State DOT Budgets Grow by Double Digits Again

What’s happening: At the state level, Department of Transportation (DOT) budgets, most of which began July 1, grew to $213.7 billion in Fiscal Year (FY) 2024, up 11 percent over last year. Almost two-thirds of the new budget authority ($131.4 billion) is allocated for new highways and bridges.

Since FY 2023, when most state budgets first included increased federal funding from the Infrastructure Investment and Jobs Act (IIJA), highway capital allocations grew at a 13 percent annual rate more than double the preceding five-year average of six percent.

Why it matters: While not an exact indicator of actual annual spending, new budget authority is an important predictor of future market activity. In FY 2023, IIJA and one-time federal funding drove nearly 70 percent of net budget growth.

A key takeaway for FY 2024: most new budget growth comes from state funding efforts critical to maximizing the IIJA’s full impact. For example, the Florida and Tennessee legislatures supplemented DOT budgets with $4 billion and $3.3 billion, respectively, in general fund transfers to accelerate road projects. Minnesota’s legislature approved several new or increased sources of transportation funding that’s expected to raise an additional $1 billion.

What’s next: Budget data for all 50 states, including line-item detail, is available as part of ARTBA’s Transportation Construction Market Intelligence Service. Information will be updated as states enact legislation and release updated budgets.