New sidewalks or bike paths for seven municipalities in northern Vermont are on hold after an Environmental Protection Agency grant was halted abruptly last year when the agency determined the projects no longer aligned with the government’s goals.
The $877,000 grant for the Northwest Regional Planning Commission, which covers around 20 municipalities in Franklin and Grand Isle counties, was terminated less than a year after it was awarded, Catherine Dimitruk, the planning commission’s executive director, said in an interview last week.
The environmental justice grant was geared toward a project constructing “equitable active transportation” in the region with the aim of enhancing biking and walking access and safety.
The termination is a lost opportunity to build both infrastructure and community connections, said Jesse Bridges, CEO of United Way of Northwest Vermont, a partner organization on the grant.
“We know that transportation remains one of the biggest barriers to health, financial security, and community resiliency — especially for our neighbors living in rural areas, where distances are greater and transportation options are often limited,” Bridges said in the emailed statement.
It’s too late for the planning commission to recover that money, but Dimitruk said she hopes a judge’s ruling earlier this month will prevent the termination of active grants in the future for organizations that rely on federal funds.
U.S. District Judge Indira Talwani’s July 17 ruling found that agencies cannot cancel already secured funding for states, including Vermont, based on changes in executive branch priorities. Court filings in the case included mention of the NRPC grant, according to the Vermont attorney general’s spokesperson.
The judge found that relevant regulations “do not allow terminations of awards based on new program goals or agency priorities that an agency identifies after granting the award.”
The judge’s decision offers Vermont more protection against the kind of chaos the Trump administration triggered last year when Elon Musk’s Department of Government Efficiency started canceling grants that were already promised, officials say.
“This ruling is an important step toward protecting Vermont’s federal funding, now and in the future, from arbitrary termination based on the shifting priorities of the Trump Administration,” Attorney General Charity Clark wrote in a press release.
This ruling comes as the Office of Management and Budget is considering a new proposal to change the rules that govern federal grants. The proposal would create a new process for political appointees to review grants to ensure that funding aligns with the president’s “policy priorities.”
The OMB did not respond to requests for comment on whether the administration would appeal the decision and how this ruling could impact the proposed new rule, if at all.
Vermont last year joined 20 other states and Washington D.C. in a lawsuit against the Office of Management and Budget and other agencies in the Trump administration.
The multistate coalition asserted they had collectively lost billions of dollars of funding through the termination of thousands of awards in the first half of 2025, including funding for universities, school lunch programs and initiatives to combat hate crimes. This came after President Donald Trump created DOGE by executive order and directed agencies to review grants for termination.
The suit did not aim to restore lost funding, but the ruling helps ensure that federal grants continue to support work in Vermont, Clark, the Vermont attorney general, said in an interview.
“In a practical sense, this is extremely significant because we need these programs, and we deserve to have our tax dollars coming back to us here in Vermont,” Clark said.
Specifically, the lawsuit sought clarity on a regulation that guides federal grants called the termination clause, which the administration cited when canceling grants.
In 2020, the Office of Management and Budget introduced the clause and later revised it in 2024 to allow agencies to pull funding in part or entirely “if an award no longer effectuates the program goals or agency priorities.”
The OMB had asked the court to dismiss the lawsuit, arguing that the states’ concerns with grant termination were not specific or timely.
In the ruling, Talwani wrote that there is an imminent threat of states’ losing at least some current grants if the court did provide clarity on the termination clause.
“The court finds that the Termination Clause does not permit the termination of grants based on their inability to effectuate program goals and agency priorities identified after the award was made,” Talwani ultimately ruled.
