A bipartisan group of legislators and state-wide associations is pressing lawmakers to increase funding for the Consolidated Highway Improvement Program (CHIPS) by at least $250 million.
Last year’s state budget sent Washington and Warren Counties and their municipalities near record levels of CHIPS funds – roughly $2.3 and $2.4 million, respectively. If approved by the legislature, Governor Kathy Hochul’s proposed 2026-27 budget, funding for CHIPS and the Marchiselli programs (which helps cover matching funds for transportation projects eligible for federal aid) will deliver nearly $650 million to local governments, roughly the same amount appropriated in FY 2025, according to the New York State Association of Counties’ County Impact Report.
But as road maintenance costs rise, local governments are being forced to shoulder an increasingly large share of the burden, despite the fact that state aid has reached historic highs.
“Local roads are essential to keeping communities safe and supporting economic growth,” said Matt Simpson, Lake George’s representative in the state Assembly. “With construction costs up nearly 70% nationally due to inflation, flat funding simply isn’t enough. Local governments face a growing $2.69 billion annual shortfall to maintain our 97,000 miles of roadways and thousands of bridges.”
Warren County Superintendent of Public Works Kevin Hajos, who recently completed a term as president of the New York State County Highway Superintendents Association, said he found it curious that “New York State can find an extra $1.5 billion to bail out New York City but not enough money for the roads that everyone uses to travel to work, to school, to hospitals.”
To adequately address the highway needs of New York State’s 62 counties and 933 towns, an increase of $1.5 billion in the 2026-27 budget for CHIPS and related programs would be required, Hajos told a Warren and Washington County Town Highways Superintendents Roundtable, held February 27 in Fort Anne.
“In a $260 billion budget, $250 million is a drop in the bucket,” said Hajos.
In testimony before the Joint Legislative Hearings on the proposed budget on February 11, the Association of Towns framed higher CHIPS funding as an investment in economic stability and public safety, arguing that reliable infrastructure underpins housing development, commerce and emergency response-times.
CHIPS remains one of the most important and reliable funding streams for towns, which maintain nearly two-thirds of the state’s road miles, the association stated.
“Local governments own 85 percent of all roads in New York State, and towns alone maintain 62.9 percent of all centerline miles,” Christopher Koetzle, the association’s executive director, told the legislators.
Towns spent more than $1.4 billion on transportation-related expenses in 2024, with roughly one in every five dollars in the typical town budget devoted to highways, bridges, equipment, materials and related costs, Koetzle said.
Rising prices for asphalt, diesel fuel, heavy equipment, insurance and labor have intensified budget pressure, officials said.
Climate change is exacerbating the challenges faced by local governments as they seek to keep pace with aging and inadequately engineered infrastructure, legislators were told.
State Transportation Commissioner Marie Therese Dominguez said DOT maintenance workers are “on the front lines” of climate change, which is “increasing the frequency and severity of weather events and battering our roads, bridges and culverts.”
On February 3, leaders of the New York State County Highway Superintendents Association and the New York State Association of Town Superintendents of Highways told lawmakers that more severe winter storms, as well as new climate-related mandates, are among the factors driving the rising costs of maintaining roads and bridges.
James Dussing, president of the Town Highway Superintendents Association and the highway superintendent for the Town of Clarence in Erie County, said the unusually harsh winter weather has significantly increased overtime, fuel and equipment costs.
“When weather-related circumstances push costs $2 million beyond our adopted budget, no extra funding is provided,” Dussing stated. “Those costs must be absorbed by diverting funds from other critical services, including pavement and bridge maintenance.”
Warren County’s Superintendent of Public Works noted that no state funds were available to compensate the county for the $5 million required to repair damage from the severe storms of December, 2023.
“I’ve been with the county’s Public Works Department for 18 years, and we’re certainly seeing more severe storms than in the past,’ said Kevin Hajos. “These storms are causing a lot more infrastructure damage.”
Officials have also warned that implementing the state’s Climate Action Council Final Scoping Plan will require significant investments in facilities, equipment and vehicles.
“Heavier electric school buses shorten the life of a road by two years,” said Assemblyman Simpson. “The increased costs of maintenance will fall primarily on towns and villages.”
According to the groups testifying at the budget hearings, predictable levels of CHIPS funding have provided towns with a reliable source of revenue that can be incorporated into long-term capital planning, allowing them to schedule resurfacing cycles and coordinate capital improvements more efficiently. But when funding fails to keep pace with costs, towns must delay maintenance, the groups stated. And, they warned, deferring maintenance will only increase long-term costs, noting that every dollar postponed can result in $4 to $5 in future reconstruction expenses
“Deferred maintenance is not a savings strategy; it is a cost multiplier,” the Association of Towns stated.
Town officials say ensuring that CHIPS appropriations accurately reflect current construction costs is critical to protecting local property taxpayers from larger future reconstruction bills.
Negotiations on the 2026-27 state budget will continue over the course of the next few weeks.
“Governor Hochul’s executive budget is dumping massive new costs onto local taxpayers. We support cleaner transportation, but the state must step up with real resources to prevent devastating burdens on our towns and villages,” said Assemblyman Simpson.
