Committee considers indexing town highway aid to inflation to protect municipal road funding

Committee members discussed the structure of town highway funding and proposed adding a growth or inflation indexing mechanism to preserve municipal purchasing power.

Members said the town highway aid program currently includes a mechanism tied to transportation-fund revenue growth, while the town highway class 2 road and town highway structures programs are fixed-dollar figures. Committee members noted those fixed amounts were increased last year but are now reverted to statutory levels, leaving towns with rising costs and flat funding. One member said last year's appropriation reached approximately $88 million and that current figures have returned to statutory levels, producing a year-over-year decline for towns.

Legislative staff and JFO were cited as working with committee members to draft language that would tie class 2 roads and structures funding to a growth measure such as CPI or another index for future budgets. Members said they do not plan to rewrite the current year's budget at this late stage but want structural changes so next year's budgeting accounts for inflation and rising municipal costs. Examples discussed included directing a portion of new revenue sources to municipalities or identifying retail delivery fees that could be routed to towns to offset truck-traffic impacts.

Members asked staff to continue developing options and to present fiscal estimates; no formal change to statutory funding was proposed or voted on during the meeting.