me. Oh. Yeah. All right, that looks great.

[Logan Mabry (Joint Fiscal Office analyst)]: So we'll start with the one with the yellow bar, it says transportation appropriations overview and funded by fund, FY twenty seven gov rec, or the yellow bar at the top, orange bar. So these are the numbers as you sort of have seen them in the white book, just sort of laid out by the different funds. So the colored column there is the total of all funds added up together. And then you have your fund categories out there, T fund, federal, local slash others, inter department transfers, TIP funds, and internal service funds. And then the left hand column is just how they're broken out by the different departments and the B900 secondtion, which is related to the big bill and how they'll show up in the budget for the year. But can go through some of these. I don't know if there's any specific questions on these. You'll notice the total program development taking up very large portion of the budget, yes.

[Matt Walker (Chair)]: Okay, I'm just gonna, just for simplicity's sake, I'm gonna start right there at the top, B9, 10 Department of Motor Vehicles. So that 5.5% would tell me that out of that $51,000,000 that's 5.5% of the $934,000,000 total? Correct. Okay. And then if I go further to the right of the $51,000,000 that those are made up of T funds, 46,000,000 plus the almost $5,000,000 federal plus 122. If I take all the columns to the right of it, they're going add up back to the $51,000,000 They should. Yep. Okay. And so everywhere down this column on the left, if you want to see where we spend our largest shares of money, that's an easy spot, quick, that that's the percentage of the grand total of the budget. Correct. There is not a column that says the grand total or the percentage of the T funds. But we can eyeball that pretty easily. But put that on a parking lot note of a potential consideration as a very small column somewhere that shows how much of an hour we were spending. But that doesn't because obviously, the biggest one down there in maintenance, and they go down from there. But it doesn't mean we have to add that. It's just kind of interesting how much of our funds we spend. But that's the structure is, in effect, those are the percentage of the grand total. And each of the columns to the right, it is important for us to always remember where's the money coming from. So that's my simplicity piece of it. Representative White, you got a question?

[Representative Candice White (Member)]: Yes, thank you for that overview, Chair. That's helpful. What's the interdepartment again? That's money coming from one department going into the T fund or going

[Logan Mabry (Joint Fiscal Office analyst)]: Yeah, that's a way you can think about it. So it's money moving around interdepartmentally. A lot of these-

[Representative Candice White (Member)]: But not within just the transportation department,

[Michele Boomhower (Agency of Transportation, Policy/Planning leadership)]: within A the entire state

[Logan Mabry (Joint Fiscal Office analyst)]: lot of these, and we could look into black book numbers and see exactly where come from things related to sort of like FEMA match or stuff like that, which might be housed in a different area of government, but it's being used for kind of the program, they include sort of interdepartment of transfers. I believe that's what those two people, about 10,000,000 in the program development. Again, could go online and see for sure exactly what they are, but I'm guessing they're related to some sort of federal emergency funding for certain projects and it's being shifted around. And I guess I don't know We can kind of come down

[Matt Walker (Chair)]: just come down a little bit at a time and point out some of the things that you tend to look at or jump out at you or just to help keep walking through it, then everybody can go into their own questions at another point.

[Logan Mabry (Joint Fiscal Office analyst)]: And I guess I don't know how in-depth you wanna get here to the previous question. I can show you all where to sort of find exactly what those interdepartmental transfers referred to if you want to jump over and look at some of the BlackBook numbers or we can go through this first. Just if there are more questions about, like, what the numbers actually What's what's that? Down, and then when

[Matt Walker (Chair)]: we wanna dig into something more specific, we'll do that. Perfect. After we make sure that everybody understands the full we went across. I didn't go down and break it down and cut it down. I I broke it across columns, but I didn't really break it across rows to look at it that way. So let's go down for a while, and then we'll get as specific as anybody wants to. Yeah.

[Logan Mabry (Joint Fiscal Office analyst)]: So under the b 903 program development, this is sort of the largest chunk. These are the projects we've all been hearing about. Paving 16% of the budget almost this year, 148,000,000, largely federally funded. Some other large ones, as the chair mentioned, if you go down to the middle of the page, B905 is maintenance. This is, I believe, the single largest source of T fund spending. It's $109,000,000 this year. This is usually almost always state funds. There are sometimes federal funds involved, as you can see here. I think these federal funds are also involved in some sort of emergency, maybe a flooding repairs that were done and we got reimbursed for those, but it's normally the largest source of transportation funds within the budget. Rail is another large $160,000,000. A mix of funds here, a lot of it comes from the federal funds. There's also some kid funds, which as you all remember is for longer term projects like bridges or rail infrastructure, stuff like that. There are also some federal funds in there. A new program this year is the Rail Trail, which I don't know if you've heard about that one yet. It's been broken out into the B907.1 election. So that'll be new compared to last year, but I think the agency can speak on why they sort of broke that out if they haven't already. Central Garage, B909, that's our internal service fund. As you remember, and you've probably heard from Ernie's presentation, Central Raj gets a payment from all the other sort of areas of the transportation department that use the equipment and the fleet there. So they all pay into this internal service fund, and that's how they sort of fund their stuff. That blue line. Yeah,

[Representative Timothy R. Corcoran II (Vice Chair)]: thank you. So I guess it's fair to say the central garage, although it shows the money coming from the other departments, is made up of state, federal funding. But probably the majority of it goes to maintenance is in service of maintenance. So majority of it probably is state funding.

