Vermont Legislature SmartTranscripts:

[Matt Walker (Chair)]: Morning here on Wednesday morning, March whatever it is here, twenty twenty twenty twenty six. We've been having a hard time getting the committee together since the four times and extended piece. The purpose of this morning is to walk through most of the Ways and Amendment on Friday. We weren't able to meet yesterday. Today, I was hoping that the JFO would give us a brief, quick overview of the money change in the Ways and Beans Amendment portion. And then I'll hear from the agency on their opinion of the change. And then we're going to straw pull the amendment. And then I want to hear from anybody that has a concern about whether they will or won't be ready to go with their floor report. We'll go off that we can handle administratively after the fact. But we want to make sure we still do have the opportunity to ask the speaker for a delay of one legislative day if we felt we needed it. But I, in general, think we're mostly ready to go. Today

[Mollie S. Burke (Member)]: or tomorrow?

[Matt Walker (Chair)]: Today, we need whether we're ready to go today or we would need one day to delay to continue to get ready. We're on the second reading today unless we ask for a postponement. If you wouldn't mind coming up for a second, I appreciate it. And basically, what I'm looking for is particularly the money piece related to the 2,200,000.0 of 500,000 versus the 1.7 and Make sure the committee understands what was done there. The rest of it we went through almost entirely on Friday.

[Logan Moulton (Joint Fiscal Office)]: All right. For the record, Logan Mover at the joint fiscal office. Front of you and on the screen, and I don't know if it's probably not today, maybe yesterday or the date before this fiscal note from or as recommended by the health committee on ways and means, could be on your page somewhere. If not, I will send it to Gabby again in a second if he can post it. Specifically based around so there's the two sections that chair mentioned. It's the sort of change the amount of user fee. And then also there is a transfer of a base infrastructure bond fund into the T fund. And there's some stuff happening there. So I'll just sort of walk through them briefly. So, the mileage based user fee, there were a number of changes.

[Mollie S. Burke (Member)]: I see two documents from yesterday.

[Matt Walker (Chair)]: I'm

[Mollie S. Burke (Member)]: Ways and is on Friday.

[Logan Moulton (Joint Fiscal Office)]: Friday. That's

[Mollie S. Burke (Member)]: what you're looking at.

[Logan Moulton (Joint Fiscal Office)]: Yeah. So the one from Ways and Means, as recommended by Ways and was that?

[Mollie S. Burke (Member)]: We're not looking at the updated fiscal note.

[Logan Moulton (Joint Fiscal Office)]: No. So there's two fiscal notes. There's one as the bill passed out of this committee and then the one as recommended by ways and means. Right now we're looking at the one recommended by ways

[Mollie S. Burke (Member)]: and. 1.2,

[Logan Moulton (Joint Fiscal Office)]: yes. So, I won't go through all the changes that occurred in the mileage based user fee. I think Damien had a good walk through or side by side to sort of break that down better. But as far as the money is related, the sort of estimate that I came up with when looking at this, based on the fact that when the mBuff would first start being collected, because there's sort of a lag period between your first inspection and then your second inspection. After your second inspection, you get assessed an MBOT. And then there's some sort of, you could just pay all upfront or you could pay quarterly or you could pay monthly. So there's a breakdown there. Essentially in fiscal year twenty seven, the MBOT wouldn't be bringing in any revenue because there'd be no one actually paying it yet. But you would still have the repeal of the EV infrastructure fee, which is that $89 fee that would go into place January 1. So we would lose the revenue from that. I estimate about half $1,000,000, and we wouldn't yet be gaining any revenue from the mBuff. FY '28, we would start to see some revenue come in from the M Buff, but because revenue collections would start in the '28, and then you also have some people be paying all at once, some people will be paying quarterly, some people will be paying monthly. It could fluctuate between, I estimate around $350,000 to maybe a million dollars if everyone's are paid all at once. The loss from the repeal of the EV infrastructure fee, roughly $1,200,000 So less of a net revenue loss in FY twenty eight between maybe 200,000 and up to $850,000 And then in '29, everyone is sort of in the inbox system and paying revenue generated around $2,600,000 against revenue loss of 1.4 from the repeal of the EV infrastructure fee. For then the net revenue in '29, 1.2, and then that would continue to grow in the future years as EVs grow in.

