America’s
Trillion-Dollar
Repair Bill:
CAPITAL BUDGETING AND THE DISCLOSURE OF
STATE INFRASTRUCTURE NEEDS
JERRY ZHIRONG ZHAO
CAMILA FONSECA-SARMIENTO
JIE TAN
November 2019
WORKING PAPER
This paper was prepared for the Volcker Alliance for its project on Truth and Integrity in Government Finance.
The views expressed in this paper are those of the authors and do not necessarily reect the position of the
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AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
ii
TRUTH AND INTEGRITY IN GOVERNMENT FINANCE TEAM
W G
SENIOR VICE PRESIDENT AND DIRECTOR
STATE AND LOCAL INITIATIVES
M A
ASSOCIATE DIRECTOR
N A. W-R
PROJECT MANAGER
M C
PROGRAM ASSISTANT
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
iii
CONTENTS
EXECUTIVE SUMMARY 1
INTRODUCTION 2
LITERATURE REVIEW 4
FINDINGS 15
CALL TO ACTION: Ten Steps Toward Better Disclosure 33
CONCLUSION: Turning Best Practices into Infrastructure Policy 39
APPENDIX A: States that Post Centralized Capital Improvement Plans 40
APPENDIX B: Agencies Addressing Infrastructure Needs 41
Acknowledgments 42
About the Alliance 43
About the Humphrey School of Public Affairs at the University of Minnesota 43
About the Authors 44
Board of Directors 45
Staff of the Volcker Alliance 45
Endnotes 46
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
1
EXECUTIVE SUMMARY
STATE AND LOCAL GOVERNMENTS PROVIDE about 80 percent of US public infrastructure
spending. But reported infrastructure spending may not suciently address America’s criti-
cal need to repair public assets, such as roads, highways, waterworks, and buildings, that are
vital to the functioning and growth of the nation’s economy. In its annual Truth and Integrity
in State Budgeting studies, the Volcker Alliance has found that few states have disclosed the
immense cost of these needed repairs in their budget documents. We estimate that the cost
of making deferred repairs at the state level may be as large as $873 billion, equivalent to 4.2
percent of US gross domestic product, or almost three times the value of all investment by
states and localities in nonresidential xed assets. Combined with a reported federal backlog
of $170 billion, the national total deferred maintenance cost may be at least $1 trillion. The
sum may be even larger because while states disclose voluminous information about their
general fund budgets, the same cannot be said for their capital budgeting practices, which
vary widely among states.
In contrast to general fund budgets, which pay for recurring operating expenditures such
as education, public safety, and, sometimes, routine maintenance of infrastructure, capital
budgets typically include costly, long-lived assets involving one-time expenses whose pay-
ment is spread over years to equalize funding needs over time and stabilize taxes. But reporting
standards, such as the type of assets included and the information disclosed, dier from state
to state, and few report infrastructure conditions and needs in their budget documents. To
help states close this critical information gap and improve their decision-making processes,
we oer a ten-point action plan based on best practices relied upon by several states and the
District of Columbia. Implementing the plan will help policymakers set common standards;
improve asset management; make information consistent, updated, and available; and build
a better-informed decision-making process for capital projects.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
2
INTRODUCTION
CAPITAL BUDGETS FINANCE MOST public infrastructure projects, with state and local
governments—through taxes, user fees, bonds, loans, and other nancing mechanisms—
responsible for about 80 percent of public infrastructure investment.
1
According to the US
Bureau of Economic Analysis, state and local investment in government nonresidential xed
assets reached $304.3 billion in 2018.
2
But this sum is likely insucient to address America’s
critical need on deferred maintenance of roads, highways, waterworks, buildings, and other
locally and state-owned assets that are vital to the functioning of the nation’s economy. In
its 2018 study, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis,
3
the
Volcker Alliance found that few states reveal the cost of deferred maintenance in their general
fund budget documents. According to the report, “Unfunded infrastructure maintenance is
akin to underfunded pensions. The total liability for each may grow every year that spending
is short of what is required.”
4
States’ lack of disclosure of their deferred maintenance liability has helped reduce most
of their budget transparency grades. Only three states—Alaska, California, and Tennessee,
all of which publish deferred maintenance cost estimates—received a top A in the category
for fiscal 2016 through 2018.
5
The poorer showing by other states show that while most
disclose considerable information about their general fund, or operating, budgets, includ-
ing processes, funding gaps, and program ecacy, the same cannot be said for their capital
budgeting practices.
Although infrastructure is widely regarded as a national concern, capital budgeting prac-
tices dier widely from state to state, reecting America’s composition as a republic of y
individual sovereign entities. State capital budgets typically include costly, long-lived assets
that generally involve one-time expenses whose payment is spread over years to equalize
funding needs and stabilize taxes. But reporting standards, such as the type of assets included
and the information disclosed, vary among states. For instance, transportation assets are
excluded from capital budgets in some states, and information on deferred maintenance is
oen limited. Capital budgets also may not include assets managed by government agencies,
such as state infrastructure authorities.
Few states report on infrastructure conditions and needs in their budget documents.
Most states refer to a document called a capital improvement plan (CIP) as a road map for
future capital infrastructure needs. However, this document depicts more a revenue-oriented
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
3
than a needs-based planning process. The lack of available information about infrastructure
condition forces the public and policymakers to rely on outside analysis of data to inform
decision-making. While such sources are important and largely reliable, states should con-
sider making data collection, distribution, and disclosure more of a priority in their capital
budgeting processes.
This working paper examines the disclosure of infrastructure needs in state budgeting
documents, building on Truth and Integrity in State Budgeting: Preventing the Next Fiscal
Crisis and its 2017 predecessor, Truth and Integrity in State Budgeting: What Is the Reality?
6
The two reports evaluate the purpose of public spending and the manner in which funds
are spent, and emphasize the importance of comprehensive and accurate accounting and
transparent reporting to inform citizens, encourage responsible policymaking, and improve
scal stability.
In this paper we delve deeper into capital budgeting practices, particularly the disclo-
sure of infrastructure needs in the y states and the District of Columbia. We rst present a
review of literature on the topic and then discuss the methodology used in this paper. Follow-
ing that, we present our ndings in terms of capital budgeting processes, capital budgeting
documentation, and infrastructure needs. We then lay out a ten-point infrastructure disclosure
action plan, featuring examples of best practices from states and the District of Columbia.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
4
LITERATURE REVIEW
Capital Budgeting Practices
Most literature on capital budgeting has focused on budgeting practices across the states. In
their foundational 1963 work for the Council of State Governments, State Capital Budget-
ing, Albert Miller Hillhouse and S. Kenneth Howard
7
performed some of the most complete
research. The authors used the term “central state capital budgeting” to describe a budgeting
process that considered the submission of agencies’ capital requirements to a central review
agency, the consolidation of these requests for submission to the legislature, and the existence
of administrative arrangements for execution. In a 1988 study that appeared in Public Budgeting
and Finance, researchers Lawrence W. Hush and Kathleen Pero
8
summarized the results of
a survey conducted in all y states that collected information on capital budgets, including
how the capital budget appeared in the governor’s budget, the role of the state legislature,
the elements included in the capital budget, and the way states nanced capital projects. In
a 2013 study published in State and Local Government Review, public nance scholar Natalia
Ermasova
9
examined the eects of economic decline on changes in capital budgeting practices
and evaluated capital budgeting processes in the states aer the Great Recession.
10
Lastly, the
National Association of State Budget Ocers (NASBO) published a series of reports on bud-
geting procedures, including Capital Budgeting Practices in the States, with editions in 1992,
1997, 1999, and 2014. In its 2014 report, NASBO provided a comparative analysis of capital
budgeting practices in the states, highlighting information on each state’s budget documents,
process, and denitions.
11
While existing literature is thorough and reveals nuances in states’
capital budgeting practices, it does not provide a systematic analysis of these practices.
Comparing Capital Budgeting Practices
The literature agrees that the lack of a standardized budget makes it dicult to compare
capital budgeting practices across the states. Capital budgets dier in their contents and the
time span they cover.
12
Each state (we treat the District of Columbia as a state throughout this
paper) has its own denitions, measures, standards, and policies regarding capital expen-
ditures included in the capital budget. Capital expenditures may include land acquisition,
construction, buildings, equipment, renovations, and maintenance.
13
Due to the variety of capital expenditures, states use additional criteria to consider them
in the capital budget. These criteria, such as minimum expenditure thresholds, minimum
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
5
useful life, and nonrecurring nature, vary widely across states. Capital projects in Mary-
land, for instance, are “acquisitions, designs, construction and equipment with a een-year
life, excluding vehicles and supplies and projects under $100,000,” while in Massachusetts
they correspond to “expenditures related to the construction, substantial improvement or
acquisition of capital assets.”
14
Even the denition of capital expenditures—particularly that
of capital maintenance—changes. Ermasova
15
found that a quarter of states included some
maintenance in their operating budgets, while almost a third distinguished between main-
tenance for building renewal, which is included in capital budgets, and routine maintenance,
which is part of operating budgets.
Similarities and Variations in Capital Budgeting Practices
Existing studies reveal some similarities in budgeting practices:
•
States generally rely on long-term capital plans to forecast infrastructure and nancial
needs. Most states report such plans in the CIP, a document that includes capital needs,
the costs of planned projects, and sources of nancing. The life span of these plans
usually ranges between three and ten years, with ve years the most frequent.
16
In its
2014 capital budgeting report, NASBO found that forty-two states and the District of
Columbia have a multiyear CIP.
•
Most states estimate the scal impact of capital projects on future operating budgets.
According to NASBO, capital project requests in forty-three states must include such
information so that ocials can better assess project aordability and facilitate coor-
dination between operating and capital budgets.
17
•
States’ capital budgets may not include all capital expenditures. Hush and Pero
18
found
that the budgets frequently covered less than half of total capital spending. Transpor-
tation was the major exclusion, followed by higher education.
19
NASBO reported that
nineteen states did not include capital expenditures for transportation in their capital
budgets, mainly because transportation revenues came from earmarked resources.
20
•
Current revenues are the primary funding source for most state capital projects, despite
their long life spans. Over the last two decades, current revenues have funded about
70 percent of capital projects, while bond proceeds have nanced the remaining 30
percent.
21
In 1967, twenty states relied primarily on current revenues to fund capital
projects.
22
The number has remained stable, with twenty-two states maintaining a
formal or informal policy of funding capital projects with current revenues.
23
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
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Although there are some similarities in states’ capital budgeting practices, the literature
illustrates widely dierent procedures—most involving the agencies that prepare budgets.
State agencies submit capital budget proposals to either the governor or the governor’s budget
sta, to the governor and the legislature simultaneously, or to the legislature.
24
The capital
budget formulation usually includes recommendations from state agencies, suggestions from
the capital budget sta, and governor’s preferences. In most cases, the legislature becomes
involved in the process aer the proposed budget is submitted. According to NASBO, twenty-
ve states have a joint legislative and executive review board for capital projects, an approach
that provides another layer of scrutiny before legislative consideration.
25
A number of states,
including Delaware, Indiana, Oregon, Texas, Utah, Washington, and Wisconsin, have, in addi-
tion to the governor’s proposal, a state board or advisory committee that submits capital
development recommendations and priorities to the legislature.
26
Classification of States
Of the articles reviewed, Hillhouse and Howard
27
and Ermasova
28
categorized states using dif-
ferent criteria (see table 1). Hillhouse and Howard classied states into three groups according
to the time span covered by the capital budget. The authors determined that the third category
was the “ideal,” and they found just two states in it: Hawaii and Rhode Island. Ermasova
also classied states in three categories, but according to their capital budgeting practices.
She focused on multiyear capital planning, nancial forecasting, nancing sources, formal
systems to present and track capital projects, evaluation of spending, project prioritization,
separation of budget processes, and the CIP.
