Vermont Legislature SmartTranscripts:

[Senator Richard "Rich" Westman (Chair)]: So this is Senate and House Transportation Committee, and we are here with the economists and the emergency consensus forecast. We're mainly gonna zero in on transportation and we're gonna have Tom Yu Lee to talk about that forecast and then we're going to move into general questions. I will, in the upfront, I'm gonna take the prerogative as chair of the Senate Committee, say to you Tom, since you spoke, the governor has come out with his budget. The overall piece of his budget over a five year period brings back the purchase and use tax. But underlying that in the very high level and some of it will take projections is if we get the purchase and use tax, if that passed in what the governor proposed happened, we do have the fact that combustion fuel taxes are declining. At some point in the future, the 50,000,000 wouldn't be enough. And some of that is a projection that you could help us figure out where do those lines cross. So I'd like you to open up and say what you but and then if you could, so you create an overall picture of where the fund is headed with under the scenario that the governor and when would those lines cross. And then we'll have total openness up totally to everybody.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: Great. Well, you. Thank you, Rich. And thanks to you all for doing this jointly. I really appreciate not having to repeat the same thing over and over for all the committees. And I think some of you who sit on multiple committees and maybe the emergency board also perhaps tired of hearing the same thing. But I think the committee Q and A sessions can be really valuable. And, so that's that's what I wanna mostly do. I'll give a little, thumbnail overview, and I'm assuming you all have the forecast document, which is was released on, the sixteenth with the, explanatory text, some charts, and various tables. I also, wanna apologize for not being there in person. I much prefer, in person testimony, but, we were trying to schedule everything on Friday and everybody's schedules didn't work. So, it's a little late, but it then does have the benefit of having already heard how the governor's gonna fold all this into a budget and what the implications are for transportation, which the senator Westman said, are pretty pretty dire. So the the the forecast that we did in July is is sort of the starting point when we do an update in January. We get six months of real data, and we rerun the models and true up everything. And after the first six months of this fiscal year, the transportation fund was two tenths of 1% higher than the target. So that's $300,000 on a target of 158,500,000.0. That's exceptionally small. That's essentially saying that's as close to right on as you're ever gonna get. And across all three major funds was within half of 1% off. So we were coming into this with very small variances from expectation. And as a result, sometimes could seem confusing that in this time of phenomenal turmoil in the external economic environment, that that too would be relatively similar to the forecast we had in July. There's tremendous uncertainty, but, it's not like the expectations for growth, and a lot of the key things that affect revenues have changed radically. As a result of all that, the forecast that we presented to the emergency board was very similar to those numbers that we had in July. I don't think we've ever recommended so few changes or such a small magnitude in the way of changes. You can see them on pages six and seven of the document, the forecast document, where there are three tables that are kinda yellow and tan tables showing the first one on page six at the top, you know, the variance year to date. And then at the bottom, page six, the dollar value of the changes we're we're recommending in the forecast. And then on the next page, the percent change those variances represent. And that final table, the top of page seven, if you look at all the variances for the three major funds, so not healthcare only, because that was the fund with the biggest percent changes. And that doesn't have anything to do with the economy, that has only to do with the Reconciliation Act, which lowered the rate at which the hospital provider tax could be assessed. But if you look at all the other three major funds between fiscal twenty six and fiscal thirty, there's no change, that's greater than 1%. So this is, you know, again, it seems odd with all the chaos and turmoil going on outside. This is pretty steady state, Not a lot of surprises in terms of your your planning. So that's kind of the backdrop. You know, there is a lot happening in the economy, the general economy, and if I just point to three things that that are the main kind of tailwinds and headwinds, the the fiscal policies and the monetary policy, there have been a few changes in, but again, nothing that's all that different than what we had expected. But the three things that are going on is de globalization, which is represented by the tariff and immigration policies, which are signature administration policies. And those are really significant headwinds in 2025, GDP growth, dropped from 2.8% in 2024 to 2% in 2025, and that's largely the result of the tariff and immigration headwinds. So that's slowing things down. On the other side of ledger, AI investment has just been phenomenal, and that has powered a tremendous percentage of the growth in GDP. It's also powered a tremendous gains in the stock market, which have wealth effects that affect many revenue categories, including motor vehicle purchase and and use. So there there those two forces and then and then the prospect of added stimulus fiscal stimulus from the, One Big Beautiful Bill Act and the, monetary policy, will be lowering interest rates a little bit more. But it's it's been hard for the Fed to drop interest rates as quickly as they would otherwise have done with the inflationary effects of the tariffs. And let me just add that the inflationary effects of the tariffs have yet to be fully felt. A lot of people are saying, oh, gee, it didn't really have much impact. There there has been a lot of swallowing of those costs by middlemen and corporations and manufacturers. But it's estimated that about 96% of those costs have been borne by Americans or American companies. And, they are not gonna accept reduced margins and and the like forever if they have any market power, and those costs will be passed on. They've been doing it slowly and carefully and without a lot of fanfare, but there's a lot more to come in the way of price increases. And vehicle prices, vehicle parts and vehicle insurance all affect people's willingness to buy new vehicles and hold vehicles of any kind and age. And that trickles down into various Motor Transportation Fund revenues. So, so that's kind of the the 30,000 foot picture of what we're what we recommended, what's happening in the economy. As to, just briefly, as to, Senator Westman's question about, motor vehicle purchase and use, and when those lines may cross, there is a third I

