Vermont Legislature SmartTranscripts:

[Matt Walker (Chair)]: I don't know if you heard back from oops. So good afternoon, House of Transportation on Wednesday, February 18. We took some quite a bit of testimony this morning on local options tax and down in our joint session. So we have this section to sort of follow-up on that. Here are some other perspectives from the tax department and from the cities and towns. I don't know if you want to flip a coin to who This goes conversation is kind of based on what we had this morning. But I know there's another, which also was brought up this morning, the whole discussion about Representative Burke's bill that brought her to put in related to the fuel that might lead to that. But today we're kind of picking up from where we left off this morning since they had gone through it twice and that was our first purview of it. So whomever would like to come up and join us in the witness stand first is entirely flip

[Logan Murray (Joint Fiscal Office)]: it forward. Flip for it.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: Hello. Good afternoon.

[Matt Walker (Chair)]: Thank you very much for joining us. I know we've hooked you on the phone, but all of a sudden, here you are in person.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: I know, you invited me up, and here I am. Okay. For the record, my name is Rebecca Samaroff. I'm the deputy commissioner at the Vermont Department of Taxes. And I thought I could just do a little local option tax 101, unless that feels really We

[Chris Rupe (Fiscal Analyst, Joint Fiscal Office)]: got a little bit of

[Matt Walker (Chair)]: a 101 this morning, but I suspect in case we missed it and you want to go through it fairly quickly, this would be good chance

[Kate Lalley (Member)]: for Well, don't have anything confirmation questions.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: We're formally prepared, so That's okay. You could also leave me where your curiosity is, too. Did have my colleague Sarah sent the committee a document that we had put together for Senate transportation yesterday. They were curious about who has reached out to us about upcoming local option tax votes for town meeting day. So I think that's sitting with either the assistant or is maybe posted online.

[Phil Pouech (Ranking Member)]: It is possible there's two municipalities voting on local option taxes, and then towns voting on local option taxes. So we have two there.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah, I think the distinction here was there was a group of towns that have indicated to us that they are, like, for sure, gonna put this on their ballots for town meeting day. We have 10 of those. And then we also had folks reaching out because they're considering putting it on a ballot. And then we just get regular data requests, which sometimes turn in Or sometimes it's like a town official who's just curious because they're making a case. Sometimes it's a real move to get it on the ballot, not quite sure how to weigh those. We don't dig into those so much.

[Matt Walker (Chair)]: Do you

[Logan Murray (Joint Fiscal Office)]: have the ability to put

[Matt Walker (Chair)]: it up as far as all this goes, or the presentation you gave to the site yesterday?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah, I don't Without a plug in. Yeah, yeah.

[Matt Walker (Chair)]: Don't

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: think there's not much to discuss there. It's a resource that you guys have handy. And I talk about local apps and tax a lot, so I just was gonna rattle off the overview.

[Matt Walker (Chair)]: And so I can

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: totally do that, but I don't wanna bore if you've had it already this far.

[Matt Walker (Chair)]: I have a question, which is the data that is available to a town or not that they're asking for in terms of how much sales tax they pay by zip code, is that available in terms of what you collect from sales tax reports and whatnot? What information is

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: available to a town? Yeah, that is a great question. There's a little bit of nuance there. So for brick and mortar establishments in the town, like stores that are just there within a town boundary, we can and do report monthly sales stats for all Vermont municipalities. And that's really what's reflected there. It's the stores that are in your jurisdiction. In this modern world, a lot of sales activity is happening online as well. So a nuance there is that e commerce vendors, like big online platforms or any online platforms who make sales across towns in Vermont, they file one sales tax return with us every month, and that's their aggregated sales from across the state. So we don't have granular data from those filers as to where to geolocate those sales. So when you look at our sales and use tax statistics or our meals and rooms tax statistics online, those are nicely broken out by town and by county, but there's a big missing slice there, which is e commerce for the sales tax. For meals and rooms tax, it's the big short term rental platforms. It's the same dynamic. They file one return with the tax department for all their activity across the state.

[Matt Walker (Chair)]: Go ahead, Rutland.

[Phil Pouech (Ranking Member)]: Does that imply that people who are buying online, you're getting the 6% sales tax? Absolutely. Appropriate. But if there's a local option tax for sales in that town that I happen to live in, it's not getting collected because you don't know what actually came from that town.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: No, we do. We fully collect the 1% from all those folks. That is So like in our, great questions, they're exactly in the right order, but I should have anticipated this one. So for all municipalities, we have those monthly sales, meals, rooms, stats available online. If your town already has a local option tax, then sales into your town are broken out on the return. So, we absolutely see those sales. We make sure the taxpayer is correctly collecting and remitting a 1% where appropriate towns that have a local option tax. We can tell towns actually get with the quarterly disbursement report how many sales, what was their sales, what was the revenue generated, what's their local option tax. So we can geolocate the destination of deliveries from e commerce platforms to towns that have a local option tax. Everyone else is just included in that big aggregate bucket. So it doesn't matter

[Phil Pouech (Ranking Member)]: really where you buy it from. I could buy it from my town, Heinzburg. If I shipped it, I think my period has oil tax, maybe they do or not. If I shipped it here, they're the ones that will get that 1%.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Right, yeah. So it's sales tax as well as meals tax and room tax are called destination based. So it's all about where you, the consumer, take possession of the item. So whether that's at your PO box or at your home address, that is the sales tax jurisdiction that the company is being held to when they make a delivery.

[Phil Pouech (Ranking Member)]: Just a follow-up. So Amazon, when they sell something to Vermont, they know, oh, it's Timbuktu, Vermont. I gotta add 6% sales tax, then they charge that. But if it's Shelburne, which has local option tax, they know, okay, Shelburn, I now have to add the additional 1%.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Great. Because it's both Shelburne. So that information is shared

[Phil Pouech (Ranking Member)]: with all these vendors.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Right. Yeah. And maybe I'll just do a little deep dive, shallow dive on just our administrative practice when a new town comes online, because I think that's kind of helpful. So, town meeting days when most of these local option tax votes happen. So, we'll get a string of emails in the hours and days following saying, We're in, we're doing it. And then we require a ninety day period to just get our administrative form signed in order before that can become effective. So ninety days, and then the first ninety days after a town alerts us that they have enacted a local option tax, we can bring it online in the first quarter after that ninety days. So that's often July 1 for town meeting day votes. And in that period of time, we make sure our integrated tax system, like our tax stack, is all resorted to be accommodating the new local option tax. We also update this publicly available rate and boundary file, which is a file that the e commerce companies, or more often a third party service that does this for you and plugs into your shopping cart, if you're an e commerce vendor. They will scrape those files and use that information to determine the taxability. So we have that big rate and boundaries file. We also host a tool supported by the Vermont Center for Geographic Information, which is a really excellent group of mapping nerds here in the state. They're exceptional to work with. They built us this awesome tool on our website, Local Option Tax Rate Finder, where you can plug in an address or a PO box, and they'll tell you which jurisdiction that address falls in and what local option taxes are in play there. So all that gets updated. Then we send correspondences to every business in the new local Optum Tax municipality to make sure they know about what's about to come online and what their responsibilities are, and that they're all set up and understand their filing requirements. We send similar correspondence to all the businesses in a neighboring jurisdiction to let them know about their neighbor's new global option tax, because when it comes to deliveries, it can happen in food service too, with pizzas or florists or anything. Brick and mortar stores often are doing deliveries as well. Important to know that a new local option tax is coming on nearby. And then we also send correspondences to all of our sales taxpayers that generally pay tax in more than one Vermont municipality, that's kind of a proxy for what we think of as the e commerce vendors. If we see that you regularly have sales across all of our towns, then we think it's pretty likely that you'll be impacted by a new local law firm tax coming online too. So we make sure that they have that information as well. But yeah, that's all stuff that's happening in that ninety days, and that's how the vendors get a flag from us at least. But I think we do our proactive flagging, I think they are also being very proactive because Vermont's not unique in having local option taxes. So they have either a third party business tracking this for them or host their own local sales tax awareness team internally.

[Matt Walker (Chair)]: What's the audit process like for these filers? I don't know. How many sales tax filers you have in the state?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: That's a really great question. I actually don't know that either, that I could find that quickly. But I've become pretty bad at multitasking since having two year old twins a couple of years ago. That part of my brain just stopped. So I will not venture to do that, but I can follow-up with the community afterwards with some accumulated That's 2,000. Yeah. There's less. Yeah.

[Matt Walker (Chair)]: Is there some kind of audit process that reviews the local option taxes to see if they're filed correctly or that they're going to the right places? What kind of audit system do you have

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: in your Hopefully. So because, as I think the committee is probably aware, local option tax is tagged on to one of our main state types. So certainly in the normal course of sales and use tax audits or meals and rooms tax audits, the local option tax piece of those returns is reviewed as well. But once a new local option tax comes online, we spend a lot of attention on that town or towns in the first few months. And a lot of that is we have automated programs that look for making sure we're seeing that town light up on returns that often pay local option tax across many towns. So some of those presumed e commerce returns. And then we also get a lot of manual one on one feedback during those months, too, because it's just unavoidably messy when it's basically having a new tax type emerge in that community. So we get myriad pings from either businesses who are concerned with a consumer's complaint or consumers saying, Hey, I got charged 1%. I don't think that was right. Sometimes we're dealing with brick and mortar stores or national chains and have a headquarters in Denver or something. So it's like that headquarters POS system might not understand the nuance between Berry City and Berry Town. And I can go on a deep dive here, but I'll just do a little aside for now, unless folks are curious. But the USPS system really does not set Vermont up for success here. We have many, many towns that coexist within five digit zip codes. And for better or worse, USPS assigns a town name to a five digit zip code. So I have some visuals that are pretty striking, where you can see all the zip codes that are identified as Montpelier, and they spread to East Montpelier, to Middlesex, to Lister. It's a real interesting spread of all Montpelier. And then meanwhile, Berry City and Berry Town are just all Berry or USPS. So something that you think should be pretty definitive in understanding where you are in space, like looking at an envelope or just your postal address, is not really helpful in this case. So we get a lot of noise in the first couple of months. And our taxpayer services business team is routinely calling businesses, calling company headquarters, to make sure everyone's getting there, getting it all fine tuned, and pointing to our tools for folks that don't know about them.

