Vermont Legislature SmartTranscripts:

[Matt Walker (Chair)]: And we are. Alright. Thursday, 02/19/2026, House Transportation. And we've got, plans for this afternoon. We're gonna do them a little bit there in reverse. We have Damien for a limited amount of time. And we're working on our letter to the House appropriations. And then we're going to have committee discussion about the tour through the state that we had on regional planning commissions and what we did take from that, and whether there's something, anything we want to consider on there. On your calendar, on your agenda, we're kind of flipping because of availabilities and whatnot. We're talking committee's response letter to appropriations. That is basically the you've seen the budget. What's your take on it? And what should you want to highlight to us? It's pretty high level when it comes to appropriations. We're talking about the big picture. We did take a look at last year's letter, and we still have that available if

[Timothy R. Corcoran II (Vice Chair) (possible)]: we need it. And we have

[Matt Walker (Chair)]: the letter from approves what they're looking for. And then we are sort of drafting our response. And with that, Damien, we've talked about the intro of continuing to echo the transportation revenue challenges. And I saw it kind of say, we appreciate what happened last year with the Jay talk and then we had much further flood, a big hole to fill. That was sort of the concept of the introduction. And then we sort of need to talk about the elephant in the room with the purchase and use and the step down. And then anything else that we want to add. We've got some time this afternoon and we've got time available on Friday if we need to. And we need to give our pledge counsel some direction. And we have our JFO for information we need and phone with friends in the room. So I turn it over to you. That's the setting stage of where we're at, what we're working on for the next five minutes or an hour.

[Damian Leonard (Office of Legislative Counsel)]: Perfect. For the record, I'm Damian Leonard from the Office of Legislative Council. So I've started drafting a letter based on the committee's discussion yesterday and the short conversation I had with the chair after the meeting wrapped up. I do want to just note that if I've captured anything or failed to capture something or misconstrued something, just please let me know. It was not intentional. I was trying to take notes as quick as I could on the discussion you were having yesterday, and I've tried to put that into something. And I've used last year's letter as a model for this year's letter, so a lot of the tone is similar. But again, this is your letter. So please, as we walk through it, highlight things that you think are need to change or that you think needs to be expanded on or taken out, whatever it is. And this is not meant as a here's your letter. This is meant as a starting point for your discussion. So I'll share my screen. Would it be helpful to go back over the appropriations letter or just start with the draft? I'll start with the draft. Alright. K. Behind me. Just a question for everybody. I tend to run my screen with the the dark mode on. Is it easier if I switch over to the the white paper?

[Chloe Tomlinson (Clerk)]: Okay.

[Damian Leonard (Office of Legislative Counsel)]: Yeah.

[Unidentified Committee Member (possible Candice White or James Casey)]: We have to retype it or it's There we go.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. Just bear with me. Alright. So I've dated it tomorrow. The since that'll probably be when you voted out. Although, if you voted today, I'll change the the date. So, again, we start off with generally, I put basically the same first sentence in every one of these budget letters. And then the next paragraph here expresses gratitude for the work last year to discontinue the annual support for the state police known as the JTAL transfer And it points out that in fiscal year twenty twenty six, those funds enabled the state to keep up with its non federal match needs, the ongoing growth of base costs, and to include transportation program 11 paving projects, one road project, 14 rail projects, and seven aviation projects that would have otherwise been canceled or postponed, and to provide additional funds outside an employee overtime for winter road maintenance, which is probably good given the winter we've had. And then I go on in the next paragraph, or the letter goes on in the next paragraph to say, nevertheless, Vermont continues to experience significant transportation funding challenges. Transportation fund revenues have increased by only 1.2% relative to last fiscal year, resulting in an estimated 33,400,000 shortfall for the state match for federal funding. Without those funds, the state would lose access to an estimated $163,000,000 in federal funding for transportation projects. That deficit is projected to grow in future years, which could lead to maintenance backlogs, increased repair costs for deteriorating infrastructure, and a greater percentage of Vermont roads in poor condition. At current transportation funding levels, the agency projects that roughly 60% of state roads would be in poor condition by 2030. I think again, I've drafted this fairly quickly. I think there are other details in here that I have likely overlooked. But I wanted to stop and discuss the introduction and whether that reflects the committee's sort of feeling and intent or whether you'd like to change the language.

[Matt Walker (Chair)]: You scroll back up over to the. Thank you.

[Damian Leonard (Office of Legislative Counsel)]: And I I pulled the numbers for fiscal year twenty twenty six from our letter for last year, so this actually tracks the language that we put in there.

[Matt Walker (Chair)]: Are these numbers I don't know if they've

[Damian Leonard (Office of Legislative Counsel)]: gone through the GFO or the agencies. Anybody nobody's had a chance to review them with any anyone. I drafted them on last

[Matt Walker (Chair)]: the sidelines if they had a chance to just double check them and make sure that they're that they match with their numbers at some point in between today and tomorrow. Just wanna be certain. I'm sure they didn't come out of nowhere, so I appreciate that. Just to make sure we're all on the same page. I don't know if it needs to be quite as long, but it Yeah,

[Timothy R. Corcoran II (Vice Chair) (possible)]: I mean, only thing I would Long. I would like to add.

