Vermont DMV says FY26 budget will absorb FAST system maintenance, adds staffing and contract costs

Montpelier — The Department of Motor Vehicles told the House Transportation Committee on Feb. 13 that its fiscal 2026 budget reflects a shift from development to maintenance of the FAST core modernization system, producing higher ongoing contract costs, modest personnel reductions and several operational savings.

"We are here to talk about FY '26, budget for DMV," Commissioner Andrew Collier said when he began the agency presentation. He said the department is on track for fiscal 2025 budgeted-versus-actual performance and is not expecting a significant carry forward into the agency fund this year.

The department flagged a $1.5 million increase in contractual services tied to FAST as the system moves from development and implementation into a maintenance-and-operations phase. Collier said that transition is the reason the contractual line in the DMV budget will be higher going forward and that the agency expects the annual contracts line to be closer to $10 million rather than the $8 million shown in last year’s budget.

Renee Coda, DMV director of finance, confirmed the change in the contract budget and explained that implementation costs were paid from a mix of sources (including ARPA and IT modernization funds), while ongoing maintenance will be charged to DMV’s transportation/general fund in the FY26 operating budget.

The agency also reported reductions in other lines tied to modernization: postage and printing costs are expected to fall because more transactions will be completed online, and the department budgeted about $57,000 for new scanners, copiers and enforcement weigh-station equipment.

On staffing, Collier said the DMV will reduce headcount from 245 to 231 in FY26 as limited-duration positions used for the FAST implementation are returned to the regular payroll. He said the department currently has about 10 vacancies, roughly 4% of authorized positions.

Committee members pressed DMV staff about fee collection and new revenue streams tied to changing vehicle fleets. Collier said the agency is sending the EV infrastructure fee bills now but has encountered a data problem: manufacturer VIN classifications for plug-in hybrids do not always match records in DMV systems, forcing manual reconciliation for some registrations. "We are currently working off of a list that they manually do monthly," Collier said, adding the department is consulting with other states facing similar VIN-class issues.

On the mileage-based user fee, Collier said the department expects to collect the fee through existing registration/fee collection systems once the administration finalizes the administrative implementation framework. He said the department has not yet decided whether mileage charges would be billed monthly, quarterly or annually and that the implementation lead on the project is Patrick Murphy.

Committee members also asked about e-permitting for overweight permits. Collier said the e-permitting project is a shared effort with the Agency of Transportation (AOT) and that, once the initial state-level system is in place, there is capacity to allow municipalities to opt into digital permitting for local roads.

On inspections, Collier said that inspection stickers are produced under contract (Parsons was named as the contractor) and flow through DMV. The committee asked DMV to provide comparative data on registration renewals versus inspection-fee receipts; Collier said staff are preparing those numbers and will report back.

Collier said the licensing portion of the FAST rollout is scheduled to go live in November; after that transition the department expects more licensing services (renewals, scheduling, printing of permits and registrations) to be available online through users' MyDMV accounts. The commissioner told the committee that the licensing go-live should make in-person visits more likely to result in completed transactions on the same visit.

The DMV presentation also noted increases in fringe-benefit costs tied to statewide health and retirement plan changes and new family medical leave insurance costs, which the state covers as an employer. Collier and Coda said those are set by statewide employer plans and are reflected as percentage increases in the DMV fringe-benefit lines.

The committee did not take formal votes during the hearing. Members asked DMV to return with data on inspection fees, registration counts and ticketing/enforcement correlations; DMV agreed to provide those figures.

Why it matters: The FY26 changes shift DMV spending from one-time implementation financed by special funds to ongoing maintenance paid from the department’s regular budget. That change will raise recurring contract costs and requires the legislature to consider the long-term fiscal impact of modernization as part of proposed transportation budgets.

What’s next: DMV staff said they will provide the committee with follow-up data on inspections versus registrations, confirm the routing of EV infrastructure fees intended for the Agency of Commerce and Community Development, and supply more detail on how the department plans to bill and collect any future mileage-based user fee.