[Phil Pouech (Ranking Member)]: Patricia? Another question, something I don't know this year, but maybe it's not news to everybody. If I have a public electric vehicle charger, and I'm selling electricity to somebody, there's a 6% sales tax. It's news to me. And then therefore, if there's a local option, it should be 7%, could be 7%. Right.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah, sales tax on electricity doesn't strike everyone right away, because residential electricity is exempt. So we don't really feel it in our day to day. But yeah, absolutely.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: So

[Unknown Committee Member]: it was helpful to understand some of the admin and communications and taxpayer support elements for bringing a new law online. Do you imagine it would be a similar workload or any less if it was upping from 1% to 2%, as one of the proposals has

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: suggested?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah, really great question. And we've just started, understandably, kicking the tires on this internally at the tax department. And I do think the workload would look really similar, bringing a town that currently has a 1% up to a 2%, just a lot of the same processes have to happen, both the communication side, for sure, and doing all these same updates. It's not like a light switch. You have to be specific about what that new rate is for both our rating boundary files, that are this publicly available database. That's going be a whole new layer if that should come to pass in our rate finder too, that we work with BCGI on. And then programming it into our system, adding new lines on the return, I think a lot of that work is gonna be as if a new town has come online for the first time.

[Matt Walker (Chair)]: Marsha Member?

[Mollie S. Burke (Member)]: Yeah, I just wanna add to this conversation. I presented a bill, 8,766, which you may know about, and adding a, because my town asked me to do this to tax gas at local gas stations, local option tax, and in the process, you find out that that would require setting up a whole new tax system and would be hugely expensive. So I just that confirmation and and hoping that this possible increase in global option tax might do the job for now to, but it is a great idea, but not really feasible.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah. Part of the elegance of the local option tax as it is designed and statute today is just the way it neatly attaches to one of our state tax types that are tried and true, really strong enforcement and great filer experience. Most of this is done electronically. We have a really great system. And it makes all of this pretty straightforward. And as I'm describing, just the compliance context, a lot of what we do to administer local option taxes is very related to what we do to administer the underlying tax types as well. So that's nice. So yeah, when we're venturing into something that the tax department doesn't administer for Yeah, us, then it's either DMV gets to grow all these skills, we go off into a new adventure. So, yeah, not quite as tightly aligned there. Could you

[Matt Walker (Chair)]: give us a little bit of a background on some of that conversation perhaps that Franklin Burke was talking about in terms of what, you mentioned what was feasible or not feasible. I don't know if you'd feel comfortable talking a little bit about how gasoline, whether it was per gallons versus per Do you have a sales tax on gasoline? Could you do it that way? Yeah. Not rooms and meals, it's not alcohol, general merchandise or whatever you call it, but could there not be a fourth item that is gasoline? Or could gasoline just be treated just as the same as it

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: was a Snickers bar that was sold in the convenience store? Yeah, well, Snickers might be tax exempt. It's really interesting because some candy falls under the food exemption if it has flour, it thinks, like a Twix bar or something, while other candy is candy and it's not food and it's taxable. Fun nuance.

[Matt Walker (Chair)]: Then you get into prepared foods and I was gonna say, I'm having a sandwich, but then I think I don't

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: know. Well, I think this is a really interesting question. I do want to be very careful here, because I really know nothing about taxing gasoline because of the way administration is split in our state. DMV fully handles that world. Don't know if there was a sales tax on gasoline at the pump, like a consumer sales tax, would be a place that one could apply a local option tax. But my understanding is that right now it is taxed at the wholesaler level, which is relatively new, understand, because it's our conversation. We don't think about it that much. And yeah, so it wouldn't only be a new taxable event for a consumer. It would also be a brand new structure for the businesses that do this work. Tracking sales, collecting, permitting. There's the basics of our We call them trust taxes, sales and use in meals and rooms, which is kind of like an old timey term for reflecting the fact that a business collects the tax on behalf of the state, holds it in trust, and then remits it once a month or once a quarter. But there's a lot of associated administration that goes along with that, a huge amount of regulation, but exemptions and all the intricacies of what is taxable and what isn't, bundled transactions, timing impacts, all the appeal rights and enforcement statutes. So it's really pretty impressive how much goes into creating a body of tax like that.

[Matt Walker (Chair)]: So in the idea that you said a Twix bar might not be, another one may be, but you also have clothing that's exempt or isn't easy. Is gasoline somehow handled before that? It's not even put into that category? It must be exempt from sales. Is it on the same list of exemptions?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: That's a really good question.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: How does that

[Matt Walker (Chair)]: exempted before must be handled in some statute way that would get it not to get into the list of exemptions or is in the list of exemptions? You see what I'm otherwise, it's just another product.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Totally. It either is tangible personal property, which is kind of like the basis of our sales tax base, and it is exempted, or it is not even considered tangible personal property. And I don't know the answer to that, and I'll certainly get right back to you guys on that, too.

[Phil Pouech (Ranking Member)]: It's really, that's a good question. Representative Pouech? Yeah, this is fascinating. We understand that the gas tax is completely outside of your realm, and it's been around since 1920s or so. And we've been told that the efficiency of collecting it or how much it costs to collect a dollar, they're saying maybe it's only 2% that go into the work to collect the money, making it very efficient. Do you know what the sales tax is and what the local option tax might add to it? I mean, does it take ten percent ten cents to collect the dollar? Or do you know what that is?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah, well, I mean, for local option tax specifically, we approach this pretty bluntly by collecting a per return fee. The tax department does, yeah. So, our administrative costs are very much covered by that fee. I shouldn't say very much covered. There was a time in the legislature I was just an analyst that we were proactively coming to the state house and saying, Oh, we should address this fee. It feels like a little too much for what we do. And now we are using that fee right up. Yeah, we just The amount of local often tax and just the complexity with the move to more and more e commerce has really just completely changed administration of this tax. It's much more

[Phil Pouech (Ranking Member)]: So the fee is a monthly fee or whatever. That helps you process what they send in to you, I guess. That makes sense. But on just the sales tax, you go to the efficiency or go to whatever. Yeah, well, do you know what the efficiency of that is?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: No, my former commissioner made a great infographic after like a deep data dive. And I think across the board, we determined that it cost us a penny to raise a dollar across our tax types. I'm not sure that broke out more specificity than that. Suffice to say it's pretty efficient. Yeah, we have worked. We are very efficient at this. We're very lucky to have an IT system that works amazingly well. This is the same vendor that is now working with DMV and labor.

[Matt Walker (Chair)]: The sales reports that people file, all the filers have to file. I'm assuming a lot of seasonal business, you still have to file them every month, even if it's $0 to report.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: A really good question. There is actually Yeah.

[Matt Walker (Chair)]: You still collect the $5.69

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: on $0 ones? We do have filing frequencies below the monthly level, but they are for smaller businesses. So there's monthly, there's quarterly filers, and then there's It's either called seasonal or occasional. I think maybe there used to be both, and maybe we collapsed them into wine. So there is something, it's kind of like for your farmer's market vendors, your Christmas market vendors who are just having a occasional interaction with our tax code. If you are a monthly filer and you have an off month, you close the shop and go to Florida for a couple months or something, you still have to file a zero return. That's So that's kind of part of the enforcement there, is making sure We want to make sure folks aren't getting out of the practice of filing their monthly returns. Because when you're at that level, as I said, these are trust taxes. You're holding a lot of cash that belonged to Vermonters and is destined for the state. We don't want it just sitting in your store for a while. So, yeah, the filing frequencies are scaled based on what your last year's annual sales were. But many of a normal sized business and above is filing monthly.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Yes, Doctor. Limbaugh. Thank you. A couple of questions. So first, just clarifying, local option tax, you're talking about, you've got zip codes, town lines, the local option tax for say Montpelier, even if the Montpelier zip code goes into four other towns, does the local option tax go with the zip code? Does it follow the zip code or does it follow the town line? I wish it could follow

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: the zip code. No, it has to follow the jurisdictional lines of Montpelier itself. And that's why there was, I think in the before times, there wasn't so much e commerce. You could kind of take shortcuts, like thinking about zip codes as more relevant in this space. But now, you really have to geolocate the destination of all your sales, or you have to geolocate where your store is in space. Yeah, I think it seems kind of clear. Well, I know. I live in Berlin now and still kind of feel like I live in Montpelier. So, even that line, I think, can be a little mushy, but that's kind of where the example of having a headquarters somewhere out west. That headquarters POS system might not have the nuance of Berlin Montpelier even. There's a lot of big box stores in that area that might be struggling with just even knowing where they are in time or in space, much less like an e commerce vendor who doesn't have any foothold in Vermont making delivery. So you can't rely on the zip code. You can't even rely on the nine digit zip code. That's, I think, a common misconception that, Oh, you just put a nine digit ZIP code on an address, then this will all get sorted out. It's about being able to geolocate where that nine digit ZIP code is. Is it in Middlesex, or is it in Montpelier, or is it in Wisser? USPS is gonna call those all Montpelier. So you need the type of tools, this rate and boundary file, for example, or our handy clickable local option tax finder to really verify where something is going.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Okay. And my second question is, so looking at the sales tax that has been added to public charging stations, public EV charging, I'm curious about the decision to put a sales tax on that versus a tax that can go to the DMV, like the gas tax, since the gas tax is fueling automobiles and the electric vehicle chargers are charging automobiles. So was that just legislated or was that a decision that was made in the tax department? Do you know the rationale behind that? Because that confuses me. Yeah, very good question. I feel like that's a great opportunity to make some money for transportation, because it's supporting transportation.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah, totally understand that. So the sales tax has always applied to electricity with an exemption for residential. So there are many non residential uses of electricity that are taxable under the sales tax. So it's not that, to my knowledge at least, legislators in the state house has not proactively said, We're gonna add a sales tax to these charging stations. They're just taxable under the sales tax. Yeah, because it's electricity, and there hasn't been a proactive legislative decision to change that treatment yet. I think it probably feels new because they are very new to themselves.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Yeah. And do you have any idea of how much

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: revenue that 6% sales tax on level two and level three charges is bringing to the state? Another good question. I have seen an estimate that was done using external data, and

[Kate Lalley (Member)]: I am going

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: to pull that up. I really can do this efficiently. We just familiarity of this is a new committee for me, so some of the stuff you'd hear me say all the time if I was in here more often, but we have some pretty strict confidentiality requirements with our data at the tax department, and we don't have enough public charging stations to meet our 10 taxpayer threshold to make this data reportable. So, we can't look at our returns and report to you what the exact number is. But I have seen an external estimate for EV charging station revenue.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: And I'm going to pull up any minute, Adam.

[Logan Murray (Joint Fiscal Office)]: You say like

[Matt Walker (Chair)]: 10, we didn't meet the threshold for charging?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah, don't report on taxpayer information for groups below 10 individuals. So that could be like 10 individual people, 10 businesses.