[Senator Richard "Rich" Westman (Chair)]: got into the picture that we're trying to get. Some of it is your revenue, but another piece of this is when you talk about tariffs and you talk about all of that, and I talk about the construction within transmutation, I can't build a bridge without I beams and steel. So I and we face huge increases in cost. So as I'm trying to I'm trying to, in my mind, figure out how we maintain a system. So some of this comes on the side of the construction of the project. Some of it comes in. The governor proposed bringing purchase and use back because of our anemic revenues in it. So I'm trying to build a picture when do those lines all cross, and I need you guys that are smarter than me to help me understand. And I'm sure there are other people that understand more of this than me. But I know the lines are going to cross here at some point.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: Yeah. Well, I don't think, any of us are smarter than you guys, but, collectively, more more brains are always better than fewer. So, what what we look deeply at, of course, is the revenue side of the picture. We've almost never been tasked with looking at the expenditure side of anything. Occasionally, we did some studies on education spending and various things like that. But if the same effort and analytic depth were applied to expenditures as well as revenues, I think that might be helpful in trying to understand options, strategies, things that might be done. Typically, expenditures get cut only when there are revenue shortages and there's a lot of pressure. In a private sector enterprise the size of the state of Vermont, there will be constant pressure to cut costs and build inefficiencies because there's individual profit that benefits from that, and the people driving the ship are the ones who benefit the most. So those pressures are different in state government and it takes a lot of vigilance and constant focus to be as efficient as possible. You wanna deliver as much as you can to the public at the lowest possible cost. I can't really speak to all the expenditure side, but absolutely, steel costs, a lot of costs that flow through the equipment. The machinery that's used is, again, very steel heavy. And I've seen that just in buying farm equipment and various things like that, that implements and things like that, that have a lot of steel in them, prices are way up. When we look at this huge amount of federal monies that are parked in the state treasury, that we've been getting lots and lots of interest income from. And you look at what those are supposed to buy, having sat in the bank for a few years and not been expended, they're gonna purchase far, far less than everybody thought they were gonna purchase when projects were approved and the like. So cost overruns are not limited to Federal Reserve Board renovations in Washington DC, and there are cost overruns on almost anything that's been in progress over the last four or five years. So that's a huge challenge. So on the revenue side alone, it's pretty easy to see what the revenue implication would be of either a smaller or no diversion of what we call source transportation fund revenues. And we have a table for how we track source revenues, both general fund, transportation fund, healthcare fund, and education fund. But the source revenues are the big picture. Obviously, don't forecast two different forecasts for motor vehicle purchase and use, one for the T fund, one for the E fund. We have one combined forecast, and then we allocate two thirds to available transportation fund, and onethree to available education fund. So you can simply add the number that's in the transportation fund forecast that's available or look at the source motor vehicle purchase and use transportation fund revenue, those are on pages twenty three and forty nine, those tables of the handout. So the pages 23 are only two year forecasts, and that's because the statute only requires that of us. But for a very long time, Jeff Carr and I have been providing five year forecasts. Those are the ones on page 49, which are not officially adopted but give guidance as to what we see longer term. And there are times that's really important. So, you know, those two tables can if you look at motor vehicle purchase and use, will tell you exactly how much money you'd have if there was a lower diversion, and you could play with that percentage and formula. So that's really the, you know, the information I can provide on that. And then the expenditure side and policy side and matching federal funds, you definitely wanna maximize all that. And, you know, those are those are not things that I'm asked to be involved with.

