Paving industry warns Vermont lawmakers of shrinking transportation fund, fewer miles planned

Representatives of the paving industry told a joint legislative transportation hearing that Vermont faces a growing maintenance shortfall after state paving program funding dropped sharply and miles scheduled for work declined.

The Paving Association of Vermont’s lobbyist, Nick Sherman of Leonine Public Affairs, told members the transportation program “at its height” was about $141,000,000 two years ago and that the governor’s proposed program this year is about $102,000,000, and he said the miles planned for paving have dropped by roughly 100 miles in that same span. “We are very concerned,” Sherman said, “that there’s a real risk and that this downward trend in miles paved will continue.”

Why it matters: Federal highway funding frequently requires a state match; without sufficient state match money the state cannot draw down federal dollars for projects. The industry witnesses told the committee that fewer annual lane miles of preventive treatments means more expensive repairs later, and that the state aims for roughly 300 miles per year to sustain a 10-year pavement cycle.

Industry witnesses and committee members discussed options for addressing the gap but stopped short of endorsing any single revenue measure. Sherman said the association has not adopted a position on a single revenue proposal and asked lawmakers to prioritize keeping transportation dollars in the transportation fund and to consider alternatives such as broadening bonding programs or other revenue mechanisms the legislature may study.

Jay Perkins, vice president of commercial sales at Pike Industries, and Caleb Wellstein, estimator at Peckham Industries, described how reduced volumes affect contractors’ planning and equipment purchases. Perkins said Maine and New Hampshire use tolls on some highways to generate revenue and that Maine and New Hampshire also receive credits and other mechanisms that help sustain their programs; Vermont, he said, has fewer such options. Wellstein described how companies that work across multiple states can shift personnel to keep crews employed but warned that long-term reductions would reduce reinvestment in paving equipment and make it harder to ramp back up when demand returns.

Committee members pressed industry witnesses about trade-offs within the paving program. witnesses stressed that lower-cost treatments (for example, surface overlays and certain mill-and-fill or “ep aid” treatments) allow the state to stretch limited dollars to cover more miles; those lower-cost treatments constituted a substantial share of the proposed program’s miles but a much smaller share of the dollars. Sherman told the committee that 40 miles listed in the proposed paving program were lower-cost treatments that together represent about one-third of the program’s miles but only about 12% of the program’s funding.

The witnesses also described the operational consequences of fewer miles: emergency, short-term fixes cost more in aggregate and can force the state into a cycle of making temporary repairs rather than preventive work. Sherman recounted a recent emergency story on Route 22A near Fairhaven and Orwell: an emergency rough-fill job of about $1,000,000 was followed the next year by a full mill-and-fill that removed the quick-fix asphalt.

On federal requirements, witnesses noted that federal participation brings prevailing-wage rules (Davis-Bacon) and other administrative requirements that can raise costs. Sherman said federal funding does increase oversight and can add costs such as prevailing wages for certain crews, and Perkins estimated federal involvement can materially raise project cost though he declined to say it doubled costs.

Where the committee goes next: lawmakers and witnesses agreed the committee will continue reviewing revenue options, program design and project prioritization. Several representatives signaled willingness to weigh revenue moves that are politically difficult, and industry witnesses repeated one specific ask: maintain or restore the state match levels that allow Vermont to draw federal funds and prioritize program choices that buy more miles per dollar.

Ending: The committee scheduled more budget and program accountability hearings and will receive agency updates in March; industry representatives encouraged continued dialogue between the legislature and the Agency of Transportation to find ways to stabilize funding and get “more miles out of less money.”