[Logan Mabry (Joint Fiscal Office analyst)]: Yeah, yeah, I would imagine almost all of it is state funding. Yeah, the funds you see there in central garage are not new, they're kind of considered duplicate funds. So they exist within the maintenance budget as well, and they show up here. This is how we show up for transparency, but they are within the other budget lines that you see here.

[Representative Candice White (Member)]: Okay, I just want to go back to that, Logan. So the maintenance line of $112,000,000 the central garage line of $26,000,000 is included in that $112,000,000 and then also appears separately?

[Logan Mabry (Joint Fiscal Office analyst)]: Yes. So not in its entirety, but And I don't I'd have to go back and look to see what portion of it. A large portion of the money that Central Garage gets to this internal service fund comes from maintenance because they use snowplows and stuff like that. But it's a mechanism for an accounting mechanism for having the people within the agency that use the equipment pay the people that are maintaining the equipment.

[Representative Candice White (Member)]: So 26,000,000 is coming from maintenance to Central Barrage because they're using all the trucks and plows that Central Barrage maintains.

[Logan Mabry (Joint Fiscal Office analyst)]: Other areas also paint to the Central Barrage, but maintenance is just the largest. So I don't know if the entire 26, I'm guessing, is not all from maintenance, but I don't know what the breakdown is. If

[Matt Walker (Chair)]: another group in the rail had a pickup truck for getting to and from different sections of the rail, they would pay for that pickup truck for fleet to manage it, buy it, maintain So there would be some so when you look at the P and L or operating expenses of that section, that they would show that they have to pay into central garage because they use a couple of pickup trucks. Essentially how it works. And so you probably have we hear about these the the Ford electric trucks are used in two or three different departments. They must pay back to Central Garage, in effect, so that their operating expenses look like what it costs them. But it gets lumped up into Dave's group to take care of them all, purchase them all, and sell them all eventually. Hope that helps, but that's the way I understand it.

[Representative James "Jim" Casey (Member)]: Represent Casey? So transportation must disperse out some funds yearly to each one of the garages, right? Yeah, I

[Logan Mabry (Joint Fiscal Office analyst)]: would imagine. I don't It starts out that way and that's how they pay allocated. But, yeah.

[Representative James "Jim" Casey (Member)]: That's how they pay back to Central Garage for rent on a dump truck. Right? Yep.

[Logan Mabry (Joint Fiscal Office analyst)]: So they get their money through The loss. Through the budget summary. Yeah. It's not it's not new money coming. It's sort of a duplicated money. It's just the way that we sort of account for it within the budget and sort of see what those totals are. But it's not money that exists outside of what's being appropriated to any of these sort of I haven't noticed a garage near me doing fundraisers or any donor sales or nothing like that. So I assume it came from somewhere. Yeah. So the first blue line on the page is the total we consider VTrans programs. So these are all the sort of things that the department is doing themselves. This is the vast majority of the budget, if they're 90% there, $844,000,000 and projects, all the main things here. And then below that we get into sort of the town highway programs. And this is sort of money or funding that goes out to towns. The big ones are the town highway bridges, which you'll notice are largely federally funded. There is some local match I'm assuming and some paid money in there. The other ones that you all worked on last year was town highway structures and the class two roadway programs. And then the other large one is the town highway aid program, which I know we discussed last year, that's sort of the largest chunk of state dollars, T fund dollars that goes out to towns so that they can use to maintain roads and the likes. Second blue line is the town highway programs total 9.6%, makes up the rest about 89,000,000 or 89 and a half, a little over 1,000,000 this year. And then you get the total $934,000,000 all told, most of that, good portion of it is federal funds, $515,000,000 and $331,000,000 in state dollars.

[Representative Chris Keyser (Member)]: Representative Keyser? Thank you. So this explains that line item, that non duplicative budget, or something like that. When you take that 26,000,000, that's so really that 934,700,000.0 is less 26,000,000 in actual dollars.

[Logan Mabry (Joint Fiscal Office analyst)]: That is also a correct way to think about it.

[Representative Chris Keyser (Member)]: And I know you didn't put this accounting together, but there's other ways to do that. Okay, thank you.