[Matt Walker (Chair)]: It just seems like we have way more to find business. 10 filers. I would say 10 vendors, 10 perhaps, if that's one of them. Then, the amount of apps and stuff that we saw, the amount of apps that are supposedly selling electricity that should be paying a sales tax seemed like it was But it's a brand new, burgeoning business. You wonder, which is what we found from that. So yes, there were more than 10 apps up on that. Yeah, yeah, yeah, yeah.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Some of these may be aggregated under the same Oh, that's gonna the same. And also, this isn't fresh from today. This is I'm not sure how long ago I looked at that

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: stuff. Was just asking.

[Matt Walker (Chair)]: Well, we're all feeling like there's a money opportunity there somewhere, We're all grasping for pennies.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: We have a

[Matt Walker (Chair)]: spot where we collect cans now for the competition. Yeah, we had a jar,

[Kate Lalley (Member)]: and we had a

[Matt Walker (Chair)]: bake sale on Fridays. We're gonna pass the hats and

[Kate Lalley (Member)]: I know that expression, it'll be a fun day, won't it? Yes.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: All right, I found a friend.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: I can chime in from the bench if

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: I don't get this there. I'm happy to wait on that question, on the answer.

[Matt Walker (Chair)]: But in the meantime, you said no multitask.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: I know. I'm like, am I reading my notes out? Go do it. Got headbutted by one. Lovingly, followed by a lot of kisses. I digress. Are there any more local option tax questions?

[Phil Pouech (Ranking Member)]: Yeah, I

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: think. So I

[Phil Pouech (Ranking Member)]: think this committee is gonna get involved in EV charging in this when do you charge tax, when do you not charge tax? You know, it's part of that sort of question. So just to understand when you charge tax for electricity. So I imagine a ski mountain with lifts and pumps, they use a lot of electricity. Do they pay tax on the electricity that they use to run their business?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah, my understanding would be that the residential exemption certainly wouldn't apply to them if they're like organized as a nonprofit or if there's some other ski related exemptions I'm not thinking of, that could be at play. But I'm going to venture to say yes.

[Phil Pouech (Ranking Member)]: A manufacturing

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: company that runs machines and makes things, do they pay electric tax on their electricity? I know that there are significant amounts of sales tax exemptions for machinery, equipment, manufacturing, and I cannot recall if electricity itself is one of those inputs. I can imagine colleagues back at the department are slapping their foreheads right now that I don't remember this stuff.

[Phil Pouech (Ranking Member)]: I guess my question gets back to the charging, really is, you know, who's responsible to calculate that amount? So if the ski resort maybe they're exempt, maybe they're not. But is it Green Mountain Power that says, we sold you x amount? Or is it, you know, the ski resort who says, here's how much electricity we use. Here's Great question. It'd be the former.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: It's it's the, you know, the vendor who's managing

[Phil Pouech (Ranking Member)]: their bill, and then they submit it to you like any other.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Right, yeah. Some of their customers will be tax exempt customers, like their residences, or if they fall under another exemption. Yeah, in many cases for sales tax exemptions, you present an exemption certificate to your vendor. That's a form with the tax department saying, I'm exempt for this reason. It could be something like that. I'm sure that happens once, and then you're lodged as an exempt customer.

[Matt Walker (Chair)]: All right. We're going to have one more question, and then we're moving on.

[Unknown Committee Member]: Hopefully quick. I'm just looking at the list of towns that are interested in lots this year, and I'm just wondering if that is a market increase. It just seems like a lot in one year. Are there any trends year over year in

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: terms of Yeah. For data requests, this is pretty frequent, I think. It's common for municipal officials or even just other folks that have municipal roles in the town to wanna get into this and explore it. And all this is available online. Folks can navigate it themselves, but we like to be helpful making sure municipalities know what they're getting into and what they could potentially get out of it. Despite how streamlined it is from our perspective, it's so complicated. We wanna make sure folks are going in eyes wide open, what they're signing up for with the revenue split, with the department's fee, walk through all that. So, I'm not surprised to see so many data requests. We certainly have seen an uptick in local option packs since the legislature, a couple of years ago removed the requirement for most towns to come here and have their charters approved once they vote a local option tax. Now, all it takes is a vote at the local level, assuming you're staying within the framework in Title 24 of what's allowable under the current local option tax structure. If you're trying to do something more custom, that will land you back here at the state house for review from the general assembly. But since that step was taken out, we've certainly seen more local ops and tax towns come online and expect that to continue.

[Kate Lalley (Member)]: Just going make a comment. It's probably also that towns are much more strapped. Probably the tax

[Logan Murray (Joint Fiscal Office)]: is different

[Kate Lalley (Member)]: from at combination.

[Matt Walker (Chair)]: Pressure on finding some other answer other than property taxes is real and is everywhere. I will say that we appreciate you coming in, new community for you, and our members are always interested in learning more and digging in, as you can see. So appreciate the chance for you to come in. And thank you very much.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Yeah, great to meet everyone. Can't call us back any time. Thank

[Matt Walker (Chair)]: you.

[Phil Pouech (Ranking Member)]: Very relaxing conversation.

[Matt Walker (Chair)]: You leave very little time for the Leagues of Cities in Town to tell us what they thought of what they've heard in the Senate the last couple of testimonies regarding the local option tax, the 2% concept, the perhaps sharing of revenue into town highways, all of it. What we're looking to hear about is cities and towns initial, maybe it's not in a formal opinion yet, but a take on what's been discussed in

[Damien Leonard (Office of Legislative Counsel)]: the Senate the last few days and what we joined this morning.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: So Josh Hanford, Director of Intergovernmental Relations at Vermont League of Cities and Towns. And that's good you that's what you wanna hear because that's what I was gonna talk about. Just first big picture, you know, we went into this session with a list of priorities and under transportation. We had a a lot of them that basically said we'd support any new revenue that we can come up with from any place anyhow. We're not going to be obstructionist to anyone that's got an idea on the table. We specifically called for a full transfer of the purchase and use tax from the Ed fund back to the transportation fund. We know that's under discussion, and there's a 10,000,000 step up. Some of the reasons that people expressed why we can't do that don't seem relative to municipalities. The property tax shift has already happened a long time ago, and municipalities are raising transportation fund revenue on their side of the property tax bill. So the folks saying that's an argument not to do this, it just doesn't make any sense from our perspective because we've already been doing that for a long time. One of the other issues before I jump into exact Well, it's related, but there is a pilot surplus. As I think you heard from the overview, it's about 15,000,000 now. Last year we were talking about returning that to the municipalities that sort of overpaid their local option tax, if you will. Obviously, weren't successful with that request, but we were successful in bringing the pilot retained percent of the 1% down from 30% of the 1% to 25% of the 1% that clearly is meeting the need in the three plus. It's growing and we just had what five or seven counts last year at local option tax. I would very much agree with the list you saw from the tax department on the 18 towns considering it right now. We have recently just heard from a reporter that's interviewed every town and says that there's 17 considering it. We'll see on town meeting day what but it clearly is becoming more of a place municipalities are going to to collect needed revenue to just run local government. Otherwise, it goes on the proper tax bill. With that, there's some concerning trends with that pilot surplus. This year in the governor's FY '27, he marked almost 4,000,000 to go towards paying for the statewide property appraisal and equalization study out of the surplus and house approach added it to this year's BAA. So right now there's a proposal to take 8,000,000 of that 15,000,000 locally option tax generated surplus and use it to fund what the state has always paid for out of the general fund or the ed fund to actually assess the property valuations in every town in Vermont so that we could collect the state's education property largely on the backs of volunteers and folks that make very little money. And so using local option tax money from a few towns to pay for the state responsibility for what raises the most revenue in the entire state budget is rather concerning for us. It's either it's a sign of real desperation that we've run out of money everywhere or it's a sign of just not an understanding of how hard municipalities are are facing with budget concerns that we're gonna use their own money to collect taxes for the state. With that aside, because it's related, senator Westman's proposal or the proposal that's being discussed in senate transportation is appealing to us. Certainly, we think it can be improved in several ways and I'll talk about those. But the fact that we could use a new local option tax to collect money to help with the transportation Town Highway 8 is appealing. We think that the formula that that is broken down in there could be improved. The 50 the towns keep, 40 goes to this this local transportation fund, and then 10 go to the pilot. We don't need the 10. The pilot is more than enough money. It's got surplus that the state's finding ways to spend for other statewide needs. And then giving up 40 might not be too appealing to municipalities. They want to share, but I don't know if they wanna share beyond 50% of what they collect. They ask their voters to vote. So we would propose, and this hasn't been fully vetted by all of the LCT members. It's just so new, but the ones we've talked to feel that they could get behind this if it's revised. And I think it would work better with the tax department's current processing and collection where it's a seventy five twenty five split. So if this authority is granted, we always support municipal authority to raise revenue locally. Whether they choose to take it up or not, that's up to the municipality. We don't pressure municipalities to adopt this. We provide them tools and resources, and they make their own decision on what their voters feel is is right thing to do. But if we allowed municipalities to retain 75% of this new 1% authority, they might put it towards transportation. If that's their most pressing need, they might use it for something else if it's the most pressing need. But the 25% going to this new local options municipal transportation special fund is a good idea. And we think more municipalities would take this opportunity if they got to keep the majority of what they raised, but yet they're helping their neighbors municipalities. 45% is is is not something to just laugh at. It could grow. And if the trends continue, you know, if there's even 10 municipalities that adopt local option tax this year, that's just gonna keep growing. And so we think it's if the goal is to get folks to use this, changing those percentages to seventy five twenty five will get us there. The bill also includes a $3,000,000 appropriation from the pilot surplus fund to sort of support the town highway aid and it's sort of a lockbox. It's above the minimum thresholds that this committee helped put in. So it can't be used to like offset what V Trans would normally give us, which is great. I can't comment yet if the municipalities would support that, because as I said, municipalities wanted the pilot surplus return to those municipalities that raised it. But each year we don't do that. It's harder to heart harder and harder to calculate how to reimburse them. And I can tell you that municipalities would much rather see the surplus if it's not returned to them to go to something that every municipality benefits from. Every municipality has roads, and it's the only program that I'm aware of in state government that actually has a formula that everyone gets something. It's not competitive. It's not you win or you lose from this. Everyone gets something. So that seems to me, much more reasonable than how we've been spending the pilot surplus so far on other state responsibilities. So what I told senate transportation this morning is we're appreciative of this outside of the box thinking. We think we can improve this to make it more desirable for municipalities to to pick this up and run with it. And we'll be open to other ideas. I think the conversation around the public charging stations and what they're paying in sales tax is fascinating. Seems like there's a really good use for that sales tax. Happy to engage on that conversation. I know that Representative Burke's proposal with the gas tax is harder to maybe administer and stand up. I think the benefit of something like this, if you actually run through the numbers, and I'm not here prepared with data sets that can prove this to you, but I think in concept people will agree, the challenge that Browderboro was expressing in other communities of visitors and others that are using the roads that aren't contributing to the cost of maintaining those, this is more eloquent way to do that. So you could have someone visiting Mount Snow that is driving up from Southern New England in a fully electric vehicle, but they're staying at a hotel or an Airbnb paying 1% local option there. They're going out to dinner, having a nice dinner. They're paying local option there. All those pieces and points, if it's contributed in this new 1% authority with the transportation aid fund, I would venture to guess raises a lot more money than if you just did local option on gas. Because it's not one picking up electrical vehicle drivers. Two, it's a smaller percentage of all those other sales that are happening, And yet it's being dedicated to benefit the same goal that your idea had. So it really could be something we should consider working with and looking at how to improve it. Sort of, I would commit to working with our members on trying to get them to understand the opportunity that's here and the pilot surplus challenge. If we don't dedicate it to something, it's going to be nickel and dimed away without a direct benefit. And so this may be a place of compromise to work on.

