MONTPELIER — Vermont Gov. Phil Scott’s administration is proposing to lay off as many as 19 employees at the state Agency of Transportation in order to save money in its budget for the fiscal year starting in July.
Overall, the governor’s fiscal year 2027 budget would cut 31 transportation agency positions, though a dozen are currently vacant, Joe Flynn, the state transportation secretary, said Wednesday. The plan would save the state just over $4 million.
The secretary was giving the House and Senate transportation committees a first look at the Scott administration’s transportation-related budget proposals for the upcoming fiscal year at a joint hearing Wednesday morning. The governor did not mention the proposed layoffs during his budget address Tuesday, though officials from his administration indicated at an earlier press briefing that some layoffs were likely.
Wednesday’s proposal is notable because it comes just months after the transportation agency cut some of its staff last fall. The agency was required by law to find savings in 2025 after state economists, in July, lowered past projections for how much revenue the state would get to pay for transportation projects. Under its resulting cost-cutting plan, the agency slashed 31 total positions, in addition to delaying some planned projects.
Last year’s cuts resulted in at least five agency employees losing work, Jayna Morse, the agency’s director of administration, told the House Appropriations Committee earlier this month. About half of the positions on the chopping block were vacant, while some workers were able to get other jobs in state government, she said.
The transportation agency currently has about 1,200 employees, Flynn told legislators.
The proposed layoffs represent the largest group of staff cuts at any one agency across Scott’s new budget plan. They would not take effect until after Scott and the Legislature enact their new fiscal year budget, a process that’s typically completed by May.
Twenty of the latest proposed cuts would be in the agency’s maintenance division, Flynn said. Eight are in its administrative office. Two are in its division focused on highways, and one is in the division overseeing rail, airport and public transit.
The latest proposed round of cuts comes as the state continues to face major challenges paying for its transportation system.
State transportation revenues are projected to be about $33 million short of the amount needed to access as much matching federal grant funding as possible for transportation projects. In the upcoming fiscal year, if unfilled, that shortage could leave about $165 million in federal dollars on the table, according to legislative analysts.
In his budget address, Scott proposed plugging about a third of that hole by diverting $10 million in state revenue from taxes on new vehicle purchases to the Transportation Fund. Absent that change, the $10 million would go to the state’s Education Fund.
Each year, a third of all revenue the state brings in from that “purchase and use” tax goes to schools. Scott said Tuesday that he wants to wean the Education Fund off that revenue source over the next five years. His plan drew immediate skepticism from some Legislative leaders, though, who said they worried it would create a hole in the Education Fund that would be filled by property taxpayers who are already burdened with steep bills.
Later Wednesday, Candace Elmquist, the transportation agency’s chief financial officer, told the House Transportation Committee that the state wants nearly all — about $9.3 million — of the redirected tax revenue to pave roads and repair or replace bridges. The remaining sliver would pay for tree trimming along Interstate 89, she said.
Beyond the $10 million tax revenue shift, last year’s position cuts and the cuts laid out on Wednesday, the agency has proposed filling much of the remainder of its $33 million gap in the coming year by using an accounting mechanism that allows certain funding from the federal government to be used, effectively, as a one-to-one replacement for state revenue, Elmquist said.
The chairs of the House and Senate transportation committees said Wednesday it was too early to say whether they’d be willing to spend money in their proposed versions of a budget to keep the 19 workers in their jobs.
“We’re going to have to measure the pain,” said Sen. Richie Westman, R-Lamoille, one of the committee chairs. “And we’re going to have to judge that versus all of the (other) stuff.”
This story was republished with permission from VtDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To learn more, visit vtdigger.org/community-news-sharing-project.