Capital Planning Overview: State and Local Government Summary

October 11, 2013

As part of its ongoing analysis of State and local government budgets, the Civic Federation also reviews proposed capital budgets along with any planning documents provided in support of infrastructure investments.

Although many governments approve new and reappropriated capital spending on an annual basis, few public entities in Illinois have based these expenditures on comprehensive capital improvement plans (CIPs). Unlike the operating budgets, which mostly require that all appropriated funds be spent in the same year they are approved, capital appropriations must be reauthorized over multiple years as planning, engineering and construction of capital investments commences.

Based on the best practices for capital budgeting recommended by the National Advisory Council on State and Local Budgeting Practice and the Government Finance Officers Association, a complete CIP includes the following elements:

  • A comprehensive inventory of all government-owned assets, with description of useful life and current condition;

  • A narrative description of the CIP process including how criteria for projects were determined and whether materials and meetings were made available to the public;

  • A five-year summary list of all projects and expenditures per project as well as funding sources per project;

  • Criteria for projects to earn funding in the capital budget including a description of an objective and needs-based prioritization process;

  • Publicly available list of project rankings based on the criteria and prioritization process;

  • Information about the impact of capital spending on the annual operating budget of each project;

  • Annual updates on actual costs and changes in scope as projects progress;

  • Brief narrative descriptions of individual projects, including the purpose, need, history, and current status of each project; and

  • An expected timeframe for completing each project and a plan for fulfilling overall capital priorities.

Once the CIP process is completed, the plan should be formally adopted by the governing body and integrated into its long-term financial plan. A well-organized and annually updated CIP helps ensure efficient and predictable execution of capital projects and helps efficiently allocate scarce resources. It is important that a capital budget prioritize and fund the most critical infrastructure needs before funding new facilities or initiatives.

According to the National State Budget Crisis Task Force Report on Illinois, over the next 30 years it will cost more than $300 billion to address the current infrastructure needs in the State of Illinois, including roads, bridges, aviation, government facilities, mass transit, water systems and public education facilities.

The following document provides an overview of the most recently approved capital budgets and status of the capital improvement plans (CIPs) currently undertaken by the State of Illinois and other local governments monitored by the Civic Federation. The information included in this brief is summarized from the most recent Civic Federation budget analyses available and includes data from varying fiscal years depending on each government’s budget cycle.

Capital Planning Overview: State and Local Summary