Insights & Perspectives

Are states investing enough in roads and bridges to prevent them from falling apart and to avoid leaving future generations on the hook for a costly repair bill? Historically, a lack of consistent information on the condition and needs of this infrastructure in states has limited policymakers’ ability to answer this question, prevented governments from making fully informed investment decisions to address maintenance backlogs, and hindered public accountability and transparency about whether decisions are fiscally sustainable.

There’s a saying in the state budget world that there is no such thing as a “normal” budget cycle. Part of the budgeting process requires allowing for unforeseen events.

In their 2025 State of the State addresses, governors throughout the nation raised concerns about budgetary constraints, revenue shortfalls, and the difficult decisions they face in balancing their states’ budgets. Many states are grappling with declining revenues because of the expiration of federal pandemic aid; slowing economic growth; and rising costs in areas such as health care, education, and public safety.

It’s a truism that demography is destiny—and that includes the financial destiny of states. Although the population of the 50 states grew at its fastest rate in nearly a quarter of a century last year, increasing by almost 1% between mid-2023 and mid-2024, and nearly all states gained residents—driven mostly by domestic and international migration—these numbers don’t tell the full story.

The unprecedented revenue wave that states experienced from mid-2020 to the end of 2022—attributed to multiple factors, including the influx of federal funds to confront the COVID-19 pandemic—enabled policymakers to make massive deposits into their rainy day funds. Several states filled these reserve accounts to their legal limits.