Candace Umquist, chief financial officer for the Vermont Agency of Transportation, told the House Appropriations Committee on Jan. 8 that a $7.5 million downgrade in the July forecast triggered a statutory rescission and detailed line-item reductions and personnel changes the agency submitted to the joint fiscal committee.

Umquist described a modest budget adjustment to backfill the pilot special fund: AOT had a FY2026 appropriation of $1,400,000 for pilot special funds but $1,100,000 was insufficient to cover prior grant agreements with towns. The agency requested excess spending authority from the administration and now proposes transferring $360,050 from general and transportation funds to backfill the pilot fund so towns with completed projects can be paid promptly.

On the rescission plan, Umquist said the agency identified roughly $7.5 million in reductions across many lines: $270,000 in carried-forward project contingency for program development, a delay to the Springfield garage project, postponed upgrades to the Rutland snow-removal equipment building, and a $575,000 reduction in central garage equipment purchases that equates to buying four fewer dump or snowplow trucks this year. She said the trucks are on an eight-year replacement cycle and AOT will account for that in future budgets.

Other cuts include elimination of contracted tree cutting for $415,000 (AOT said about 80% of tree cutting is kept in-house), a $300,000 reduction in preventative culvert maintenance for one year, a 15% cut in contracted mowing (about $200,000), repurposing of iPads bought for the Vermont Asset Management system, and cancellation of a Section 111 automation project after vendors failed to meet business needs (Umquist said some costs, "some cost $800,000," had already been incurred).

Umquist also outlined position-management savings of roughly $2,254,000 tied to a reduction in force that eliminated 31 positions; she said 15 of those positions were vacant and 16 were filled, 21 employees had received notices that they might be impacted, and the net separations reported at the time were five employees (six separated, one later rehired elsewhere).

Committee members asked whether the rescission risks losing federal funding and whether revenue structure changes such as adjusting the gas tax would help. Staff said the rescission was driven by revised revenue forecasts and recommended further review by consensus revenue and joint fiscal office staff; they did not present a specific tax change model at the hearing.

Jane Morris, AOT director of administration, said the agency is prioritizing required certifications and essential training and "we do have some availability for virtual related trainings," noting some discretionary conferences were skipped when virtual options were not available.

The chair said the committee will get a new revenue forecast next Friday and continue budget work; AOT officials said they are prepared to return for further budget questions.