Senate Transportation hears DMV FY26 budget as FAST system shifts costs to vendors and fees boost revenue

Andrew Collier, commissioner of the Vermont Department of Motor Vehicles, told the Senate Transportation Committee on Feb. 12 that the department’s recommended FY26 budget shifts costs as the FAST core system moves from implementation into maintenance and operation, and that the department is “right on target” with its FY25 spending.

The shift includes a $1,850,000 increase under personal services to cover maintenance and operations for the FAST system, Collier said, and a 22% rise in contractual/third‑party costs tied to vendor contracts for system operation. Collier said the final phase of the FAST system is scheduled to go live in November of this year.

The budget presentation also identified cost savings and offsets. Collier said postage and printing costs are decreasing by about $420,000 because scanned materials and electronic transfers have reduced mailed correspondence. The department is also accounting for vacancy savings at about 5% of salaries and benefits, and noted internal service fund charges—such as payroll and benefits—have increased by more than 6%.

Committee members pressed Collier about a recent registration fee increase and its effect on revenue. Collier said the registration fee changes are producing roughly $15,000,000 in additional revenue and that motor vehicle fees were up about 24.2% year over year as of Dec. 31. He cautioned that isolating exactly how much of the change is attributable to the fee increase — versus higher service use or population growth — requires further analysis.

Senators asked how the department will meet future cost pressures. Collier said some operational efficiencies are already built in from the FAST transition (for example, reducing desk phones and reexamining equipment needs). He also confirmed the FY26 budget reduces the department’s headcount from 245 positions in FY25 to 231 in FY26 — a net reduction of 14 limited‑service positions that were brought on for FAST implementation and are no longer needed as implementation ends.

Several senators raised questions about the rising contractual line items and whether the agency is outsourcing core capabilities. Collier explained the increase primarily reflects the cost of the FAST system itself as it moves to maintenance and operations and that much of that work is performed through vendor contracts outside of state employment. Collier agreed to provide the committee with a more detailed breakdown of where those vendor and contract dollars will be spent.

Committee members also discussed operational details raised in the budget book. Collier said the department is exploring a modernization of license plate production — replacing a mechanical embossing process with contemporary printing equipment used by many other states — which could change the internal contract the department has with corrections for plate fabrication. Collier said the change would be evaluated for quality, packaging, weight and cost per plate and that corrections would continue to perform plate production under a different equipment model if the change occurs.

Logan Blueberry of the Joint Fiscal Office summarized two minor technical changes in the House‑passed budget adjustment act (BAA) relevant to transportation: a cleanup to remove a duplicated transfer for the Vermont Recreational Trails Fund so the transfer occurs only once, and a reversion of $2,500 in FY21 DMV project funds. Blueberry described both as technical edits with no substantive program effect.

No committee votes were recorded during the hearing. Members asked for follow‑up materials, including a detailed breakdown of contractual and vendor spending tied to the FAST system and an analysis isolating revenue attributable to the registration fee increase.

The department’s presentation and committee discussion make clear the FY26 budget centers on recurring operating costs for the FAST system, reduced temporary staffing tied to implementation, and revenue increases that the department says largely offset rising costs. Collier said the department will provide the requested contract breakdown to the committee for further review.