Giving Compass' Take:

• Governing magazine does a deep dive on the capital budgets of states across the U.S., which used to be dry, technical affairs but are now volatile territory in partisan warfare.

• What does that mean for nonprofits and other groups that rely on funding from the state government? How can they maneuver the politics that go into transportation, IT and other infrastructure projects?

• Here are ways we can recognize the role of infrastructure as an economic anchor.

While [state] operating budgets take care of daily expenses like personnel and office supplies, capital budgets pay for more permanent items. In essence, they are construction budgets with funding for anything from major projects like roads and bridges, on down to local parks and arts facilities. No two states have the same rules for their capital budgets. For instance, 19 states have a separate capital plan for transportation projects, according to a survey by the National Association of State Budget Officers (NASBO). Only 29 states include information technology, which has a much shorter shelf life than buildings and roads, in their capital plans. And roughly half of states mandate that assets their capital budget invests in must be of a physical nature.

For years, legislating and ironing out capital budgets was reserved for technical experts — like, say, those who know how to calculate the net present value of a project. But increasingly, they are being held captive in political battles. Growing fixed costs in the operating budget, such as retiree pensions, have made state annual spending plans less flexible. It’s hardly surprising, then, that the traditionally lower-profile capital budget is becoming a tempting place to achieve new policy goals. “It’s a way to shift the political battlefield to something that still matters a lot to people,” says Justin Marlowe, a public finance professor at the University of Washington and a Governing columnist, “but not in a way that results in as many angry calls from constituents.”

Read the full article about state capital budget spending by Liz Farmer at Governing magazine.