Lawmakers close NDOT budgets, approve bond sales as highway fund projects outpace revenues

The joint subcommittees on Ways and Means and Finance on April 30 approved the Nevada Department of Transportation's recommended highway construction base budgets and related actions, and authorized bond sales to help close a projected funding gap.

The subcommittees voted to recommend the governor's base highway construction appropriations of $578,600,000 for fiscal year 2026 and $578,700,000 for fiscal year 2027 and approved staff motions to move the NDOT closing package forward. Chair Taylor moved the motion and Assemblymember Brown May seconded; the motion carried.

Fiscal staff told lawmakers NDOT projects the unrestricted highway fund balance would be about $12.3 million below the recommended minimum level of $153.8 million at the end of the 2025–27 biennium under updated DMV revenue projections, and substantially lower if previously approved one‑time work programs and equipment purchases are included. NDOT and staff cited relatively flat highway revenues and construction inflation (reported as a 66.5% increase from 2020 to 2023) as the main drivers of the gap.

To help bridge the shortfall, the committee approved recommendations in the bond construction account to sell $85,000,000 in bonds pledged with State Highway Fund revenue and $75,000,000 in subordinate bonds pledged with Clark County fuel revenue indexing, with interest earnings of $1,600,000 budgeted each year of the biennium for construction projects, including the Henderson Interchange and U.S. 395 North Valleys projects. The subcommittees were told the subordinate bond structure was chosen to improve financial flexibility and that recent issuances showed minimal differences in interest cost between senior and subordinate bonds.

Committee materials also summarized major projects NDOT expects to work on during the biennium, and noted the governor recommended issuing up to $323.2 million in highway revenue bonds over the biennium to fund critical work. NDOT projections (including recent IFC work program approvals) show federal revenue averaging roughly $408 million per year over recent years; staff cautioned that relying on federal funds and bonding leaves the highway fund vulnerable if state revenues do not keep pace with construction inflation.

Other NDOT items in the closing package were approved by the subcommittees, including: authorizations for rest facility reconstruction funding at the Bawawi rest area (the governor's recommendation of $18.5 million in FY2027 was approved); continued funding for a statewide fueling‑system upgrade project ($7.9 million in FY2026 and $6.7 million in FY2027 were approved as read by staff); and information technology system enhancements ($11.7 million in FY2026 and $9.9 million in FY2027). Each of these votes passed with a voice vote recorded as “aye” and no recorded opposition.

The panel asked NDOT and fiscal staff to continue coordination with the Interim Finance Committee and the Transportation Board on work program timing and to provide technical adjustments as necessary. Several members noted concern that nonessential, state‑funded programs could face cuts or delays if the highway fund remains constrained.

Ending: The subcommittees closed NDOT's Transportation Administration and Bond Construction accounts with motions approving the governor's budget recommendations and the recommended bond sales; fiscal staff retained authority to make technical adjustments and to update projections as DMV and other actions change revenue outlooks.