[Senator Richard "Rich" Westman (Chair)]: Matt, I have one question here. Matt, do you have questions in your room? Excuse

[Representative Matt [unidentified] (House Transportation leadership)]: me. Morning. Tom, thank you for coming in. Senator Westman, you for putting it together. I do have a question. I don't think we have any around the room yet. But when we look at whatever terms you use in economic slowdown, 11,000 less vehicles purchased last year, 11,500 or something like that, that were bought and sold by Vermonters and the aging population. Wouldn't it be exasperated by quite a bit of any level of slowdown if that aging population can more easily not buy and not participate? And wouldn't that even make the numbers, I guess, slow down even faster? I wonder, the amount of the slowdown in their economic activity and particularly when they can almost immediately stop buying vehicles, don't we see something about that with what does that say to the 11,500 less vehicles last year when there were still incentives pretty heavily available? I don't know, I'm kind of curious where aging and economic activity related to

[Senator Wendy Harrison (Clerk)]: that purchasing use tax, if you have any thoughts or if you could talk a little bit about that.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: Yeah, well, that's baked into the forecast. We start with demographics whenever we're doing projections like this. And so that is a part of it. I think the other part of the equation though, is not just how many people there are, but how much money they have. And that is what's driving consumption today. We're getting almost 50% of all consumption from households in the top 10% of the income distribution. That's really lopsided. That's what people refer to as the K shaped economy, where you know, there's some that look out their window and things look great. Their their net worth is going up, quickly and and substantially, because they have holdings in the stock market. They have holdings in real estate, asset prices have been doing really well if you own assets. If you don't, you're not a part of that picture at all. And then you're looking at wages and salaries, which have not gone up in any kind of dramatic fashion since the pandemic, and you're looking at costs, and they have gone up, and they're still going up. And so that's why I think there's this bifurcation of how people look at the economy. So in terms of vehicles, if there's money, even if somebody's old, you're gonna have more vehicles per household, and you're going to have newer, better, and more expensive vehicles. And sometimes people wait until they're retired and then splurge on the vehicle they always wanted to buy before. So we've seen purchases nationally we don't have this at the state level, though of higher priced vehicles going pretty quickly and rapidly, but a lot more stress as you move down the price points on vehicles. And I think last year, we can say, yeah, the incentives are still in place, but so were the tariffs, and so is the dislocation with the tariffs. I actually purchased a vehicle before in February, knowing that there were going to be big price increases down there. I didn't know exactly when, but it seemed pretty obvious. And the old one was all rusted out, and I knew I probably could have kept it another couple of years, but I didn't because of the tariff. So it accelerated a purchase, but that tends to be a little bit of a sugar high. And the other side of that is then people that didn't purchase in advance were looking at higher prices. And same with EVs, there was certainly an incentive to go ahead and buy ahead, but then there's something of a drop off after that. We're still getting demand from high end consumers of all ages, and that is a big part of it. Now we did adjust the forecast, and this is the sort of thing that happens underneath the aggregate numbers. We look at and make assumptions about future gasoline gallonage consumption and the change in policies at the federal level away from green energy and encouraging and subsidizing that and focusing more on incentivizing and subsidizing fossil fuel extraction is going to slow the decline in gasoline gallons demanded. We made that adjustment, and that would otherwise raise revenue in the transportation fund, but not by a whole lot, because there's not been a huge change in the demographics. And there's still incentives for people and companies to be as efficient as possible with the vehicles they do drive. The other thing though that happened simultaneous with that is all that encouragement for more fossil fuel production lowers gas prices. So all the work you guys have done to generate some revenues based on the price and not just the volume went the opposite direction. So gasoline price assumptions going out are lower than they were in July even. And those two were pretty much offsets, but represented a very slight net gain. And you'll see that if you look at the individual fuel taxes. So I mean, that's going on. Is it gonna change a thirty year trajectory? No, but it's a slower decline on the fossil fuel side of the ledger.

