Surface Transportation: Restructured Federal Approach Needed for 
More Focused, Performance-Based, and Sustainable Programs	 
(06-MAR-08, GAO-08-400).					 
                                                                 
Surface transportation programs need to be reexamined in the	 
context of the nation's current unsustainable fiscal path.	 
Surface transportation programs are particularly ready for review
as the Highway Trust Fund faces a fiscal imbalance at a time when
both congestion and travel demand are growing. As you requested, 
this report (1) provides an overview of the federal role in	 
surface transportation and the goals and structures of federal	 
programs, (2) summarizes GAO's conclusions about the structure	 
and performance of these programs, and (3) provides principles to
assess options for focusing future surface transportation	 
programs. GAO's study is based on prior GAO reports, stakeholder 
reports and interviews, Department of Transportation documents,  
and the views of transportation experts.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-400 					        
    ACCNO:   A81233						        
  TITLE:     Surface Transportation: Restructured Federal Approach    
Needed for More Focused, Performance-Based, and Sustainable	 
Programs							 
     DATE:   03/06/2008 
  SUBJECT:   Accountability					 
	     Federal funds					 
	     Federal/state relations				 
	     Fiscal policies					 
	     Funds management					 
	     Grant monitoring					 
	     Ground transportation				 
	     Highway safety					 
	     Internal controls					 
	     Performance measures				 
	     Policy evaluation					 
	     Program evaluation 				 
	     Program management 				 
	     Strategic planning 				 
	     Transportation					 
	     Transportation costs				 
	     Transportation industry				 
	     Transportation planning				 
	     Transportation policies				 
	     Transportation safety				 
	     Fiscal imbalance					 
	     Policies and procedures				 
	     Program goals or objectives			 
	     GAO High Risk Series				 
	     Highway Trust Fund 				 

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GAO-08-400

   

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material separately. 

Report to Congressional Requesters: 

United States Government Accountability Office:
GAO: 

March 2008: 

Surface Transportation: 

Restructured Federal Approach Needed for More Focused, Performance-
Based, and Sustainable Programs: 

GAO-08-400: 

GAO Highlights: 

Highlights of GAO-08-400, a report to congressional requesters. 

Why GAO Did This Study: 

Surface transportation programs need to be reexamined in the context of 
the nationâs current unsustainable fiscal path. Surface transportation 
programs are particularly ready for review as the Highway Trust Fund 
faces a fiscal imbalance at a time when both congestion and travel 
demand are growing. As you requested, this report (1) provides an 
overview of the federal role in surface transportation and the goals 
and structures of federal programs, (2) summarizes GAOâs conclusions 
about the structure and performance of these programs, and (3) provides 
principles to assess options for focusing future surface transportation 
programs. GAOâs study is based on prior GAO reports, stakeholder 
reports and interviews, Department of Transportation documents, and the 
views of transportation experts. 

What GAO Found: 

Since federal financing for the interstate system was established in 
1956, the federal role in surface transportation has expanded to 
include broader goals, more programs, and a variety of program 
structures. To incorporate additional transportation, environmental and 
societal goals, federal surface transportation programs have grown in 
number and complexity. While some of these goals have been incorporated 
as new grant programs in areas such as transit, highway safety, and 
motor carrier safety, others have been incorporated as additional 
procedural requirements for receiving federal aid. Broad program goals, 
eligibility requirements, and transfer provisions give states and local 
governments substantial discretion for allocating most highway 
infrastructure funds. For transit and safety programs, broad basic 
grant programs are augmented by programs that either require a 
competitive selection process or use financial incentives to directly 
target federal funds toward specific goals or safety activities. 

Many current programs are not effective at addressing key 
transportation challenges such as increasing congestion and freight 
demand. They generally do not meet these challenges because federal 
goals and roles are unclear, many programs lack links to needs or 
performance, and the programs often do not employ the best tools and 
approaches. The goals of current programs are numerous and sometimes 
conflicting. Furthermore, statesâ ability to transfer highway 
infrastructure funds among different programs is so flexible that some 
program distinctions have little meaning. Moreover, programs often do 
not employ the best tools and approaches; rigorous economic analysis is 
not a driving factor in most project selection decisions and tools to 
make better use of existing infrastructure have not been deployed to 
their full potential. Modally-stovepiped funding can impede efficient 
planning and project selection and, according to state officials, 
congressionally directed spending may limit the statesâ ability to 
implement projects and efficiently use transportation funds. 

A number of principles can help guide the assessment of options for 
transforming federal surface transportation programs. These principles 
include: (1) ensuring goals are well defined and focused on the federal 
interest, (2) ensuring the federal role in achieving each goal is 
clearly defined, (3) ensuring accountability for results by entities 
receiving federal funds, (4) employing the best tools and approaches to 
emphasize return on targeted federal investment, and (5) ensuring 
fiscal sustainability. With the sustainability and performance issues 
of current programs, it is an opportune time for Congress to more 
clearly define the federal role in transportation and improve progress 
toward specific, nationally-defined outcomes. Given the scope of needed 
transformation, it may be necessary to shift policies and programs 
incrementally or on a pilot basis to gain practical lessons for a 
coherent, sustainable, and effective national program and financing 
structure to best serve the nation for the 21st century. 

What GAO Recommends: 

Congress should consider reexamining and refocusing surface 
transportation programs so that they: (1) have goals with direct links 
to an identified federal interest and role, (2) make grantees more 
accountable through more performance-based links between funding and 
program outcomes, (3) use tools and approaches that emphasize the 
return on the federal investment, and (4) address the current imbalance 
between federal surface transportation revenues and spending. DOT 
generally agreed with the information in this report, and provided 
technical clarifications, which were incorporated as appropriate. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-400]. For more information, contact 
JayEtta Hecker at (202) 512-2834 or [email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

The Federal Role in Surface Transportation Has Expanded to Include 
Broader Goals, More Programs, and a Variety of Program Structures: 

Current Federal Surface Transportation Programs Do Not Effectively 
Address Identified Transportation Challenges: 

Principles Can Guide Assessment of Options to Restructure Federal 
Surface Transportation Programs: 

Conclusions: 

Matter for Congressional Consideration: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Overview of Federal Surface Transportation Programs: 

Appendix III: Implications of "Turning Back" Surface Transportation 
Programs and Revenues to the States: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Federal Roles and Goals: 

Performance and Accountability; Best Tools and Approaches: 

Fiscal Sustainability/Financing the Nation's Transportation System: 

Tables: 

Table 1: Potential Fiscal Impact of Turning Back Federal Transportation 
Programs to the States, Assuming the Devolution of Almost All Programs 
and Revenues: 

Figures: 

Figure 1: Budget Authority for Highway Trust Fund Expenditures by 
Program Area, 2007: 

Figure 2: Historical Expansion of Major Federally Funded Highway 
Infrastructure Grant Programs: 

Figure 3: Historical Expansion of Major Federally Funded Transit 
Infrastructure Programs: 

Figure 4: Historical Expansion of Major Federally Funded Highway Safety 
Programs: 

Figure 5: Historical Expansion of Major Federally Funded Motor Carrier 
Safety Programs: 

Figure 6: Broad Flexible Fund Transfer Provisions within Highway 
Programs: 

Abbreviations: 

AASHTO: American Association of State Highway and Transportation 
Officials: 

APTA: American Public Transit Association: 

CBO: Congressional Budget Office: 

CDLP: Commercial Driver's License Program: 

CMAQ: Congestion Mitigation & Air Quality Improvement Program: 

DOT: Department of Transportation: 

FHWA: Federal Highway Administration: 

FMCSA: Federal Motor Carrier Safety Administration: 

FRA: Federal Railroad Administration: 

FTA: Federal Transit Administration: 

GPRA: Government Performance and Results Act: 

HBRRP: Highway Bridge Replacement and Rehabilitation Program: 

HSIP: Highway Safety Improvement Program: 

HTF: Highway Trust Fund: 

ICC: Interstate Commerce Commission: 

IM: Interstate Maintenance Program: 

ISTEA: Intermodal Surface Transportation Efficiency Act: 

ITS: intelligent transportation systems: 

mph: miles per hour: 

MCSAP: Motor Carrier Safety Assistance Program: 

MPO: Metropolitan Planning Organizations: 

NEPA: National Environmental Policy Act of 1969: 

NHS: National Highway System: 

NHTSA: National Highway Traffic Safety Administration: 

RABA: revenue-aligned budget authority: 

RITA: Research and Innovative Technology Administration: 

SAFETEA-LU: Safe, Accountable, Flexible, Efficient Transportation 
Equity Act - A Legacy for Users: 

STP: Surface Transportation Program: 

UMTA: Urban Mass Transit Act of 1964: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

March 6, 2008: 

The Honorable James Inhofe: 
Ranking Member: 
Committee on Environment and Public Works: 
United States Senate: 

The Honorable Jim DeMint: 
United States Senate: 

Transportation programs, like all areas of federal involvement, need to 
be viewed in the context of the nation's fiscal position. Long-term 
fiscal simulations by GAO, the Congressional Budget Office (CBO), and 
others all show that despite a 3-year decline in the federal 
government's unified budget deficit, we still face large and growing 
structural deficits driven by rising health care costs and known 
demographic trends. As the baby boom generation retires, entitlement 
programs will grow and require increasing shares of federal spending. 
Absent significant changes to tax and spending programs and policies, 
we face a future of unsustainable deficits and debt that threaten to 
cripple our economy and quality of life.[Footnote 1] Although the long-
term outlook is driven by health care costs, demographics and revenues, 
other areas of government should also be re-examined. This involves a 
fundamental reexamination of government programs and commitments by 
reviewing their results and testing their continued relevance and 
relative priority for the 21st century. This reexamination offers an 
opportunity to address emerging needs by eliminating outdated or 
ineffective programs, more sharply defining the federal role in 
relation to state and local roles, and modernizing those programs and 
policies that remain relevant. 

The nation's surface transportation programs are particularly ready for 
reexamination. For example, the Highway Trust Fund (HTF) was created in 
1956 to finance the construction of the Interstate Highway System 
because of the national interest in interstate mobility. That system is 
now complete. However, the federal highway program's financing and 
delivery mechanisms have not substantially changed and their continued 
relevance in the 21st century is unclear. In addition, without 
significant changes in funding mechanisms or revenue sources, or 
reductions in planned spending, the HTF is projected to begin incurring 
significant deficits in the years ahead. As a result, in 2007, we added 
financing the nation's federal transportation infrastructure to GAO's 
High Risk List. 

Given the need to reexamine all government programs and the importance 
of a sustainable federal role in the nation's surface transportation 
system, you asked us to examine the federal approach to surface 
transportation programs--in particular, those financed by the HTF. This 
report (1) provides an historical overview of the federal role in 
surface transportation and the goals and structures of federal surface 
transportation programs funded by the HTF, (2) summarizes conclusions 
from our prior work on the structure and performance of these and other 
federal surface transportation programs, and (3) identifies principles 
to help assess options for focusing the future federal role and 
structure of federal surface transportation programs. 

To provide an historical overview of the federal role in surface 
transportation and the goals and structures of federal surface 
transportation programs funded by the HTF, we drew information from 
statutes, regulations, budget documents, agency reports, and literature 
on transportation policy by outside experts. We also interviewed 
officials in the Office of the Secretary of Transportation and in the 
relevant Department of Transportation (DOT) modal administrations. To 
summarize conclusions from our prior work on the structure and 
performance of federal surface transportation programs, we synthesized 
relevant GAO reports on specific transportation programs, and reports 
that looked at broader issues of performance measurement, oversight, 
grant design, and other related issues. We also reviewed reports and 
other materials from stakeholder groups and other organizations and 
sought the views of transportation experts, including those who 
participated in a forum on transportation challenges convened by the 
Comptroller General in June 2007. To identify principles to help assess 
options for focusing the future federal role and the structure of 
surface transportation programs, we examined principles found in 
relevant GAO reports on specific transportation programs, and reports 
that looked at broader issues such as performance measurement, 
oversight, grant design, and other related issues. We performed our 
work between April 2007 and February 2008 in accordance with generally 
accepted government auditing standards. A more extensive discussion of 
our scope and methodology is in appendix I. 

Results in Brief: 

Since the Federal-Aid Highway Act of 1956 created the modern federal 
highway program, the federal role in surface transportation has 
expanded to include broader goals, more programs, and a variety of 
program structures. Although most surface transportation funds remain 
dedicated to highway infrastructure, federal surface transportation 
programs have grown in number and complexity, incorporating additional 
transportation, environmental, and societal goals. While some of these 
goals have been incorporated as new grant programs in areas such as 
transit, highway safety, and motor carrier safety, others have been 
incorporated as additional procedural requirements for receiving 
federal aid, such as environmental review and transportation planning 
requirements. This program expansion has also created a variety of 
grant structures and federal approaches for establishing priorities and 
distributing federal funds. Most highway infrastructure funds continue 
to be distributed to states in accordance with individual grant program 
formulas and eligibility requirements. However, broad program goals, 
eligibility requirements, and authority to transfer funds between 
programs give state and local governments substantial discretion for 
allocating highway infrastructure funds according to their priorities. 
Although some transit formula grant programs also give grantees 
considerable discretion to allocate funds, a portion of transit 
assistance requires grantees to compete for funding based on specific 
criteria and goals. Similarly, basic safety formula grant programs are 
augmented by smaller programs that directly target federal funds to 
specific goals and actions using financial incentives and penalty 
provisions. Federal law has also increasingly allocated infrastructure 
funds through provisions directing spending to specific areas or 
projects. For example, according to the Transportation Research Board, 
the most recent surface transportation reauthorization legislation, 
passed in 2005--the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act - a Legacy for Users (SAFETEA-LU)--contained 
over 5,000 dedicated spending provisions. Additionally, state and local 
government responsibility for oversight has recently increased, as 
state and local governments have assumed oversight responsibility for 
the majority of highway infrastructure spending, and federal safety 
programs have shifted from direct program oversight to a more 
performance-based approach. 

Our summary of our prior conclusions about federal surface 
transportation programs found that many of these programs are not 
effective at addressing key transportation challenges such as 
increasing congestion and growing freight demand because federal goals 
and roles are unclear, many programs lack links to needs or 
performance, and the programs in some areas do not employ the best 
tools and approaches to ensure effective investment decisions. The 
goals of federal surface transportation programs are numerous and 
sometimes conflicting, which contributes to a corresponding lack of 
clarity in the federal role. For example, despite statutes and 
regulations that call for an intermodal approach that creates 
connections across modes, there is only one federal program 
specifically designed for intermodal infrastructure. Most highway funds 
are distributed through formulas that have only an indirect 
relationship to needs and no relationship to performance or outcomes. 
The largest safety and transit grants are also distributed through 
formulas without regard to performance. However safety grants more 
likely than highway grants to be focused on goals rather than specific 
transportation systems, and several highway safety and motor carrier 
safety grants allocate incentive funds on the basis of performance or 
states undertaking specific safety-related activities. Since the 
majority of surface transportation funds are distributed without regard 
to performance, it is difficult to assess the impact of recent record 
levels of federal highway expenditures, though congestion has increased 
in the same period. Mechanisms to link programs to goals also appear 
insufficient, because particularly in the Federal-Aid Highway Program, 
federal rules for transferring funds between different highway 
infrastructure programs are so flexible that the distinctions between 
individual programs have little meaning. Furthermore, surface 
transportation programs often do not employ the best tools and 
approaches to ensure effective investment decisions. Rigorous economic 
analysis is not a driving factor in most investment decisions by state 
and local governments--in a survey of state DOTs, 34 cited political 
support and public opinion as very important factors, whereas 8 said 
the same of the ratio of benefits to costs. The federal government also 
does not possess adequate data to assess outcomes or implement 
performance measures; for example, DOT does not have a central source 
of data on congestion, even though it has identified congestion as a 
top priority. While some funds can be transferred between highway and 
transit programs, modally-stovepiped funding nevertheless impedes 
efficient planning and project selection. State DOT officials have 
noted that congressionally directed spending may limit states' ability 
to implement projects and efficiently use transportation funds. 
Additionally, tools to make better use of existing infrastructure, such 
as intelligent transportation systems and congestion pricing, have not 
been deployed to their full potential. Finally, increases in federal 
spending for transportation appear to reduce state spending for the 
same purpose, reducing the return on the federal investment--research 
estimates that 50 percent of each additional federal grant dollar for 
the highway program displaces funds that states would otherwise have 
spent on highways. 

Through our prior work on reexamining the base of government, our 
analysis of existing programs and other prior reports, we identified a 
number of principles that could help drive reexamination of federal 
surface transportation programs and an assessment of options for 
restructuring the federal surface transportation program. These 
principles include: (1) ensuring goals are well defined and focused on 
the federal interest, (2) ensuring the federal role in achieving each 
goal is clearly defined, (3) ensuring accountability for results by 
entities receiving federal funds, (4) employing the best tools and 
approaches to emphasize return on targeted federal investment, and (5) 
ensuring fiscal sustainability. The first step involves identifying 
issues in which there is a strong federal interest and determining what 
the federal goals should be related to those issues. Once the federal 
interest and goals have been identified, the federal role in relation 
to the states and local governments can be clearly defined. For issues 
in which there is a strong federal interest, ongoing federal financial 
support and direct federal involvement could help meet federal goals. 
But for issues in which there is little or no federal interest, 
programs and activities may best be devolved to other levels of 
government. The next step is to ensure accountability for results by 
incorporating performance objectives, grant incentive or penalty 
provisions, or more use of competitive selection procedures in awarding 
grants. Then, in assessing investment decisions, more emphasis could be 
placed on return on investment and benefit-cost analysis as criteria 
for comparing alternatives and directing funds. The relationship of 
investments to national goals also should be considered along with 
locally-based calculations of benefit and cost. Efficient investment 
decisions can be facilitated by employing the best tools and 
approaches, using mechanisms such as congestion pricing to make more 
efficient use of existing infrastructure, applying updated grant design 
features such as varying matching requirements and maintenance of 
effort provisions, supporting improved data collection, and promoting 
intermodal approaches. Finally, bringing revenues and expenditures into 
balance would ensure the fiscal sustainability of surface 
transportation programs. The current challenge for Congress is to 
structure a program responsive to these 21st century principles. With 
the clear unsustainability and performance issues of the current 
program, it is an opportune time for Congress to better define the 
federal role in transportation and improve the progress toward 
specific, nationally-defined outcomes. Reforming the current approach 
to transportation problems will take time and it may be necessary to 
shift policies and programs incrementally or on a pilot basis, but a 
transformation of policies and programs is needed to effectively 
address the nation's transportation needs and priorities. 

To improve the effectiveness of the federal investment in surface 
transportation, meet the nation's transportation needs, and ensure a 
sustainable commitment to transportation infrastructure, Congress 
should consider reexamining and refocusing surface transportation 
programs to be responsive to these principles so that they: (1) have 
well-defined goals with direct links to an identified federal interest 
and federal role, (2) institute processes to make grantees more 
accountable by establishing more performance-based links between 
funding and program outcomes, (3) institute tools and approaches that 
emphasize the return on the federal investment, and (4) address the 
current imbalance between federal surface transportation revenues and 
spending. 

We provided copies of a draft of this report to DOT for its review and 
comment. In an e-mail on February 22, 2008, DOT noted that surface 
transportation programs could benefit from restructured approaches that 
apply data driven performance oriented criteria to enable the nation to 
better focus its resources on key surface transportation issues. DOT 
officials generally agreed with the information in this report, and 
they provided technical clarifications which we incorporated, as 
appropriate. 

Background: 

Since 1796, the federal government has had a role in developing and 
funding surface transportation infrastructure such as roads and canals 
to promote the nation's economic vitality and improve the quality of 
life for its citizens. In 1956, Congress substantially broadened the 
federal role in road construction by establishing the Highway Trust 
Fund, a dedicated source of federal revenue, to finance a national 
network of standardized highways, known as the Interstate Highway 
System. This system, financed and built in partnership with state and 
local government over 50 years, has become central to transportation in 
the United States. 

Currently most federal surface transportation programs funded by the 
HTF span four major areas of federal investment: highway 
infrastructure, transit infrastructure and operations, highway safety, 
and motor carrier safety. Federal surface transportation funds are 
distributed either by a formula or on a discretionary basis through 
several individual grant programs.[Footnote 2] These grant programs are 
organized by mode and administered by four of DOT's operating 
administrations--the Federal Highway Administration (FHWA), the 
Federal Transit Administration (FTA), the National Highway Traffic 
Safety Administration (NHTSA), and the Federal Motor Carrier Safety 
Administration (FMCSA).[Footnote 3] The modal administrations work in 
partnership with the states and other grant recipients to administer 
federal surface transportation programs. For example the federal 
government currently provides financial assistance, policy direction, 
technical expertise and some oversight, while state and local 
governments are ultimately responsible for executing transportation 
programs by matching and distributing federal funds and by planning, 
selecting and supervising infrastructure projects and safety programs 
while complying with federal requirements. Appendix II provides further 
information on the current and historical operation of these federal 
surface transportation programs. Additionally, the federal government 
provides financial assistance for other surface transportation programs 
such as intercity passenger rail, which has received over $30 billion 
of federal support since its inception in 1971. However this program is 
financed and operated separately from other surface transportation 
programs and an in-depth discussion of federal intercity passenger rail 
assistance is not included in this report.[Footnote 4] 

Increases over the past 10 years in transportation spending at all 
levels of government have improved the physical condition of highways 
and transit facilities to some extent, but congestion has worsened and 
safety gains have leveled off. According to the most recent DOT data, 
between 1997 and 2004 total highway spending per year by federal, 
state, and local governments grew by 22.7 percent in constant dollars. 
During this time, DOT reported some overall improvements in physical 
condition for road systems and bridges. For example, the percentage of 
vehicle miles traveled per year on "good" pavement conditions increased 
from 39.4 percent to 44.2 percent and the percentage of deficient 
bridges fell from 29.6 percent in 1998 to 26.7 percent per year in 
2004. At the same time, incidents such as the Minneapolis bridge 
collapse in August 2007 indicate that significant challenges remain. 
Furthermore, despite increases in investment levels and some 
improvements in physical condition, operational performance has 
declined. For example, during the same period the average daily 
duration of travel in congested conditions increased from 6.2 hours to 
6.6 hours, and the extent and severity of congestion across urbanized 
areas also grew.[Footnote 5] Transportation safety has improved 
considerably over the past 40 years, and although motor vehicle and 
large truck fatality rates have generally continued to fall modestly 
since the mid-1990s, the improvements yielding the greatest safety 
benefits (e.g., vehicle crashworthiness requirements and increases in 
safety belt use) have already occurred, making future progress more 
difficult. 

Furthermore, demand on transportation facilities nationwide has grown 
considerably since our transportation systems were built and is 
projected to increase in the coming decades as population, income 
levels, and economic activity continue to rise. According to the 
Transportation Research Board, an expected population growth of 100 
million people could double the demand for passenger travel by 
2040.[Footnote 6] Similarly, freight traffic is expected to climb by 92 
percent from 2002 to 2035. These trends have the potential to 
substantially deepen the strain on the existing system, increasing 
congestion, and decreasing the reliability of our transportation 
network--with potentially severe consequences ranging from the economic 
impact of wasted time and fuel to the environmental and health concerns 
associated with increased fuel emissions. 

Moreover, at the current fuel tax rate, revenues to support the HTF may 
not be sufficient to sustain it. Currently, trust fund receipts are 
growing and will continue to grow with increased traffic. However, the 
purchasing power of the dollar has declined with inflation, and the 
federal motor fuel tax rate has not increased since 1993. In addition, 
more fuel-efficient and alternative-fuel vehicles are using less 
taxable motor fuel per mile driven. Recent legislation has authorized 
spending that is expected to outstrip the growth in trust fund 
receipts. According to a recent estimate from CBO, the remaining 
balance in the Highway Account of the Highway Trust Fund[Footnote 7] 
will be exhausted in 2009, and in fiscal year 2009 projected highway 
spending will exceed revenue by $4 to $5 billion.[Footnote 8] 

In January 2008 the National Surface Transportation Policy and Revenue 
Study Commission released a report with several recommendations to 
place the trust fund on a sustainable path, as well as reform the 
current structure of the nation's surface transportation 
programs.[Footnote 9] The recommendations include significantly 
increasing the level of investment by all levels of the government in 
surface transportation, consolidating and reorganizing the current 
programs, speeding project delivery, and making the current program 
more performance-and outcome-based and mode-neutral, among other 
things. To finance the additional investment, the Commission 
recommended raising the current federal fuel tax rate by 25 to 40 cents 
per gallon on an incremental basis equivalent to an increase of 5 to 8 
cents per gallon per year for 5 years. It also said that states would 
have to raise revenue from a combination of higher fuel taxes and other 
sources. In addition to raising the fuel tax, the Commission 
recommended a number of other user-based fees such as tolling, 
congestion pricing, and freight fees to provide additional revenue for 
transportation improvements. 

Three members of the Commission disagreed with some of the findings and 
recommendations of the Commission report. For example, the minority 
view disagreed with the Commission's recommendations on expanding the 
federal role and increasing the federal fuel tax, among others. Rather, 
the minority view proposed sustaining fuel taxes at the current levels, 
refocusing federal investment on two areas of national interest, and 
providing the states with greater regulatory flexibility, incentives, 
and the analytical tools to allow adoption of market-based reforms on 
their highway systems. We have ongoing work assessing the Commission's 
proposal and other reauthorization proposals and will be issuing a 
report in 2008. 

The Federal Role in Surface Transportation Has Expanded to Include 
Broader Goals, More Programs, and a Variety of Program Structures: 

Although most surface transportation funds are still directed to 
highway infrastructure, the federal role in surface transportation has 
broadened over the past 50 years to incorporate goals beyond highway 
construction, and federal surface transportation programs have grown in 
number and complexity. The resulting conglomeration of program 
structures reflects a variety of federal approaches for setting 
priorities, distributing federal funds, and sharing oversight 
responsibility with state and local partners for surface transportation 
programs. 

Federal Goals Have Broadened, and Programs Have Grown in Number and 
Complexity: 

The HTF was established in 1956 to provide federal funding for 
Interstate highway construction and other infrastructure improvements 
based on the "user-pay principle"--that is, users of transportation 
systems should pay for the systems' construction through highway user 
fees such as taxes on motor fuels, tires, and trucks. However, since 
1956, the federal role in surface transportation has expanded beyond 
funding Interstate construction and highway infrastructure to include 
grant programs that address other transportation, societal, and 
environmental goals. For example, although most HTF expenditures 
continue to support highway infrastructure improvements (see fig. 1), 
Congress established new federal grants for highway safety and transit 
during the 1960s and added a motor carrier safety grant program during 
the 1980s.[Footnote 10] 

Figure 1: Budget Authority for Highway Trust Fund Expenditures by 
Program Area, 2007: 

[See PDF for image] 

This figure is a pie-chart, depicting the following information: 

Budget Authority for Highway Trust Fund Expenditures by 
Program Area, 2007: 
Highway infrastructure programs[A]: 81%; 
Transit: 15%; 
Highway safety: 2%; 
Motor carrier safety: 1%; 
Highway infrastructure program administration: 1%. 

Source: GAO analysis of CBO and DOT data. 

Note: Program administration costs are included in the totals for NHTSA 
and FMCSA. FTA program administration costs are funded by general 
funds. 

[A] Highway infrastructure programs include highway infrastructure-
related safety expenditures. 

[End of figure] 

Furthermore, Congress has since expanded the initial basic grant 
programs in each of these areas to incorporate a variety of different 
goals. For example, the highway program has expanded to include 
additional programs to fund air quality improvements, Interstate 
maintenance, and safety-related construction improvements (see fig. 2). 

Figure 2: Historical Expansion of Major Federally Funded Highway 
Infrastructure Grant Programs: 

[See PDF for image] 

This figure is a time line of the Historical Expansion of Major 
Federally Funded Highway Infrastructure Grant Programs. The following 
information is depicted: 

Highway Infrastructure grant: Federal-aid Primary Program (1952-
1991)[A]; 
Type of grant: Formula grant; 
Time frame: 1952-1991. 

Highway Infrastructure grant: National System of Interstate Highways 
(1944- )[B]; 
Type of grant: Formula grant; 
Time frame: 1944- ongoing. 

Highway Infrastructure grant: National Highway System (1991-); 
Type of grant: Formula grant; 
Time frame: 1991-ongoing. 

Highway Infrastructure grant: Federal-aid Secondary Program (1952-
1991)[C]; 
Type of grant: Formula grant; 
Time frame: 1952-1991. 

Highway Infrastructure grant: Urban Extensions (1944-1976); 
Type of grant: Formula grant; 
Time frame: 1944-1976. 

Highway Infrastructure grant: Federal-aid Urban System (1970-1991); 
Type of grant: Formula grant; 
Time frame: 1970-1991. 

Highway Infrastructure grant: Surface Transportation Program (1991- ); 
Type of grant: Formula grant; 
Time frame: 1991-ongoing. 

Highway Infrastructure grant: Emergency Fund (Emergency Relief Program) 
(1956- ); 
Type of grant: Discretionary grant; 
Time frame: 1956-ongoing. 

Highway Infrastructure grant: Highway Bridge Replacement and 
Rehabilitation Program (1970 - ); 
Type of grant: Formula grant; 
Time frame: 1970-ongoing. 

Highway Infrastructure grant: Interstate System Resurfacing (Interstate 
3R) (1976-1981); 
Type of grant: Formula grant; 
Time frame: 1976-1981. 

Highway Infrastructure grant: Interstate 4R (1981-1991); 
Type of grant: Formula grant; 
Time frame: 1981-1991. 

Highway Infrastructure grant: Interstate Maintenance Program (1991- ); 
Type of grant: Formula grant; 
Time frame: 1991-ongoing. 

Highway Infrastructure grant: Federal Lands Highways Program (1983- ); 
Type of grant: Discretionary grant; 
Time frame: 1983-ongoing. 

Highway Infrastructure grant: Minimum Allocation (1983-1998); 
Type of grant: Formula grant; 
Time frame: 1983-1998. 

Highway Infrastructure grant: Minimum Guarantee (1998-2005); 
Type of grant: Formula grant; 
Time frame: 1998-2005. 

Highway Infrastructure grant: Equity Bonus Program (2005- ); 
Type of grant: Formula grant; 
Time frame: 2005-ongoing. 

Highway Infrastructure grant: Congestion Mitigation & Air Quality 
Improvement Program (1991- ); 
Type of grant: Formula grant; 
Time frame: 1991-ongoing. 

Highway Infrastructure grant: Highway Safety Improvement Program (2005-
[D]; 
Type of grant: Formula grant; 
Time frame: 2005-ongoing. 

Source: GAO analysis of DOT data. 

Notes: This chart includes only a portion of federal highway 
infrastructure grants. As part of its report, the National Surface 
Transportation Policy and Revenue Study Commission identified 62 
highway programs. Unless otherwise noted, start dates in the chart 
indicate program authorization dates. Programs that are related in 
purpose to grant programs in successive reauthorization legislation are 
included in the same row. 

[A] Federal funding for primary roads was first authorized in 1921, but 
the separate grant program was not established until 1952. 

[B] Federal funding for the Interstate Highway System was first 
authorized in 1944, but the separate grant program was not established 
until 1952. Significant funding was not provided until 1956. 

[C] Federal funding for secondary roads was first authorized in 1921, 
but the separate grant program was not established until 1952. 

[D] Prior to the establishment of the Highway Safety Improvement 
Program, dedicated funds for highway infrastructure-related safety 
expenditures were available as a set-aside under the Surface 
Transportation Program. 

[End of figure] 

Federal transit assistance expanded from a single grant program that 
funded capital projects to multiple programs that provide general 
capital and operating assistance for urban and rural areas,[Footnote 
11] as well as numerous specialized grants with goals ranging from 
supporting transit service for the elderly, persons with disabilities, 
and low-income workers to promoting the use of alternative fuels (see 
fig. 3). 

Figure 3: Historical Expansion of Major Federally Funded Transit 
Infrastructure Programs: 

[See PDF for image] 

This figure is a time line of the Historical Expansion of Major 
Federally Funded Transit Infrastructure Programs. The following 
information is depicted: 

Transit infrastructure grant: Discretionary Grant or Loan Program (1964-
1987); 
Type of grant: Discretionary grant; 
Time frame: 1964-1987. 

Transit infrastructure grant: New Starts (1987- ); 
Type of grant: Discretionary grant; 
Time frame: 1987-ongoing. 

Transit infrastructure grant: Bus Grants (1987 - ); 
Type of grant: Discretionary grant; 
Time frame: 1987-ongoing. 

Transit infrastructure grant: Fixed Guideway Modernization (1987- )[A]; 
Type of grant: Discretionary grant (1987-1992); Formula grant (1993-); 
Time frame: 2987-ongoing. 

Transit infrastructure grant: Small Starts (2005- ); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Transit infrastructure grant: Alternatives Analysis Program (2005 -); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Transit infrastructure grant: Research, Development, and Demonstration 
Projects Program (1964- ); 
Type of grant: Discretionary grant; 
Time frame: 1964-ongoing. 

Transit infrastructure grant: Grants for Technical Studies (Planning) 
Program (1966- )[B]; 
Type of grant: Discretionary grant (1966-1992); Formula grant (1993-); 
Time frame: 1966-ongoing. 

Transit infrastructure grant: Planning and Research Program (1991-
2005)[C]; 
Type of grant: Discretionary grant; 
Time frame: 1991-2005. 

Transit infrastructure grant: Grants and Loans for Special Needs for 
Elderly Individuals and Individuals with Disabilities (1970 -); 
Type of grant: Formula grant; 
Time frame: 1970-ongoing. 

Transit infrastructure grant: Urban Mass Transit Program (1974-1982); 
Type of grant: Formula grant; 
Time frame: 1974-1982. 

Transit infrastructure grant: Block Grants (Urbanized Area Formula 
Grants) Program (1983 - ); 
Type of grant: Formula grant; 
Time frame: 1983-ongoing. 

Transit infrastructure grant: Formula Grant Program for Areas Other 
than Urbanized Areas (1978-); 
Type of grant: Formula grant; 
Time frame: 1978-ongoing. 

Transit infrastructure grant: Over the Road Bus Accessibility Program 
(1998- )[D]; 
Type of grant: Discretionary grant; 
Time frame: 1998-ongoing. 

Transit infrastructure grant: Job Access and Reverse Commute Program 
(1998- )[E]; 
Type of grant: Discretionary grant (1998-2005); Formula grant (2006-); 
Time frame: 1998-ongoing. 

Transit infrastructure grant: New Freedom Program (2005- ); 
Type of grant: Formula grant; 
Time frame: 2005-ongoing. 

Transit infrastructure grant: Parks & Public Lands (2005- )[F]; 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Transit infrastructure grant: Growing States & High Density States 
Formula (2005- )[G]; 
Type of grant: Formula grant; 
Time frame: 2005-ongoing. 

Transit infrastructure grant: Clean Fuels Formula Grant Program (1998- 
); 
Type of grant: Formula grant; 
Time frame: 1998-ongoing. 

Source: GAO analysis of DOT data. 

Notes: This chart includes only a portion of federal transit 
infrastructure grants. As part of its report, the National Surface 
Transportation Policy and Revenue Study Commission identified 20 
transit programs. Unless otherwise noted, start dates in the chart 
indicate program authorization dates. Programs that are related in 
purpose to grant programs in successive reauthorization legislation are 
included in the same row. 

[A] In 1991, Fixed Guideway Modernization changed from a discretionary 
grant to a formula grant program. 

[B] In 1991, Grants for Technical Studies Program changed from a 
discretionary grant to a formula grant program. This program currently 
funds both state and local planning activities. 

[C] Planning and Research Program provided separate funding to states 
for planning and research activities. Research funds were distributed 
on a discretionary basis and planning funds were distributed on a 
formula basis. 

[D] Over the Road Bus Accessibility Program is also referred to as the 
Rural Transportation Accessibility Incentive Program. 

[E] In 2005, Job Access and Reverse Commute Program changed from a 
discretionary grant to a formula grant program. 

[F] Parks and Public Lands is also referred to as Alternative 
Transportation in Parks and Public Land. 

[G] Growing States and High Density States Formula is also referred to 
as Apportionments Based on Growing States Formula Factors. 

[End of figure] 

Federal safety assistance has also expanded from funding general state 
highway and motor carrier safety programs and enforcement activities to 
additionally funding many specialized grants to address specific 
issues. For example, federal highway safety assistance currently 
includes several grant programs to address specific accident factors 
(e.g., alcohol-impaired driving) and safety data gaps (see fig. 4). 
Similarly, the number of federal motor carrier assistance programs has 
increased to include several grants for improving data collection, 
supporting commercial driver's license programs and funding border 
enforcement activities (see fig. 5). Consequently, federal funds 
currently support a wide variety of goals and modes beyond the initial 
federal focus on highway infrastructure, ranging from broad support for 
transit in urban areas, to targeted grants to increase seat-belt usage. 

Figure 4: Historical Expansion of Major Federally Funded Highway Safety 
Programs: 

[See PDF for image] 

This figure is a time line of the Historical Expansion of Major 
Federally Funded Highway Safety Programs. The following information is 
depicted: 

Highway safety grants: Highway Safety Programs (402) (1966- ); 
Type of grant: Formula grant; 
Time frame: 1966-ongoing. 

Highway safety grants: Highway Safety Research and Development (403) 
(1966- ); 
Type of grant: Discretionary grant; 
Time frame: 1966-ongoing. 

Highway safety grants: Innovative Project Grants (1978- ); 
Type of grant: Discretionary grant; 
Time frame: 1978-ongoing. 

Highway safety grants: National Maximum Speed Limit (55 mph Incentive 
Grants) (1978-1981); 
Type of grant: Discretionary grant; 
Time frame: 1978-1981. 

Highway safety grants: Alcohol Traffic Safety Programs (408) (1982-
2005); 
Type of grant: Discretionary grant; 
Time frame: 1982-2005. 

Highway safety grants: Drunk Driving Prevention Programs (410) (1988-
1991); 
Type of grant: Discretionary grant; 
Time frame: 1988-1991. 

Highway safety grants: AlcoholâImpaired Driving Countermeasures (410) 
(1991- )[A]; 
Type of grant: Discretionary grant; 
Time frame: 1991-ongoing. 

Highway safety grants: Safety Incentives to Prevent Operation of Motor 
Vehicles by Intoxicated Persons (163) (1998-2005); 
Type of grant: Discretionary grant; 
Time frame: 1998-2005. 

Highway safety grants: Safety Incentive Grants for Use of Seat Belts 
(157) (1998-2005)[B]; 
Type of grant: Discretionary grant; 
Time frame: 1998-2005. 

Highway safety grants: Safety Belt Performance Grants (406) (2005- ); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Highway safety grants: Occupant Protection Incentive Grants (405) 
(1998 - ); 
Type of grant: Discretionary grant; 
Time frame: 1998-ongoing. 

Highway safety grants: Child Safety and Child Booster Seat Incentive 
Grants (2011) (2005- ); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Highway safety grants: State Highway Safety Data Improvements (411) 
(1998-2002)[C]; 
Type of grant: Discretionary grant; 
Time frame: 1998-2002. 

Highway safety grants: State Traffic Safety Information System 
Improvements (408) (2005 -); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Highway safety grants: Motorcyclist Safety (2010) (2005- ); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Highway safety grants: Grant Program to Prohibit Racial Profiling 
(1906) (2005- ); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Highway safety grants: National Maximum Speed Limit (55 mph Penalty ) 
(1978-1995); 
Type of grant: Penalty provisions; 
Time frame: 1978-1995. 

Highway safety grants: National Minimum Drinking Age (1984-)[D]; 
Type of grant: Penalty provisions; 
Time frame: 1984-ongoing. 

Highway safety grants: Use of Safety Belts and Motorcycle Helmets 
(1991- )[E]; 
Type of grant: Penalty provisions; 
Time frame: 1991-ongoing. 

Highway safety grants: Operation of Motor Vehicles by Intoxicated 
Minors (1995-); 
Type of grant: Penalty provisions; 
Time frame: 1995-ongoing. 

Highway safety grants: Open Container Requirements (154) (1998- ); 
Type of grant: Penalty provisions; 
Time frame: 1998-ongoing. 

Highway safety grants: Minimum Penalties for Repeat Offenders for 
Driving While Intoxicated or Driving Under the Influence (164) (1998- 
); 
Type of grant: Penalty provisions; 
Time frame: 1998-ongoing. 

Highway safety grants: Safety Incentives to Prevent Operation of Motor 
Vehicles by Intoxicated Persons (BAC .08) (163) (2003- ); 
Type of grant: Penalty provisions; 
Time frame: 2002-ongoing. 

Source: GAO analysis of DOT data. 

Notes: This chart includes only a portion of federal highway safety and 
motor carrier safety grants. As part of its report, the National 
Surface Transportation Policy and Revenue Study Commission identified 
12 highway safety grant programs. Unless otherwise noted, start dates 
in the chart indicate program authorization dates. Programs that are 
related in purpose to grant programs in successive reauthorization 
legislation are included in the same row. 

[A] Alcohol-Impaired Driving Countermeasures was funded out of Highway 
Safety Programs Section 402 funds from 1993-1997. 

[B] Safety Incentive Grants for Use of Seat Belts remains authorized 
but has not been funded since 2005. 

[C] State Highway Safety Data Improvements remains authorized but has 
not been funded since 2002, when the program funds were fully 
disbursed. 

[D] National Minimum Drinking Age penalty provisions were authorized in 
1984, but did not take effect until 1987. 

[E] The motorcycle helmet penalty provision of Use of Safety Belts and 
Motorcycle Helmets was repealed in 1995. 

[End of figure] 

Figure 5: Historical Expansion of Major Federally Funded Motor Carrier 
Safety Programs: 

[See PDF for image] 

This figure is a time line of the Historical Expansion of Major 
Federally Funded Motor Carrier Safety Programs. The following 
information is depicted: 

Motor safety carrier grant: Motor Carrier Safety Assistance Program 
Grants (1983 -)[A]; 
Type of grant: Formula grant; 
Time frame: 1983-ongoing. 

Motor safety carrier grant: Withholding of Highway Funds for State Non-
compliance (1986- ); 
Type of grant: Penalty provisions; 
Time frame: 1986-ongoing. 

Motor safety carrier grant: Commercial Driver's License Program (1986 - 
1991)[B]; 
Type of grant: Discretionary grant; 
Time frame: 1986-1991. 

Motor safety carrier grant: Information System Grants (CVISN & PRISM) 
(1998-2005); 
Type of grant: Discretionary grant; 
Time frame: 1998-2005. 

Motor safety carrier grant: Commercial Vehicle Information Systems and 
Network Developments (CVISN) Core Development Grants (2005 - )[D]; 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Motor safety carrier grant: Performance and Registration Information 
Systems Management Grants (PRISM) (2005- ); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Motor safety carrier grant: Data Collection and Analysis (Commercial 
Vehicle Analysis Reporting System) (1999-2005)[E]; 
Type of grant: Discretionary grant; 
Time frame: 1999-2005. 

Motor safety carrier grant: Safety Data Improvement Program (2005- ); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Motor safety carrier grant: Commercial Driverâs License Information 
System Modernization (2005- ); 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Motor safety carrier grant: Grants for Commercial Driverâs License 
Program Improvements (2005- )[F]; 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Motor safety carrier grant: Border Enforcement Grants (2005- )[G]; 
Type of grant: Discretionary grant; 
Time frame: 2005-ongoing. 

Source: GAO analysis of DOT data. 

Notes: This chart includes only a portion of motor carrier safety 
grants. Smaller grant programs such as the Grant Program for Commercial 
Motor Vehicle Operators were not included. Unless otherwise noted, 
start dates in the chart indicate program authorization dates. Programs 
that are related in purpose to grant programs in successive 
reauthorization legislation are included in the same row. 

[A] Formula basis for distributing funds was established by the agency 
rather than by statute. 

[B] Commercial Driver's License Program (CDLP) funding began in 1987 
and was provided by four separate grants in the authorizing 
legislation. The program name was not established by statute but DOT 
refers to the program as CDLP. 

[C] Information System Grants remains authorized, but has not been 
funded since 2005. 

[D] CVISN Deployment activities were also funded from 1998-2005 as part 
of DOT's Intelligent Transportation Systems (ITS) Deployment Program, 
and from 1994-1998 through the Intelligent Vehicle Highway System 
Program. 

[E] Data Collection and Analysis program was jointly administered with 
NHTSA. In 2005, the program was reauthorized as the Safety Data 
Improvement Program. 

[F] FMCSA provided funds to states for commercial drivers license 
programs on an emergency basis from 2001-2003. 

[G] Although authorized in 2005, Border Enforcement Grants program did 
not distribute funds until 2006. FMCSA also funded border enforcement 
activities from other sources during 2004 and 2005. 

[End of figure] 

Furthermore, Congress has also expanded the scope of federal safety 
goals to include specific legislative changes at the state level. For 
example, in accepting certain federal-aid highway infrastructure funds, 
states must enact certain laws to improve highway safety or face 
penalties in the form of either withholdings or transfers in their 
federal grants. Over the past 30 years, penalty or incentive provisions 
have been used to encourage states to enact laws that establish a 
minimum drinking age of 21 years, a maximum blood alcohol level of 0.08 
to determine impaired driving ability, and mandatory seat belt usage, 
among others (see fig. 4), with transfer or withholding penalties as 
high as 10 percent of a state's designated highway infrastructure 
funds. While most states have chosen to adopt laws that comply with 
many of these provisions, some remain subject to certain penalties. For 
example, as of January 2008, 11 states are penalized for not enacting 
an open container law and 11 are penalized for not enacting a repeat 
offender law. 

As federal goals have broadened, Congress has added new federal 
procedural requirements for infrastructure projects and programs and 
agencies have issued more complex rules to address these additional 
federal goals. For example, Congress established cooperative urban 
transportation planning as a matter of national interest and passed 
legislation in 1962 requiring all construction projects to be part of a 
continuing, comprehensive, and cooperative planning process between 
state and local governments.[Footnote 12] In another example, grant 
recipients may be required to conduct environmental assessments for 
many federally funded transportation projects to comply with the 
federal environmental goals established by the National Environmental 
Policy Act of 1969 (NEPA). [Footnote 13] Other federal requirements may 
include compliance with the Americans with Disabilities Act, 
nondiscrimination clauses in the Civil Rights Act of 1964, labor 
standards mandated by the Davis-Bacon Act, and Buy America procurement 
provisions, among others. 

Although behavior-oriented safety programs and activities are generally 
not subject to construction-related requirements, Congress has required 
that agencies address additional federal goals in safety-related 
rulemaking processes. For example, to address national environmental 
objectives, Congress expanded NHTSA's regulatory scope in highway 
safety to include establishing regulations for corporate average fuel 
economy standards, in addition to issuing rules in areas such as tire-
safety standards and occupant-protection devices (e.g., seat belts). 
Similarly, to address other areas of national concern, Congress has 
broadened FMCSA's regulatory authority in motor carrier safety to 
include household goods movement, medical requirements for motor 
carrier operators, and greater oversight of border and international 
safety.[Footnote 14] Furthermore, when establishing federal standards 
in these areas, regulatory agencies such as NHTSA and FMCSA may be 
subject to increasingly rigorous requirements for analysis and 
justification associated with a wide range of federal legislation and 
executive orders including NEPA, Executive Order 12866 requiring cost-
benefit analysis for proposed rules,[Footnote 15] Executive Order 13211 
requiring consideration of the effects of government regulation on 
energy, and the Unfunded Mandates Reform Act of 1995, among others. 

Current Program Structures Reflect a Variety of Federal Approaches to 
Surface Transportation: 

Program expansion over the past 50 years has created a variety of grant 
structures and established different federal approaches for setting 
priorities and distributing federal funds across surface transportation 
programs. These approaches, which range from formula grants to 
dedicated spending provisions, give state and local governments varying 
degrees of discretion in allocating federal funds. As in the past, most 
surface transportation programs are jointly administered by the federal 
government in partnership with state or local governments, but in 
recent years the federal government has increasingly delegated 
oversight responsibility to state and local governments. 

Federal Responsibility for Establishing Priorities and Directing Funds 
Varies across Programs: 

Federal approaches for setting priorities and distributing funds 
currently range from giving state and local governments broad 
discretion in allocating highway infrastructure funds to directly 
targeting specific federal goals through the use of incentive grants 
and penalty provisions in safety programs. In 1956 federal surface 
transportation funds were distributed to the states through four 
formula grant programs that provided federal construction aid for 
certain eligible highway categories (e.g., Interstate, primary, and 
secondary highways and urban extensions). The states in turn, matched 
and distributed funds at their discretion, within each program's 
eligibility requirements. Within the highway program, this federal-
state partnership has changed in response to considerable increases in 
state and local authority and flexibility since 1956. 

Largely because of revisions to federal highway programs in the 1990s, 
state and local governments currently have greater discretion to 
allocate the majority of their federal highway funds according to state 
and local priorities. For example, core highway programs such as the 
Surface Transportation Program and the National Highway System program 
have broader goals and project eligibility requirements than earlier 
highway infrastructure grant programs.[Footnote 16] Although funds 
continue to be distributed by formula to the states for individual 
programs based on measures of highway use or the extent of a state's 
highway network, or other factors, as figure 6 demonstrates, six core 
highway programs permit the states to transfer up to 50 percent of 
their apportioned funds, with certain restrictions, to other eligible 
highway programs. Furthermore, although the process for calculating the 
distributions is complex for some programs, the end result of most 
highway program formulas is heavily influenced by minimum 
apportionment[Footnote 17] and "equity" requirements. For fiscal year 
2008, each state's share of formula funds will be at least 92 percent 
of their relative revenue contributions to the Highway Account of the 
Highway Trust Fund.[Footnote 18] According to FHWA estimates, the 
equity requirements will provide approximately $9 billion in highway 
funds to the states in addition to the amount distributed by formula 
through the individual grant programs.[Footnote 19] Over $2 billion of 
these additional funds will have the same broad eligibility 
requirements and transfer provisions of the Surface Transportation 
Program. Moreover, flexible funding provisions within highway and 
transit programs allow certain infrastructure funds to be used 
interchangeably for highway or transit projects. 

Figure 6: Broad Flexible Fund Transfer Provisions within Highway 
Programs: 

[See PDF for image] 

This figure depicts the Broad Flexible Fund Transfer Provisions within 
Highway Programs and the interrelationship of those programs. 

Program: National Highway System (NHS); 
Transfer to (Fund transfer provision): With certain restrictions, up to 
50% of apportioned funds may be transferred[A]: HSIP, HBRRP, IM, CMAQ; 
Transfer to (Fund transfer provision): 100% of NHS funds may be 
transferred to the STP program if the Secretary of Transportation 
approves the transfer and a sufficient public comment period is 
provided[C]: STP; 
Transfer from: (Fund transfer provision): With certain restrictions, up 
to 50% of apportioned funds may be transferred[A]: HSIP, HBRRP, IM, 
STP; 
Transfer from: (Fund transfer provision): CMAQ funds may be transferred 
if a minimum threshold is met[B]: CMAQ. 

Program: Surface Transportation Program (STP); 
Transfer to (Fund transfer provision): With certain restrictions, up to 
50% of apportioned funds may be transferred[A]: HSIP, HBRRP, IM, CMAQ, 
NHS; 
Transfer from: (Fund transfer provision): With certain restrictions, up 
to 50% of apportioned funds may be transferred[A]: IM, HBRRP, HSIP
Transfer from: (Fund transfer provision): CMAQ funds may be transferred 
if a minimum threshold is met[B]: CMAQ; 
Transfer from (Fund transfer provision): 100% of NHS funds may be 
transferred to the STP program if the Secretary of Transportation 
approves the transfer and a sufficient public comment period is 
provided[C]: NHS. 

Program: Interstate Maintenance Program (IM); 
Transfer to (Fund transfer provision): With certain restrictions, up to 
50% of apportioned funds may be transferred[A]: HBRRP, CMAQ, NHS; STP, 
HSIP; 
Transfer from: (Fund transfer provision): With certain restrictions, up 
to 50% of apportioned funds may be transferred[A]: NHS, HBRRP, HSIP, 
STP; 
Transfer from: (Fund transfer provision): CMAQ funds may be transferred 
if a minimum threshold is met[B]: CMAQ. 

Program: Highway Bridge Replacement and Rehabilitational Program 
(HBRRP); 
Transfer to (Fund transfer provision): With certain restrictions, up to 
50% of apportioned funds may be transferred[A]: IM, CMAQ, NHS, STP, 
HSIP; 
Transfer from: (Fund transfer provision): With certain restrictions, up 
to 50% of apportioned funds may be transferred[A]: NHS, IM, HSIP, STP; 
Transfer from: (Fund transfer provision): CMAQ funds may be transferred 
if a minimum threshold is met[B]: CMAQ. 

Program: Highway Safety Improvement Program (HSIP); 
Transfer to (Fund transfer provision): With certain restrictions, up to 
50% of apportioned funds may be transferred[A]: IM, CMAQ, NHS, STP, 
HBRRP; 
Transfer from: (Fund transfer provision): With certain restrictions, up 
to 50% of apportioned funds may be transferred[A]: NHS, IM, HBRRP, STP; 
Transfer from: (Fund transfer provision): CMAQ funds may be transferred 
if a minimum threshold is met[B]: CMAQ. 

Program: Congestion Mitigation and Air Quality Improvement Program 
(CMAQ); 
Transfer to (Fund transfer provision): CMAQ funds may be transferred if 
a minimum threshold is met[B]: NHS, STP, IM, HBRRP, HSIP; 
Transfer from: (Fund transfer provision): With certain restrictions, up 
to 50% of apportioned funds may be transferred[A]: NHS, STP, IM, HBRRP, 
HSIP. 

Source: GAO. 

[A] TEA-21, Pub. L. No. 105-178 Â§1310, (June 9, 1998), codified at 23 
USC Â§126(a). 

[B] Ibid. 

[C] 23 USC Â§104. 

[End of figure] 

Major transit infrastructure grants currently range from broad formula 
grants that provide capital and operating assistance,[Footnote 20] such 
as the Block Grants Program (Urbanized Area Formula Grants), to 
targeted discretionary grants for new transit systems, such as New 
Starts and Small Starts, that require applicants to compete for funding 
based on statutorily defined criteria. For example, projects must 
compete for New Starts funds on the basis of cost-effectiveness, 
potential mobility improvements, environmental benefits, and economic 
development effects, among other factors.[Footnote 21] Additionally, 
smaller formula grants direct funds to general goals such as supporting 
transit services for special populations like elderly, disabled, and 
low-income persons. Unlike most surface transportation funding, which 
is distributed through the states, most transit assistance is 
distributed directly to local agencies, since transit assistance was 
originally focused on urban areas. 

Current major highway and motor carrier safety grants include formula 
grants to provide general assistance for state highway safety programs 
and improving motor carrier safety and enforcement activities, such as 
Highway Safety Programs (402) and Motor Carrier Safety Assistance 
Program (MCSAP) Grants. They also include targeted discretionary grants 
such as Occupant Protection Incentive Grants and Border Enforcement 
Grants. Additionally, they include penalty provisions, such as Open 
Container Requirements (154) and Minimum Penalties for Repeat Offenders 
for Driving While Intoxicated or Driving Under the Influence (164), 
designed to address specific safety areas of national interest. Unlike 
formula-based funding, some of the discretionary grants, such as the 
Safety Belt Performance Grants, directly promote national priorities by 
providing financial incentives for meeting specific performance or 
safety activity criteria (e.g., enforcement, outreach). Additionally, 
penalty provisions such as those associated with Open Container laws 
and MCSAP Grants promote federal priorities by either transferring or 
withholding state highway infrastructure funds from states that do not 
comply with certain federal provisions. For example, in 2007, penalty 
provisions transferred over $217 million of federal highway 
infrastructure assistance to highway safety programs in the 19 states 
and Puerto Rico that were penalized for failure to enact either open 
container or repeat offender laws. 

Finally, Congress provides congressionally directed spending for 
surface transportation through specific provisions in legislation or 
committee reports. While estimates of the precise number and value of 
these congressional directives vary, observers agree that they have 
grown dramatically. For instance, the Transportation Research Board 
found that congressional directives have grown from 11 projects in the 
1982 reauthorization act to over 5,000 projects in the 2005 
reauthorization act.[Footnote 22] 

State and Local Government Oversight Responsibilities Have Increased: 

Most federal surface transportation programs continue to be jointly 
administered by the federal and state, or local governments, but the 
federal government has increasingly delegated oversight responsibility 
to state and local governments. This trend is most pronounced for 
highway infrastructure programs; however, it has also occurred in 
federal transit and safety programs. For example, when Interstate 
construction began, the federal government fully oversaw all federally 
funded construction projects, including approving design plans, 
specifications, and estimates, and periodically inspecting 
construction progress. In 1973, Congress authorized DOT to delegate 
oversight responsibility to states for compliance with certain federal 
requirements for noninterstate projects.[Footnote 23] During the 1990s, 
Congress further expanded this authority to allow states and FHWA to 
cooperatively determine the appropriate level of oversight for 
federally funded projects, including some Interstate 
projects.[Footnote 24] Currently, based on a stewardship agreement with 
each state, FHWA exercises full oversight over a limited number 
Federal-aid Highway projects, constituting a relatively limited amount 
of highway mileage. States are required to oversee all Federal-aid 
Highway projects that are not on the National Highway System, which 
constitutes a large majority of the road mileage receiving federal 
funds, and states oversee design and construction phases of other 
projects based on an agreement between FHWA and the state. Full federal 
oversight for transit projects is limited to major capital projects 
that cost over $100 million, and grant recipients are allowed to self-
certify their compliance with certain federal laws and regulations for 
other projects. Although state and local grant recipients have 
considerable oversight authority, FHWA and FTA both periodically review 
the recipients' program management processes to ensure compliance with 
federal laws and regulations. 

State and local government responsibilities for overseeing 
transportation planning processes have also grown in recent decades. 
Although such responsibilities predate federal transportation 
assistance programs, since 1962, the federal government has made 
compliance with numerous planning and project selection requirements a 
condition for receiving federal assistance.[Footnote 25] During the 
1970s, federal requirements grew in range and complexity and, in some 
cases, specified how state and local governments should conduct 
planning activities. However, since the 1980s, state and local 
governments have had greater flexibility to fulfill federal planning 
requirements. For example, in 1983, urban transportation planning 
regulations were revised to reduce the level of direct federal 
involvement in state and local planning processes, and state and local 
agencies were allowed to self-certify their compliance with federal 
planning requirements. Similarly, although the federal government 
identified specific environmental and economic factors to be considered 
in the planning process as part of the surface transportation program 
legislation enacted in 1991 and subsequently amended in 1998, these 
requirements give state and local governments considerable discretion 
in selecting analytical tools to evaluate projects and make investment 
decisions based on their communities' needs and priorities. 

The states have also been given greater oversight responsibility for 
safety programs as federal agencies have shifted from direct program 
oversight to performance-based oversight of state safety goals. For 
example, since 1998, NHTSA has not approved state highway safety plans 
or projects, but instead focuses on a state's progress in achieving the 
goals it set for itself in its annual safety performance plan. Under 
this arrangement, a state must provide an annual report that outlines 
the state's progress towards meeting its goals and performance measures 
and the contribution of funded projects toward meeting its goals. If a 
state does not meet its established safety goals, NHTSA and the state 
work cooperatively to create a safety improvement plan. FMCSA uses a 
similar approach to oversee state motor carrier safety activities. 
Starting in 1997, the states were required to identify motor carrier 
safety problems based on safety data analysis, target their grant 
activities to address these issues, and report on their progress toward 
the national goal of reducing truck crashes, injuries, and fatalities. 
Much as FHWA and FTA do for their grant programs, both NHTSA and FMCSA 
periodically review state management processes for compliance with 
federal laws and regulations. 

Current Federal Surface Transportation Programs Do Not Effectively 
Address Identified Transportation Challenges: 

Many federal surface transportation programs do not effectively address 
identified transportation challenges such as growing congestion. While 
program goals are numerous, they are sometimes conflicting and often 
unclear--which contributes to a corresponding lack of clarity in the 
federal role. The largest highway, transit, and safety grant programs 
distribute funds through formulas that are typically not linked to 
performance and, in many cases, have only an indirect relationship to 
needs. Mechanisms generally do not link programs to the federal 
objectives they are intended to address, in part due to the wide 
discretion granted to states and localities in using most federal 
funds. Furthermore, surface transportation programs often do not employ 
the best tools and approaches available, such as rigorous economic 
analysis for project selection and a mode-neutral approach to planning 
and investment. 

There Is No Clear, Consistent Federal Role in Surface Transportation: 

The federal role in surface transportation is unclear, in part because 
program goals are often unclear. In some cases, stated goals may be 
contradictory or may come into direct conflict.[Footnote 26] For 
example, it may not be possible to improve air quality while spurring 
economic development with new highway construction. With the 
proliferation of goals and programs discussed in the previous section 
of this report, the federal role varies from funding improvements in 
specific types of infrastructure (such as the National Highway System) 
to aiming at specific outcomes (such as reducing highway fatalities). 
At a recent expert panel on transportation policy convened by the 
Comptroller General, experts cited the lack of focus of the federal 
role in transportation as a problem, and some stakeholders have also 
made similar criticisms. 

In some policy areas, the federal role is limited despite consensus on 
goals. For example, freight movement is widely viewed as a top 
priority, yet no clear federal role has been established in freight 
policy. DOT's draft Framework for a National Freight Policy, issued in 
2006, is a step toward clarifying a federal role and strategy, but it 
lacks specific targets and strategies and criteria for achieving 
them.[Footnote 27] Current approaches to planning and financing 
transportation infrastructure do not effectively address freight 
transportation issues--few programs are directly aimed at freight 
movement, and funding is based on individual modes, but freight moves 
across many modes.[Footnote 28] Similarly, despite statutes and 
regulations that identify an intermodal approach that provides 
connections across modes as a goal of federal transportation policy, 
there is currently only one federal program[Footnote 29] specifically 
designed for intermodal infrastructure, and all the funds available for 
the program are congressionally designated for specific 
projects.[Footnote 30] 

The federal government also lacks a defined role in or mechanism for 
aiding projects that span multiple jurisdictions.[Footnote 31] The 
discretion and differing priorities of individual states and localities 
can make it difficult to coordinate large projects that involve more 
than one state or local sponsor.[Footnote 32] There have been some 
successful multijurisdictional transportation initiatives, such as the 
FAST Corridor across several metropolitan areas in Washington 
State,[Footnote 33] but a lack of established political or 
administrative mechanisms for cooperation, combined with the large 
degree of state and local autonomy in transportation decision-making, 
is an obstacle to such "megaprojects."[Footnote 34] At a hearing of the 
National Surface Transportation Policy and Revenue Study Commission in 
New York City, an expert on the regional economy cited the Tappan Zee 
Bridge in New York State as an example of the obstacles such projects 
can face. Neighboring Connecticut wants the bridge's capacity expanded, 
but there is currently no established mechanism that allows Connecticut 
to help move the project forward.[Footnote 35] In testimony for the 
Commission, stakeholders such as the U.S. Chamber of Commerce and the 
American Association of Port Authorities cited fostering 
interjurisdictional coordination as a key federal role, and AASHTO has 
also highlighted the need for improved multijurisdictional coordination 
mechanisms in its reports on the future of federal transportation 
policy.[Footnote 36] 

At times, DOT has undertaken new activities without assessing the 
rationale for a federal role. For example, the agency made short sea 
shipping[Footnote 37] of freight a priority, but did not first examine 
the effect of federal involvement on the industry or identify obstacles 
to success and potential mitigating actions. Without a consistent 
approach to identifying the rationale for a federal role, DOT is 
limited in its ability to evaluate potential investments and determine 
whether short sea shipping--or another available measure--is the most 
effective means of enhancing freight mobility.[Footnote 38] 

Most Programs Do Not Link Funding to Performance and Lack Mechanisms to 
Ensure That Stated Objectives Are Met: 

Most federal surface transportation programs lack links between funding 
and performance.[Footnote 39] Federal funding for transportation has 
increased significantly in recent years, but because spending is not 
explicitly linked to performance, it is difficult to assess the impact 
of these increases on the achievement of key goals. During this period 
of funding increases, the physical condition of the highway system has 
improved, but the system's overall performance has decreased, according 
to available measures of congestion.[Footnote 40] DOT has established 
goals under the Government Performance and Results Act (GPRA) of 1993 
that set specific benchmarks for performance outcomes such as 
congestion and highway fatalities. However, these performance measures 
are not well-reflected in individual grant programs because 
disbursements are seldom linked to outcomes--most highway funds are 
apportioned without relationship to the performance of the recipients. 
The largest transit and safety programs also lack links to 
performance.[Footnote 41] States and localities receive the same 
disbursement regardless of their performance at, for example, reducing 
congestion or managing project costs. As a result, the incentive to 
improve return on investment--the public benefits gained from public 
resources expended--is reduced. 

Safety and some transit grants are more directly linked to goals than 
highway infrastructure programs, and several incorporate performance 
measures. Whereas highway infrastructure programs tend to focus on 
improving specific types of facilities such as bridges, highway safety, 
and, to a lesser extent, transit programs, are more often designed to 
achieve specific objectives. For instance, the goal of the Job Access 
and Reverse Commute transit program is to make jobs more accessible for 
welfare recipients and other low-income individuals. Likewise, under 
the Section 402 State and Community Highway Safety Grant Program, funds 
must be used to further the goal of reducing highway 
fatalities.[Footnote 42] To some extent, transit and safety programs 
also have a more direct link to needs because their formulas do not 
incorporate equity adjustments that seek to return funds to their 
source. Furthermore, several highway safety and motor carrier safety 
grants make use of performance measures and incentives. For example, 
under the Motor Carrier Safety Assistance Program, some funds are set 
aside for incentive grants that are awarded using five state 
performance indicators that include, among others, large truck-involved 
vehicle fatality rates, data sharing, and commercial driver's license 
verification.[Footnote 43] 

Most highway transportation programs lack links to need as well as 
performance. As discussed above, most grant funds are instead 
distributed according to set formulas that typically have an indirect 
relation to need. As a result, grant disbursements for these programs 
not only fail to reflect performance, but they may also not reflect 
need.[Footnote 44] Some of the formula criteria, such as population, 
are indirect measures of need, but the equity bonus[Footnote 45] and 
minimum apportionment criteria are not related to need, and exert a 
strong influence on formula outcomes. Certain programs, such as the 
Highway Bridge Replacement and Rehabilitation Program, which bases 
disbursements on the cost of needed repairs, use more direct 
measures.[Footnote 46] In general, however, the link between needs and 
federal highway funding is weak. 

Besides lacking links between funding and performance, federal surface 
transportation programs generally lack mechanisms to tie state actions 
to program goals. DOT does not have direct control over the vast 
majority of activities that it funds; instead, states and localities 
have wide discretion in selecting projects to fund with federal 
grants.[Footnote 47] Federal law calls the federal-aid highway program 
a "federally-assisted state program," and specifies that grant funds 
"shall in no way infringe on the sovereign rights of the States to 
determine which projects shall be federally financed."[Footnote 48] In 
addition, states have broad flexibility in using more than half of 
federal highway funds as a result of a combination of programs with 
wide eligibility (such as the Surface Transportation Program) and the 
ability to transfer some funds between highway programs.[Footnote 49] 
Furthermore, "flex funding" provisions allow transfers between eligible 
highway and transit programs; between 1992 and 2006, states used this 
authority to transfer $12 billion from highway to transit programs. 
[Footnote 50] While these provisions give states the discretion to 
pursue their own priorities, the provisions may impede the targeting of 
federal funds toward specific national objectives. Federal rules for 
transferring funds between highway programs are so flexible that the 
distinctions between individual programs have little meaning. To some 
extent, the Federal-aid Highway program functions as a cash transfer, 
general purpose grant program, not as a tool for pursuing a cohesive 
national transportation policy.[Footnote 51] Transit and safety grants, 
in contrast, are more linked to goals because they do not allow 
transfers among programs to the same degree.[Footnote 52] Safety grants 
are linked to goals because states must use data on safety measures to 
create performance plans that structure their safety investments, yet 
states are still able to set their own goals, develop their own 
programs, and select their own projects. Performance measures are also 
used in allocating funding in several highway safety grant programs, 
providing an even more direct link to goals.[Footnote 53] 

Programs Do Not Employ the Best Tools and Approaches to Ensure 
Effective Investment Decisions: 

In some areas, federal surface transportation programs do not use the 
best tools and approaches available. Rigorous economic analysis, 
applied in benefit-cost studies, is a key tool for targeting 
investments, but does not drive transportation decision-making. While 
such analysis is sometimes used, we have previously reported that it is 
generally only a small factor in a given investment decision.[Footnote 
54] Furthermore, statutory requirements of the planning and project 
selection processes--such as public participation procedures or NEPA 
requirements that may be difficult to translate into economic terms--
can interfere with the use of benefit-cost analysis. Decision makers 
often also see other factors as more important. In a survey of state 
DOTs that we conducted in 2004 as part of that same study, 34 said that 
political support and public opinion are factors of great or very great 
importance in the decision to recommend a highway project, while 8 said 
that the ratio of benefits to costs was a factor of great or very great 
importance. Economic analysis was more common for transit projects, 
largely because of the requirements of the competitive New Starts grant 
program, which uses a cost-effectiveness measure. However, the New 
Starts program constitutes only 18 percent of transit funding 
authorizations under the Safe, Accountable, Flexible, and Efficient 
Transportation Equity Act - A Legacy for Users (SAFETEA-LU) 
authorization.[Footnote 55] There are also few formal evaluations of 
the outcomes of federally-funded projects. As a result, policymakers 
miss a chance to learn more about the efficacy of different approaches 
and projects. Such evaluations are especially important because highway 
and transit projects often have higher costs and lower usage than 
estimated beforehand.[Footnote 56] New Starts is also the only 
transportation grant program that requires before-and-after studies of 
outcomes.[Footnote 57] 

The modal basis of transportation funding also limits opportunities to 
invest scarce resources as efficiently as possible. Instead of being 
linked to desired outcomes, such as mobility improvements, funds are 
"stovepiped" by transportation mode.[Footnote 58] Although, as 
discussed above, states and localities have great flexibility in how 
they use their funds, this modal structure can still discourage 
investments based on an intermodal approach and cross-modal 
comparisons.[Footnote 59] Reflecting the separate federal 
transportation funding programs, many state and local DOTs are 
organized into several operating administrations with responsibilities 
for particular modes. Because different operating administrations 
oversee and manage separate funding programs, these programs often have 
differing timelines, criteria, and matching fund requirements, which 
can make it difficult for public planners to pursue the goal--stated in 
law and DOT policy--of an intermodal approach to transportation needs. 
For example, a recent project at the Port of Tacoma (Washington) 
involved widening a road and relocating rail tracks to improve freight 
movement on both modes, but it was delayed because highway funding was 
available, but rail funding was not. Moreover, despite the wide funding 
flexibility within the highway program and between the highway and 
transit programs, many funds are dedicated on a modal basis, and state 
and local decision makers may choose projects based on the mode 
eligible for federal funding.[Footnote 60] Experts on the Comptroller 
General's recent transportation policy panel cited modal stovepiping as 
a problem with the current federal structure, saying that it inhibits 
consideration of a range of transportation options.[Footnote 61] State 
officials have also criticized stovepiping, both in AASHTO policy 
statements and individually.[Footnote 62] For instance, a state 
transportation official told a hearing of the National Surface 
Transportation Policy and Revenue Study Commission that modal 
flexibility should be increased to allow states to select the best 
project to address a given goal.[Footnote 63] 

The federal government is not equipped to implement a performance-based 
approach to transportation funding in many areas because it lacks 
comprehensive data. Data on outcomes--ideally covering all projects and 
parts of the national transportation network, as well as all modes--
would be needed in order to consider performance in funding decisions. 
Presently, data on key performance and outcome indicators is often 
absent or flawed. For example, DOT does not have a central source of 
data on congestion--the available data are stovepiped by mode--and some 
congestion information for freight rail is inaccessible because it is 
proprietary and controlled by railroad companies.[Footnote 64] 
Likewise, FTA does not possess reliable and complete data on transit 
safety.[Footnote 65] A partial exception is highway safety, for which 
NHTSA and FMCSA have data on a variety of outcomes, such as traffic 
fatalities. NHTSA employs this information to help states set 
priorities, FMCSA uses it to target enforcement activities, and both 
agencies use it to monitor states' progress toward achieving their 
goals and to award incentive grants. However, the safety data that 
states collect are not always timely, complete, and consistent. For 
example, a review of selected states found that some of the information 
in their databases was several years old.[Footnote 66] 

Tools to make better use of existing infrastructure have not been 
deployed to their full potential, in part because their implementation 
is inhibited by the current structure of federal programs. Research has 
shown that a variety of congestion management tools, such as 
Intelligent Transportation Systems (ITS) and congestion 
pricing[Footnote 67] are effective ways of increasing or better 
utilizing capacity.[Footnote 68] Although such tools are increasingly 
employed by states and localities, their adoption has not been as 
extensive as it could be given their potential to decrease congestion. 
One factor contributing to this slow implementation is the lack of a 
link between funding and performance in current federal programs--
projects with a lower return on investment may be funded instead of 
congestion management tools such as ITS. Furthermore, DOT's measures of 
effects fall short of capturing the impact of ITS on congestion, making 
it more difficult for decision makers to assess the relative worth of 
alternative solutions. State autonomy also contributes to the slowed 
rollout of these tools. Even though federal funding is available to 
encourage investment in ITS, states often opt for investments in more 
visible projects that meet public demands, such as capacity 
expansion.[Footnote 69] 

Federal investment in transportation may lead to the substitution of 
federal spending for state and local spending. One strategy that 
Congress has used to meet the goals of the Federal-aid Highway program 
has been to increase federal investment. However, not all of the 
increased federal investment has increased the total investment in 
highways, in part because Congress cannot prevent states and localities 
from using some of their own highway funds for other purposes when they 
receive additional federal funds. We reported, on the basis of our own 
modeling and a review of other empirical studies, that increased 
federal highway grants influence states and localities to substitute 
federal funds for funds they otherwise would have spent on 
highways.[Footnote 70] Specifically, we studied the period from 1983 
through 2000 and our model suggests that over the entire time period, 
states substituted about 50 cents of every dollar increase in federal 
highways grants for funds they would have spent on highways from their 
own resources. For the latter part of that period, 1992 through 2000, 
we estimated a substitution rate of about 60 cents for every dollar 
increase in federal aid. These results were consistent with other study 
findings and indicate that substitution is reducing the impact of 
federal investment.[Footnote 71] Federal grant programs have generally 
not employed the best tools and approaches to reduce this potential for 
substitution--maintenance of effort requirements and higher nonfederal 
matching requirements, discussed in the next section of this report. 
One reason for the high rate of substitution for the Federal-aid 
Highway program is that states typically spend more than the amount 
required to meet federal matching requirements--generally 20 percent. 
Thus, states can reduce their own highway spending and still obtain 
increased federal funds.[Footnote 72] 

Finally, congressionally directed spending may not be an ideal means of 
allocating federal grant funds. Some argue that Members of Congress are 
good judges of investment needs in their districts, and some 
congressional directives are requested by states. However, officials 
from FHWA and FTA have stated that congressional directives sometimes 
displace their priority transportation projects by providing funds for 
projects that would not have been chosen in a competitive selection 
process. For example, FHWA officials stated that some congressional 
directives listed in the Projects of National and Regional Significance 
program[Footnote 73] would not have qualified for funding in a merit-
based selection process.[Footnote 74] Officials from three state 
departments of transportation also noted that inflexibilities in the 
use of congressionally directed funds limit the states' ability to 
implement projects and efficiently use transportation funds by, for 
example, providing funding for projects that are not yet ready for 
implementation or providing insufficient funds to complete particular 
projects. However, an official from one state department of 
transportation noted that although congressional directives can create 
administrative challenges, they often represent funding that the state 
may not have otherwise received. 

Sustainability of Transportation Financing Threatened by Funding 
Imbalance and Long-Term Trends: 

The solvency of the federal surface transportation program is at risk 
because expenditures now exceed revenues for the Highway Trust Fund, 
and projections indicate that the balance of the Highway Trust Fund 
will soon be exhausted. According to the Congressional Budget Office, 
the Highway Account will face a shortfall in 2009, the Transit Account 
in 2012.[Footnote 75] The rate of expenditures has affected its fiscal 
sustainability. As a result of the Transportation Equity Act for the 
21st Century (TEA-21), Highway Trust Fund spending rose 40 percent from 
1999 to 2003 and averaged $36.3 billion in contract authority per year, 
and the upward trend in expenditures continued under SAFETEA-LU, which 
provided an average of $57.2 billion in contract authority per year. 

Congress also established a revenue-aligned budget authority (RABA) 
mechanism in TEA-21 to help assure that the Highway Trust Fund would be 
used to fund projects instead of accumulating large balances.[Footnote 
76] When revenues into the Highway Trust Fund are higher than forecast, 
RABA ensures that additional funds are apportioned to the states. The 
RABA provisions were written so that the adjustments could work in 
either direction--going up when the trust fund had greater revenues 
than projected and down when revenues did not meet projected levels. 
However, when the possibility of a downward adjustment occurred in 
fiscal year 2003 as a result of lower-than-projected trust fund 
revenues, Congress chose to maintain spending at the fiscal year 2002 
level. If the RABA approach is kept in the future, allowing downward 
adjustments could help with the overall sustainability of the fund. 

While expenditures from the trust fund have grown, revenues into the 
fund have not kept pace. The current 18.4 cents per gallon fuel tax has 
been in place since 1993, and the buying power of the fixed cents-per-
gallon amount has since been eroded by inflation. The reallocation to 
the Highway Trust Fund of 4.3 cents of federal fuel tax previously 
dedicated to deficit reduction provided an influx of funds beginning in 
1997. However, this influx has been insufficient to sustain current 
funding levels. In addition, if changes are not made in policy to 
compensate for both the increased use of alternative fuels that are not 
currently taxed and increased fuel economy, fuel tax revenues, which 
still account for the majority of federal transportation financing, may 
further erode in the future.[Footnote 77] 

Principles Can Guide Assessment of Options to Restructure Federal 
Surface Transportation Programs: 

A sound basis for reexamination can productively begin with 
identification of and debate on underlying principles. Through our 
prior work on reexamining the base of government, our analysis of 
existing programs and other prior reports, we identified a number of 
principles that could help drive reexamination of federal surface 
transportation programs and an assessment of options for restructuring 
the federal surface transportation program. The appropriateness of 
these options will depend on the underlying federal interest and the 
relative potential of the options to develop sustainable strategies 
addressing complex national transportation challenges. These 
principles are as follows: 

* Create well-defined goals based on identified areas of federal 
interest. 

* Establish and clearly define the federal role in achieving each goal. 

* Incorporate performance and accountability for results into funding 
decisions. 

* Employ best tools and approaches to emphasize return on investment. 

* Ensure fiscal sustainability. 

Create Well-Defined Goals Based on Identified Areas of Federal 
Interest: 

Determining the federal interest involves examining the relevance and 
relative priority of existing programs in light of 21st century 
challenges and identifying emerging areas of national importance. For 
instance, increases in passenger and freight travel have led to growing 
congestion, and this strain on the transportation system is expected to 
grow with population increases, technology changes, and the 
globalization of the economy. Furthermore, experts have suggested that 
federal transportation policy should recognize emerging national and 
global imperatives such as reducing the nation's dependence on foreign 
fuel sources and minimizing the impact of the transportation system on 
global climate change. Given these and other challenges, it is 
important to assess the continued relevance of established federal 
programs and to determine whether the current areas of federal 
involvement are still areas of national interest. Key to such an 
assessment is how narrowly or broadly the federal interest in the 
nation's transportation system should be defined and whether the 
federal interest is greater in certain areas of national priority: 

* Should federal spending and programs be more focused on specific 
national interests such as interstate freight mobility or on broad 
corridor development? 

* Is there a federal interest in local issues such as urban congestion? 
If so, are there more distinct ways in which federal transportation 
spending and programs could address local issues that would enhance 
inherent local incentives and choices? 

* To what extent should federal transportation policy address social 
concerns such as mobility for disadvantaged persons and transportation 
safety? 

* If environmental stewardship is part of the federal interest, how 
might federal transportation policy better integrate national long-term 
goals related to energy independence and climate change? 

The proliferation of federal surface transportation programs has, over 
time, resulted in an amalgam of policy interests that may not 
accurately reflect current national concerns and priorities. Although 
policymakers have attempted to clarify federal transportation policy in 
the past[Footnote 78] and an FHWA Task Force has called for focusing 
federal involvement on activities that clearly promote national 
objectives, current policy statements continue to cover a wide spectrum 
of broadly defined federal interests ranging from promoting global 
competitiveness to improving citizens' quality of life. While these 
federal programs, activities, and funding flows reflect the interests 
of various constituencies, they are not as a whole aligned with a 
strategic, coherent, and well-defined national interest. In short, the 
overarching federal interest has blurred. Once the federal interest has 
been refocused and more clearly defined, policymakers will have a 
foundation for allocating scarce federal resources according to the 
level of national interest. 

With the federal interest in surface transportation clearly defined, 
policymakers can clarify the goals for federal involvement. The more 
specific, measurable, achievable, and outcome-based the goals are, the 
better the foundation will be for allocating resources and optimizing 
results. Even though some federal transportation safety programs are 
linked to measurable outcome-based goals, such as achieving a specific 
rate of safety-belt use to reduce traffic fatalities, the formula 
funding for general improvements to transit facilities or highway 
systems is generally provided without reference to achieving specific 
outcomes for federal involvement. For example, the guidelines for state 
and local recipients' use of the largest highway and transit formula 
grant funds, such as the Surface Transportation Program or Block Grant 
Program (Urbanized Area Formula Grants), are based on broad project 
eligibility criteria. These criteria involve the type of highway or 
type of work (e.g., transit capital investment versus operating 
assistance) rather than the achievement of clearly defined and 
measurable outcomes.[Footnote 79] Furthermore, although DOT has already 
established some outcome measures as part of its strategic planning 
process, its agencywide goals and outcomes cover a vast array of 
activities and are generally not directly linked to project selection 
or funding decisions for most highway funding and the largest transit 
and safety programs. Without specific and measurable outcomes for 
federal involvement, policymakers will have difficulty determining 
whether certain programs are achieving desired results. 

Establish and Clearly Define the Federal Role in Achieving Each Goal: 

After identifying the federal interest and federal goals, policymakers 
can clearly define the federal government's role in working toward each 
goal and define that role in relation to the roles of other levels of 
government and other stakeholders. This would involve an examination of 
state and local government roles, as well as of the federal role. 
Following such an examination, the current relationship between the 
federal and other levels of government could change. For example, in 
the federal-aid highway program, the current "partnership" between the 
federal government and the states is based on an explicit recognition 
of state sovereignty in the conduct of the program, and the states have 
considerable flexibility in moving funds within this program. By 
contrast, highway safety programs operate under a grantor-grantee 
relationship and for transit the grantees are largely local units of 
government, although the role of states has grown. An examination of 
these programs could change these relationships, since different 
federal goals may require different degrees and types of federal 
involvement. Where the federal interest is greatest, the federal 
government may play a more direct role in setting priorities and 
allocating resources, as well as fund a higher share of program costs. 
Conversely, where the federal interest is less evident, state and local 
governments could assume more responsibility. 

Functions that other entities may perform better than the federal 
government could be turned back to the states or other levels of 
government. Given the already substantial roles states and localities 
play in the construction and operation of transportation facilities, 
there may be areas that no longer call for federal involvement and 
funding could be reassessed. Notably, we have reported that the modal 
focus of federal programs can distort the investment and decision-
making of other levels of government and a streamlining of federal 
goals and priorities could better align programs with desired outcomes. 
Turning functions back to the states has many other implications. For 
example, states would likely have to raise additional revenues to 
support the increased responsibilities. While states might be freer to 
allocate funds internally without modally stovepiped federal funding 
categories, some states could face legal funding restrictions. For 
example, some states prohibit the use of highway funds for transit 
purposes, so if a transit program were returned to the states, 
alternative taxes would have to be raised or the laws would have to be 
changed. Until a program or function is actually turned back to the 
states or localities, it is uncertain how these other levels of 
government will perform. For example, if highway safety programs were 
turned back to the states, it is not known whether states would 
continue to target the same issues that they currently choose to 
address under federally-funded programs or would emphasize different 
issues. Likewise, if a program that targets a specific area such as 
urban transit systems is turned back to the states, there is no 
assurance that the states would continue to fund this area. Turning 
programs back to the states would have far-reaching consequences, as 
discussed in appendix III. 

Observers have argued that certain issues, such as urban mobility, are 
essentially metropolitan in character and therefore should be addressed 
by metropolitan regions, rather than by states or cities. In addition, 
regional organizations can promote collaborative decision-making and 
advance regional coordination by creating a forum for stakeholders, 
address problems of mutual concern, and engage in information and 
resource sharing.[Footnote 80] Metropolitan Planning Organizations 
(MPO) currently perform this function for surface transportation. While 
MPOs do receive some federal funding for operations, they are not 
regional governments and generally do not execute projects. Addressing 
these regional problems remains difficult in the absence of more 
powerful regional governmental bodies. The development of more powerful 
regional entities could create new opportunities to address regional 
transportation problems. 

Incorporate Performance and Accountability into Funding Decisions: 

Once federal goals and the federal role in surface transportation have 
been clarified, significant opportunities exist to incorporate 
performance and accountability mechanisms into federal programs. 
Tracking specific outcomes that are clearly linked to program goals 
could provide a strong foundation for holding grant recipients 
responsible for achieving federal objectives and measuring overall 
program performance. In particular, substituting specific performance 
measures for the federal procedural requirements that have increased 
over the past 50 years could help to shift federal involvement in 
transportation from the current process-oriented approach to a more 
outcome-oriented approach. Furthermore, shifting from process-oriented 
structures such as mode-based grant programs to performance-based 
programs could improve project selection by removing barriers to 
funding intermodal projects and giving grantees greater flexibility to 
select projects based on the project's ability to achieve results. 
Directly linking outcome-based goals to programs based on clearly 
defined federal interests would also help to clarify federal surface 
transportation policy and create a foundation for a transparent and 
results-based relationship between the federal government and other 
transportation stakeholders. 

Accountability mechanisms can be incorporated into grant structures in 
a variety of ways. For example, grant guidelines can establish uniform 
outcome measures for evaluating grantees' progress toward specific 
goals, and grant disbursements can depend in part on the grantees' 
performance instead of set formulas. Thus, if reducing congestion was 
an established federal goal, outcome measures for congestion such as 
travel time reliability could be incorporated into infrastructure 
grants to hold states and localities responsible for meeting specific 
performance targets. Similarly, if increasing freight movement was an 
established federal goal, performance targets for freight throughput 
and travel time in key corridors could be built into grant programs. 
Performance targets could either be determined at the national level 
or, where appropriate, in partnership with grantees--much as DOT has 
established state performance goals for highway safety and motor 
carrier safety assistance. 

Incentive grants or penalty provisions in transportation grants can 
also create clear links between performance and funding and help hold 
grantees accountable for achieving desired results. For example, the 
current highway and motor carrier safety incentive grants and penalty 
provisions can be used to increase or withhold federal grant funds 
based on the policy measures that states enact and the safety outcomes 
they achieve. Depending on the federal interest and established goals, 
these types of provisions could also be used in federal infrastructure 
grants. 

In addition, a competitive selection process can help hold recipients 
accountable for results. For example, DOT's competitive selection 
process for New Starts and Small Starts transit programs require 
projects to meet a set of established criteria and mandates post-
construction evaluations to assess project results. To better ensure 
that other discretionary grant programs are aligned with federal 
interests and achieve clearly defined federal transportation goals, 
Congress could establish specific project selection criteria for those 
programs and require that they use a competitive project selection 
process. For instance, key freight projects of national importance 
could be selected through such a competitive process that would 
identify those investments that are most crucial to national freight 
flows. DOT also recently selected metropolitan areas for Urban 
Partnership Agreements, which are not tied to a single grant program 
but do provide recipients with financial resources, regulatory 
flexibility, and dedicated technical support in exchange for their 
adoption of aggressive congestion-reduction strategies. When a national 
competition is not feasible, Congress could require a competitive 
selection process at the state or local level, such as those required 
for the Job Access and Reverse Commute Program. This program, however, 
lacks the statutorily defined selection criteria used to select 
projects for the New Starts and Small Starts programs. 

Employ Best Tools and Approaches to Help Improve Return on Investment: 

The effectiveness of any overall federal program design can be 
increased by promoting and facilitating the use of the best tools and 
approaches. Within broader federal program structures that fit the 
principles we discuss in this report, a number of specific tools and 
approaches can be used to improve results and return on investment, 
which is increasingly necessary to meet transportation challenges as 
federal resources become even more constrained. We and others have 
identified a range of leading practices, discussed below, however their 
suitability varies depending on the level of federal involvement or 
control that policymakers desire for a given area of policy. 

Rigorous economic analysis is recognized by experts as a useful tool 
for evaluating and comparing potential transportation projects. 
Benefit-cost analysis gives transportation decision makers a way to 
identify projects with the greatest net benefits and compare 
alternatives for individual projects. By translating benefits and costs 
into quantitative comparisons to the maximum extent feasible, these 
analyses provide a concrete way to link transportation investments to 
program goals. However, in order for benefit-cost analysis to be 
effective, it must be a key factor in project selection decisions and 
not seen simply as a requirement to be fulfilled. A complementary type 
of tool is outcome evaluation, which is already required for New Starts 
transit projects. Such evaluations would be useful in identifying 
leading practices and understanding project performance, especially 
since the available information indicates that the costs of highway and 
transit projects are often higher than originally anticipated. 

It should be recognized, however, that benefit-cost comparisons and 
other analyses do not necessarily identify the federal interest--many 
local benefits from transportation investments are not net benefits in 
national terms. For example, economic development may provide financial 
benefits locally, but nationally the result may be largely a 
redistribution of resources rather than a net increase. Accordingly, in 
emphasizing return on federal investment, the relationship of 
investments to national goals must be considered along with locally-
based calculations of benefit and cost. 

Because current programs are generally based on specific modes, it is 
difficult to plan and fund intermodal links and projects that involve 
more than one mode, despite a consensus among experts and DOT itself 
that an intermodal approach is needed. A number of strategies could be 
used to move toward an intermodal approach. For example, policy could 
be changed to allow a single stream of funding to pay for all aspects 
of a corridor-based project--even if the improvements include such 
diverse measures as highway expansion, transit expansion, and 
congestion management. DOT recently created competitive Urban 
Partnership Agreements, which award grants for initiatives that address 
congestion through congestion pricing, transit, telecommuting, and ITS 
elements. Finally, decision makers cannot make full use of cross-modal 
project comparisons, such as those developed through benefit-cost 
analysis, if funding streams remain stovepiped. 

Better management of existing capacity is another strategy that has 
proved successful, primarily on highways; it is useful because of the 
growing cost and, in some cases the impracticality, of building 
additional capacity. We have reported that implementing ITS technology 
can improve system performance. Congestion pricing of highways, where 
toll rates change according to demand, is another such leading 
practice. From an economic perspective, congested highways are 
generally "underpriced." Although the social cost of using a roadway is 
much higher at peak usage times, this higher cost is usually not 
reflected in what drivers pay. When toll rates increase with demand, 
some drivers respond to higher peak-period prices by changing the mode 
or time of their travel for trips that are flexible. This tool can 
increase the speed of traffic and has the potential to increase 
capacity as well--an evaluation of the variably priced lanes of State 
Route 91 in Orange County, California, showed that although the priced 
lanes represent only 33 percent of the capacity of State Route 91, they 
carry an average of 40 percent of the traffic during peak travel times. 
Although the Value Pricing Pilot Program encourages the use of this 
tool, tolling is prohibited on most Interstate highways by statute. 
Broader support in policy could increase the adoption of congestion 
pricing, improving the efficiency and performance of the system. 

Public-private partnerships are another tool that may benefit public 
sponsors by bringing private-sector financing and efficiencies to 
transportation investments, among other potential advantages. 
Specifically, private investors can help public agencies improve the 
performance of existing facilities, and in some cases build new 
facilities without directly investing public funds. At the same time, 
such partnerships also present potential costs and trade-offs, but the 
public sector can take steps to protect the public interest. For 
example, when evaluating the public interest of public-private 
partnerships, the public sector can employ qualitative public interest 
tests and criteria, as well as quantitative tests such as Value for 
Money and Public Sector Comparators, which are used to evaluate if 
entering into a project as a public-private partnership is the best 
procurement option available.[Footnote 81] Such formal assessments of 
public interest are used routinely in other countries, such as 
Australia and the United Kingdom, but use of systematic, formal 
processes and approaches to the identification and assessment of public 
interest issues has been more limited in the United States. Since 
public interest criteria and assessment tools generally mandate that 
certain aspects of the public interest are considered in public-private 
partnerships, if these criteria and tools are not used, then aspects of 
public interest might be overlooked. Although these techniques have 
limitations, they are able to inform public decision making--for 
instance, the Harris County, Texas, toll authority conducted an 
analysis similar to a public-sector comparator, and the results helped 
inform the authority's decision not to pursue a public-private 
approach. 

Tools can also be used in designing grants to help increase the impact 
of federal funds. One such tool is maintenance of effort requirements, 
under which state or local grantees must maintain their own level of 
funding in order to receive federal funds. Maintenance of effort 
requirements could discourage states from substituting federal support 
for funds they themselves would otherwise have spent. However, our past 
work has shown that maintenance of effort requirements should be 
indexed to inflation and program growth in order to be effective. 
Matching requirements are another grant design tool that can be 
adjusted to increase the impact of federal programs. The allowable 
federal share covers a substantial portion of project costs--often 80 
percent--in many transportation programs, especially for highways. 
Increasing the state share can help induce recipients to commit 
additional resources. For example, NHTSA's Occupant Protection grant 
program provides 75 percent federal funding the first year, but reduces 
the federal share to 25 percent in the fifth and sixth years to shift 
the primary financing responsibility to the states. 

Data collection is a key tool to give policymakers information on how 
the transportation system is functioning. Data on the system and its 
individual facilities and modes are useful in their own right for 
decision making, but are also essential to enable other effective 
approaches, such as linking grant disbursements to grantees' 
performance. As discussed previously, DOT does not have complete data 
in some crucial areas; the effective use of data in safety programs, 
despite problems, demonstrates the potential of more comprehensive data 
gathering to improve evaluations and induce improved performance in the 
surface transportation system. 

A restructured federal program could increase the application of these 
and other leading tools and approaches by providing incentives for or 
requiring their use in certain circumstances. For example, in 
competitive discretionary grant programs, the application of specific 
tools and approaches could be considered in evaluating proposals, just 
as the use of incentives or penalties could be considered in 
noncompetitive grant programs. The Motor Carrier Safety Assistance 
Program already employs this approach--one factor considered in 
awarding incentive funds is whether states provide commercial motor 
vehicle safety data for the national database. The use of certain tools 
and approaches could also simply be required in order to receive 
federal funds under relevant transportation grant programs. However, if 
federal programs were restructured to be based on performance and 
outcomes, states would have more incentive to implement such tools and 
approaches on their own. Under such a scenario, an appropriate federal 
role could be to facilitate their identification and dissemination. 

Ensure Fiscal Sustainability: 

Transportation financing, and the Highway Trust Fund in particular, 
faces an imbalance of revenues and expenditures and other threats to 
its long-term sustainability. In considering sustainable sources of 
funds for transportation infrastructure, the user-pay principle is 
often cited as an appropriate pricing mechanism for transportation 
infrastructure.[Footnote 82] While fuel taxes do reflect usage, they 
are not an exact user-pay mechanism and they do not convey to drivers 
the full costs of their use of the road. These taxes are not tied to 
the time when drivers actually use the road or which road they use. 
Taxes and fees should also be equitably assigned and reflect the 
different costs imposed by different users. The trucking industry pays 
taxes and fees for the highway infrastructure it uses, but its payments 
generally do not cover the costs it imposes on highways,[Footnote 83] 
thereby giving the industry a competitive price advantage over 
railroads, which use infrastructure that they own and operate.[Footnote 
84] An alternative to fuel taxes would be to introduce mileage charges 
on vehicles--Oregon is pilot testing the technology to implement this 
approach. Finally, the use of congestion pricing to reflect the much 
greater cost of traveling congested highways at peak times will help 
optimize investment by providing market cues to policymakers. 

Concerns about funding adequacy have led state and local governments to 
search for alternative revenue approaches, including alternative 
financing vehicles at the federal level, such as grant anticipation 
revenue vehicles, grant anticipation notes, state infrastructure banks 
and federal loans. These vehicles can accelerate the construction of 
projects, leverage federal assistance, and provide greater flexibility 
and more funding techniques. However, they are also different forms of 
debt financing. This debt ultimately must be repaid with interest, 
either by highway users--through tolls, fuel taxes, licensing or 
vehicle fees--or by the general population through increases in general 
fund taxes or reductions in other government services. Highway public-
private partnerships show promise as an alternative, where appropriate, 
to help meet growing and costly transportation demands. Highway public-
private partnerships have resulted in advantages, from the perspective 
of state and local governments, such as the construction of new 
infrastructure without using public funding, and obtaining funds by 
extracting value from existing facilities for reinvestment in public 
transportation and other public programs. However, there is no "free" 
money in public-private partnerships. Highway financing through public-
private partnerships also is largely a new source of borrowed funds 
that must be repaid to private investors by road users, over what could 
be a period of several generations.[Footnote 85] 

Finally, the sustainability of transportation financing should also be 
seen in the context of broader fiscal challenges. In a time of growing 
structural deficits, constrained state and local budgets, and looming 
Social Security and Medicare spending commitments, the resources 
available for discretionary programs will be more limited.[Footnote 86] 
The federal role in transportation funding must be reexamined to ensure 
that it is sustainable in this new fiscal reality. The long-term 
pressures on the Highway Trust Fund and the governmentwide problem of 
fiscal imbalance highlight the need for a more efficient, redesigned 
program based on the principles we have identified. The sustainability 
of surface transportation programs depends not only on the level of 
federal funding, but also on the allocation of funds to projects that 
provide the best return on investment and address national 
transportation priorities. Using the tools and approaches for improving 
transportation programs that we have discussed could also help surface 
transportation programs become more fiscally sustainable and more 
directly address national transportation priorities. 

Restructuring Principles Can Help Frame the Discussion of the National 
Commission Report and Dissent: 

The National Surface Transportation Policy and Revenue Study Commission 
(National Commission) issued its final report in January 2008.[Footnote 
87] The report recommended significantly increasing the level of 
investment by all levels of government in surface transportation, 
consolidating and reorganizing the current programs, speeding project 
delivery, and making the current program more performance-based and 
mode-neutral, among other things. However, several commissioners 
offered a dissenting view on some of the Commission's recommendations, 
notably the level of investment, size of the federal role, and the 
revenue sources recommended. The divergent views of the commission 
members indicate that while there is a degree of consensus on the need 
to reexamine federal surface transportation programs, there is not yet 
a consensus on the form a restructured surface transportation program 
should take. The principles that we discussed for examining 
restructuring options are a sound basis on which this discussion can 
take place. These principles do not prescribe a specific approach to 
restructuring, but they do provide key attributes that will help ensure 
that a restructured surface transportation program addresses current 
challenges. 

Conclusions: 

The current federal approach to addressing the nation's surface 
transportation problems is not working well. Despite large increases in 
expenditures in real terms for transportation the investment has not 
resulted in a commensurate improvement in the performance of nation's 
surface transportation system, as congestion continues to grow, and 
looming problems from the anticipated growth in travel demand are not 
being adequately addressed. The current collection of flexible but 
disparate programs grants that characterizes the existing approach is 
the result of a patchwork evolution of programs over time, not a result 
of a specific rationale or plan. This argues for a fundamental 
reexamination of the federal approach to surface transportation 
problems. In cases where there is a significant national interest, 
maintaining strong federal financial support and a more direct federal 
involvement in the program may be needed. In other cases, functions may 
best be carried by other levels of government or not at all. There may 
also be instances where federal financial support is desirable but a 
more results-oriented approach is appropriate. In addition, it is 
important to recognize that depending on the transportation issue and 
the desired goals, different options and approaches may best fit 
different problems. Reforming the current approach to transportation 
problems will take time, but a vision and strategy is needed to begin 
the process of transforming to a set of policies and programs to 
effectively address the nation's transportation needs and priorities. 
The current system evolved over many years and involves different 
modes, infrastructure and safety issues, and extends widely into the 
operations of state and local governments. 

Given the proliferation of programs and goals previously discussed, 
refocusing federal programs is needed to address the shortfalls of the 
current approach. Focusing federal programs around a clear federal 
interest is key. Well-defined goals based on identified areas of 
federal interest would establish what federal participation in surface 
transportation is designed to accomplish. A clearly defined federal 
role in achieving these goals would give policymakers the ability to 
direct federal resources proportionately to the level of national 
interest. Once this is accomplished, a basis exists to reexamine the 
current patchwork of programs, test their continued relevance and 
relative priority, potentially devolve programs and policies that are 
outdated or ineffective, and modernize those programs and policies that 
remain relevant. 

Once those areas of federal interest are known, tying federal funds to 
performance and having mechanisms to test whether goals are met would 
help create incentives to state and local governments to improve their 
performance and the performance of the transportation system. Both 
incentive programs and sanctions are possible models for better tying 
performance to outcomes. Having more federal programs operate on a 
competitive basis and projects selected based on potential benefits 
could also help tie federal funds to performance. 

There also is a need to improve the use of analytical tools in the 
selection and evaluation of the performance of projects. Better use of 
tools such as benefit-cost analysis and using return on investment as a 
criterion for the selection of individual projects can help identify 
the best projects. Specifically, the use of a return on investment 
framework will help to emphasize that federal financial commitments to 
transportation infrastructure projects are, in fact, long-term capital 
investments designed to achieve tangible results in a transparent 
fashion. 

Finally, a fundamental problem exists in the fiscal sustainability of 
surface transportation programs as a result of the impending shortfall 
in the Highway Trust Fund. The trust fund is the primary source of 
federal support to state and local governments across highways, 
transit, and surface transportation safety programs. This fiscal crisis 
is fundamentally based on the balance of revenues and expenditures in 
the fund, and thus either reduced expenditures, increased revenues, or 
a combination of the two is now needed to bring the fund back into 
balance. Finally, given the scope of needed transformation, the shifts 
in policies and programs may need to be done incrementally or on a 
pilot basis to gain practical lessons for a coherent, sustainable, and 
effective national program and financing structure to best serve the 
nation for the 21st century. 

Matter for Congressional Consideration: 

To improve the effectiveness of the federal investment in surface 
transportation, meet the nation's transportation needs, and ensure a 
sustainable commitment to transportation infrastructure, Congress 
should consider reexamining and refocusing surface transportation 
programs to be responsive to these principles so that they: 

* have well-defined goals with direct links to an identified federal 
interest and role, 

* institute processes to make grantees more accountable by establishing 
more performance-based links between funding and program outcomes, 

* institute tools and approaches to that emphasize the return on the 
federal investment, and: 

* address the current imbalance between federal surface transportation 
revenues and spending. 

Agency Comments: 

We provided copies of a draft of this report to DOT for its review and 
comment. In an email on February 22, 2008, DOT noted that surface 
transportation programs could benefit from restructured approaches that 
apply data driven performance oriented criteria to enable the nation to 
better focus its resources on key surface transportation issues. DOT 
officials generally agreed with the information in this report, and 
they provided technical clarifications which we incorporated, as 
appropriate. 

We will send copies of this report to interested congressional 
committees and the Secretary of Transportation. Copies will also be 
available to others upon request and at no cost on GAO's Website at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-2834, or [email protected]. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix IV. 

Signed by: 

JayEtta Z. Hecker: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

We were asked to (1) provide an historical overview of the federal role 
in surface transportation and the goals and structures of federal 
surface transportation programs funded by the Highway Trust Fund, (2) 
summarize conclusions from our prior work on the structure and 
performance of these and other federal programs, and (3) identify 
principles to help assess options for focusing the future federal role 
and the structure of federal surface transportation programs. 

We focused our work on programs funded by the Highway Trust Fund (HTF) 
because it is the primary vehicle for federal financing of surface 
transportation, receiving nearly all federal fuel tax revenue; it is 
also a focus of most proposals to reform the current federal role. We 
examined the Federal Highway Administration (FHWA), Federal Motor 
Carrier Safety Administration (FMCSA), Federal Transit Administration 
(FTA) and National Highway Traffic Safety Administration (NHTSA) as 
part of this study; we did not look at two other DOT agencies that 
receive HTF funds, the Research and Innovative Technology 
Administration (RITA) and the Federal Railroad Administration (FRA). 
RITA was excluded because it focuses on federal research, in contrast 
to our focus on federal-state programs; FRA was excluded because the 
portion of HTF funds that it receives is so small that it cannot be 
compared to the other operating agencies. 

To provide an historical overview of the federal role in surface 
transportation and the goals and structures of federal surface 
transportation programs, we drew information from statutes, especially 
transportation authorization laws; regulations; budget documents; 
agency reports; and literature on transportation policy by outside 
experts. We interviewed officials in DOT's modal administrations, 
including FHWA, FMCSA, FTA, and NHTSA in order to help clarify agency 
goals, roles and structures. We also interviewed representatives of 
stakeholder groups such as the American Association of State Highway 
and Transportation Officials (AASHTO) and the American Public Transit 
Association (APTA). 

To describe conclusions that we and others have drawn about the current 
structure and performance of these federal programs, we reviewed 
relevant GAO reports on specific transportation programs, as well as 
reports that looked at broader issues of performance measurement, 
oversight, grant design, and other related issues. We also reviewed 
reports, policy statements, and other materials from stakeholder groups 
and other organizations. Additionally, we reviewed materials from 
hearings held by the National Surface Transportation Policy and Revenue 
Study Commission. Finally, we sought the views of transportation 
experts, including the 22 who participated in a forum convened by the 
Comptroller General in May 2007, that included public officials, 
private-sector executives, researchers, and others. 

To review policy options for addressing the federal role, we identified 
options from previous proposals, both those originating in Congress and 
presidential administrations, as well as those presented by stakeholder 
groups such as AASHTO. We also reviewed options discussed in previous 
GAO reports, as well as testimony and other materials generated by the 
National Surface Transportation Policy and Revenue Study Commission, 
which the Congress also tasked to examine the federal approach to 
surface transportation programs. 

In addition, to complement our appendix III discussion of the 
implications of turning over responsibility for surface transportation 
to the states, we analyzed the potential fiscal impact of turning over 
most elements of the federal transportation program to the states. We 
obtained DOT data on state grant disbursements and calculated total 
federal grant receipts for each state and the District of Columbia. We 
limited our analysis to grant programs funded by the HTF, because the 
federal fuel taxes that would be eliminated or sharply reduced under 
this scenario are deposited almost exclusively in the HTF. We also 
omitted discretionary grants because they are a small portion of 
federal transportation grants and often vary significantly from year to 
year in a given state. Separately, we obtained state fuel consumption 
data from DOT. In order to calculate the extent to which individual 
states would have to raise their fuel taxes to maintain the same level 
of spending if federal grants were eliminated, we divided the total 
grant receipts (as described above) for each state by the number of 
gallons of highway fuel used in that state in the prior year. This 
calculation yielded the per-gallon increase in state taxes that would 
be needed to maintain spending, assuming it would be implemented evenly 
across all types of fuel. Because diesel and gasoline are taxed at 
different federal rates, and represent different shares of total usage 
in each state, we used a weighted average to calculate the current 
effective per-gallon federal fuel tax rate in each state. We then 
expressed the per-gallon tax rate results in terms of change from the 
current federal tax rate. Where we had not previously assessed the 
reliability of the source data, we conducted a limited data reliability 
analysis and found the data suitable for the purpose of this analysis. 

We conducted this performance audit between April 2007 and February 
2008 in accordance with Generally Accepted Government Auditing 
Standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence that provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Overview of Federal Surface Transportation Programs: 

Federal Highway Infrastructure Assistance Since 1956: 

Current Programs: 

Federal assistance for highway infrastructure is distributed through 
several grant programs, known collectively as the Federal-Aid Highway 
Program. Both Congress and DOT have established multiple broad policy 
goals for the Federal-Aid Highway Program, which provides financial and 
technical assistance to states to construct, preserve, and improve 
eligible federal-aid highways. The program's current goals include 
safety, efficiency, mobility, congestion relief, interstate and 
international commerce, national security, economic growth, 
environmental stewardship, and sustaining the nation's quality of life. 

The Federal-Aid Highway Program currently consists of seven core 
formula grant programs and several smaller formula and discretionary 
grant programs. The majority of Highway Trust Fund revenues are 
distributed through the core formula grant programs to the states for a 
variety of purposes, including road construction and improvements, 
Interstate highway and bridge repair, air pollution mitigation, highway 
safety, and equity considerations. Broad flexibility provisions allow 
states to transfer funds between core highway programs and to the 
Federal Transit Administration (FTA) for eligible transit projects. 
Highway Trust Fund revenues are also distributed through the smaller 
formula and discretionary grant programs, which cover a wide range of 
projects, including border infrastructure, recreational trails, and 
safe routes to schools. Congress has also designated funds for specific 
projects. For example, according to the Transportation Research Board, 
SAFETEA-LU--the most recent reauthorization legislation--contained 
over 5,000 dedicated spending provisions. 

The Federal-Aid Highway Program is administered through a federal-state 
partnership. The federal government, through FHWA, provides financial 
assistance, policy direction, technical expertise, and some 
oversight.[Footnote 88] FHWA headquarters provides leadership, 
oversight, and policy direction for the agency, FHWA state division 
offices deliver the bulk of the program's technical expertise and 
oversight functions, and five FHWA regional service resource centers 
provide guidance, training, and additional technical expertise to the 
division offices. In turn, state and local governments execute the 
programs by matching and distributing federal funds; planning, 
selecting, and supervising projects; and complying with federal 
requirements. Currently, based on stewardship agreements with each 
state, FHWA exercises full oversight on a limited number of federal-aid 
projects. States are required to oversee all federal-aid highway 
projects that are not on the National Highway System, and states 
oversee design and construction phases of other projects based on an 
agreement between FHWA and the state. FHWA also reviews state 
management and planning processes. Many state and local government 
processes are driven by federal requirements, including not only 
highway-specific requirements for transportation planning and 
maintenance, but also environmental review requirements and labor 
standards that are the result of separate federal legislation designed 
to address social and environmental goals. 

Changes over Time: 

Since its reauthorization under the Federal-Aid Highway Act of 1956, 
the Federal-Aid Highway Program has grown in size, scope, and 
complexity as federal goals for the program have expanded. In 1956, the 
primary focus of the Federal-Aid Highway Program was to help states 
finance and construct the Interstate Highway System to meet the 
nation's needs for efficient travel, economic development, and national 
defense. The Federal-aid Highway Program made funds available to states 
for road construction and improvements through four formula programs--
one program for each of four eligible road categories--with a 
particular focus on the Interstate system. Yet the Federal-Aid Highway 
Program has also served as a mechanism to achieve other societal goals. 
For example, the 1956 Act requires that states adhere to federal wage 
and labor standards for any state construction project using federal-
aid funds. In successive reauthorizations of the program, Congress has 
increased program requirements to achieve other societal goals such as 
civil rights, environmental protection, urban planning, and economic 
development. 

Besides increasing compliance requirements, Congress has authorized new 
grant programs to achieve expanded program objectives. For example, 
Congress authorized new core grant programs to address Interstate 
highway maintenance, environmental goals, and safety. In response to 
controversy over the distribution of highway funds between states that 
pay more in federal taxes and fees than they receive in federal-aid 
(donor states) and states that receive more in federal-aid than they 
contribute (donee states), Congress established and strengthened equity 
programs that guarantee states a minimum relative return on their 
payments into the Highway Account of HTF. Additionally, Congress has 
further expanded the program's scope by authorizing highway funds for 
additional purposes and uses, such as highway beautification, historic 
preservation, and bicycle trails. 

The federal-state partnership has evolved as programs have changed to 
give states and localities greater funding flexibility. For example, in 
1991, when Interstate construction was nearly complete, Congress 
restructured the Federal-aid Highway Program to promote a more 
efficient and flexible distribution of funds. Specifically, under the 
Intermodal Surface Transportation Efficiency Act of 1991 
(ISTEA),[Footnote 89] Congress substantially increased flexibility by 
consolidating road-category grant programs, creating a surface 
transportation block grant, and establishing broad flexible fund 
transfer provisions between highway programs and transit--a structure 
that remains today. At the same time, Congress altered the established 
federal-state partnership by increasing the authority of metropolitan 
planning organizations--local governmental planning bodies--in 
federally mandated planning processes. 

The federal-state partnership has further evolved as Congress has 
delegated federal oversight responsibilities to state and local 
governments, but has assumed a greater role in project selection. When 
Interstate construction began, the federal government provided direct 
oversight during the construction and maintenance phases of projects 
and ensured that the states complied with federal requirements. By 
1973, states could self-certify compliance with most federal grant 
requirements, and during the 1990s, Congress further expanded this 
authority to allow states and FHWA to cooperatively determine the 
appropriate level of oversight for federally funded projects, including 
some Interstate projects. While reducing the federal role in oversight, 
Congress has increased its role in project selection--traditionally a 
state and local responsibility--through congressional directives. For 
example, according to the Transportation Research Board, there were 
over 5,000 directives in the latest reauthorization from 2005, up from 
1,850 in 1998 and 11 in 1982. 

As the Federal-Aid Highway Program has grown in size and complexity, so 
too has the federal administrative structure although some shifting or 
consolidation of responsibilities has occurred. Before FHWA was created 
in 1967, its predecessor, the Bureau of Public Roads, established a 
decentralized administrative structure and a field office in each 
state, reflecting the close partnership between the federal government 
and the states. Moreover, as the number of the Federal-Aid Highway 
Program requirements and the scope of the program increased, the 
agency, which initially had an engineering focus, hired a wide range of 
specialists including: economists, landscape architects, planners, 
historians, ecologists, safety experts, civil rights experts, and 
others. When DOT was formed in 1967, new motor carrier and traffic and 
vehicle safety functions were assigned to FHWA. These functions have 
since shifted to NHTSA and FMCSA, although FHWA continues to 
collaborate on these issues and retains responsibility for highway 
infrastructure-related safety projects and programs. In 1998, FHWA 
consolidated its organization by eliminating its nine regional offices 
and establishing regional service resource centers, as well as 
devolving responsibility for state projects and programs entirely to 
the FHWA division offices in each state. For fiscal year 2009, FHWA 
requested funding for 2,861 full-time equivalent staff divided between 
headquarters, 5 regional service resource centers and 55 division 
offices.[Footnote 90] 

Federal Transit Assistance: 

Current Programs: 

Both Congress and DOT have established multiple broad policy goals for 
FTA, which provides financial and technical assistance to local and 
state public agencies to build, maintain, and operate mass 
transportation systems. FTA's current statutory goals include (1) 
promoting the development of efficient and coordinated urban 
transportation systems that maximize mobility, support economic 
development, and reduce environmental and energy consumption impacts, 
and (2) providing mobility for vulnerable populations in both urban and 
rural areas. DOT's six strategic goals also apply to FTA: safety, 
congestion mitigation, global connectivity, environmental stewardship, 
security and preparedness, and organizational excellence. 

Currently, FTA divides its major capital and operating assistance 
programs into two categories: formula and bus grants, which are funded 
entirely from HTF's Mass Transit Account,[Footnote 91] and capital 
investment grants, which are financed using general revenue. The 
formula and bus grants provide capital and operating 
assistance[Footnote 92] to transit agencies and states through a 
combination of seven relatively large and five smaller formula and 
discretionary grants. Under these grants, the federal government 
generally provides 80 percent of the funding and the locality provides 
20 percent, with certain exceptions.[Footnote 93] The capital 
investment grants provide discretionary capital assistance for the 
construction of new fixed-guideway and corridor systems and extensions 
of existing systems. Funds for new fixed-guideway systems are 
distributed through the New Starts and Small Starts grant programs and 
are awarded to individual projects through a competitive selection 
process.[Footnote 94] Although the statutory federal match for the New 
Starts and Small Starts programs is 80 percent, agency officials stated 
the actual federal match is closer to 50 percent due to high levels of 
state and local investment and the competitive selection process that 
favors projects that require a lower federal match. FTA also provides 
financial support for research and planning activities. Funds for 
research are allocated on a discretionary basis out of the General 
Fund, and planning funds are taken from the Mass Transit Account of the 
Highway Trust Fund and distributed to states by formula. In addition to 
the funding they obtain through these programs, states may transfer a 
portion of certain highway program funds to FTA for eligible transit 
expenses. According to the most recent DOT data, in 2004, 28.1 percent 
of the funding for transit was system-generated through fares or other 
charges, and the remaining funds came from local (34.6 percent), state 
(19.7 percent), and federal (17.6 percent) sources. Approximately 75 
percent of federal transit assistance is directed to capital 
investments, and the remainder is directed to other eligible expenses 
such as operating expenses. 

In contrast to federal highway infrastructure programs, which are 
administered through a federal-state partnership, federal transit 
programs are generally administered through a federal-local 
partnership, although rural programs are administered at the state 
level. The federal government, through FTA headquarters and 10 FTA 
regional offices, provides financial assistance, establishes 
requirements, performs oversight, and conducts research. Grant 
recipients such as local transit agencies are responsible for matching 
federal funds and for planning, selecting, and executing projects while 
complying with federal requirements. The degree of federal oversight 
varies across programs and among grant recipients. Currently, full 
federal oversight[Footnote 95] is limited to major capital projects 
that cost over $100 million, and local and state grant recipients are 
allowed to self-certify their compliance with certain federal laws and 
regulations. For example, FTA conducts periodic reviews of program 
management processes for recipients of Block Grants Program (Urbanized 
Area Formula Grants) funds and provides direct project management 
oversight for recipients of New Starts funding.[Footnote 96] In 
addition, FTA conducts discretionary reviews of grantees' compliance 
with requirements in other areas such as financial management or civil 
rights and uses a rating system to determine the level of oversight 
needed for each grantee.[Footnote 97] FTA employees work with external 
contractors to conduct project management and program management 
process reviews. For fiscal year 2009, FTA requested funding for 526 
full-time-equivalent staff, divided among its 10 regional offices and 
headquarters. 

Changes over Time: 

From the modern transit program's inception as part of the Urban Mass 
Transportation Act of 1964 (UMTA), Congress justified federal funding 
for mass transportation capital improvements as a means to address 
pressing urban problems such as urban decay, traffic congestion, and 
poor development planning. Federal capital assistance was distributed 
to local governments on a discretionary basis to help urban areas 
improve and expand urban mass transportation systems. Congress also 
established federal transit programs to achieve other societal goals. 
For example, UMTA required grant recipients to provide labor 
protections for transit employees and relocation assistance for 
individuals displaced by transit projects.[Footnote 98] Later federal 
legislation increased grant requirements to achieve other societal 
goals such as civil rights, environmental protection, and economic 
development. 

In addition to increasing compliance requirements, Congress has 
authorized new grant programs and broadened program eligibility 
requirements to promote expanding objectives. For example, federal 
transit assistance expanded during the 1970s to include grant programs 
designed to meet social and transportation-related goals such as: 
improving mobility in rural areas[Footnote 99] and making public 
transportation more accessible for the elderly and the 
disabled.[Footnote 100] More recently, Congress has further broadened 
the scope of programs to include making transportation to jobs more 
accessible for welfare recipients and low-income individuals[Footnote 
101] and providing transit service within public parks and 
lands.[Footnote 102] Although federal transit funding was initially 
provided on a discretionary basis from the General Fund of the 
Treasury, many of the newer programs make funds available through 
formulas, and highway user fees have replaced general revenues as the 
major source of transit assistance since the creation of the Mass 
Transit Account of the Highway Trust Fund in 1983. In addition, 
Congress has broadened the scope of federal transit assistance to 
include operating expenses and capital maintenance as well as capital 
expenses. For example, concerns about growing operating deficits among 
transit agencies led Congress to authorize the use of federal funds for 
transit operating expenses in 1974. Although federal support for 
operating expenses in urbanized areas has since declined, operating 
assistance is still available for areas with a population of less than 
200,000. 

The federal-local relationship in transit has evolved as Congress has 
expanded federal involvement in transit and increased state and local 
government authority and flexibility in using federal funds. For 
example, in 1978, Congress expanded federal transit assistance to rural 
areas and made state governments responsible for receiving and 
distributing these funds. According to agency officials, states 
previously played a limited role in transit projects because the 
federal government worked directly with urban areas and transit 
agencies. In 1991, Congress increased local authority by expanding the 
role of metropolitan planning organizations in project selection and 
transportation planning. At the same time, Congress substantially 
increased state and local authority to transfer funds between highway 
and transit programs. The combination of additional transfer authority 
and the gradual shift toward apportioning funds through formulas rather 
than individual project awards has increased flexibility for both state 
and local transit grant recipients. In addition, state and local 
government oversight responsibilities have increased for federal 
transit grants, much as they have for federal highway infrastructure 
grants, with self-certification procedures for compliance with federal 
laws and regulations, and additional federal compliance requirements 
such as those for environmental review. 

Federal Highway Safety and Motor Carrier Safety Assistance: 

Current Programs: 

Federal highway safety and motor carrier safety assistance programs are 
separately administered by NHTSA and FMCSA. The primary statutory 
policy goals of these programs are directed to reducing accidents, and 
the bulk of NHTSA's and FMCSA's financial support and research, 
education, rulemaking, and enforcement activities fall under DOT's 
strategic goal of improving safety. Although FHWA and FTA exercise 
rulemaking authority in the administration of their programs, 
rulemaking and enforcement are primary tools that NHTSA and FMCSA use 
to reduce accidents and their associated damages. 

Highway safety and motor carrier safety grant programs are similarly 
organized. Both use a basic formula grant to provide funding to states 
for safety programs, enforcement activities, and related expenditures, 
coupled with several targeted discretionary grants. Currently, almost 
40 percent of authorized federal highway safety assistance is 
distributed by formula to states through the State and Community 
Highway Safety Grant Program (Section 402), which supports a wide range 
of highway safety initiatives at the state and local level. This basic 
program is augmented by several smaller discretionary grant programs 
that mostly target funds to improve safety through the use of measures 
such as seat belts and child safety restraints, among others.[Footnote 
103] Most of these discretionary grants provide states with financial 
incentives for meeting specific performance or safety activity 
criteria. For example, to be eligible for Alcohol-Impaired Driving 
Countermeasures Incentive grants, most states must either have a low 
alcohol fatality rate or meet programmatic criteria for enforcement, 
outreach, and other related activities.[Footnote 104] In addition to 
discretionary grants, Congress has authorized highway safety provisions 
that penalize states by either transferring or withholding state 
highway infrastructure funds from states that do not comply with 
certain federal provisions. These penalty provisions can provide a 
substantial amount of additional funding for state safety activities. 
For example, in 2007, penalty provisions transferred over $217 million 
of federal highway infrastructure assistance to highway safety programs 
in the 19 states and Puerto Rico that were penalized for failure to 
meet federal criteria for either open container requirements or minimum 
penalties for repeat offenders for driving while intoxicated or under 
the influence.[Footnote 105] 

The majority of federal motor carrier safety funds are distributed by 
formula to states through the Motor Carrier Safety Assistance Program 
(MSCAP), which provides financial assistance to states for the 
enforcement of federal motor carrier safety and hazardous materials 
regulations. In addition, several smaller discretionary programs are 
targeted to achieve specific goals such as data system improvements and 
border enforcement, among others. Some of these grants require states 
to maintain a level of funding for eligible motor carrier safety 
activities to reduce the potential for federal funds to replace state 
financial support.[Footnote 106] Finally, FMCSA sets aside MCSAP funds 
to support high-priority areas such as audits of new motor carrier 
operations. Unlike the highway safety grants, most of these 
discretionary programs do not have statutorily defined performance or 
outcome-related eligibility criteria, and funds are allocated at the 
agency's discretion.[Footnote 107] States that do not comply with 
federal commercial driver licensing requirements may have up to 5 
percent of their annual highway construction funds withheld in the 
first fiscal year and 10 percent in the second fiscal year of 
violation. However, these withheld funds, unlike the funds withheld or 
transferred under some highway safety penalty provisions, are not 
available to the penalized states for motor carrier safety activities. 

Like highway infrastructure grants, most federal highway safety and 
motor carrier safety grants are jointly administered through a federal-
state partnership. Through NHTSA and FMCSA, the federal government 
provides funds, establishes and enforces regulations, collects and 
analyzes data, performs oversight, conducts research, performs 
educational outreach, and provides technical assistance. In turn, 
states provide matching funds, develop and execute safety and 
enforcement plans and programs, distribute funds to other governmental 
partners, collect and analyze data, and comply with federal grant and 
reporting requirements. Both NHTSA and FMCSA use a performance-based 
approach to grant oversight. Each agency reviews state safety plans, 
which establish specific performance goals, and then monitors states' 
progress towards achieving their goals. Because these efforts rely on 
the accuracy and completeness of state safety data, both NHTSA and 
FMCSA emphasize state data collection and analysis in the 
administration of their grant programs. In addition to their annual 
safety performance reviews, NHTSA and FMCSA conduct periodic management 
and compliance reviews of grant recipients. 

NHTSA and FMCSA also each have a substantial regulatory role. NHTSA 
establishes and enforces safety standards for passenger vehicles in 
areas such as tire safety, occupant protection devices, and 
crashworthiness, as well as issuing fuel economy standards. FMCSA 
establishes and enforces standards for motor carrier vehicles and 
operations, hazardous materials, household goods movement, commercial 
vehicle operator medical requirements, and international motor carrier 
safety. NHTSA conducts testing, inspection, analysis, and 
investigations to identify noncompliance with vehicle safety standards, 
and if necessary, initiates a product recall. FMCSA conducts compliance 
reviews of motor carriers' operations at their places of business as 
well as roadside inspections of drivers and vehicles, and can assess a 
variety of penalties including fines and cessation orders for 
noncompliance. Both NHTSA and FMCSA rely on data to target their 
enforcement activities. 

NHTSA and FMCSA use different organizational structures to administer 
their grant programs. NHTSA has both a headquarters office and 10 
regional offices. Headquarters staff develop policy and programs and 
provide technical assistance to regional staff. Regional staff review 
and approve state safety plans, and provide technical assistance. 
According to agency officials, since NHTSA does not provide the same 
level of technical assistance as FHWA, a regional rather than a state 
division structure is appropriate to NHTSA's needs. For fiscal year 
2009, NHTSA requested funding for 635 full-time-equivalent staff 
divided among its headquarters and regional offices. Similar to FHWA, 
FMCSA has a field structure of 4 regional service centers and 52 
division offices. Headquarters staff establish and communicate agency 
priorities, issue policy guidance, and carry out financial management 
activities. Regional service centers act as an intermediary between 
headquarters and division offices by clarifying policy and organizing 
training and goal-setting meetings for MSCAP grants. Division offices 
have primary responsibility for overseeing state motor carrier safety 
programs and work closely with the states to develop commercial vehicle 
safety plans. These offices also monitor state progress and grant 
expenditures. For fiscal year 2009, FMCSA requested funding for 1119 
full-time equivalent staff divided among its headquarters and field 
offices. 

Changes over Time: 

In broad terms, both federal highway safety and motor carrier safety 
programs have followed a similar path since their inception. Both 
federal highway safety and motor carrier safety activities were 
components of the federal highway program before separate modal 
agencies were established within DOT. Both state-assistance programs 
began as a single basic formula grant that was then expanded to include 
smaller targeted discretionary grants. Additionally, Congress has given 
states greater flexibility to set their own priorities within the 
parameters of national safety goals, and both NHTSA and FMCSA have 
adopted a performance-based approach to grant oversight. Although 
broader environmental and social goals have had less of an impact on 
federal safety grant programs, the scope and administrative complexity 
of highway safety and motor carrier safety regulatory functions has 
expanded to incorporate these goals. 

Because of growing concerns about vehicle safety and traffic accidents, 
the National Traffic and Motor Vehicle Safety Act and Highway Safety 
Act established highway safety as a separate grant program and 
regulatory function in 1966. Two major grants provided federal highway 
safety assistance in 1966: the State and Community Highway Safety 
(Section 402) grants and Highway Safety Research and Development 
(Section 403) grants. Section 402 grants distributed federal assistance 
to states by formula to support the creation of state highway safety 
programs and the implementation of countermeasures to address 
behavioral factors in accidents. State safety programs were required to 
meet several uniform federal standards to be eligible for funding and 
avoid withholding penalties. Section 403 grants provided discretionary 
federal funding for research, training, technical assistance, and 
demonstration projects. Although originally administered by the 
Department of Commerce, federal highway safety grants and regulatory 
authority were transferred to the Federal Highway Administration (FHWA) 
upon its creation in 1967. In 1970, FHWA's National Highway Safety 
Bureau became a separate agency within DOT and was renamed the National 
Highway Traffic Safety Administration. 

Since 1966, Congress has increased state and local government authority 
and flexibility to set and fund safety priorities by removing some 
federal grant requirements and restrictions, and by relying more on 
incentive-based discretionary grants to achieve national safety goals. 
For example, the uniform federal standards first established in 1966 
for state highway safety programs funded by Section 402 grants became 
guidelines in 1987, and in 1998, Congress amended federal oversight 
procedures from direct oversight of state safety programs to selective 
oversight of state safety goals based on state performance. 
Additionally Congress has removed dedicated spending restrictions on 
Section 402 funds and replaced some of them with separate incentive 
grant programs. For example, provisions that required a percentage of 
Section 402 funds to be dedicated to 55 mph speed limit enforcement, 
school bus safety, child safety restraints, and seat belt use have been 
discontinued. Some of the priorities addressed by these spending 
restrictions have become separate incentive programs designed to reward 
state performance and activities in these areas rather than limit the 
availability of Section 402 funds.[Footnote 108] However, in certain 
priority areas, Congress has provided additional incentives for state 
compliance by authorizing penalty provisions to withhold or transfer 
state highway infrastructure funds for failure to meet specific safety 
criteria. 

Unlike federal highway and transit infrastructure grants, NHTSA's 
grants have not been as directly affected by emerging national social 
and environmental goals, although Congress has incorporated these goals 
into NHTSA's regulatory processes. States must comply with several 
broad federal requirements such as nondiscrimination policies to 
receive federal safety funds. However, these requirements have not 
increased the administrative complexity of highway safety grants to the 
same extent as infrastructure grants because most safety activities 
funded through NHTSA do not require construction. For example, state 
safety activities such as enforcement of traffic laws and accident data 
collection are generally not subject to construction-related 
requirements such as environmental assessments and construction 
contract labor standards which apply to highway and transit 
infrastructure programs. Similarly, Congress has added only one 
targeted highway safety grant program to specifically address a social 
goal unrelated to safety--the reduction of racial profiling in law 
enforcement--and one grant provision requiring states to ensure 
accessibility for disabled persons on all new roadside curbs. In 
contrast, federal social and environmental goals have had a greater 
impact on NHTSA's regulatory processes. For example, in response to the 
energy crisis during the 1970s, Congress gave NHTSA authority to set 
corporate average fuel economy standards. Furthermore, the agency's 
rulemaking process is subject to executive orders and regulations 
designed to meet legislatively established social and environmental 
goals such as NEPA, the Paperwork Reduction Act, energy effects, and 
unfunded mandates. 

Before FMCSA was established as a separate modal administration within 
DOT in 1999, federal motor carrier safety functions were administered 
by both the former Interstate Commerce Commission and FHWA. Until 1982, 
the federal government regulated motor carrier safety but did not 
provide financial assistance to states for enforcement. The Surface 
Transportation Act of 1982 authorized the Secretary of Transportation 
to make grants to the states for the development or implementation of 
state programs to enforce federal and state commercial motor vehicle 
regulations. This authorization became the foundation for the basic 
MCSAP grant. Since 1982, Congress has expanded the number and scope of 
motor carrier grant programs and requirements to meet emerging areas of 
concern, including border enforcement, vehicle and driver information 
systems, commercial driver license oversight, and safety data 
collection. Congress has also set-aside grant funds for purposes such 
as high-priority areas and new entry audits. Additionally, grant 
eligibility requirements have increased. For example, state enforcement 
plans must meet 24 criteria to be eligible for a basic MCSAP grant 
today, compared with 7 criteria when the program started in 1982. 
Although grant requirements have increased, Congress has given states 
some flexibility to set enforcement priorities by restructuring the 
programs to become performance-based and allowing states to tailor 
their activities to meet their particular circumstances, provided these 
activities work toward national goals. Additionally, FMCSA follows a 
performance-based approach to grant oversight. 

Like highway safety grant programs, motor carrier safety grant programs 
have undergone fewer structural and administrative changes in response 
to emerging national social and environmental concerns than have 
federal highway and transit infrastructure grant programs. Although 
states must adhere to broad requirements to receive federal funds, some 
of these requirements, such as those calling for environmental 
assessments, are not relevant for safety activities that do not involve 
construction. Furthermore, Congress has not added any specific grant 
programs or grant requirements exclusive to motor carrier safety 
assistance that directly address other social and environmental goals. 

FMCSA's regulatory and enforcement scope has expanded considerably over 
time. Much of this expansion is related directly to safety, but 
Congress has also incorporated other policy goals into FMCSA's 
regulatory functions. For example, hazardous materials transport, 
commercial driver licensing programs, and operator medical requirements 
have become additional areas of FMCSA regulation and enforcement that 
directly relate to safety. However, Congress has also given FMCSA 
regulatory authority for consumer protection in interstate household 
goods movement, which does not specifically address reducing motor 
carrier-related fatalities. Additionally, FMCSA's rulemaking process 
is subject to executive orders and regulations designed to meet 
legislatively established social and environmental goals. 

[End of section] 

Appendix III: Implications of "Turning Back" Surface Transportation 
Programs and Revenues to the States: 

A fundamental reexamination of surface transportation programs begins 
with identifying issues in which there is a strong federal interest and 
determining what the federal goals should be related to those issues. 
Once the federal interest and goals have been identified, the federal 
role in relation to state and local governments can be clearly defined. 
For issues in which there is a strong federal interest, ongoing federal 
financial support and direct federal involvement could help meet 
federal goals. But for issues in which there is little or no federal 
interest, programs and activities may better be devolved to other 
levels of government or to other parties. 

In some cases, it may be appropriate to "turn back" activities and 
programs to state and local governments if they are best suited to 
perform them. Many surface transportation programs have a dedicated 
source of funding, that is, they are funded from a dedicated fund--the 
Highway Trust Fund. Devolving federal responsibility for programs could 
entail simultaneously relinquishing the federal revenue base, in this 
case, revenues that go into the Highway Trust Fund.[Footnote 109] A 
turnback of federal programs, responsibilities, and funding would have 
many implications and would require careful decisions to be made at the 
federal, state, and local levels. These implications and decisions 
include the following: 

* At the federal level, it would need to be determined (1) what 
functions would remain and (2) how federal agencies would be structured 
and staffed to deliver those programs. In deciding what functions would 
remain, the extent of federal interest in the activity compared to the 
extent of state or local interest should be considered. Furthermore, in 
deciding how to staff and deliver programs, for agencies with a large 
field presence, like FHWA and FMCSA, it would have to be determined 
what their responsibilities would be. 

* At all levels of government, it would need to be determined how to 
handle a variety of other federal requirements that are tied to federal 
funds, such as the requirements for state highway safety programs 
related to impaired driving and state and metropolitan planning roles. 
At the federal level, Congress would have to decide whether to keep the 
requirements, and if so, how to ensure that they are met without 
federal funds to provide incentives or to withhold with sanctions. If 
the effect of a turnback is to relinquish requirements, then states and 
localities would have to decide what kind of planning and other 
requirements they want to have and how to implement them. 

* At the state and local levels, it would need to be determined (1) 
whether to replace revenues with state taxes and (2) what type of 
programs to finance. Deciding whether to replace federal revenues with 
state taxes may be difficult because states also face fiscal challenges 
and replacing revenues would have different effects on different 
states. For example, if states decided to raise fuel taxes, some states 
could simply replace the current federal tax with an equivalent state 
tax, but other states might have to levy additional state taxes at a 
much higher level than the current federal tax. States would also have 
options of using other revenue sources such as vehicle registration 
fees or expanded use of tolling. With states deciding what type of 
programs to continue there is no way to predict which federal programs 
would be replaced with equivalent state programs. Finally, while states 
may gain flexibility in how they deliver projects, in some cases states 
could actually lose some flexibility they currently have using federal 
funds--for example, the flexibility to move funds between highway and 
transit programs. 

A Turnback Would Require Deciding What Federal Functions Would Remain 
and How Federal Agencies Would Be Structured to Deliver Those 
Functions: 

The functions that would remain at the federal level would be 
determined by the level of federal interest. Some functions are 
financed from the Highway Trust Fund but exist because of broader 
commitments. For example, the federal government owns land managed by 
agencies such as the Bureau of Land Management, Bureau of Indian 
Affairs, and the Forest Service. The responsibility for funding and 
overseeing construction of these roads is within DOT, specifically 
within FHWA's federal lands division. It is unlikely that the federal 
government would assign the responsibilities to construct roads on 
federal lands to state or local government. Thus, the decision may be 
whether, in a restructured federal program, to continue to finance this 
responsibility from federal gas taxes or shift responsibility to the 
managing agency, but not whether the responsibility would be turned 
over to another level of government. In another area, the federal 
government takes a defined role in response to disasters, as 
exemplified in the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act.[Footnote 110] Similarly, the Emergency Relief program 
provides funds to states and other federal agencies for the repair or 
reconstruction of federal-aid highways that have been damaged or 
destroyed by natural disasters or catastrophic failures. This is a 
long-established federal function and Congress has provided funds for 
the emergency repair of roads since at least 1928. Given the ongoing 
federal commitment to respond to disasters it is likely that emergency 
relief would remain a federal function. Devolving other programs would 
depend on how the federal interest and the federal role were defined. 
For example, maintaining systems such as Interstate highways or the 
National Highway System could be designated as part of the national 
interest. 

The effect of various turnback scenarios on DOT modal agencies would 
depend on how expansively the federal role is defined. For example, 
FHWA in fiscal year 2008 had about 1,400 personnel in field offices, or 
about half of its total staff. FHWA maintains a division office in each 
state that provides oversight of state programs and projects as defined 
in a stewardship agreement between the state and the division office. 
The division offices may provide project-level oversight in some cases 
or delegate that responsibility to the state. Division offices also 
review state DOTs' programs and processes to ensure that states have 
adequate controls in place to effectively manage federally assisted 
projects. Thus, if a substantial portion of federal highway programs is 
turned back to the states, the greatest effect might be felt at the 
division office level, as the oversight activities of these offices 
might largely be considered for elimination. However, certain functions 
and offices could remain, such as the Office of Federal Lands Highways, 
which provides funding and oversight for highways on federal lands and 
constitutes, including both headquarters and field, about one-fourth of 
all FHWA staff. Other functions, such as Emergency Relief program or 
environmental oversight, might remain and require a field office 
presence of some type. A reduced or eliminated division office 
structure might be warranted, or residual functions might suggest a 
regional structure. Even under an extensive turnback scenario, FHWA 
might retain a technical support function, along with its five existing 
resource center locations. Effects on other DOT agencies of a general 
turnback of transportation grants would vary and would hinge on what 
activities the agencies would continue to perform. For example, 
assuming FMCSA's inspection activities continue, the significant 
numbers of field staff required to perform those functions would 
remain. If NHTSA's safety grants to the states for purposes such as 
reducing impaired driving or increasing seat belt use were turned back, 
the functions of NHTSA field staff would need to be reviewed, as these 
staff would no longer be needed for grant oversight. However, NHTSA 
could still retain its regulatory and research responsibilities, such 
as those related to fuel economy standards, automotive recalls, and 
crash testing, among others, and might need to retain those staff. 

The Status of Other Federal Requirements Tied to Federal Funds Would 
Need to Be Decided: 

In some programs, federal funding is contingent on actions taken by 
states. In the highway safety area the federal government has applied 
both incentives and sanctions based on state actions. In the past these 
strategies have been used to encourage states to enact laws that 
establish a minimum drinking age of 21 years and a maximum blood 
alcohol level of 0.08 to determine impaired driving ability. In 
addition, Safety Belt Performance Grants promote national priorities by 
providing financial incentives for meeting certain specific performance 
or safety activity criteria. Penalty provisions such as those 
associated with Open Container laws and Motor Carrier Safety Assistance 
Program grants promote federal priorities by transferring or 
withholding the state's federal funds if states do not comply. If such 
programs were turned back to the states and if these incentive and 
sanction programs were eliminated, there would not appear to be a 
substitute basis for the federal government to influence state actions. 

Extensive state and metropolitan planning requirements could be 
affected by a turnback of the highway program. Federal laws and 
requirements specify an overall approach for transportation planning 
that states and regional organizations must follow in order to receive 
federal funds. This approach includes involving numerous stakeholders, 
identifying state and regional goals, developing long-and short-range 
state and metropolitan planning documents, and ensuring that a wide 
range of transportation planning factors are considered in the process. 
Without this structure, it is not clear what form planning processes 
might take at the state level, or what role, if any, the federal 
government would have in relation to planning activities. At the local 
level, metropolitan planning organizations (MPO) came into being 
largely as result of federal planning requirements, and MPO activities 
are in part funded through the current federal-aid program. In general, 
the role MPOs would play after a turnback of the federal program is 
unclear and would need to be redefined. The status of existing planning 
requirements and the amount of federal funding for metropolitan 
planning organizations (MPOs), if any, would have to be determined. If 
the effect of a turnback is to relinquish requirements, then states and 
localities would have to decide what kind of planning and other 
requirements they want to have and how to establish those requirements 
as a matter of policy. 

In addition, a turnback of federal surface transportation programs 
would necessitate a review of which federal requirements still apply. 
As a condition of receiving federal funds, states must adhere to 
federal regulations such as those covering contracting 
practices.[Footnote 111] For example, under the current highway program 
states must comply with the provisions of the Disadvantaged Business 
Enterprise Program, which requires that a certain percentage of 
contracts be awarded to socially or economically disadvantaged firms 
such as minority and women-owned businesses.[Footnote 112] Yet another 
area requiring review would be the applicability of federal 
environmental requirements. Federal laws not predicated on the receipt 
of federal funds would still apply and in some cases states have 
environmental regulations requiring their own environmental process. 

States and Localities Would Have to Decide Whether to Replace Revenues 
with State Taxes and What Types of Programs to Finance: 

States would have to decide whether to replace revenues with state 
taxes. This decision would have different impacts on different states 
because some states contribute more in taxes than they get back in 
program funds and vice versa. In the highway context, these states are 
referred to as donor and donee states. However, a turnback might 
require states to replace Highway Trust Fund revenues for transit 
programs and safety grants as well as highways. For some states 
replacing federal revenues with state taxes sufficient to continue to 
fund existing federal programs would result in a net decrease in fuel 
taxes in that state while in others a net increase in fuel taxes--in 
some cases a substantial increase. This raises questions whether 
surface transportation programs would continue at the same funding 
level under a turnback because states face their own long-term fiscal 
challenges, and the fiscal capacity of states varies. Other factors 
could affect outcomes at the state level. For example, there is no way 
to reliably predict the extent to which "tax competition" between 
states--efforts to keep taxes lower as a way of attracting business--
would occur. 

We considered the implications of a relatively complete turnback of 
federal grant programs, including highway, transit and safety grants. 
In the following example, almost all federal surface transportation 
programs funded through the Highway Trust Fund would be turned back to 
the states, with the exception of Federal Lands and Emergency 
Relief.[Footnote 113] In order to provide a consistent basis for 
comparison, we assumed that states would substantially continue current 
programs and activities that now receive federal funding, and that 
states would raise their fuel taxes to provide the additional revenues 
needed to cover the cost of these programs and activities. However, if 
a turnback of the federal program were to actually occur, the outcome 
would almost certainly differ from these results, because states would 
not necessarily elect to replace all current federal programs or 
finance the same programs and activities from their own resources. 
Furthermore, states might not elect to replace federal revenue with 
state fuel taxes as states have options for raising revenue other than 
fuel taxes. For example, a state might choose to raise vehicle 
registration fees or increase the use of tolling. 

The illustrative analysis of this turnback scenario showed that 27 
states could achieve the same funding level as they currently receive 
through federal transportation grants with taxes lower than the 
existing federal tax, while 23 states and the District of Columbia 
would require taxes higher than the existing federal tax, or other 
revenue sources, to achieve full replacement value. 

Figure 1 lists the net change in per-gallon fuel taxes that would occur 
if the federal fuel tax were eliminated and states replaced Highway 
Trust Fund grants with their own fuel taxes.[Footnote 114] States in 
table 1 with a negative value would need to raise state taxes less than 
the current federal tax level, and states with a positive value would 
need to raise state taxes more than the current federal tax level, or 
obtain other revenue sources. 

Table 1: Potential Fiscal Impact of Turning Back Federal Transportation 
Programs to the States, Assuming the Devolution of Almost All Programs 
and Revenues: 

State: Virginia; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -5.60; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.44; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -6.04. 

State: Arizona; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -5.57; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.47; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -6.04. 

State: Kentucky; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.57; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.51; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -5.09. 

State: Minnesota; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -4.58; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.47; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -5.05. 

State: Ohio; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -4.24; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.41; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -4.64. 

State: Colorado; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -4.82; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 0.25; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -4.57. 

State: Maine; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.06; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.45; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -4.52. 

State: Tennessee; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.22; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.14; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -4.35. 

State: Iowa; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -2.91; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.20; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -4.11. 

State: Missouri; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.00; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.85; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -3.85. 

State: Indiana; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -2.82; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.00; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -3.82. 

State: Oregon; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.67; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 0.29; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -3.38. 

State: North Carolina; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -1.97; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.14; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -3.11. 

State: Nevada; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -2.91; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.01; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -2.92. 

State: Utah; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.31; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 0.73; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -2.58. 

State: Texas; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -1.76; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.78; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -2.53. 

State: Georgia; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -1.74; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.73; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -2.48. 

State: South Carolina; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -0.68; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.75; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -2.43. 

State: Wisconsin; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -1.39; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.68; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -2.08. 

State: Michigan; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -1.57; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.40; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -1.96. 

State: Oklahoma; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -0.06; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.73; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -1.79. 

State: Pennsylvania; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.98; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 2.26; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -1.71. 

State: Nebraska; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -0.42; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.19; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -1.60. 

State: New Hampshire; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -0.05; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.53; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -1.58. 

State: Maryland; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.84; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 2.26; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -1.58. 

State: California; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -3.62; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 2.11; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -1.51. 

State: Alabama; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 1.04; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.19; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: -0.15. 

State: New Mexico; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 1.18; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.10; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 0.08. 

State: Florida; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 0.24; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.07; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 0.17. 

State: Arkansas; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 1.82; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.58; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 0.24. 

State: Kansas; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 1.65; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.15; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 0.50. 

State: Illinois; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -2.92; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 3.47; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 0.55. 

State: Washington; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -0.69; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 2.07; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 1.38. 

State: New Jersey; 
Net change in per-gallon tax rate If state replaced 
all federal funds using fuel tax (cents): Highway account: -2.44; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 5.41; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 2.96. 

State: West Virginia; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 4.18; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.66; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 3.53. 

State: Delaware; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 3.55; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 0.33; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 3.88. 

State: Wyoming; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 6.84; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.79; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 5.05. 

State: Massachusetts; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: -0.37; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 5.76; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 5.39. 

State: Idaho; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 6.40; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.68; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 5.72. 

State: Connecticut; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 4.03; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 4.17; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 8.20. 

State: Hawaii; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 3.57; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 5.12; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 8.69. 

State: North Dakota; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 14.31; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.86; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 13.46. 

State: Vermont; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 14.39; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.92; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 13.47. 

State: New York; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 1.77; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 12.53; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 14.31. 

State: South Dakota; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 14.94; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.15; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 14.78. 

State: Louisiana; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 18.43; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.77; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 17.66. 

State: Rhode Island; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 16.43; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 3.72; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 20.15. 

State: Montana; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 21.21; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -0.48; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 20.73. 

State: Mississippi; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 32.75; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: -1.89; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 30.86. 

State: Alaska; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 40.32; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 8.61; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 48.93. 

State: District of Columbia; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Highway account: 52.57; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Transit account: 89.89; 
Net change in per-gallon tax rate If state replaced all federal funds 
using fuel tax (cents): Total: 142.46. 

Source: GAO analysis of DOT data. 

Notes: The Highway Account of the Highway Trust Fund receives 15.44 
cents of the total 18.4 cents of the per-gallon federal gasoline tax; 
21.44 cents of the total 24.4 cents of the federal diesel fuel tax goes 
to the Highway Account. The Transit Account of the Highway Trust Fund 
receives 2.86 cents of the per-gallon federal gasoline tax. 

[End of table] 

Although table 1 shows that a similar number of states would likely 
require net increases and net decreases, the range is much wider among 
states that would require a net increase. While some states, such as 
Virginia and Arizona, would likely end up with modest net decreases in 
fuel taxes of up to 6 cents per gallon under this scenario, nine states 
and the District of Columbia would face increases of more than twice 
that--Mississippi and Alaska would all require comparatively extreme 
net increases of more than 30 cents per gallon, and the District of 
Columbia over $1 per gallon. These results reflect a cumulative effect 
of many factors, such as the "donor-donee" distinctions between states, 
equity and minimum apportionment adjustments from the Highway Trust 
Fund, the various allocations made to states for safety, and 
allocations to states and localities for transit programs. 

States Would Have Flexibility in Funding Programs: 

In general, states would have great flexibility in how they use funds 
under a turnback approach. States would have greater flexibility to 
develop their own programs and approaches without being limited to the 
current federal program categories, and would have greater discretion 
to define and fund projects that best suit their needs. In addition, 
there would be no congressionally directed spending. To the extent that 
federal programs affect the targeting of funds, states might shift 
funds to different projects. However, the current federal-aid program 
already gives states great discretion in setting priorities and 
selecting projects. In contrast, the current federal program may 
provide some states with flexibility they otherwise would not have. For 
example, some federal highway programs provide that funds may be 
transferred (flexed) between highway and transit programs. However, 
under a turnback of surface transportation programs, this flexibility 
could be lost in some states. For example, some states have 
constitutional provisions that require all fuel taxes to be spent 
solely on roads, thus making transit and safety programs ineligible 
barring constitutional change. Such states would have to revise certain 
laws and constitutional provisions or develop alternative sources of 
revenue in order to replace federal funds. 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

JayEtta Hecker (202) 512-2834 or [email protected]: 

Staff Acknowledgments: 

In addition to the individual named above, other key contributors to 
this report were Steve Cohen, Assistant Director; Lauren Calhoun; 
Robert Ciszewski; Jay Cherlow; Elizabeth Eisenstadt; Teague Lyons; Josh 
Ormond; and Lisa Van Arsdale. 

[End of section] 

Related GAO Products: 

The following are GAO products pertinent to the issues discussed in 
this report. Other products may be found at GAO's Web site at 
[hyperlink, http://www.gao.gov]. 

Federal Roles and Goals: 

Surface Transportation: Preliminary Observations on Efforts to 
Restructure Current Program. GAO-08-478T. Washington, D.C.: February 6, 
2008. 

Freight Transportation: National Policy and Strategies Can Help Improve 
Freight Mobility. GAO-08-287. Washington, D.C.: January 7, 2008. 

Highlights of a Forum: Transforming Transportation Policy for the 21st 
Century. GAO-07-1210SP. Washington, D.C.: September 19, 2007. 

Railroad Bridges and Tunnels: Federal Role in Providing Safety 
Oversight and Freight Infrastructure Investment Could Be Better 
Targeted. GAO-07-770. Washington, D.C.: Aug. 6, 2007. 

Motor Carrier Safety: Preliminary Information on the Federal Motor 
Carrier Safety Administration's Efforts to Identify and Follow Up with 
High-Risk Carriers. GAO-07-1074T. Washington, D.C.: July 11, 2007. 

Intermodal Transportation: DOT Could Take Further Actions to Address 
Intermodal Barriers. GAO-07-718. Washington, D.C.: June 20, 2007. 

Intercity Passenger Rail: National Policy and Strategies Needed to 
Maximize Public Benefits from Federal Expenditures. GAO-07-15. 
Washington, D.C.: November 13, 2006. 

Freight Railroads: Industry Health Has Improved, but Concerns about 
Competition and Capacity Should Be Addressed. GAO-07-94. Washington, 
D.C.: October 6, 2006. 

Public Transportation: New Starts Program Is in a Period of Transition. 
GAO-06-819. Washington, D.C.: August 30, 2006. 

Freight Transportation: Short Sea Shipping Option Shows Importance of 
Systematic Approach to Public Investment Decisions. GAO-05-768. 
Washington, D.C.: July 29, 2005. 

Rail Transit: Additional Federal Leadership Would Enhance FTA's State 
Safety Oversight Program. GAO-06-821. Washington, D.C.: July 26, 2006. 

Intermodal Transportation: Potential Strategies Would Redefine Federal 
Role in Developing Airport Intermodal Capabilities. GAO-05-727. 
Washington, D.C.: July 26, 2005. 

21st Century Challenges: Reexamining the Base of the Federal 
Government. GAO-05-325SP. Washington, D.C.: February, 2005. 

Homeland Security: Effective Regional Coordination Can Enhance 
Emergency Preparedness. GAO-04-1009. Washington, D.C.: September 15, 
2004. 

Freight Transportation: Strategies Needed to Address Planning and 
Financing Limitations. GAO-04-165. Washington, D.C.: December 19, 2003. 

Surface and Maritime Transportation: Developing Strategies for 
Enhancing Mobility: A National Challenge. GAO-02-775. Washington, D.C.: 
August 30, 2002. 

Highway Infrastructure: Interstate Physical Conditions Have Improved, 
but Congestion and Other Pressures Continue. GAO-02-571. Washington, 
D.C.: May 31, 2002. 

Performance and Accountability; Best Tools and Approaches: 

Highway Public-Private Partnerships: More Rigorous Up-front Analysis 
Could Better Secure Potential Benefits and Protect the Public Interest. 
GAO-08-44. Washington D.C.: February 8, 2008. 

Federal-Aid Highways: Increased Reliance on Contractors Can Pose 
Oversight Challenges for Federal and State Officials. GAO-08-198. 
Washington D.C.: January 8, 2008. 

A Call For Stewardship: Enhancing the Federal Government's Ability to 
Address Key Fiscal and Other 21st Century Challenges. GAO-08-93SP. 
Washington, D.C.: December 2007. 

Public Transportation: Future Demand Is Likely for New Starts and Small 
Starts Programs, but Improvements Needed to the Small Starts 
Application Process. GAO-07-917. Washington, D.C.: July 27, 2007. 

Surface Transportation: Strategies Are Available for Making Existing 
Road Infrastructure Perform Better. GAO-07-920. Washington, D.C.: July 
26, 2007. 

Motor Carrier Safety: A Statistical Approach Will Better Identify 
Commercial Carriers That Pose High Crash Risks Than Does the Current 
Federal Approach. GAO-07-585. Washington, D.C.: June 11, 2007. 

Public Transportation: Preliminary Analysis of Changes to and Trends in 
FTA's New Starts and Small Starts Programs. GAO-07-812T. Washington, 
D.C.: May 10, 2007. 

Older Driver Safety: Knowledge Sharing Should Help States Prepare for 
Increase in Older Driver Population. GAO-07-413. Washington, D.C.: 
April 11, 2007. 

Older Driver Safety: Survey of States on Their Implementation of 
Federal Highway Administration Recommendations and Guidelines, an E-
Supplement. GAO-07-517SP. Washington, D.C.: April 11, 2007. 

Performance and Accountability: Transportation Challenges Facing 
Congress and the Department of Transportation. GAO-07-545T. Washington, 
D.C.: March 6, 2007. 

Transportation-Disadvantaged Populations: Actions Needed to Clarify 
Responsibilities and Increase Preparedness for Evacuations. GAO-07-44. 
Washington, D.C.: December 22, 2006. 

Federal Transit Administration: Progress Made in Implementing Changes 
to the Job Access Program, but Evaluation and Oversight Processes Need 
Improvement. GAO-07-43. Washington, D.C.: November 17, 2006. 

Truck Safety: Share the Road Safely Pilot Initiative Showed Promise, 
but the Program's Future Success Is Uncertain. GAO-06-916. Washington, 
D.C.: September 8, 2006. 

Public Transportation: Preliminary Information on FTA's Implementation 
of SAFETEA-LU Changes. GAO-06-910T. Washington, D.C.: June 27, 2006. 

Intermodal Transportation: Challenges to and Potential Strategies for 
Developing Improved Intermodal Capabilities. GAO-06-855T. Washington, 
D.C.: June 15, 2006. 

Federal Motor Carrier Safety Administration: Education and Outreach 
Programs Target Safety and Consumer Issues, but Gaps in Planning and 
Evaluation Remain. GAO-06-103. Washington, D.C.: December 19, 2005. 

Large Truck Safety: Federal Enforcement Efforts Have Been Stronger 
Since 2000, but Oversight of State Grants Needs Improvement. GAO-06-
156. Washington, D.C.: December 15, 2005. 

Highway Safety: Further Opportunities Exist to Improve Data on Crashes 
Involving Commercial Motor Vehicles. GAO-06-102. Washington, D.C.: 
November 18, 2005. 

Transportation Services: Better Dissemination and Oversight of DOT's 
Guidance Could Lead to Improved Access for Limited English-Proficient 
Populations. GAO-06-52. Washington, D.C.: November 2, 2005. 

Highway Congestion: Intelligent Transportation Systems Promise for 
Managing Congestion Falls Short, and DOT Could Better Facilitate Their 
Strategic Use. GAO-05-943. Washington, D.C.: September 14, 2005. 

Highlights of an Expert Panel: The Benefits and Costs of Highway and 
Transit Investments. GAO-05-423SP. Washington, D.C.: May 6, 2005. 

Federal-Aid Highways: FHWA Needs a Comprehensive Approach to Improving 
Project Oversight. GAO-05-173. Washington, D.C.: January 31, 2005. 

Highway and Transit Investments: Options for Improving Information on 
Projects' Benefits and Costs and Increasing Accountability for Results. 
GAO-05-172. Washington, D.C.: January 24, 2005. 

Highway Safety: Improved Monitoring and Oversight of Traffic Safety 
Data Program Are Needed. GAO-05-24. Washington, D.C.: November 4, 2004. 

Surface Transportation: Many Factors Affect Investment Decisions. GAO-
04-744. Washington, D.C.: June 30, 2004. 

Highway Safety: Better Guidance Could Improve Oversight of State 
Highway Safety Programs. GAO-03-474. Washington, D.C.: April 21, 2003. 

Executive Guide: Leading Practices in Capital Decision Making. GAO/
AIMD-99-32. Washington, D.C.: December 1998. 

Fiscal Sustainability/Financing the Nation's Transportation System: 

Congressional Directives: Selected Agencies' Processes for Responding 
to Funding Instructions. GAO-08-209. Washington, D.C.: January 31, 
2008. 

Highway and Transit Investments: Flexible Funding Supports State and 
Local Transportation Priorities and Multimodal Planning. GAO-07-772. 
Washington, D.C.: July 26, 2007. 

State and Local Governments: Persistent Fiscal Challenges Will Likely 
Emerge within the Next Decade. GAO-07-1080SP. Washington D.C.: July 18, 
2007. 

Highway Emergency Relief: Reexamination Needed to Address Fiscal 
Imbalance and Long-Term Sustainability. GAO-07-245. Washington, D.C.: 
February 23, 2007. 

High Risk Series: An Update. GAO-07-310. Washington, D.C.: January 
2007. 

Highway Finance: States' Expanding Use of Tolling Illustrates Diverse 
Challenges and Strategies. GAO-06-554. Washington, D.C.: June 28, 2006. 

Highway Trust Fund: Overview of Highway Trust Fund Estimates. GAO-06-
572T. Washington, D.C.: April 4, 2006. 

Federal-Aid Highways: Trends, Effect on State Spending, and Options for 
Future Program Design. GAO-04-802. Washington, D.C.: August 31, 2004. 

U.S. Infrastructure: Funding Trends and Federal Agencies' Investment 
Estimates. GAO-01-986T. Washington, D.C.: July 23, 2001. 

Federal Budget: Choosing Public Investment Programs. GAO/AIMD-93-25. 
Washington, D.C.: July 23, 1993. 

[End of section] 

Footnotes: 

[1] Additional information about GAO's simulations and the nation's 
long-term fiscal challenge can be found at [hyperlink, 
http://www.gao.gov/special.pubs/longterm/]. 

[2] Formula grant programs allocate funds to states or their 
subdivisions in accordance with a distribution formula prescribed in 
law or administrative regulation. Grant recipients may then allocate 
these funds to specific projects based on program eligibility 
guidelines. Discretionary grant programs provide funds to recipients 
for specific projects or eligible activities based on eligibility and 
selection criteria as established by law, regulation, or on an 
administrative basis. 

[3] Although federal funds are distributed to states through several 
individual grant programs, in aggregate, these grants are often 
referred to as a single federal program in each area of federal 
investment. For example, the collection of individual highway 
infrastructure grants is commonly referred to as the Federal-Aid 
Highway program. Similarly, the assortment of federal motor carrier 
safety grants is collectively referred to as the federal motor carrier 
safety program. 

[4] GAO, Intercity Passenger Rail: National Policy and Strategies 
Needed to Maximize Public Benefits from Federal Expenditures, GAO-07-15 
(Washington, D.C.: Nov. 13, 2006). 

[5] DOT defined congested conditions as periods of time where travel at 
less than free-flow speeds occurs on a portion of a road system. 

[6] Transportation Research Board, Critical Issues in Transportation 
(Washington, D.C.: 2006). 

[7] The HTF is divided into two major accounts, the Highway Account and 
the Mass Transit Account. A portion of federal fuel taxes is deposited 
into the Mass Transit Account. For example, of the 18.4 cents federal 
gas tax, 2.86 cents is deposited into the Mass Transit Account. 

[8] CBO, Public Spending on Transportation Infrastructure (Washington, 
D.C.: Oct. 25, 2007). 

[9] Congress created The National Surface Transportation Policy and 
Revenue Study Commission in 2005 under Section 1909 of the Safe, 
Accountable, Flexible, Efficient Transportation Equity Act--A Legacy 
for Users (SAFETEA-LU), Pub. L. No. 109-59, Â§1909, 119 Stat. 1471 (Aug. 
10, 2005). The Commission was created to examine the condition and 
future needs of the nation's surface transportation system, and short 
and long-term alternatives to replace or supplement the fuel tax as the 
principal revenue source to support the HTF. 

[10] Although federal transit funding was initially provided on a 
discretionary basis from the General Fund of the Treasury, highway user 
fees have replaced general revenues as the major source of transit 
assistance since the creation of the Mass Transit Account of the 
Highway Trust Fund by the Surface Transportation Assistance Act of 
1982. Pub. L. No. 97-424, Â§531, 96 Stat. 2187 (Jan. 6, 1983). 

[11] When federal operating assistance was initially established in 
1974, large urbanized areas were eligible for these grants. However, 
operating assistance is currently limited to urbanized areas with a 
population of less than 200,000. See appendix II for more information 
about federal transit assistance programs. 

[12] Pub. L. No. 87-866, Â§9, 76 Stat. 1148 (Oct. 23, 1962). 

[13] Pub. L. No. 91-190, 83 Stat. 852 (Jan. 1, 1970); 42 USC Â§4321 et 
seq. 

[14] Prior to the establishment of FMCSA by the Motor Carrier Safety 
Improvement Act of 1999, both FHWA and the former Interstate Commerce 
Commission (ICC) regulated separate aspects of motor carrier and 
commercial vehicle safety. When the ICC was terminated in 1995, its 
motor carrier and commercial vehicle regulatory authority was 
transferred to the Secretary of Transportation. Although some of the 
changes to the federal motor carrier programs and regulations predate 
FMCSA, for the purpose of clarity, we refer to FMCSA as the only modal 
administration with responsibility for motor carrier safety in the 
text. See app. II for more information about the history of federal 
motor carrier safety programs. 

[15] On January 18, 2007, the President issued Executive Order 13422, 
"Amendment to Executive Order 12866 for Regulatory Planning and 
Review," which revised Executive Order 12866 to include a process for 
interagency coordination and review of significant guidance prior to 
issuance, among other procedural changes. 

[16] The majority of highway infrastructure funding is distributed 
through seven major programs, often referred to as "core" highway 
programs. These programs are the National Highway System, Surface 
Transportation Program, Interstate Maintenance, Highway Bridge 
Replacement and Rehabilitation Program, Congestion Mitigation and Air 
Quality Improvement Program, Highway Safety Improvement Program, and 
the Equity Bonus Program. FHWA also administers a number of smaller, 
discretionary grants programs to provide federal highway infrastructure 
assistance to states. 

[17] For most of the largest Federal-aid Highway programs, the minimum 
apportionment is 0.5 percent; each state must receive at least that 
much of the total money apportioned, regardless of other formula 
calculations. 

[18] This also includes projects designated "high priority" by Congress 
in accordance with SAFETEA--LU. 

[19] Based on state data, FHWA estimates how much tax revenue each 
state contributes to the Highway Trust Fund. The Equity Bonus Program 
guarantees states will receive a minimum rate of return on their 
contributions to the Highway Account of the Highway Trust Fund and a 
minimum funding increase relative to their average annual program 
apportionments under the previous transportation authorization bill, 
TEA-21, which authorized transportation programs from 1998-2003. 

[20] Operating assistance is limited to urbanized areas with a 
population of less than 200,000. 

[21] GAO is evaluating FTA's approach to measuring all of these 
factors, and identifying alternative approaches. GAO is planning to 
issue this report in July 2008. 

[22] Transportation Research Board, The Fuel Tax and Alternatives for 
Transportation Funding (Washington, D.C.: 2006). 

[23] In a process known as certification acceptance, states may certify 
that they will operate under state laws, regulations, directives, and 
standards at least equivalent to the current federal requirements. 

[24] Interstate projects eligible for state oversight include 
resurfacing or other maintenance projects and new construction/
reconstruction under $1 million. 

[25] Federal planning requirements describe various tasks that state 
and local governments must perform and currently include developing 
strategic goals and objectives, considering a wide range of 
environmental and economic factors, preparing long-term and short-range 
plans, and ensuring an inclusive planning process. 

[26] GAO, Highlights of a Forum: Transforming Transportation Policy for 
the 21st Century, GAO-07-1210SP (Washington, D.C.: September 2007). 

[27] GAO, Railroad Bridges and Tunnels: Federal Role in Providing 
Safety Oversight and Freight Infrastructure Investment Could Be Better 
Targeted, GAO-07-770 (Washington, D.C.: Aug. 6, 2007). 

[28] GAO, Freight Transportation: Strategies Needed to Address Planning 
and Financing Limitations, GAO-04-165 (Washington, D.C.: Dec. 19, 
2003). 

[29] The Freight Intermodal Distribution Pilot Grant Program is the 
only federal program specifically directed at intermodal 
infrastructure. 

[30] GAO, Intermodal Transportation: DOT Could Take Further Actions to 
Address Intermodal Barriers, GAO-07-718 (Washington, D.C.: June 20, 
2007). 

[31] In part to address this problem, in 2006 DOT issued a request for 
applications for the new Corridors of the Future program, which will 
assist a limited number of multi-state partnerships selected through a 
competitive process. 

[32] GAO-06-855T; GAO, Intermodal Transportation: DOT Could Take 
Further Actions to Address Intermodal Barriers, GAO-07-718 (Washington, 
D.C.: June 20, 2007); GAO, Surface Transportation: Many Factors Affect 
Investment Decisions, GAO-04-744 (Washington, D.C.: June 30, 2004); 
GAO-04-165. 

[33] The FAST Corridor created an improved freight rail route and 
improved port access across several cities in Washington State, 
including Seattle and Tacoma. 

[34] GAO-04-165. 

[35] Transcript of New York City hearing of the National Surface 
Transportation Policy and Revenue Commission, Nov. 15, 2006. 

[36] AASHTO, Vision for Metropolitan Transportation-Metropolitan 
Mobility and Congestion Issues Panel, March 19-20, 2007. 

[37] Short sea shipping refers to moving freight on ships along coasts 
or on rivers; although it typically involves heavy or bulky cargoes 
that are not time-sensitive, in recent years there have been efforts to 
use it to transport cargo that would otherwise travel by truck or 
train. 

[38] GAO, Freight Transportation: Short Sea Shipping Option Shows 
Importance of Systematic Approach to Public Investment Decisions, 
GAO-05-768 (Washington, D.C.: July 29, 2005). 

[39] GAO, High Risk Series: An Update, GAO-07-310 (Washington, D.C.: 
Jan. 31, 2007); GAO, Federal-Aid Highways: Trends, Effect on State 
Spending, and Options for Future Program Design, GAO-04-802 
(Washington, D.C.: Aug. 31, 2004). 

[40] GAO, Highway Infrastructure: Interstate Physical Conditions Have 
Improved, but Congestion and Other Pressures Continue, GAO-02-571 
(Washington, D.C.: May 31, 2002). 

[41] U.S. Department of Transportation Performance and Accountability 
Report for Fiscal Year 2007, [hyperlink, 
http://www.dot.gov/perfacc2007/index.htm]; GAO-07-1210SP; GAO, 
Performance and Accountability: Transportation Challenges Facing 
Congress and the Department of Transportation, GAO-07-545T (Washington, 
D.C.: Mar. 6, 2007); GAO, Federal-Aid Highways: FHWA Needs a 
Comprehensive Approach to Improving Project Oversight, GAO-05-173 
(Washington, D.C.: Jan. 31, 2005). 

[42] FHWA program description, [hyperlink, 
http://www.safety.fhwa.dot.gov/state_program/section402/402_over.htm]. 

[43] 49 CFR 350.327. 

[44] GAO-07-545T. 

[45] The "equity bonus" criterion applies only in highway programs. 

[46] FHWA Highway Statistics 2005 Table FA-4A, Apportionment Formulas: 
Federal-aid Highway Program, Enacted in SAFETEA-LU. 

[47] GAO-07-545T. 

[48] 23 U.S.C. 145. 

[49] GAO-04-802. 

[50] GAO, Highway and Transit Investments: Flexible Funding Supports 
State and Local Transportation Priorities and Multimodal Planning, 
GAO-07-772 (Washington, D.C.: July 26, 2007). 

[51] GAO-04-802. 

[52] Transfers to the highway program are permitted, but have been 
small compared to highway-to-transit transfers; only $40 million was 
moved from transit to highway programs between 1992 and 2002. 

[53] GAO, Highway Safety: Better Guidance Could Improve Oversight of 
State Highway Safety Programs, GAO-03-474 (Washington, D.C.: Apr. 21, 
2003). 

[54] GAO, Highway and Transit Investments: Options for Improving 
Information on Projects' Benefits and Costs and Increasing 
Accountability for Results, GAO-05-172 (Washington, D.C.: Jan. 24, 
2005). 

[55] Federal Transit Administration, SAFETEA-LU: Authorization Levels 
for Fiscal Years 2005 Through 2009, [hyperlink, 
http://www.fta.dot.gov/documents/SAFETEAU_Funding_by_Program_by_Year.pdf
]. 

[56] GAO-05-172. 

[57] GAO, Surface Transportation: Strategies Are Available for Making 
Existing Road Infrastructure Perform Better, GAO-07-920 (Washington, 
D.C.: July 26, 2007). 

[58] GAO-07-920. 

[59] GAO, Freight Transportation: National Policy and Strategies Can 
Help Improve Freight Mobility, GAO-08-287 (Washington, D.C.: Jan. 7, 
2008); GAO-04-165. 

[60] GAO-04-165. 

[61] GAO-07-1210SP. 

[62] AASHTO, Transportation - Invest in Our Future: A New Vision for 
the 21st Century, July 2007. 

[63] Testimony of Thomas J. Madison Jr., Commissioner, New York State 
Department of Transportation, to the New York City hearing of the 
National Surface Transportation Policy and Revenue Study Commission, 
November 16, 2006. 

[64] Congressional Research Service, Surface Transportation 
Congestion: Policy and Issues (RL 33995) May 10, 2007; GAO-07-770. 

[65] GAO, Rail Transit: Additional Federal Leadership Would Enhance 
FTA's State Safety Oversight Program, GAO-06-821 (Washington, D.C.: 
July 26, 2006). 

[66] GAO, Highway Safety: Improved Monitoring and Oversight of Traffic 
Safety Data Program Are Needed, GAO-05-24 (Washington, D.C.: Nov. 4, 
2004). 

[67] Under congestion pricing, toll rates vary with demand. ITS employs 
technologies such as monitoring of traffic conditions and optimized 
timing of traffic signals. 

[68] GAO-07-920; GAO, Highway Congestion: Intelligent Transportation 
Systems' Promise for Managing Congestion Falls Short, and DOT Could 
Better Facilitate Their Strategic Use, GAO-05-943 (Washington, D.C.: 
Sept. 14, 2005). 

[69] GAO-05-943. 

[70] GAO-04-802. 

[71] In our analysis, as well as the other studies that we reviewed, 
the focus was on highway spending. Thus, if increased federal grants 
for highways led states and localities to shift their own funds from 
highway spending to transit spending, such a shift would be considered 
substitution. To the extent that occurred, then the substitution away 
from total transportation spending from increased federal grants would 
be smaller than the rates that we and others estimated. 

[72] In contrast, for the New Starts transit capital program, the level 
of state and local contributions is a factor the FTA considers in 
awarding discretionary grants. 

[73] Projects of National and Regional Significance was created as part 
of SAFETEA-LU to provide funding for high cost projects of national or 
regional importance that have total costs higher than $500 million or 
higher than 75 percent of the state's annual federal highway funds. 
Although it was established in law as a competitive program, the 
competition never took place because Congress directed all the funds to 
specific projects. 

[74] GAO, Congressional Directives: Selected Agencies' