VTrans overview and legislative study propose shifting rural bus service out of Green Mountain Transit to cut costs

Vermont Agency of Transportation public transit officials told the House Transportation Committee on Jan. 21 that the agency’s public transit program faces a “new normal” of higher operating costs and that a legislative study recommends transferring most rural Green Mountain Transit operations to neighboring regional providers to improve efficiency and reduce costs.

The presentation opened with Ross McDonald, Public Transit Program Manager at VTrans, describing the department’s aims “to meet the basic mobility needs of all Vermonters, including transit dependent persons,” and to support access to employment, reduce congestion and preserve air quality. McDonald said VTrans’ public-transit budget was about $48,000,000 in the most recent year and that roughly two-thirds of that funding comes from federal highway funds flexed into transit, supplemented by state dollars and local provider matches.

The nut graf: A VTrans-commissioned legislative study of rural service found GMT’s rural operating rate is substantially higher than other rural providers. The study’s author and VTrans staff said moving rural routes to agencies such as Tri-Valley Transit and Rural Community Transportation could lower statewide rural operating costs while allowing GMT to concentrate on urban transit in Chittenden County — a shift that the study recommends the Legislature consider this session.

Study findings and recommendation

Steve Fobble, the analyst who prepared the rural-service study and long-time VTrans performance lead, presented cost comparisons that used both a service-hour cost model and a staffing-based model. Fobble said GMT’s rural transit rate rose substantially in early FY25 relative to other rural providers; several methods in the report show GMT’s rural cost-per-hour and cost-per-trip are the highest of Vermont’s rural operators.

Fobble summarized the recommendation as a staged transfer of most GMT rural operations to adjacent rural providers: Washington County service to Tri-Valley Transit (TVT), most Franklin County service and the Lamoille/seasonal mountain shuttle to Rural Community Transportation (RCT), with some commuter routes retained by GMT. The study projects transition costs but estimates net annual savings on the order of roughly $1.2 million a year statewide if the recommended transfers proceed. Fobble emphasized the recommendation is intended to preserve the same level of on-street service for riders while changing only the operating entity.

Officials cautioned the savings estimate is sensitive to several variables, including recent wage increases from a new collective-bargaining agreement, board and union actions, and updated FY25 cost data. Fobble said his team reran the analysis with FY25 Q1 figures and that the recalculation increased the projected savings compared with FY24 data; he added he continued to refine numbers and would provide more detail in the final report due in early February.

Agency context, funding and operations

McDonald explained how Vermont’s funding mix differs from many states: roughly 65% of the public-transit budget includes FHWA funds flexed to transit, plus the state contributes about $10 million and local providers generate $8–10 million in nonfederal matches. He said the Department of Vermont Health Access (Medicaid) non-emergency medical-transportation program is braided with the state demand-response program and contributes about $16–18 million for additional trips.

McDonald described state efforts on electrification (VTrans received multiple low‑ and no‑emission bus awards and plans procurement of about 65 battery buses), pilots for microtransit, and a mobility outreach tool (Go Vermont) and said VTrans wants to align budgets and performance reporting before launching many new pilots in 2025–26.

Committee questions and board positions

Committee members asked about vehicle types, volunteer-driver programs, fare policy and GMT’s urban fiscal outlook. McDonald said the state’s volunteer driver pool has fallen (from roughly 300 to about 180 reported), increasing the use of wage-paid vehicles and raising per-trip costs. He said rural providers vary on fares; some rural systems operate fare-free while GMT’s urban system historically relied more on fares (making up a larger share of urban revenue), and VTrans has not recommended restoring fares statewide in the rural system at this time.

Fobble told lawmakers the GMT, TVT and RCT boards have already discussed the study. According to the presentation, TVT and RCT indicated conditional support pending due diligence; GMT has taken a neutral position and deferred to the Legislature. Fobble said any transition would require legislative action, further financial analysis, facility planning (including a federally funded replacement facility for Washington County), continued union discussions with the Teamsters, and agreement on subrecipient contracts so that rural funding no longer flows to GMT at the start of FY27 under the recommended timeline.

What the study does not decide

Officials stressed the study is an analytic recommendation rather than a final administrative action. No committee vote was recorded. McDonald and Fobble said the Legislature must decide whether to pursue transfers, approve additional implementation funding, and direct VTrans on transition steps such as addressing GMT’s urban cash-flow and overhead impacts. Fobble also noted that municipal assessments, formula apportionments (FTA Sections 5307 and 5311), and other federal allocations would remain subject to FTA and federal rules; VTrans staff said the recommended transfers are intended to clarify urban-versus-rural funding lines for auditors and federal partners, not to change federal apportionments.

Why it matters

Vermont’s public transit structure affects riders who are transit dependent, older adults, people with disabilities and Medicaid clients statewide, particularly in rural counties that rely on demand-response and volunteer services. The committee heard that managing complex rural Medicaid and demand-response programs imposes a large administrative burden; the study’s authors contend transferring rural operations could reduce the statewide unit cost of rural trips, freeing Medicaid and transit funds to serve more trips or support other rural providers.

Next steps

VTrans staff and the study author said the final report will be submitted to the Legislature in early February. Any transfer would require additional fiscal analysis, continued negotiations with the Teamsters, facility planning for Washington County, and development of FY27 budgets and subrecipient agreements. Lawmakers will consider legislative options during the 2025 session.