Vermont Agency of Transportation outlines $883.4 million fiscal 2026 budget, flags bridge and program risks

The Vermont Agency of Transportation on presented a proposed $883,400,000 budget for fiscal 2026 and told the Appropriations Committee the plan relies primarily on federal formula dollars plus state matching revenues from motor-vehicle fees and registrations.

The proposed budget front-loads spending on state and interstate bridges, maintenance and roadway safety, while reducing the agency's state paving allocation from about $130,000,000 in fiscal 2025 to $102,000,000 in fiscal 2026, the agency said. The presentation emphasized federal formula stability from the Federal Highway Administration but warned that grant programs and some one‑time federal funds remain at risk.

Why it matters: AOT said aging bridges, higher construction bids and lingering post‑flood recovery work are forcing prioritization decisions that shift more money to bridge rehabilitation and maintenance. Those choices affect paving levels, town projects and the timing of large replacements across the interstate and state route systems.

Budget and revenue mix

AOT told the committee the agency's recommended fiscal 2026 budget totals $883.4 million. The largest single revenue source is formula funding from the Federal Highway Administration; the agency identified that piece as about $388,400,000 for fiscal 2026. Other revenue lines include federal rail, transit and aviation grants; local and other pass‑through funds; a Central Garage fund; and a statutorily required Transportation Infrastructure Bond (TIB) account. AOT officials said the department raises state match through Department of Motor Vehicles fees, registrations and related receipts.

The agency noted that some federal emergency and one‑time funds from recent flood responses (Federal Highway Emergency Relief and FEMA Public Assistance) are included in recent years’ revenue and that the governor’s recommended budget expands language to allow certain one‑time state match dollars to be used for Federal Highway Administration eligible projects.

Priorities and program…