[Senator Richard "Rich" Westman (Chair)]: Thank you. Anybody else? I can't see your hands, Matt, but Senator White has a question and then if there's a question in your room. Well

[Senator Rebecca "Becca" White (Vice Chair)]: hi there, hi Tom, thanks for being here. So I'm looking at your slide, well it's the same percentage on a few different pages, but page twenty three and twenty four related to the change in percentage for the purchase and use tax. And I'm just wondering if you could explain to me kind of how you see the likelihood of that because I see like 3.7 for 2027 and three point two as an increase for 2028. I'm wondering if you could speak a little bit to the sustainability of that fund. It feels like as we, I don't want to say we're getting closer to a recession, but I think people feel to your point, the k shaped economy and are making informed decisions about their vehicle purchases. And it feels like to me the crystal ball would say that we're gonna see less in purchase and use than even that 3% because folks will be risk averse in not making purchases. So I'm wondering if maybe if you could just add a little bit more to that and if you see this as a sustainable source of revenue or how you would define? Is it a growing source of revenue? I guess whatever the terminology would be that you would use.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: Yeah. So It it can fluctuate, of course, year to year based on lots of things. I think the uncertainty that created a pause for a lot of consumers. And so I think with more certainty, I still don't think there's a lot of certainty about what vehicle prices are gonna be through tariffs because the arrangement with Canada and Mexico, the North American free trade agreement, that's really central. That's really more important than I mean, the steel tariffs are are a big negative and aluminum are a big negative and cost contributor. But the the the tariffs the tariff agreements ultimate tariff agreements with Mexico and Canada are really gonna impact vehicle prices. Mhmm. So those are very important. That create a lot of uncertainty as that uncertainty is clarified, and it it still isn't. I mean, you have to check the news every day to see if supreme court's ruled on whether the tariffs are even legal that affect a lot of the tariffs And so I think there will be a little bit more normal environment in terms of the people who have capacity to buy, their willingness to buy, their need to buy hasn't changed. So you could that that will improve a little bit. So that speaks, I think, to the general improvement. The the motor vehicle purchase use tax is the only source of transportation fund well, not only, but the only major source of transportation fund revenue that will be growing at or above rates of inflation. So when you talk about the expenses that you're trying to balance on a road system that doesn't shrink just because you have fewer people or not a whole lot of growth in the number of people using it. That's a recipe for disaster no matter what. Purchase and use tax grows more in part because it's a consumption tax. If there's more inflation in the price of vehicles, then our revenue goes up. So that's a big part of it, is is you're getting a a kind of inflation adjustment to it. You can lose demand from too much inflation. But to the extent that wages go up or or capacity buy goes up at the same time price does, you the tax revenue at least will keep pace with that. And then there is some real growth. I mean, there are new things with vehicles, and even though it's also income related. So that is a source of revenue that will be very important to have. If you had two or three others even were at that level, that'd be great. There's nothing quite like say personal income or corporate or estate or things like that that are really much more heavily asset tied. But then you get phenomenal volatility. And even with purchase and use, you get, of course, a lot more volatility than you do with something like fees. You're not going to get a lot of growth unless you raise the fees, but at least it's pretty predictable. And you don't have huge price responses usually right away unless you have a really steep fee increase. Thank

[Senator Rebecca "Becca" White (Vice Chair)]: you, Mr. Cabet. That was very helpful.

[Senator Richard "Rich" Westman (Chair)]: Matt, do you have someone with a question?

[Representative Matt [unidentified] (House Transportation leadership)]: Yes, Representative Pouch.

[Representative Pouch (first name unknown)]: Yes, hi, Tom. Thanks for being here. And I got to watch last week, last Friday, I guess, but it's always good to hear it over and over again. It begins to sink in a little bit. Just curious if in your analysis for transportation, we've been trying to implement the mBuff mileage based user fees for electric vehicles And whether you've looked at that at all and with that, be a stabilizing factor, you know, I don't imagine since it's based on mileage driven and people tend to drive in driving less mileage. I don't think it's a windfall by any means, but it seems like it would help to stabilize the slight reduction every year in gas tax.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: Yeah. I mean, I haven't studied that extensively. I think that'd be interesting. You do get a few other wrinkles with that. When you talked about the elderly population, where what you really get is a whole lot less miles driven because they're not driving to work every day and they're not you know, they're just not as, as active. So they may have a car. They're paying their car taxes. They pay the taxes when they buy the car. They may have two cars or three cars, but miles driven probably drops with age there. Miles driven dropped precipitously, of course, during the pandemic, but then it remained pretty low afterwards. Instead of me driving to Montpelier today, this remote capability has become accepted in a way that it wasn't before. And there are pros and cons to that. I mean, we've gotten revenue, income tax revenue from a lot of workers, really high paid workers who are remote in Vermont, who would never have been otherwise paying personal income tax. That's that's a that's a plus. But the downside is that that we didn't really get it after the pandemic. It didn't really pop back up. I mean, it came back up into a much lower floor or much lower ceiling than it was at before. So I think we'd want to run the numbers and just see what But that the big shift to electric is going to be slowed dramatically without the incentives. I was getting some service done on another car I had, very anecdotal personal stories. I bought a gas powered truck because I have to tow things in February, and the electric trucks for towing just don't have battery capacity to do that. But earlier, I had a Tesla. In 2018, I bought a Tesla. And so I took that down yesterday for some servicing, which is another part of the EV side of things, is the servicing costs are incredibly low. Nothing like taking your gas powered vehicle in for service. But it was at a service center, the only one's out of state in Massachusetts, and it's also a dealership. And I go in there and the place is just dead. I mean, it's empty. There are not people walking around trying to test driving things. They're not making a lot of sales. They're doing service work. And I spent the whole service time test driving a newer vehicle with full self driving. I'd never done full self driving, so I did that for two and a half hours in Downtown Holyoke and places that would be hard to drive. It was actually extremely impressive. I had full self driving on the 2018 Tesla for three months for free when I first got it, and it was not that great. And I like to drive, so I don't I don't really care to have it driving for me. It's But it's improved dramatically. And I actually could see a lot of elderly people who as their driving skills diminish, would find it worthwhile to have a self driving electric vehicle like that so that they would have independence for a longer period of time. So you get these kind of things with the demographics that can work both directions. Same with, EV mileage rate things. I'd have to study it further to really tell you where it all triggers off.

