Last week, the Joint Transportation Oversight Committee met to confront sobering projections for Vermont’s Transportation Fund and a recission plan for current reduced FY26 estimates. The fund is facing a widening deficit that may require cuts to core programs and critical maintenance, with consequences for road quality, safety, and the economy.

According to the Joint Fiscal Office, transportation revenues are projected to grow at just 1.6% in FY26, well below the projected rate of inflation. Structural challenges drive this stagnation: fuel taxes are tied to consumption, and greater vehicle efficiency and electric vehicle adoption exacerbate this decline in revenue. Tariffs on steel and other construction materials are also inflating costs, and a projected $33.4 million shortfall by FY27 for federal matches could put an additional $163 million in federal dollars at risk.

On the current trajectory, the state could see 60% of roads in poor or very poor condition by the end of the decade. Paving, which is the most reactive to swings in funding, already fell to a historic low of 135 miles in FY25, far short of the 300 needed yearly to maintain system health and the 243 miles per year average for the past five years.

This issue affects far more than just drivers. Poor road conditions hurt Vermont’s visitor economy and increase costs for manufacturers dependent on reliable shipping.

The Transportation Fund challenge is a stark example of the reality every agency will face in the near term if Vermont does not change its long-term projections. With resources tightening and Vermonters already struggling with affordability, higher taxes are not a viable solution. Instead of cycling between program cuts and tax increases, Vermont can pursue a more sustainable path: growing opportunity and revenue through economic vitality. The Vermont Futures Project’s Economic Action Plan provides a roadmap to expand the economy, strengthen the workforce, and ensure long-term sustainability.