[Matt Walker (Chair)]: That's quite all right. I'm saying that some of it might be able

[Damian Leonard (Office of Legislative Counsel)]: to shrink a little bit. You The could

[Timothy R. Corcoran II (Vice Chair) (possible)]: 1.2, the reference to that, I think, asking correlation to the increase in construction costs. Know, to 4%, that really hits a home on the thing. Obviously it sort of says that, I think you put in the, and I think 3% is low. I think I've heard about three, five, 6% cost of construction. I guess we'd go with a lower number, doesn't add up to the 1.2. I'd make reference to that. And I would make reference to the fact that how the budget was constructed of $12,000,000 this year and 12, roughly 12,000,000 next year, indirect again official terminology, the indirect cost and sort of how that water down the federal money because we're diluting the federal dollars. So when we're saying we're not leaving federal dollars on the table, technically that's true, but we're leaving projects on the table. I don't know how you say that, but I think that, you to point it out.

[Matt Walker (Chair)]: That is part of the next step of saying we didn't we have a financial situation. In this year's book, for last year, thank you for last year. Here's the overall trend that it's down, instruction's up, and that continues to happen. And then to build this budget, there is this, in addition to our problems, $32,000,000 hold, there is the indirect cost ratio And reduction in force. You're going to mention that. I think we should also be mentioning reduction in Yeah, that's in force. I'm not sure if we put it up first.

[Phil Pouech (Ranking Member) (possible)]: Well, it's first.

[Matt Walker (Chair)]: By the way, I haven't edited on this at all yet.

[Unidentified Committee Member (possible Candice White or James Casey)]: Yes, you're up. Sorry.

[Patricia McCoy (Member)]: We've spent an awful lot

[Phil Pouech (Ranking Member) (possible)]: of time in this committee talking about the impacts to our communities, about the reduced availability of funding for roads because the priority is to do national highway system and the interstate, above all, understandably. So I wonder if it would be appropriate to put something in there about bringing it home to our towns, or going to see fewer resources. Because that is, it seems, the existential issue for us that

[Patricia McCoy (Member)]: we're confronting.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Well, you could make reference that we're only meeting a third of the requests there. That's true.

[Patricia McCoy (Member)]: There you go, something like that. Yeah. Just

[Phil Pouech (Ranking Member) (possible)]: speak to that so that it's at both ends, in other words.

[Damian Leonard (Office of Legislative Counsel)]: Is that one third of the municipal requests?

[Timothy R. Corcoran II (Vice Chair) (possible)]: Yeah, I don't know if it's across the border or was this class two? Well, it's the grants. The municipal grants. Yeah,

[Unidentified Committee Member (possible Candice White or James Casey)]: roughly, we need about a third.

[Phil Pouech (Ranking Member) (possible)]: Maybe something like these effects are systemic. This is a transportation network and the effects are systemic or something like that. So just to sort of vividly portray what the range of impacts

[Patricia McCoy (Member)]: Make it very legible.

[Timothy R. Corcoran II (Vice Chair) (possible)]: A tape hammer in there and hammer it over your nose. It was like probably doing math in public.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. So I'm taking rough notes for myself here. And I'm gonna rely a bit on Logan and Candice and Chris to help me fill in some of the details here. Admittedly, I was rushing up until five minutes before trying to go through Logan's presentations on the budget to fill in details. And I know there's more out there that I've overlooked that all of you are more familiar with than I am. So and the order here may not remain as we do this. Other notes?

[Patricia McCoy (Member)]: Let's I guess

[Matt Walker (Chair)]: Did we get a note on the indirect cost? Indirect indirect cost rate for at least two years. 12,000,000. And what was the projection for next year? Representative White is up in just a second here. He's both here.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Go ahead.

[Patricia McCoy (Member)]: You ready for me? Okay. Would you mind going back to the first paragraph, Daniel? Mhmm. Okay, this sentence, I'm a little confused. I'm just gonna read

[Kate Lalley (Member)]: it out loud. In state fiscal year 2026, those funds have enabled the state to keep up with its non federal match needs, address the ongoing growth in base costs, and to include to include in the state transportation program I'm just confused about the punctuation. Yeah, like maybe as a colon. Some

[Damian Leonard (Office of Legislative Counsel)]: other colons. Yeah.

[Kate Lalley (Member)]: Let's see. Those funds have been able to stay to keep up with the state. Address the ongoing growth in base costs. I'm I'm just not sure where So

[Damian Leonard (Office of Legislative Counsel)]: item one, nonfederal match needs. Item two, address the ongoing growth in base costs. Item

[Kate Lalley (Member)]: Three. Okay. So so Including the state transportation program. And on the additional

[Patricia McCoy (Member)]: additional 11 paving projects, one roof project, 14 rail projects, and seven eighty, they would have otherwise been provided.

[Kate Lalley (Member)]: Provided,

[Patricia McCoy (Member)]: Provide Provide it. Additional funds for salt.

[Damian Leonard (Office of Legislative Counsel)]: Does that make more sense? I could also

[Kate Lalley (Member)]: Yes. Bullet it or some

[Unidentified Committee Member (possible Ken Wells or Chris Keyser)]: No.

[Kate Lalley (Member)]: I think that's the punctuation is

[Chloe Tomlinson (Clerk)]: Yeah.

[Kate Lalley (Member)]: Correct. Yeah. Yeah. That's much clearer.

[Damian Leonard (Office of Legislative Counsel)]: So I I'll apologize for the grammar and style. This was a Yeah. We just wanted a rough draft to start with. Okay. I have not gone through this before.

