House Transportation Committee warned federal IIJA supplementals may not be continued after reauthorization

BURLINGTON, Jan. 13, 2026 — Costa Pappas, federal policy director at the Agency of Transportation, told the House Transportation Committee on Tuesday that Vermont relies heavily on federal funding and faces an uncertain outlook as Congress approaches reauthorization of surface transportation programs.

Pappas said formula funds — the predictable allocations for highways and transit — remain the backbone of state capital planning, but discretionary, competitive grants introduced or expanded under the Infrastructure Investment and Jobs Act (IIJA) provided a large, one‑time infusion that may not survive the next reauthorization. “What happens when the IIJA expires? … We don't know what's gonna happen next,” he said, noting that September 30 is the statutory expiration for some IIJA funding windows.

Why it matters: Pappas warned that Vermont’s recent success in securing large discretionary grants — including multiple major bridge and rail awards in recent years — depends on programs that were funded at much higher levels during the IIJA than in prior reauthorizations. If Congress does not reauthorize those supplemental grant programs at similar levels, states could see a substantial drop in available capital funding for bridges, airports, transit vehicles and rail.

Pappas contrasted that with formula funds, which are allocated in five‑year bills and are more reliable for planning. He said federal shares vary widely by program — with some transit operations receiving roughly half of costs and interstate projects eligible for 90% or more of federal funding — and cautioned that a return from IIJA supplemental levels to historical baselines would force states to prioritize differently.

On grant competitiveness, Pappas described discretionary awards as highly selective, using an analogy: “I compare it to getting admitted to an Ivy League school. It's 8%,” he said, to convey how many strong applications cannot be funded. He added that while Vermont has done well in recent rounds, the majority of competitive grants nationwide are limited and awarded through agency evaluations that culminate in decisions by the Secretary’s Office.

Committee members asked how the state’s congressional delegation or state advocates influence grant decisions. Pappas explained the process: federal modal administrations (for example, the Federal Railroad Administration or the Transit Administration) evaluate technical merit, and the Secretary’s Office makes the final discretionary decisions; municipalities and local governments also apply directly for many competitive awards.

Historical parallels: Pappas cited the 2008–09 ARRA stimulus and the recent FAA reauthorization as precedents in which funding spiked and then moved back to lower baselines after one‑time supplements ended. He noted that IIJA created roughly 20 new or expanded discretionary programs and injected substantial general fund dollars for items such as bridge repair and EV charging infrastructure (NEVI), and that those increases may not be replicated unless Congress chooses to sustain them.

On formula allocation mechanics, Pappas discussed the small‑state minimums — provisions that guarantee no state falls below a set amount under certain formula programs — dating back to SAFETEA‑LU, and said recalculation or rebalancing of formula methods is periodically studied in Congress.

The committee did not take formal action on the briefing. The chair closed the Q&A with plans to hold hearings on highway safety and later review the governor’s budget. The full committee schedule and presentation materials were to be posted to the committee page.

Sources: Transcript of the House Transportation Committee briefing, Jan. 13, 2026. Direct quotes are from Costa Pappas, federal policy director at the Agency of Transportation.