Vermont Legislature SmartTranscripts:

[Sen. Andrew Perchlik (Member)]: You're live.

[Sen. Richard Westman (Chair)]: So this is Senate Transportation. It is February, and we're getting started for the week. We have Matt Russo, who is going to talk to us about the inspection manual. He was scheduled to also talk about the license plate issue, but I understand that motor vehicles isn't ready to do that, so we will just be doing the inspection manual. And Matt, if you could introduce yourself, and we have documents from me.

[Matt Russo, Deputy Commissioner of DMV]: Matt Russo, Deputy Commissioner for DMV. And I will also share my screen.

[Sen. Richard Westman (Chair)]: Right.

[Matt Russo, Deputy Commissioner of DMV]: Everyone see that?

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah. We see a document with some black boxes on it for some reason.

[Sen. Richard Westman (Chair)]: Yeah, your black box is blocking out a little. Yeah. It's mostly there.

[Sen. Andrew Perchlik (Member)]: I'm gonna see an IT issue. This happened last week too. Oh, they're there though.

[Sen. Wendy Harrison (Clerk)]: They're good birds.

[Sen. Andrew Perchlik (Member)]: I see what's under those.

[Sen. Rebecca “Becca” White (Vice Chair)]: And they seem to have migrated.

[Sen. Richard Westman (Chair)]: Is that

[Sen. Andrew Perchlik (Member)]: any better?

[Sen. Wendy Harrison (Clerk)]: If you x out your left nav bar, that might give you a motor move.

[Sen. Richard Westman (Chair)]: That at least moved it over. Now I got a black box on the side, but it's not covering.

[Matt Russo, Deputy Commissioner of DMV]: All right. All right. So we will start with page 31 and I also had sent attachments if you have those as reference. Page 31 is wheels and tires. Our proposed changes are to modify two of the bullets and remove number four. We'll be updating number two, to include a deep cut in addition to a worn spot that exposes the cord through the tread. And number three, we're gonna keep any tire that has visible bulges indicating So

[Sen. Richard Westman (Chair)]: if you can hang on here. So we have, I have another document, the pleasure car and light truck periodic inspection manual. So when you're referring to two and three, is that under the rejected if? Correct.

[Logan Hoon Gray, Joint Fiscal Office]: Yes, if.

[Sen. Richard Westman (Chair)]: Yep. So we should be going back and forth between the two documents.

[Matt Russo, Deputy Commissioner of DMV]: Yes. For reference, you can go back to the inspection manual document. Okay.

[Logan Hoon Gray, Joint Fiscal Office]: Yep.

[Matt Russo, Deputy Commissioner of DMV]: And then we're removing number four. We did take the word cut from number four and put it into number two, but the weather in the ozone is more indicative of aging. So we took that out, because that seems to be an issue at inspection. And I'll just keep going, but if you have questions along the way, just let me know. Power steering and suspension. We're gonna move the following from failure to advisory. Power steering, belt broken, and vehicle continues free rocking motion after release. And these are more about, in our notes section. These are more about ride quality and not direct safety. Brake performance. We're removing the section, that has a road test requirement. Again, we've referenced other states inspection and checked within inspection stations, and this is not a requirement with any other state, after a break change. Page 36, rotors and drums. We're removing the word rust from if more than half inch of pitting, which was formerly rust exists. We'll keep the definition of rust in the notes section. We're gonna add language evidence of cracks on rotor drum extending to open edge, and strike the word chips from brake lining shows evidence of cracks or chips or if adhesion is compromised.

[Sen. Richard Westman (Chair)]: We have a question.

[Sen. Andrew Perchlik (Member)]: Yeah, if you don't mind any questions as we go along. Yeah. Thank you. Obviously a big deal. I heard from a constituent a suggestion because as all of y'all know, there's different sizes of rotors. A half an inch on small car is very different than a half an inch on a big car. So he was suggesting that we have a percentage of the rotor instead of just a one half inch or in addition to it. It could be oars, but just having a percentage of the rotor having rust would be more impactful than just a half

[Sen. Richard Westman (Chair)]: inch. Okay.

[Sen. Wendy Harrison (Clerk)]: Go ahead. We had in this committee, I think two years ago, on this discussion, DMV send a bulletin to all the stations about road arrest, and I don't have it in front of me right now. I can go look it up, in that, there was some language about how to interpret it. Instead of forcing the entity to go through the rules to make this kind of change, we just had them send a memo. So I'll find out. I don't know if you do you know what I'm

[Matt Russo, Deputy Commissioner of DMV]: talking about? I do. I remember that. And it was meant to explain the whole rust situation, which was has always been an issue, and we're still getting complaints about rust. So I think that we just wanted to clarify that the safety concern is really around the pitting and not so much the rust.

[Sen. Wendy Harrison (Clerk)]: That is the pitting that will change breaking distance, I'm assuming, not in surface rust.

[Matt Russo, Deputy Commissioner of DMV]: Right. Right. We're just removing rust completely.

[Sen. Wendy Harrison (Clerk)]: Yeah. Okay. That's that's definitely the proof, but but Harrison might have a point about the amount of pitting. But if we remove rust, then it that'll be a big help.

[Matt Russo, Deputy Commissioner of DMV]: Lighting and electrical systems, page 38. The following are, will be moved from failure to advisory. They're all lighting elements that are primarily cosmetic or supplemental. These aren't a safety concern. And so our recommendation is to move them to advisory.

[Sen. Wendy Harrison (Clerk)]: What are what are clearance lamps? Yeah.

[Matt Russo, Deputy Commissioner of DMV]: It's the the lights on the top of a a truck so you know how wide the truck is, and that's for rear and for front.

[Sen. Richard Westman (Chair)]: Do you do you know what

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: it is? Yeah. They're a little Five.

[Rep. Patrick “Pat” Brennan (Member)]: They're orange most of the time. Right?

[Matt Russo, Deputy Commissioner of DMV]: Yeah. There's, like, four four to six on the top of a a big truck at the very top.

[Sen. Richard Westman (Chair)]: So you can see on

[Rep. Patrick “Pat” Brennan (Member)]: of, like like, big trucks. Yeah. I got a three quarter No. It. Oh, yeah. Got them on mine. How you doing?

[Sen. Richard Westman (Chair)]: Thanks. Go ahead.

[Sen. Andrew Perchlik (Member)]: Can I just ask you

[Sen. Rebecca “Becca” White (Vice Chair)]: a general question, which is so this is the updates that you're gonna be making? My understanding of the process for which you've come to the recommendations that you're making is through rule making. So I guess I'm just wondering like how If you could just give us a little bit more detail, like is our comments today going to be reflected in any changes to this document or is this merely to provide to us what is the change that we should be expecting to see? I guess the- I have many comments, I don't really know if I'm shouting into

[Sen. Andrew Perchlik (Member)]: the wind on this one.

[Sen. Richard Westman (Chair)]: No, I think I totally, I don't know what the process they have planned. I thought we'd run through the document of what they were doing. At the end, we'd have a discussion with the commissioner and the deputy commissioner. What do you see as the process? Okay, Perfect. But I That's it. Because the issue came up in here. They talked about the manual and what we might do to make the manual easier for people to deal with, and then we can talk about what the process would be. In the backdrop of this, we also have the two year inspection. What would we do in that and what track would that take? So I see the two as connected. Okay. Go ahead. And what

[Sen. Wendy Harrison (Clerk)]: I thought kind of was the potential process when we talked to our council was that we would look over these things and then give them authority to make these changes under emergency rules so they didn't have to go through the full rule process. These could be in effect more immediately than they would like on the back end go through the rule process to make sure.

[Sen. Richard Westman (Chair)]: We did have that discussion here.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah, I'm in favor

[Sen. Andrew Perchlik (Member)]: of that. So that's great. Thank you.

[Sen. Richard Westman (Chair)]: Good. Go ahead.

[Matt Russo, Deputy Commissioner of DMV]: Next is headlamp aiming on page 39. And we're proposing to remove this entire section. This is rarely performed by inspection stations. And that was our that was their recommendation.

[Sen. Rebecca “Becca” White (Vice Chair)]: If anything off, it's come to its way of constituents. You might all know what I'm about to say, but headlamps are extremely bright for a lot of people and can be even disorienting if you're behind if someone's behind you and it's coming in the back. Do we have any limitations in our inspection manual for being too too much light coming out of a a vehicle's headlamps?

[Matt Russo, Deputy Commissioner of DMV]: I'm not sure if there's anything about the brightness or the type of bulb.

[Sen. Wendy Harrison (Clerk)]: I they're at the side level. Think we talked about this before, there's some side level. Yeah.

[Sen. Richard Westman (Chair)]: They went from something to

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: what's the new ones? The LED. The LED. Right? Yeah.

[Sen. Andrew Perchlik (Member)]: Well, they keep They can be. Yeah. They can do, really.

[Sen. Richard Westman (Chair)]: I I I just you know, this is my technical term. I hate them. Yeah. Yeah. There you go. Go ahead.

