Laura Streets has never seen the roads in Morrisville in worse shape than they are now, 25 years after she moved there.
The paved roads downtown are rutted and dotted with potholes. Dirt roads like the one she lives on have poor drainage that sends stormwater gushing into people’s yards. And some stretches, including a key road between Morristown and Stowe, are “almost undriveable,” she said.
“I told the town: If people hit those bumps, they’re going to break axles,” Streets said last week.
A recent report commissioned by the town backs up her assessment. It concluded that 42 percent of roads in Morristown are in either poor or very poor condition. The town has a backlog of paving projects that would cost $3.2 million, more than its entire annual highway budget. Officials acknowledge they’ve struggled for years to keep up with road repairs — and they’re far from alone.
Aging infrastructure in rural communities around the state is being battered year round with more freeze-thaw cycles in winter and climate change-fueled flooding in the summer, said Brent Raymond, Morristown’s town manager. Repair costs are rising faster than town highway budgets.
“With the limitations of a local tax base, it’s overwhelming,” Raymond said.
Vermont roads get heaved by frost, pummeled by snowplows and pockmarked by short-term patches each winter, and then await the arrival of warmer weather for repaving. But this year, people who try to resolve these problems increasingly say that Vermont’s road network — and the complex system that funds it — is beginning to crumble.
Federal funding cuts, damage from climate change, soaring construction costs and a steady decline in gas taxes are choking state and local transportation budgets.
With the limitations of a local tax base, it’s overwhelming.
Brent Raymond
The Vermont Agency of Transportation faced a $33 million hole in its current budget. To address the shortfall, it went through two rounds of layoffs, postponed projects and raised some motor vehicle fees. It further cut back on bridge grant programs, overtime and maintenance. The agency also plans to give towns the bare minimum required by law for road maintenance in the coming year.
Construction costs have increased by more than 60 percent since 2020, according to the National Highway Construction Cost Index. But the amount the state pays cities and towns to help keep up their roads has remained largely stagnant over that period. The governor’s current budget proposal calls for sprinkling $31 million among 247 cities and towns next year. That will account for a small fraction of most local highway budgets and is just 2.7 percent more than this year.
Unable to keep up, Morristown is considering abandoning as many as 19 roads so the town won’t have to repair or maintain them. Waitsfield may close two damaged bridges, including the Great Eddy Covered Bridge, if the town can’t come up with the cash for repairs.
And lawmakers are scrambling to find new funding streams that can help fix the problem without further burdening taxpayers.
Vermont is “about to go off a cliff if we don’t turn this bus around,” said Josh Hanford, the director of intergovernmental relations for the Vermont League of Cities and Towns. “Bridges are closing, and roads are being abandoned. It’s irresponsible to not invest more in transportation.”
Transportation funding involves ever-changing federal, state and local programs that pay not just for roads but rail lines and airports. VTrans is proposing a $935 million budget this year, the largest in state history.
Traditional funding, however, is not keeping pace with soaring costs for fuel, asphalt and employees.
“There is a sustainability problem going forward,” VTrans Secretary Joe Flynn acknowledged to lawmakers.
Revenue from gas taxes, one of the key funding sources for roads, is sliding as people increasingly turn to electric vehicles and hybrids. After peaking in 2019 at around $79 million, gas tax revenue dropped sharply during the pandemic. It is forecast to dip below $69 million by 2030.
That’s one of the reasons that VTrans has proposed a program to charge people based on how many miles they drive per year. The proposal, under consideration by the legislature, would create a mileage-based user fee. It would apply to the owners of battery-only-powered cars and trucks first.
EV owners, who don’t pay gas taxes, have been assessed an $89 annual flat fee since 2025 that’s meant to ensure that they pay their fair share for road maintenance.
A bill that passed the House calls for EV owners to begin paying 1.4 cents per mile in 2027. For someone driving the Vermont average of 11,000 miles per year, the annual fee would be around $150. The fee would be charged based on odometer readings during annual vehicle inspection — even though legislators are considering rolling that back to make inspections mandatory every other year.
Hybrid vehicles with both gas and electric motors would be added in 2029, and gas-powered vehicles would be added in 2031, both at lower rates to reflect that they pay some gas taxes. A number of issues still need to be resolved, however, such as whether drivers should be charged for out-of-state driving.
