Don’t Pass Deferred Maintenance Costs to the Next Generation!: The Effects of Politics on State Highway Maintenance Spending

Abstract

Routine maintenance spending for public infrastructure is critical for reducing life-cycle costs, and improving asset preservation and quality. Yet, states focus more on building new roads and expansion than maintaining existing assets’ conditions. Deferred maintenance costs are transferred to the future taxpayers, and they will eventually pay the expensive price. So far, there is little academic endeavor to examine the determinants of state and local routine maintenance spending. This study uses a panel data analysis covering 47 states from 1995 to 2009 to examine the effects of politics on state highway routine maintenance spending. The study finds that political incentive and conflict are key factors delaying state highway routine maintenance spending. The re-election-minded governors and legislatures tend to allocate less funding to maintenance to satisfy the current taxpayers. The study further finds that politically-divided states spend less on highway maintenance due to higher transaction costs in the policy-making process.