[Matt Russo, Deputy Commissioner of DMV]: Alright. Next is instrument cluster, speedometer, defroster horn on page 40. The following will be moved to advisory, airbag warning lights, speedometer illumination, and front defroster function. This is keeping, the the brake system failure as a failure, but moving the rest to advisory. So we're only keeping the the one that really is a safety indicator. Vehicle glass, page 42. Moving this one from failure to advisory to read two or more star breaks or bull's eye bull eye bull's eyes larger than 1.5 inches within any part of the critical area. Small cracks or chips outside the drivers view should not fail an inspection. And we're talking about the little spider cracks. This is the small ones, little bullseyes.

[Sen. Wendy Harrison (Clerk)]: Is this a requirement just for the windshield or just all go ahead?

[Matt Russo, Deputy Commissioner of DMV]: This is just for the windshield. Side windows, page 43. Moving this one to an advisory rather than a failure. Any manual or power operated window fails to operate properly. And that's for both driver and rear windows. And while it's it's a it's it really is more of an advisory. It's not a direct safety issue for a driver. Exterior body and sheet metal on page 46. Proposed changes are moving from a failure to an advisory that portions of the wiper blades that contact the windshield are ripped or missing sections of rubber. Again, this is more of an advisory. And then under sheet metal and body, define failure as corrosion or torn metal that compromises structural integrity. Also, inserting into the manual diagram, which identifies the a, b, and c pillars in excluding the front and rear doors. And this is just for safety reasons, not for cosmetic. Develop clear language describing when rust on these pillars constitutes failure.

[Sen. Richard Westman (Chair)]: Go ahead. Could you you Oh. Oh, yeah. Well,

[Logan Hoon Gray, Joint Fiscal Office]: go ahead.

[Rep. Patrick “Pat” Brennan (Member)]: Could you

[Sen. Richard Westman (Chair)]: You caught my eye, but you can't we both had about to see.

[Rep. Patrick “Pat” Brennan (Member)]: Could you define structural integrity? Like, on a rear fender rust or a little ball set Does it pertain to that?

[Matt Russo, Deputy Commissioner of DMV]: This is specific to the a, b, and c pillars of the vehicle. And so we wanna include a diagram showing exactly where the rust cannot be so that it does not compromise the integrity of the the pillars.

[Sen. Wendy Harrison (Clerk)]: So the structural integrity is only in relation to

[Matt Russo, Deputy Commissioner of DMV]: the pillars? For this portion.

[Sen. Wendy Harrison (Clerk)]: Okay. Is there somewhere else where you're about the rocker panels? Because I I failed because of rust on rocker panels

[Matt Russo, Deputy Commissioner of DMV]: before. Yeah. No. There there is other sections that reference that. This proposal is just for page 46 specific to the pillars, but there are other sections.

[Sen. Wendy Harrison (Clerk)]: And so so it seems like, to under Brandon's question, if there was just some rust over the wheel wells, that wouldn't it might be structural integrity of the wheel well, but it's not a safety structural integrity of the vehicle and wouldn't wouldn't fail.

[Matt Russo, Deputy Commissioner of DMV]: Right. We and there's also in in that section, there's an area about the metal tape that you can use over a certain size rust hole, and that that would just be that would pass if you had that that metal tape. So that wouldn't be a fail.

[Sen. Wendy Harrison (Clerk)]: Right now, after you put the tape over, it's failed. But you're when you're changing it, you wouldn't have to put the tape over. You could just pass with a rust hole in your fender.

[Matt Russo, Deputy Commissioner of DMV]: Right. Where yes. Yeah. Yep. And that is not and, again, that's not included in this section.

[Sen. Wendy Harrison (Clerk)]: Do you have changes to the rest of other parts of the vehicles? Because we're down the last page of this doc. We we do not.

[Sen. Andrew Perchlik (Member)]: I'm sorry. What was that question?

[Sen. Wendy Harrison (Clerk)]: It's like it might get the rust on the brain or on the proper panel. They're not suggesting a change to that.

[Sen. Richard Westman (Chair)]: So it would probably be helpful in this part if We had a closer comparison, and you get I'm on it says page 38, sheet metal body, objected vehicles. We've got more of a side by side here of what's in and what's out.

[Matt Russo, Deputy Commissioner of DMV]: Yep. And we can also send the committee a diagram. Yeah, we've

[Sen. Richard Westman (Chair)]: got diagrams in. And I think this is the area where there seems to be a lot of interest around. So if we could better understand what will remain and what's being taken out so we have a better idea of this.

[Sen. Wendy Harrison (Clerk)]: We can do that.

[Matt Russo, Deputy Commissioner of DMV]: And then the last is just renumbering the pages to align with the online manual. And that is all I have for proposed changes.

[Sen. Andrew Perchlik (Member)]: Questions? Well, a comment on a question. These seem like significant changes, so I appreciate the work and I think we should have some time for members of the public to digest these, see

[Sen. Richard Westman (Chair)]: them before we make a final decision. Well, I think if we get back something and we can better understand the rest around that, then I think we'll figure out who are some people in the inspection community to come in and talk about this. That'd be great. So, go ahead.

[Sen. Rebecca “Becca” White (Vice Chair)]: Well, to that point, Senator Harrison, I think in a way we are kind of, the one limitation to this process if we move forward with just giving them the ability to move forward is there will be less public input on it. So I do, I think that's just one the rulemaking process doesn't really lend itself to a lot of public engagement, but we are, I think, taking away a little bit of time that people would have to consider it. So I don't know if we wanna when we do our public hearing to include these changes as something people could comment on in general. We could do that. Because I'm not a mechanic. I'm not a body shop person. I reacted to each of these going from failure to advisory for the most part is positive. But I, to your point, you have a constituent who already had suggestions.

[Sen. Andrew Perchlik (Member)]: Yeah, and I'd like to give him the opportunity to, he has to be.

[Sen. Richard Westman (Chair)]: If we get this to some final draft, we can post this and say this is part of the hearing. Okay. Okay. So the question, and you should state your name before you talk, Commissioner.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Sorry. And

[Sen. Richard Westman (Chair)]: we're talking about expediting, how would you see this moving forward?

[Andrew Colliers, Commissioner of DMV]: Because I know it came up last week in committee about this committee approving if we can get some.

[Sen. Richard Westman (Chair)]: Get you to anger me.

[Rep. Patrick “Pat” Brennan (Member)]: Oh, apologies. Sorry.

[Andrew Colliers, Commissioner of DMV]: Been a perpetual Monday. Sorry, you mean it. Andrew Colliers, Commissioner of DMV, for the record. Know we had proposed a kind of complete change in the rule making process, and we're happy not to formulate, but we think an expedited manner of moving this forward, I'm just not familiar how that process, if this committee approves it and it goes

[Sen. Richard Westman (Chair)]: how Well, think, much that because there's so much attention around inspection in all of this, but I'd like to see us put some language in the miscellaneous DMV bill from, and you can tell me if this is wrong or the staff can tell us it's wrong, but we would reference these rule changes it kind of instructs you to go to expedited rules. So we have referenced that. What we are looking at is kind of a hearing, maybe the last week of this month. We might post this and say the hearing is about inspections, some rule making changes, and longer term investigating two year inspections and have a hearing and people can show up if they're interested. Yep. That would be And then but it our reference to you would be we'd like you to move ahead with this in some fashion. Not telling you exactly what would be in that, but we are learning, if we have a hearing, we will hear from the public.

[Andrew Colliers, Commissioner of DMV]: Yes, absolutely. That would work for us, our, the only thing we're just waiting on timing is, again, we come to agreement on this and that path forward, we just have to make that change within the AVIP system, the inspection system, so we're just waiting on how long that will take the vendor just to complete that. It's not gonna be any, know, thing, I just wanna make sure we have

[Sen. Wendy Harrison (Clerk)]: a good

[Sen. Richard Westman (Chair)]: timeline. So what I like from DMV is you to sit down with Damian, our staff, and come up with some language that we might put in the miscellaneous DMV bill that would accomplish what we just talked about. We can do that. And if you can convey that and Damian can write it for you, that would be great.

[Rep. Patrick “Pat” Brennan (Member)]: Okay, perfect. Before he goes, is he gone?

[Sen. Richard Westman (Chair)]: And which key were you talking about?

[Rep. Patrick “Pat” Brennan (Member)]: The commissioner or the deputy? Well, probably both, but I'm just wondering, these changes were probably came from a number of complaints from inspection stations or just things you've heard in here?

[Matt Russo, Deputy Commissioner of DMV]: It's a combination of what we've heard from Vermonters and we've also consulted inspection stations in other states. So these are also the

[Sen. Wendy Harrison (Clerk)]: top? These are the top.

[Rep. Patrick “Pat” Brennan (Member)]: Was there any complaint that you might have heard that was a little too tough to change for you? Like maybe more safety related, a common complaint.

[Matt Russo, Deputy Commissioner of DMV]: I don't recall anything specifically. A lot of the complaints were really the same complaints we've been hearing for years.

