Maine’s abrupt plan to cut $400M in construction projects roils the industry

This story will be updated.

The Maine Department of Transportation is moving to slash up to $400 million in projects from its agenda, a shocking and abrupt cutback that is rattling the state’s construction industry at the start of building season.

Roughly $50 million across six pavement projects have already been delayed, according to a memo exclusively obtained by the Bangor Daily News. The agency plans to cut or delay another $150 million in bridge, highway, intersection and multimodal projects later this month. A further $200 million or more in cuts are planned in the next three-year work plan.

Those figures were outlined by Transportation Commissioner Dale Doughty in the May 18 memo to Gov. Janet Mills that has since circulated widely in the transportation sector, which has been getting drip-by-drip details on the wide scope of the cuts over the past three weeks.

It comes at the beginning of the state’s relatively narrow construction season. Companies have hired workers and ordered materials for projects they expected to begin this summer. The severity of the transportation budget problems was not raised to lawmakers during the 2026 legislative session.

Kelly Flagg, executive director of the Associated General Contractors of Maine, called the shortfall “deeply troubling” in a statement.

“We stand ready to work with policymakers, stakeholders, and industry partners to identify both immediate and long-term solutions,” Flagg said. “Maine cannot afford to fall further behind.”

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The cuts stem from a structural funding gap of at least $130 million in the state’s current work plan, according to Doughty’s memo. Losses are magnified because state money from the gas tax and other revenue sources is matched by federal funds. Lawmakers have long grappled with politically difficult long-term problems with the state’s transportation budget.

A Mills spokesperson said Wednesday morning that the administration was working on a response to questions from the BDN. The department says it needs roughly $240 million more in state capital funding annually to maintain the existing system, and that anything less than $200 million will erode it over time.

Doughty’s memo the only near-term solution is a series of bonds beginning as soon as possible. Lawmakers would have to return to Augusta to authorize that if one is going to appear on the November ballot.