VTrans presents municipal funding and payback reports; recommends transparency, training and standardized payback language
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Summary
VTrans presented two January reports to the Senate Transportation Committee: one on municipal funding pathways recommending more transparency and training for towns; the other on payback provisions (affected by IIJA), recommending standardized payback language, early scoping and clearer appeals procedures.
The Agency of Transportation told the Senate Transportation Committee on Feb. 4 that towns face uneven access to transportation funding and that VTrans has recommendations to improve transparency, training and consistency in payback rules.
"The report was to evaluate the state's Town Highway aid and grant programs to look for any sort of efficiencies," Jeremy Reed, chief engineer at VTrans, told the committee, summarizing findings from a January report required by Section 16 of Act 43 of 2025. Reed said the study found a mix of funding streams — direct aid and multiple competitive grant programs — and uneven municipal capacity to apply for federal funds that come with more administrative requirements.
Reed said recommendations include a single public webpage for municipal funding opportunities, a cloud‑based application option, and a training series to help municipal staff and selectboards understand application criteria and federal funding strings. "A formula driven process eases the administrative burden," Reed said when comparing direct aid versus competitive grants.
Committee members raised equity concerns: formula aid provides a predictable stream to towns that meet statutory formulas, while grants such as Better Connections or Better Roads often advantage municipalities with planning staff and prior zoning work. One senator said small towns that meet once a month need longer notification periods to respond to funding opportunities.
Reed also presented a second report on payback provisions that he said became more complicated after the Infrastructure Investment and Jobs Act (IIJA). Before IIJA, Reed said, payback provisions were consistent across state statute, grant agreements and federal regulations. "IIJA relaxed some of the payback provisions," Reed said, creating ambiguity between state statutes and federal CFR guidance, and producing inefficiencies when projects languish or are canceled.
Recommendations on payback include standardized language with clear milestones for when towns would be liable for repayment (for example, right of way or engineering milestones), enhanced upfront scoping to ensure towns are ready to pursue construction grants, and an institutionalized, more workable appeals and consultation process to reduce onerous, time‑compressed adjudications.
Reed said VTrans is still evaluating the recommendations and is not proposing legislative action in the current transportation or DMV bills; the agency will continue coordinating with VLCT, VAPT and regional planning commissions before proposing specific changes.
Ending: VTrans asked committee members to identify priorities for next steps; staff said additional detail could be provided on any recommendation the committee wants to pursue, but no legislative text was advanced at the hearing.