[Matt Walker (Chair)]: Okay, there's a lot there. I have a couple of different pieces. Pilot is not a transportation topic that I can help you. I'm glad you got a chance to share everybody your opinion, but we can't take that up in this area. It's not our purview in terms of the pilot fund, but

[Damien Leonard (Office of Legislative Counsel)]: I'm happy to Other

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: than there's an appropriation in this bill

[Matt Walker (Chair)]: from What the they did with the money and that part, I can't go back on that. But we're also in a spot where I let the committee get too far ahead on the last subject. So we have a traveled visitor this one that have already postponed once. You're in the building. I would like to bring you back if you

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: I see this as a sign,

[Matt Walker (Chair)]: so no problem. Happy to agree to Well, big question on what we heard in the Senate piece that I think you're hearing that I thought I heard, and I know you can confirm, that towns that do have the ability to raise local option tax understand that when it comes to roads, there are towns that are feeders. In effect, like we discussed this morning, that in effect, they understand that some towns don't have the ability to raise those additional funds and whatnot. This idea that if it was Stowe, that there are all kinds of feeder towns that are using the transportation network to get in and out. And is that what drives the idea that they said they would be willing to share that 25 if they knew it was going to towns? Other town highway budgets is that particular part that they're saying that they got 75 back and 25 was going to a town highway trust or a fund of some sort that they think that is valuable. What's the

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: Yeah, mean, can't speak directly to You

[Matt Walker (Chair)]: said you would support I something in that

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: can't speak

[Matt Walker (Chair)]: to what Stowe's exact reaction is. Your perspective, why are you okay with that 20 tell me. Yeah. What's the reasonings? And I I'm glad, but I wanna hear your

[Logan Murray (Joint Fiscal Office)]: right there.

[Josh Hanford (Director of Intergovernmental Relations, Vermont League of Cities and Towns)]: I think you raised valuable points in others. There's some some small towns that just they don't have a lot of revenue to raise from 1%. Sure. There's online sales coming to every municipality in the state. In fact, there are Airbnbs in every municipality in the state. So there there is a chance for them to raise something there. But it it may be not substantial enough, but yet there are feeder roads. There's a benefit to a transportation network that works for everyone and has some way for us all to stop the free fall that the transportation fund budget is in without any real solutions at this point. And so I think we share that pain, feel it every day. And so we've got to give something to here if the general assembly is willing to put something forward. You

[Matt Walker (Chair)]: very much for that. And we'll have you back for all the questions that I know everybody has. I wanna be fair to somebody I've already rescheduled and have traveled here to be with us. So we know we can get you again next week. So we'll be in touch and you guys can jump on your questions from there. You're still on my charger. I'm willing to share just like the League of Cities and Towns. I've just learned that there would be a no, guess. Please. Rita, this will be our Well, you're the anchor of our Regional Planning Commission's cleanup position. There you go.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Quickly, Mr. Chair, sir, in your mouth with the Department of Taxes, it is $400,000 from electric vehicle. 400,000?

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: 400,000

[Matt Walker (Chair)]: that pays sales tax now. And I suspect we're on.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: And Sarah, I know it's based on 2025, 2024.

[Matt Walker (Chair)]: Okay. So we got that other seconds while you're setting up. We've done kind of tour all the way around the state with regional planning commissions. We're gonna have some committee discussion time on the agenda. Help me out with Gabriella later this week about what we've heard and if there's any particular in those trends, things that we want to potentially try to address. So that's on the discussion time for this week. And we're adding cleanup out of the Otakuchi region. It's a fun word to say. Did I get it right? The Adequichi? Yes. Two Rivers Adequichi Region Commission.

[Logan Murray (Joint Fiscal Office)]: Thank you all

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: for being able to meet with me. My name is Rina Seto with the Two Rivers Adequichi Regional Planning Commission. I am the senior transportation planner there. I work with Peter Gregory.

[Kate Lalley (Member)]: I'm to double check. I don't have great feedback. Okay. So

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: I'm told that you've met with my other counterparts last week, so I guess I am the designated hitter to clean up for this week. So thank you. So to give you an idea for the 2 Rivers region, we are kind of the East Central Region of Vermont. We are one of the larger regions that cover 32 municipalities. What's interesting is a lot of our economy is related to New Hampshire in the Upper Valley. Dartmouth College and the Dartmouth Hitchcock Medical Center is kind of our key economic drivers that pull a lot from our region into New Hampshire. So a lot of our transportation needs and everything else are kind of derived from that. Our municipalities cover four counties, which is kind of interesting. A lot of our other counterparts, they kind of focus on one or two counties. We cover four, which makes during a FEMA disaster declaration very interesting when they come and they kind of designate their FEMA folks that's kind of county based. Our region is roughly about 50,000 folks, just a little under. We have two major interstates that cross our region, 91 and 89. We also have a key East West corridor with Route 4 that would connect with Rutland. And as you know, it's a major trucking route. We also have an active transportation advisory committee, and we also meet with our road forming committee as well. So you've heard from our counterparts last week with the regional planning commissions. We have a fantastic relationship with the transportation planning initiative with VTrans. So we provide a lot of various technical planning assistance to our towns, data collection, public engagement, project development. So we add Kate Lortons for different projects. We also have different impacts and input to the trends, different projects, model plans. So I'm not gonna really cover that as much because I think you've kind of heard of that. I do wanna focus on four different areas of not concern, but kind of categories I wanna kind of focus on from our region. The first one is on public transit. We have two public transit agencies that are covering our region, Tri Valley Transit, which focuses on commuter routes, as well as the O and D program that covers Medicaid transportation. And then we also have Advanced Transit, which is kind of a unique public transit agency. It's one of the few bi state public transit agencies that we share with New Hampshire. So they are pretty active, that kind of focuses a lot of ridership around the Dartmouth College and the hospital economic driver of the Upper Valley. Ridership has definitely decreased since post COVID. Especially with Tri Valley Transit, their O and D program has really suffered a lot. Obviously, lot of their rides were focused on providing rides to older adults and bringing them to senior centers. During COVID, all of that pretty much stopped. Post COVID, some of those senior centers that offer meal sites have even shut down completely. So that has impacted a lot of services that you can provide to those clients. They also have impacted the volunteer driver program that Tri Valley Transit has really built up over the years pre COVID. Their volunteer ridership program has been reduced almost by half post COVID, and they're doing their best to try to market and rebuild that volunteer driver program back. Really do rely on that because it is, it has been determined that it is least costly in providing those transportation trips versus trying to find a van or something that is wheelchair accessible that can transport one on one to wherever other clients need. So that is kind of the overview of public transit. We understand with the older population, there are less available riders or drivers that can kind of provide those rides. They're doing everything that they can to kind of market to students, to those that are working remotely that have some hours during their week to provide those services. It's slow going, but they're slowly kind of making it back up. But also with the cost of car ownership and things like that, that has really kind of impacted the availability of volunteers for the program. So Bridges and Culverts is a big infrastructure piece in our region. I began my career at Charter Rivers in 2007, so you can say that I'm one of the very few Irene veterans left that have kind of been through it with the towns. Our region was significantly impacted during Irene. And then post that, we've had a couple other FEMA declared disasters in 2017, 2019 and 2023. We've worked very closely over the years since Irene with Vermont Emergency Management, VTrans and Towns to establish a protocol for when disasters or events occur, that we're here for them. I work closely with their road foreman to know that any sort of weather systems, a quick text message or something to check if they're okay or having that relationship with them. They really appreciate the oversight that we have just to make sure that they're okay. So from that, we had a lot of different lessons learned from Irene. One of them was the town roads and bridges standards that e trans has improved over the years. Towns have also been using that to improve their infrastructure over the years with upsizing culverts and how to improve their road building infrastructure. Also taken advantage of a lot of various brands that are available to improve all of their road infrastructure, which also includes the most recent municipal roads general permit, which then kind of fed into the newer V Trans Grantsnake program that focuses on stitching the culverts. So many of our towns have really taken advantage of these grant programs to slowly improve resilience in their roads and bridges. What they're finding is the culverts that are three foot, four foot that undergo a hydraulic analysis. And then they determine that they need a much bigger structure, two, three times larger. The cost is significant. The funding sources that are available to cover the construction is shrinking. So right now, there's only a handful of grant programs that can really cover the design and full construction of those culverts and bridges. And it can be quite over risk for towns. From the FEMA perspective, for hazard mitigation grants, what has been a real struggle for towns that are trying to find funding sources to cover roads and bridges, or at least bridge construction, is the sizing, the hydraulic analysis, as well as with the hazard mitigation grant program, they want to show repeat damage to kind of prove benefit cost analysis. So what happens is with these little culverts that may get hit a couple of times, and then they get a hydraulic analysis completed, that is two, three times the size, that gets fed into their benefit cost analysis formula. But then the number of beneficiaries or the residents that we serve doesn't quite spit out the right formula or the right number to say, Oh, yes, this is really beneficial, versus, Oh, it only serves about 80 residents. It's not really beneficial to spend $2,000,000 to upsize this bridge or this culvert that keeps washing out. And so towns are unable to do the right thing and upsize to what is the appropriate size. And they're unable to put in anything smaller because ANR's stream alteration permit will not allow them to put anything smaller. So they want to do the right thing, but they're kind of stuck between financing something more significant, but then risking it continuing to wash out because it's undersized. So a lot of our accounts are kind of facing the double edge there of trying to balance the budget, but also how many times do I have to fix this bridge culvert?

