Legislative economists warn long-term strain on Vermont transportation fund despite short-term gains

Tom Kavett, the legislature’s legislative economist, told the House Transportation Committee on Jan. 23 that midyear revenue estimates show only modest changes since July but that the transportation fund faces structural pressures from declining gasoline purchases, continued remote work, and growing shares of vehicle value-based revenue being routed elsewhere.

Kavett said the board that sets revenue assumptions adopted updated tables that show very small net changes since the July forecast. "The bottom line is the difference in all 3 funds, you know, between January [and] July is $60,000,000," he told the committee. He added that, for the transportation fund specifically, the January adjustment was about $3 million higher than the July forecast and that much of the near-term strength comes from motor-vehicle purchase-and-use receipts.

Why it matters: the committee heard that the mix of revenue sources matters more than short-term headline gains. Fuel taxes are declining both on a per-gallon and a volume basis because vehicles are becoming more…