[Rep. Patrick “Pat” Brennan (Member)]: Okay. I would just add, I think

[Andrew Colliers, Commissioner of DMV]: the easiest one actually to fix was the brakes and drums. We pulled language from New Hampshire, actually. Oh. The one that is just, it's hard to fully grasp the rust one, we have a good plan with that working based on some other seeds. We have a diagram, apologies, I thought you had that, but I think the Rust one at least can allow, would allow some more vehicles to Pass. Pass that really aren't drivable and are not safety related, within that of A from C column, is the passenger compartment, it kind of opens up outside of that and allows some vehicles to pass.

[Sen. Richard Westman (Chair)]: So before, and because I want you to hear, and this is my question to the committee. If we were gonna have a hearing and we did it on the twenty fourth or the twenty fifth, that's a Tuesday or a Wednesday, my goal would be that before we leave on Friday for the town meeting break, that we're pretty much done with miscellaneous DMV. Right. Would four to six in either Room 10 or eleven, whichever, would either one of the, are either one of those days out for anybody? I believe twenty fourth or the twenty fifth?

[Sen. Andrew Perchlik (Member)]: The twenty

[Sen. Wendy Harrison (Clerk)]: fifth is good. Twenty

[Logan Hoon Gray, Joint Fiscal Office]: fifth is good. Twenty fourth is great.

[Sen. Andrew Perchlik (Member)]: Yeah. I do the twenty fourth.

[Sen. Rebecca “Becca” White (Vice Chair)]: I could do either, and maybe we do the wall of a house.

[Sen. Richard Westman (Chair)]: Well, the reason I wanted to do it the beginning of the week is it would give us that week to pull the bill together, so by Friday, because I'd like to have that, I think we have till like the March, but coming back, it's a pain. Yeah. So I'd like to have it done.

[Sen. Andrew Perchlik (Member)]: So the twenty fourth?

[Sen. Wendy Harrison (Clerk)]: The twenty fourth, I think so. I just wanna make sure

[Sen. Richard Westman (Chair)]: it's not conflicted with the budget

[Sen. Wendy Harrison (Clerk)]: meeting. Thought I had that out.

[Sen. Richard Westman (Chair)]: When is your when is your public meeting on there? We can do both of them at the same time.

[Sen. Rebecca “Becca” White (Vice Chair)]: Spell us your opinion.

[Sen. Andrew Perchlik (Member)]: And another thing.

[Sen. Richard Westman (Chair)]: We could do it later in the evening if that worked.

[Rep. Patrick “Pat” Brennan (Member)]: Well, you, wouldn't we, I would assume we want to if we wanted inspection guys to chime in and stuff, right?

[Sen. Andrew Perchlik (Member)]: February 19, it says twelve to the nineteenth.

[Sen. Richard Westman (Chair)]: The nineteenth?

[Sen. Wendy Harrison (Clerk)]: Yeah. For hours. Yeah. Twelve. So twenty fourth.

[Sen. Richard Westman (Chair)]: Would four to six get them there? Or Well, if you're, most places are closed by five, and if we allow people a Zoom option.

[Sen. Andrew Perchlik (Member)]: What about five to seven?

[Sen. Richard Westman (Chair)]: Five to seven? Is that where?

[Sen. Wendy Harrison (Clerk)]: Yeah.

[Sen. Richard Westman (Chair)]: Do you have that, Megan? Got it. On the twenty fourth. And we're gonna be looking to you, Commissioner, to make sure we have the right stuff to post so people can understand this. And it's gonna be both this and the concept of a two year inspection. Let me

[Sen. Andrew Perchlik (Member)]: Yes. Oh, sorry.

[Sen. Wendy Harrison (Clerk)]: I was just gonna say, commissioner, it might be helpful if you could have it on the as, like, strike through in additions to the actual document. Like, we're gonna cut out this, you know, have it strike through like we would build in. Okay. You know? That makes people, especially if they're inspection stations, they used to look at the manual and they'll just see it struck out or added language instead of having to go back and forth through the two documents. And then I I couldn't find that bulletin. I'm wondering if you were able to find that bulletin. We can send a copy of that.

[Andrew Colliers, Commissioner of DMV]: Okay. I think I saw it on

[Sen. Wendy Harrison (Clerk)]: the mini web page. I

[Chris Rupe, Joint Fiscal Office]: think I I

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: have it.

[Sen. Wendy Harrison (Clerk)]: Oh, it's just from last year?

[Sen. Andrew Perchlik (Member)]: Posted it.

[Sen. Wendy Harrison (Clerk)]: Okay.

[Sen. Andrew Perchlik (Member)]: Can you just speak fast while you're talking about?

[Sen. Wendy Harrison (Clerk)]: Okay.

[Sen. Richard Westman (Chair)]: Yeah. It'd be refreshed.

[Sen. Andrew Perchlik (Member)]: Can I ask a question for all your folks? So, Commissioner, it sounded like you had other thoughts when you when you when we're talking about the rotors, when you were just explaining things, it sound it sounded like you had more ideas than what was on this. You you had more details.

[Andrew Colliers, Commissioner of DMV]: Oh, on on this? No. I I was just saying we stole this updated verbiage from New Hampshire on on how they handle well, I guess they still have it. I don't know if they handle it for it breaks right now. Okay. So it's it's improving the rust. We're getting rid of that in humidity of it, and then we're sticking with the cracks to the open edge, which they clearly define as a safety issue on theirs.

[Sen. Andrew Perchlik (Member)]: Uh-huh, and can you start thinking about what percentage of the rotor surface would be an appropriate percentage? Because I'm just going to keep asking about that because it really does make a difference.

[Andrew Colliers, Commissioner of DMV]: So we're getting rid of rust soap, so we don't.

[Sen. Andrew Perchlik (Member)]: Okay, or the pitting, right? Because just a half inch is different with different cars. Right, so- So, so what, what size of car, what rotor, what's the sample regular rotor that the half inch is meant to alter?

[Andrew Colliers, Commissioner of DMV]: So we're remove that first section of the press. So we're not gonna define a failure as rust on the rotor.

[Sen. Andrew Perchlik (Member)]: I understand, but this pitting is still defined by a half an inch.

[Rep. Patrick “Pat” Brennan (Member)]: So it

[Sen. Andrew Perchlik (Member)]: Right? So the pitting

[Andrew Colliers, Commissioner of DMV]: so the rot so there what was happening was they're saying that half inch down from the pop edge of rotor downwards from the open edge. Any rust there, they were saying is not good. We're saying now we're not gonna look at that.

[Sen. Andrew Perchlik (Member)]: Understand the I'm sorry that it's unclear that I understand the rust part, but what I'm getting at is the measurement of a half an inch is a different situation depending on, like how did you pick a half an inch?

[Rep. Patrick “Pat” Brennan (Member)]: Oh, I,

[Sen. Andrew Perchlik (Member)]: or how was this? Somebody picked a half an I'm not sure

[Andrew Colliers, Commissioner of DMV]: how that get balanced.

[Sen. Andrew Perchlik (Member)]: If you could just put some thought into it because like my rotors are pretty small, right? So half inch would be a larger percentage and more impactful.

[Rep. Patrick “Pat” Brennan (Member)]: You're pick your car?

[Sen. Andrew Perchlik (Member)]: I know, I might. But it's working well now, so.

[Sen. Richard Westman (Chair)]: And I would just say to you, Commissioner, it would be nice for us to have a statement from you and the EMV to talk about, here are the things, here's what we're trying to do with rust, here's what we're trying to do with the inspection manual from an extremely high level. Here's the things we're trying to accomplish. And then we would post that with it in front of the hearing. And, we'll want to get that posted within the next couple of days. I think it I'm just gonna say the first time with the inspections, I'm feeling like we've got a plan. Yeah. So you can be sure.

[Sen. Rebecca “Becca” White (Vice Chair)]: We have a runway.

[Sen. Richard Westman (Chair)]: Thank you. You've taken The runway is so often short to me up until it's done. So Matt, I think we're done with you and we thank you very much.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Thank you.

[Sen. Richard Westman (Chair)]: Very helpful this morning.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Thank you.

[Sen. Wendy Harrison (Clerk)]: Thank you.

[Sen. Andrew Perchlik (Member)]: Thanks.

[Sen. Richard Westman (Chair)]: Next is Jeremy. You can sit. Do you have good news or bad?

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: I have news. You can decide what

[Sen. Wendy Harrison (Clerk)]: it is.

[Sen. Andrew Perchlik (Member)]: Oh, I'm very confident.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: That's bad.

[Sen. Richard Westman (Chair)]: That's bad. He's always bad. He's always mean to me.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Logan's got worse news, so they're bad.

[Sen. Andrew Perchlik (Member)]: Oh, no. And

[Sen. Richard Westman (Chair)]: Christopher He's good. He's after you. He's just before lunch, so he can spoil our lunch. Okay.

[Sen. Andrew Perchlik (Member)]: I think that when you sign in to share, if you could share something would be helpful. Or in the PDF. Yeah. Because I think the reason we're seeing

[Sen. Richard Westman (Chair)]: the whole stuff. I don't know if

[Chris Rupe, Joint Fiscal Office]: you know. I didn't I didn't

[Sen. Andrew Perchlik (Member)]: we were sharing. Okay.