[Matt Walker (Chair)]: Question. Does that represent Keyser? Yeah,

[Chris Keyser (Member)]: I've got a disconnect here. The infrastructure fee is not being charged in '29. So we won't see that as a loss of revenue in '29. What we will see only, there's a question, rhetorical, 2,600,000.0. And so really the net revenue that you show or is shown here is 1.2. Really what we're gonna see when we see the '29 FY is 2.6. 2.6 from the MBUC, correct.

[Logan Moulton (Joint Fiscal Office)]: But if the MBUC wasn't in place, we wouldn't correct But

[Chris Keyser (Member)]: that's not what we're gonna see. When we see the budget, we're gonna see 2.6 from the MBUF revenue. Correct. And that's it.

[Logan Moulton (Joint Fiscal Office)]: Current forecast assumes So the current numbers you see in the forecast assume that we're getting the EV infrastructure fee. That's no longer gonna be a case. So you will see 2.6 coming in from the EMBA estimated, but also they will take out the estimated money coming in from the EV infrastructure fee,

[Chris Keyser (Member)]: 1.4. I guess I've disconnected. I'm sorry to take time, but we're not charging for it. So are you saying that there's somewhere out there in the world that they had 1,400,000.0 in 'twenty nine?

[Logan Moulton (Joint Fiscal Office)]: Probably not that exact number, but the forecast assumes, in if the forecast goes out, we have until '31 right now, assuming that we're going to be collecting the EV infrastructure fee that entire time until an MBUS goes in place and it is repealed. So the forecast currently expects some revenue from that fee.

[Chris Keyser (Member)]: Okay, got it. So this is a variance on forecast. But what we're gonna see when we get all done is when we see our '29 budget, we're gonna just see 02/2006, period, end of story.

[Logan Moulton (Joint Fiscal Office)]: I'm assuming this goes into place. Yeah, well, gotcha. Yep, yep,

[Candice White (Member)]: Let's mark this. At what point are we not gonna see the infrastructure fee?

[Logan Moulton (Joint Fiscal Office)]: So you won't see the infrastructure fee after 01/01/2027 if this goes into place right now.

[Candice White (Member)]: So you're just showing it here as if we still have it in place, this is what?

[Logan Moulton (Joint Fiscal Office)]: This is what revenue would be generated. So it's sort of a you would be losing this out by implementing this because we would expect to collect this in the future.

[Matt Walker (Chair)]: No. ACD doesn't stay in the transportation anyway.

[Logan Moulton (Joint Fiscal Office)]: So, yeah, language currently has this going to ACCD for the EV infrastructure. Okay.

[Matt Walker (Chair)]: I'm gonna slide over here for a second.

[Christopher Rupe (Joint Fiscal Office)]: During Christopher's reference slide, just wanted to reiterate to what Logan said and add a little clarity that when we do the revenue forecast, we need not to do revenue forecast. They assume current law. So whenever the law changes, after each session, we talk to them in June and say, here's all the things that change. So one of those things would be, hey, that EV infrastructure fee, you need to peel it off as of this year. I also wanted to mention that these numbers are shown going out to 29. The forecast shows out to 31. We really, by law, look at two fiscal years. When you start going beyond that, it reminds me of like those weather maps you see in hurricanes. Hansen, with that like cone of uncertainty, things get really fuzzy when you start going beyond the two year horizon. So that is my long way of saying the numbers that you see for like FY '29, take that just with a grain of salt all the time, because those are subject to significant change.

[Matt Walker (Chair)]: Representative White?

[Candice White (Member)]: Logan, can you remind us what approximately how much money is coming in from the ED infrastructure fee in '26? Is it about?

[Logan Moulton (Joint Fiscal Office)]: I don't know off the top of my head. I do know that in the FY '27 budget you're currently working on, there is 1,000,000 going appropriate to ACCD for that program. So I'd have to go look at the schedule too and see what the exact collections are, but off my head, that's what I have.

[Unidentified member or staff]: There'll still be an EV plug in hybrid EV, and that doesn't change, although the money goes Just into the depot, yep, correct. Starting in 2027.

[Logan Moulton (Joint Fiscal Office)]: '27, yep, I believe that's the effective date of that section. Thank you very much. Well, one last thing then that you had mentioned is, so remembering this sort of estimated net revenue loss of half $1,000,000, This transfer that has been proposed in section 23 is transferring $2,200,000 from the TIF fund into the TIF fund. It is then spending $1,700,000 of that to be used for town highway aid, and then it's leaving half $1,000,000 in the T fund sort of to make up for the estimated potential revenue loss from this M bus. It's in

[Matt Walker (Chair)]: the T fund as opposed to the T bond fund then? Correct. It'll be transferred into the T fund.

