House Transportation hears update on Downtown Transportation Fund as applications exceed annual budget

Wednesday, Feb. 19, 2025 — The House Transportation Committee received an overview of the Downtown Transportation Fund on Feb. 19, including eligibility rules, common project types and the status of 2025 applications.

Natalie Elvage, a planning coordinator with the Department of Housing and Community Development, said the program supports transportation-related improvements in designated downtowns and village centers. "We have 24 designated downtowns," Elvage said, and noted a 2021 one-time allocation expanded eligibility to village centers that completed the Better Connections planning process.

The Downtown Transportation Fund pays for pedestrian and bicycle improvements, streetscape and lighting upgrades, accessibility modifications, parking and transit-related work and wayfinding, Elvage told the committee. Grants have a $200,000 maximum and require a 20% local match, which can include in‑kind contributions. Applications are typically due in February, with funding decisions made in April; projects have about 24 months to begin and 36 months to complete once awarded.

Elvage told members that the annual appropriation for the program is roughly $520,000. In 2021 the state provided a one-time $5 million allocation that allowed village centers that completed the Better Connections master‑planning process to become eligible; Elvage described that as the source of the program’s temporary expansion.

Department staff reported that 14 applications arrived for the 2025 cycle — seven from designated downtowns and seven from village centers — requesting more than $2 million in total. "In this cycle we saw an equal split between villages and downtowns," Elvage said. Committee members noted the mismatch between requests and the annual budget and asked how many projects are likely to be funded. Staff said with the existing $520,000 annual appropriation, and a $200,000 grant cap, roughly two to three projects could be funded absent additional one‑time funds or underspend from prior cycles.

Committee members asked about program origins, evaluation criteria and interagency coordination. Elvage said the 2021 one-time funding came from a mix of the capital budget and a transportation bill and that the Community Investment Board makes final funding decisions after staff checks for completeness, historical‑preservation review and other application requirements. She said the Department works closely with VTrans and provides resources to applicants about applicable standards.

Representative Lahoud pressed for greater coordination and capacity to expand access for villages, calling the current scale of investment insufficient. "This seems unbelievably shortsighted to me that we are not investing in our villages," Lahoud said, urging more technical assistance and larger funding commitments to make village improvements feasible.

Committee members and staff cited program history and case studies to illustrate typical uses and outcomes. Since the fund’s inception, staff said, the program has financed projects dating back to 1999; Elvage told the committee that since 2020 the Downtown Transportation Fund has supported 47 projects in 30 communities, investing about $5.9 million in program funds and leveraging roughly $4.7 million from other sources. Examples discussed included sidewalk, bench and accessibility work in St. Albans; green and pathway improvements in Bristol; wayfinding and transit investments in Brattleboro; a park expansion in Springfield; and wayfinding work in Rutland.

Staff described steps the Department and partners are taking to address capacity constraints, including a year‑long review of technical assistance capacity with regional and preservation partners and outreach to municipalities. No formal changes to program policy or funding were adopted at the hearing; staff said they'll review 2025 applications for completeness in the coming weeks and expect the Community Investment Board to make awards in April.

Applications received in 2025 and the program’s limited annual appropriation mean the committee and staff acknowledged that fewer projects will be funded unless additional appropriations are made. Decisions about whether to continue village eligibility beyond the one‑time funding were described as contingent on future appropriations.

What’s next: Department staff will complete application reviews and present recommendations to the Community Investment Board in April; committee members said they will continue discussions about coordination, technical assistance capacity and long‑term funding options.