Transit finance study sets $21 million annual target and favors utility fee or county property tax

Marshall Distel introduced a Transit Finance Study to the Chittenden County Transportation Advisory Committee on Feb. 1, 2022. Consultant Stephen Falbel of Steadman Hill presented the study’s scope, alternatives evaluation and recommendations, saying the goal is to find a sustainable revenue source to maintain current transit service levels and to leverage federal funds to expand access across Vermont.

The study estimates a $21 million annual transit funding target to sustain and expand service. Falbel told the TAC that currently only about one-third of Vermont towns are served by a fixed-route bus and that all towns have access to demand-response service subject to eligibility rules. The alternatives the study evaluated include a sales tax, payroll tax, business revenue charge, county property tax, income tax, utility fee, property transfer tax and mortgage-recording tax; the study’s scoring matrix ranked a utility fee highest and a county property tax second.

Why it matters: the study frames a funding debate that could affect fare policies, service coverage and local governance. Members noted that any new revenue source could replace existing transit funding streams and change the local match available for federal grants, and that different revenue structures could raise questions about who decides routes and service levels.

Committee members pressed presenters on details. Sam Andersen asked whether the utility fee rate was pegged to the $21 million target; Falbel confirmed the rate assumptions were based on residential and commercial usage and said industrial users would be assessed at lower rates. Andrea Morgante asked whether the study considered consolidating school transportation under a broader public-transportation funding umbrella; Falbel said that concept has been examined in other reports but was outside the scope of this study.

Members also discussed fare policy. Sandy Thibault noted that Green Mountain Transit (GMT) plans to reinstate fares in July. Falbel said fare policy is ultimately in the hands of the legislature and providers, and Charlie Baker observed that while state action may be slow this session, the legislature is likely to take the matter more seriously next year because jurisdictions will need more local match to draw down federal funds. Chris Damiani said GMT’s board has approved reinstating fares for its urban system while some rural systems will remain fare free.

On ridership impacts, Falbel cited prior research summarized in Vermont’s Section 20 report and a Transit Cooperative Research Program review of fare-free experiments: historically fare removal has been associated with about a 30% increase in ridership, with many new riders shifting from walking or biking rather than from car trips. Falbel cautioned that pandemic effects complicate predictions about how reinstated fares will affect ridership.

For rural expansion, Falbel said a $5 million allocation could support volunteer-based microtransit or on-demand services (for example, smartphone-based requests) and that electric vehicles with solar recharging would be preferable to relying on internal-combustion vehicles across large rural areas.

The full presentation and final funding report are posted on the CCRPC TAC webpage. The study has already been presented to House and Senate transportation committees and the GMT Board and will be delivered to other regional planning commissions. Next steps include legislative consideration and local discussions about governance if a new revenue source is adopted.

The TAC did not take a formal vote on the study; discussion will continue at future meetings and through state-level processes.