The gas tax would apparently stay in place. Vermonters pay about 50 cents per gallon in taxes: 31.5 cents per gallon in state taxes and 18.4 cents in federal taxes.
Sen. Richard Westman (R-Lamoille), who chairs the Senate Transportation Committee, acknowledged that the idea faces criticism but said the issue is too crucial to ignore. The state is falling behind many of its goals for replacing bridges and repaving roads, Westman said. “Particularly in paving, we’re sucking wind,” he said.
The proposed 2026-2027 budget would repave only 1 percent of state roads, far less than the rate needed to keep up with deterioration, he noted. Anemic investment means that the percentage of state roads in poor or very poor condition, currently at 38 percent, would rise to 60 percent in 2030, VTrans predicts.
Road construction companies require consistent government spending year after year to be comfortable making significant investments in the machinery and staff involved, Westman said. He added that a mileage-based fee could lead to the stability the system needs.
Around 13,000 fully electric cars are registered in Vermont, or about 6 percent of the total. While the rapid rate of EV adoption has slowed due to the expiration of federal tax credits, more of them are anticipated on Vermont roads over time. It’s both financially unsustainable and unfair for EV and hybrid drivers not to pay their share toward the upkeep of roads, Westman said.
“What we’ve got built into this system is inequity, and what we need to do is work toward a system that has a future that treats everyone the same,” Westman told Seven Days.
Shifting to a mileage-based system could be a big lift. Environmental groups such as the Vermont Natural Resources Council and the Sierra Club initially supported a mile-based program but have cooled to the idea recently.
“We want to make sure that this program, when it’s implemented, is successful and it actually works and is fair and doesn’t penalize people who are driving EVs,” said Kati Gallagher, VNRC’s sustainable communities program director.
The Sierra Club also says it’s premature to launch a program with so many outstanding questions and has called for it to be postponed. The group notes that, because the new program would replace the $89 annual fee, it would reduce revenue flowing into the transportation fund during the first two years.
The Sierra Club also worries that forcing EV drivers to pay higher fees initially would discourage people from buying them, putting Vermont’s climate goals further out of reach.
Sen. Becca White (D-Windsor) supports a mileage-based fee in theory but agrees the proposal doesn’t seem to be fully baked.
“My concern is that it’s going to get rolled out so poorly that it’s going to sabotage it ever getting rolled out to other vehicle types,” she said.
VTrans has another controversial funding proposal. It wants Vermont to gradually shift roughly $50 million in tax revenue generated by vehicle sales from the education fund back to transportation. The 6 percent tax on car sales and 9 percent tax on rentals bring in about $150 million per year. Two-thirds goes to transportation and the rest to education.
Gov. Phil Scott wants to steer about $10 million more to the transportation fund beginning next year, in part to ensure the state can maximize federal funding. The amount would increase over five years, so by 2031 all the money from that tax would go to transportation, which by then would be an additional $58 million.
The House Ways and Means Committee objected to such a long-term change, proposing instead to tweak the ratio. Instead of a 2-1 split, the House approved a 73-27 split, which would ensure the transportation department gets the extra $10 million Scott has proposed.
Rep. Matt Walker (R-Swanton), chair of the House Transportation Committee, said members of his committee agreed with Scott’s long-term transition. But that won’t be soon enough for municipalities that are hurting now.
“Towns are looking for any way to try to fund infrastructure and avoid raising property taxes,” Walker noted.
On Town Meeting Day, voters in 13 towns agreed to add a 1 percent sales tax, bringing to 50 the number of municipalities that now have what is known as a local option tax.
Morristown was one and estimates the tax will bring in about $1.25 million each year. Most of the money will be used to help the town dig out of its road repair backlog, Raymond, the town manager, said.
The future revenue “will be our saving grace,” he said.
That’s fine for cities and towns with shopping and restaurants, but Westman worries about smaller communities, such as Eden, where a local option tax isn’t an option. The fix risks deepening the rural-urban inequities in the state.
“We’ve had enough of Band-Aids,” he said. “Sometimes you have to stand up and do the right thing.” ➆
The original print version of this article was headlined “Roads in Ruins | Lawmakers seek alternate routes as rising costs and stagnant funding have left Vermont’s roads crumbling”
This article appears in April 15 • 2026.
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