Appropriations committee briefed on $20.25M "JTOC" transportation appropriation and projected $30M federal‑match gap

The House Appropriations Committee on Feb. 19, 2025 heard a Joint Fiscal Office briefing on the so‑called JTOC transfer — a recurring appropriation of $20,250,000 from the Transportation Fund that has been used to offset Vermont State Police costs — and on projections that the state may face roughly a $30 million state‑match shortfall for federal transportation grants in coming years.

The briefing, led by Chris Roop of the Joint Fiscal Office (JFO) and fiscal analyst Logan Mulberry, traced the JTOC item’s history and explained how retaining or eliminating the appropriation would affect the Transportation Fund (T Fund) and the department budgets that rely on federal matching money. "First of all, it's not a transfer ... what this really refers to is there is a $20,250,000 appropriation paid from the T Fund to offset costs of the Vermont State Police," Roop told the committee.

Committee members were shown two JFO documents: a historical summary of past budgets and a VTrans memo summarizing what would have to be reduced in the agency’s budget if the appropriation continues to flow out of the T Fund. Mulberry highlighted the agency’s projection that, by fiscal 2027, the state could face about a $30,000,000 state‑match deficit that would force choices about which federally eligible projects to pursue. "As of right now, they're estimating that it's gonna be about a $30,000,000 gap," Mulberry said.

The presenters described several past budget decisions that affect current balances. In recent years the governor suggested eliminating the JTOC appropriation and using that amount instead for projects such as the DMV core modernization; the legislature at times retained the appropriation while shifting other costs to ARPA, the general fund or fee increases. Roop noted that the T Fund has historically been "relatively pure" compared with some states that divert larger shares of transportation revenues to non‑transportation spending.

The committee and staff also discussed how much of transportation revenue is earmarked elsewhere. Roop said the Education Fund receives one‑third of motor vehicle purchase‑and‑use tax revenue by statute (he estimated that share to be roughly $52,000,000), with the remaining two‑thirds staying in the T Fund. The briefing also noted roughly $4,000,000 in T Fund support that goes to Buildings and General Services to maintain travel information centers.

The VTrans memo attached to JFO materials listed programmatic cuts that would be required if the appropriation remained directed away from the T Fund. The memo specifically flagged about $12.5 million of state paving dollars that would likely be cut, which VTrans estimated would reduce roughly $44,000,000 in paving work once federally matched funds are included; the agency memo also estimated roughly $100,000,000 in combined paving and related federal‑match program impacts across lines shown in the document.

Presenters and committee members emphasized that the T Fund faces structural revenue pressure: consensus forecasts show low single‑digit growth in T Fund revenue year over year, driven by long‑running vehicle fuel‑efficiency gains and limited population growth. The presenters noted the purchase‑and‑use tax has been a larger revenue source in recent years because vehicle prices rose, while other T Fund revenue streams remain flat or declining. Roop and Mulberry said that trend — accelerated by electric vehicle adoption — is increasing the T Fund’s reliance on supplemental general‑fund support or new revenue approaches.

There was an exchange during the briefing about whether the $30 million projection assumed that the $20.25 million appropriation would remain in the T Fund or would be transferred out. Staff and several legislators asked for clarification; the briefing contained inconsistent statements on that point and committee members requested follow‑up to resolve the assumption and the chart’s basis.

Committee members and staff also discussed longer‑term revenue options that several states are studying, including mileage‑based user fees, while acknowledging no single policy is likely to be a complete solution. Committee members were urged to consider the transportation contingent appropriation list and end‑of‑year reserves when weighing budget priorities because delayed investments in infrastructure can raise future costs.

The committee did not take a formal vote during the briefing; members asked JFO and VTrans staff to provide additional detail on the projections and the assumptions underlying the agency memo and to meet offline for further discussion ahead of budget decisions.