Several states are reporting significant transportation funding challenges due to declining revenues and rising costs.
On September 11, the Vermont Agency of Transportation proposed $7.5 million in project delays and administrative cost cutting for Fiscal Year (FY) 2026. This move follows a downward revision in projected transportation revenues, driven by lower-than-expected collections from motor vehicle purchase taxes and DMV fees in FY 2025, as well as continued underperformance in the early part of this year.
In New Mexico, Transportation Secretary Ricky Serna told lawmakers on August 22 that the state faces a $471.6 million funding gap for priority transportation projects. He cited a stagnant gas tax, inflation, and increased vehicle fuel efficiency as key factors behind the shortfall.
Similarly, South Carolina Transportation Secretary Justin Powell warned on August 20 that the state is grappling with several revenue challenges. Speaking before the South Carolina Modernization Ad Hoc Committee, Powell pointed to inflation, decreased gas tax collections due to more efficient and electric vehicles, and population growth as major pressures on the state’s program. In total, the secretary stated an additional $1 billion annually is needed to fully implement the agency’s 2050 transportation plan.