[Sen. Richard Westman (Chair)]: Like, a new bug. I'll I'll try

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: to just share the power or the

[Sen. Andrew Perchlik (Member)]: Just the So yeah.

[Sen. Richard Westman (Chair)]: No worries.

[Sen. Andrew Perchlik (Member)]: We'll see if that works. And so IT is right. Nothing

[Sen. Richard Westman (Chair)]: here from the side. I was working here. No. How long are you gonna be? Not an hour. No. I'm talking about before you're ready.

[Sen. Andrew Perchlik (Member)]: Oh. It's good.

[Sen. Wendy Harrison (Clerk)]: It's not

[Sen. Andrew Perchlik (Member)]: gonna be an hour, Parker.

[Sen. Richard Westman (Chair)]: Parker. Has the technology got the best of you yet? Or I'm I'm

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: trying to join as we speak. You guys know back up in here, by the way. I've got Logan. Hey, Chris. Oh, okay.

[Rep. Patrick “Pat” Brennan (Member)]: I mean, computer back up.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Oh, no. Yeah. We're we're living on the edge.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Yeah.

[Sen. Wendy Harrison (Clerk)]: Half inch of the Okay. What they call

[Sen. Richard Westman (Chair)]: it. The pin? Contacts. So it's not the whole. Okay.

[Sen. Wendy Harrison (Clerk)]: But I think I think your point is the whole offense. You could say it's Do not share. The contents,

[Sen. Richard Westman (Chair)]: the rotor. The key is Yeah.

[Sen. Andrew Perchlik (Member)]: I'll just get the guy that I Oh, okay. To me at the time. Right. Because we can look at, you know,

[Sen. Richard Westman (Chair)]: the salary team. So they'll blame us.

[Sen. Andrew Perchlik (Member)]: They're private. And so they're in a different you know, it's it's it's really a question of of that status is really what you should look at.

[Rep. Patrick “Pat” Brennan (Member)]: I think

[Sen. Richard Westman (Chair)]: that's the context. Yeah.

[Rep. Patrick “Pat” Brennan (Member)]: I think the rest of pitting the pitting for the

[Sen. Wendy Harrison (Clerk)]: rest was the key there. Yeah. Because before people would say, they're they're I thought

[Sen. Richard Westman (Chair)]: they were falling from there. Yeah. I thought rest. I thought of those things are long pitted this morning.

[Sen. Wendy Harrison (Clerk)]: Great.

[Sen. Richard Westman (Chair)]: Ready? I I this is your show?

[Rep. Patrick “Pat” Brennan (Member)]: Oh, yeah. Okay. No. No. It

[Sen. Andrew Perchlik (Member)]: is. Yeah. Exactly.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Okay. Good morning. Thank you. Jeremy Reed, chief engineer, agency of transportation. And just a handful of slides to demonstrate what the correlation is between the state and federal funds. Now I've got a whole slew of caveats and assumptions that went into this, so I'll I'll certainly get those out of the way here.

[Sen. Richard Westman (Chair)]: Is your name Jeremy Butt Reed?

[Sen. Andrew Perchlik (Member)]: Because everyone's got a butt in his place.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: I don't want to be accused of misleading the committee.

[Sen. Richard Westman (Chair)]: So what

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: I'm demonstrating looks very strictly at the highway divisions. I did not consider any discretionary grants. I have removed federal highway funds that don't go to projects, so that would be the funds or excuse me, removed non formula federal highway funds as well. So non formula federal highway funds would be funds. We move federal highway funds that don't go to projects that are like highway work programs and our asset management is heavily funded by Federal Highway.

[Sen. Richard Westman (Chair)]: What you're basically talking about is the core of construction.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Yes, I've taken basically the formula funds we use to build our capital program that we can count on on an annual basis that are predictable.

[Sen. Richard Westman (Chair)]: This is the meat and potatoes of the funds Yep. For the

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Obviously, I've taken some assumptions based on what the reauthorization of the surface transportation bill will be, and those are kind of shots in the dark at this point, but we've demonstrated a couple of different outcomes. The other thing I did is understanding that there's a potential five year recapture of the $50,000,000 purchase in years. I've tried to scale that in a manner that that is illustrated here. So in the first year, FY '27, I said I took $0 of that. So what I'm trying to do is establish '27. Now this is different than the governor's recommend, but I'm just trying to establish again a baseline sort of traditional budget without any recapture, without any. '28, I I took 5,000,000 of the potential 20,000,000. And so, again, how I kind of came up with that, as I said, 12,000,000 would go to indirects that we are baking into the '27 budget, 3,000,000 would go through other key fund initiatives, and then 5,000,000 would go again to our core capital projects.

[Sen. Andrew Perchlik (Member)]: So you are assuming that it will all go to the T fund, this is the proportion of that?

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: That I would sort of, again, broad assumptions here, this is what I'm saying comes to highway for matching formula funds. Why wouldn't you use all 20,000,000 for funding? Well, for instance, there are other agency needs potentially within the D Fund, and we know that we're using $12,000,000 of indirects this year for the '27 budget, and I think if we could end that practice, we would, because that frees up $12,000,000 of federal funds. In 'twenty nine of the $30,000,000 I just took thirteen, and thirty of the $40,000,000 I took 20, and then in 'thirty one of the $50,000,000 I took '22. And again, no real science behind that. I just made some broad assumptions based on to start somewhere, basically.

[Sen. Richard Westman (Chair)]: Hey. Go ahead.

[Rep. Patrick “Pat” Brennan (Member)]: Was I seeing by '31, you said $50,000,000 but am I seeing a $58,000,000 number somewhere? Yeah, I don't know what the projection It could very well be there, because I think

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: it's actually 53 or 54 today. But again, since I'm making a lot of assumptions, I'm just using round numbers

[Logan Hoon Gray, Joint Fiscal Office]: for this exercise.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: So this is a slide you've seen before, talks about all the revenue sources, and really the intent here is just to demonstrate that, yes, our Federal Highway money is roughly $375,000,000 but after I strip out all the things that I said I was stripping out, it's really closer to $2.75. So that's the number that I based all of my assumptions on and examples rather to follow.

[Sen. Andrew Perchlik (Member)]: And the TIF fund ends this

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: time, The TIF fund doesn't end, I just didn't include it in the analysis. So, think that basically flatlines around 15,600,000.0 going forward because that's, again, relatively flat based on the gas revenue, gas and diesel up there. So, again, I've ignored that and set that aside.

[Sen. Andrew Perchlik (Member)]: But our I guess I was thinking our debt is

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Our debt's been expired for three, four years now, so we get to use that to like T fund, but for a specific subset of projects, typically, GRIPs.

[Sen. Andrew Perchlik (Member)]: Okay, so it is restricted to something? Yes. Bridges? Or a large project?

[Logan Hoon Gray, Joint Fiscal Office]: Well, it's not necessarily the size of the project, it has to have

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: a ten year serviceable life or something like that.

[Sen. Andrew Perchlik (Member)]: Ten year?

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Think it's I we

[Rep. Patrick “Pat” Brennan (Member)]: were at thirtieth. No. Yeah.

[Sen. Richard Westman (Chair)]: When we did it, it was like

[Rep. Patrick “Pat” Brennan (Member)]: Did we change it?

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: I I I think it's down to, like

[Sen. Rebecca “Becca” White (Vice Chair)]: Okay.

[Rep. Patrick “Pat” Brennan (Member)]: I I could be wrong.

[Sen. Andrew Perchlik (Member)]: But the Bridges are easy to Right.

[Logan Hoon Gray, Joint Fiscal Office]: Hop into them. Yeah.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: A paving project, not so much.

[Logan Hoon Gray, Joint Fiscal Office]: Got

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: it. I think we can justify, for instance, Pittsford branded, brand new road reconstruction because that has served its life pretty long. So it's it's bridges typically, and then if we have build new road reconstruction

[Sen. Richard Westman (Chair)]: Yeah. The the the TIM stuff had to be unique when we started this to to have it not, and you'll appreciate that more than the rest of us. It had to be unique in its own specific source to not tip the bonded indebtedness of the stent. It could be separated out in its own so it didn't affect the overall indebtedness. So

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: here are two, well, I'm just a very simple spreadsheet. And what I did is I just said, and again, broad assumptions here. I said, what happens if federal funds escalate at 5% and then state funds escalate at two different scenarios, three and one point five? I think 1.5 is is closer to to the target. In the highlighted portion, you'll see what that is. So in 2027, again, just to establish a baseline, we've got roughly $275,000,000 in federal funds, roughly 50,000,000 out of the T fund, which yields essentially $325,000,000 total program. And generally, again, based on what types of projects we use or do, that works out to about a 15% match that we have across all programs. Interstate's ninetyten, townhighway's ninetytenten, normal state system is eightytwenty. So, once you aggregate all that, 15% is the approximation. So, basically this fifth column tells you where the the lines between state and federal match cross, and anything below 15% essentially tells us that we have run out of state match, essentially. So in scenario one here, I took an escalator of 5% annually and 3% the escalator beginning in 2032. So again, one of the assumptions I made is it was just flat until the purchase and

[Matt Russo, Deputy Commissioner of DMV]: use is fully

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: recaptured, and then a 3% escalator on top of that beginning in 2032. And so, with that, essentially it shows that you've run out of state match in 2041. Now just to give you some intuitive sense of of how drastic this can change, if we look at a one and a half percent state escalator and maintain the same 5% federal escalator, we run out of state funds to match in 2036. So, essentially, a five year reduction in that. I'll also add, we know because we get a reauthorization in sort of a five year chunk, it isn't gonna be a linear escalation. It will be kind of a staircase thing. But, again, for the for the exercise, I just used the 5% insulator year over year.