[Logan Moulton (Joint Fiscal Office)]: Fund

[Chris Keyser (Member)]: integral to the numbers that we see that come

[Logan Moulton (Joint Fiscal Office)]: in for the revenue forecast for the AOT? Yes. And TIP had a sort of extra amount that had been carried for a few years. In 'twenty seven, it's going to be $2,200,000 It's not going to be spent on anything.

[Chris Keyser (Member)]: It's just sort of sitting. So if that's included in our overall revenue forecast that the committee looks at, maybe what we're seeing here is the ways and means deciding to do policy for our committee.

[Matt Walker (Chair)]: Doctor. Lundberg?

[Mollie S. Burke (Member)]: So, in terms of what we had been looking at was the local option cap, and that amount of money was going to be less than 1.7?

[Logan Moulton (Joint Fiscal Office)]: Yeah, I think it less than $200,000 so I'd have to go back and look. I think 195 maybe it's the current estimate based on-

[Mollie S. Burke (Member)]: From the whole thing, to be divided as one Yeah.

[Logan Moulton (Joint Fiscal Office)]: So it's from the excess global off impact revenue that came in after you sort of paid these current requirements as laid out in the language you all put forward. I think the estimate when you sort of do that math is there'd be about $400,000 extra in local impact revenue. Half of that would go to Town Highway 8, so around 200,000, I think slightly less than So

[Mollie S. Burke (Member)]: divided among all the 10.

[Logan Moulton (Joint Fiscal Office)]: So divided among every pound.

[Mollie S. Burke (Member)]: And now this 1.7 will be divided among all 10, yes. As more of a one time?

[Logan Moulton (Joint Fiscal Office)]: Yes, this will be one time something.

[Mollie S. Burke (Member)]: So it would be a lot more, but it won't be one time. So that's really the difference.

[Logan Moulton (Joint Fiscal Office)]: I

[Matt Walker (Chair)]: would also say that the piece of the pilot would have been an ongoing and growing portion versus our current transportation scenario where most of our funding is flat or declining would be that portion of it. But this overall money right now is more for sure. Representative Carter? I just had a question, and I don't

[Unidentified Representative (shared ID)]: know if you can answer it, Morgan, but when we set up the TID Fund years ago, there's rules that we had to follow. We couldn't call it gas tax. It had to be an assessment. We put money, which had to be on projects ten years or longer, certain criteria to spend that money. Well, that's just not withstanding the language, because that sort of money in the water is when we want to go out and bond again with a bond rating people saying, hey, this was set up specifically for long term projects, you're just sort of notwithstanding, instead of going through the procedure of just backing it out of projects, so just notwithstanding.

[Logan Moulton (Joint Fiscal Office)]: I don't think so, right? So it'd be based on forecasted revenues that would be generated from the TIF fund to pay for future bond obligations. This is just one time money that's sitting at the bottom of the fund. It's not really decreasing future revenues into the TIF fund by any manner, it's just sort of using some excess that was in there.

[Representative Carter]: Yeah, so we need make sure we don't bunny the waters of, you know, because it would be just as easy just to find a project back out.

[Logan Moulton (Joint Fiscal Office)]: Yeah, don't think so, but not a bond expert by any means, but I can't imagine it'd have an impact on that. Okay.

[Matt Walker (Chair)]: Thank you very much. I'd ask the agency to join us for a second if they could. Now that we've a few days to pass, guess the 11 page amendment that came out of ways and means, I'd like to get the testimony of the agency's review and feedback on the waiting as amended.

