Updated at 6:08 p.m.
MONTPELIER — Vermont’s Agency of Transportation is laying off 16 employees and cutting a dozen more vacant positions as part of a plan to trim its budget for the current fiscal year to match a reduction in projected revenue over that same time period.
Employees were slated to receive formal notice they were being laid off Thursday, according to Jayna Morse, the agency’s director of finance and administration. At least five of the workers being laid off have enough seniority that they have a clear path to take other jobs in state government, Morse said.
The personnel cuts are expected to save the agency $2.25 million. It’s the largest slice of a $7.5 million “rescission plan” the agency is enacting after getting approval for the reductions from a Vermont legislative panel Thursday. Members of that panel, the Joint Fiscal Committee, needed to greenlight the overall plan — however, according to Morse, the agency had already sent out preliminary notices to workers who were being laid off before Thursday morning’s vote.
“Unfortunately, we’re not going to be able to avoid reductions,” she told the legislators, who voted 9-1 to approve the plan.
Most of the positions being eliminated Thursday, Morse said, were created to help manage projects funded by former President Joe Biden’s 2021 bipartisan infrastructure law. However, she said steep increases in construction costs in the years since have curtailed the amount of work the state could support with those dollars, which is why many of the positions on the chopping block Thursday are vacant.
The transportation agency’s current budget included funding for 1,311 total positions. Morse said the cuts equal about 1% of its total salary and benefits costs.
The agency was required to come up with cuts after state economists, in July, scaled back their estimates — by that same $7.5 million figure — for the amount of money the state would likely have available to fund its transportation program over the 2026 fiscal year. That timeframe started in July and ends next June 30. Vermont’s transportation program is supported, at the state level, with revenue from taxes on gasoline and on motor vehicle purchases, as well as fees for car registrations and other services at the Department of Motor Vehicles.
The revenue downgrade comes as these funding sources have, broadly speaking, grown stagnant and failed to keep pace with inflation, Logan Mooberry, an analyst with the Legislature’s Joint Fiscal Office, told committee members Thursday.
State gas tax revenue has long been declining as cars get more fuel efficient and more people switch to driving electric vehicles, he said. Legislators have attempted to curb some of that impact by charging EV drivers a new annual fee starting this year. Meanwhile, Mooberry said, Vermont’s slow population growth is limiting how many new cars are sold in the state each year, and thus, limiting how much the state brings in from fees people pay to register their cars.
Some legislators said Thursday that discussion of layoffs at the transportation agency could be a primer for similar conversations to come in other areas of state government as looming federal funding cuts, many of which are included in President Donald Trump’s sweeping tax and spending law, begin to take effect.
“I foreshadow things coming in the area that I oversee,” said Rep. Theresa Wood, D-Waterbury, who chairs the House Human Services Committee.
Steve Howard, the executive director of the Vermont State Employees’ Association, agreed. He told legislators that the union would rather see Gov. Phil Scott’s administration find more ways to raise state revenue — such as by increasing fees for government services — than, speaking hypothetically, propose future staffing cuts in order to balance what legislative leaders have already warned will be a challenging state budget for the upcoming fiscal year.
“I think we’re a little nervous, because this feels like the tip of the iceberg,” Howard said.
Beyond laying off workers, the transportation agency’s plan will save $2 million by delaying the planned replacement and expansion of a vehicle garage in Springfield until a future fiscal year. Cutting back on tree trimming, mowing and culvert maintenance would together save $915,000, according to an agency memo. Meanwhile, another $575,000 will be saved by purchasing four fewer dump and plow trucks, and instead, keeping several older vehicles in service.
The agency will also save $500,000 by putting off a plan to improve the platform at the Amtrak station in Rutland and save $421,000 by canceling a project meant to improve the process by which people apply for permits for utility work, among other uses, along public roads. Candace Elmquist, the agency’s chief financial officer, told legislators that the contractor the state hired to work on the project had been struggling to meet the state’s requirements for it.
Meanwhile, among a number of other cuts, the agency also expects to save $230,000 by limiting future travel and conference expenses for its employees, per the plan.
Sen. Richard Westman, R-Lamoille, who chairs the Senate Transportation Committee, said he was concerned about pushing projects into the future, when they could get more expensive to complete. Legislators need to have serious conversations about new transportation revenue sources, he told his colleagues — but for now, he said, the agency’s plan reflects its current fiscal realities.
“We aren’t happy about where we are,” he said of the plan. “But it’s probably as good as we’re going to get.”