Single-State Studies
Some authors have focused on single cases. For example, researcher Arwiphawee Srithon-
AUTHORS CATEGORIES
Hillhouse and Howard (1963) 1) States preparing a capital budget that covers the same time period as the operating budget.
2) States with capital budget and operating budget covering the same period and a capital
program covering a longer period.
3) States with a capital budget that covers the operating budget period as well as a longer
period.
Ermasova (2013) 1) Capital budgeting as part of operations.
2) Capital budget as multiyear capital planning.
3) Capital budgeting as strategic capital management.
TABLE 1: Categorization of State Capital Budgeting
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
7
grung
29
and New York State Comptroller Thomas P. DiNapoli
30
examined capital budgeting
processes in Illinois and New York, respectively, in 2010. Srithongrung found Illinois’s tech-
nical practices for capital budgeting (including cost-benet analyses, quantitative scoring
systems, and statewide inventory accounting) were replaced by nonaccounting approaches,
such as incremental appropriation, interactive discussions in priority ranking, and internal
negotiations among policymakers. Departments usually ranked identied projects based on
each agency’s own criteria and did not use technical practices in prioritization. The author also
found that not all agencies used the CIP, as their projects did not receive funding according to
the CIP schedule; some agencies used the CIP only when obliged to by federal requirements.
Moreover, most of the agencies Srithongrung interviewed stated that the nal appropriations
were not consistent with the original strategic plan because of limited resources, political
inuences, and the legal framework.
DiNapoli noted that agencies lacked a standardized approach to assess the condition of
their capital assets. Without such an approach, agencies provide information with dierent
degrees of specicity, which results in a CIP with inconsistent information. His report also
stated that it was impossible to know how much agencies would spend on maintenance of
capital assets, as that expense was oen included within funds allocated for other capital
purposes. The comptroller also highlighted a lack of integration and coordination in New
York’s capital budgeting and nancing processes, which undermined long-term strategic
planning and made it dicult for the state to assess its risks, needs, and opportunities.
NASBO, GFOA Recommended Practices
While several academic studies and professional association publications help guide ocials
preparing operating budgets, less research has been done on best practices in public capital
budgeting. At the national level, organizations such as NASBO and the Government Finance
Ocers Association (GFOA) have studied some of these practices.
In the 2014 edition of Capital Budgeting in the States, NASBO identied “good practices”
that budget ocers recognize as “eective and ecient tools” to better allocate operating and
capital resources. The organization grouped best practices into ve categories: identication
of capital and maintenance expenditures; capital planning and budgeting; capital nancing
and debt management; capital budget development and execution; and capital asset man-
agement and evaluation (see table 2).
Complementing NASBO’s best practices, GFOA brought attention to the presentation of
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
8
the capital budget as part of the budget document. According to the association, “An excep-
tional capital presentation enhances the transparency and accountability to citizens.” It also
provided guidelines for presentation of the capital budget document:
31
It should include the
denition of capital expenditures it contains, as well as the funding sources and uses for all
projects; it should communicate major steps in the decision-making processes, such as the
schedule, and the evaluation, prioritization, and reporting processes; and it should include
capital project details such as description and costs, time line, and operating impacts.
32
The
association also recommends linking the capital budget to the multiyear CIP, which should
be in a separate section of the budget document.
State Infrastructure Needs
Economic growth and community development depend on high-quality, reliable infrastruc-
ture. Such infrastructure facilitates industrial production and the delivery of goods to con-
sumers. The daily life of communities depends on water and sewer systems, highways and
roads, and schools. Despite its importance, infrastructure in the US is seen as being in poor
TABLE 2: NASBO Recommendations for Good Practices
CATEGORY RECOMMENDATIONS
Identification of capital
and maintenance
expenditures
statute).
Capital planning and
budgeting
Capital financing and debt
management
Capital budget
development and
execution
Capital asset management
and evaluation
SOURCE National Association of State Budget Officers, Capital Budgeting in the States.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
9
condition, signicantly deteriorated, and below standard.
33
This carries serious consequences,
not only for economic growth but for quality of life.
In the literature, we identied three main ways that infrastructure needs are chroni-
cled: the Infrastructure Report Card of the American Society of Civil Engineers (ASCE), an
industry organization, as numerous reports and state documents on infrastructure refer to
it or support its ndings;
34
the state management report card,
35
which grades some areas of
government management, including infrastructure; and infrastructure investment trends
in recent decades in the US.
36
The National Council on Public Works Improvement (NCPWI) originated the concept
of a report card to grade US infrastructure. The NCPWI was created by congressional man-
date as an ad hoc council with a two-year life and the mission of reporting to Congress and
the president about the condition of the nation’s infrastructure.
37
The council published a
report in 1988, Fragile Foundations: A Report on America’s Public Works, that assessed the
quality of infrastructure for aviation, drinking water, hazardous waste, inland waterways,
roads, schools, solid waste, transit, and wastewater. The US was given an overall grade of C
because of signs of deterioration and signicant deciencies in conditions and functionality.
ASCE began performing a similar analysis and tracking of the condition of infrastructure
in the US aer the federal government indicated that the NCPWI’s report would not be updated.
ASCE issued its rst Infrastructure Report Card in 1998, adding bridges and dams to NCPWI’s
original categories. Since then, ASCE has added energy, levees, ports, parks and recreation, and rail.
ASCE has updated the report every four years since 2001 and expanded its breadth. The
report now includes a total cost estimate for improving America’s infrastructure—specically,
the cost of upgrading to achieve a B grade in all areas. Since 2009, the report has also included
estimated funding gaps (see table 3). According to the latest report, “Investment needs and
funding are estimated by looking at past trends and future projections when available.”
38
Government agencies, nonprot corporations, and industry consortiums are the ASCE’s main
sources of information.
ASCE grades on a scale of A to F (see table 4). An A indicates that the infrastructure is
in excellent condition, new or recently rehabilitated, and meets future needs. On average,
however, US grades remain poor, exhibiting few signs of improvement over the decades. Ten
years aer the National Council on Public Works Improvement was issued, ASCE reduced
the nation’s overall grade to D. Since then, the grade has risen no higher than D-plus, its
level in 2013 and 2017. The grades indicate that most US infrastructure is in poor condition,
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
10
with many facilities approaching the end of their useful life. Among the sixteen categories,
transit receives the lowest grade (D-minus), while rail receives the best (B). Aviation, dams,
drinking water, inland waterways, levees, and roads all receive Ds.
To assess the condition of infrastructure in categories and ultimately assign a grade,
ASCE formed the twenty-eight-member Committee on America’s Infrastructure. It calcu-
lates grades using eight criteria:
39
CAPACITY Capacity to meet current and future demands.
CONDITION Existing and near-future physical condition of the infrastructure.
FUNDING Current level of funding from all levels of government compared to the esti-
mated funding needed.
YEAR
US
GRADE
TOTAL
INVESTMENT NEEDS
TOTAL
FUNDING GAP
ANNUAL
INVESTMENT NEEDS
ANNUAL
FUNDING GAP
1988 C N/A N/A N/A N/A
1998 D N/A N/A N/A N/A
2001 D+ $1.74 trillion N/A $0.35 trillion N/A
2005 D $1.94 trillion N/A $0.39 trillion N/A
2009 D $2.32 trillion $1.33 trillion $0.46 trillion $0.27 trillion
2013 D+ $3.91 trillion $1.74 trillion $0.49 trillion $0.22 trillion
2017 D+ $4.6 trillion $2.1 trillion $0.46 trillion $0.21 trillion
TABLE 3: The Cost of US Infrastructure Improvement
SOURCE National Council on Public Works Improvement (1998), American Society of Civil Engineers infrastructure report cards (1998–2017).
NOTES N/A: Not available. Values adjusted by authors to constant 2015 dollars.
TABLE 4: ASCE Infrastructure Grading Scale
GRADE DEFINITION
A EXCEPTIONAL, FIT FOR THE FUTURE:
Facilities meet modern standards for functionality and are resilient to withstand most disasters and severe weather events.
B GOOD, ADEQUATE FOR NOW:
capacity issues and minimal risk.
C MEDIOCRE, REQUIRES ATTENTION: The infrastructure is in fair to good condition, it shows general signs of deterioration
vulnerability to risk.
D POOR, AT RISK: The infrastructure is in poor to fair condition and mostly below standard, with many elements approaching
concern with strong risk to failure.
F FAILING/CRITICAL, UNFIT FOR PURPOSE: The infrastructure is in unacceptable condition with widespread advanced
SOURCE American Society of Civil Engineers, 2017 Infrastructure Report Card.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
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FUTURE NEED Cost to improve the infrastructure and the ability of future funding will
to address the need.
OPERATION AND MAINTENANCE Owners’ ability to operate and maintain the infrastructure
properly, and the infrastructure’s compliance with government regulations.
PUBLIC SAFETY The extent to which the condition of the infrastructure jeopardizes public
safety, and the consequences of failure.
RESILIENCE Infrastructure system’s capability to prevent or protect against signicant
multihazard threats and incidents, and ability to quickly recover and reconstitute critical
services with minimum consequences for public safety and health, the economy, and
national security.
INNOVATION The implementation of new and innovative techniques, materials, technolo-
gies, and delivery methods to improve the infrastructure.
The committee applies the grading criteria and metrics to reports about specic types of
infrastructure—such as aviation, dams, bridges, and railroads. Instead of relying on state data,
which can be scarce, scattered, and inconsistent, ASCE uses for its analysis data from the US
government and professional societies. Reports from the Federal Aviation Administration,
Federal Highway Administration, Association of State Dam Safety Ocials, Environmental
Protection Agency, Federal Emergency Management Agency, and National Parks Service all
appear in ASCE work.
Since its inception, the Infrastructure Report Card has increased in use and popularity.
Several individuals, organizations, and agencies rely on it for insights into the condition of
infrastructure in the nation as well as in individual states. The administrations of Presidents’
Barack Obama and Donald Trump have referenced it, as have international, national, state,
and local news outlets. ASCE’s state-level reports equip national and state legislatures, pro-
fessional associations, and local government associations to make the case for new invest-
ment in infrastructure, in addition to helping them better understand the current condition
of their infrastructure and the costs of delaying investment.
In a study for the Pew Center on the States published in 2008, Katherine Barrett and
Richard Greene (currently special project consultants to the Volcker Alliance) assessed the
quality of management in state government.
40
In particular, states were assigned a grade,
on a scale from A to D, in four fundamental areas of government management, including
infrastructure.
41
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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The study graded states less on the physical condition of infrastructure than on the way
it is managed. According to the authors, an A-graded state should “have excellent statewide
and agency planning, be a leader in performance auditing, have outcome data for almost all
government functions, show substantial use of performance information by the executive
branch and some use by the legislature,” and electronically communicate the state’s perfor-
mance to citizens. In assigning grades, the authors used data from several sources, including
an online survey and public documents such as budgets, capital and workforce plans, auditor
reports, and websites. They also conducted interviews with legislators and their stas, scal
analysts, controllers, treasurers, budget ocers and auditors, human resource and transpor-
tation ocials, managers in charge of nontransportation infrastructure, and representatives
of agencies and departments. The authors then considered these criteria:
•
The state regularly conducts a thorough analysis of its infrastructure needs and has a
transparent process for selecting infrastructure projects.
•
The state has an eective process for monitoring infrastructure projects throughout
their design and construction.
•
The state maintains its infrastructure according to generally recognized engineering
practices.
•
The state comprehensively manages its infrastructure.
•
The state creates eective intergovernmental and interstate infrastructure coordina-
tion networks.
Barrett and Greene’s nal report gave the y states an average infrastructure score of
B-minus. Utah (A) and Florida and Michigan (both A-minus) performed best, while Massachu-
setts and New Hampshire (both D-plus) performed the worst. According to the authors, Utah
had a good idea of what its infrastructure required in the way of maintenance and budgeted
1.1 percent of the total replacement value of state-owned buildings every year. Conversely,
New Hampshire’s underfunding and lack of clear priorities for buildings, bridges, and roads
le the state with tough deferred maintenance problems and outdated infrastructure.
