Vermont Legislature SmartTranscripts:

[Matt Walker (Chair)]: Good morning. It's Friday, 03/13/2026. In a little early edition of House Transportation Committee. We are working on a t bill piece, and we are doing a kind of a final review of all the adjustments adjustments we've made through some transportation alternatives language. Reminder, this is about a significant amount of federal funding that has not gotten out of the transportation alternatives programs based on a number of cancellations and other issues, and we are looking to open the parameters up a little bit more for the agency to make sure to get that money out before it expires, is what my recollection is. Somebody wants to characterize it otherwise. If I missed anything, please do. And otherwise, I'll turn it over to our alleged counsel to walk us through the revised or final version and see whether or not it's ready to potentially move into the T Bill.

[Damon Leonard (Office of Legislative Counsel)]: For the record, I'm Damon Leonard from the office of legislative council. Pulling up on the screen now the latest draft, which is identical to what you looked at yesterday afternoon. Just it's gone through editing. So the first change is going forward after this fiscal year, the maximum grant award will be 600,000 instead of 300,000. The next change is we've eliminated the percentages starting with this coming fiscal year going forward, so there would no longer be a requirement that 50% be set aside for water quality. Instead, now program funds shall be awarded for any eligible activity and the language we added yesterday, including environmental mitigation projects relating to storm water and highways, such as eligible salt and sand shed projects, and infrastructure related projects and systems that will provide safe routes for non drivers. And then the other change in the bill, which was in yesterday's version, is allowing for this coming fiscal year for the maximum grant award to be up to 1,200,000.0 per grant allocation.

[Matt Walker (Chair)]: Does anybody have any questions about that language?

[Timothy R. Corcoran II (Vice Chair)]: Answers everything that the committee wanted to go. Okay. And I moved that in our Transportation Building.

[Matt Walker (Chair)]: Thumbs up if they're on board with that. Representative Burke, are you there?

[Mollie S. Burke (Member)]: Yeah, I'd like to I'm looking where I can raise my hand.

[Kate Lalley (Member)]: Oh, that's a of disadvantage here. Be great.

[Mollie S. Burke (Member)]: Because I I wasn't able to participate yesterday. Yep. Home at home recuperating.

[Matt Walker (Chair)]: Sound good.

[Mollie S. Burke (Member)]: So I'm just so just that would just went sort of fast for me. What what is the is it is it gonna be the 8020? Is that what we're talking about?

[Matt Walker (Chair)]: Representative Pouech, please.

[Phil Pouech (Ranking Member)]: Sure. Hi, Mollie. No, there's no percentage to either to water quality or transportation alternative projects. So it's wide open, but I think from the testimony we heard that by far there's more transportation infrastructure, small projects that can go through. So this gives the agency wide berth on how much goes to water and how much goes to transportation alternatives. But I think from the testimony, we know the majority will go now the transportation alternatives. And this is all about getting the money out in the next year so that we don't lose any and we potentially are open for getting more by not having underspend.

[Mollie S. Burke (Member)]: Yeah, I'm just concerned which I have been over this time. We'd like to make sure that there's some money for the Safe Routes to Schools programs, which have been severely restricted over the past number of years. So I'm trying to figure out if you

[Phil Pouech (Ranking Member)]: could We have testimony on this, and the agency is looking at highway safety program, which fits better for Safe Routes to School. And they've, I think, committed to moving money into that category from those funds. And these funds will be used primarily for infrastructure for transportation alternatives rather than education. Which includes path. Right. Bike path. Yeah. It has the highest priority. This section is what

[Kate Lalley (Member)]: And you it also includes Sorry.

[Matt Walker (Chair)]: Representative White, Representative Lalley, I'm sorry. Representative

[Kate Lalley (Member)]: Burke, I'm glad to hear you're feeling a little better. And I just wanna call your attention to the previous page, the highlighted section, the updated language, which says including environmental mitigation projects relating to stormwater and highways, such as eligible salt and sand shed projects and infrastructure related projects and systems that will provide safe routes for non drivers. So calls out infrastructure projects that Safe Routes to Schools, I think, can be a part of without specifying every particular program that could be included here.

