Innovative Financing Methods for Local Roads in Midwest and Mountain-Plains States

Abstract

Budget constraints for transportation projects is a growing problem at the federal, state, and local levels. At the same time, several changes have been affecting demands placed on the transportation systems, for example, population shifts, changes in travel patterns, and changes in economic activity. County and local governments are faced with increased demands on some portions of their road systems, and other portions have seen a drop in the level of use. As a result, these transportation agencies are facing tremendous challenges to maintain their extensive road networks and provide improvements when and where needed. Traditional funding sources are no longer adequate. There is a great need for counties to explore innovative methods to increase revenues or decrease costs or both. However, because of the nature of rural states (i.e., low population density and a limited tax base), methods used to supplement public funding of transportation projects in urban areas may not be applicable. Described are 4 innovative financing methods (e.g., rural improvement districts) and 14 cost reducing strategies (e.g., sharing equipment) used by local governments in eight rural states. County road officials identified these methods through a mail questionnaire and rated key criteria, such as ease of collection, to evaluate each method before implementing it. Rural improvement districts, special assessment districts, and the wheel tax were identified as innovative methods that are not widely used to raise revenues for a county road system. Advantages and disadvantages of each innovative financing method identified are discussed.