Related Links: Urban Land Institute/Ernst & Young Report

As deficit worries press the U.S. federal government to cut its infrastructure funding, states and localities are filling some of the gap by getting more active in advancing public-works projects, says a new report on infrastructure trends.

The study, released on May 9 by the Urban Land Institute (ULI) and consulting firm Ernst & Young LLP, points to a variety of U.S. state and local infrastructure initiatives, such as a Los Angeles ballot measure that voters approved in 2008 that aims to provide $40 billion for transportation projects.

Maureen McAvey, ULI senior resident fellow, says, "The message is, we are seeing more and more dollars generated locally, and we're seeing every possible kind of new fees, new taxes … new toll lanes." McAvey adds, "We are looking across the board at new ways of getting money to support our infrastructure needs."

She says one reason for the state and local actions is a "gridlocked" federal funding situation, citing the long-delayed highway-transit reauthorization.

State and municipal budgets remain under pressure, however. States' fiscal health has improved but has yet to rebound to pre-recession levels. Still, their capital spending is substantial, totaling an estimated $86.1 billion in fiscal 2011. That's down marginally from 2010 but up 2% from 2009, says a December 2011 National Association of State Budget Officers report.

The ULI-Ernst & Young study also examines the picture in other countries. In the United Kingdom, it says, tight fiscal policy has forced a re-evaluation of infrastructure priorities. Other European countries' financial crises have pushed public-works plans to the back burner, the study adds.

China has had a massive infrastructure push. But the report says that even China "shows signs of needing to rein in its voracious appetite to transform in the face of possible fiscal fatigue."