LFC: Transportation Project Fund outperforms capital outlay in funding readiness but demand far exceeds supply

The Legislative Finance Committee received a new Legislative Finance Committee (LFC) brief examining state programs that fund local transportation projects and recommended greater consistency in program administration and consideration of tradeoffs between local match rates and fund utilization.

LFC analysts Cali Carswell and Joey Simon compared three funding paths: discretionary capital outlay appropriations, the Transportation Project Fund (TPF) and the Local Government Road Fund (LGRF). They found the TPF — which uses a structured planning, regional review and disbursement‑based model plus a 5% local match — generally produces awards that are closer to requested project amounts and reduces the risk that projects will go unfunded or unfinished. Average TPF awards from FY22–FY25 were about $1.2 million, roughly double the average capital outlay award for local transportation projects over the same period.

By contrast, capital outlay appropriations typically provided much smaller shares of requested amounts; across FY19–FY25 local transportation projects funded through discretionary capital outlay received about 28% of requested funding, the LFC found. Total qualified requests to TPF exceeded funds available; the brief estimates roughly $670,000,000 in TPF requests went unfunded in the analyzed cycles and flagged about $5.7 billion in unfunded transportation work listed across local government ICIPs (FY26–FY30).

The LFC also highlighted differences in local match rates (TPF 5% vs. many LGRF programs 25%), district administrative support and inconsistent processes across DOT districts that affect completion rates. Some districts that provided engineering and application support to local governments had higher on‑time completion rates. The brief flagged the municipal‑arterial subprogram within LGRF as underfunded while other formulaic LGRF subprograms had been fully funded in recent years.

Why it matters: the brief frames program design tradeoffs — lower match and active district support can increase project uptake and completion but reduce the total dollar leverage of local contributions. Committee members discussed options including combining pots, adjusting match rules, and improving regional engineering support to reduce shortfalls.

LFC analysts said agency and district practices could be refined to increase the odds that awarded dollars lead to completed projects and that legislative choices about match levels and program structure will change how much work can be accomplished per dollar.