Government Fleets: Starved for Funding

Rod Sutton, Editorial Director | January 18, 2011

A glimmer of hope greeted states and municipalities late in 2010, as reports of tax-revenue increases began to surface. It’s not too soon, as public fleet budgets continue to starve. Fewer are cutting further into already decimated fleet-management budgets, but no rebound is in sight.

State fleet budget trends matched last year’s forecast, a net of -45 percent, with a net of -48 percent (7 percent increasing budgets minus 55 percent decreasing). They anticipate it to worsen, though, with no increases expected: 58 percent say budgets will decrease, 42 percent say it will stay the same for a net of -58 percent.

Local government fleets have a similar outlook, an- ticipating a 2011 net of -47 percent (11 percent increasing minus 58 percent decreasing) after a 2010 net of -60 per- cent (7 percent increasing minus 67 percent decreasing).

Fleet size trends remained down. State managers re- duced fleet size at a net of -24 percent (7 percent increasing minus 31 percent decreasing), and local fleets were down a net of -4 percent (15 percent increasing fleet size minue 19 percent decreasing), compared to a projected decline of -10 percent. This year, little change is forecast. States expect a decrease of -18 net (4 percent increasing minus 22 percent decreasing); locals expect a decrease of -6 net (10 percent increasing minus 16 percent decreasing).

Replacement rates ticked upward last year, and expectations are for continued improvement. State fleets replaced 6.9 percent of their machines in 2010, and they say they will continue this year, with a rate of 7.1 percent forecast. Local fleets dipped slightly in 2010, with a replacement rate of 4.7 percent, but managers project a rate of 5.2 percent in 2011.

Work volume, especially among local fleets with public-safety responsibilities, has not tracked with fleet budgets. State work volume decreased a net of -24 percent last year (10 percent increasing minus 34 percent decreas- ing), and is expected to stay flat in 2011 for 80 percent of fleets, although the net of -12 percent represents 4 percent increasing minus 16 percent decreasing work volume.

Fleet condition is reflecting the protracted strain on budgets. In 2008, the year marking the current decline, 47 percent of fleets were reported to be “excellent” or “very good.” It’s declined since, with only 34 percent of managers saying their fleets are in this condition. Nearly one in five fleets is labeled in “fair” or “poor” condition.

The nation’s fleets are starving, with the third consecutive decrease in funds. Of the nine regions, four are anticipating even worse years than 2010: Northern Plains, Southern Plains, Mid-South and Mountain. State fleets replaced at a higher rate than 2009, with locals down a bit. Each expect to replace machines at a higher rate in 2011.