[Matt Walker (Chair)]: I think we might need to hit mute or turn the volume off on your we're gonna back up, which presumably means your volume is still on. Thank you.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Wanna lower or more volume?

[Matt Walker (Chair)]: Run off entirely or muted, but you're sounds like it's already gone, whatever you were doing. Perfect.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Sam was also distracted. Yeah, was. Thank

[Matt Walker (Chair)]: you. Representative Lalley has a question for you. I'm sorry, I just stepped out.

[Kate Lalley (Member)]: Please. So I was intrigued when you said that the service area is roughly about 50,000 people. That is the sort of minimal size for a metropolitan planning organization. And I was wondering just where that might stand. I realize this is a more rural area, but are the attributes starting to change and become more reflective of some of the programs that could maybe bring benefits including funding opportunities. And the other thing I

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: was wondering in terms of transit was eligibility for stick factors in that area. So the population is just under 50, so it's not quite there. I know we've looked at that possibility of having the MPO status. I don't think we've, based on the census, we've really gotten quite to that level of, yes, it's like 50,010 people that, yes, we can definitely get it. It's always just been under. And so we've not been able to take advantage of that. Peter, I don't know if you have anything else to add to that.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: Peter Gregory, Director of Two Rivers Addison. Think actually the federal threshold may have increased from 50,000 as well. So I think it's firmly out of our reach at this point, but if it were to come into being, it would include New Hampshire towns, Hanover, Lebanon. It would be a by state MPO at some point.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: So this is just an example of the infrastructure. This was from the April 2019 rainstorm that hit the lower portion of Bethel Mountain Road in Rochester. This word is fairly important. Bethel Mountain Road also connects to Camp Brook Road in Bethel, and this is considered a federal aid secondary road. It's a class II road from the town perspective. But once FEMA declaration does get hit or does get declared, Federal Highway Emergency Funds gets us money to this. So it's a unique roadway. So you can see the whole lower section of Bethel Mountain got hit. They worked pretty hard to get a lot of this repaired because they were under the Federal Highway Emergency Program, which then they needed to get all the repairs done within, I believe, one hundred and eighty days to get 100% funding covered. So that was huge for the town. It was definitely a big rush because from April to fall before snow hits, they were really struggling to reach the deadline and get in all their design permits and all that fun stuff kind of squared away. This road is also something

[Phil Pouech (Ranking Member)]: This Bethel over Bethelmont, that's a road even though it's a town road that's on the federal? It's secondary.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Yeah. Yes. Right. Okay.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: And we have a couple of those in the region where we've flagged them for towns, especially if they have staff turnover, reform and turnover, that may not necessarily understand the distinction that during a federal declared disaster, if these particular roads get hit, to notify us so we can make sure VTrans is aware so that they can start the clocking. Because we ran into that during Irene with a couple of our towns where FEMA was in the room, and then it wasn't a few months later until they realized, oh, this actually should be covered under Federal Highway. And so they've lost time to do

[Logan Murray (Joint Fiscal Office)]: that.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: The what? Just along those lines, just so I understand, disaster, in you've got FEMA and you've got federal highway. Two different sources to help repair roads for towns. And the distinction, is FEMA only dealing with highway? Where's the distinction? Sure. So for FEMA, those are for your typical town highway class two and three roads. There are certain class two roads in town that have a designation of the federal aid secondary designation. And the only special designation is that during a FEMA declared disaster, a switch gets clicked, and then that particular road, instead of being covered under FEMA funds, it gets covered under a federal highway emergency. So that's a decision that FEMA makes? No. They've already been designated? It's already been designated under I believe there's a federal highway classification for the roads. So you can ask either your towns or V Trans mapping has those classifications pulled out. And then I have one other question on the previous slide, the culvert, you're talking about that balancing act or challenge between ANR saying you can't have a culvert that's too small. My understanding was that, at least in my town, that FEMA would only replace the exact same size of culvert. They wouldn't pay for upsizing a culvert, which is what we want to do for better resiliency. Is that what you're referring to? That as well. Yes. So sometimes too, it's what is FEMA going to dictate or what are they going to actually cover under a project worksheet? And so usually the first thing is, well, do you have a hydraulic study? Prove to us what sizing is going to be appropriate. And so usually ANR will provide the hydraulic study and say, Well, we recommend a culvert size that's going to be three times as big. And we are only going to issue a stream alteration permit to allow you to put something this big. We're not going to let you put anything smaller because it's not going to be big enough. And then FEMA would say, Well, I haven't been involved recently with how FEMA has been deciding on their awards of mitigation. I'm told they They have been providing some mitigation funding to towns, but it may or may not necessarily be related to upsizing over. So anything that also depends on who the project person is. And you also referenced that FEMA is looking at the population size to determine whether or not they would award something. So there's, I guess you could say there's the two sources of funding from FEMA. There's one source where there's active damage to the culvert and there's the project worksheet to get it repaired. And then there's the other one where it may got repaired, but FEMA's not going to really upsize it. So they're going to persuade the town to go and apply for the hazard mitigation grant program, which is a separate funding source. And with that, the grant program requires a benefit cost analysis that goes with it. And so with that, the town needs to prove that with the sizing, as well as how many residents or how many people is it going to benefit by upsizing and get crunched into a certain formula to spit out basically, does it benefit or does it not benefit? And sometimes there's not enough residents around for that structure to really benefit from the eyes from the grant program to say, yes, we're going to award this program to upsize this culvert. Towns are kind of stuck in terms of available funding source to kind of do the right thing. Absolutely. That's a federal hazard mitigation. And so every time there's a declared disaster, there's a particular bridge in Bethel on Camp Brook Road that has had previous damage from previous FEMA disaster. And so we were like, Okay, one more disaster. Because previously, they said, Well, let's FEMA would always be like, well, if you get three disasters, that should be enough to hit the benefit cost analysis. So this particular bridge in Bethel was one away from meeting the BC possibility. And so the 2023 flood, I was talking to the townspeople, oh, so did it get flooded? I'm like, well, no. I said, well, it should have gotten flooded. He said, well, unfortunately, a good Samaritan neighbor had their excavator out kind of prevented. I'm like, no. So we could have gotten it flooded to meet the BCA. So anyways, he's aware now to just let it go next time. Crazy to think that, but yeah.

[Matt Walker (Chair)]: It would be great if that neighbor took his estimator, went down that whole road. I have to go over it every Yeah. Corner on that My teeth are all loose. All the Going up and over.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Yes. Yes. So those are the interesting stories that we work with our tenants to get their bridges and culverts fixed and just wait for the next disaster thing. All right, so the other thing that we do focus on in our region is bikeped infrastructure. Our towns are very supportive of deplete streets. They want bikeped infrastructure in towns. We do focus a lot and assist on the B TRANS bikeped and their transportation alternatives program to apply for these programs for bikeped improvements. We feel like the annual $3,000,000 allocation to the program is really not sufficient. A lot of these bikeped project scale can run at least up to a million dollars easy for different programs. What I found is we've managed a lot over the years of these different bikeped programs. And we understand that after a while, the costs have increased. And so by the time the grant gets awarded and by the time it goes to construction, the costs have really increased to the point where they're coming back for enhancements. And so we hope that Etrans will continue to prioritize allocating funding to complete existing grant projects before awarding these so that they can finish what's going on.

[Phil Pouech (Ranking Member)]: Yeah, I think our town has hit that a few times. We've had a project, we got some pricing, we started to, it took a little while, then all of a sudden when, well, we get, we had estimates. And then by the time, which might be a couple of years, finally get an estimate for the cost. Oh, it's more. So then we have this again, another delay. So your recommendation is maybe sort of slow the process down and move the projects faster or make things move faster so we don't

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: have those delays. Right. Yeah. I know over the last five years, costs have just been really challenging to kind of pinpoint. Pre COVID and then post COVID. We had the post COVID issues with materials increasing, the lack of labor, the war of Ukraine causing havoc with materials everywhere. It's just everywhere. And so we've done our best in terms of taking whatever the consulting firms have scoped out in terms and we've put as much contingency as possible and inflation. But it still is just not enough to say, we can go to this one pot. This is our best guess estimate. Things pop up. One of the projects that I'm working on is a concrete retaining wall that we gave the best estimate, and now we're at least 200,000 plus because of everything. And then the towns are like, well, do we continue? Do we not continue? We want this project, but how much more is it going to take to complete this project? So I also want to point out, too, this is one of the bigger projects that I'm managing actively right now in South Royalton Village. It's an interesting project. It is not your typical sidewalk project. Those of you who familiar with Subarleton Village by the law school, you have to walk with all the businesses there. The scope of this is really to bring the sidewalk up so that it meets ADA standards. So when you enter the entrances of the storefronts, they will be level. So it's a very big, bold vision to really refresh the downtown area with some gentle sloping ramps. They're going to extend the sidewalk out at least 10 feet. They're going to have really nice patio areas and sitting areas and just a really nicer pedestrian accessibility through the village here, while still navigating the parking and the loading for the business trips and things like that.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: EV chargers playing out in

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: that location? It was not included in this scope. I know the town is looking at possibly looking at EV charging elsewhere along the green there.

[Logan Murray (Joint Fiscal Office)]: So

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: yeah. That's what You see

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: that we're working through the right of way right now. It's interesting because there's a post office involved as well as the railroad. So doing our best to navigate all that. But we're hoping to go to construction in 2027. But one of the pieces with this is the cost of the construction has increased by a million dollars. Has significant historic preservation components, the historic columns there that we wanna improve and keep. And so there's a lot of components that have really increased the cost of this. The TAM is still very supportive of this transformation. They're actually like, what's taking so long? But we're working through the right of way with the railroad, and we are hoping to go to construction for 2027. We also need to go back to ask for an enhancement as well. But once that's done, we hope you can all come down to take a visit to see how the transformation has occurred. But the Bike Pet program does I was quite surprised they actually awarded this because it's such a large scale and eats up a good portion of the $3,000,000 allocation at the time. But the scoring criteria really, it hit a lot of the high points of what they wanted to meet. Serves a lot of the different businesses, the people in the village, creating a safer pedestrian walkway, all of those things. So we're really excited about this program and the project.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Is it self

[Kate Lalley (Member)]: oriented in a community that's served by municipal wastewater?

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Yes, I believe they do. Yeah, leverage is dropped. It's great. And it's right next to the law school as well. So we're hoping to really keep this flourishing.

[Kate Lalley (Member)]: It's great. I always thought that South Royalton was a little diamond in the rough, so this is exciting.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: I know the town has also been working on they have a plan to improve the sidewalk network in the rest of the village as well, eventually. So they're slowly chugging away at that.

