Commonwealth Transportation Board approves Six-Year Improvement Program

On June 16, the Commonwealth Transportation Board adopted the Final FY 2027–2032 Six-Year Improvement Program (SYIP) — Virginia’s master plan for transportation spending over the next six fiscal years. The headline number is $28.5 billion across highways, rail, and public transit. For VTCA members in highway construction, engineering, and aggregate production, this plan defines the pipeline of work through FY 2032. The next day, VDOT leadership attended VTCA’s Annual Meeting and explained what VTCA members need to know. 

What Is in the Plan 

The SYIP allocates $21.1 billion to highways and $7.4 billion to rail and public transportation. The highway program funds more than 4,300 projects across all nine VDOT construction districts, covering everything from interstate capacity to bridge preservation to safety improvements. Key programs include: 

• State of Good Repair (SGR): $2.5 billion for bridge and pavement preservation — the largest single construction sub-program and the most accessible to VTCA members. 
• Construction District Grant Program (DGP): $2.4 billion in formula-driven district-level project funding, the backbone of local construction activity statewide. 
• High Priority Projects / SMART SCALE: $1.5 billion for competitively selected capacity and congestion projects. 
• Interstate Operations and Enhancement (IOEP): $2.0 billion including continued I-81 Corridor work. 
• Revenue Sharing: $637.5 million in state match to leverage local project investment. 

Three Reasons to Be Encouraged 

• The program is large and project-rich. At $21.1 billion and 4,300-plus projects, this is a substantial six-year highway program. The depth of the project pipeline across districts and program categories provides work opportunities for contractors, consultants, and producers of all sizes. 
• SGR and bridge investment is growing. The State of Good Repair program has grown significantly from earlier cycles, averaging roughly $417 million per year — up from $370 million annually in the FY 2023–2028 plan. New bridge and pavement projects were added between draft and final. This is a direct result of VTCA’s sustained advocacy on preservation-first infrastructure investment. 
• Revenue growth is real. The Commonwealth Transportation Fund is projected to generate $34.7 billion in state revenue over six years — up $6.4 billion from the prior plan. The Highway Use Fee on electric vehicles, growing from $103 million to $222 million annually by FY 2032, demonstrates that Virginia’s diversified revenue structure is working as intended.  

Three Reasons for Concern 

• Construction inflation is eroding real purchasing power. The SYIP is programmed in nominal dollars, but Virginia highway construction inflation has run approximately 7 percent annually over the past six years. At that rate, the $21.1 billion program is worth closer to $18 billion in today’s purchasing power — a gap of roughly $2.5 to $3 billion.  
  
  Projects funded in years five and six of the plan will cost significantly more to build than what is currently programmed. Members should expect continued cost escalation, project schedule slippage, and scope reductions on later-year projects unless the General Assembly addresses this structural gap in future years. 
• Maintenance is crowding out construction. The Highway Maintenance and Operating Fund is projecting a $653.7 million deficit in FY 2027 alone, requiring a $366.7 million transfer from the construction fund to cover it. Over the full six-year plan, maintenance and operations ($18.7 billion) now exceeds construction ($17.8 billion) for the first time. This structural imbalance — driven by an aging system, rising labor costs, and revenues that do not keep pace with maintenance cost growth — will compress future construction programs if left unaddressed.  The Commissioner wants to meet with VTCA membership in the coming months to discuss this issue in more detail. 
• Federal funding uncertainty is a real risk. Federal revenue was already revised downward between the draft and final SYIP based on updated FHWA apportionment tables. The Infrastructure Investment and Jobs Act (IIJA), which turbocharged Virginia’s construction program over the past five years, is winding down. Congress has not yet enacted a successor federal surface transportation bill. A delay or reduction in federal reauthorization could remove hundreds of millions of dollars from the out-years of this plan.  Both ARTBA and NSSGA are working to shore up support in Congress on this effort and VTCA members will meet with the Virginia Delegation on job site tours this summer to discuss the importance of IIJA reauthorization.   

What VTCA Will Do Next 

This plan sets the stage for VTCA’s advocacy agenda heading into the 2027 General Assembly session and our Centennial year. Three priorities stand out: 

• Make the inflation case to the General Assembly. Virginia’s transportation revenues grow with the economy; construction costs grow faster. VTCA will lead a concerted effort in the upcoming Sessions to educate newly elected legislators on the significance of long-term funding plans on transportation.  In addition, we will look at opportunities to establish a construction cost index — rather than general CPI — as the basis for transportation funding growth. The $2.5–3 billion purchasing power gap in this plan is the evidence.  We will also look at additional funding mechanisms to ensure the dollars going in are spent on the expected outcomes – completed projects, rather than just outputs – material costs, labor costs, etc.  
• Press VDOT on the HMOF deficit and the construction crossover. The maintenance-to-construction crossover cannot become a permanent feature of Virginia transportation finance. VTCA will meet with VDOT leadership and discuss the re-baseline process to include a long-term HMOF solvency plan.   
• Monitor the federal reauthorization closely and engage Virginia’s congressional delegation. The single largest variable in the FY 2027–2032 program is what happens in Washington. VTCA will coordinate with ARTBA and NSSGA and the national contractor community to ensure Virginia’s delegation understands what a delayed or reduced federal highway bill means for jobs and projects in every district of the Commonwealth. 

The FY 2027–2032 SYIP is a strong program on paper. VTCA’s job is to ensure it remains strong in practice — by fighting for the purchasing power to build it, the maintenance funding to protect what has already been built, and the federal partnership that Virginia’s transportation system depends upon. 
 
Read the Release here.