Vermont Agency of Transportation flags rising costs, starts review of underperforming transit routes

Ross McDonald, public transit program manager at the Vermont Agency of Transportation (VTrans), told the Senate Transportation Committee that the agency is reassessing service and grants after five years of rising costs.

“We do have a presentation to talk about the budget and, our granting plan,” McDonald said as he opened the briefing. He told the committee that about 55% of VTrans’s public transit program funds come from non‑FTA sources and that the state blends FHWA, state and local funds to reach a program that now exceeds $50 million.

The committee heard that ridership has not fully returned from the pandemic. “Ridership, it returned. We're still about 9% under pre COVID levels, primarily because of commuter routes,” McDonald said, and that commuter‑oriented routes remain roughly 30% below pre‑COVID ridership. At the same time, McDonald said operating costs per trip rose about 13% from 2023 to 2024, driven by higher wages, insurance and vehicle maintenance.

Why it matters: VTrans said the total public transit budget has grown from about $36 million to roughly $53 million in five years as the agency layered FHWA and other funds on top of FTA formula money. The agency is reviewing routes it classifies as underperforming and plans to use the next grant cycle to steer awards and adjustments intended to hold the overall program to a new post‑COVID baseline.

What was discussed: McDonald and Tri‑Valley Transit executive director Jim Moulton described program elements that the agency funds and oversees: fixed‑route trunk services, deviated fixed routes, demand‑response dial‑a‑ride (including services braided with Medicaid non‑emergency medical transportation), intercity connections, tourism services and a growing set of microtransit pilots. McDonald said VTrans draws roughly $23 million from FHWA funds and about $10 million from state sources and then works with local providers to secure additional local matches.

Committee members pressed staff on route performance and outreach. VTrans staff described their annual route performance review process: they compute an average cost‑per‑trip for route categories, flag routes more than 50% above that average as candidates for further review and consider routes 66% below the average as highly successful. McDonald said the process begins with outreach to providers to explore marketing, schedule or routing changes before making cuts. He said some services have been reduced or absorbed into other routes (for example, a Jeffersonville commuter route that was discontinued earlier this calendar year), while others remain pilots (Middlebury microtransit overlay) and are not subject to immediate change.

The committee also discussed how land‑use permitting can affect transit. Members raised Act 250 review and whether towns have sufficient authority to require developers to provide transit funding or infrastructure. McDonald described VTrans’s advisory role in Act 250 reviews and said the agency generally notifies regional providers and regional planning commissions when a development may require transit accommodations; he said the agency lacks enforcement authority to require developer funding.

Timing and next steps: McDonald outlined the calendar that ties the budget to the grant awards: late‑April grant applications, May–June awards and adjustments, and a September budget presentation for the following fiscal year. He said VTrans will publish its granting plan after initial awards and will present route performance results compiled using the National Transit Database in October–November.

Potential impact: Committee members said they were concerned that budget pressures could force not only underperforming routes but also some performing routes to be reduced next year unless state or federal revenue increases. McDonald said the agency is also awaiting competitive grant opportunities (vehicle and facility NOFOs) that would affect longer‑term capital plans.

Ending: VTrans staff told the committee they will continue outreach and iterative grant award conversations with providers over the spring and will return with more detailed award intentions at the June Public Transit Advisory Council meeting and in follow‑up budget materials to the legislature.