[Mollie S. Burke (Member)]: Yeah. I mean, understand the desire to not sort of limit, you know, what happens if there isn't a project ready. But I guess the question is, somebody apply for a safer to schools program through the transportation alternatives.

[Kate Lalley (Member)]: Yeah. I think yesterday, we had that conversation. And, yes, I think for infrastructure related Safe Routes to Schools projects, those are appropriate for this grant program.

[Mollie S. Burke (Member)]: Okay. Because there are other aspects to the Safe Routes to Schools like a coordinator and other aspects of it that it's sort of all right.

[Kate Lalley (Member)]: And I think there was another grant program mentioned yesterday. I don't recall the name that was more appropriate for non infrastructure related safe routes to schools programs. I don't

[Kate Lalley (Member)]: know if anyone spoke highway safety.

[Matt Walker (Chair)]: Representative Lalley?

[Kate Lalley (Member)]: Yes, we had really good discussion on that topic and the importance of planning and helping communities get ready to be in a position to utilize this funding to build that infrastructure. So that was my understanding was that that was something they were It was a priority for the agency, and they were working on that too. But using it in this particular sort of bucket, the HSIP, I think is the acronym for it.

[Mollie S. Burke (Member)]: I was just wondering about mentioning Routes to Schools the program

[Phil Pouech (Ranking Member)]: in

[Mollie S. Burke (Member)]: the legislation.

[Kate Lalley (Member)]: So if I may.

[Matt Walker (Chair)]: So

[Kate Lalley (Member)]: yes, that is something that was also discussed by the committee. And they do prepare marketing information and that more level of detail would be something that would be in the marketing information. Whereas this is a little bit more of the broader catch all level in the legislation.

[Mollie S. Burke (Member)]: Yeah. Well, I would just like to follow-up with that and see if that actually happens. I just think things get lost if you don't specify them and people forget and whatever. Anyway. Okay. Well, thanks for your input, Wish I were there with you.

[Matt Walker (Chair)]: I appreciate the dialogue, and I appreciate it. I think that there was a significant attempt in the committee to represent representative Burke's opinions even though she wasn't able to be here. And it does call out that particular program. And we still have the traffic highway safety portion that we can continue to work on. So I think we were in the middle of the vote, though, and I probably let some discussion I should have let the discussion in before the vote. Yeah.

[Timothy R. Corcoran II (Vice Chair)]: Think we have

[Matt Walker (Chair)]: it in. I think everybody had a thumbs up. Either way, whether we have enough of them. And so I will instruct our legislative council to move that language into our e bill for this year. Okay? Okay. I'd like to use the next few minutes, if we could, to use some language that I've asked the Legislative Council to work on based on a subject I kind of mentioned a couple of times in that I think that helping our town highway departments, our towns are hit with the same level of construction costs and inflation issues that the state is. We've done a tremendous job of educating the building on the T situation, but I'm not sure that everybody understands that the highway departments and our towns, our municipalities are facing the exact same struggles and issues. Finding the funding for the T Fund does not, by any definition, translate over to health, to the town highways, to the town structures, to Town Highway 8. And I would like to see our committee take a look at this where currently local options taxes are sent to the state. They're split. There's a fee for processing the local option tax filing. And then the split of the revenue is 70 five-twenty 5. 25 goes into the pilot. The pilot is currently funded at the level of amount that it comes out. There's 12 new towns and municipalities that pass the option tax at town meetings. There will be additional revenue coming. The pilot is fully funded. And I think that we could convince members that helping the town highway with money that was collected in the town by sending some portion of it back to them is worthwhile for us to try to do. And I asked the legislative council to draft some language to try to put our stake and claim in that money that's coming in from the towns to go back to the towns. And that's really that simple, that solving the T fund problem does not solve the challenges of our communities that have been hit by all kinds of weather related issues and challenges in addition to their bite of inflation. That's probably the number one challenge that's eaten into their budget. So that's what I'm trying to help push the committee towards. I'm looking for support along that. And this will be a first run at some of that language that might do that. If you'd like to take a look at it for the next ten minutes and then let me go to the floor.

