KEY POINTS
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Tennessee’s public infrastructure backlog has surged to $82.7 billion, a $5 billion increase in one year that now exceeds the state’s entire annual operating budget.
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Over half of the total needs, $42.8 billion, stem from transportation and utility projects, driven by rising costs, new bridge requirements, and water infrastructure updates.
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With the majority of projects still unfunded, industry professionals can closely monitor which conceptual and design-stage projects secure state, local, or federal funding.
Tennessee is grappling with a public infrastructure backlog that swelled to $82.7 billion, marking a significant $5 billion, or 6.5% increase in just one year. The total, which covers identified needs from July 2024 through June 2029, now surpasses the state’s entire annual budget of roughly $64 billion.
The growing list of unfunded projects across transportation, education, utilities, and public facilities highlights a mounting challenge for state and local governments.
Public Infrastructure Report
These figures come from the Tennessee Advisory Commission on Intergovernmental Relations (TACIR), which compiles an annual Public Infrastructure Needs Inventory. Established in 1978, TACIR was created to address the need for a permanent body to study and act on intergovernmental issues, including organizational structures, powers, and relationships among federal, state, and local governments.
Its Public Infrastructure Needs Inventory serves as a planning tool for communities across the state. It catalogs projects costing $50,000 or more in conceptual, design, or construction phases, drawing data from local governments, state agencies, and higher education institutions.
While specific project details are not included, it does offer a broad perspective of potential future work.
Costs are mentioned early in the report, as Tennessee, like many other states, struggles with rising construction costs. The report states the “estimated cost per capita of all needed public infrastructure improvements in Tennessee increased for the 10th straight reporting period.”
Where the Infrastructure Needs Are Greatest
A look at the inventory reveals where the most significant investments are needed to meet public infrastructure needs.
Transportation & Utilities: $42.8 Billion
Making up 52% of all needs, this category remains the largest and has also increased for the tenth straight year. Transportation projects alone saw a $3.6 billion jump, driven by new projects and cost escalations on existing work.
Bridge needs were a significant factor, growing by $976 million. This increase is partly due to methodological changes in how bridges are rated and a clearer understanding of the damage caused by Hurricane Helene, the Public Infrastructure Needs Inventory stated.
Education: $19.9 Billion
Overall education needs climbed by $978 million, fueled by a $1.7 billion surge in post-secondary projects. Major investments are planned for technology centers and community college campuses.
In contrast, K-12 new construction needs actually declined by $711 million, largely because over $515 million worth of projects reached completion during the reporting period.
Health, Safety & Welfare: $12.7 Billion
This category saw modest growth but includes significant water and wastewater projects. Needs in water and wastewater infrastructure increased by $229 million, reflecting large-scale treatment and consent-decree projects in Tennessee counties like Coffee, Davidson, and Sevier.
The Widening Funding Gap
The Tennessee infrastructure report states that nearly two-thirds of the identified needs remain unfunded. At the time of the inventory, 65% of the required dollars lacked a secured financing source. Of the $58.9 billion in projects with known funding details, only $20.9 billion has been secured, leaving a gap of $31.5 billion.
While the share of funded projects has slightly increased from 34.6% in 2023 to 35.5% in 2024, the total dollar gap continues to grow.
What It Means for Construction
For contractors, subcontractors, and building product manufacturers, the Public Infrastructure Needs Inventory report signals a potential pipeline of Tennessee project opportunities valued at more than $80 billion. The most active nonresidential construction sectors are expected to be transportation, higher education, water/wastewater, and recreation.
With the majority of projects still unfunded, industry professionals can closely monitor which conceptual and design-stage projects secure state, local, or federal funding. Early engagement with TDOT, public university systems, and local utilities may improve positioning for upcoming requests for proposals.
The report also serves as a reminder of ongoing cost pressures. Inflation has impacted construction prices, a trend that attentive firms factor into their bidding and project management strategies.
As projects advance from planning to construction, this inventory remains a general guide to where the next wave of bid opportunities may emerge in Tennessee.
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