[Timothy R. Corcoran II (Vice Chair) (possible)]: No. It's based on appreciate

[Matt Walker (Chair)]: Yeah.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. If something doesn't make sense, just let me know. There are times when things tumble out and it doesn't it it's not English at the end of the the writing process. Other questions and thoughts? So when we kind

[Matt Walker (Chair)]: of if we decide to bullet it out or forgot, we've got sort of the, thank you for your work last year. Financial structural problems continue to exist. Piece of the money's with that. Now the building of this year's budget included the indirect, sort of almost ABCD, the indirect cost ratio, the reduction in force and the rollback of, well there was changes in other cutbacks and then it's the purchase and use piece. So it's sort of a one, thank you. Two, this financial constraints still exist and structural issues need to change. And number three, here's how they built the budget. The major factor of building a budget has at least three big subcategories that we're concerned about. The indirect cost ratio, the RIF, and purchase and use. We really need to highlight then maybe I need to slow down.

[Damian Leonard (Office of Legislative Counsel)]: Is the indirect cost ratio forgive me, I'm not familiar with this term. Is this the reduction in projects over time that we're seeing? Or Okay.

[Matt Walker (Chair)]: Sync has shifted. My understanding, and I'll hopefully get corrected on is an effort inside of the financial aspect of building the budget that allows us to use federal money to cover operational expenses, indirect costs related to projects. We're going to save $12,000,000 We're gonna use $12,000,000 of federal money to pay indirect overhead expenses. Normally, you would not do that. You would want that money leveraged against construction projects. But to make this budget work, they're using a method, a rarely used method to, that's generally during tougher financial times, which this is in transportation. And it's projected to in effect, save $12,000,000 of TIFON money this year and next year. If that helps you what it is. Did I get that close? I see

[Timothy R. Corcoran II (Vice Chair) (possible)]: a nod from that. There's a memo on this.

[Matt Walker (Chair)]: Which we did cover, but the downstairs has been monopolizing our pledge council's time. But they'll have that misleads all tied up by the time he comes here.

[Damian Leonard (Office of Legislative Counsel)]: Hopefully, everything but one section by tomorrow.

[Unidentified Committee Member (possible Candice White or James Casey)]: We're sort of But to

[Timothy R. Corcoran II (Vice Chair) (possible)]: really wrap that up, I think we should end the line. While not leaving federal dollars on the table, but leaving projects out.

[Matt Walker (Chair)]: That's my estimate. Built out a $6,000,000 project. 55,600,000.0.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Well, that's another. Yeah, that's on top of the indirect. But the indirect, that money's not gonna go towards. Prospects. I just think it's sort

[Matt Walker (Chair)]: of as Indirect. Yeah, incorrectly. Inirect. We want to consider, and I know it's hard to do on the spot so we're not in a hurry either, I could see in effect bullet points under the sort of 2027 budget build and those bullet points are going to be the indirect cost ratio, the reduction in force, the purchase and use, the drop of the delay of projects, unfunded or delayed, I don't know which way we would say that. So in effect, you've got that sort of title of the 2027 budget and at least four bullet points underneath it that are of concerns to us. But what we spent our time trying to understand.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Least we agree with 1,900,000.

[Matt Walker (Chair)]: On an outline sort of basis. Because we're not gonna expect them to be trust me, Damien, we are totally gonna edit it and work with it. We just wanna make sure the committee hears all of the conversation, has their input. Yeah. If there's anything else that we want to make sure is in there, will people hear how it was built. Hopefully a lot of that sounds like review to others that were in the room. Understanding where to Right.

[Damian Leonard (Office of Legislative Counsel)]: I know you were talking about shortening it before. This may end up pushing us into maybe two paragraphs here, so it's not a long dense chunk of text. And it or one paragraph with bullets and then one summary.

[Matt Walker (Chair)]: When we get into that fourth or fifth bullet about purchase and use, that the $10,000,000 well, not sure it's exactly 10,000,000, but whatever the number was, it was basically 10,000,000, to leverage 53,000,000 to $6,063,000,000 total. Yeah.

[Damian Leonard (Office of Legislative Counsel)]: And that's that's actually discussed in more detail in the next section. So are we good on the first section? Well, I'm Well, I

[Matt Walker (Chair)]: mean Yeah. We're gonna go back and readjust it and edit it. But I I think we're gonna I mean, I guess that's a good spot to stop and say that as far as building the budget of 2026 and where we offer anything else that comes to mind or peace. Or we'll come back to it. Don't see any hands raised right now.

[Patricia McCoy (Member)]: What's the title of this one?

[Unidentified Committee Member (possible Candice White or James Casey)]: Letter to the books.

[Damian Leonard (Office of Legislative Counsel)]: Just subject to state fiscal year 2027 budget. Okay. Yep. So the next section begins, the committee supports the proposal in the governor's recommended budget to gradually draw down the percentage of the motor vehicle purchase and use tax revenues that are transferred to the education fund and to reallocate that money to the transportation fund moving forward. Probably not the best sense, but the $10,000,000 proposed to be reallocated in fiscal year twenty twenty seven will provide the state match for roughly $63,000,000 in federal funding. The gradual reduction in the purchase and use tax revenues transferred to the education fund and the elimination of that transfer by 2030 will help to address the ongoing costs and funding pressures in the transportation fund. And then the next paragraph notes that the committee acknowledges the significant funding challenges faced by the state's education system and believes that a gradual reallocation of purchase and use tax will help to ensure that the funding transition can occur in concert with any reforms to the state's education funding system. That's essentially verbatim, something you said last year. The committee believes that this gradual reallocation of the purchase and use tax to serve its original intended purpose will help to ensure the ongoing health of the transportation fund in a manner that supports the maintenance and improvement of the state's transportation infrastructure. Again, those two sentences are very close to something that you wrote last year. Is there a way to sort of say,