[Michelle Boomhower (Vermont Agency of Transportation)]: Thank you, Mr. Chair. For the record, Michelle Blumhauer from our Agency of Transportation. I'll start first with the commentary on the $2,200,000 estimated fund balance and the tip at the end of FY 'twenty seven. So, on that's the estimate of what we expect there to be in that fund balance at the end of FY '27. Since the fund balance is not annual revenue, it's not dictated by the economist projections. And so it's kind of outside of that. And it's, as Logan mentioned, had a fund balance for many years, and we see that as analogous to the T Fund reserve. Therefore, we didn't budget it as a fund balance item. And we didn't submit it as part of our budget because we don't want to rely on one time revenues. So that we would consider that a one time revenue source. We also do have concerns similar to the questions brought up by Representative Corcoran related to the nature of the TIP. And is this a way of washing these monies through the TIP fund to remove the characteristics that are demanded in statute for the use of TIP funds? So those are questions that we have brought up. As it relates to the 11 pages added by the House Ways and Means Committee, those were added with very little time for us to digest them. And we have had major concerns, which we did express in our testimony to Ways and Means. The structure the agency had put forth for the MBUF was one whereby there would be kind of an estimated amount that average drivers use each year. And that would be what you pay at the beginning of the assessment period, which would be your first inspection. Excuse me, your, well, it would be the first registration, after the 01/01/2027. And you would have the option, and we estimated that to be about $157 you would have the option of paying that all at once upfront, paying it quarterly or monthly, whatever your budget met. And then at the end, depending on how much you put in, what your miles were when you got to your second inspection, we would determine with reconciliation whether you had overpaid us because you drove less miles than the average, or you had underpaid us at which time you would owe for the miles you have driven. And so we're always projecting forward, not in arrears. We're mostly concerned about doing a reconciliation after the fact because of all of the fringe cases that will have to be reconciled when somebody sells a vehicle. And so you go to sell the vehicle, it may or may not be a transaction where you personally have to be in touch with the DMV, but the new owner does. And so how do we collect those monies from the person who has driven them in the event that they have a transaction of that nature? We're concerned that it'll be much more overly complicated than the process we had put forward for this new program. Okay. Thank you. Oops, Representative Roper. Just a quick question on the, was any money anticipated for the MBOF from January

[Representative Roper]: to June incorporated in this year's budget?

[Michelle Boomhower (Vermont Agency of Transportation)]: Yes, yeah, because we did have the expectation that there would be revenues coming in from the prepayments of your mileage based user fee for those folks who were in that beginning period in the first six months. And I don't recall what the exact amount was. But not only does it remove those revenues from the scenario, but there may be a case where people go on a payment plan, and then they're not paying their FY 'twenty eight ms buff until later, much later. It could be even in 'twenty nine. So it'll be difficult to manage the estimation of the revenues for not only the commencement, but also the of all of 'twenty eight.

[Representative Roper]: Yeah, so I guess that's news to me.

[Michelle Boomhower (Vermont Agency of Transportation)]: 'twenty nine.

[Representative Roper]: I didn't think there was any money in there, because when we had Lalley saying that any money that was generated was going to go to the towns, and there really wasn't much pushback. So I'm sort of didn't realize that, so I guess I'm thankful for the clarification of your answer. It would be interesting to see how much it was, but if you can get back to Candice, I'll look into that.

[Logan Moulton (Joint Fiscal Office)]: Got real quick?

[Mollie S. Burke (Member)]: Yeah, I just wanted to ask the agency. It was my understanding that with the new computer update system that you felt very confident that you could handle these new ones too. Well, I

[Michelle Boomhower (Vermont Agency of Transportation)]: think we did explain that it's going to automate almost all of the activities that will occur with the MBUF. But in terms of if we get into a place where we're not getting upfront payments, we're getting after the fact payments, and then we start having people who maybe when they sell their vehicle, don't reconcile their transactions at that time, And then we have to start going after people. And so it's the kind of going after people that could create more issues.

[Mollie S. Burke (Member)]: So just the concern that Ways and Means had that this would be an administrative lift for you, This is that that was actually not the case.

[Michelle Boomhower (Vermont Agency of Transportation)]: That's not the case. And

[Mollie S. Burke (Member)]: and in fact, this may be creating more this Yeah. So maybe creating more of an administrative lift. That's what we're concerned about. Right. That's my understanding. Thank you.

[Unidentified member or staff]: Representative Burke?

[Mollie S. Burke (Member)]: Yeah, I'm just wondering how the open sheet feels about the use of the one time money versus the other proposal for the local option types.

[Michelle Boomhower (Vermont Agency of Transportation)]: So the agency only supports the governor's recommend, which does not include a local options tax. And so we put forth a plan for use of pilot funds and a long term plan, which would create sustainability in the T Fund after the five year return of all of the purchase and use tax. So that was sort of the proposal that we support.

[Logan Moulton (Joint Fiscal Office)]: Okay.

[Unidentified Representative (shared ID)]: All

[Matt Walker (Chair)]: right. Think Thank you, Michelle.

[Unidentified Representative (shared ID)]: Yeah. Thanks a lot. One more question. I think that we approve the amendment by the ways and

[Matt Walker (Chair)]: All those in favor of the ways and means amendment raise your hand. One, three, four, five, six, seven. All those opposed? One, two, three, four. When we report on the floor, we'll report that this the amendment from Ways and Means passed, favorably seven to four. We are now due in Room 11 with the ways and means for the student transportation, piece.