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State transit operating match removed from DOT budget; local agencies warn of service cuts
Summary
DOT officials confirmed the governor’s FY26 recommendation omits a $1.8 million special general‑fund transit operating match that helped local operators meet federal matching requirements.
The governor’s recommended FY26 budget for the New Hampshire Department of Transportation does not include a previously adopted general‑fund appropriation used as a state operating match for federal transit grants, DOT staff said at the Finance Division II hearing.
Why it matters: DOT staff and transit administrators told the committee that the omitted state operating match — about $1.8 million in general funds provided in the prior biennium — helps local transit agencies meet the typical federal requirement for a local match (often about 50% for operating grants). Without the state match, DOT staff said some federal funds may not be usable by local providers, which could translate to service reductions for riders.
What DOT said: Danielle Chandra, DOT director of finance, explained that in the prior budget some local transit agencies received a special general‑fund appropriation of about $1.8 million to help with local matches. The FY26 governor’s budget did not include that special appropriation; DOT reallocated about $200,000 inside the aeronautics, rail and transit accounting unit to cover retiree health and indirect cost charges assigned to the department. The department said the effect of dropping the special state operating match “remains to be seen,” adding it may cause some federal funds to go unused if local agencies cannot come up with matching funds.
Local transit impact: DOT staff told the committee they have reached out to the 10 public transit providers statewide and expect those agencies to present more specific impact estimates at a special session on Friday. DOT's transit staff said the potential effects include reduced frequency, elimination of weekend service, cuts to shopper or demand‑response routes in remote communities, or scaling back connecting runs. Staff estimated a possible total reduction of about $3.7 million in funded transit service if the state match is not provided and local agencies cannot find replacement matching resources.
What transit agencies plan next: DOT said it is coordinating with regional transit providers and planned outreach to the legislature and the public as agencies prepare impact information for a scheduled Friday hearing.
Sources and context: The discussion and figures were provided in the DOT budget hearing by Danielle Chandra and Shelley Winters (Director, Aeronautics, Rail, and Transit). DOT said use of federal FTA funds and the timing of federal grant obligations can stretch over multiple years; loss of a state match might not immediately show up in spending but would affect future federal drawdown and service continuity.
Ending: Committee members asked DOT to follow up with detailed projections from local transit agencies. DOT staff said they will forward impact assessments and clarified that some federal funds are formulaed and can be reallocated over time, but that a prolonged match gap would likely result in service reductions for some communities.