US Infrastructure Investment
State and local governments are responsible for most investment in US infrastructure. Over
the years, their responsibility has increased as federal infrastructure investment has decreased;
recently state and local governments accounted for about 80 percent of public infrastructure
investment.
42
Infrastructure spending as a share of GDP has declined in the US over the last
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
13
decades. In a 2014 report for the National Association of Manufacturers, Jerey Werling
and Ronald Horst
43
estimated that total real infrastructure investment, including that in the
public and private sectors, had decreased from nearly 4.5 percent of GDP in the late 1960s to
about 1.5 percent in 2012. Real public infrastructure investment had fallen especially rapidly
since 2003.
44
From 2003 to 2008, such investment fell by 4 percent annually because of high
construction costs; aer that and because of the Great Recession, it continued to fall by an
average of 2 percent a year. Between 2009 and 2010, there was a slight increase due to the
American Recovery and Reinvestment Act, which provided state and local governments with
funds for infrastructure spending.
These results are similar to those presented by Elizabeth McNichol of the Center for
Budget and Policy Priorities,
45
who showed that, between 2002 and 2016, capital spend-
ing as a share of GDP fell in the vast majority of states. The author also found that in most
states, the portion of total expenditures devoted to capital projects was less than 15 percent
in 2014. Only North Dakota (22.7 percent), South Dakota and the District of Columbia (each
16.7 percent), Wyoming (15.7 percent), and Alaska (17 percent) exceeded that threshold.
Overall, capital spending varied across states based on size, population density, and the
age of infrastructure.
Methodology
We performed a document analysis of governors’ capital budget proposals, capital bills, budget
instructions, budgeting processes and time lines, capital improvement plans, and infrastruc-
ture programs for all states and the District of Columbia. The analysis includes only publicly
available documents and other information. The analysis is divided into three main categories:
capital budgeting processes, capital budgeting documentation, and infrastructure needs.
For the capital budgeting processes analysis, we primarily reviewed the budget pro-
cess document, the budget instructions document, and legislature’s websites. For the capi-
tal budget documentation, we examined the governor’s proposed plan and bills related to
capital projects, the budget instructions document, and the capital improvement plan. We
later analyzed the CIP, as many states noted the importance of this document as a road map
for capital infrastructure needs. Finally, we reviewed infrastructure needs reports and the
disclosure of deferred maintenance in capital budgets and CIPs. Deferred maintenance is
particularly important because of increased costs and risks in an aging infrastructure system.
Because regular maintenance activities are less visible than the construction of new
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
14
facilities, they are oen postponed. The failure to keep up with maintenance has signicant
negative impacts on asset life, leading to higher future maintenance costs and threatening
the safety and health of those using the facility.
46
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
15
FINDINGS
Capital Budgeting Processes
We reviewed budgeting processes with the aim of assessing the level of separation between
the capital and the operating budgeting processes. The budget cycle, which includes all the
events in the budgeting and spending process, consists of four major phases: preparation,
legislative consideration, execution, and audit and evaluation.
47
In this section, we consider
the dierences between capital and operating budgeting processes in terms of when these
processes occur in budget cycles, the parties involved in their preparation, and legislative
consideration (see gure 1).
Most of the literature does not distinguish between the timing for determining the
operating and capital budgets but treats them as being decided simultaneously. We expand
on the current literature by dierentiating between the consideration of these two budget
components. Budget cycles for the capital and operating budgets occur simultaneously in
forty-eight states, with members of the legislature voting for the respective bills in the same
legislative session. In the two exceptions, Minnesota and Ohio, budget cycles for the capital
and the operating budgets are clearly separated. These states use a biennial budget, with the
rst year devoted to the operating budget and the second to the capital budget. Legislators
vote for the operating and the capital bills in sessions held in alternating years.
Hillhouse and Howard
48
listed states according to where capital budget proposals were
submitted: to the governor’s operating budget sta, the governor directly, the legislature
directly, or the governor and the legislature simultaneously. Ermasova,
49
meanwhile, pre-
sented a list of the agencies and committees responsible for preparing a capital budget. We
expand the literature by looking at whether states have a governor’s capital budgeting sta
or a dierent agency that prepares the capital budget. In most states, the governor’s budget
oce prepares the operating budget. Only eleven states clearly identify in their budget docu-
ments either an oce or division dedicated to preparing the capital budget (see table 5). In
Maryland, for instance, the Oce of Capital Budgeting prepares the governor’s annual capital
budget.
50
In New Jersey, all departments requesting capital funding must submit their plan
to the state Commission on Capital Budgeting and Planning, which includes representatives
of the executive branch, the legislature, and the public.
51
Most of the literature on the legislative consideration of the capital budget focuses on
boards or committees that submit recommendations to the legislature that may be made in
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
16
FIGURE 1: Capital Budgeting Processes
Capital Budget Separation Preparation and Consideration Preparation Consideration Neither
WA
MT
ND
SD
NE
KS
OK
MN
WI
MI
OH
ME
NY
PA
WV
KY
AL
FL
SC
NC
VA
IL
MO
AR
LA
WY
NM
HI
MA
RI
CT
NJ
DE
MD
DC
VT
NH
ID
NV
UT
CO
TX
IA
IN
TN
MS
GA
AZ
OR
CA
AK
•
•
•
SOURCE Authors’ research.
TABLE 5: Oce or Division for Capital Budget Preparation
STATE OFFICE OR DIVISION FOR CAPITAL BUDGET PREPARATION
Idaho Permanent Building Fund Advisory Council, Division of Financial Management, and Legislative Services Oce
Louisiana Facility Panning and Control in the Division of Administration
Maryland Oce of Capital Budgeting in the Department of Budget and Management
Massachusetts
Missouri Division of Facilities Management, Design, and Construction in the Oce of Administration
Montana Architecture & Engineering Division of the Department of Administration
Nevada State Public Works Division in the Department of Administration
New Jersey New Jersey Commission on Capital Budgeting and Planning in the Oce of Management and Budget
New Mexico Capital Outlay Bureau in the Department of Finance and Administration
Vermont Department of General Services
Wisconsin Secretary of the State Building Commission
SOURCE Authors’ research.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
17
addition to the governor’s proposal. In this paper, we examine the legislative committees
or subcommittees that consider capital budget appropriations. In een states, the capital
budget is the responsibility of a single committee in each chamber of the legislature, either
an appropriations panel or a subcommittee dedicated to capital projects; that committee or
subcommittee is separate from the one that reviews operating budget appropriations (see
table 6). In Michigan, for instance, the budget appropriation goes to the Appropriations
Committee in each chamber,
52
and each committee has a Capital Outlay Subcommittee
53
to
consider capital projects. In Washington, the House Capital Budget Committee oversees only
the capital budget,
54
while the Senate Ways and Means Committee is responsible for both
operating and capital budgets.
55
Capital Budgeting Documentation
To assess states’ transparency in disclosing infrastructure needs, we examine key elements
of the documentation and the information disclosed in it. We focus on the capital budget
document, the disclosure of transportation expenses in capital budgets, and the use of a
centralized capital improvement plan.
In its 2014 report, NASBO found that in thirty-two states the capital budget is dis-
tinct from the operating budget, while in eighteen states the capital budget is included in
the operating budget.
56
In our study we expand the question by looking at those states that
include the capital budget in the operating budget—particularly on how these states present
the capital budget.
We nd that thirty states and the District of Columbia have an individual document for
the capital budget (see table 7). This document can be a proposal or a bill. All other states
present their capital budget as part of the operating budget: Nine states clearly separate the
capital and the operating budget in two dierent sections in the same document; four fol-
low almost the same pattern but distinguish the capital and operating budgets as dierent
subsections in accordance with the request of each department; and seven blur the boundary
between capital and operating budgets. In these states, the capital budget is presented as a
line item in the operating budget.
Is Transportation Spending Included in the Capital Budget?
According to some studies, transportation expenditures are the major exclusion in the capital
budget.
57
NASBO recently reported that nineteen states do not include capital expenditures
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
18
TABLE 6: Committees for Legislative Consideration of Capital Budget
STATE COMMITTEE FOR LEGISLATIVE CONSIDERATION OF CAPITAL BUDGET
Colorado
Connecticut
Delaware
Iowa Senate Appropriation Committee, Transportation, Infrastructure, and Capital Appropriations Subcommittee
House Appropriation Committee, Transportation, Infrastructure, and Capital Appropriations Subcommittee
Maryland
House Appropriation Committee, Capital Budget Subcommittee
Michigan Senate Appropriation Committee, Capital Outlay Subcommittee
House Appropriation Committee, Capital Outlay Subcommittee
Minnesota Senate Capital Investment Committee
House Capital Investment Committee
Montana Senate Finance and Claims, Long-Range Planning Subcommittee
House Appropriation Committee, Long-Range Planning Subcommittee
New Hampshire Senate Capital Budget Standing Committee
House Public Works and Highways Standing Committee
North Carolina House Appropriation Committee on Capital
2
Oregon Joint Committee on Ways and Means, Subcommittee on Capital Construction
Utah Senate Appropriations Committee, Infrastructure and General Appropriations Subcommittee
House Appropriations Committee, Infrastructure and General Appropriations Subcommittee
Vermont Senate Committee on Institutions
House Committee on Corrections and Institutions
Virginia Senate Finance Committee, Capital Outlay and General Government Subcommittee
House Appropriation Committee, General Government and Capital Outlay Subcommittee
Washington House Capital Budget Committee
3
Senate Ways and Means Committee
3
SOURCE Authors’ research.
1) Joint subcommittee. 2) The Senate Appropriations/Base Budget Committee. 3) The Senate Ways and Means Committee consider both
operating and capital budget bills.
TABLE 7: Capital Budget Document
CAPITAL BUDGET DOCUMENT STATES
Individual capital budget Alaska
, Arkansas
, Colorado
, Delaware
, District of Columbia
, Illinois
, Iowa
, Kansas
, Kentucky
,
Louisiana, Maryland, Massachusetts
, Minnesota
, Missouri, Montana, Nebraska, Nevada, New
Hampshire
, New York
, Ohio, Oklahoma, Oregon, Pennsylvania
, Rhode Island
,
South Carolina, Tennessee, Vermont, Washington, Wisconsin, Wyoming
Capital budget in the operating
budget with some separation
Separate section:
Arizona, Connecticut
, Idaho, Indiana, Michigan, Mississippi, North Carolina,
North Dakota, Virginia
Capital budget as an operating
budget line item
Alabama, California, Florida, Georgia, Maine, South Dakota, West Virginia
SOURCE Authors’ research.
1) Discloses transportation expenses in capital budget.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
19
for transportation in their capital budgets, mainly because transportation revenues oen come
from dedicated sources like motor fuel taxes.
58
In this study, we look closely at information
on transportation service expenses, which typically include expenditures on highways, local
roads, and transit.
Almost half of the states with a CIP include in it the cost of transportation services.
Ohio, Vermont, and Washington prepare independent transportation bills. The other states
present transportation expenses in their operating budgets.
The Capital Improvement Plan
While it is not a legally binding document, the CIP assesses capital needs using a multiyear
planning horizon. The document typically comprises two parts: a capital budget and a capital
program.
59
Usually, the rst year or two of the CIP covers the capital budget. The remaining
years are the capital program, which includes projects for which funding may not have been
obtained.
According to NASBO, the CIP serves as a medium- or long-term roadmap for capital
infrastructure requirements. In this document, states identify capital spending needs, the
costs of planned projects, sources of nancing, and the impact that planned projects will
have on current and future operating budgets.