[Matt Walker (Chair)]: We got a couple more minutes.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Sure, great. So the last issue I wanted to talk about is, and you might have heard from other counterparts, the RPCs have become the de facto archivists for towns. Towns have, in the last five, six years, have really increased their turnover in town administration. They're a key reformer. So the long term reformer, they're starting to retire. So you have these new ones that some stay, some don't stay, but their turnover is more frequent. And so what is happening is grant projects are falling through the cracks. This particular town that I have on the spreadsheet here, they have a new town manager, new DPW director. And I've been able to cobble out all the grants that they've had in the last five years. And how many have been completed. You can see the ones that are highlighted in orange are the grants that they were unable to complete. That's about $257,000 of potential grant projects that they had in hand, that they just were unable to complete due to staffing changes and turnover. It's very frustrating, but also it also highlights the challenges of the rotation of staff and having us being there to kind of help say, oh, remember, you have this project and this project, and don't forget this project. So we're doing our best to keep all of our 32 towns afloat as they go through their transitions as staff. But it can be a lot. But it's hard to see them on the table. We want them to use it. And we know that those funding sources are never there for sure, there for a while. So we do hope to have a more official role in the future, maybe, just to keep tabs on them. So that's just kind of a quick summary of the of the four main issues I want to talk about from a region perspective. Peter, do you have anything else to add?

[Logan Murray (Joint Fiscal Office)]: If

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: you have any other questions, please feel free to reach out.

[Matt Walker (Chair)]: Using

[Phil Pouech (Ranking Member)]: the LifePad grant program and the transportation, the Downtown Fund, have you used some of those? Yes,

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: there are some towns that have been able to utilize those, Particularly in the last ride, we've had two towns that have participated in the Better Connections grant program. And I know in the last few rounds, they've been eligible to utilize that to do their sidewalks. Those are great. It is, I would say, less onerous, but the process to implement a sidewalk project through the Downtown Transportation Fund is definitely a little easier than going through the V TRANS, the municipal assistance program, but only just because of the different funding requirements that come to it. Although the Downtown Transportation Fund, the funding is The cap is a little bit less. So there's that balance of maybe towns can complete smaller sections with the downtown transportation fund and the bigger ones can go to the bigger federal funds. So, yeah, thank you. Well, really appreciate you coming in. Thank you for

[Matt Walker (Chair)]: your patience with the reschedule.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: No problem.

[Matt Walker (Chair)]: If that was the bonus of getting you to be here live, then it was worth the trip. And we appreciate you hitting cleanup in our tour around the state of Regional Planning Commission. We are going to have a committee discussion and sort of what's next and what we should look at later this week. I think it's on tomorrow's agenda. And we appreciate the time and the effort and your 32 sounds. Appreciate it.

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: Well, thank you.

[Matt Walker (Chair)]: Now what we're going to do, and I'm not sure if Damien's coming up next. Every year we get a letter from the Appropriations Committee that says, please write us your priorities, your number one, number two, or issues with the budget, with the piece, and where you're at as well in the highest in your budget review. And last year, we wrote the letter. And while Damian is working his way up, I think we focused almost entirely on the JTOP piece last year. Would

[Damien Leonard (Office of Legislative Counsel)]: We're going to start with

[Matt Walker (Chair)]: Logan. Logan's going start. I'm sorry.

[Damien Leonard (Office of Legislative Counsel)]: Way questions, and then I'll start writing the letter since he has to go. Okay.

[Matt Walker (Chair)]: So we're going to that's quite all right. We're going to figure that part out. I'm not sure if we're posting up the letter that we got from folks or not. Post it under today's or under Pull it.

[Logan Murray (Joint Fiscal Office)]: Can have it pulled up if you want it on the slide.

[Matt Walker (Chair)]: That would be great if you could put it on the screen. And just as far as reference to everybody's in the committee that last year, I recall it anyway unless somebody remembers it differently, we pretty much just focused on the JTOG transfer as our number one priority last year. And that's what they did. You'll see the letter here in a second. We're gonna have to draft and respond by Friday, our committee's piece. I would certainly suggest anyway, the part of the letter starts out that it's been known in the building or we've worked hard to understand there's a $50,000,000 transportation funding gap that's been in the works for a long time. Last year, you took big steps with the $20,000,000 JTOC, and that knocked it down to a $30,000,000 problem. We much appreciate that support. This budget is obviously, they've gone through some pretty serious, you know, machinations to make the closure of this year's 30,000,000, and so it's still there. And I sort of remember that this is a historical issue and it was $50,000,000 and we cut it back by $20,000,000 last year. This year, they proposed a little budget to another $10,000,000 from the purchase and use and fill up the other $20,000,000 through the reduction in force and some conversions and all the other fees. I'm not saying that all has to be in there, but sort of the $50,000,000 was cut by $20,000,000 We still have a $30,000,000 hole when we get to this year based on the work last year. That's sort of the big picture. Thanking them for their work and appropriations last year, That would be one of the suggestions I would add. And then we need to move forward and sort of answer the rest of the questions. Logan's got the letter up there. You can maybe walk us through it real quick, or you can kind of follow it down. It's the basic pieces and then it sort of Yeah.

[Logan Murray (Joint Fiscal Office)]: So for the record, Logan Murray at the Joint Fiscal Office. So this is the letter you all the bank measures received from House of Appropriations asking you to look at the budget and let them know what you think. There's some links there. The one we're gonna look at are the I'll take you through at least this, the fiscal year twenty twenty seven budget language. This is the governor's recommended budget language. I will just go through and highlight some of the sections that relate specifically to transportation. There are a few in here that you should be aware of, and then can make your decisions and decide what you wanna say in your letter. Also not within the languages, the other things that you've been looking at budget wise in your presentations. If you have anything in there that you wanna mention, you could say that in this letter as well. As you all know, the appropriations or the work, the projects that get done in the white book end up being appropriated in the budget themselves. So all these things can kinda go together. I wanna read this or else I can switch to the language and highlight some sections.

[Matt Walker (Chair)]: You can ask questions. Yeah.

[Phil Pouech (Ranking Member)]: Just the process, how we're going about it here. If we wanted to add to present transportation budget from the administration, that's not in the budget, like something else. Do we have to get it on this letter? Or this is just like a polite way of letting

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: Yes. Those committees

[Logan Murray (Joint Fiscal Office)]: don't think you have to put it on the letter, but it's them sort of asking. But

[Phil Pouech (Ranking Member)]: if we were to, you know, we have the T bill budget, and I think in the past, this committee has said, you know, alright, it's the same amount, but we're gonna take a little bit from here and put it in this category.

[Logan Murray (Joint Fiscal Office)]: Yep.

[Phil Pouech (Ranking Member)]: In that case, it's probably not as important to get on that letter. Is

[Logan Murray (Joint Fiscal Office)]: that So at times the committee will make sort of like one time appropriations or changes and stuff like that, that you do within the T bill. But once the T bill goes to the appropriations committee, they usually strip all those out and hold them and put them in the budget. So, to the extent that you know what you wanna do this period, it might be good to give them a heads up. Obviously, things come up and there can be other informal discussions between the committees so that everyone is made aware of it. This is just sort of the first, what do you think of the budget I've proposed? Do you have any thoughts immediately that they should know about as they're starting their work? So they're as unsurprised as they can be surprised in the process, I guess. Thanks.

[Matt Walker (Chair)]: Yeah. As part of our review progress, we want to hear from your committees as to what you agree with, what you disagree with, and what your priorities in the budget area might be. And then there's a part, finally, if there's any new initiatives, you better put it in here now. It doesn't quite say that, but that's a little bit below right at the bottom of the paragraph.

[Phil Pouech (Ranking Member)]: And does it say when this is due?

[Matt Walker (Chair)]: Friday. Friday.

[Phil Pouech (Ranking Member)]: And today's Wednesday. Uh-huh. Okay.

[Matt Walker (Chair)]: Which is the same thing that we did last year in terms of your part about whether we make some changes within the amounts is not gonna make it on. This is a big appropriations doesn't want to hear about 100 out of our $900,000,000 budget. They're not looking at if we were to move hundreds of thousands of dollars. This is my perception. Big picture, let us know if we got a big problem coming our way that we're not aware of yet, is more of my perception. You can move

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: chairs on the deck. They don't care less than the parameter. If they just wanna know if it's outside of that parameter, that's gonna affect their numbers. Okay.

[Kate Lalley (Member)]: Just recall doing, when we're actually gonna do the T bill, is when we moved that money into I conduit remember putting things up, what's our priority, is on the 100,000 here, 200 there. But that was when we were going to sign off on the T Bill.

[Matt Walker (Chair)]: Well, think we did it both simultaneously, if there was a request, and then we figured out.

[Phil Pouech (Ranking Member)]: Yes. But not

[Kate Lalley (Member)]: for this lighter item.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: No, well, we just like, if there's Logan,

[Logan Murray (Joint Fiscal Office)]: this turns to reach you.

[Kate Lalley (Member)]: Not bad

[Matt Walker (Chair)]: things. No, no. If there's a reason why discussion time. Okay, yeah. I think I put it there as,

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: You know, if somebody wants to say fund EVs for 20,000,000, we would request to the appropriations, we want 20,000,000 for X and this went, know, this is where the opportunity to do it, because they would have to find us.

[Kate Lalley (Member)]: So if I want to request the 15,000,000 in purchasing instead of 10?

[Phil Pouech (Ranking Member)]: Yes, would go okay. This would be the time.

[Matt Walker (Chair)]: I did put it down as committed business, so I do expect some little back and forth, and we'll keep it within the reins, and if I don't like it, we'll keep on it. That work?

[Kate Lalley (Member)]: The best budget, what's out there already includes the 10,000,000.

[Matt Walker (Chair)]: Yes. Perhaps we can bring

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: up last year's letter, if that's easily found. And another question. If I had,

[Kate Lalley (Member)]: for example, in the $8.63 bill that we just presented, a lot of the things were level fund programs, etcetera, but there was a line in there that was in last year's two bill of 325,000 for drive and electric per month, I would like us to consider.

[Matt Walker (Chair)]: I would say that I suspect we could add some things that may be under consideration, depending on their dollar value, or that we are continuing to work on the budget, the not a but, but sort of how I view this is, they're looking for our reaction to the governor's budget, and they're looking for high level things that should be on their radar they're not in writing. And so I guess I have this idea. If it's got one comma, it probably doesn't go in the letter. If it's got two, it better have been already long since.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: Yeah, the question is, where are you going to get it? If you're saying, I can find it in the maintenance budget, we

[Logan Murray (Joint Fiscal Office)]: don't need to put that in

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: the letter. But if you're saying a corporation is finding this

[Kate Lalley (Member)]: money, that's something else. I don't know. And then I guess the other thing is we we had heard that maybe there's some other plans afoot to deal with the 10,000,000,000 in another way. I don't know.

