Paving industry urges Senate to stabilize transportation fund, warns of shrinking program and workforce impacts

Industry representatives testified to the Senate Transportation Committee on Feb. 14 that the state's paving program is shrinking and urged the legislature to stabilize the transportation fund and the state match that supports federal dollars.

Nick Sherman of Lehigh Public Affairs, representing the Paving Association of Vermont, told senators the group's top legislative priority is ensuring a stable state match so the paving program can continue. "Do everything you can to stabilize the transportation fund and ensure that there's a state match both this year and going forward," Sherman said, arguing that proposed transfers and program reductions would significantly reduce paving work.

Contractors described a drop in program size and miles. Witnesses said the paving program declined from about $141 million two years ago to a proposed $102 million in the current year; they said programmed miles have also fallen and that the industry regularly advocates for a 300-mile annual paving target to maintain the state network. Witnesses said a 200-mile program corresponds to a roughly 15-year treatment cycle, whereas 300 miles corresponds to about a 10-year cycle.

Speakers outlined causes and consequences: federal Infrastructure Investment and Jobs Act formula increases raise the amount of federal funding available, which in turn increases the state's required match in future years; inflation and material and labor cost growth have driven bid prices higher; and workforce shortages and seasonal layoffs make it difficult for contractors to scale up when funding returns. Jay Perkins of Pike Industries said companies are shifting crews to other states where work is more abundant and that inconsistent statewide programs make it harder to retain staff. Several contractors said they are increasing wages to attract workers and, in some cases, moving employees between states.

Contractors also discussed procurement dynamics: lower-cost, high-mileage projects yield more miles per dollar but shorter treatment life; larger reconstruction and urban projects cost more per mile and narrow competition. One witness said profit margins on certain work can be roughly 10 percent, but that margins vary by project type and risk. Industry representatives suggested a range of policy responses discussed in the hearing, including reviewing the vehicle purchase-and-use transfer to the education fund, broadening allowable uses for certain transportation funds, and exploring other revenue or programmatic changes to sustain state match.

Committee members asked detailed operational questions about bidding, profit margins, workforce wages and how contractors respond to uneven year-to-year funding. Contractors described a mix of responses: shifting work between states, converting paving crews to other types of construction work in the off season, and accepting lower-margin projects to keep crews employed.

Industry representatives asked the committee to consider both stabilizing revenues and programming projects to get more preventive treatments and miles for available dollars. They offered to work with the Agency of Transportation and the committee on options; no formal committee action was recorded during the testimony.