60
NASBO found that forty-two states and the
District of Columbia maintain a multiyear CIP. We expand the literature by focusing on the
disclosure of a centralized capital improvement plan. We dene a centralized, multiyear CIP as
a document that is unique to each state, issued by a central oce, and includes requests from
all state agencies. Such a document reects an enhanced level of analysis and coordination
by the budget oce. It implies that the oce is taking the time to analyze and gather all the
data available to have an informed decision-making process about the state’s capital projects.
We nd that thirty-seven states and the District of Columbia use a CIP (see table 8).
Eighteen states and the District of Columbia have a centralized CIP. In eighteen other states,
the central budget oce asks state agencies to submit a CIP through the budget instruction
document, but a centralized document is not available. In most of these cases, the central
budget oce provides a link for each agency’s CIP. The remaining fourteen states do not
provide any information related to long-term capital planning. A few states, such as Mas-
sachusetts, publish a document that is called a multiyear report but that in fact presents
information only for the current budget cycle.
We further concentrate on the states that have a centralized CIP. We focus on the number
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
20
TABLE 8: Where Centralized Capital Improvement Plans Are Used
STATE
CENTRALIZED CAPITAL
IMPROVEMENT PLAN
NO CAPITAL IMPROVEMENT
PLAN CONSOLIDATING
INDIVIDUAL AGENCY PLANS NEITHER
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
SOURCE Authors’ research.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
21
of years covered by the centralized CIP, the connection between CIPs and capital budgets, the
coverage of asset types, the availability of a scheme to prioritize capital projects, information
about nance choices, and the provision of actual infrastructure needs (see table 9). More
than 60 percent of centralized CIPs cover a ve-year period, although the duration of plans
can range from two to ten years. The asset coverage of the centralized CIP is limited in most
states. As table 9 shows, we group states into three categories of asset coverage: buildings
only, limited, and comprehensive. While building only refers to CIPs that include only struc-
tures, comprehensive refers to CIPs that contain all types of assets, including highways and
roads. Limited includes states that exclude transportation assets or that include or exclude
specic capital projects.
TABLE 9: Centralized Capital Improvement Plan Details
STATE PERIOD
CONNECTION
WITH CAPITAL
BUDGET COVERAGE
PRIORITIZATION
SCHEMES
DISPLAYS
FUNDS
DISPLAYS
FINANCING
SOURCES
FUNDING
GAP
Arizona 2 years Buildings only
California
5 years Comprehensive
Connecticut 5 years Buildings only
District of
Columbia
6 years Comprehensive
Iowa 5 years Limited
Kentucky
6 years Limited
Maryland 5 years Comprehensive
Nebraska 6 years Buildings only
New Jersey 7 years Comprehensive
New Mexico 5 years Limited
New York
5 years Comprehensive
Oklahoma 8 years Limited
Rhode Island 5 years Comprehensive
South
Carolina
5 years Limited
South
Dakota
5 years Limited
Texas 5 years Comprehensive
Utah 5 years Buildings only
Vermont 10 years Limited
Virginia 6 years Limited
SOURCE Authors’ research.
1) Financing sources include bond history.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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In CIPs with more comprehensive coverage, capital projects in transportation and educa-
tion usually comprise a higher proportion of assets than other sectors. For instance, in Rhode
Island’s 2018–22 CIP, those two categories account for 67.5 percent of total recommended
appropriations for future years.
61
In California, transportation service represents 91 percent
of total proposed funding.
62
In most cases, states oer detailed explanations of their recom-
mended appropriations for future years. South Dakota, Iowa, New Mexico, and Virginia CIPs
contain only limited explanations, however.
Just a handful of states use a standardized method to prioritize capital projects. This typi-
cally includes a single agency or committee taking a lead role in project evaluation. Nebraska,
for example, relies on its Comprehensive Capital Facilities Planning Committee to take charge
of evaluating appropriations. The committee oers suggestions from three dierent perspec-
tives: critical issues related to threat to human life and immediacy of the need; nancial and
economic goals related to operating cost savings and asset preservation; and values related
to project signicance, improved services, and mission relevance.
63
While many CIPs fall short in terms of their scope, 84 percent provide details of revenue
sources, including general funds, federal funds, and other specic funds. The CIPs of eleven
states disclose the availability of nancing sources, such as general obligation bonds, but
only ve of those states include their bond history.
Arizona, New Jersey, Vermont, and Virginia also indicate whether an infrastructure
funding gap may exist. In all four states, the gap reects the dierence between the revenue
available for appropriation and total requests from state departments. The planning of future
capital projects, or at least the preparation of the CIP, is developed primarily by considering
the amount of future revenues. Therefore, the information in CIPs allows us to observe a
pattern of a revenue-oriented planning process in capital budgets. (Further information on
which state agencies issue centralized CIPs can be found in appendix A.)
Disclosure of Infrastructure Needs
Disclosure of infrastructure needs is limited. Several states refer to the capital improvement
plan as the road map for planning, but the CIP usually considers only infrastructure needs
that will be funded in the future. We dene infrastructure needs as the sum of three compo-
nents: deferred maintenance, operation and maintenance, and additional construction (see
gure 2). These elements represent investments that would be needed for current and future
capacity, as well as investments that have been deferred and accumulated over the years and
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
23
that aect present and future investments. We nd that capital budgeting documents con-
sider all the needs in operations and maintenance but only a portion of those in additional
construction and deferred maintenance—usually the portion that will be funded. The portion
that is unfunded constitutes a gap in the data on infrastructure needs.
As many accounts of infrastructure needs refer to ASCE report cards, we looked at
whether states themselves produce reports on their infrastructure needs. We searched docu-
ments providing comprehensive information for various infrastructure assets, along with
their condition and any funding gaps.
We found that Tennessee, New Jersey, Michigan, and the District of Columbia have
released information on infrastructure needs in centralized reports. Although most state
governments do not publicly disclose estimates of their infrastructure needs, some non-
governmental organizations (NGOs) and academic institutions produce reports in this area
(see table 10).
The Tennessee Advisory Commission on Intergovernmental Relations (TACIR), for
example, is tasked with compiling and maintaining an inventory of needed infrastructure as
well as with presenting those needs and associated costs to the General Assembly during its
regular legislative session. Created by statute in 1978, TACIR includes representatives from
the executive and legislative branches and counties and municipalities, as well as the state
comptroller. By law, TACIR issues an annual report on infrastructure needs covering a ve-
year period, including projects involving a capital cost of at least $50,000. Information in
the report come from data from the Tennessee Department of Transportation, capital budget
requests submitted by state agencies, and state and local ocials, although localities may
provide only partial information or may decline to participate without penalty.
64
According to TACIR’s January 2018 report, the total estimated cost of needed infra-
structure improvements in the state is about $45 billion, with about two-thirds of this cost
FIGURE 2: Components of Infrastructure Needs
INFRASTRUCTURE NEEDS
DEFERRED MAINTENANCE OPERATION & MAINTENANCE ADDITIONAL CONSTRUCTION
Deferred
Maintenance
Unfunded
Deferred
Maintenance
Appropriation
Operation and Maintenance
Appropriation
Additional
Construction
Appropriation
Additional
Capacity
Unfunded
Gap Capital Appropriation Gap
<
<
<
SOURCE Authors’ research.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
24
unfunded. The total amount includes projects in six categories
65
that will be completed during
the ve-year period of July 2016 to June 2021.
66
In the District of Columbia, the Oce of the Chief Financial Ocer is required to develop
an annual report on a replacement schedule for capital assets. The oce’s Long-Range Capital
Financial Plan Report includes capital asset replacement needs beyond the normal six-year
capital planning period. To determine total capital needs, the district completes a compre-
hensive review of governmental agencies’ capital and asset maintenance requirements, and
scores and ranks each project to ensure that the highest-priority projects were funded.
To analyze needs, the District of Columbia developed the capital asset replacement
scheduling system (CARSS). It involved creating a centralized database of all district-owned
assets and their condition to calculate maintenance and replacement costs.
67
For 2018–23, the
district plans to fund $6.7 billion in capital projects, about $5 billion more than its nancing
capacity (amounting to an average primary capital needs gap of $700 million a year, or 8 per-
cent of the district’s general fund). Of this gap, 52.5 percent corresponds to facilities (mainly
elementary, middle, and high schools) and 36.8 percent to so-called horizontal infrastructure,
principally repairs to streets.
68
In a report last issued in 2000 and not updated since, the New Jersey State Planning
Commission
69
compiled and summarized information provided by state agencies since the
adoption of the rst Infrastructure Needs Assessment in 1992. According to the 2000 report,
the state’s total needs for 2000–20 were $65.5 billion (in constant 1999 dollars), of which
$45.8 billion corresponded to present needs
70
and $19.7 billion to prospective ones.
71
These
amounts included seventeen components of infrastructure in three categories: transporta-
TABLE 10: Reports on Infrastructure Needs
STATE ISSUED BY PERIOD COVERAGE
ANNUAL AVERAGE
TOTAL NEEDS
(BILLIONS)
ANNUAL AVERAGE
TOTAL GAP
(BILLIONS)
Tennessee State 6 sectors $9.0 $6.0
District of Columbia DC government 5 sectors $1.1 $0.8
New Jersey State 3 sectors $4.9 N/A
Michigan State 4 sectors N/A $3.0
Hawaii University 5 sectors $2.9 N/A
Kentucky NGO 12 sectors N/A N/A
Washington NGO 11 sectors $9.5 N/A
SOURCE Authors’ research.
NOTES N/A: Not available. NGO: Nongovernmental organization. Figures in 2018 dollars.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
25
tion and commerce (44 percent), health and environment (33 percent), and public safety and
welfare (23 percent).
In 2016, the governor of Michigan created the 21st Century Infrastructure Commission
to address infrastructure needs. It estimated that the state infrastructure investment gap
over the next 20 years exceeded $60 billion, with an annual investment decit of almost $4
billion. The commission concluded that the state had an annual gap of $1 billion in water,
$2.7 billion in transportation, and almost $70 million in communications infrastructure. The
panel also advanced more than 100 recommendations to improve communications, energy,
transportation, and water infrastructure. The advice revolved around four main subjects:
asset management, coordinated planning, sustainable funding, and emerging technologies.
Some of the recommendations were pilot-testing a regional infrastructure asset manage-
ment process; instituting a database system; implementing a long-term strategy to address
asset condition, needs, and priorities; and creating the Michigan Infrastructure Council to
coordinate infrastructure-related goals.
72
The commission ceased operating in 2017, with its
recommendations unfullled.
73
In some states—including Hawaii, Kentucky, and Washington—NGOs rather than ocial
bodies produce infrastructure needs reports. The Hawaii Institute for Public Aairs
74
con-
solidated in a report the state’s projected infrastructure costs for scal 2010–15. It included
projects in water and environment, transportation, public facilities, energy, and disaster
resiliency, with data coming from an inventory survey of twenty governmental agencies.
The institute found that a total of $14.3 billion of infrastructure was planned for the six-year
period, 53 percent of which was for new projects. Almost 55 percent of the total related to
transportation projects.
The Kentucky Chamber of Commerce released a report in 2017 on the condition of infra-
structure.
75
The report did not provide an exact total to cover needs but listed gaps of about $2
billion in bridges, $6.2 billion in drinking water facilities, and $6.2 billion in wastewater assets.
76
A 2017 report from the Association of Washington Business, the Association of Washing-
ton Cities, the Washington State Association of Counties, and the Washington Public Ports
Association
77
presented the state’s infrastructure needs and benets. Data came from federal
and state departments, cities, and the ASCE. The associations determined total infrastruc-
ture needs of about $190 billion over twenty years, including$134 billion for highways and
roads, about $13 billion for aviation, and $5 billion each for ports, energy, water, wastewater,
and bridges.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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26
Disclosure of Deferred Maintenance in Capital Budget Documents
In the literature, only the Volcker Alliance discusses the disclosure of deferred maintenance
in budget documents. The Alliance
78
in 2017 reported that only two states, Alaska and Cali-
fornia, estimated the costs of deferred infrastructure maintenance in their operating budget
or equivalent documents; in 2018 it updated the total to include Hawaii and Tennessee.
