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Paving industry backs FY27 increase, urges long-term fix to stabilize Vermont’s road funding
Summary
Representatives of the Vermont Paving Association and Peckham Industries told the House Transportation Committee they support the FY27 paving increase but warned the state needs a durable revenue solution — such as a phased purchase-and-use transfer, indexed gas tax, or mileage fee — to avoid costly year-to-year volatility and preserve contractor capacity.
Nick Sherman, representing the Vermont Paving Association, told the House Transportation Committee on March 11 that the association supports the proposed FY27 paving budget and welcomed an increase after several years of declines. "We are supportive of the proposed FY27 paving budget," Sherman said, adding that predictability in the program is essential for planning, workforce retention and lowering long-term costs.
Will Hadlock, materials operations lead for Peckham Industries, described how a predictable multi-year program helps contractors keep crews and equipment ready. "Consistency of the program is super important to us," Hadlock said, noting that full-depth reclamation can cost "four to five times as much as just simply doing a quick mill and overlay." He said that when paving funding fluctuates, companies may lose workers to other states and find it hard to plan investments.
Sherman emphasized that sustaining state transportation revenues is necessary to meet matching requirements and draw down federal funds. He warned the committee that without a long-term revenue path the state could resort to repeated one-time solutions, producing the very volatility that raises costs: "If we don't find a way to make the fund more stable going forward, we could very well be faced with a year-after-year situation where we're having to come up with a one-time solution."
Members pressed witnesses on specific targets and trade-offs. Industry representatives said a sustained program that paves roughly 300 miles a year would better support the system and lower long-term costs; the 300-mile figure reflects an allocation that balances cheaper preventive overlays with less frequent, more expensive full-depth rebuilds. Sherman and Hadlock urged the committee to consider both miles and the mix of treatments when measuring program health.
Committee members and witnesses discussed several revenue options. Witnesses highlighted a phased "purchase-and-use" transfer being considered in this legislative session as a means to restore resources to the transportation fund, and indicated industry groups would support sensible, implementable approaches. Sherman and others also acknowledged that proposals such as indexing the gas tax or a mileage-based user fee have political and operational complexities and would require time to implement.
The group also addressed the practical limits on industry capacity and geography. Speakers said contractors can scale up if increases are predictable and spread across regions; but if funding shifts dramatically from one region to another, firms that base plants and equipment nearby may see large local booms or busts. "If you know that's the trend, that's the direction it's going in, we can ramp up," Sherman said, urging predictability to allow hiring and equipment placement.
Witnesses discussed cost risks tied to petroleum markets: liquid asphalt is closely tied to crude oil prices and can represent a large share of per‑ton asphalt cost. Sherman noted market volatility can materially change paving yields even with contract price escalators in place. To reduce exposure to liquid asphalt, industry witnesses urged allowing higher shares of recycled asphalt in mixes; they said Vermont's existing 20% cap has been exceeded in pilot projects and that some states have used up to 40% recycled content on local projects.
On workforce, Hadlock said the construction sector generally pays well and companies have been able to recruit workers, though certain manufacturing operations remain more challenged. Both witnesses urged that maintaining steady program levels helps employers retain staff and invest in training.
The committee pressed for clarity on which projects would be accelerated if stepped funding is adopted and how near-term actions affect future years. Witnesses said a formal stepped commitment would improve the agency’s fall advertising and bidding schedule, but that the detailed stepped schedule had not been finalized at the time of testimony. The session ended with the committee requesting witnesses remain available for follow-up as the legislature continues deliberations.