[Phil Pouech (Ranking Member)]: I'm looking at the language for the first time. Are you gonna go through it?

[Matt Walker (Chair)]: I am.

[Phil Pouech (Ranking Member)]: Yeah. Let's do that.

[Matt Walker (Chair)]: I haven't been through it either entirely. Representative Burke, is that did you figure out how to put the hand up or did you Can't put it down now. Can't put it down now.

[Mollie S. Burke (Member)]: No. I'll wait I'll wait I'll wait for the language. Okay? I do have a question, but I'll wait for the language.

[Matt Walker (Chair)]: Okay.

[Damon Leonard (Office of Legislative Counsel)]: So the the open to the language here. So local option taxes are the state's proceeds from them are deposited in the pilot special fund. The pilot special fund is used for a couple of things. The two primary ones are pilot payments to the town and also grand list stabilization payments for properties that have been flooded out. So the what we're doing here on the first page is simply adding in. There's also payments for correctional facilities that are located in a municipality. We're adding in a reference to subsection C just to authorize the payments that we're going to be or that this draft creates there. So subsection c provides that if the local option tax revenues deposited in the pilot special fund in any state fiscal year exceed the full amount of the payments that are made under subchapters four and four c. So subchapter four is the pilot payments and the correctional payments. Subchapter four c is the grant list stabilization payments. So if all of those have been met, one half of the amount by which the local option tax revenues exceed those payments would be transferred to the transportation fund in the next fiscal year and allocated to general state aid for town highways. So that's the general formula program that goes out to all municipalities in the state based on your mileage of class one, two, and three roads. And the language added in 03/2006 provides that if you remember two years ago, I believe, so the last biennium, this committee added an inflation adjustment so that that general state aid for town highways didn't kinda kept up with inflation. And then last year, we added that for town highway structures and town highway bridges, I believe. I could be could be wrong on on the second one there. But what this says is that in addition to the base appropriation there, which will stay the same or go up with the inflator, these additional amounts would be appropriated, distributed, and used in the same manner, but it's sort of a a payment on top of that. So, you know, let's say there's 10,000,000 in the base appropriation and there were $2,000,000 in excess pilot revenues, dollars 1,000,000 would come in so that your base appropriation plus the additional amount would become like $11,000,000 if that makes sense. That'd be the base for the following year? No, so this wouldn't change the base.

[Matt Walker (Chair)]: It wouldn't.

[Timothy R. Corcoran II (Vice Chair)]: Oh, I thought you were saying this.

[Damon Leonard (Office of Legislative Counsel)]: Yeah, so this wouldn't change the base. So that year you'd have 11,000,000. Let's say the year after that, was no excess in the pilot fund. You'd have 10,000,000 plus the interest adjustment. So if pilot payments go down and they're tied to things like sales tax, which can fluctuate with the economy, or if the pilot revenues go down, this will not keep drawing out if the revenues are not enough to cover the payments. But if they are enough to cover the payments, it'll take a portion of the excess, but not all of the excess. There are other things that the pilot fund is used to pay frequently in one time, which is where the complication comes into this. They're not necessarily in a statutory formula. So the placeholder language sets it at one half and it's essentially the year after you've had a year where there's excess local option tax revenue for the state, you'll get a bump in town highway aid because we won't know what those revenues are until the end of the fiscal year. And in years or if we have an economic downturn and the local option tax revenues dry up a bit, then you'll see these payments dry up for a while. So it's not a guaranteed income source, but it is essentially a surplus. And there's a surplus for the state that some of it goes back to the towns and town highway aid. And because of that, we can't I don't think you can put the

[Matt Walker (Chair)]: T fund on the obligation as it will fluctuate up and down. We can't build the T fund Yeah. Transferred to the towns on an up and down number is what that idea of write out fees. So

[Phil Pouech (Ranking Member)]: representative Pouech and then representative Lalley. Couple of things. One is so we're only

[Mollie S. Burke (Member)]: I'd like to talk to

[Damon Leonard (Office of Legislative Counsel)]: Yes. Tell me.

