Survey Examines State Capital/Infrastructure Funding Approaches

A May 29 Governing article reported on recent survey by the National Association of State Budget Officers (NASBO) that examined how states approached their capital/infrastructure budgets.  How a state approaches its capital budget can influence how much local governments receive for needed infrastructure projects.   From the article:

[NASBO] found that,

  • There is not a uniform definition for what qualifies as a capital project and what can be included in the capital budget. For example, 29 states include information technology projects in their capital plans.
  • 19 states do not include transportation projects in their capital plans, mainly because those projects are funded separately using dedicated revenues from sources such as the gas tax.
  • Last fiscal year, 53 percent of state spending on transportation came from dedicated revenue streams, such as the gas tax. The second largest source of transportation money for states was federal money, which accounted for 33 percent of the spending.
  • More than half of states (26) use general funds to help pay for capital projects for higher education.
  • 33 states use a centralized agency to manage capital projects. Agency tasks often include estimating costs, scheduling projects and writing budget requests.
  • 37 states include inflation when calculating the cost of capital projects.
  • State constitutions, laws and other policies limit the amount of general obligation debt states can issue in 38 states. But states vary considerably on how much they rely on debt. Alaska, Iowa, Missouri, Nebraska and North Dakota rely especially heavily on using cash on hand to pay for their capital projects.

Capital Budgeting in the States (NASBO, Spring 2014)

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