Historically, states have funded transportation projects on paying for construction, maintenance and administration as money becomes available from user fees and federal grants. Now, existing revenues may not be enough. In many states, legislatures cannot solve transportation problems because they cannot afford to do so. Rapid growth has increased public demand for transportation services, strained existing infrastructure and drained financial resources. Some states are projecting transportation budget shortfalls in the tens of billions of dollars.
To pay for projects, states more frequently are turning to bonds and other forms of debt to meet transportation needs. Although states previously have used such mechanisms, the greater reliance on financing may generate political barriers to transportation programs. Lawmakers, reluctant to create more debt for the state, may be less willing to support finance mechanisms. At least eight states have constitutional provisions that prevent them from going into debt, making it extremely difficult to consider use of debt financing for transportation projects.