Legislators worry Vermont could lose more than $60 million in federal stimulus money

Print More

(Host) There’s growing concern at the Statehouse that the state could lose more than $60 million in federal stimulus money for transportation projects. 

Key lawmakers say that could happen if the Legislature cuts state transportation spending to balance the budget.

VPR’s Bob Kinzel reports

(Kinzel) Over the next two years, Vermont is expected to receive $130 million for transportation projects under the new federal stimulus bill. But there’s a catch.

The law stipulates that individual states can’t cut their own transportation budgets and then use the new stimulus money to backfill those cuts.

Last week, lawmakers were told that it’s likely that revenue from the gas tax, the diesel tax and the purchase and use tax will be $8 million lower than projected for the 2010 budget.

While legislative leaders are considering additional cuts to the General Fund to offset declining revenues, House Transportation Chairman Rich Westman says that’s not an option for the Transportation Fund.

(Westman) "If we drop our level of spending and we aren’t able to match all the federal dollars, the feds say we aren’t maintaining our effort and we become ineligible for federal stimulus funds going forward."

(Kinzel) Westman thinks the solution may be a bonding plan that’s part of the House transportation bill.  The proposal authorizes $120 million in new spending, over the next three years, that’s financed by a 5-cent increase in the gas tax.

Westman says the full package is needed to sustain spending and to provide new money for road and bridge repairs.

(Westman) "If all we’re using bonding for is to stick our finger in the dike, that’s not what we need to be doing. That said, I’m very aware that the economy is not good and we can’t allow ourselves to be put in the position that the second half of the stimulus money, which is going to be over $60 million, we leave on the table. These are hard decisions now."

(Kinzel) But Senate Transportation Chairman Dick Mazza doesn’t agree with Westman’s approach.  He opposes the authorization of a major bond package because he believes the combination of the federal stimulus funds and the bond money will overwhelm the state’s construction industry.

(Mazza) "I just don’t see getting into debt. I think we felt very strongly about that. Why get into debt if you don’t need it today and let’s try to work pay-as-we-go until such time as it’s really required."

(Kinzel) Mazza says he isn’t certain how to deal with the problem of potentially losing the federal stimulus money. He says he hopes to find a solution when the House and Senate begin their negotiations over the transportation bill.

For VPR News, I’m Bob Kinzel in Montpelier

Comments are closed.