79
We expand the eld by looking at disclosure in capital budgets or supplemental documents
and nd that twenty-three states and the District of Columbia disclose some information
about deferred maintenance (see table 11). We emphasize the denition of deferred mainte-
nance in documents, coverage, estimation methods, and size of the total maintenance gap
or appropriation.
States have similar denitions for deferred maintenance. At the national government
level, the Federal Accounting Standards Advisory Board denes deferred maintenance as
“maintenance that was not performed when it should have been or was scheduled to be and
which, therefore, is put o or delayed for a future period.”
80
In addition, it recognizes the
use of two measurement methodologies: condition assessment surveys and life-cycle cost
forecasts. Condition assessment surveys are periodic visual inspections of property, plants,
and equipment to determine their condition and the estimated cost to correct deciencies.
Life-cycle costing is an acquisition or procurement technique that considers operating, main-
tenance, and other costs as well as the acquisition cost of assets.
81
State agencies use similar
denitions but oen add that deferred maintenance occurs because of lack of funds, other
pressing expenses, and priority projects. In addition, the denition of deferred maintenance
varies among states. We identify the three main variations as maintenance appropriation,
maintenance gaps, or a combination of both:
MAINTENANCE APPROPRIATION The amount allocated or requested by an agency to fund
maintenance that has been deferred in previous years.
MAINTENANCE GAP The maintenance need that has been deferred. This information is
disclosed as a total (for example, the total deferred maintenance is estimated to be $X
million) or as a portion (this project will reduce deferred maintenance by $X million) in
which the total maintenance gap is unknown.
COMBINATION OF BOTH Deferred maintenance is dened as an appropriation and as a gap
interchangeably throughout the document.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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27
TABLE 11: How Deferred Maintenance Is Reported
STATE
USAGE OF
DEFERRED
MAINTENANCE
DOCUMENT
CONTAINING
DEFERRED
MAINTENANCE
INFORMATION
PLACEMENT
THROUGHOUT
THE
DOCUMENT COVERAGE CALCULATION COORDINATION
Alaska Maintenance
Gap;
Maintenance
Appropriation
with Funding
Final Total SLA
2017
Scattered Limited
Arizona Maintenance
Gap
ADOA Building
System CIP
FY2018
Centralized Limited
Arkansas Maintenance
Appropriation
Biennium
Centralized Limited
California Maintenance
Gap;
Maintenance
Appropriation
2017 California
Five-Year
Infrastructure
Plan
Centralized Comprehensive
Delaware Maintenance
Appropriation
FY2019
Governor's
Recommended
Capital Budget
Scattered Limited
District of
Columbia
Maintenance
Gap
Long-Range
Capital Financial
Plan
Centralized
Hawaii Maintenance
Appropriation
Operating and
Capital Budget,
Centralized Comprehensive
Illinois Maintenance
Gap;
Maintenance
Appropriation
Capital Budget
FY 2019
Centralized Comprehensive
Indiana Maintenance
Appropriation
List of
Appropriations
Biennium
Scattered Limited
Iowa Maintenance
Appropriation
Budget Report
Scattered Limited
Kentucky Maintenance
Appropriation
Statewide
Capital
Improvements
Plan
Scattered Limited
Louisiana Maintenance
Appropriation
2018 House Bill
No. 2
Scattered Limited
2
Maryland Maintenance
Gap
Capital Budget
Volume
Scattered Limited
2
Massachusetts Maintenance
Appropriation
FY2018
22
Five-Year Capital
Investment Plan
Scattered Limited
SOURCE Authors’ research.
1) Excludes transportation assets. 2) Includes only universities and colleges.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
28
Only twenty-three states and the District of Columbia disclose information about
deferred maintenance. Of these, een states refer to deferred maintenance as “mainte-
nance appropriation,” four refer to it as “maintenance gaps,” and four use the denitions
interchangeably. Most of the information is available in the capital budget (such as a plan or
bill) or CIP and is usually scattered throughout the document. Only six states and the District
of Columbia provide centralized information about deferred maintenance.
The coverage of deferred maintenance is mostly limited. Coverage is related to the state
STATE
USAGE OF
DEFERRED
MAINTENANCE
DOCUMENT
CONTAINING
DEFERRED
MAINTENANCE
INFORMATION
PLACEMENT
THROUGHOUT
THE
DOCUMENT COVERAGE CALCULATION COORDINATION
Minnesota Maintenance
Gap
2018 Governor's
Capital Budget
Recommendations
Scattered Limited
Montana Maintenance
Appropriation
Governor's
2019, Long-
Range Building
Program
Scattered Limited
Nebraska Maintenance
Appropriation
Biennial Budget
information,
biennium
Scattered Limited
Nevada Maintenance
Appropriation
Scattered Limited
New Jersey Maintenance
Gap;
Maintenance
Appropriation
Fiscal
Year Capital
Improvement
Plan
Scattered Limited
2
North Dakota Maintenance
Gap
Legislative
Appropriations
Biennium
Scattered Limited
2
Oregon Maintenance
Appropriation
Enrolled Senate
Scattered Limited
Pennsylvania Maintenance
Appropriation
Senate Bill 651
Scattered Limited
2
South Carolina Maintenance
Appropriation
Budget
Scattered Limited
Texas Maintenance
Appropriation
Sec. 17.14
in General
Appropriations
Biennium
Centralized Limited
SOURCE Authors’ research.
1) Excludes transportation assets.
2) Includes only universities and colleges.
TABLE 11: How Deferred Maintenance Is Reported
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
29
departments or agencies that issue information related to deferred maintenance and the
quality of that information. We classify states to have comprehensive or limited coverage.
Comprehensive coverage means that most state departments or agencies issue deferred
maintenance information and that this information relates not only to state-owned buildings
but to other state assets, including transportation assets. In our analysis, California, Hawaii,
and Illinois provide comprehensive coverage. The other states have limited coverage, as they
disclose deferred maintenance only on state-owned buildings or do not include transportation
assets. Louisiana, Maryland, New Jersey, North Dakota, and Pennsylvania provide informa-
tion on deferred maintenance only for colleges and universities.
There is also a lack of information about how deferred maintenance estimates are arrived
at. Of the twenty-three states that disclose information about deferred maintenance, only
Minnesota and Arizona disclose their calculation methods. In Minnesota, the higher educa-
tion system uses a facilities reinvestment and remodeling forecasting tool to maintain the
system’s projected backlog and renewal needs.
82
This tool is critical for estimating building
needs and projected life expectancy as structures wear out and need replacement. Arizona
uses a building renewal formula (BRF) that was approved by the legislature and follows the
Sherman-Dergis Formula, developed at the University of Michigan in 1981, to model struc-
tures’ upkeep and replacement costs. The BRF is used to determine the annual appropriation
required for renewal for state administrative buildings.
83
It is expressed as
BRF =
2/3 (BV) BA
n
where BV is the building value, BA is the building age, and n the life expectancy of the struc-
ture. According to the Arizona Department of Administration, the BRF reects the current-
year replacement value by updating the original construction cost using the Marshall & Swi
Valuation Service’s building cost index.
84
The state denes the deferred cost in a given year as
Deferred cost = BRF – appropriation
Based on this formula, the department reported $532 million of deferred costs in 2010
dollars accumulated from 1988 to 2017.
85
Only three states (Illinois, Nebraska, and Texas) have a central agency in charge of coor-
dinating deferred maintenance information. In Illinois, the Capital Development Board is
responsible for renovation and rehabilitation projects at more than 8,700 state buildings.
86
The board’s 2019 report shows $7.4 billion in deferred maintenance needs, with the Depart-
ment of Corrections and the Department of Human Services accounting for 53.4 percent of
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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that sum. Nebraska’s Task Force for Building Renewal addresses the state’s sizable backlog of
deferred building repairs and improvements. The task force evaluates, prioritizes, and allo-
cates funds for requested deferred building renewal projects.
87
Its process typically includes
a team of architectural, mechanical, and electrical professionals, and requires inspections
of the highest-priority requests of the campus, institution, or agency. Such allocations may
not exactly follow those priorities. In Texas, the Education Code requires the Higher Educa-
tion Coordinating Board to collect information on deferred maintenance needs, including at
public universities, colleges, and health care–related institutions.
88
Many states appropriate less than 1 percent of annual expenditures to address deferred
maintenance (see table 12). Only Illinois and Indiana appropriate more than 2 percent, while
Hawaii, in contrast, appropriates close to 10 percent. But overall, the nation’s total maintenance
gap is unknown. Only California reports complete data on deferred maintenance, providing
comprehensive asset coverage and the total maintenance gap. The governor’s 2017 ve-year
infrastructure plan reports statewide deferred maintenance needs of $78 billion, including
for the Department of Transportation (72.9 percent), Department of Water Resources (16.6
percent), and the University of California (4.0 percent).
89
Considering that the total maintenance gap as a share of California’s expenditures is
about 44 percent and assuming this share is similar across all states, the total state mainte-
nance gap for the nation can be estimated at $873 billion (with a general expenditure of $1.98
trillion in the US for scal 2017
90
). This amount, combined with a federal maintenance gap of
$170 billion,
91
produces a national total deferred maintenance cost of more than $1 trillion.
The amount is almost three times the value of all state and local investment nonresidential
xed assets in 2018
92
and is equivalent to 4.2 percent of US gross domestic product.
The estimated size of the gap and inconsistency of reporting methods cry out for the
adoption of common standards for the disclosure of deferred maintenance. The Governmental
Accounting Standards Board (GASB), which recommends nancial reporting practices for states
and localities, has provided a single standard for disclosure of deferred maintenance costs.
93
Through its Statement 34, GASB requires capital assets to be reported in the statement of
net assets included in state and local governments’ comprehensive annual nancial reports.
94
This statement allows governments to report on their assets by using either the depreciation
method or the so-called modied approach.
95
With the former approach, states can report
how much of the estimated original cost of the asset has been lost during its estimated useful
life. With the latter, states can report the cost of maintaining the asset throughout the year.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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Adopting the modied method as the sole option would set a standard for calculating and
managing deferred maintenance.
Such a systematic approach should at a minimum meet the following requirements: 1)
have an inventory of eligible assets; 2) document the condition of those assets; 3) demonstrate
that assets are being preserved at a predetermined level; and 4) estimate the actual cost to
TABLE 12: Deferred Maintenance as a Percentage of Annual Expenditures
STATE PERIOD TOTAL MAINTENANCE GAP
TOTAL MAINTENANCE
APPROPRIATION
Alaska
2
2018 18.24% 0.19%
Arizona 2017 0.31% 0.34%
Arkansas N/A 0.20%
California 43.87% 0.46%
Delaware 2018 N/A 0.21%
District of Columbia 2017 3.62% N/A
Hawaii N/A 9.95%
Illinois 2019 8.22% 0.53%
Indiana N/A 2.31%
Iowa 2019 N/A 0.04%
Kentucky 2019 N/A 0.04%
Louisiana
3
2018 N/A 0.10%
Maryland
3
2019 2.33% N/A
Massachusetts 2018 N/A 0.09%
Minnesota 2018 2.11% N/A
Montana N/A 0.15%
Nebraska N/A 0.28%
Nevada 2018 N/A 0.02%
New Jersey
3
2018 0.34% 0.13%
North Dakota
3
0.25% N/A
Oregon 2017 N/A 0.05%
Pennsylvania
3
2018 N/A 0.38%
South Carolina 2018 N/A 0.00%
Texas N/A 0.21%
SOURCE Authors’ research.
1) Deferred maintenance gaps and appropriations as percentages of combined operating budget and capital budgets.