[Matt Walker (Chair)]: while recognizing this puts I guess we are saying that significant can say differently too. House Appropriations Committee to build the statewide budget that we recognize we're putting additional work on them to solve one problem creates another. But this is what we wrote last year, almost verbatim. This is what we're at this year, the governor included in the budget. But we may want to acknowledge the additional pressure we're putting on them. I don't know if that's fair or not, but

[Unidentified Committee Member (possible Candice White or James Casey)]: go ahead. No. It's probably not. News to the committee, I'm not big on this. I mean, it didn't solve anything in my opinion. Mhmm. And while it would be nice to transfer the purchasing use back to transportation, I'm okay with it. But until you solve the other, this just creates a cold somewhere else. And it doesn't do anything even for the long term funding for transportation. So

[Matt Walker (Chair)]: What do mean that doesn't do anything long term? If we keep it all here, you know

[Unidentified Committee Member (possible Candice White or James Casey)]: what saying? We're gonna run into a point where that purchasing use isn't providing the funds necessary. This this will get us through maybe three years. Without doing Something else. On the Tax. Revenue enhancement of some sort.

[Matt Walker (Chair)]: I'd rather I mean, I'm I'm I'm not uncomfortable saying I'm not uncomfortable saying it if I'm saying it for you I'm or not uncomfortable saying it, that if you were suggesting this is going to take us through the four years of transition to get to the 50,000,000 that we talked about, or 30,000,000 that's left, so it would be one, two, three, four years, the revenue continues to go down, expenses continue to go up. If you're looking at introducing the idea that you want some level of support around additional revenue enhancements of some sort may even be needed, I'm putting words in your mouth.

[Unidentified Committee Member (possible Candice White or James Casey)]: Yeah, I think it is temporary and it does create a hole somewhere else. So we could say, well, we're not gonna raise gas tax, fine. You're gonna raise property tax by doing this. I'm just saying that. The the education costs this year are not gonna go down. And so if we came for 10,000,000, then it's gonna go to property tax. So I'm just uncomfortable saying, you know, without acknowledging this isn't really a long term solution. I gotcha.

[Matt Walker (Chair)]: Representative Tomlinson and then Representative White and then come back around. If you were I

[Unidentified Committee Member (possible Ken Wells or Chris Keyser)]: think to address that concern that while shifting the purchase and use tax back to the T Fund addresses part of the problem, it certainly doesn't, I would say, ensure the ongoing health of the T Fund. It helps limit the losses. But at least my understanding of testimony from JFO was that we're still seeing a delta between where we need to be, even with the full transition of the purchase and use tax back to the T Fund. So I guess my main concern with this as written is the phrase ensure the ongoing health, because I think it might be important for folks to understand that for the long term health of the T Fund, this alone isn't sufficient.

[Kate Lalley (Member)]: Represent what? Yeah, on the same topic. The phrase is, will help to ensure So I read it as, this is one measure that's going to help, but it's not the only And I was going to suggest that perhaps we add a sentence at the end there to say the committee continues to look at other potential revenue generating ideas, are just MBUF, when it is ready to roll out, will be something. We've talked about gas doing something with Anyway, so we are talking about those, and I think I would acknowledge that we are continuing to look for other sources to build more revenue.

[Timothy R. Corcoran II (Vice Chair) (possible)]: And it supports out of my mouth. I was just say that, just to point out the other things, but maybe we could restructure that top paragraph saying, while this transfer is not going to truly fix the underlying financial issue or problem that we have in transportation. This is a means to get us through the transition period of deteriorating funding through the purchase and use. And then we recommend the appropriations committee to look at the tax on electricity, which is roughly 400,000. And then we can just come up with like bullet points of maybe them clawing back taxes on trail. I mean, just something for them to consider while we're making, clawing back some purchase of use to say, hey, we know this is a short term, but the long term, we need substantial revenue source. Let me get out longer. Yeah, it was the same thing. It's not long term, but it was ours in 'nineteen. So, I mean, it all helps as far as that goes. And the governor's never gonna

[Matt Walker (Chair)]: have

[Timothy R. Corcoran II (Vice Chair) (possible)]: gas tanks tanks while he's in office. That option will never be there. He's made that clear.

[Matt Walker (Chair)]: That is certainly true, that he's made that clear. But I would be willing to say that the committee has been open to some level of revenue enhancement or adjustment at some point is likely to be needed is what I would hear. We spent a significant amount of time last year taking testimony of not just gas tax, we chose the Woodbury Fee last year, we talked about tires at one point, we talked about rental car fees, we talked about We went through I'd have to go back and look at it, but we went through about six or seven, at least, different areas of residence enhancement. They're not part of this budget, and they're not part of the solution, and I don't think that we can make that happen in the budget. But we probably say something in the letter, I guess. I'm open to that. It doesn't mean that everybody is, but I am not, I think I've made it clear when you were talking before that this is transportation money that was used when the education fund was in trouble. And now we are, the transportation fund is in trouble, education has obviously found a lot of ways to get funds. Transportation has not. We may need, if you're looking to put in something that talks about that this is not the end of this, We'll be back again and again at some point. I'm open to that. That's where the last three or four pieces have of We wouldn't have spent the amount of time in committing on it that we have if that doesn't recognize that this is one piece of a solution. Think that, yes.

[Phil Pouech (Ranking Member) (possible)]: Maybe we should be really out there and say, transportation is the heart and soul of our communities too. This is just beyond frustrating to me. And I think we should be very blunt about saying that this is an important first step.

