The construction of a new courthouse isn’t cheap. Depending on the size of the city or county, costs can range from tens of millions to hundreds of millions of dollars. Once the decision has been made to move forward and project costs are estimated, figuring out how to fund a courthouse capital project often becomes the most challenging step. With the sums involved, a courthouse is typically one of the largest financial outlays for a city or county.
Letting the Cost Tail Wag the Dog
The financial cost of any large capital project is a big deal, and courthouses are no exception. Taxpayers have every right to be concerned that costs could spiral out of control, leading to unexpected and painful tax increases. While transportation projects are often the worst offenders for overruns, courthouses carry their own risks—especially the risk of being built too small or not at all.
When courthouses are downsized to save money, they can be out of space within 10 years, forcing immediate renovations or the construction of an annex. In extreme cases, tenants are already short on space the day the building opens, defeating one of the primary purposes for building it.
We’ve seen many projects shrink in size during the cost-estimating phase. Sometimes this results in a courthouse that doesn’t meet the needs originally identified—particularly in terms of adequate, secure space. This compromises the court’s ability to serve the public effectively and safely for decades to come.
The Cost of Delays
Project delays or cancellations due to cost can be even worse. Every year a project is delayed adds more expense due to inflation.
We’ve seen projects planned multiple times over more than a decade, with each attempt scrapped because the price tag seemed too high at the time. This “kick the can” approach is especially risky when inflation is high or an event—like the COVID-19 pandemic—causes sudden cost spikes.
Penny Wise, Pound Foolish
Sometimes, the additional cost needed to “do it right” is relatively small. We’ve seen instances where an extra $5–$10 million would have provided exactly what the court needed for decades of optimal operation. But because the total exceeded the initial funding amount—by even a small percentage—the project was cut back or abandoned entirely.
Funding Options for Courthouse Projects
Let’s look at the most common ways cities and counties fund large capital projects. These options can be used alone or in combination to ensure your courthouse is built right the first time.
Taxes
The most direct way to fund a courthouse is to raise taxes—though it’s often the least popular.
Property tax increases can draw strong opposition from voters, and elected officials risk backlash at the polls. Income tax increases (where allowed) and sales tax increases are other options. These tax measures can be broad-based and permanent, or narrow and temporary.
For example, in Franklin County, IL, a 1% sales tax increase was approved in 2019 to fund a courthouse. It was set to last no longer than 15 years.
Bonds
Bonds are a common way to raise large sums upfront, repaid over time with interest.
- General Obligation (GO) Bonds are backed by the municipality’s credit and tax base, and usually require voter approval. They’re better suited for courthouses, which don’t generate significant revenue.
- Special Purpose Bonds are backed by revenue from the project—making them more suitable for toll roads and similar infrastructure.
The drawback to GO bonds is timing. Election schedules can delay urgent projects for years, and voter approval can be unpredictable.
A recent example: Madison County, MT voters approved $10 million in bonds to renovate and expand a historic courthouse. This added about $3 a year to property taxes per $100,000 of a home’s value.
Intergovernmental Budgets and Grants
Large municipalities may have capital project funds, but these are usually spread across multiple projects.
State and federal funds can supplement local budgets—sometimes through grants, sometimes through direct appropriations. While these amounts may not cover the full cost, they can bridge funding gaps.
Example: Morrow County, OR received an additional $5 million from the state for its courthouse project.
Public Private Partnerships
In a P3 arrangement, a private entity finances, builds, and often owns the building, while the government leases it for a long term. The stability of government lease payments over decades makes this model attractive to investors.
Example: In 2019, Howard County, MD broke ground on a 238,000-square-foot courthouse through a P3—the first in the county.
Main Benefits of the Right Funding
- Project Size Determined by Need, Not Arbitrary Cost Limits
Careful planning establishes legitimate space and staffing needs. Cutting essential space just to meet an artificial cost cap undermines the entire process. - A Long-Term Asset
Once built, a properly funded courthouse can serve optimally for 30 years or more, transforming a liability into a long-term asset. - Improved Safety and Security
Modern courthouses incorporate secure circulation, updated HVAC systems, and advanced safety features—reducing risks from security breaches and unhealthy buildings.
Final Thoughts
Costs will always be a factor in courthouse planning—especially in times of construction cost inflation. But when cost alone dictates scope, the result is often a compromised building that doesn’t serve the community’s needs.
Using the right mix of funding vehicles can prevent drastic cuts and keep the project on track, ensuring functionality, security, and long-term value.
Don’t let rigid funding constraints derail your once-in-a-generation opportunity to build a courthouse that meets your community’s needs now and for decades to come.
