6.3.1.1
Funding and Resource Allocation Trends
Historical trends related to the performance and condition of the highway system or the way investments have been made provide useful information for estimating future investment needs. These trends contain important insights into future needs and highlight the consequences associated with different tradeoffs in the various use of funds. This information can be useful in developing the life cycle management and financial planning portions of a TAMP.
The FHWA introduces the importance of historical trends for the following reasons:
- Illustrating whether past expenditures were adequate or whether they need to increase
- Helping an agency shift from a budgeting process based on incremental growth in expenditures to a performance-based approach addressing need
- Building agency confidence in forecasting future investment needs and conditions
Types of funding and resource allocation trends commonly include:
- Revenue trends over time by funding source
- Funding allocations by program category over time
- Expenditures by asset and work category over time
- Expenditures by system (e.g., Interstate, non-Interstate NHS and non-NHS) over time
- Expenditures by district or region over time
Revenue Trends by Funding Source
A summary of revenue trends by funding source provides an agency with a foundation for projecting the amount of revenue available in future years to address asset needs. These trends help an agency understand whether revenues are increasing or decreasing, identify which revenue sources have significant amounts of variability or more consistent growth rates over time, and illustrate whether the agency is relying on unsustainable funding. The information is a vital foundation for forecasting future revenue levels for planning purposes and helping formulate the assumptions upon which future revenue forecasts are based.
An example of a revenue trend table is provided in Table 6.3. The trends illustrate which revenue sources have increased or decreased over time and are thus important for making future revenue projections. The table also highlights how overall funding levels peaked between 2007 and 2009 largely due to state bonds in 2007, federal bonds in 2007 and 2009 and one-time ARRA (American Recovery and Reinvestment Act) funding in 2009. When these three funding sources ended, the available revenue reverted to 2005 levels. If the effects of inflation were taken into consideration, the agency could also show how the purchasing power of available funding has dropped in later years.
Table 6.3 Example of Historical Revenue Trends by Funding Source
| Sources | 2003 | 2005 | 2007 | 2009 | 2011 | 2013 | 2.15 |
|---|---|---|---|---|---|---|---|
| State Motor Fuel Tax | $658 | $651 | $644 | $637 | $630 | $624 | $617 |
| License, Vehicle Fees | $60 | $60 | $59 | $57 | $53 | $50 | $50 |
| Other | $21 | $21 | $23 | $22 | $21 | $22 | $22 |
| State Bonds | $20 | $76 | $296 | $92 | $0 | $0 | $0 |
| Federal-Aid | $725 | $789 | $825 | $857 | $900 | $888 | $877 |
| ARRA | $0 | $0 | $0 | $273 | $10 | $0 | $0 |
| Federal Bonds | $0 | $0 | $120 | $80 | $0 | $0 | $0 |
| Total Revenue | $1,484 | $1,597 | $1,967 | $2,018 | $1,614 | $1,584 | $1,566 |
Source: NHI 136002 – Financial Planning for Transportation Asset Management. Participant Workbook.
Funding Allocations by Program Category
Transportation agencies typically track funding allocations and expenditures by program category, but the number of categories and the category descriptions may vary depending on the agency. In general, funding allocations are tracked separately for the highest-value assets and the performance of these assets are incorporated into the agency’s strategic goals. This may lead agencies to track investments made in pavements, bridges, maintenance, safety and other assets. Within each of these categories, agencies can project the level of funding expected and predict the conditions and performance expected for it. Past trends in funding allocations by category can help indicate whether expected funding will be adequate to achieve the stated objectives.
Expenditures by Asset and Work Category
Information on past expenditures by asset and work type, along with resulting conditions, provides insight into the amount of funds needed for these activities in future years or helps set expectations for conditions achievable in future years. Where there are differences in planned expenditures and needed expenditures, the agency may report the existing financial gap.
Expenditures by System
Expenditures by system also provide valuable information, laying the groundwork for predicting how future funding levels will impact the condition of the Interstate, non-Interstate NHS and non-NHS assets. The information by system also conveys the agency’s past priorities for system investment, with higher levels of investment in high-volume facilities being common.
Expenditures by District or Region
Trends showing expenditures by district or region may be used to identify geographical areas requiring more focus on a particular type of work or experiencing an accelerated rate of asset deterioration. Information provided at this level can also be used to identify differences in production rates with the potential to serve as the basis for improving future practices. For example, a district with an unusually high production rate for repairing guardrail end treatments could share its experiences with other districts to improve the overall productivity rate at the statewide level.