[Phil Pouech (Ranking Member)]: So a couple of things. One is we're only taking 50% of the excess. So the assumption is that other 50% nobody's claimed yet. It will just continue to be in that fund. And it sounds like the fund sort of has fixed costs as far as the prisons and state buildings and municipalities, that's that doesn't change and it's not gonna change significantly. Then those costs would be the same unless there's some inflationary thing on those or they're tied to property taxes or something. But the one, the third piece covering property tax for flooded areas that could grow in any particular year. And then that would be a time when I guess we wouldn't get any additional town money potentially. Does make sense?

[Damon Leonard (Office of Legislative Counsel)]: Yeah. So the way the grand list stabilization program works is when the municipality acquires a flood prone property and it comes off the grand list, they can apply to the commissioner of taxes. And it's only for properties that have been acquired since 07/01/2023. And then when they get certified and added to the list, they get an annual payment for that property to compensate for the loss of the municipal property tax. And then that payment is made for five years. And then see. There there's additional language there that they can go up to ten years at an additional one half amount. So it's not a program I'm an expert on, but it sounds like essentially if if you have a flood and you do a buyback, then you can up for five to ten years. You can get a payment from the state. So this will fluctuate a bit, but it's a it's a it's a known cost for the state. The other thing to keep in mind is because of the way the pilot funds works here is that excess is also does create insurance for the economic downturn. So it is a bit of a rainy day fund.

[Matt Walker (Chair)]: Yeah. And there are so like 50%. It'd be

[Damon Leonard (Office of Legislative Counsel)]: pretty

[Phil Pouech (Ranking Member)]: interesting to get an estimate of like what it would have been last year or what it would have been next year if that was possible, Just to get an understanding of the scope.

[Matt Walker (Chair)]: Yes. And on Tuesday, we will hear from JFO and Logan, one of his colleagues on picking up from what we've heard in the joint session with the senate regarding this money and what it is, how much, what's the anticipation of the 12 new towns, what could be the situation. It's not gonna fix all of our town highway issues, I wanna be clear, but we found a way to get them some additional help last year. It's been a mission of mine to work on finding a way to help them some this year. And so representative Lalley and then representative Burke.

[Kate Lalley (Member)]: Yeah. I was just wondering about the time frame in

[Matt Walker (Chair)]: which we might

[Kate Lalley (Member)]: have this information about what we might expect in the how that works in the No, no, no, no,

[Kate Lalley (Member)]: no. I meant

[Kate Lalley (Member)]: let's say we put this in this everybody agrees when we put this in place. How just what when the towns would this would be based on the previous years, you know, everything would be accounted for, and then whatever the excess would be, we would be eligible. At what point do we know what that number might be? Maybe that's gonna be part of the Tuesday presentation. Just so we have a sense for, like, yeah. Along the lines of we would not be looking to touch anything with this year's We

[Matt Walker (Chair)]: would be looking to have it in place and being tracked, we don't know how those towns will come on or not, and we know there's other fights for that one time money. But we are going to get presentation, that'll be definitely, the ears that are out there are listening to exactly the type of questions that are going be asked that will be able to be prepared for Tuesday.

[Kate Lalley (Member)]: We'll get the mechanics of how this might work be

[Matt Walker (Chair)]: That's, I'm looking for that nod, yes.

[Kate Lalley (Member)]: I'm getting a nod in the corner. Okay, great, that's all I'd like to know, thank you.

[Matt Walker (Chair)]: Representative Burke?

[Mollie S. Burke (Member)]: Yeah, so would this money get distributed to all towns or just towns that have a local option tax?

[Damon Leonard (Office of Legislative Counsel)]: This money, because it's in the general state aid for town highways, it goes to all towns in the state based on your mileage. And there there's a formula set up for that. Yeah.

