Municipal leaders back optional 1% local tax for roads, press for pilot surplus to stay local
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Summary
Josh Hanford of the Vermont League of Cities and Towns told the Senate Transportation Committee that municipalities should be allowed to adopt an additional 1% local‑option tax for transportation with a 75/25 local/state split; he urged keeping roughly $15 million in pilot surplus for municipal transportation rather than reallocating it to statewide appraisal work.
Municipal officials urged the Senate Transportation Committee to give towns more tools to raise money for roads and bridges, arguing a new local‑option tax could help close a transportation funding gap.
Josh Hanford, speaking for the Vermont League of Cities and Towns (VLCT), described draft language to let municipalities vote to adopt an additional 1% local‑option tax dedicated to transportation and said VLCT "support[s] any effort that's trying to address the budget shortfall and the transportation budget this year." He recommended keeping most revenue local — suggesting a 75/25 split (75% staying with the municipality, 25% directed to a statewide municipal transportation fund) — to make the option more attractive to voters.
Hanford said the pilot program has accumulated a surplus (which he described as roughly $15,000,000, citing JFO figures) and criticized House BAA and the governor's FY27 recommendation for proposals that would use parts of that surplus to fund statewide property appraisal and equalization work. "We're seeing...close to $8,000,000" proposed toward appraisal and equalization functions, he said, and argued those uses would divert money away from municipal priorities that generated the revenue.
Committee members questioned allocation formulas and equity concerns — for example, a single town like Williston may generate a disproportionate share of pilot revenue — and asked whether VLCT had membership consensus. Hanford said VLCT had not taken a formal vote but would work to design an allocation mechanism members could support. The League also advocated restoring the purchase‑and‑use tax diversion back to the transportation fund to preserve federal match opportunities.
Members discussed broader revenue options, including indexing gas taxes and capturing visitor spending not currently subject to gas taxes, as an increasingly important consideration for a state with sizable outdoor tourism. VLCT said it collects some town highway spending data but cannot compel comprehensive reporting and described anecdotal reports of towns delaying paving or stretching maintenance budgets.
No formal motion or recorded vote occurred during the testimony. The committee scheduled further testimony later in the session.