[Sen. Richard Westman (Chair)]: And and I'm not saying this because everybody in the committee gets this, but that's if all of of the third of purchasing use comes back.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: So that's counting 22,000,000 of the $54.58, pick the number. So it's it's based on, yes, all of it coming back. Some of it will go for other uses, like paying off indirect maintenance, other non core flyaway project functions. So this is

[Sen. Richard Westman (Chair)]: Non core construction. Correct. I would say plowing the road is a core function.

[Andrew Colliers, Commissioner of DMV]: Yes,

[Logan Hoon Gray, Joint Fiscal Office]: yes, good correct.

[Sen. Richard Westman (Chair)]: We've had a winter where if you didn't plow the roads, they couldn't get the very bar.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Yes, so this is looking at recapturing 22,000,000 of state match on our formula funds, basically. Yes. So again, similar exercise, what I did is I dropped the federal to 3.5% year over year, and I kept the state more in line with the targets. Again, you see a fairly significant difference here, essentially, with a one and a half percent year over year increase of state, your lungs don't cross until 2044.

[Sen. Richard Westman (Chair)]: So I'm a little slow in this. But my question, this, can you remind us underneath what the estimates were for fuel taxes? For combustion engines fuel taxes?

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: I don't know that I have that number. I think Logan can provide some. Think the total was 1.7, 1.3, something like that, total T fund growth.

[Sen. Richard Westman (Chair)]: We're gonna come back, but you took the assumptions of the economists.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Well, what I did is I offered two separate scenarios, one at 1.5% growth and one at 1.8% growth, I wanna say their assumption was more precise than that, but in that ballpark.

[Sen. Richard Westman (Chair)]: They were in the ballpark, but that would kind of incorporate that and no increase in fees

[Logan Hoon Gray, Joint Fiscal Office]: and

[Sen. Richard Westman (Chair)]: kind of in the highs and lows of what the estimates were for, that's where you get between 1.5 in this range.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Correct. And and and, again, I did take out the highs and lows and made it a a true linear thing, which we know after ten years, you know, there's going

[Sen. Richard Westman (Chair)]: to be And when Logan gets in the chair, I'm gonna ask to drill down a little bit on those assumptions to Thank you.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: At a 3.5% escalator on the federal side and a 1.8%, which I think is on the high side a little bit, you see we're out at 2,046. So, obviously, and I just want to make this point, stark contrast between a 3.5% federal increase and a 5.5% federal increase, and with that level of uncertainty coming out of Washington, this is an exercise to show how it changes and can change drastically, but I'm in no position to handicap what the reauthorization could look like. Again, no inclusion of grants and other funding sources potentially, CDSs, things like that.

[Rep. Patrick “Pat” Brennan (Member)]: Perfect.

[Sen. Richard Westman (Chair)]: So define looking at underneath this, this is my high level take. We got all of the purchase and use tax back. We're looking at the Feds between one and a half, or 35% increase that we've got just for construction, not any money within our T fund for the towns, not any money. But this does accommodate no new money for the towns, just living with the formula. You can maintenance in our plowing, just the regular increases. We've got, if we got all of the purchase and use tax now, we've got someplace a decade or a little more before we run into trouble.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Yeah, and again, I didn't consider anything. It's not that I included it, I just flatly ignored it beyond my initial assumptions of how much of the purchase and use. Okay. I'm not making any statements whether in 2033 there would be enough for the towns or for maintenance. I think Logan might have some numbers to best guess that. This is strictly looking at we capture the entire purchase and use of assigned some proportion to it, and then from that point on there's some linear growth from gas and fuel tax, purchase and use, all components of the T fund are sort of linear growth at that point. But yes, somewhere between a decade and fifteen years, there becomes an issue with matching federal funds.

[Sen. Richard Westman (Chair)]: You're gonna stick around, right? Yes. All right. I'm gonna ask you to retire to the bench. Temporary. And log in.

[Sen. Andrew Perchlik (Member)]: I haven't posted these yet, but I will write.

[Sen. Richard Westman (Chair)]: Oh, thank you.

[Logan Hoon Gray, Joint Fiscal Office]: For the record, Logan Hoon Gray with the Joint Fiscal Office. I have a presentation similar to Jeremy's creating this hypothetical scenario to sort of estimate what the future might look given the purchase and use proposal and some of the other constraints. The obligatory, the informational, policy recommendations in here. Also, as Jeremy had mentioned, whether the numbers here are adequate, enough, good is something for you all to decide. These are just the presentation as I have it. So we'll start with some assumptions that I have to make to come up with this. We'll walk through why I chose these assumptions and how I chose them. You all can decide if those are good or right or what are you going to do. We'll talk about the hypothetical scenario that I came up with, and then some considerations about what's not being considered and what you might want to think about in addition to what I have presented here. So the board main assumptions here are one, funding needs grow at a rate of 3.71% annually. And I'll explain how I got that in a second. Two, T fund appropriations to the agency of transportation grow at the same rate as fund techniques, 3.71% annually.

[Sen. Richard Westman (Chair)]: Can you remind us what the T Fund state revenues have grown at over the last ten years?

[Logan Hoon Gray, Joint Fiscal Office]: Yeah. I believe I have a slide. Oh, grown out over the last ten years. No. I can tell you what their forecast did they grow at.

[Sen. Richard Westman (Chair)]: What are they forecast to grow at?

[Logan Hoon Gray, Joint Fiscal Office]: T fund revenue of forecast did grow at 1.35% annually between 2026 and 2031. So we're

[Sen. Richard Westman (Chair)]: projecting this at a 3.7, and so we've got, we're at least 2% down from that. And that is sort of

[Logan Hoon Gray, Joint Fiscal Office]: the crux of the constraint that you all have been discussing is that needs are growing faster than our revenue is growing.

[Sen. Wendy Harrison (Clerk)]: This

[Logan Hoon Gray, Joint Fiscal Office]: will largely say the same thing, just with some additional numbers and the proposed purchase and use reallocation added in and stuff like that. So that's three. The government proposed P and U reallocation, which I'll get into in a little details, does occur in the analysis. So the

[Sen. Richard Westman (Chair)]: revenue estimates from that approved by the emergency board and have come for a 3.5 and Jeremy's worst estimate here is 1.5.

[Logan Hoon Gray, Joint Fiscal Office]: Yes. So we're below

[Sen. Richard Westman (Chair)]: his worst case in this?

[Logan Hoon Gray, Joint Fiscal Office]: Well so the the the forecasted estimates from the e board and that Tom and the economists did do not include the governor's proposed purchase and use reallocation. When you include those, which is the fourth section here, which we'll get into, when you include those numbers into it, the growth increases in the out years, and it gets a little complicated and I've got a few slides to explain it. It increases to 1.67, assuming all of that purchase and use goes

[Sen. Richard Westman (Chair)]: in That's very helpful.

[Logan Hoon Gray, Joint Fiscal Office]: I think it'll sort of As I walk through these, maybe some questions will be answered.

[Sen. Andrew Perchlik (Member)]: Can I just ask about it? So the assumption, the first two, so funding needs grow at 3.7, and how are you defining funding needs as what's in the budget? A great question.

[Logan Hoon Gray, Joint Fiscal Office]: I'll show you. I'll walk through all these assumptions and explain why I chose them and how we get them. So the first assumption is that funding needs grow at a rate of 3.71%. So, I used, as many of you will remember, in the transportation funding study that the agency did a few years ago, they had this basic needs analysis or preliminary ten year estimate of the cost required to maintain, operate an administered Vermont's transportation system. And so, they estimated these out for ten years, and they came up with this large number that if money wasn't a constraint, how much would we need to spend to maintain the system? Now, actual numbers there are very large, and we can get into that presentation at a different time. But what I did use here is the compound annual growth rate of those numbers to estimate how much needs might grow in the future year over year. And so when you take that estimate, you get 3.71. So I assume that transportation needs in general are gonna grow by 3.71% every year. This is just one way to do it. It is not what they will provide. It's not exact finding input. It's just an assumption that I made to come up with the larger So that's

[Sen. Andrew Perchlik (Member)]: all the needs being met. That is really an interesting concept, but I haven't seen that.

[Logan Hoon Gray, Joint Fiscal Office]: That's in the funding study that they presented. There's a chart in there and they go into more details about the specifics of how they break it out and sort of the assumptions that they make in that and how you can and can't use it. So I would recommend going to that. I linked it down there if you want to sort of look into it.

