Senate Transportation hears House leaders on T bill as committee seeks options for shrinking revenue

Senate Transportation convened a joint discussion with House Transportation leaders to review the House's transportation budget bill and related policy changes, with members foregrounding a long-term transportation revenue shortfall and several policy shifts aimed at stabilizing town and state project funding.

Committee leaders said the bill includes a change to how towns receive money for class 2 town highway structures: the allocation will be adjusted each year by the same inflation measure used in the Town Highway 80 program so amounts can rise automatically with CPI and transportation revenue rather than reverting to a baseline and requiring annual increases. "That this way, there'll at least be a review of it every year," a House committee leader said, adding the committee's fiscal office estimated compounding increases would put towns "substantially ahead" within a couple years.

The change is intended to help towns that face the same rising construction costs and contractor shortages as the state. Committee members stressed it is not a full solution to larger funding gaps. "The revenue outlook is pretty bleak," one House member said, noting a projected near-term shortfall. Senators and representatives discussed multiple revenue avenues, including adjusting gasoline and diesel taxes, exploring a mileage-based user fee, and studying a retail delivery fee for heavy truck traffic. Committee members agreed there was no single consensus solution coming out of the hearing but said they had expanded language and study around mileage-based charges and EV taxation in recognition that electric vehicles will need to contribute to transportation funding.

Witnesses and committee members flagged several technical and programmatic edits to the House bill. The committee removed a provision that would have allowed the state to recoup planning funds from towns that return a grant after scoping work; members said towns and municipal leagues raised concerns and the parties did not reach agreement. The committee also clarified permitted and prohibited uses on rail-banked corridors, with one legislative counsel describing a newly added section that lists activities not permitted on rail trails so those restrictions are codified rather than left solely to policy or rulemaking. "There is 1 new section there which is modeled on regulation of other rights of way," David Leonard of the Office of Legislative Counsel said, explaining the section would codify prohibited activities such as unauthorized campfires.

Members described a number of line-item adjustments: an EV registration/infrastructure fee was clarified to flow to the designated program that supports multiunit and business chargers; some smaller EV-related appropriations were consolidated; a $300,000 electric fund balance was redirected to other EV programs; and minor project changes and technical language edits were made to align with the governor's recommendations. Committee members said, overall, the House-passed T bill largely follows the governor's recommended allocations while giving the Agency of Transportation additional flexibility in maintenance and central accounts.

Transit providers and Green Mountain Transit were called multiple times to testify. Members said providers supported the recommended budget but remain concerned about ridership recovery, the cost per rider for micro-transit pilots, and potential Medicaid-related pressures that could affect medical transportation services. Committee members also raised a separate set of federal projects that are currently on hold; if federal funds are lost, senators said they may seek to require more reporting from the agency about priority-setting for large projects.

On local project transfers, the committee took testimony on a St. Albans route-transfer request; members required a signed selectboard letter from the town indicating a desire to assume control and heard the agency's assessment of maintenance needs. The town said it plans to cover maintenance via local option tax and property tax revenue and expects local control will accelerate planned sewer and intersection work.

Committee members acknowledged a heavy legislative calendar constrained by crossover deadlines and said timing, not disagreement over policy content, explained why some bills or provisions from companion proposals (including several complete-streets and bike-ped measures) were not incorporated into the T bill this session. "It came down to timing," a House leader said, noting some bills arrived late in the schedule and the committee lacked the time to assimilate them into a large budget bill.

The committee did not record any roll-call votes during the session excerpted in the transcript; members described amendments and deletions adopted in committee but did not present a formal vote tally on the floor during this hearing. The committee urged continued collaboration with appropriations and joint committees on federal-match and revenue questions going forward.

Ending: Committee leaders asked staff to continue providing data on project lists and federal holds and to follow up on revenue options and transit provider needs as work on the bill moves to other chambers.