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Capital Expenditures are a unique challenge in state budgets because subdivisions of the state are rarely charged for using the state’s debt or equity for facilities, equipment, and other investment needs. In an effort to take advantage of the current resource allocation process, state subdivisions lobby for capital expenditure appropriations. The result is an inefficient distribution of resources for capital expenditures within state budgets where the most connected, best funded lobbying efforts frequently win. This paper proposes changing the capital resource allocation processes by attaching a cost to state appropriated capital expenditures in an effort to increase accountability and efficiency while improving the long-term credit strength of the state. 
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