2) Excluding transportation assets.
3) Includes only universities and colleges.
NOTE N/A: Not available.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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maintain and preserve the assets.
96
If a state does not appropriate enough funds to meet the
cost of maintaining its assets in a scal year, the gap becomes the deferred maintenance. Most
states disclose depreciation in their comprehensive annual nancial reports, but the reported
information may not reect the real cost of maintenance and, therefore, maintenance that
is being deferred.
97
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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CALL TO ACTION: Ten Steps Toward Better Disclosure
BASED ON OUR IDENTIFICATION of best practices among states as well as the Volcker
Alliance’s research ndings, in this section we identify ten steps that states should take to
promote scal transparency in the process of capital budgeting. Adoption of these measures
will help set common standards; improve asset management; make information consistent,
updated, and available; and contribute to having a better-informed decision-making process
regarding capital projects. The recommended actions are organized into three groups: capital
budgeting processes, capital budgeting documentation, and infrastructure needs disclosure.
Capital Budgeting Processes
1. Present the capital budgeting process graphically. Most states provide a diagram explaining
the steps in the budget process, their timing, and the agency in charge of every step. But these
diagrams commonly depict only the operating budget. States should also produce a diagram
with the capital budget process, explaining the steps, their timing, and the agency in charge
of each step, and explain how capital and operating budgets are related. Some states, includ-
ing Texas, Maryland, and Louisiana, have already implemented this practice (see gures 3
and 4). Displaying the process for the capital budget will facilitate the public understanding
of the budgeting process.
2. Designate an agency in charge of preparing the statewide capital budget. This agency could be
dierent than the one in charge of preparing the operating budget, as is the case in Nevada,
or a separate oce or division within the agency that prepares the operating budget, as in
Maryland and New Mexico. States should clearly display this information in their capital
budgeting documents. In addition, states should include explanations regarding the coordina-
tion between divisions or agencies in charge of the capital and operating budget preparation.
This practice will help guarantee the independence of the capital budget from other processes
inside the state agencies and allow for greater transparency.
3. Designate a legislative committee to oversee the capital budget. States should designate a leg-
islative committee to oversee budgets for capital projects. This committee could be dierent
than the one in charge of operating budget appropriations—the rule in Minnesota and New
Hampshire—or a separate subcommittee of the appropriations committee, as in Michigan
and Virginia. States should clearly display this information in their capital budgeting docu-
ments. In addition, they should include explanations about the coordination between this
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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FIGURE 4: Maryland’s capital budget process
Departments submit
proposed State projects
by July 1
Capital Budget Cycle
Governor submits budget to
GA no later than 20 days after
the session starts
General Assembly committee
hearings, budget passed
Bill cannot be passed until after
the operating budget has been
approved by General Assembly
Governor may line item veto parts or
all of the bill
DBM invites submission of budget
requests
Site visits of selected
facilities/projects by DBM,
budget committees, DLS, and
other interested parties
DBM departmental meetings
in cooperation with DGS –
DLS staff attend
CDAC report released, agencies submit
requests for grant and loan programs
DBM reviews projects and prepares
five-year CIP with assistance of DGS
DBM recommendations
submitted to Governor
Enactment
Execution
Formulation
CDAC: Capital Debt Affordability Committee
CIP: Capital Improvement Program
DBM: Department of Budget and Management
DGS: Department of General Services
DLS: Department of Legislative Services
GA: General Assembly
Source: Department of Legislative Services
A Guide to Capital Budget Instructions
FY 2020
Jan.
Feb.
Mar
.
Jan.
Apr.
May
June
July
Aug.
Sep.
Oct.
Nov.
Dec.
SOURCE State of Maryland, Guide to Capital Budget Instructions, FY2020, https://dbm.maryland.gov/budget/Documents/capbudget/
Instructions/FY2020CapitalBudgetInstructions.pdf.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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committee or subcommittee and the one in charge of the operating budget. This practice will
contribute to identifying institutional responsibilities and thus increase accountability and
transparency for the public.
Capital Budgeting Documentation
4. Separate the capital budget from the operating budget. Some states display the capital bud-
get as a line item in the operating budget. This practice fails to give enough importance to
capital budgeting, as it does not provide enough detail about capital projects to be funded
during a scal year. States should present the capital budget either as a separate document
or separate section of the operating budget. In addition, there should be clear explanation
of the coordination between the capital and operating budgets. The separation of the capital
and the operating budgets will contribute to enhanced public engagement on management
of capital assets.
5. Describe asset coverage and display capital budget–related documents in one place online. States
should provide descriptions of the assets covered in their capital budgeting documentation.
Such asset coverage should be consistent across all capital budget–related documents, such as
the capital budget and the capital improvement plan. The descriptions should include a deni-
tion of capital expenditures—citing the state constitution, statutes, or other documents—and
capital expenditures by program area. This will help standardize capital project information
among documents and facilitate coordination among agencies. To improve public understand-
ing, states should also display on one website all capital budgeting–related documents from
the legislature and executive branch or other agency in charge of preparing the capital budget.
At minimum, the website should include links to all pertinent capital budget documentation.
6. Standardize the Capital Improvement Plan. States should follow the examples set by Cali-
fornia and Maryland by providing a more comprehensive and standardized format for CIPs
that comprises a presentation of all capital projects needed for the period under review—
including those that will not receive funding—as well as annual appropriations to address
deferred maintenance. Other components should include a comprehensive justication for
all capital projects needed (some states provide only tables, with no explanation about the
need for future projects); estimates of total future expenditures (some states provide future
expenditures for various years but not subtotals or totals, which makes it dicult to under-
stand and quantify the funding available and the gaps for future projects); and funding as
well as nancing sources.
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7. Connect the capital budget and the capital improvement plan. The CIP should inform capital
budgets for future scal years. States should connect the capital budget and the CIP either
by displaying present and future capital plans in the same document or by having two docu-
ments and explaining the connection between them. In either case, the asset coverage should
be consistent and the information about the assets comprehensive. This connection will
contribute to enhancing short- and long-term strategies for capital asset management.
Disclosure of Infrastructure Needs
8. Develop a centralized statewide asset inventory. States should emulate the examples of Ten-
nessee and the District of Columbia and develop a centralized statewide asset inventory
and update it regularly. Such an inventory—creation of which has been proposed recently
by California’s treasurer and Michigan’s 21st Century Infrastructure Commission—should
comprise all state-owned assets, as well as all the assets totally or substantially funded by
state revenues, such as buildings, transportation assets, and assets owned by state authori-
ties. It should contain information regarding the assets’ condition and accumulated deferred
maintenance costs, provide estimates of the cost to maintain assets or bring them to good
condition, and establish the denition of good condition.
9. Produce a statewide report on infrastructure needs. States should develop a report on infra-
structure needs that includes accumulated deferred maintenance and additional capacity, as
well as details on how to calculate infrastructure needs and deferred maintenance. The report
should be updated regularly, and the asset coverage should be comprehensive and consistent
with all capital budgeting documents. This practice will contribute to setting standards for
estimating and disclosing information of infrastructure needs and deferred maintenance.
Better disclosure of infrastructure needs, including deferred maintenance costs and gaps,
will improve decision-making regarding appropriations and contribute to reducing main-
tenance backlogs.
10. Create an agency to address infrastructure needs. Each state should consider establishing a
coordination agency to address the critical condition of America’s infrastructure. This agency
should work side by side with the state’s budget oce and take responsibility for creating an
asset inventory; assessing asset conditions; setting criteria for prioritizing projects; devel-
oping reports on infrastructure needs and gaps; and giving recommendations to the execu-
tive and legislative branches regarding appropriations to improve and maintain statewide
infrastructure. The Tennessee Advisory Commission on Intergovernmental Relations and
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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the Oce of the Chief Financial Oce in Washington, DC, currently take on some of these
responsibilities to assist in capital infrastructure planning. (For more information on these
agencies, see appendix B.)
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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CONCLUSION: Turning Best Practices into Infrastructure Policy
CONSIDERING THE POOR CONDITION of America’s infrastructure, the nation’s trillion-
dollar deferred maintenance decit and the dominant role that states play in nancing con-
struction and maintenance, states need to give high priority to improving how they identify
and disclose their infrastructure needs. Table 13 presents a summary of best practices that
states may wish to adopt in the areas of capital budgeting processes, documentation, and
disclosure of infrastructure needs. The table assesses the feasibility of implementing each
practice, taking into consideration the additional costs associated with implementation.
Practices we deem to have high administrative feasibility are easy to implement because
information is already available and needs only to be incorporated in budget-related docu-
ments. These practices should be regarded as a rst step toward adopting additional reforms.
Practices we identify as having low administrative feasibility should not be ignored, however.
While adopting them may require creating information sets or hiring specialized personnel
to perform a new function, they are still useful for helping policymakers identify critical
infrastructure needs and determine their cost.
TABLE 13: Implementing Best Practices
CAPITAL BUDGETING PROCEDURE FEASIBILITY PRIORITY
Capital Budgeting
Processes
Display the processes for the capital budget High High
Designate an agency in charge of preparing the capital
budget
Medium Medium
Designate a committee in the legislature to oversee the
capital budget
High Medium
Capital Budgeting
Documentation
Separate the capital budget from the operating budget High Medium
related documents in one place online
High High
Standardize the capital improvement plan Low Medium
Connect the capital budget and the capital improvement
plan
Medium Medium
Disclosing
Infrastructure Needs
Develop a statewide asset inventory Low High
Develop a statewide report on infrastructure needs Low Medium
Create an agency or commission to address infrastructure
needs
Low Medium
SOURCE Authors’ research.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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APPENDIX A: States that Post Centralized Capital Improvement Plans
STATE AGENCY DOCUMENT URL
Arizona Arizona Department of
Administration
ADOA Building System CIP
Capital%20Improvement%20Plan%20FY2018.pdf
California Governor's Oce
Infrastructure Plan
http://www.ebudget.ca.gov/2017-Infrastructure-Plan.pdf
Connecticut Oce of Policy and
Management
State Facility Plan
http://www.ct.gov/opm/lib/opm/assets/state_facility_
plans/state_facility_plan_2017_to_2022.pdf
District of
Columbia
Government of the District
of Columbia
Proposed Budget and
Financial Plan
publication/attachments/DCOCFO_Volume_6_web.pdf
Iowa Department of Management
Infrastructure Five Year
Plan
https://www.legis.iowa.gov/docs/publications/
SD/852566.pdf
Kentucky Capital Planning Advisory
Board of the Kentucky
General Assembly;
Legislative Research
Commission
Statewide CIP
https://apps.legislature.ky.gov/moreinfo/cpab/016-
22syp/2016-2022completeplan.pdf
Maryland Department of Budget and
Management
Capital Budget Volume
https://dbm.maryland.gov/budget/Documents/capbudget/
FY2019CapitalBudgetBook.pdf
Nebraska State Comprehensive
Facilities Planning
Committee and the
Administrative Services/
State Building Division
Comprehensive Capital
Facilities 6-year Plan
http://das.nebraska.gov/building/capitalplanning.html
New Jersey Commission on Capital
Budgeting and Planning
Seven Year CIP
CIP2020.pdf
New Mexico Department of Finance and
Administration
Local Infrastructure CIP
http://www.nmdfa.state.nm.us/Capital_Outlay_Bureau.
