The Delaware Department of Transportation (DelDOT) defines a Transportation Improvement District (TID) in its Standards and Regulations for Subdivision Streets and State Highway Access (Standards and Regulations)* as “a geographic area defined for the purpose of securing required improvements to transportation facilities in the area.” The purpose of a TID is to comprehensively coordinate land use and transportation within a specific geographical area.
Why are TIDs Needed?
Across the nation, state transportation departments face challenges in financing infrastructure improvements. Federal funding for transportation has eroded and traditional revenue sources have failed to keep pace with capital needs of transportation improvements. Delaware is no exception. Delaware’s Transportation Trust Fund (TTF), originally designated for construction costs, became financially constrained when DelDOT’s operating budget was transferred to the TTF. Pressures to the TTF include a combination of stagnant or flat revenue streams, residual debt, rising operating and construction costs, increased transit expenses, ongoing maintenance requirements, and steadily rising demand for new projects to keep pace with economic expansion and traffic growth. Delaware’s motor fuels tax, a primary source of TTF revenue, has not been increased since 1995. Unlike other states, however, Delaware plays a key role in funding transportation and in strategic management of the state’s transportation assets. DelDOT is responsible for maintaining nearly 90% of over 13,000 lane miles in Delaware, while the nationwide average for states is approximately 20%.
Many states are eyeing or have adopted alternative funding mechanisms, including TIDs, to supplement traditional transportation revenue streams. As a transportation-based impact fee, TIDs provide a way to equitably distribute the cost of development-related growth and infrastructure improvements to the private sector that benefits from the facilities, rather than costs being absorbed by the general public. TIDs are designed to achieve fair-share mitigation of transportation impacts. They provide a funding mechanism to secure required, long-term improvements on a “fair-share” basis from developers to fund transportation infrastructure and facilities within that area.
In addition, TIDs can be an effective funding mechanism to ease land development pressures and prepare targeted growth areas for market-ready (re)development. Economic development and growth can bring jobs and additional revenue to a community. However, unintended consequences of poorly planned growth include sprawl, traffic congestion, environmental problems, and increased costs for necessary public services and infrastructure. A TID provides a framework for managing transportation impacts of planned growth. In addition, a TID can attract investment to an area targeted for growth and (re)development by expediting preconstruction phases and leveraging state and federal funds for improvements to state-owned transportation assets.
*In 2015, DelDOT expects to adopt a comprehensive rewrite of the Standards and Regulations. It is expected that there will be minimal changes to TID regulations, but the document will be renamed to “Development Coordination Manual.”