[Matt Walker (Chair)]: I guess one of the pieces that I would there's a couple well, we're going to part of the committee discussion will go as we continue to go through this. 15% of the T funds go to our tenants. Take $49,000,000 almost $50,000,000 out of $331,000,000 $332,000,000 in T funds, we give about 15% to our tenants. What do say? 15%. It's not on there. No, it's 9.6 of the total, of the total budget. But that's part of where I'm saying that we might want another column that shows what's the percentage of T funds. Because the T funds are $50,000,000 that, in effect, we control to some degree or another. They're tied to lots of programs. But we as a state have $331,000,000 We give $50,000,000 of it to the towns through various programs. Probably it's more than that in terms of because a lot of these projects up above, bike beds, etcetera, obviously they're all done in these towns. So I don't want to paint that picture too tightly in terms of how much we do or don't give. But it would be one of my long term objectives if I were to be here long term to see whether that percentage is the right amount and what we could do about that. Or you have to grow the bigger number in order to get more for your towns. But that's part of the reason I'm wondering, we may want to add that chart, because we give about 15% plus inside all these other projects. They're done in somebody's town. It may be a state highway, but it's on somebody's town property, I guess, if you'd say. It's in their town limits. So it's a little bit misleading when we say that we only give x amount to towns. But that's part of one of the numbers that I look at and think about historically, whether we're helping them or do they deserve a bigger portion or does we have to grow the whole pie in order to grow their share of the pie. Those are some of the things that I think about when I represent my town. I know the struggles they have to keep up with their infrastructure with a huge increase in expense. Has funding been flat for quite a few years now for towns? That's a great question for Logan, because some things are up and some things are down. That's probably a little bit on this next sheet too. So I would have

[Logan Mabry (Joint Fiscal Office analyst)]: to go back and look at the entirety of what we sent to towns to see what the growth sort of has been or hasn't been if you've taken all of these programs. The only one I know for certain is the Town Highway eight program for few years in the past was level funded. The past few years, it has been increasing, but before then, and I would have to go back and look to see how many years ago there was a period of time where it was level funded for that specific program. But entirety, would have to go back and look at the numbers to see if it was level or not.

[Representative Timothy R. Corcoran II (Vice Chair)]: Yeah, and I'm guessing this year it went up, I think 2.9% the town class 2.7. And we put last year in an

[Logan Mabry (Joint Fiscal Office analyst)]: inflationary figure,

[Representative Timothy R. Corcoran II (Vice Chair)]: assuming that's exactly what that was. It'd be interesting to sort of walk through that as a little exercise. Here's what it was. And there were, it was a complicated way that it was designed, but exactly how it kicked in this year and how it got there. The purpose of that was to keep at least this one line item that every town relies on for their roadways, maintenance, paving, that would at least increase a little bit to help the town's eye. Because if it's just flat, the towns are going backwards and it's only getting a commodity property tax

[Representative James "Jim" Casey (Member)]: or the roads

[Representative Timothy R. Corcoran II (Vice Chair)]: won't be maintained, which will end up costing more.

[Logan Mabry (Joint Fiscal Office analyst)]: Yeah, I can put something together for sure, come back in at another time.

[Matt Walker (Chair)]: The other piece I want to point out as far as our testimony goes and the budget pieces that come in, and we are asking maintenance to come back in. We weren't able to finish that. I don't think we finished that particular piece. When we look at the questions that we're asking in our charge from the appropriations committee and from the speaker's office, that biggest chunk is maintenance is obviously where we probably should be spending some of our most significant questions and time, and then looking at the sections. But what I do find is the things we can most easily grasp a hold of are the projects in our towns, like the bike head, the bicycles, transportation alternatives, the particular ones that we can see, feel, touch, we ask lots of questions about. Looking for some additional help when we revisit some of these areas, when we know that they are 30% of the entire budget, we owe it to what our charge is, is to dig further into those areas like questions you were asking earlier today. When 30% of the money is in maintenance, we should be spending probably some more time in that to at least understand it. That doesn't mean there's anything wrong in there, just to understand it. That's why I wanted to point out the percentage of your T fund dollars that are there. That's in the oversight piece and the charge from the speaker and from the appropriations piece. So that's another part that I was interested in doing. I'll go ahead with the representative.

[Representative James "Jim" Casey (Member)]: I think the Black Book tells us how much how much the state paid in overtime. Right? Believe that will

[Logan Mabry (Joint Fiscal Office analyst)]: be in the Black Book, actually. We we don't get a Black Book number? It's online. Think.

[Representative James "Jim" Casey (Member)]: I show you how to find that. Can't get one physically in our hands, Not all the same stuff is there online though? It's all in there?

[Logan Mabry (Joint Fiscal Office analyst)]: I believe so. But that'd

[Matt Walker (Chair)]: be a great question for

[Logan Mabry (Joint Fiscal Office analyst)]: the agency. But my understanding is that it is currently online.

[Matt Walker (Chair)]: That is the way you'll find it. We need to spend any time on the bottom portion of this piece? Yeah.