[Matt Walker (Chair)]: At least the second, because we did thank them for their work last year. I'm sorry to interrupt

[Phil Pouech (Ranking Member) (possible)]: In regards to getting to purchase and use, but say that the need is far more substantial than this. Because I think that is what we're having a hard time communicating somehow. I'm not sure why. I have not been shy about being very frank about it. But I think we need to just be very clear. This is our opportunity to sort of put them on notice that

[Patricia McCoy (Member)]: the significance of the challenges that we're facing in the sector. Representative McCoy? I'll say it again, I mean, the 50,000,000 now, I think we should ask for the 50,000,000, and that would be incremental ten year. You know, we give, we're going to be giving millions and millions to education. We've given $270,000,000 above the $1,400,000,000 we give them every year. They have taken $270,000,000 from the general fund. We're asking for our 50 from purchasing this. Kate said.

[Matt Walker (Chair)]: You're talking about the amount of money we've used as an estate to buy down property taxes in the last three years. Three years. Does that include this year's amount that's proposed?

[Unidentified Committee Member (possible Candice White or James Casey)]: That's $7,170.

[Patricia McCoy (Member)]: That's how much we get. And we're asking for our money back. I mean, we've given it to you how many years? It's like, we can't do it in you. It's like the heart and soul. You know, we take the brunt here. How come you're

[Unidentified Committee Member (possible Candice White or James Casey)]: not doing anything about roads?

[Patricia McCoy (Member)]: How come you're not doing anything here? Because we have no money. And if you give us our 50,000,000 now, instead of parceling it out over five years, then perhaps we can build on it, put some of it in the slush fund and earn interest, and digging it out in parcels over five years to get us maybe, instead of being 60% or both, maybe they're only 1% or 10%. You keep hearing me say 59. Okay, there you have. Put it out there. Put it in the letter. We put the 20,000,000 in the letter. We claw back the JTOC money, we did, we got it. We didn't claw back JTAC, we'll take $5,000,000 this year, and for the next four years.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Well, it's alright if we didn't claw back, that looked like twenty years to claw back. Or maybe longer. Is that

[Matt Walker (Chair)]: right to ask for it, it finally happened last year? Yeah, that took a lot. Well, I guess to the earlier point, have we conveyed the need enough, or do they know the need enough? And it isn't just the need of this one budget. All of the things that we sort of talk about that we aren't able to do.

[Unidentified Committee Member (possible Candice White or James Casey)]: Right, there are some things.

[Matt Walker (Chair)]: That we're not able to do. We also want to be very cognizant that we are a revenue and a policy committee, don't know how that gets phrased as well. And we are not looking to pass the buck on the request. We know that this is going create a problem elsewhere. I I don't want to say that the wrong way. I support putting a statement like that in the letter that says, We realize this. We're not just a policy committee that is saying, Send me money. We are saying, We have a certain amount of revenue. The demands are much greater, and I don't know that the building's aware of the amount of their town requests, their additional pieces. We should get that money back because transportation is supposed to be a user funded

[Unidentified Committee Member (possible Candice White or James Casey)]: partner. So purchase and use that money is for purchasing vehicles that are gonna use transportation, Vehicles, trailers, whatever. So that money should've come back. I'm just pointing out by doing this, we do cause, you know, we cause a hole somewhere else. Sure. That, you know, this isn't gonna even, you know, pulling it back ten million years, we're gonna run into such a problem. Well And just sort of saying that with the technology. And we're This is a year that sort of patch everything up and keep going. I'm just not hungry.

[Matt Walker (Chair)]: Are able to get that 10,000,000 back? Well, it's in the government's budget right now, and we haven't voted on the budget. We haven't gone through all the language, but it's in the budget right now. Whether we change that in the next three or four weeks, it's in there now. It's in there as the writing of this letter. It's in there. Well, education's not gonna let go of that, are they? Are absolutely correct. That is conversations going on echoing throughout the building and are not They're not decided in this committee. I would expect, I don't know this, but I would expect that we're going to keep the $10,000,000 We have asked for it as a committee. We put it in our letter last year. Everybody's on the committee that asked for it last year. Said it in last year's letter. We're supporting it again, I believe, here. But whether it gets adjusted or stripped out in either the two other financial committees that touch it, that remains to be seen. I think we're trying to craft our letter in a way that says, we need this money. It leverages $53,000,000 or $63,000,000 more in work. It's not going to be enough. Revenue enhancements perhaps should be considered, but we recognize that that's not going to happen in our committee.

[Unidentified Committee Member (possible Candice White or James Casey)]: Future years won't look out of the things. And

[Matt Walker (Chair)]: then We'll see where that goes. But we want to highlight that we are already doing this indirect cost ratio. We're also reduction in force, both in the fall and this year. I don't want the letter to go on forever, but we're trying to outline why. And we recognize that we're not getting far enough on the money that's in our spot. So this is why Damian's putting it all together at the end. It's sort of a bullet point. And am willing to acknowledge that more need to be done. I would be willing to say that we really need the money now, but we're trying to be sensitive to the issues of other areas. And we have to continue to work together to solve this in the long term.

[Unidentified Committee Member (possible Candice White or James Casey)]: I mean, think the bottom line is if you say, we don't get the money, we are leaving federal money.

