Skip to content U.S. Department of Transportation/Federal Highway AdministrationU.S. Department of Transportation/Federal Highway Administration

Office of Planning, Environment, & Realty (HEP)
Planning · Environment · Real Estate

HEP Events Guidance Publications Glossary Awards Contacts

Study of the National Scope and Potential for Improvement of State Economic Development Highway Programs

Part 6. National Summary of State Funding

This Part draws from findings originally presented in the first phase report, Overview of State Economic Development Highway Programs, Task A-B Report, prepared by Economic Development Research Group for the Federal Highway Administration, US Department of Transportation, 2004.

6.1 States With Economic Development Highway Programs.

Of the 50 States, a total of 23 states have formal programs with dedicated state funding to promote industrial development through investment in local industrial access connector routes and/or inter-city connector routes. The total rises to 28 if states with set-aside discretionary funds for economic development highway projects, and states that co-fund economic development and industrial access roads through programs of the Appalachian Regional Commission are included. Another 11 states lack formal funding for economic development highways but do have formal policies recognizing economic development as a criteria for project selection in funding decisions. Table 6-1 summarizes the types of programs and policies occurring in each state.

Table 6-1 Summary of State Economic Development Highway Programs & Policies

State Econ. Devel. Highway Funding Programs Formal Econ. Devel. Highway Policies
State Corridors Local Roads ARC Programs
Alabama   X X  
Alaska       X
Arizona   X    
Arkansas        
California        (D)
Colorado        (D)
Connecticut         
Delaware        X
Florida  X      
Georgia  X   X  
Hawaii         
Idaho        X
Illinois    X    
Indiana        X
Iowa   X    
Kansas    X   X
Kentucky    (B) X  
Louisiana  X      
Maine         
Maryland      X X
Massachusetts    X    
Michigan   X    
Minnesota (A)      
Mississippi X   X  
Missouri   X    
Montana       X
Nebraska        X
Nevada        X
New Hampshire         
New Jersey       X
New Mexico        X
New York    X X  
North Carolina    X X  
North Dakota       X
Ohio      X X
Oklahoma    X    
Oregon   X    
Pennsylvania    (B) X  
Rhode Island        X
South Carolina   (B) X  
South Dakota   X    
Tennessee   X X  
Texas    (C)    
Utah        (D)
Vermont   (C)    
Virginia    X X  
Washington   X    
West Virginia   X X  
Wisconsin    X    
Wyoming   X    
  1. Funded for "interregional corridor system" to connect trade centers, but no special targeting to economically depressed locations.
  2. Annual set-aside funding exists to support road and highway projects based on economic development justifications, but no formal "program" is in place.
  3. No annual set-aside funding exists to support road and highway projects, however other informal alternatives are considered for economic development related transportation projects.
  4. Currently working on development of a formal policy for economic development road/highway funding

6.2 State Funding Levels for Economic Development Highways.

Of the 23 states that have their own formal economic development highway programs, annual state spending was over $600 million/year as of the last year measured (2002). That figure includes about $150 million for investment in local access roads and about $450 million for longer-distance economic development corridors.

Additionally, state co-funding of projects within (1) ARC's Appalachian Development Highway System (ADHS) and (2) ARC's Local Access Roads programs also contributed to economic development in that region. Portions of 13 states have roads and highways covered by these ARC programs. Two of those states have only the ARC programs to provide economic development highway assistance. Approximately $83 million/year of state and local funding is expended under these two regional ARC programs.

Three states have informal set-asides for discretionary economic development related projects. The other eight states have their own formal economic development highway programs to cover other types of projects and other parts of their land and highway systems not covered by the ARC programs. A total of $30 million/year of state funds is being set aside for discretionary economic development related transportation projects.

Table 6-2 summarizes the level of state funding for these various types of programs. It shows that the formal economic development road and highway programs in 28 states have accounted for approximately $712 million/year of statewide spending.

Table 6-2. Summary of State Economic Development Highway Programs

Group Economic Development Road Funding Programs States State Spending (A)
A State Road Funding with Specific Economic Development Requirements 10 $73,700,000
B State Road Funding for Targeted Areas 4 $21,000,000
C State Road Funding in Partnership with State Economic Development Agency 6 $55,600,000
D Planned Statewide Economic Development Highway Investment Programs 4 $449,600,000
  Subtotal 23(B) $599,900,000
E Multi-State ARC Program (state/local portion) 2 13 $82,200,000(C)
F State Annual Set-asides for Discretionary Economic Development Projects (D) 3 $30,000,000
  Grand Total (E) (F) 28(B) $712,100,000
  1. Annual spending; FY 2002 when available, otherwise FY 2001.
  2. Some states had more than one type of program, but each state is counted only once in the total.
  3. Includes state and local spending, but is predominantly state spending.
  4. All of these states also participate in ARC's programs.
  5. Not included are projects funded under mainline programs where economic development is only one of the reasons for doing the project, even if economic development is the primary reason
  6. A small amount of rail is included in the above total.

Notes on Program Categories Shown in Table 6-2

  1. State Road Programs with Specific Economic Development Requirements - These are state programs with earmarked funding for construction of local road projects that are needed so that target businesses can expand or locate in the state. Normally, local communities apply or nominate projects for this funding. The state DOT provides state funding contingent on a promise of matching private investment to create a specific number of new jobs or provide a specific dollar amount of private capital investment in new business facilities in the local area. Through this general mechanism, the state programs are intended to "leverage" new private sector business investment in business locations in the state.

  2. State Road Funding for Targeted Local Areas - These are state programs with earmarked funding for local transportation projects to serve new or expanded industrial parks or facilities in areas of economic need. They do not have a specific private sector job creation or private capital investment requirement as Category A (and hence there is generally no tracking of economic impacts). Instead, states require the local community to apply for the project funding and remain as a partner, through matching capital funding and/or responsibility for ongoing road maintenance.

  3. State Road Funding in Partnership with State Economic Development Office - These are state programs that provide grant funds to support local road projects that are supportive of the broader economic development efforts of local and/or state economic development agencies. Generally, the grants are made on the basis of local applications and an assessment by staff of the state-level economic development agency, concerning the existing local economic development need and the expected local economic development benefit. As a result, some of the states do track economic need and project impacts.

  4. Planned Economic Development Highway Corridors.These are state programs that focus not on local access roads and interchanges, but rather, on improving specific highway connections to promote the economic development of depressed areas. These programs specifically fund highway network improvements that are intended to provide better connections to economic markets for small and medium size communities whose economic development has been lagging the state due (at least in part) to their sub-standard accessibility to other parts of the state.

  5. Multi-State ARC Program.A total of 13 eastern States participate in the Appalachian Region Commission (ARC), which is a federal-state partnership. The ARC has two programs for the funding of road investment to foster economic development. One is the Appalachian Development Highway System, a system of planned economic development highways that is similar to category D, except that it is a multi-state program. The other is the Local Roads portion of the ARC's Public Works Program, which has requirements for private sector investment similar to category A except that it is a multi-state program. These programs are included in this report because the projects are selected and administered by the states, with partial funding also coming from the states. They differ from all of the preceding programs in that there is also a federal government portion of the total program funding.

Updated: 04/18/2012
HEP Home Planning Environment Real Estate
Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000