[Matt Walker (Chair)]: And I would say that that is potentially outside of our piece, the governor's recommend has a $10,000 reduction in the purchase and I use would say that they probably do expect us to comment on that aspect. Might suggest that we'd be commenting on that, like we said last year, that the level of funding piece, this does remind me that it did come from, thought it came from all of us last year. I know in previous years of my time on the committee, the chairs didn't ask But for anybody's I'm not like, I want to have the conversations to a certain degree. So that's not my spot. But here's my letter from last year.

[Damien Leonard (Office of Legislative Counsel)]: So for the record, I've been in my letter from the office of Legislative Council. So you started off with a paragraph framing the ongoing fiscal challenges faced by the transportation fund, and you then advocated for discontinuing the JTOC transfer. You followed that up with a request to reallocate the revenues from the purchase of use tax to the transportation fund. And then you advocated for funding necessary to establish MBUF for battery electric vehicles. And that was the extent of the letter last year. This year, with all of these, it's important to remember that you're reacting for this letter, you're reacting to the governor's proposed budget and also including other things that you think should be in the big bill, not things that should be in the t bill. So that's sort of the distinction here that the committees draw. So if you're asking for additional funding, you're asking for support for creation of a new program, so for example if you were creating a program in T bill that was going to use general fund dollars instead of the allocated T fund dollars, that might be something that you request here, something like that. Or if part of the governor's budget was proposal to reallocate some revenues in the state, similar to the purchase and use tax proposal that's there this year, you could support or oppose that proposal, depending on how you feel about it in terms of the proposal itself and what its effect would be on T fund's transportation issues. So obviously the governor's proposal this year appears to be consistent with the proposal this committee made last year to reallocate those revenues back to transportation.

[Matt Walker (Chair)]: It's on the agenda for today. It's on the agenda tomorrow. We have agenda time if needed on Friday. So it's not like we're making decisions on things today. We're going through the same process we went through last year. I think we should do

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: the same sort of concept. Just outline our $33,000,000 gap, outline the 1.2% growth in the T fund, have a bullet point for the 3% to 4% of the cost to do these projects. Sort of hammer that home, and say, hey, this is our problem. And then me personally, Mike made a comment about the indirect mechanism that was used in the budget to backfill state dollars. We got a service, don't have a solution because it's a new revenue, but yeah, just sort of like have a bullet point, just outline our case of why we need that $10,000,000 and then

[Matt Walker (Chair)]: With

[Kate Lalley (Member)]: that, I would also, we have to say something like that, dollars 10,000,000 realizes.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: Oh yeah, yes, 100%. I

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: would suggest on the $10,000,000 for purchase and use, maybe saying that this is year one, but we will continue to recommend that every year we are keeping more of that money in the T fund versus letting it go to education. The pilot surplus, is that coming into transportation? No. So it's just out there?

[Matt Walker (Chair)]: I'm sorry.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Sounds like that might be something, if we want to go for that, to address it in this letter. Because I think a lot of the other programs we are talking about, we are assuming that we would get funding within the transportation budget and not the general fund. I could be wrong, but that's kind of how I've been.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: Yeah, no, and also too, on top of that, is the charging for the EV, $400,000 And that's what we should get in the hammer. Also, there are other things outside of the T funds that we

[Logan Murray (Joint Fiscal Office)]: received that could be

[Kate Lalley (Member)]: covered. And

[Logan Murray (Joint Fiscal Office)]: that would be a good one. I don't know if that

[Kate Lalley (Member)]: 400,000 was accurate. Well, sure you'll

[Phil Pouech (Ranking Member)]: let us

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: know what year that was paid for.

[Matt Walker (Chair)]: I don't get that. Business pays they're paying a tax on a certain portion of my electric bill we're manufactured. I pay sales tax on the entire electric bill. I pay a sales tax, I believe, part of it, but I'll look at that again. We're not going be taxing as much as we're going be electricity. But we do have a highlighted issue of that there are other areas that perhaps transportation revenues have been that are not quite allocated to us. It could be something that we discussed.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: Anything in manufacturing, in my experience, is exempt. And so if you have a combined operation, you file a certificate that says 20% of this is manufacturing imbalances, and it fuel with me, but electricity and other places. So that's how I remember that working. And it was subject to audit, and the auditors were very specific about me proving what my customer told

[Logan Murray (Joint Fiscal Office)]: me.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: Two more thoughts on that. Number one, it was mentioned Representative McCoy has a bill in energy and digital infrastructure that identifies some money that might be used to fund EV purchases. And I don't know of anything more about it, don't know where the money is coming from, but Representative Pouech, did you wanna

[Kate Lalley (Member)]: No. I mean, that was that was the omnibus Reggie. That's yeah. The Reggie money. The Reggie money.

[Rina Seto (Senior Transportation Planner, Two Rivers-Ottauquechee RPC)]: And my one last question is, when are we when do we need to get the T bill out of this committee?

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: March 13 or March 20? March 20? March

[Kate Lalley (Member)]: We give it to them a couple of days ahead of time.

[Matt Walker (Chair)]: One of the weeks we're obviously not here. March. Reference to the T Bill, I would say that for an FYI of the committee, I've been approached by the Burlington Airport. They've got some language they would like us to consider. Nobody's seen it yet. They just say they're working on it. Damien, that should be coming your way for the Burlington Airport on a piece regarding their funding, a language change regarding the T bill. There is the Green Mountain Transit language that David's going to present to the committee that they've requested. So there's a couple of And then there's the Caledonia Airport language request that's not in the T bill. So for a reminder, it will take an effect of movement that usually comes from the vice chair, about it doesn't always, but about putting pieces into the bill. We have heard testimony on the Caledonia Airport. We haven't heard testimony on another two yet. We will have to do that before that can happen. We're not going to we can't move to put it into the thing if we haven't done our due diligence. I'm saying those are pieces that are being asked for. There are potentially some others that are going to be That's asked separate from this letter. We're going to continue to work on the T Bill, and those will be in our agenda over the next three weeks. That's T Bill language. I'm getting sidetracked from the letter, but I do want you to be aware of those three or four other pieces that are looking to be added to, plus I believe there are a couple of others that are being worked on and we will have to hear more testimony on those. So we're going to get to the part where people kind of ask, well, is this the law or not the law? We're starting to head in that. We're narrowed down to that spot on pieces that we've gotten a ton of information in the background and it will be much more specific over the next three weeks to four weeks about, are we making a law change in Jordan Hawk? And You will see these gentlemen in the committee significantly more particularly in the back as we're doing that. So you'll see how that kind of changes for the reminder of we all don't do this on a regular basis. But back to the letter, highlight, we did three highlights last year. The smallest one was $3,000,000 and the rest were higher. So it is appropriations high level. Where do we stand on the budget? What do we want to highlight? And are there any other major pieces? We have asked for purchase and use to be addressed in last year's budget, which didn't happen. It's in this year's budget. We got the bill on the wall on the other committee that is signed on by most of the members or many of the members here in the committee, like what representative White has mentioned in support of that sort of stage down. We didn't finalize this for the letter, but that's the direction we've been going with the committee. So those are where we're at. So I'll try to bring us back to the letter. We're looking at three at the most bullet points. We could put some other language about what else we might be considering. And I'm going to hear more about those pieces. I guess I would assume everybody's okay with an introductory reminder of the T fund revenue being flat and budget still being under major issues. I'm assuming from sort of nods, everybody's okay with that part of the letter. If we are able to give Damian some thought on what he is going to draft, we're okay with going in that direction on the first section.

[Damien Leonard (Office of Legislative Counsel)]: It might be helpful to go through a couple of those things that you're being asked to just comment on. Because unlike last year there was a couple of language changes proposed in the bill that relates to transportation that will also want to know if you're supportive or not supportive of it.

[Matt Walker (Chair)]: You mean the big bill portion? The big bill. Oh, which is on

[Damien Leonard (Office of Legislative Counsel)]: the I can walk you through that too.

[Logan Murray (Joint Fiscal Office)]: I'll also wrap it up. I should

[Matt Walker (Chair)]: go back to you guys if I can stop talking. Alright.

[Logan Murray (Joint Fiscal Office)]: And for that so within the governor's recommended budget language, so for the big bill, there are a few transportation related language changes that I will just highlight and then we have a lot of questions maybe, Damien can dig into them. So the first one is on, I guess page four, and this is the language if you look at the letter, they linked in the letter from ACT to you all, there's a link to the governor's recommended language. It might also be on the committee page now. So, under the one time appropriations, and I apologize, I'll be scrolling a fair bit throughout here. So, let me find it right here on H. Agency of Transportation in fiscal year 2027, funds are appropriated from the following, 1,300,000.0 and change transportation funds for the FEMA 04/28 project relocating the central garage to Payne Turnpike in Berlin. You heard about this during the presentation. This is a portion of the money that will be used to build the new central garage location up on paying dirt bike. Remember this 1.36, it's gonna come up again in just a second.

[Phil Pouech (Ranking Member)]: So this is money from the transportation fund going into the buildings, the group that would build this, right?

[Logan Murray (Joint Fiscal Office)]: Yeah, it is money currently from the transportation fund in this section, but in another section, we're gonna see where we're getting This money is specifically called out from a different fund. Okay. Which is why I want you to remember that Transportation's 1.3

[Phil Pouech (Ranking Member)]: going out to whoever builds the build.

[Logan Murray (Joint Fiscal Office)]: Correct. Yeah. Whoever won the bid. Then let me find the next section. Pause this while I scroll to page seven. So within the 101 fund transfers, if you look at section two there, these are the sort of annual transfers that you do in the transportation fund. There's one for the general obligation bond debt services, 02/4000. That's also on your budget on a page sheet. These are sort of transfers that we do every year. And then the Downtown Transportation and Related Capital Improvements Fund is also one that we do annually and have done annually for a number of years. It's a sort of standard business. You then go to page eight, section seven, you'll see from the insurance reserve fund to the transportation fund, that's where we're getting that 1.36 and change. So that's where the money that's coming from the T fund to pay for the central ground is coming from this insurance reserve funds. And

[Phil Pouech (Ranking Member)]: what is that insurance reserve fund?