[Logan Mabry (Joint Fiscal Office analyst)]: Sure. I'll point out the one time appropriations or appropriation as it is now for the central garage relocation. The budget right now is 1,360,000.00, which is sort of the state portion of the money needed to do the central garage, new central garage, which you've heard about. This money is coming from, if you go down to the last box, you'll see from the insurance reserve fund of the same amount. So we will put the fee fund will be getting a transfer from that fund, which will then be used as one time funds to pay for the central garage. The other.

[Representative James "Jim" Casey (Member)]: Where was that case? Is that overpayment of insurance? Is that what that is?

[Logan Mabry (Joint Fiscal Office analyst)]: I'm not entirely sure what all goes into this fund. I believe this is from the payments we would have received for when the current central garage flooded. But I can All right. So, one thing for a thing. Okay. Yeah. And then the last one, well, Pay Act there, we do that every year. That one's not new. And then underneath this, there's a proposal, and and this is a topic we can discuss more at a different point. If you'll want to do a transfer for the EVSE charging at ACCD, you'll remember that the money coming from the infrastructure fee that's levied on EVs and plug in hybrids goes to this program run by ACCD to do charging stations.

[Representative Timothy R. Corcoran II (Vice Chair)]: And so that's showing, again, another transfer from those fronts.

[Logan Mabry (Joint Fiscal Office analyst)]: Yes. Yeah. So It seems more than

[Matt Walker (Chair)]: previous.

[Logan Mabry (Joint Fiscal Office analyst)]: I'd have to look into that. I think the thing to note here is that previously, and this sort of gets in a little bit of the language and the initial, which we can discuss, is that we used to do sort of Last year, we did a one time appropriation of these funds to the agency of transportation, and then they sent the money to ACCD because within statute, essentially, we're not allowed to send money, transportation monies to other agencies. It has to go to the agency of transportation first. The proposal in the budget, there's some language that would essentially amend that statute to allow a portion of T funds to go to ACCD for this specific purpose of doing the charging here. So that is a policy decision for you all to make, whether you want it to be how it was before or this new language, and we can get into it and bring Damien in and sort of discuss it in more details. But I will just mention that there, it is showing up differently this year because of that.

[Representative Timothy R. Corcoran II (Vice Chair)]: Representative Gordon?

[Representative Candice White (Member)]: Yeah. At some point, can we find out how many vehicles that were? I have sort of a more detailed accounting of that money and how much was brought in and how much is where is it going?

[Logan Mabry (Joint Fiscal Office analyst)]: For the EV infrastructure fee? Yeah. I tell you what that's collected, and ACCD will have to come in and talk about how they've used the funds, but I can tell you what it has collected.

[Representative Candice White (Member)]: And if there's extra funds that Beatrice is collecting, where do those go, etcetera?

[Logan Mabry (Joint Fiscal Office analyst)]: We can look into Is

[Representative Candice White (Member)]: all the money going to ACCD?

[Logan Mabry (Joint Fiscal Office analyst)]: I believe it should all be going to ACCD. Yeah.

[Representative Chris Keyser (Member)]: ACCD, if I'm remembering correctly, they were having trouble getting that money out to do this job. Is that right? Last year?

[Logan Mabry (Joint Fiscal Office analyst)]: That's a question we'd have to ask that I'm not sure. Remember that

[Representative Candice White (Member)]: Thank you for coming. Thanks.

[Representative Timothy R. Corcoran II (Vice Chair)]: Yeah, just sort of clarify that. They were divvied up by county and some counties had maxed out and some counties hadn't or even. So it would be good to get them in here, just to see how the program's going. They had run into a few barriers to getting some of the money out in certain counties, so that'll be good to have discussions with Ben.

[Matt Walker (Chair)]: All right. Michelle, here we go.

[Logan Mabry (Joint Fiscal Office analyst)]: I think that is most of what I wanted to mention on this page. You can jump to the comparison if you want. So this document just looks at FY '26 budget as passed, and I'll make note of that. This does not include the reduction that happened during the rescission plan. I do not have time to sort of go through and add those in. So this is just the as passed FY twenty six budget to the gov reqs FY twenty seven budget. And this is just sort of the totals of each line, and then the comparison numbers on the right hand side there. So you can see the increase or decrease from last year, then what percentage of increase or decrease. The larger ones here, as you've heard paving, total increase of 44% over last year, 45,000,000. Interstate bridges saw a increase as well. Traffic and safety, I think you heard about that 17.6% increase. Total program development increase of 12.7%, that's $52,000,000 in total. Some larger increases moving down, the environmental policy and sustainability, solid 57% increase. I think that has to do with shifting of people around, but I'll double check on that one. And when they come in, if they haven't already can speak to where that increase is coming from. You also see some larger numbers that rest areas was decreased 62%. Again, we can look into why that is maintenance, all a slight decrease. Total VTrans programs, they're in the blue bar. Looking at yes.

[Matt Walker (Chair)]: One of the I make sure I understand it because it's as fast when the recissions took place in the fall and whatnot. Know at least into the next one, a good chunk of maintenance. So the difference might not be quite if they had to adjust and things would may have gone down. In some cases, these differences are less or more because the word change is made. And I can go through

[Logan Mabry (Joint Fiscal Office analyst)]: the future and show you it after the revision. This is just I didn't have the time to get to go through it.

[Matt Walker (Chair)]: I don't know. I thought the maintenance in particular, and I I'm not I understand why that that's not there. I was just weren't some of those reduction in force was in maintenance. Yeah. I believe so. So I I not sure where it will affect. What I was trying to get at, I guess, is when you look at things that have gone up or gone down, we're not entirely set yet that that's exactly what we're preparing against because some areas did get cut. And we'll see that in the future. But it is still a tool to look at for right now. This is the guide.

[Logan Mabry (Joint Fiscal Office analyst)]: Moving down into the town highway programs, as was mentioned, you'll see that 2.7% increase for the town highway structures, the town highway class two roadways, and the town highway aid program. Those are all based on formulas and statute.

[Matt Walker (Chair)]: I have asked for more testimony that I think we saw some of it yesterday, down highway bridges about the IIJA funds and how there was a significant increase in build out and how that program is coming towards an end. And we want to be careful that our towns view that as a change in policy or direction or funding priority. I don't understand that to be that's what's happened there. And I want to make sure that that's part of this whole committee discussion as we go into it, that we really understand that. Did we make a decision to pull back on its funding of town highway bridges, or was it really the end of a program? That's what I thought we'd seen for testimony that it was the ending of a program that had been from some significant general fund money that we put into it years ago. But I don't want to let people run out with a narrative that we've pulled away from town highway bridges if that's not the case.

[Representative James "Jim" Casey (Member)]: Is it the case? Could it be that there's just less bridges that need work? Is that is that we can assume or are they just getting kinda fixated? That'd a great

[Logan Mabry (Joint Fiscal Office analyst)]: question for the agency. I don't know that I can really explain If to they haven't come in already, I'm sure they can come in and talk about this program specifically.

[Matt Walker (Chair)]: Yeah, sorry, I wasn't pulling it.

[Logan Mabry (Joint Fiscal Office analyst)]: No, no, they're good.

[Matt Walker (Chair)]: The need is another part of the community discussion we had at some point, but that's what Senator Westman wanted to add to the T bill last year, was there is no white book for the entire town and municipality's needs. Now there is a white book that really helps outline the needs of the state. But there is a program underway about how do we quantify the assets that are out there and what their real need is. We talk and assume that there's a huge need from towns, and we believe that, but we don't have a real quantified program to know that. And I don't know if it's cost prohibitive to come up with a program like that or not. So that's something the agency is working on based on what language was put in the T bill that we passed last year. That was two years for them to I believe two years for them to work on that and kind of come back with recommendations, whether that can be done or not. So the need is assumed and probably believed and probably true, but we don't have a quantifiable way of saying what are all the towns needs and how much money would we possibly need to fill those needs. I

[Representative James "Jim" Casey (Member)]: know my towns, I don't see anything happening in them and I know they have needs, so that would be a good conversation to have at some point. I'll stick with

[Matt Walker (Chair)]: I do think that what we put in in terms of the multiplier that's very clear there on the two or the affiliate sharing piece of 2.7, Those numbers aren't going to go back. Now they've got a build off the 7.3 in town highway structures and it'll build up from there. That was an accomplishment for us last year, or I think from last year, but it does put increased pressure on the T Fund because we're taking T Fund money and putting it into towns. And I think we all agreed to it very clearly, but because it was part of the need to fill that $33,000,000 hole, part of it we added to. And I we did just hear about the municipal mitigation this morning. There was some mentions about something to dig into the transportation board on some potential changes, but it was so low on the money list that I haven't put any priority to that yet.

[Michele Boomhower (Agency of Transportation, Policy/Planning leadership)]: Yes, we're at section 15.

[Representative Chris Keyser (Member)]: Questions? A comment, actually. I find this very helpful to get a comparison between year two. I would ask the chair to ask those that present to us to have this same type of thing. It's a lot harder to understand, at least in my point of view, to understand the dollars that were thrown out interstate, dollars $51300000.0.33 project. Well, how much was it before? This comparison, I find it difficult to follow without a year to year comparison. I'd like a three year, but I won't press for that. At least the year to year would be great. Thank you.