[Matt Walker (Chair)]: That 53,000,000 is pretty darn clear. That's pretty But we are supportive that it's going to have to be governed again next year. Other measures we need 20,000,000 next year. It's gonna be 20,000,000, yes. That is the representative? No, honestly,

[Timothy R. Corcoran II (Vice Chair) (possible)]: technically we're not leaving federal money on the table. That money we were drawing it down from was,

[Unidentified Committee Member (possible Candice White or James Casey)]: we had turned it down

[Timothy R. Corcoran II (Vice Chair) (possible)]: to advance. So it got anticipated, right? It's like advanced federal government. Advanced construction. Advanced construction, yes. So it's not like the government said, we're not leaving federal money on the table. That's what we anticipated. Then when you get on the floor, you're

[Matt Walker (Chair)]: gonna try to discuss the fact that we're understanding that indirect cost ratio, some would argue, is money that could have otherwise been applied to construction.

[Timothy R. Corcoran II (Vice Chair) (possible)]: That's what ours.

[Matt Walker (Chair)]: Representative Lalley?

[Kate Lalley (Member)]: I think that it is important to put a sentence in there about the agency's proposed cuts to full time employees. What is it, 50 something? To me, that's a significant data point to show that these are serious concerns. And just in response to Representative McCoy's suggestion to take the 50,000,000 now, I think that the tiered approach of 10,000,000 a year is responsible because we are expecting that this education reform kick in in 'twenty eight, 'twenty nine, and so we're giving them a little bit more time to ease into this.

[Patricia McCoy (Member)]: The other thing I want to you know,

[Timothy R. Corcoran II (Vice Chair) (possible)]: that keep talking about a dot,

[Patricia McCoy (Member)]: a dot could be $50,000,000 more. Chair is talking about a dollar. Like $50,000,000 more it could be. But the other issue is, you know, we know what our budget is. It's drawn up and we know what it is. As far as education is, we don't. We get a dissonance and tax letter that says, Oh, by the way, you're 12% show. We And we continue to give money to them that we don't, that we need. And that's my concern. Showing people the implications letters of results of this is helpful. But I do have a question on the 12,000,000 indirect costs. So that could be used for federal match. Why couldn't this 10,000,000 be used for federal match?

[Timothy R. Corcoran II (Vice Chair) (possible)]: Was it done after the fact? Excuse me? The administration put the budget together. It was all done, sealed up, ready to present it to us, and then I believe the governor says

[Patricia McCoy (Member)]: there's I 10 don't understand why, so why can't we say the 12,000,000 in indirect costs, we use the 10,000,000 of this money, and then the 12,000,000 that we didn't take for indirect costs could be used. I'm trying to figure out

[Timothy R. Corcoran II (Vice Chair) (possible)]: how you- You could take that 10,000,000 and not do the, I mean, you could probably do that, but then you're not drawing down the projects. You can't actually be able to draw it down. Yeah, you can't do both, but you could take the, you you could, yeah.

[Patricia McCoy (Member)]: I don't understand why we use the 20,000,000 at JTAG.

[Unidentified Committee Member (possible Candice White or James Casey)]: Don't we need to leverage for federal money? Yeah, goes to the bottom line.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Well, mean, it could still go to maintenance.

[Patricia McCoy (Member)]: So why doesn't the 10,000,000 go to the bottom line could be used for federal money?

[Timothy R. Corcoran II (Vice Chair) (possible)]: That's what it does, it goes, and then they drew down 60,000,000 or $50,000,000 Oh,

[Unidentified Committee Member (possible Candice White or James Casey)]: okay. And we did get a better answer.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Yeah, I was saying, the incorrect, they put the budget together, and then 10,000,000 And in their that's why they did Well,

[Matt Walker (Chair)]: I wouldn't agree with that statement, but $10,000,000 When came in the last

[Timothy R. Corcoran II (Vice Chair) (possible)]: the budget was

[Unidentified Committee Member (possible Candice White or James Casey)]: scrapped at the very

[Matt Walker (Chair)]: One suggestion. We don't have a full confirmation of that. That's a bit of an assumption. I may agree with it, but it's an assumption. We did not hear that in testimony. We did not.

[Unidentified Committee Member (possible Candice White or James Casey)]: We did not hear that in testimonies. For projects that this $10,000,000 is going to fund,

[Patricia McCoy (Member)]: there is federal match that's going to go along with it. So anything in the white book that's out years, those also you can consider advanced federal matches, because we haven't in the White Book for couple of years.

[Timothy R. Corcoran II (Vice Chair) (possible)]: But they're not gonna be physically getting money spent on them. We're actually expending this money. The 10,000,000. The 10,000,000. So the point is the very good rough, because just stop and they're like, oh, we're not getting that base funding of, mean, that has happened, but theoretically when they do the reauthorization that see. It's We're just like, oh yeah, we already anticipated this money.

[Patricia McCoy (Member)]: All right, but in a year that we were assured of getting federal monies.

[Timothy R. Corcoran II (Vice Chair) (possible)]: We typically are, maybe we've never been, but just assuming it's going to be the same trajectory. We're just taking it out.

[Patricia McCoy (Member)]: You're saying it in advance because we don't have the money.

[Unidentified Committee Member (possible Candice White or James Casey)]: We don't know if we get the money. But

[Patricia McCoy (Member)]: we're Yeah. Alright.

[Matt Walker (Chair)]: I get it. So, to bring it back

[Damian Leonard (Office of Legislative Counsel)]: a bit, then we

[Matt Walker (Chair)]: are going to outline under this sort of topic of the 2026 budget those bullet point ideas of the indirect cost ratio, the reduction in force showing the seriousness of the situation and the purchasing use, and acknowledging that this is the evenly step down approach is a three to five year solution that, and then there's part, if it's not combined with some other revenue enhancement, we're right back where we are right now. Something to

[Timothy R. Corcoran II (Vice Chair) (possible)]: that effect, hopefully you'll do a lot

[Matt Walker (Chair)]: better than I did. Because that's what I think that I'm hearing. Inside of other parts was the next possible suggestion. But wait, you got a few I'm pulling the notes on that. Are you sure?