[Sen. Andrew Perchlik (Member)]: Do you think it's reasonably accurate or responsible?

[Logan Hoon Gray, Joint Fiscal Office]: Yeah, I mean, can't really say it without knowing the details of the system, but yeah, seems like the funding study in general was a good report that Fantasy put out.

[Sen. Richard Westman (Chair)]: Right. And you're saying it's the best crystal ball, basically.

[Logan Hoon Gray, Joint Fiscal Office]: Right. And all these things are based on assumptions and guessing at things that are going to happen, and we can't know. So, it's a good guess, I think.

[Sen. Richard Westman (Chair)]: Senator White.

[Sen. Rebecca “Becca” White (Vice Chair)]: Thank you, Chair Westman. Yeah, I think, well, I just want to make sure the question that you're asking is, does it meet the needs? Right. And I think that's a different question than the one we're wrestling with here because I think this is what the VTrans folks thinks meets the needs, and I don't necessarily know if that's meeting the needs of our community when it comes to some of the things I've heard them request for updated infrastructure and funding for in particular. I just I don't know if that's a fair point. Jerry, you got to stand up already though.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: If I could share. So, I think the important thing to take from this is, we're talking about meeting the needs, we're talking about the growth of meeting the needs. Right? Because if you look at '26, it's it's a billion dollar budget. Right? So this this is just talking about the growth of the needs, not necessarily meeting the needs. And I just wanna clarify that.

[Sen. Richard Westman (Chair)]: Well, it's the growth of the needs and it's for the towns, what we're statutorily required to do in a form. And Yes. That's about Some of us to blend, would say when it's 2% and change going as an increase to town programs, that they're facing more pressures than a 2% rise.

[Sen. Andrew Perchlik (Member)]: Right, and just our economic experience in the last few years has just been very unusual. So this predicts, this is based on not unusual things happening, which could themselves be unusual.

[Logan Hoon Gray, Joint Fiscal Office]: Sure, it's hard to forecast unusual. So yes, as Jerry mentioned, the important thing for this slide is that growth of the needs at 3.71%, the rest of it is a larger discussion that can be had at another point, but that's how we got the first assumption there. Moving on to the second assumption then is that the TEAF fund appropriations to the agency of transportation are gonna grow at the same rate as that funding needs. This is an assumption because, as you all know, the budget doesn't grow linearly every year. But in order to look at this in the out years, we have to assume something. So I'm assuming that it's gonna grow at the same rate as the needs grow to keep up with the growth in the needs. So if you use the FY27 gov rec transportation budget as a base, and then you add or increase it by 3.71%, you get the following potential key fund appropriations going to the Agency of Transportation. Assumption three, the GAVREC purchase and use reallocation proposal occurs. So in the FY twenty seven budget, it's proposed to phase down the purchase and use tax for the education fund by $10,000,000 per year and reallocate the funding to the T fund. And then the chart below shows that breakdown, shows in FY31, the fund hits zero now, and the T fund will receive about $175,000,000 So that is included in this analysis, that T fund will be receiving all that additional revenue.

[Sen. Richard Westman (Chair)]: Okay. And

[Logan Hoon Gray, Joint Fiscal Office]: then four is the T Fund grows at a rate of 1.67% annually between FY '32 and FY '37. And for those years specifically, because other years pass the forecast. And so essentially, if you The first section of this, the FY '26 to the FY '31, has in the purchase and use line, the increased revenue coming from the PNU reallocation. And you'll see that if you do the compound annual growth rate of those years, it's skewed much higher because we're getting large chunk of money from that reallocation every year. The compound annual growth rate for just those years is 4.62%. But then once the reallocation is complete, the TCON growth rate will go back down to where we've seen it now. It will increase slightly to 1.67% because purchase and use is growing at 3%. It's making up a higher percentage of the total. And so this chart kinda shows how it came up with or got to that 1.67% SDSM growth. Even with the purchase and use, will be effective. We grow less than 5%.

[Rep. Patrick “Pat” Brennan (Member)]: Correct.

[Sen. Richard Westman (Chair)]: Al, go ahead.

[Sen. Rebecca “Becca” White (Vice Chair)]: I just I've made the point to the sector of transportation when we had our joint meeting, and I think we've had the conversation. But I this the data is disagreeing with me, so it's always tough when your assumptions are wrong. But I had assumed the purchase and use tax would not be growing even at that 3.12% rate that you've got listed here, Largely because I'm under the impression that we might be hitting a recession soon just based on my witchy sentiment. And it seems to me that purchase and use tax goes down significantly when we experience those types of financial recessions because people aren't purchasing vehicles and it's more volatile. So this is positive and disagrees with me and my assumptions, but do you have an understanding of the volatility of purchase and use? Like, what is the likelihood that that 3.12% will be a consistent amount, or do you have reflections on that?

[Logan Hoon Gray, Joint Fiscal Office]: I couldn't really say. Again, the 3.12% is what The Economist sort of forecasted it at. I'm just using that and assuming it can take in the future. There are a bunch of things that could change. These numbers shift around every six months. Is just what is currently being forecasted, and then I'm assuming it continues out into the future, but it could very well change.

[Sen. Richard Westman (Chair)]: Okay. Thank you. Oh. Oh. Do you wanna go in front of you? You're the chair. I I so what the what? Chris, go ahead.

[Chris Rupe, Joint Fiscal Office]: Chris from Joint Fiscal. I just wanted to sort of underscore what you just mentioned, Senator White, that, you know, the revenue forecast is required by statute to be a two year forecast. The Economist by tradition provides us the five year outlook. The further out you go, the more you know that is subject to variation. It reminds me of like those hurricane maps you see on like the weather channel and that kind of uncertainty you'd figure is like you move out. We know that things are particularly vulnerable to volatility and to be surprised further out. And you're absolutely right in pointing out that of all of these, the purchase and use tax has the most economic sensitivity. So any economist will tell you there will be a recession. They just can't tell you when or how bad or how long it will be. But after COVID, purchase and use tax revenue did rebase at a higher level. The forecast does not predict that we're gonna go back to pre COVID levels. But we all know what's going on in the vehicle market, and we know how sensitive that is to the broader economy. So that number could very well, when you look four, five, six years out in the future, look very different than what we're looking at right now.

[Sen. Andrew Perchlik (Member)]: Thank you.

[Chris Rupe, Joint Fiscal Office]: It's a known unknown, as Donald Rumsfeld has said.

[Sen. Andrew Perchlik (Member)]: Okay. It's a known unknown.

[Sen. Richard Westman (Chair)]: Okay. Are

[Sen. Wendy Harrison (Clerk)]: there some DNVs that are indexed, or why would the DNV fees go up?

[Logan Hoon Gray, Joint Fiscal Office]: Population growth, people buying more cars potentially. Every time you got to register, more people move to the state. There's a few reasons that could go up, but it's less than 1% right now, so it's likely just natural growth rate. Sure. Think

[Sen. Richard Westman (Chair)]: we've heard in their estimates that they've done that because of our demographics and our older population, it has dampered our growth dramatically.

[Logan Hoon Gray, Joint Fiscal Office]: Yep. So then you add assumption three and four together, so you add the additional revenue coming from the purchase and use proposal, and then in '32 to '37, you assume it grows at that 1.67%. You can sort of get this for a hypothetical T Fund plus gov proposal revenue. So this is T fund revenue in this hypothetical situation. And that gets you to this scenario. If you add these two together, the top line of that chart is that hypothetical T fund plus gov rec proposal revenue. The bottom is the hypothetical AOT T Fund appropriations. Those are the two sort of things we just looked at. You can see that due to the additional T Fund revenue coming from the proposed purchase and use reallocation revenues, Sorry, purchase and use reallocation revenues keep pace with the needed appropriations until FY33, at which point appropriations then exceed revenue. And it's essentially just a matter of what is growing faster than the other. So between '27 and '31, we're getting a substantial chunk each year from the purchase and use, which allows us to grow faster than needs. After '31, our growth goes back to what I assumed to be 1.67%, but needs are still growing at over 3%. And so the gap sort of widened as the year goes out.

[Sen. Richard Westman (Chair)]: You can follow center of weights. Is all with a flat rosy projection, no bumps.

[Logan Hoon Gray, Joint Fiscal Office]: So here's the chart if you wanna see it. Or the orange bar, excuse me, is the growth on the T fund revenues and the linear growth in the AOT T fund appropriations. You can see growing faster and then we're not growing faster.

[Sen. Rebecca “Becca” White (Vice Chair)]: Why the FY30?

[Logan Hoon Gray, Joint Fiscal Office]: That's when the purchase and use reallocation transition ends. So, we will have gotten all the purchase and use back, and that growth rate will go back to closer to what it is now and be about 1.67% instead of potentially closer to five or 4.5%. So you're essentially saying a 4.5% growth out until F531 and then a 1.6% growth in the future out years.