[Mollie S. Burke (Member)]: I so it doesn't sound like it's a huge amount of money that would go to the towns.

[Damon Leonard (Office of Legislative Counsel)]: Yeah. It's it's likely not an enormous amount of money, but it it adds a little bump to those grants. So I don't know how this compares. I think Logan can probably give you a better idea of, like, what we put out each year in these grants total, and then and then from there, you can kind of start to conceptualize what the amounts might be. And he can also give you info on revenues Right. And what the experience has been with the local option tax revenues.

[Matt Walker (Chair)]: I know we're up against

[Mollie S. Burke (Member)]: the The other thing that I'm interested in and maybe it's a little late in the game, but it sort of seems like it was being tossed around between two committees is adding the ability as we talked about earlier in the session to have towns that have a local option tax to add an extra percentage onto their existing tax. And I don't know, I guess I need to talk to my colleague in ways and means but what is happening with that conversation? It seemed like it was a conversation that was happening. And then it seems like, I don't know what's happened to that conversation.

[Matt Walker (Chair)]: We did miss you over the Representative Tomlinson, several of your colleagues in the committee have asked that question. Real quickly with the administration coming on the opposite side of that piece and the ways and means chair changed their and put that to the back burner, and the administration came out that they would veto the 2% adjustment to the extra defense to go up to 7%, to go to 8%, so that the administration indicated they would likely veto such a charter change request. That conversation sort of died and so what I've done in relation to that is try to pick this one up. And as far as the amount of money goes, all we were able to help do for all of town highway structure, class two, eight was put in the inflation injection, went by 1,400,000.0 additional for towns last year. If we can find something that's even remotely in that ballpark, it's more than anybody else is bringing to the table for them, is how I shouldn't say that. So there's no additional money that way coming from anywhere else. So that's why I'm trying to do something. But I I appreciate that. I don't if that answers your question, but the administration saying they would veto the charter change and the ways and means saying they're not ready for that fight is why that piece is not moving in, why I'm trying to go in a different direction. Represent.

[Mollie S. Burke (Member)]: Well, as you know, I I brought this, you know. Alright. Brilliant idea. We'll tax the gas stations. And of course, that turned out to be completely impossible because the way that gas is distributed. So I just was hoping to find some other means of revenue for my town and other towns. And it sounds like this is like might be a little bit of revenue, but not not particularly significant. Anyway, thank you.

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

[Chloe Tomlinson (Clerk)]: Yeah, I have a concern about distributing the surplus to the town highway fund. I mean, There are communities that are making the sacrifice to raise this revenue. And they're then remitting 25% at this point to the state, which is being used for a variety of other purposes that we're learning about. If there's surplus, I think it should go back to the communities that generated it. It just doesn't really strike me as fair to distribute that then across the state. Massachusetts, for example, 100% of local option tax revenue goes to the municipalities that generate it. And so I just have a hard time with that concept.

[Matt Walker (Chair)]: I certainly can appreciate that. And I look at the pilot fund that's only been funding towns in need now full for only three years. And we have no consideration in the building to go back and make them whole for all the years that they were shorted. So I share a frustration in that arena. I can't answer to the part other than trying to do something for town highways across the state. Whether that can or can't be part of the solution is a really good point to bring up.

[Chloe Tomlinson (Clerk)]: It's just challenging, especially when we're hearing a lot of interest from towns and BLCT to be able to address the rep's serious resource needs, and we're not making any moves to allow towns to address that. And then the surplus that they did generate is going to other purposes that aren't directly addressing their goals.

