Virginia Proposes Shifting Construction Funds to Tackle $1.7 Billion Highway Maintenance Gap

As Virginia stares down a $1.7 billion highway-maintenance gap, the Commonwealth Transportation Board is considering a plan to close it by shifting funds away from construction and transportation projects.

The plan introduced at the board’s Oct. 13 meeting proposes adding $239 million annually for pavement repairs starting in fiscal year 2028, while redirecting funds and using $300 million in GARVEE bonds to soften construction cuts.

Virginia law requires the state to prioritize maintaining its transportation assets, including bridges and pavement, which have increased over the past 20 years. Rising highway repair costs and budget decisions that prioritized construction over maintenance last year created the deficit.

Smart Scale funding, a grant program for transportation projects, would decrease by about 25% under the proposed plan. Since the program was established in 2016, it has awarded $7.6 million to transportation projects across the commonwealth.

Laura Dent, councilmember for the city of Harrisonburg, said the program has awarded the city funding for multiple projects. However, she is concerned about the impact the shortfall could have across the commonwealth, especially on those responsible for methods of transportation other than relying on vehicles.

“We rely on Smart Scale for local transportation safety, not just highways. We need sidewalks and public transit and other things that make urban living more safer and more sustainable,” Dent said.

The uncertainty for transportation projects and the Smart Scale program were points of heavy consideration during the board’s discussion, as the group considers another idea: to move about $705 million from the state’s priority projects to alternate funding sources, or have six of them compete in the seventh round of Smart Scale, which is currently in the screening and scoring process.

A chart showing how redirecting $705 million from 15 priority projects to alternative sources, including corridor funds, CMAQ, and regional programs, would preserve resources for other transportation priorities while maintaining project delivery through alternative funding strategies. (Photo courtesy of the Virginia Department of Transportation)

The six projects recommended for resubmission to Smart Scale Round 7 include: the Route 288 Southbound Hard Shoulder Running Lane ($67 million) in Goochland County; the Route 17 (Lee Highway) Corridor Safety project ($20.4 million) in Warrenton; the Route 294 (Prince William Parkway) Corridor project ($21.4million) in Prince William County; E. Parham Road Improvements from I-95 to ClevelandStreet ($10.4 million) in Henrico County; the Port of Virginia Interchange/CommerceRoad Streetscape project ($16.1million) in Richmond; and the Meadowville Bridge/Intersection project ($24.3 million) in Chesterfield County.

In November 2025, the previous board allocated approximately $715 million from GARVEE bonds and the Priority Transportation Fund (PTF) to a list of projects. About $10 million has already been spent, leaving roughly $705 million available.

The Office of the Secretary of Transportation recommends using more restricted funding sources for projects totaling approximately $555 million. The administration said this would preserve more flexible funding for other transportation needs.

Members, including Board Member J. Randall Minchew, raised concerns about how reallocating funds could affect other projects and whether adding projects to Round 7 would be fair.

“I wonder if these six projects were to be injected into that process, that I wonder if that’s unfair to the other applicants who are having their projects reviewed,” Minchew said. “It’s almost like someone being injected into the NCAA basketball tournament in round three.”

Secretary of Transportation Nick Donohue said all projects would compete on merit, with no scoring preference, and existing projects would not need to be rescored.

He explained that the priority projects were considered fully funded when Smart Scale applications opened in March, making them ineligible for evaluation. If the board redirects funding to address maintenance needs, he believes the projects should have an opportunity to compete for funding through SmartScale Round 7.

“They’re not jumping to the Sweet 16,” Donohue said. “What we’re doing is we’re expanding the field of 68 to include another six. They will get no preferential treatment other than, effectively, they get to skip the application process.”

The board presentation lasted about an hour, detailing construction cost increases, maintenance funding, and forecasts and strategies.

Construction and maintenance costs have doubled in the past 10 years, according to the National Highway Construction Cost Index (NHCCI).

According to NHCCI component contribution data, asphalt accounted for 33% of the overall increase in highway construction costs over that decade. Higher gravel and aggregate costs stemmed from increased fuel and hauling expenses, rising labor costs, and quarry blasting expenses.

A chart shows the current CTF budget projects declining investment in pavement maintenance and Interstate pavement conditions, with performance potentially falling to 71% sufficient and approximately 1,200 lane miles lost by 2031. (Photo courtesy of the Virginia Department of Transportation

The board also discussed a proposed policy requiring explanations for significant changes in pavement and bridge maintenance spending, including reductions of more than 5%. Funding changes could result from completed projects, maintenance decisions, or changes in federal funding.

The policy would also require a data-based reassessment of road and bridge conditions every four years, forecasting pavement needs over 20 years, and bridge needs over 50 years.

The board will take a final vote on the plan on Dec. 9.

By Nathaniel Cline, Virginia Mercury

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