[Sen. Rebecca “Becca” White (Vice Chair)]: But let's say we did EMBA. Let's say it all came together right around 2030 or 2031. We yeah. We might actually that might not be inaccurate. We might be able to pick that.

[Sen. Richard Westman (Chair)]: It's only doing I think Okay.

[Logan Hoon Gray, Joint Fiscal Office]: If you increase revenue, it'll it'll change the growth rate. Yes.

[Sen. Rebecca “Becca” White (Vice Chair)]: But that's kind of the interesting piece for me is I'd like to understand actually when that would affect it because if we can time it, that would be wow.

[Sen. Richard Westman (Chair)]: Do you mind if I stop you for a second? We we have a little conversation. Can

[Logan Hoon Gray, Joint Fiscal Office]: I do I got one side of it? Do the one slide. One slide and then I'm And then write down the other.

[Sen. Richard Westman (Chair)]: Good. But I think you you the offering from where you are, I think, I really wanna go ahead.

[Sen. Andrew Perchlik (Member)]: Yeah. No. I was just asking people to stay here after. When when we're home, he's not

[Sen. Richard Westman (Chair)]: he's not going anywhere. He's not going anywhere. You know?

[Logan Hoon Gray, Joint Fiscal Office]: So some considerations as you have this discussion related to this hypothetical scenario is that this looks at AOT T fund appropriations, but it does not include T fund appropriations that go to other agencies, such as we send money to BGS for the information centers on a highway. It also doesn't include transfers. So stuff like transfers to the Downtown Highway Fund and other funds that we make every year. In FY27, there are roughly $9,000,000 of non AOT appropriations and transfers that will be occurring. These represent additional pressures to the T Fund that are not being represented in this scenario. Also, this hypothetical uses the proposed FY27 transportation budget as a starting base. I did it because it was the one we're working on now, not because it represented a good or an adequate or ideal or any of those things. There's no subjective reason I chose that. So that's something for you all to consider when you're working on this. Is where we're at now a good base to work off of? So those are the things

[Sen. Wendy Harrison (Clerk)]: You haven't had arrest areas or an AOT?

[Logan Hoon Gray, Joint Fiscal Office]: Proprietary. They go to BGS. Spend about four, over 4,000,000 We've dollars a

[Sen. Richard Westman (Chair)]: had that fight over and over.

[Sen. Wendy Harrison (Clerk)]: You're saying it's AOT expense, Jack, is what you're saying.

[Logan Hoon Gray, Joint Fiscal Office]: It is appropriated not to the Agency of Transportation, but to BGS.

[Sen. Wendy Harrison (Clerk)]: But if BGS didn't do it, would it still be an expense for the AOT for the transportation? That'd be up to you to decide. Mean, why wouldn't it? It

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: seemed like Because they don't

[Logan Hoon Gray, Joint Fiscal Office]: do it now. If BGS didn't do it, no one would be doing it unless you changed where that money went.

[Sen. Wendy Harrison (Clerk)]: Right. So it seems like it's kind of like saying, if we didn't pay for paving, we wouldn't have to pay for paving.

[Sen. Richard Westman (Chair)]: Well That's not a transportation We have historically done a calculation that figures out the transportation portion of the rest areas versus the tax. Might quibble over a little bit on the side, but I think the decision statutorily has been, and in this place, that the rest areas do have at least a portion of them that are transportation related. And it's And all a so we're on the hook to pay for that piece that is and I think the only thing that I think from Logan is we aren't doing the work, but it's transportation related.

[Logan Hoon Gray, Joint Fiscal Office]: It's transportation finance bank for it. It's just not the agency of transportation doing it.

[Sen. Richard Westman (Chair)]: Doing the physical. Correct. Did you wanna add just That's exactly. K.

[Rep. Patrick “Pat” Brennan (Member)]: It goes right down to the number of flushes per toilet. Mean

[Sen. Andrew Perchlik (Member)]: I know.

[Sen. Richard Westman (Chair)]: It does. No. Really? I think Neil Shick

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: Neil Shickner.

[Sen. Richard Westman (Chair)]: Counted every single flush.

[Rep. Patrick “Pat” Brennan (Member)]: Yeah. Those dogs. Yeah.

[Sen. Wendy Harrison (Clerk)]: Yeah. So

[Logan Hoon Gray, Joint Fiscal Office]: that that was all I had for you all.

[Sen. Andrew Perchlik (Member)]: Okay. So just a question about the process. So your process. If we wanted to look at different parameters, could probably pop in different numbers, right?

[Logan Hoon Gray, Joint Fiscal Office]: Theoretically, depending on the parameters I have. But yes, if you had something you want to look at theoretically.

[Sen. Andrew Perchlik (Member)]: So one thing would be, and this is actually not parameter thing, but if we got the purchase and use tax earlier rather than later, I'm wondering what that line would look like.

[Logan Hoon Gray, Joint Fiscal Office]: Like in the past, we have got it?

[Sen. Andrew Perchlik (Member)]: No. If we get it in just a year,

[Sen. Richard Westman (Chair)]: like in in a

[Sen. Andrew Perchlik (Member)]: lump sum and start at a higher.

[Logan Hoon Gray, Joint Fiscal Office]: Oh, at one point. Yeah.

[Sen. Andrew Perchlik (Member)]: I don't know if that's politically feasible, but, you're just curious about what that would do. Because it might extend the time that we have. They

[Sen. Richard Westman (Chair)]: were only asked to base this on the proposals that are

[Sen. Andrew Perchlik (Member)]: from us. Okay, so maybe you can.

[Logan Hoon Gray, Joint Fiscal Office]: I can run those numbers. I don't have anything for you right now.

[Sen. Andrew Perchlik (Member)]: Okay, oh, no, of course not. Yeah,

[Sen. Richard Westman (Chair)]: but that if the proposal in front of us that's in the governor's budget is that so these are all based upon the only proposal that's in front of us. If you think we can pass this earlier. No,

[Rep. Patrick “Pat” Brennan (Member)]: I

[Sen. Andrew Perchlik (Member)]: would just like to see the numbers because so much of this, I mean there's just so many moving parts, right, but you have to make assumptions, so it's tough, it's difficult. And I know we're not talking about this now, but I would just like to know more about the transportation, the TIB, and why we stopped using it.

[Sen. Richard Westman (Chair)]: I can answer that.

[Sen. Wendy Harrison (Clerk)]: Go ahead. Chris from

[Chris Rupe, Joint Fiscal Office]: Jones School, we still use the revenue under the TIP fund just on a pay as you go basis. We don't use it for borrowing right now. There is the ability to do that again in the future if the environment makes sense to use that tool. But, I was around whenever Senator Westman created the system, but when

[Sen. Richard Westman (Chair)]: Well, Senator, Brandon really was

[Chris Rupe, Joint Fiscal Office]: Yeah. But but, know, fifteen years ago when it was for thereabouts, when it first went in to place, there was a lot of expensive bridge projects and and in the pipeline at that time. So it made a lot of sense to borrow and knock those bridges out at that timeframe. I think whether or not it makes sense to borrow again using the TIB money, it depends a great deal on what type of projects are in the book, because it might not be a great idea to be routinely borrowing just for, like, paving projects, because debt service could eat up all of the organic growth in our revenue base. And since the TIBS revenues are kinda constrained because it's based on the price of fuel and we know fuel consumption

[Sen. Wendy Harrison (Clerk)]: is

[Chris Rupe, Joint Fiscal Office]: going down, there's only so much we could use it to borrow under current rates. So it is something it is still a tool in the toolbox if the situation makes sense for us to use it. Right. It wouldn't make sense for us to just routinely bond to do paving projects given the nature of what's in our book.

[Sen. Andrew Perchlik (Member)]: Thank you and I'm not suggesting that. It's just some of the cost of our projects have increased tremendously especially the projects that are not paving but just a reconstruction of the road. 30,000,000 for Yeah. I mean it's just so, but then, I mean, what you're responding with and it's reasonable is that then the cost of the borrowing is gonna be higher too. So there's a balance, but I still think we should look at everything.

[Sen. Richard Westman (Chair)]: So I would just say as a piece and I had the lucky to be able to listen to Logan and Chris and Jeremy. For me, really, there's, in the overall, there's a short term problem. The attempt, think, that the governor makes is to move purchase and use to take care of the short term problem. We may be able to accomplish that, we may not be able to accomplish that, but that would be a solution. And it is really with Logan's numbers, a five to seven year fix. And then from me, there's a long term program and the conversation that Senator White talks about with vehicle miles traveled in that is we need to look at that as the shift and the decline happens in fuel taxes, that that appears with the only states that have done it to be the most logical direction that places with experience have gone ahead. For me, the next piece really is I personally, and I think I hear it a lot and I've heard it in this room and I can stand corrected, the area that we woefully underfund is our tenants. So the question is, with those, how do we deal with the short term problem? How do we deal with the long term problem? And I think we've now got some examples in that. The next piece is what do we do? Is there a way for us to positively affect our municipalities and where they get. So those are the three big areas I see from a high level. And I think we've taken a fair amount of testimony and then to back up where we are. What it is? Yeah. Is that vision a lot of

[Sen. Andrew Perchlik (Member)]: I know, I like that. And I talk about stormwater utilities a lot, but seriously, in many towns, half of what the public works department does is storm water management. If you look at ditches, ditching and culverts, finding additional revenue, from the same people, but from different property owners and including an incentive to reduce the generation of storm water, it really can make a difference because it's seriously half of a lot of towns. Just public works. Little towns. That

[Sen. Richard Westman (Chair)]: from a very high level, is that what we're all seeing? Go ahead.