[Matt Walker (Chair)]: Which happens today, and money comes from all over the place. And I would say that the argument that I'm hearing, especially in the Senate, is that the towns that have the ability to tax are supported and lived by a huge amount of towns around them that do not have the ability to tax, that do not have, and Stowe being the biggest example, that most of the workers that work in Stowe come from the surrounding communities that do not have the economy to have that. So that's the argument that's going on in the Senate. It's not that I'm saying that that's the argument. The argument is that all of the road structures used by everybody and those workers that are getting to and from work and using town highways have no way to raise any money in their little shops. They have no store. They have no commerce. That if we don't feed the entire network, then we were only to do it in towns that had that taxing structure, people would not be able to get to and from those towers. Sure,

[Chloe Tomlinson (Clerk)]: and I hear that, and I think in that case, the state should show leadership in terms of generating the amount of revenue needed to manage our growth system. But that's my perspective.

[Matt Walker (Chair)]: That is above my pay grade.

[Phil Pouech (Ranking Member)]: I hear what you're saying. There's argument there, but kind of Heinzburg local option tax, we've tried to do it. We're not gonna raise very much because people aren't coming by Heinzburg to buy washing machines, but they are going to Williston to buy, from Heinzburg are going to Williston to buy washing machines and paying that 1% tax. So getting a little bit back for the surrounding towns who have to maintain roads that allow people to get to Williston to buy it. So I would support both sides. This is, I think, a reasonable compromise. In fact, it was seventythirty at one time, right?

[Matt Walker (Chair)]: Yeah.

[Phil Pouech (Ranking Member)]: Now it's seventy fivetwenty five.

[Matt Walker (Chair)]: We did three years ago, 2023 I believe, but we'll get more from that.

[Timothy R. Corcoran II (Vice Chair)]: David, do you know right now it was last year or the year before this fund was used to fund the reappraisals for the towns, was like a chunk out taken out, and I thought that was on a continuous basis. I don't know if it's going to affect people's language there. I thought it

[Damon Leonard (Office of Legislative Counsel)]: was like $3,000,000 something that we took out

[Timothy R. Corcoran II (Vice Chair)]: of this.

[Damon Leonard (Office of Legislative Counsel)]: Believe there is money that's been used for Worcester education, and seeing

[Matt Walker (Chair)]: But I thought we would have

[Timothy R. Corcoran II (Vice Chair)]: one year, is that like a continuous thing?

[Matt Walker (Chair)]: Yeah, so that's, we would have that issue. We're gonna have to let you go to the floor. Will say that there are huge, I'm suspecting, and as we learn, and generating this conversation alone has already generated for feedback. There are a lot of people that have put the stake in the ground for that piece of the money, and I'm saying that I think that the Helping Challenge is high on that list for me, and I want the stake in the ground that can we get something? No, no, agree But with I'm willing to put up the fight for, and I would be interested in anybody that's gonna go back and tell their town highways that they had a chance to help them and they're not going to. No, my point was is

[Timothy R. Corcoran II (Vice Chair)]: their stake is already in there. And we're behind,

[Damon Leonard (Office of Legislative Counsel)]: right? Yes. So I'm

[Timothy R. Corcoran II (Vice Chair)]: just saying it's going to affect that language if it's already planned.

[Matt Walker (Chair)]: We'd have to go, we're only going

[Timothy R. Corcoran II (Vice Chair)]: to get We wouldn't want to do that, was what was saying. Would have

[Matt Walker (Chair)]: to repeat after that. After that, yeah, whatever you want to do. So I would, okay. Last one.

[Kate Lalley (Member)]: Yeah, I just want to say that we have a state tax system that redistributes opportunities and resources in many ways. So this is just one more example of that. So we're all, you want a Vermont that works for everybody, I think they all have to pay a little bit. My town certainly would like to keep 100%, but it's all for one, one for all, I think, here. And this is not inconsistent with how we finance education, for example, and lots of other needs in the state.

[Matt Walker (Chair)]: We are thank you. I'm glad you're feeling better, Mollie. We look forward to seeing you next week. But we are before you do hang on, Casey, right now, the plan is to come back to committee twenty minutes after the floor ends. But depending on how late that goes, I will keep you updated. But right now, the team is twenty minutes after the floor ends, which may be after lunch. Thank you. We're adjourned.

[Mollie S. Burke (Member)]: I'll check-in and see.