[Timothy R. Corcoran II (Vice Chair) (possible)]: I gotta take an hour break.

[Damian Leonard (Office of Legislative Counsel)]: I'm just gonna I'm just gonna make a a note here.

[Matt Walker (Chair)]: Take it off the screen and use the notebook if you want. You don't

[Damian Leonard (Office of Legislative Counsel)]: want everybody to stop my share.

[Matt Walker (Chair)]: Just wanna take your notes. You Yeah. Don't want to take your notes in front. I want to make sure that we're there. You understand that part. I did think Wait for a second. I I was gonna have beach for a punt for the event. I can

[Unidentified Committee Member (possible Candice White or James Casey)]: walk to New York.

[Patricia McCoy (Member)]: I know,

[Phil Pouech (Ranking Member) (possible)]: for swimming in seven years.

[Matt Walker (Chair)]: I wouldn't do it. You know, how many you think there'll be some people fall through? They're gonna walk across on the edge of New York and realize that Absolutely. Be a truck. Absolutely. That happens up our way at least. Brand new truck.

[Unidentified Committee Member (possible Candice White or James Casey)]: Every That's such a.

[Matt Walker (Chair)]: It froze freezes, though, it happens every year. There's at least one truck up our way that goes under. We've had people pass.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Always on the news there.

[Phil Pouech (Ranking Member) (possible)]: Collect people

[Patricia McCoy (Member)]: out on the ice. Mhmm.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. Skating, then a

[Timothy R. Corcoran II (Vice Chair) (possible)]: hundred hundred on the ice a week truck. Yeah.

[Matt Walker (Chair)]: Are you It's funny interesting. That one in transportation. We can spend some time on this after, too. Don't know it's I think we know from saying that. Yeah. There was a suggestion, I don't know if I understood it exactly or not, but that after we sort of outlined this, what we've just done, big financial picture, here's the building of the budget, these are the concerns. There's also this concern that this is a three year medium range solution that without additional revenue enhancements would be an issue. There was a suggestion that you were saying there were some revenue enhancements that should be looked at. I thought you were talking about some of the sales tax items that perhaps should be purchasing used items. The mileage based user fee should be coming on board. We're also gonna spend some time looking at electric chargers. We've had some other discussions of potential revenue pieces. I don't know how far down the path to go with that, but there was sort of I would say,

[Timothy R. Corcoran II (Vice Chair) (possible)]: hey, these what some solutions for your considerations. You know, we don't have that ability to do it ourselves. Yeah, Whatever the top three are.

[Matt Walker (Chair)]: Oh, I was just trying to throw a few of the ones that we talked about in

[Timothy R. Corcoran II (Vice Chair) (possible)]: the committee. We should put something on You the

[Unidentified Committee Member (possible Candice White or James Casey)]: know, could put in there that we've continually encouraged incorporation of the end of, and we will continue to encourage other opportunities as they come. So like the

[Timothy R. Corcoran II (Vice Chair) (possible)]: tax. Tax. I'm

[Unidentified Committee Member (possible Candice White or James Casey)]: not, you know, I think when you bring it up, it's just confusing. Are they talking about? And it's not that much, but you know, will be something when we want to look at it.

[Matt Walker (Chair)]: That's when they won't give it to us. Yeah.

[Timothy R. Corcoran II (Vice Chair) (possible)]: That's the thing is you gotta get out of this on the ground floor. Yeah.

[Patricia McCoy (Member)]: Alright.

[Damian Leonard (Office of Legislative Counsel)]: So I've got the start of a paragraph there that by itself, the gradual reallocation will not be enough. Oh, I'm sorry.

[Matt Walker (Chair)]: That was my plan, wasn't it? We didn't wanna we didn't want you to have to do your work in

[Damian Leonard (Office of Legislative Counsel)]: public. It's just the start of a paragraph here, so do bear with me. By itself, the gradual reallocation of funds will not be enough to address the ongoing revenue challenges faced by the transportation fund. And just shorthand here, that fund will need additional revenue in future years to address the ongoing challenges. And I'll make that sound better. For this reason, we encourage the appropriations committee to consider the following potential sources to help address these challenges. And

[Matt Walker (Chair)]: then

[Damian Leonard (Office of Legislative Counsel)]: there were others mentioned.

[Matt Walker (Chair)]: Bueller? What was that? Dealer. It's okay.

[Damian Leonard (Office of Legislative Counsel)]: Other other potential revenue sources?

[Timothy R. Corcoran II (Vice Chair) (possible)]: The trailers. I mean,

[Matt Walker (Chair)]: wasn't that one that It was trailers. Maybe like I said, I don't know.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Maybe should just be general. Potential Yeah. Current sales tax that could be Channeled. Channeled back. Yeah. Yes. Something like that.

[Unidentified Committee Member (possible Candice White or James Casey)]: Maybe it says the committee will continue to work to identify funding sources and including in Cody, James and M. Buff. So that one we know we're going after. The others, would be typical after.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Yeah, yeah, let me just

[Matt Walker (Chair)]: say general because again, let me

[Timothy R. Corcoran II (Vice Chair) (possible)]: start outlining and I just use them, but let's say there's opportunities in the general. We

[Unidentified Committee Member (possible Candice White or James Casey)]: continue to work on this. You know, something like what Kate said, you know, our understanding of long term transportation needs or how important they are or something like that. Yeah.