[Sen. Rebecca “Becca” White (Vice Chair)]: I would go further in that I really would have appreciated us having the ability to look at the revenue sources that could be increased to actually meet the greater need and go above and beyond what the AOP budget has in place over the next year to two years. But I respect that that conversation is not we don't have the political will for that. So I'm really appreciative of this direction. Although I would push us to go even harder and really consider some of the work that they're doing in there's a bill that a bunch of house members just introduced, does have the revenue delivery fee. There's things like that I would have appreciated if we could investigate, but I understand that that's not on the table at this time. So I am happy to move in his direction.

[Sen. Richard Westman (Chair)]: Any chance?

[Sen. Wendy Harrison (Clerk)]: Yeah. Sounds good. Yeah.

[Rep. Patrick “Pat” Brennan (Member)]: Yeah. And I don't think there's a person in this building, a legislator in this building that shouldn't be for that. Everybody has a town they represent. Everybody's you know?

[Sen. Richard Westman (Chair)]: So for the next two days, intermittent in what we're doing, I'm gonna say this, and I've said this in front of appropriations. I went to my legislative breakfast a few weeks ago, and it was in snow, and and Andy was there with me. We have a number of communities that are trying to increase the local option taxes above and beyond the 1%. And their the state now has a surplus in their pilot fund. And and right now, the split is seventy twenty five. And so but on that 25% that goes to the state, there's a surplus. And I and Stowe will be is in the lead on this, but I understand Brattleboro is looking at that. I've heard from We've got a few. Woodstock might and there are a number of communities. The split that would happen with that is we might I wanna bring up as because that will be increased revenue and how that split it. So I thought what we would do is spend the next couple of days talking about local option taxes in here, what the history is, where it is, and there might be, there will be a proposal put on the table for you to look at from a high level, rip it apart, change the numbers, do but it will that's the place where it looks like there might be some new revenue coming. And if that was, or at least a piece of it, directed directly at the towns in those three areas that we just all seem to agree need that that would create some revenue for that. So we're gonna spend a couple of days taking a look at that. Okay.

[Sen. Rebecca “Becca” White (Vice Chair)]: I think

[Sen. Andrew Perchlik (Member)]: Yeah. I'm

[Sen. Rebecca “Becca” White (Vice Chair)]: actually really excited to hear more information about that proposal because I think it hits kind of the two buckets that we've talked about, which is having local towns get support. So, think my main question would be what would the fund or where specifically the money would go? That would

[Sen. Richard Westman (Chair)]: be up for us to have a discussion.

[Sen. Rebecca “Becca” White (Vice Chair)]: Yeah. And then the second part would be what is the amount over time that we could anticipate so that we can so I I really appreciate you taking the time to investigate that one because it seems

[Sen. Richard Westman (Chair)]: Let's just sort of rush right now. We've not I haven't thought, Andy.

[Sen. Wendy Harrison (Clerk)]: There's no one that I'm 14,000,000.

[Chris Rupe, Joint Fiscal Office]: Chris, your Trump fiscal is a moving target, but it ended f y '25 with 15,000,000. So that doesn't reflect, you know, the the appropriations you all made in '26 out of the funding. It'll be lower than that by the '27, but it's

[Sen. Richard Westman (Chair)]: And the governor's made a proposal to To to ship some additional costs from

[Chris Rupe, Joint Fiscal Office]: the tax department that benefit towns over another pilot fund.

[Sen. Rebecca “Becca” White (Vice Chair)]: So that's on top of the amount needed to actually cover. That's the surplus on top of what they have to actually meet the purpose of the pilot.

[Sen. Richard Westman (Chair)]: And that's out of the 25.

[Sen. Wendy Harrison (Clerk)]: Okay.

[Chris Rupe, Joint Fiscal Office]: The 15,000,000 well, let me try this with this. The 15,000,000 already accounts for the money going in to the towns and everything else. That was just the ending balance at the end of f y twenty five. You need about 12 and a half million a year to make your pilot obligations, give or take, you know, a couple 100,000. Then there's other costs that come out of the fund as well.

[Sen. Rebecca “Becca” White (Vice Chair)]: Okay.

[Sen. Andrew Perchlik (Member)]: So that's great. Yeah. That's really a nice conversation. Barbara was asking for a local option gas tax, which I think gets complicated pretty fast. Yes. But I But I'd like to know more about how we

[Sen. Richard Westman (Chair)]: talk it. We're gonna get, we're gonna have a discussion about local option taxes, what it looks like now, how it was created, so we get a little grounding and and then talk about I I would just say for me, when the governor's proposal for me goes in and does help the tax department here and a little bit there, would we not just come up with a formula that helps all paths? And that starts a conversation that you might wanna go down the road with Revlon.

[Sen. Andrew Perchlik (Member)]: So just kind saying, so when you say all towns, really local option is only for bigger towns, generally. But you really mean all towns?

[Sen. Wendy Harrison (Clerk)]: Sometimes just don't have any good tax.

[Sen. Andrew Perchlik (Member)]: Right, exactly. So

[Sen. Wendy Harrison (Clerk)]: They could do a little profit tax on their one screaming statement.

[Sen. Andrew Perchlik (Member)]: Right. Right. So that's what I'm

[Sen. Richard Westman (Chair)]: wondering if you have that. Correct. Can But

[Sen. Andrew Perchlik (Member)]: some don't even have any yeah. Yeah.

[Sen. Rebecca “Becca” White (Vice Chair)]: Well, I think the point is it's for towns who wouldn't put forward a second percentage on top of their already existing 1%.

[Sen. Andrew Perchlik (Member)]: Okay.

[Sen. Rebecca “Becca” White (Vice Chair)]: We would do we would if I understand correctly, we would split that money out potentially to fund all towns Oh. Or transportation needs. So Oh. Town it's interesting. You've split up which community. So you you you used to have snow. You now have snow. But I think the main issue would be talking to specific communities who would probably want the whole hog to go to them, where now we would be.

[Sen. Wendy Harrison (Clerk)]: Although it's it's already so, you know, the 25% already goes to the state. It's the second percent instead of going to the state for the other needs, it would just go directly to the town.

[Sen. Richard Westman (Chair)]: Oh. Or or or or portion know, this is I don't I don't think this is any attempt to take will be, to take it all, but in the 40 look at their percentage. So they wouldn't shouldn't care. And quite frankly, I would say the 25% that is the state percent that we get, we have a surplus. Yeah. And we're picking apart that surplus in as as a piece. What should the formula be for towns that go above and beyond? Yeah. And so the attempt will be to take a look at Great. And that will be underlying a piece of the next couple of days. K. But that still doesn't take away from the fact we have an immediate problem, and then we have the long term problem. And I really would like to see us anything we did with a per mile fuel tax, or per miles traveled In tax my view, how long has it taken us to get to the point where next January we might go live with us? Several years. Several years. I don't think we can do anything. I think anything we did is probably three years out.

[Sen. Rebecca “Becca” White (Vice Chair)]: Well, that's kind of what I was trying to bring up with Logan is if if I mean, the dream scenario would be when we're hitting that pivot that we would have m buffs starting to take more shape by

[Sen. Richard Westman (Chair)]: the end of month. That would be beautiful. But my point to do is unless we start talking about it now, we probably can't get there. Completely true. Yeah. So it's a short term. It's a long term. It's a how do we address the needs we hear from our towns. Logan,

[Sen. Rebecca “Becca” White (Vice Chair)]: I know that we have talked about indexing the gas tax and kind of what that looks like with different states. That index, the construction index that we could potentially tie it to, how does that trend upwards over the next five years?

[Logan Hoon Gray, Joint Fiscal Office]: So, the National Highway Construction Cost Index, I'm not sure that they forecast it out into the future. This is a backward looking thing. I could look into that and see if they have estimates. Jeremy has thoughts, but I don't think that and I could sell. That's, like, four. Because it's hard to know what's gonna happen Yeah. Tomorrow. Right?

[Rep. Patrick “Pat” Brennan (Member)]: Most states tie up those CPI. Right? Some states do. Yeah. Some. Yeah.

[Sen. Andrew Perchlik (Member)]: Yeah, we can easily do something like that.

[Jeremy Reed, Chief Engineer, Agency of Transportation (VTrans)]: So Logan is right, I believe that is strictly backward looking, and actually I think the last quarter they have is '25, actually, posted.

[Sen. Richard Westman (Chair)]: Thank you. Perfect, thank you. Yeah. I think we are done for the

[Logan Hoon Gray, Joint Fiscal Office]: day.

[Sen. Richard Westman (Chair)]: If you could take.