[Logan Murray (Joint Fiscal Office)]: Great question. I don't know the specifics. I'm guessing it's related to insurance payments for when the building itself flooded. We probably got insurance from it, but I'm not sure on the exact specifics of that fund. It made sense, but yeah. Related to that, I would imagine.

[Matt Walker (Chair)]: That seems pretty scalable. Do have on the distant agenda items. I'm not exactly sure where it's at in this spot, but an update on the entire central garage, planning, construction, where it's at and where it'll be at when we get towards the end of the year.

[Phil Pouech (Ranking Member)]: Can you tell us, like we built one up in Swanton or in District Garage. Yeah, District Garage. Where do those funds typically come from? They don't come from the T fund, do they?

[Logan Murray (Joint Fiscal Office)]: For the Vista garages, a lot of them come from the T fund.

[Phil Pouech (Ranking Member)]: Building them, okay. So here's a case where, well, it's insurance, so it seems to make sense.

[Logan Murray (Joint Fiscal Office)]: This is a portion of the funds going to build the garage. The other portion is coming from FEMA funding that we've gotten. So federal FEMA fund, they're doing a excess receipts request for the additional money coming from this FEMA IDT fund. The pay for the vast majority of it's going from FEMA.

[Phil Pouech (Ranking Member)]: So at this point in our budget this year, there isn't any T funds necessarily going directly to it. It's sort of money coming in and out.

[Logan Murray (Joint Fiscal Office)]: So yeah, I would say that this insurance reserve fund is becoming T fund and then T fund is going to, but yes, to your point, I think the answer is yes. And I

[Matt Walker (Chair)]: also just feel compelled to say the building's not 1,300,000. More than 10 times that. But that's the portion that's coming through that piece today. Am guessing, I don't remember exactly, but the building itself and the whole project in all outstanding is probably 22 or $24,000,000 and the district garage I think was 9 or Yeah, is indication there

[Phil Pouech (Ranking Member)]: where the Western money is going to come from?

[Logan Murray (Joint Fiscal Office)]: That's the theme of funding. We'll make up the majority Pretty of

[Phil Pouech (Ranking Member)]: much too.

[Logan Murray (Joint Fiscal Office)]: My understanding is that except for this 1.3 here, the rest is coming from FEMA money.

[Matt Walker (Chair)]: I have also heard, and you get that in the presentation piece, that 2,000,000 out of the 24,000,000 settlement is to go to put the land that's going to then be vacant to be, I don't if the term remediated is correct, to make it, say, floodplain use of some sort. I'm not familiar exactly with the term of knowledge. There is a couple million being spent on the site that we would be vacated from entirely. We're gonna

[Logan Murray (Joint Fiscal Office)]: jump then page 30. So this section E five sixteen related to the education fund, but this is the purchase and you stepped out. That's where this is occurring. So you'll see here the language, this is sort of changing or amending the transportation fund statute or the education fund statute, sorry. And essentially it's decreasing the amount of purchase and use revenue that goes to the Education Fund by $10,000,000 a year, until FY '29. And then in FY '30, if you scroll down to the next section E516.1, you'll see that the transfer in its entirety is repealed. So no money will be going to the education fund, all purchase and use will be going to the transportation fund. That's these two, e five sixteen and five sixteen point one is where that will be occurring. Then the last few things I believe, page 33, scroll real quick. There it is. Page 35. Okay. Page 35, section E, nine twenty three, this section this section will, language will change slightly, but the sort of what is occurring will remain the same, it'll be pushed out one year, but this would establish that all the interest earned within the transportation fund stays within the transportation fund. As the governor's recommended language had it going into place when the bill passed, but after some discussion with finance and management and some other people has decided that this will be pushed out essentially to take effect in FY 'twenty eight, so it doesn't impact the FY 'twenty seven budget because there is sort of monetary shift that would happen here. But essentially starting in FY 'twenty eight, all of the interest that is earned from what is sort of left in the bottom line of the T Fund at the year end would stay within the T Fund that could be spent on transportation things.

[Matt Walker (Chair)]: That's not the case today. That is not. I believe it

[Logan Murray (Joint Fiscal Office)]: goes to the general fund today.

[Matt Walker (Chair)]: Any idea how much money we're talking about?

[Logan Murray (Joint Fiscal Office)]: It changes depending on how much is there at year end. I believe for FY '25, I heard the number around a million dollars, but it sort of fluctuates depending on how much money is there when they close the books at the end of the year.

[Kate Lalley (Member)]: Does anyone have any idea whether education fund money has to go into general funds to this?

[Logan Murray (Joint Fiscal Office)]: I don't know. I'll defer to Chris Rutland, if he knows.

[Matt Walker (Chair)]: I'm afraid of not. Chris Rutland, fiscal of

[Chris Rupe (Fiscal Analyst, Joint Fiscal Office)]: the Ed fund retains its interest. And this looks very different from all the different funds because their cash flows are so different. So you I think a million dollars might seem really low for a fund the size of a T fund. When you really think about how the T fund operates, it doesn't have a very high average balance most of the time. Revenues come in every month, the revenues go out. We all spend in a very high interest rate environment and a high cash balance environment in recent years. I fully expect, Logan was correct, the number we received was $1,060,000 I expect that will be creeping downward in future years just like we expected to be creeping downward with the general fund.

[Matt Walker (Chair)]: We're going to make the fun change in time for us to enjoy the slow budget. To make this even more

[Chris Rupe (Fiscal Analyst, Joint Fiscal Office)]: uplifting, what Logan had mentioned, you know, we had a conversation with finance and management,

[Matt Walker (Chair)]: the treasurer's office, a lot of

[Chris Rupe (Fiscal Analyst, Joint Fiscal Office)]: us are GFOs, very expensive fifteen minutes long, and we all sort of came to the realization that if you all agree that this makes sense, it would be cleaner to make it effective for fiscal twenty eight rather than the current year, because if you make it effective or rather in '27, because if you make it effective in '27, it unbalances things with the general fund. And if you make it effective next year, we'll have to do revenue forecast, that reflects this change, when

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: the government does their budget build,

[Chris Rupe (Fiscal Analyst, Joint Fiscal Office)]: it will be factored in, and you don't have to

[Rebecca Sameroff (Deputy Commissioner, Vermont Department of Taxes)]: go in there with

[Chris Rupe (Fiscal Analyst, Joint Fiscal Office)]: a hedge and try to make things bad and so.

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: Thank you. Another

[Phil Pouech (Ranking Member)]: question, but if we're talking about this,

[Matt Walker (Chair)]: but this is where he goes and then one more section. So

[Logan Murray (Joint Fiscal Office)]: E923.1, this amends 19 BSA 11A, which is sort of the mentioned the transportation fund appropriations. This is related to that EV infrastructure fee that is charged. Now you all know that it goes to ACCD. First it has to essentially go to B TRANS who then sort of sends it. This would allow them just to make an appropriation of T fund dollars right to the Department of Housing and Community Development for the purpose as laid out when we established the fee in the first place. So this is technical, but also a policy change because the agency will no longer be sort of involved in the transferring of that money and the program itself. It won't have to go through their hands first, and it would require changing bit of statute to allow, because you can see there, we have a couple carve outs for what transportation funds can be appropriated for. This would add an additional allowable appropriation for that very specific purpose as stated there.

[Phil Pouech (Ranking Member)]: So is this just sort of cleaning it up? Because the infrastructure fee, you know, if things go as expected or as I thought to expect, they'll last maybe another two years before the mBUF

[Logan Murray (Joint Fiscal Office)]: sort of

[Phil Pouech (Ranking Member)]: kicks in. We discuss when the mBUF kicks in, that literally disappears. So is this just I mean, is it seem worth it to clean it up that, you know, we only go another year or so?

[Matt Walker (Chair)]: I it's

[Logan Murray (Joint Fiscal Office)]: a question for you all. I know last year, they the administration proposed making a special fund for these monies. I don't wanna speak to the agency or for the administration. They've tried for a couple of years to make it so it doesn't go through. Fee transfers, they can sort of speak to why they don't like doing that. We set it up in this place with the sort of expectation that it was only gonna be around for a few years and then it would sort of go away. So why create a special fund was the sort of decision you all came out to last year. It's really a policy question for you all to answer if you wanna do this for this year or keep it how things are.

[Phil Pouech (Ranking Member)]: It doesn't change anything in the money that it's still, it's just a different It

[Logan Murray (Joint Fiscal Office)]: changes where essentially how these funds get appropriate. So under this proposal, and you can see an ACCD's budget for FY '27, they're getting a $1,000,000 T fund appropriation, assuming that this goes through for that fund previously, or if we didn't do what this statute said, we would need to appropriate one time, dollars 1,000,000 to VTrans and tell them to send it to ACCD. So it's a change of how you want to accomplish this, but there is a little bit of Did they get

[Peter Gregory (Executive Director, Two Rivers-Ottauquechee Regional Planning Commission)]: a 10% final fund to kick that?

[Logan Murray (Joint Fiscal Office)]: I believe so. And I'm sure someone from the agency, I don't know if this came from Candice or the agency or if it was higher up, could tell you why they wanna do it this way over where it's going.

[Phil Pouech (Ranking Member)]: I'm curious too, on that same topic, on these transfers of the infrastructure fee. You know, we've selected million dollars, so it's been estimated. Is there ever a true up? Because I'm guessing it doesn't go exactly a million dollars. So it comes in the DMV. So, you know, is there ever a true up to make sure that they get the exact amount or does this take that away? Even though in statute, I think it says the infrastructure fee goes to ACCD.

[Logan Murray (Joint Fiscal Office)]: Yeah. I I think and I have to go back and look at how we or how the lawyers wrote the the bill. But I I believe all the revenue that is collected from this fee is supposed to go into that. I don't know if we gave them sort of the ability to estimate what the revenue would be and appropriate for every year or if it has to be the exact amount I'd wanna go back and look at that.

[Kate Lalley (Member)]: I'd be

[Phil Pouech (Ranking Member)]: curious just to see can because I think there's been some questions. It's like, is this the right amount that they're getting? Is it the amount that we've collected?

[Logan Murray (Joint Fiscal Office)]: Yeah. We can definitely look into that.

[Matt Walker (Chair)]: To be fair to everybody that's gotta go to the floor, are tomorrow morning, we've got the caucus and the election in peace. It will be tomorrow afternoon will be part of the regional planning and follow-up from all of that.

[Phil Pouech (Ranking Member)]: Discussion on that.

[Matt Walker (Chair)]: And and our any action items that come from that and this. So this is what we have tomorrow afternoon as much as when Damien and Logan are available and we'll adjust. So regardless of which way it appears on your agenda, these are the things we're working on tomorrow afternoon. So we are adjourned until we see you tomorrow on the