[Matt Walker (Chair)]: We have guests in the room that may or may not have heard that kind of floating out there. It's sort of something we can talk about and do. Everything that we do, I'm not sure that everybody understands it, but if there is a process to it, that anything that comes up in committee, the first place we go is to the agency. And the second place we go to, or the first place might be to allege counsel and then the agency, or at the same time both, and then the GFO, and then whatever advocates may or may not have a position on that is sort of how everything that comes up to the committee that flows through the vice chair and I goes in that pretty much direction. What's the agency's comment, what's the pledge counsel's comment, what does JFO bring us for information on it, and then who else would be affected by it and should come in and testify. That's sort of the approach to everything. So every suggestion like that goes right through that process. We don't want to put cost prohibitive work onto them, but we want to provide the members with the information they need to help shape these policies. I am also emphasizing for the newer members, my memory is a way that you don't know whether you're making a difference or what you're doing or whether you understand it. There are things on this page that very clearly came from decisions we made last year And that pointed out like the ED money, the ACCD transfer, those town highway programs. And if you start digging in more, a lot of the work on other parts of it, You can't see it on the day to day all the time, but for newer members, I would say that you did help make decisions that change this spreadsheet would be different if we hadn't done that, or we did do more, whatever it might be. So yes, anything like that?

[Representative Timothy R. Corcoran II (Vice Chair)]: I'll just point out the infrastructure fee on EVs and plug in hybrids was from the administration, I think, two years ago. And we agreed with it. I

[Logan Mabry (Joint Fiscal Office analyst)]: think it

[Matt Walker (Chair)]: was one that's signed up.

[Representative Timothy R. Corcoran II (Vice Chair)]: So Oh, well, me.

[Matt Walker (Chair)]: I'm not sure. Yeah. That was before I was in this seat. That was when I was down in the prison fusers. You are sleeping. You are

[Representative Candice White (Member)]: way down at the other

[Logan Mabry (Joint Fiscal Office analyst)]: end of the kitchen.

[Matt Walker (Chair)]: Be careful what's in store for you. That's a high street.

[Representative James "Jim" Casey (Member)]: Future looks bright for you, Chris.

[Matt Walker (Chair)]: Don't be careful. What else about this sheet do we have questions on or other piece that we may or may want to do? I did have a suggestion of presenting to T funds on that other one if that's possible. Don't know if there's room to shorten it in there and make it small. I can make it work.

[Logan Mabry (Joint Fiscal Office analyst)]: I'm sure I can make that work.

[Matt Walker (Chair)]: Somehow we have to look at some trends. Let's see what it's doing over a few years. Maybe not in this format, maybe in some other anybody else have any other comments or questions on any information that they see here? None from the peanut gallery? Okay. Logan, thanks for bringing it in. Of course, same time. I'm going to switch to committee discussion on a particular area. There is this memo that you all saw and Candice. Elmfist, the CFO for the agency, came in and presented on how the budget was built. And I am referring back to it, at least maybe committee discussion, maybe we won't have a lot of discussion, but we will at least want to make sure that you guys know where I'm at least thinking at it, and we are looking at the review of what happened. And as first major accomplishment, spent all of last year and lots of people, including many that are in this room and special guests here in the room right now and all over this building, making known that transportation funding was headed for a cliff. And you all accomplished that, because it is on the news, it is on the radio, it is on television, it's in the news reports, it's on Rawl This Week, it's in the reports from the VLCT, it's in multiple activists, multiple lobbyists have put it in their reports. I encourage you to continue to push that dialogue in all of yours. So we have that attention. The speaker's office is well aware of it. The next step as appropriations is getting their budget presentations now. They just finished the BAA and they're starting, and I understand right in the preview that transportation was one of the first topics that was presented in appropriations. Agency hasn't come in to present, but in the overall presentation of the governor's budget, it's in the executive section in the very beginning. So there's a lot of attention, there's real awareness, and now there is a recommended governor's budget, and we are going to have to now figure out how we're going to respond to it. Fair enough. What I want to point out, a couple of the tricky parts of it, is everybody knows that there was a $32,000,000 hole, And when I get off base, I'm expecting other people to tell me that I don't do this right, but there was a $33,000,000 hole to fill the gap for this year. It came from a variety of different places, which is partially outlined in this memo about where that $33,000,000 hole came from. The 12,000,000 of it came from this very newly introduced to us not new, but this indirect cost ratio that we hadn't seen before, and we have to continue to indirect cost rate. And that's projected to save $12 plus million by using federal money to pay overhead expenses within the agency. It's also expected to be used this year and next year. There is a sort of my understanding, and hopefully getting corrected, that means that we're not using that federal money for a project somewhere. We're using that money to pay overhead, we usually use that federal money to pay for a project. So that is something I want to make sure you're aware, that is not how we usually use federal money, but it's how we needed to use it or how it was proposed to solve this part of this whole.

[Representative James "Jim" Casey (Member)]: Isn't that money used for kind of a match thing? Right? The money that would

[Matt Walker (Chair)]: The effect that, I guess I would say that is the match money, that we are turning it into overhead money. So we're taken from that. Some might argue that that is money that is not being spent on projects that would normally be spent out on work, construction, and other pieces that are being spent to cover overhead. I see a lot of knowledge, I think I'm getting that one right. And so yes, it is in effect matched money that's not being used for matching other projects.