New York New York State Division of
the Budget
Capital Program and
Financing Plan
https://www.budget.ny.gov/pubs/archive/fy18archive/
enactedfy18/FY2018EnactedCPFP.pdf
Oklahoma Long-Range Capital
Planning Commission
CIP and Capital Budget
https://apps.ok.gov/dcs/searchdocs/app/manage_
documents.php?id=1396
Rhode
Island
Oce of Management and
Budget
Capital Budget and CIP
http://www.omb.ri.gov/documents/Prior%20Year%20
Budgets/Operating%20Budget%202018/2_FY%20
2018%20-%202022%20Capital%20Budget.pdf
South
Carolina
Comprehensive Permanent
Improvement Plan
https://www.admin.sc.gov/budget/cpip
South
Dakota
Bureau of Finance and
Management
Texas
Utah Utah State Building Board
Five-Year Building Program
https://das.utah.gov/wp-content/uploads/2018-Building-
Board-Five-Year-Plan.pdf
Vermont Department of Finance and
Management
Capital Construction
Proposal
bdaa6f5652/Capital-Bill-FY-18-and-19-1-24-2017.pdf
Virginia Department of Planning and
Budget
Agency Capital Budget
http://publicreports.dpb.virginia.gov/rdPage.
SOURCE Authors’ research.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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APPENDIX B: Agencies Addressing Infrastructure Needs
District of Columbia Oce of the Chief Financial Ocer
The position of the chief nancial ocer (CFO) was created through the District of Columbia
Financial Responsibility and Management Assistance Act of 1995 (Public Law 104-8, 109
Stat. 142). The CFO has direct control over daily nancial operations of each district agency
and is independent of the mayor’s oce. The CFO’s independence and authority were reas-
serted through the 2005 District of Columbia Omnibus Authorization Act (Public Law 109-
356, 120 Stat. 2019). The CFO, who has considerable power in enforcing strict guidelines
for capital asset evaluation and management, is nominated by the mayor and approved by
the DC Council; the nomination is then transmitted to the US Congress for review.
98
The
CFO manages the district’s nancial operations, which include the sta in tax and revenue
administration; the treasury, comptroller, and budget oces; economic and scal analysis
and revenue estimation; agency nancial operations; and the DC Lottery.
Tennessee Advisory Commission on Intergovernmental Relations
The Tennessee Advisory Commission on Intergovernmental Relations (TACIR) was created by
Chapter 939 of the Public Acts of 1978 to ll a need for a permanent intergovernmental body
to study and act on questions of organizational patterns, powers, functions, and relationships
among all levels of government—federal, state, and local. The commission consists of public
ocials from state and local government and private citizens. Twenty-two of its twenty-ve
members are appointed to four-year terms, while three are statutory members.
99
Statutory
members are the chairs of the House and Senate Finance, Ways and Means Committees, as
well as the Comptroller of the Treasury.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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ACKNOWLEDGMENTS
WE WISH TO THANK all the sta members of the Volcker Alliance who provided us with
invaluable support and advice. A list of those individuals follows:
Melissa Austin, associate director
William Glasgall, senior vice president and director of state and local initiatives
Neilia Stephens, director of communications
Noah Winn-Ritzenberg, project manager
We also wish to thank these academics, analysts, and government ocials for their com-
ments and suggestions:
Richard Beck, adjunct professor, George Mason University
Michael Bennon, managing director, Stanford Global Projects Center, Stanford University
Matt Fabian, partner, Municipal Market Analytics
Jay Fountain, director, Oce of Policy and Management, City of Stamford, Connecticut
Chris Hamel, senior fellow, Municipal Market Analytics
Adam Miles, senior analyst, U.S. Government Accountability Oce
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
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ABOUT THE ALLIANCE
THE VOLCKER ALLIANCE advances eective management of government to achieve results
that matter to citizens. The nonpartisan Alliance works toward that objective by partner-
ing with other organizations—academic, business, governmental, and public interest—to
strengthen professional education for public service, conduct needed research on government
performance, and improve the eciency and accountability of governmental organization at
the federal, state, and local levels.
ABOUT THE HUMPHREY SCHOOL OF PUBLIC AFFAIRS
AT THE UNIVERSITY OF MINNESOTA
THE HUMPHREY SCHOOL OF PUBLIC AFFAIRS at the University of Minnesota ranks among
the country’s top ten public policy and planning schools. Long noted for equipping students
to play key roles in public life at the local, state, national, and global levels, the Humphrey
School is respected for its role in shaping public policy, its focus on social justice and human
rights, and its expertise in planning, leadership, and management.
As part of one of the world’s leading research institutions, the Humphrey School has
eight policy research centers that make signicant contributions to solutions on issues rang-
ing from politics and governance to urban and regional planning, from early childhood policy
to technology and environmental sustainability. Its Institute for Urban and Regional Infra-
structure Finance, founded in 2017, aims to advance research and engagement on strategic
issues of infrastructure investment across urban and rural areas.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
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ABOUT THE AUTHORS
JERRY ZHIRONG ZHAO is the Gross Family Professor of Public and Nonprot Management at the
Humphrey School of Public Aairs at the University of Minnesota. He holds a PhD in public
administration from the University of Georgia and earned bachelor’s and master’s degrees in
urban planning from Tongji University in China. Zhao’s research focuses on public budgeting,
nance, and urban infrastructure nance, including infrastructure revenue sources and capi-
tal structure, strategic allocation of infrastructure outlays, and the impact of infrastructure
investment. He is the founding director of the Institute for Urban & Regional Infrastructure
Finance at the Humphrey School.
CAMILA FONSECA-SARMIENTO is a research associate at the Institute for Urban & Regional Infra-
structure Finance, where she is engaged in research related to public budgeting and nance,
economic impacts of infrastructure investment, and intergovernmental scal arrangements.
She holds a master of public policy from the University of Minnesota and a bachelor’s degree
in economics and nance from Universidad del Rosario in Colombia.
JIE TAN is a PhD candidate at the School of Public Aairs at Zhejiang University in China. She
previously was a visiting scholar at University of Minnesota. Her primary eld of research is
public-private partnerships, with a focus on their use in China.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
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BOARD OF DIRECTORS
STAFF OF THE VOLCKER ALLIANCE
S B
C A B
B B VICE CHAIRMAN
T M. D
W H. D
A J. D TREASURER
A F
S C F
F F
B H
S M
N J. O
R R
W R
T W. R PRESIDENT
A W
T W. R PRESIDENT
M A
E S. B
M C
W G
N M
Y M
M C. MC
M M
S M
S M
P M
C R
N S
G V
N A. W-R
This publication is the product of the Volcker Alliance. It is an important goal of the Alliance to produce re-
ports that contain ideas, proposals, and recommendations for dealing with persistent governance problems
in new ways based on independent research and analysis supporting constructive solutions. To stimulate
this process and maintain project independence to make such conclusions and recommendations as they
deem to be appropriate, these Alliance projects are commissioned to proceed without the requirement of
approval of their conclusions and recommendations by the board of directors collectively or by individual
members of the board of directors.
P A. V CHAIRMAN
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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ENDNOTES
1. Barry P. Bosworth and Sveta Milusheva, Innovations in US Infrastructure Financing, Brookings Institute, October 21, 2011, https://www.
brookings.edu/research/innovations-in-u-s-infrastructure-financing-an-evaluation/; Elizabeth C. McNichol, It’s Time for States to Invest
in Infrastructure, Center on Budget and Policy Priorities, March 2016, updated March 19, 2019, https://www.cbpp.org/research/state-budget-
and-tax/its-time-for-states-to-invest-in-infrastructure.
2. Bureau of Economic Analysis, Investment in Government Fixed Assets, https://apps.bea.gov/iTable/iTable.cfm?ReqID=10&step=2.
3. Volcker Alliance, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis, 2018,
https://www.volckeralliance.org/publications/truth-and-integrity-state-budgeting-preventing-next-fiscal-crisis.
4. Volcker Alliance, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis, 43.
5. Volcker Alliance, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis, 49.
6. Volcker Alliance, Truth and Integrity in State Budgeting: What Is the Reality?, 2017, https://www.volckeralliance.org/publications/truth-
and-integrity-state-budgeting-what-is-the-reality.
7. Albert Miller Hillhouse and S. Kenneth Howard, State Capital Budgeting (Chicago: Council of State Governments, 1963).
8. Lawrence W. Hush and Kathleen Peroff, “The Variety of State Capital Budgets: A Survey,” Public Budgeting & Finance 8, no. 2 (June 1988):
67–79, https://onlinelibrary.wiley.com/toc/15405850/8/2.
9. Natalia Ermasova, “The Improvement of Capital Budgeting at the State Level in the USA,” Public Administration Research 2, no. 2 (2013):
92–104, http://www.ccsenet.org/journal/index.php/par/article/view/30864.
10. Natalia Ermasova, “Capital Budgeting in the States After the Great Recession,” State and Local Government Review 45, no. 2 (2013): 119–30,
https://journals.sagepub.com/doi/10.1177/0160323X13487079.
11. National Association of State Budget Officers, Capital Budgeting Practices in the States, 2014, https://www.nasbo.org/reports-data/capital-
budgeting-in-the-states.
12. Hillhouse and Howard, State Capital Budgeting.
13. National Association of State Budget Officers, Capital Budgeting Practices in the States, 9.
14. Ibid.
15. Ermasova, “Capital Budgeting in the States After the Great Recession.”
16. Ermasova, “The Improvement of Capital Budgeting at the State Level in the USA”; National Association of State Budget Officers, Capital
Budgeting Practices in the States.
17. National Association of State Budget Officers, Capital Budgeting Practices in the States.
18. Hush and Peroff, “The Variety of State Capital Budgets: A Survey.”
19. Hillhouse and Howard, State Capital Budgeting; Michael A. Pagano, “State Capital Budgeting: Controls and Constraints over Project Selec-
tion,” State & Local Government Review 18, no. 3 (Autumn 1986): 95–100, https://www.jstor.org/stable/4354883?seq=1#page_scan_tab_con-
tents; Hush and Peroff, “The Variety of State Capital Budgets: A Survey”; Ermasova, “The Improvement of Capital Budgeting at the State Level
in the USA.”
20. National Association of State Budget Officers, Capital Budgeting Practices in the States.
21. McNichol, “It’s Time for States to Invest in Infrastructure”; National Association of State Budget Officers, State Expenditure Report: Fiscal
Year 2016.
22. James Poterba, “Capital Budgets, Borrowing Rules, and State Capital Spending,” Journal of Public Economics 56, no. 2 (February1995):
165–87, https://doi.org/10.1016/0047-2727(94)01431-M.
23. National Association of State Budget Officers, Capital Budgeting Practices in the States.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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47
24. Hillhouse and Howard, State Capital Budgeting.
25. National Association of State Budget Officers, Capital Budgeting Practices in the States.
26. Ermasova, “Capital Budgeting in the States After the Great Recession.”
27. Hillhouse and Howard, State Capital Budgeting.
28. Ermasova, “The Improvement of Capital Budgeting at the State Level in the USA.”
29. Arwiphawee Srithongrung, “State Capital Improvement Programs and Institutional Arrangements for Capital Budgeting: The Case of
Illinois,” Journal of Public Budgeting, Accounting & Financial Management 22, no. 3 (2010): 407–30, https://doi.org/10.1108/JPBAFM-22-03-
2010-B005.
30. State of New York Comptroller Thomas P. DiNapoli, Planning for the Long Term: Capital Spending Reform in New York State, November
2010, https://www.osc.state.ny.us/reports/budget/2010/capital_spending_report_nov2010.pdf.
31. Incorporating the Capital Budget Into the Budget Document, approved in 2016, https://www.gfoa.org/sites/default/files/ICCBDBP.pdf; Pre-
senting the Capital Budget in the Operating Budget Document, approved in 2008, http://www.gfoa.org/presenting-capital-budget-operating-
budget-document.
32. For more information, see “The Impact of Capital Projects on the Operating Budget,” http://www.gfoa.org/impact-capital-projects-operat-
ing-budget.