[Phil Pouech (Ranking Member) (possible)]: I just want I wanna raise this as, like, we are the existential crisis that no one's paying attention to right now. You know? Because

[Damian Leonard (Office of Legislative Counsel)]: That might make sense in the opening paragraph is to say something about how without good roads

[Unidentified Committee Member (possible Candice White or James Casey)]: Oh, good transportation systems. I mean, roads, public transportation, whatever. You you know, O and D, you know, trips, all that, without that. Tourism.

[Phil Pouech (Ranking Member) (possible)]: Emergency management, rescuing you when you have, there's a flood or getting your fire and rescue to your house, getting to your job, getting to school, all of that stuff, getting food.

[Patricia McCoy (Member)]: The tapestry that performance is, and they read throughout. It was all about this. Tapestry is thought. The tapestry that we're going, mom should think of this, she's our artist. Well, is. Our roads are the threads that draw us all together. They are, literally, yeah.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Backbone is good.

[Matt Walker (Chair)]: We do have somewhere in there the town needs and the regional needs that are not being met earlier in that part we had that.

[Patricia McCoy (Member)]: Visible no more with your education committee. Did you all see that letter that came from Richard St. Paul, came to our community senate on the delivery fee? Oh, That's not me. Know what? That might be more than 60.

[Kate Lalley (Member)]: Are you laughing at it because you read it? Correct. Okay. Point is it's

[Patricia McCoy (Member)]: a double tax because the gas is supposed to be covering pasta grains.

[Kate Lalley (Member)]: And that is I mean, it looks like that's a really

[Patricia McCoy (Member)]: good point. It's because it's extracted with

[Kate Lalley (Member)]: the gas tax. It's not supporting

[Matt Walker (Chair)]: Yeah. The roads

[Timothy R. Corcoran II (Vice Chair) (possible)]: And

[Patricia McCoy (Member)]: so we're trying to find all these other solutions, but it's the gas business.

[Matt Walker (Chair)]: How are you feeling? Something along these lines. We're gonna talk about it a little bit more. I understand you have a other commitment. I've got a bit of an outline of what

[Damian Leonard (Office of Legislative Counsel)]: I think it's So I've got about fifteen more minutes before I have to step out, and then I can continue working on the draft, or I can come back probably by 03:15. I know you wanna adjourn for the day at some point here.

[Matt Walker (Chair)]: Well, we have a ten to four or 02:15.

[Damian Leonard (Office of Legislative Counsel)]: So but I can the letter now, or this just over there? There is. So the last piece here, as far as I got, was the one time funding for the relocation of the central garage. My understanding is the committee supports that. And as you can see, I left off in the middle of the sentence.

[Matt Walker (Chair)]: Any other do we need to include all of these pieces or down to the last one. That's what said that?

[Damian Leonard (Office of Legislative Counsel)]: One time funding for the relocation of the central rod, which is proposed in the budget. Oh.

[Matt Walker (Chair)]: I'm sorry. I'm sure that's one of inventions. It wasn't in their letter saying take your comment on these parts. Yeah. The parts down at the bottom.

[Chloe Tomlinson (Clerk)]: The budget language that I went over yesterday.

[Matt Walker (Chair)]: So we have to comment on the two or three pieces Yes. Out

[Chloe Tomlinson (Clerk)]: And you don't have to do anything, but if you want to comment on language, you can do it domestically.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. We could make this very short and just say additional items identified. The committee supports the one time funding. There were It's language in society. You could just mention that

[Chloe Tomlinson (Clerk)]: you support the translation really, but it doesn't Yeah.

[Damian Leonard (Office of Legislative Counsel)]: Great. We don't want to get them distracted after we put our big story together.

[Matt Walker (Chair)]: The

[Damian Leonard (Office of Legislative Counsel)]: other proposed language.

[Matt Walker (Chair)]: They referenced the conspication or whatever the couple of things were at least at the bottom. They were all technical, I guess, and we knew that they were always reset.

[Unidentified Committee Member (possible Candice White or James Casey)]: Do they have to get the budgets all back around separately? Yeah. Get extra time.

[Timothy R. Corcoran II (Vice Chair) (possible)]: Yeah, we do. They're the last ones to go. Seriously, we're up and then they're back up and all that. I don't know if things are gonna be different just to get fun, but that's the whole thing. Somebody who knows.

[Matt Walker (Chair)]: There's likely to be a lot of questions, more questions than usual on the transportation project, maybe not, but I know this, I'm just sort of saying, I'd say the safety notch, we're to make sure we're ready to answer any question after the presentation can have to take.

[Unidentified Committee Member (possible Candice White or James Casey)]: Know you're not getting a section. Oh, I am not.

[Matt Walker (Chair)]: We know you're not getting a section to present. But money wise, there might be some questions.

[Damian Leonard (Office of Legislative Counsel)]: So I think at this point, we've gone through everything. Okay. I need time to continue drafting so I can come back in the morning with a new draft. Perfect. And in the meantime, I can if there's anything that the committee thinks of, I think you could direct it through the chair, and the chair can send me any other items that need to be added to the letter. And then I'll work with As needed. Yeah. Logan, Candice, and Addison, just kind of add in details and, the nuance here that I clearly don't know when it comes to the funding. And then

[Matt Walker (Chair)]: we'll be talking about the regional planning pieces and any of the other parts that came up from all of that feedback. So we are going to take a five minute