[Representative Mollie Burke]: Thanks.

[Senator Richard "Rich" Westman (Chair)]: We have a question from Senator Harrison.

[Senator Wendy Harrison (Clerk)]: Thank you and thank you for being here. I have a question about the structure of the purchase and use tax. Have you in the past or do you have recommendations for changing or updating the structure of the tax itself? Yeah, only

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: give advice we're asked for. So if you ask Joint Fiscal for, you know, a deep dive into options and and recommendations for how to, you know, make changes to attacks to to with a goal of either generating more revenue or making more fare or whatever the goals are, we could do that. But otherwise, no. I don't I don't have recommendations unless asked, but you guys can ask. Yeah, I mean, can start by asking joint fiscal, and then they might pull me in.

[Senator Wendy Harrison (Clerk)]: Will do. Thank you.

[Senator Richard "Rich" Westman (Chair)]: Your turn, Matt.

[Representative Matt [unidentified] (House Transportation leadership)]: I have this crazy thoughts about if my business, my primary business is to maintain and build roads and maintain and build bridges, And my revenue source is entirely around motor vehicles, the sale of them, the driving of them, etcetera. And then I spend a big chunk of the revenue that I get out of them to do bike ped improvements, to get more people into electric vehicles, to get people to have more fuel efficient, and my policies are to move towards cluster housing, and I'm trying to reduce the overall amount of miles driven, and I'm trying to reduce the overall amount of vehicles that are out there, and I'm trying to push the population into other activities and other modes of transit, it seems that if my core business is to fix roads and bridges, but all the other, I spend a lot of my resources and money tearing down. If I was a private business, I would be experiencing a long slow death. Is that fair?

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: Yeah. And the policy conundrum that you outline is exactly what everybody in the state house is having to deal with. There is, on the one hand, a huge societal problem that's longer term that relates to climate change and the costs associated with that. And and in the transportation world, you're on both sides of that because the devastation that occurs with flooding that that is pretty clearly related to climate change is a huge cost issue. Even with emergency money that can come in now and then, it's a it's a huge issue. Also, the way it it it has things have to be built. And at the same time, you know, you're you know, on a on you've you've gotta maintain the system and and your constituents expect rows without potholes and rows to be plowed and, you know, them to be safe and all the rest. And, those two policy things are you know, have different objectives, and they they really need to be, you know, really needs to be meshed. It always seems to me that it is confusing and counterproductive to have as many different funds as we have. When in fact, public money, when one fund is desperately short or whatever, will get raided from another fund if things are dire enough, then it would be better to have all the money in one pot and have the political priorities decided upon by you folks. And then whatever is the most important thing, the most important need, that's where the public funds need to be allocated and not limited to one little niche area that is not a separate world from the rest of your lives and the lives of your constituents. And priorities are made as to what the most important things are. And then the that comes out of a pot of total revenues. The other thing that I think can obfuscate that is when revenues get peeled off before they even show up. So they go into some fund before they even show up as a revenue, as like an automatic. And then it becomes, it's sort of like an invisible expenditure, these so called tax expenditures. So those things, I think, just make things more confusing and more muddled. But the state has enough money to do what needs to be done with the roads, whether it comes from the Transportation Fund. Transportation fund gave away money to the education fund at one point in time. No reason it couldn't take more from some other place, you know, but why even have all the different funds if the purpose of that money is to meet the needs of Vermonters? And and it's and it's your job to to prioritize where those are, and, that's a different kinda issue than playing a game within this fence of one particular fund, and that always has to have some tax that's related to it. Because nobody envisioned EVs being such a big part of the picture or potentially such a big part of the picture twenty years ago or fifty years ago when a lot of these taxes were dreamed up.

