Tennessee infrastructure costs to increase through 2026: report

Tennessee needs $1.1 billion more capital spending than previously estimated to keep pace with statewide infrastructure improvements through 2026, said a new state report published Thursday.

The Tennessee Advisory Commission on Intergovernmental Relations released its annual “Building Tennessee’s Tomorrow” survey that anticipates the state’s infrastructure needs on a five-year timetable by conducting yearly canvases with local officials taking inventory of needs spanning the state’s infrastructure networks.

“The estimated cost of all needed public infrastructure improvements in Tennessee increased for the seventh straight reporting period,” the commission’s report said. “State and local officials report an increase of approximately $1.1 billion in this year’s inventory which brings the estimated cost of public infrastructure improvements that need to be in some stage of development between July 1, 2021, and Jun. 30, 2026, to $62.9 billion.”

Capital improvements to transportation and utilities represented the largest cost rise, with an increase of $750 million from last year’s estimate bringing the total to $35.2 billion, or 56% of the total inventory taken. The largest new cost is a $400 million increase for renovations to several terminals at the Nashville International Airport.

Health, safety, and welfare spending saw the second largest increase with a $669 million change year-over-year. Most of that can be attributed to $373 million in fresh funding needed for four new projects addressing local water and sewage treatment shortcomings, TACIR said.

For another year, capital costs for education came in second in terms of total estimated spending.

TACIR reported that while overall education costs decreased by $379 million, driven by the completion of several large projects, spending on expanding and upgrading public schools would have to increase statewide. 

TACIR said local officials rated 10% of Tennessee’s public schools  in fair or poor condition and 42% in need of improvements to existing space.

The report largely blamed the rising price of materials and labor for a jump that brought the average costs to build a school in the state from $18 million in 2011 to $37 million today.

“School systems with growing enrollment face the challenge of providing enough space for students, while other school systems need to renovate or replace their schools because of age, condition, or issues concerning school restructuring or consolidation, all while costs increase,” TACIR said.

Over 70% of projects listed in the new report still have no clear funding source, meaning officials can’t even begin planning and development, leaving the state at risk of falling behind, TACIR said.

“Typically as a project evolves funding sources are identified and pursued,” TACIR said. “A lack of funding will prevent certain projects from ever being completed; in fact, most of the infrastructure needs reported in the July 2016 inventory that were not already fully funded were still needed five years later.”