33. American Society of Civil Engineers, 2017 Infrastructure Report Card, https://www.infrastructurereportcard.org.
34. Debbie Alexander, Laurie Lewis, and John Ralph, Conditions of America’s Public School Facilities: 2012–13, National Center for Education
Statistics, US Department of Education, March 2014, https://nces.ed.gov/pubs2014/2014022.pdf; Office of Water, US Environmental Agency,
Drinking Water Infrastructure Needs Survey and Assessment, Sixth Report to Congress, March 2018, https://www.epa.gov/sites/production/
files/2018-10/documents/corrected_sixth_drinking_water_infrastructure_needs_survey_and_assessment.pdf; Robert Kirk and William Mal-
lett, Funding and Financing Highways and Public Transportation, Congressional Research Service, January 2018 (updated June 2019), https://
fas.org/sgp/crs/misc/R45350.pdf.
35. Katherine Barrett and Richard Greene, Measuring Performance: The State Management Report Card for 2008, Pew Center on the States,
March 2008, https://www.pewtrusts.org/en/research-and-analysis/reports/2008/03/03/grading-the-states-2008-report.
36. Jeffrey Werling and Ronald Horst, Catching Up: Greater Focus Needed to Achieve a More Competitive Infrastructure, Inforum report to the
National Association of Manufacturers, September 2014, https://www.supplychain247.com/images/pdfs/NAM_Infrastructure_Full_Re-
port_2014.pdf; McNichol, “It’s Time for States to Invest in Infrastructure.”
37. National Research Council, Infrastructure for the 21st Century: Framework for a Research Agenda (Washington, DC: National Academies
Press, 1987).
38. American Society of Civil Engineers, “Failure to Act: Closing the Infrastructure Investment Gap for America’s Economic Future,” 2017
Infrastructure Report Card, https://www.infrastructurereportcard.org/the-impact/failure-to-act-report.
39. American Society of Civil Engineers, “What Makes a Grade?,” 2017 Infrastructure Report Card, https://www.infrastructurereportcard.org/
making-the-grade/what-makes-a-grade/.
40. Barrett and Greene, Measuring Performance: The State Management Report Card for 2008.
41. Other areas include information (appropriate and available data for resource-allocation decision-making), people (analysis of human-capi-
tal needs, skilled workforce), and money (budgeting and financial management).
42. Bosworth and Milusheva, Innovations in US Infrastructure Financing; McNichol, “It’s Time for States to Invest in Infrastructure.”
43. Werling and Horst, Catching Up: Greater Focus Needed to Achieve a More Competitive Infrastructure.
44. Including seven categories of public infrastructure: five in transportation (highways and streets, mass transit, rail, aviation, and ports and
inland waterways) and two related to water (water resources infrastructure and water supply and waste disposal facilities).
45. McNichol, “It’s Time for States to Invest in Infrastructure.”
46. Allan D. Chasey, Jesus M. de la Garza, and Donald R. Drew, “Using Simulation to Understand the Impact of Deferred Maintenance,”
Computer-Aided Civil and Infrastructure Engineering 17, no. 4 (July 2002): 269–79, https://onlinelibrary.wiley.com/doi/pdf/10.1111/1467-
8667.00275; David Westerling and Steve Poftak, Our Legacy of Neglect: The Longfellow Bridge and the Cost of Deferred Maintenance, Pioneer
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
48
Institute White Paper 40, June 2007, https://scholarworks.merrimack.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir
=1&article=1000&context=cen_facpub.
47. John L. Mikesell, Fiscal Administration: Analysis and Applications for the Public Sector, eighth ed. (Belmont, California: Wadsworth, 2011).
48. Hillhouse and Howard, State Capital Budgeting.
49. Ermasova, “The Improvement of Capital Budgeting at the State Level in the USA.”
50. Maryland Department of Budget and Management, A Guide to Capital Budget Instructions: FY2019, https://dbm.maryland.gov/budget/
Documents/capbudget/Instructions/FY%202019%20Cap.%20Budget%20Instructions.pdf.
51. Office of Management and Budget, State of New Jersey Detailed Budget FY 2018, https://www.state.nj.us/treasury/omb/
publications/18budget/pdf/FY18BudgetBook.pdf.
52. Michigan Senate Fiscal Agency, Appropriations Process, November2018, https://www.senate.michigan.gov/sfa/BudgetProcess/Approp-
sHandbook.pdf.
53. Appropriation subcommittees available at the website of the Michigan Senate and House.
54. Washington State Legislature, House Capital Budget Committee, http://leg.wa.gov/House/Committees/CB/Pages/default.aspx.
55. Washington State Legislature, Senate Ways & Means Committee, http://leg.wa.gov/Senate/Committees/WM/Pages/default.aspx.
56. National Association of State Budget Officers, Capital Budgeting Practices in the States.
57. Hillhouse and Howard, State Capital Budgeting; Pagano, “State Capital Budgeting: Controls and Constraints over Project Selection”; Hush
and Peroff, “The Variety of State Capital Budgets: A Survey”; Ermasova, “Capital Budgeting in the States After the Great Recession.”
58. National Association of State Budget Officers, Capital Budgeting Practices in the States.
59. Susan Robinson, “Capital Planning and Budgeting,” Local Government Finance: Concepts and Practices, (Chicago: Government Finance Of-
ficers Association, 1991).
60. National Association of State Budget Officers, Capital Budgeting Practices in the States.
61. State of Rhode Island and Providence Plantations, Fiscal Year 2018 Budget.
62. State of California, 2017 California Five-Year Infrastructure Plan, http://www.ebudget.ca.gov/2017-Infrastructure-Plan.pdf.
63. State of Nebraska, Comprehensive Capital Facilities 6-Year Plan, November 2014.
64. Local officials may provide only partial information or decline to participate without a penalty.
65. Including transportation and utilities; education; health, safety, and welfare; recreation and culture; general government; and economic
development.
66. Tennessee Advisory Commission on Intergovernmental Relations, Building Tennessee’s Tomorrow: Anticipating the State’s Infrastruc-
ture Needs July 2016 through 2021, 2018, https://www.tn.gov/tacir/infrastructure/infrastructure-reports-/building-tennessee-s-tomor-
row-2016-2021.html.
67. According to the office, since the 2016 report the assets inventoried in CARSS increased from 14 percent to 96 percent of all DC assets.
68. Office of the Chief Financial Officer, District of Columbia Long-Range Capital Financial Plan Report, October 2017.
69. New Jersey State Planning Commission, Infrastructure Needs Assessment 2000–2020, 2000.
70. Defined as “backlog needs to correct existing deficiencies and rehabilitation needs to keep existent infrastructure in service,” Infrastructure
Needs Assessment 2000-2020, 2.
71. Defined as “needs to provide and maintain new infrastructure to serve anticipated future development and to respond to changes in stan-
dards of service” between the date of the needs assessment and the horizon year, Infrastructure Needs Assessment 2000–2020, 2.
72. 21st Century Infrastructure Commission, 21st Century Infrastructure Commission Report, November 2016, https://www.michigan.gov/
documents/snyder/21st_Century_Infrastructure_Commission_Final_Report_1_544276_7.pdf.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
Capital Budgeting and the Disclosure of State Infrastructure Needs
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73. Office of the Governor Gretchen Whitmer, 21st Century Infrastructure Commission.
74. Hawaii Institute for Public Affairs, Report on the State of Physical Infrastructure in Hawaii, July 2010, http://www.hipaonline.com/images/
uploads/InfrastructureReport-7-7-10.pdf.
75. Including highways, bridges, airports, riverports, electric utilities, broadband, dams, drinking water, wastewater, pipelines, public transit,
and railroads.
76. Kentucky Chamber of Commerce, A Citizen’s Guide to Kentucky Infrastructure, May 2017, https://issuu.com/kychamber/docs/the_citi-
zens_guide_to_kentucky_infr.
77. Association of Washington Business, the Association of Washington Cities, the Washington State Association of Counties, and the
Washington Public Ports Association, Building the Economy: Infrastructure Needs in Washington, March 2017, https://wacities.org/
news/2017/03/21/building-the-economy-infrastructure-needs-in-washington.
78. Volcker Alliance, Truth and Integrity in State Budgeting: What Is the Reality?.
79. Volcker Alliance, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis.
80. Federal Accounting Standards Advisory Board, Statement of Federal Financial Accounting Standards 42, April 2012, http://files.fasab.gov/
pdffiles/original_sffas_42.pdf, 5.
81. Federal Accounting Standards Advisory Board, Statement of Federal Financial Accounting Standards 42, 5–6.
82. Minnesota State Legislature, State of Minnesota Final Capital Budget Requests, January 2018, https://www.leg.state.mn.us/docs/2018/
mandated/180066/minnesota-state-final-cap.pdf.
83. The system includes buildings owned by twenty-four Arizona agencies, boards, and commissions. Included in the system are the Depart-
ment of Administration; the legislature; the Secretary of State; the departments of Agriculture, Child Safety, Corrections, Economic Security,
Environmental Quality, Forestry and Fire Management, Game and Fish, Health Services, Public Safety, and Veterans’ Services; the Lottery
Commission; and the Parks Board. As of June 2018, the system included 4,492 structures totaling 24 million square feet.
84. Arizona Department of Administration, ADOA Building System Capital Improvement Plan, 2018, https://gsd.az.gov/sites/default/files/
ADOA%20Capital%20Improvement%20Plan%20FY2018.pdf.
85. Arizona Department of Administration, ADOA Building System Capital Improvement Plan.
86. State of Illinois, Capital Budget Fiscal Year 2019, https://www2.illinois.gov/sites/budget/Documents/Budget%20Book/FY%202019/
Fiscal-Year-2019-Capital-Budget.pdf.
87. State of Nebraska, Department of Administrative Services, 309 Task Force for Building Renewal Handbook, March 14, 2014.
88. Texas Higher Education Coordinating Board, Capital Expenditures Report FY 2018 to FY 2022, January 2018, http://reportcenter.thecb.state.
tx.us/reports/data/capital-expenditure-plans-fy-2018-fy-2022/.
89. State of California, 2017 California Five-Year Infrastructure Plan.
90. US Census Bureau, Annual Survey of State Government Finances, https://www.census.gov/programs-surveys/state.html.
91. Department of the Treasury, Financial Report of the United States Government FY 2018, https://fiscal.treasury.gov/reports-statements/
financial-report/current-report.html.
92. Bureau of Economic Analysis, Investment in Government Fixed Assets.
93. Governmental Accounting Standards Board, Summary of Statement No. 34, Basic Financial Statements—and Management’s Discussion and
Analysis—for State and Local Governments, June 1999, https://www.gasb.org/st/summary/gstsm34.html.
94. In 2011, the Federal Accounting Standards Advisory Board issued Statement of Federal Financial Accounting Standards (SFFAS) No. 40
amending SFFAS 6 to improve reporting on deferred maintenance and repairs. In 2012, SFFAS No. 42 amended standards on deferred mainte-
nance and repairs measurement and reporting, https://fasab.gov/accounting-standards/document-by-chapter/.
95. Schar School of Policy and Government, Deferred Infrastructure Maintenance and GASB 34: Analysis of Selected State Comprehensive Annual
Financial Reports 2002-17, May 2018, https://schar.gmu.edu/sites/default/files/Deferred-Infrastucture-Maintenance-and-GASB-34.pdf.
96. Minnesota Department of Transportation, 2018 Pavement Condition Annual Report, March 2019, https://www.dot.state.mn.us/materials/
pvmtmgmtdocs/AnnualReport_2018.pdf.
AMERICA’S TRILLION-DOLLAR REPAIR BILL:
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97. Depreciation reported in the comprehensive annual financial report could be mathematical rather than physical estimates and may not be
comparable from state to state because of different accounting treatments. More research would be needed in this matter.
98. Information from a conversation between William Glasgall and Jeff DeWitt.
99. The members include four state senators and four State Representatives appointed by the speaker of each chamber of the TN General As-
sembly, four elected county officials, one official nominated by the County Officials Association of Tennessee, four elected city officials, one
development district nominee, two private citizens, and two executive branch officials.