[Representative Matt [unidentified] (House Transportation leadership)]: Replen Burke has an additional question. Thank you, Tom.

[Representative Mollie Burke]: Yeah, thank you for this. So what

[Representative Matt [unidentified] (House Transportation leadership)]: would

[Representative Mollie Burke]: it take for motor if we were to raise motor vehicle fees? That add substantially to the transportation fund? I have a big flat potato issue, but just asking that question. And then the other question I have for you is when you were just talking about live signs or whatever, would you recommend some kind of a raising in income taxes? Talking about two things that are very challenging to talk about, but I just wanted to ask those questions.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: Yeah, your voice was a little garbled with a mic Sorry. Going on, but that's okay.

[Representative Mollie Burke]: I can ask it again if you want me to.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: No, I think I have a question. I'll just reiterate. Asking about places you could get more revenue. Is motor vehicle fees one? And as the income tax and other taxes like that, should that be fair game?

[Representative Mollie Burke]: Correct.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: So motor vehicle fees, you'd have to raise on an annual basis to at least keep up with inflation. And then if you wanted to exceed inflation, then you'd have to say inflation plus whatever you want. Now you can do that, but obviously, you will feel political pressure from a tax that's pretty widespread and a tax that is also regressive. So, know, I mean, you're always weighing political costs with revenue. If it were easy to raise revenue, you'd do it all kinds of places, but it's it's not. It's that's hard. And so fees typically have been sort of, you know, not an easy place to to raise money, but, but, yeah, if you wanted it to be to keep up with your expenditures, you would have to have an inflation indexed with, inflation plus something else probably. As to whether getting personal income money, everybody looks at that because it's the biggest single source, but it is incredibly volatile. And it will it we we will see that in the coming years. We have a forecast. It's pretty steady state, but any external shock, it hits there. And you can see how in corporate revenues, that's an extreme case where it's even more concentrated among a relatively small number of payers, broader base than it used to be before the apportionment factors were changed. That volatility can wreak havoc if you've got expenditure flows that are steady and need to be predictable. So there are trade offs to every source of revenue you might tap, and I don't think anything should be off the table.

[Senator Richard "Rich" Westman (Chair)]: But

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: the costs are largely political as to which one you really could raise and should raise. The idea with the transportation fund is that it all has to do with driving and transportation, and that it sort of pays for itself. But they're they're bigger issues, yeah. So, that's almost more of a political than an economic decision.

[Senator Richard "Rich" Westman (Chair)]: So at this point, the Senate Transportation Committee has to move on. If House Transportation, I can't speak for you guys, but we have to pull out of this. I will say to you, Tom, and seeing for the broader world, and I'm sure there's somebody from the transportation agency between joint fiscal, between your office, Tom, and the transportation agency, I'm going to be looking, and I think Senate Transportation is going to be looking in the projections that are out restating my question, where did the lines cross? And so if we follow the path where purchasing use came back over a five year period, On the revenue side, you can help us. I think we'd look to the agency to come up with estimates for increases in it, but where do the lines cross and what does that picture look like going out to the future? And I'm pretty aware that in the immediate we can get to a place where it's advantageous to the T fund to have purchase and use, but we do have declining revenue sources and we do have costs that are outstripping our revenue growth in there. So there will be a point where the lines cross. And I'm, I personally am not clear about where that is and we'll be looking for the three entities that help us paint a picture. But with that, thank you all and we're gonna sign out and I don't know what whether House Transportation is gonna sign out or whether they want to continue to do. I leave that up to the rest of you. But

[Representative Matt [unidentified] (House Transportation leadership)]: Thank you very much. I think we're all set. We appreciate your time this morning, and thank you to the senate for putting it together. And thank you, Tom, JFO, agency, etcetera. Thank you.

[Tom Kavet (Legislative Economist, Joint Fiscal Office)]: Thank you all very much.

[Senator Richard "Rich" Westman (Chair)]: Thank you. I'm gonna take and we'll be back at 10:00. Good. And we're gonna sign out for ten minutes, then we'll be back with Damian and more vehicles and