[Representative Timothy R. Corcoran II (Vice Chair)]: Also out of that, would just say, I I think there's a recognition by the administration to be trans because they seem to only do this when things get squeezed. And then there's at least evidence that we did it in the past and then we stopped doing it. So that to me says there should be an expectation that we're seeing a little squeeze and that this wouldn't be a permanent. I assume other states do this on a permanent basis and maybe, but it sounds like it's not permanent change, that

[Unidentified member/participant]: would be a question.

[Matt Walker (Chair)]: The testimony that we did hear said they were planning on doing it at least in this year and next year. That's, it's just,

[Representative James "Jim" Casey (Member)]: Go ahead. The governor wanted to pull back 10,000,000 ish back from education. Is that going to go through or is that something that's going get stuck?

[Matt Walker (Chair)]: We'll help decide and I'm going to get to that. Because we start with a $33,000,000 hole in the first $12,000,000 The biggest chunk is this indirect, I'm not gonna say it right, right? Indirect cost rate. That's 12,000,000 Now if you go through and you look at it and you say, Okay, that's 12, then there's a reduction in force, 4,100,000.0 from the fall and 3,300,000.0 in this current budget recommendation. So that's $8,000,000 You got 12,000,000 and plus, and 8,000,000 and plus, that's $20,000,000 And then there is the piece where we took almost 5,400,000.0 in highway projects that are in the white book that we have scaled back out of the white book and said we're not doing. So you're taking 12 plus eight plus nearly six. So that's $26,000,000 more or less. And then we said, Okay, we're cutting back on aviation by $1,000,000 rail by $3,000,000 and then maintenance by $600 $500 $400 another couple million. That's how we filled the 33,000,000 hole. This recommended budget is to fill that $33,000,000 hole. And charging credit cards, another 2,000,000. But the whole was not filled. The recommendation of the budget that we're going to deal with is not filled by keeping the transportation money in transportation, by reducing the amount we send to education. We did not use the $10,000,000 and this budget does not use that $10,000,000 to fill that $33,000,000 hole. It then uses the $10,000,000 after how we just filled the hole. And by we, I just keep saying that, but that's not what I mean. I mean, the budget fills up 33,000,000. And then the budget recommends and is recognized. The budget is saying, take that $10,000,000 and leverage it against the full federal match that's available and put more work on the ground to deal with the decaying infrastructure. So we took the budget takes projects out of the highway, which we're going to get testimony from the chief engineer about which ones came out. And then we accelerated, the budget accelerates. I apologize for I can't stop saying that. We've accelerated a whole bunch of projects, which we're also going to get testimony on, into then to then drive work onto the ground as soon as possible this year, responding to heavy pressure that our years of paving had gone down significantly over the last couple of years. And this use of that 10,000,000 has helped increase the paving by about 50% for this year. But I wanna make sure that everybody's understanding that the filling of the $33,000,000 hole isn't coming from the $10,000,000 purchase and use reduction of what we send to education. That is being used to maximize more federal money. And that was my purpose of having committee discussion on that. How important it is to you each individually is up to you. What I want you to say is we are going to more meetings with the rest of the ways and means and appropriations, and our liaison to appropriations and the speaker's office explaining to them, and the CFO is gonna explain it all over the place, the appropriations. That's what we need to understand. That's the governor's proposal. And the 10,000,000 is not part of that $33,000,000 hole. It is about leveraging more projects. We will debate what's good or bad or should or shouldn't be changed, but we at least need to make sure, I think we need to make sure that we're all coming from the same sort of baseline. And if this doesn't make sense to you or it does, I felt it was important enough to go over it to make sure that we're on the same page. And if I didn't explain it right or we need to have them come back, whether it be the JFO or the agency, we'll do that again. But when we have testimony and I'm expecting on this particular memo, I'm looking for the explanation on every single line that says how we built this budget. That's part of what I think is my responsibility. Then we'll figure out whether we do or don't can or not move forward. But we you should understand what we did. We asked for this big attention. We asked for a commitment to help solve the transportation funding problems. This is what's been recommended. We should really understand what actually is recommended. And then you should be talking to whomever you do about whether or not how we're going move forward. Does that convey what I was trying to bring the ball? Representative White?

[Representative Candice White (Member)]: Couple questions. First of all, Chair Walker, you were referring to Candice's memo, is that the January 21 Testimony. Of his creation? She's got literally like six documents from her. Is that the right one? January 21, Agency of Transportation, and then it's first one time revenue sources on page two. The fixed page document.

[Matt Walker (Chair)]: Yeah, this one I'm referring to there, based

[Representative Candice White (Member)]: on that. Yes, that's it. Great, thank you. My second question, on this unusual accounting plan that the agency has to take federal money to pay normal operating expenses as opposed to using it to match bigger federal dollars. I'm just wondering if Logan from JFO had anything to say about that, just kind of historically? I'm just wondering from someone who works in finance full time, is this a practice we should be avoiding? We've done it in the past in tighter times. I'm just wondering if there's anything you wanna opine for us on that particular procedure or plan?

[Logan Mabry (Joint Fiscal Office analyst)]: I guess I'll say this, and with the caveat that I'm not an expert on federal government persons by any means. Is a relatively unused tool in budget creation for the agency of transportation. We, to my knowledge, in the past, I'll say fifteen years, could be long enough, have used it maybe once before. That was during late twenty twenty two, right after COVID when there were lots of potential funds coming in. We used some federal money in an indirect cost rate. Other than that, I don't know the time to have to Jim, maybe if you want that card enough, we can find a time where the agency has made use of this. I think the reason we haven't made use

[Unidentified member/participant]: of this is because it's not the most attractive option for our use of our

[Logan Mabry (Joint Fiscal Office analyst)]: federal funds. Whether we should be using it

[Unidentified member/participant]: or not using it, I believe that all up to you all to decide, but it is not

[Logan Mabry (Joint Fiscal Office analyst)]: a common tool that is used when you're creating the transportation budget.

[Representative Candice White (Member)]: And I just have one more comment question. When we're looking at the 2027 budget, and looking at really the big areas, and Pei Bing is going up by 50%. And that's 24,000,000 of T fund dollars and 123,000,000 of federal dollars. So it looks like we're taking full advantage of federal matching there. I guess my question on that is, it's a really big number. Will we be able to achieve that 50% increase in labor and projects on the paving side? Understand all the reasons why we don't want to get behind on paving, or we were behind last year, but this is a pretty significant increase. So asking vendors to do that, asking the agency to oversee those. I'm just wondering, is that realistic for us? In which case, maybe we could pull a million or 2 back from the T Fund column there, to put somewhere else if we're looking to

[Matt Walker (Chair)]: I think again, papers are fair to say that we're to go out of sleep. No, have, and we will hear testimony, can hear both from the agency and from the papers. So that is exactly where we go next, to make sure that we're all, we're totally understanding what we're at and that is where we go next is why we will hear from the agency, we'll hear from overturning one to hit them with advocates or papers in this case or affected parties. And those are the kind of questions that we will be asking as we go through the budget. Maybe we should have started here, but sometimes always, we've got to start where we start. We're not in February yet, so we've got some time to really understand it and dig into it. But I wanted to make sure we were at a baseline of understanding how it was built, representing Casey. I'm sorry, it's

[Representative James "Jim" Casey (Member)]: good to say. I hope this addresses or maybe things go somewhere else. But before COVID, or actually because of COVID, we had a lot of extra money. Did we start a bunch of new programs because of COVID? Do they still exist today? Are we gonna?

[Matt Walker (Chair)]: You know, that's a gigantic question that we're not gonna be able to answer in this few, four minutes, but I appreciate the question because everybody across the whole state government is wrestling with how do you fund things now that we don't have that level of money. I think to answer some of your questions, this program we did start CEB incentives, but that's a longer game. Was the only one that you could give It's only 21,000,000 I think that's carried some mind.

[Representative James "Jim" Casey (Member)]: That one's kind of

[Matt Walker (Chair)]: backed off. I'm totally into digging into that question. Think it's a very good question from that perspective. Is there more money out there to be saved? But for this, I'm definitely looking to make sure that we understand how it was built, and that's where we go next, what do we spend the money on? So that's my answer to that. I want to make sure that we're just down before we break that you understand that part of it. Then that is the question, what else could not be adjusted? I'm sorry. I think it

[Representative Timothy R. Corcoran II (Vice Chair)]: was a comment on the 10,000,000 from purchase and use that this budget has tried to bring back to transportation. That's a question we've been dealing with for a number of years. I just wanna point out that the way the administration put that together makes it really easy for it not to happen because we have a list of exactly what wouldn't happen, and it's not intermingled through all this. And if it was, then it would be a really hard thing to understand. We understand the benefit, then we would understand the, you know what I mean? It's an easy piece to peel off. Not it's from that town. Not if it's from that town. But I mean, that's, I think a decision that we can struggle with here, but obviously it's gonna happen over in approves too. So just being into, there'll be a lot more discussion on it. But the fact that it's we know exactly what it's for, you know, then you can make good argument for or against that wherever you wanna go. I'm not saying one way or the other. But if it was intermingled through all here, that would be very, very messy.

[Matt Walker (Chair)]: Interesting to look at it. Okay.

[Representative Candice White (Member)]: I just thought Michelle had her hand up.

[Matt Walker (Chair)]: Oh, I'm sorry, thank you.

[Michele Boomhower (Agency of Transportation, Policy/Planning leadership)]: I'm sorry, I don't mean to interrupt. When you, Representative Casey asked the question about COVID created programs, Michelle Bean Power, for the record, one of the things that we've often spoken to, and you see it in our public transit budget, is there was a huge influx of funding for public transit agencies that really is the very most specific program that you see a huge boost for COVID. There are other areas we can talk about, but that's super significant. As you can see, it's very difficult to pare that back down after it's been infused. I just want to highlight that.

[Matt Walker (Chair)]: Okay. I know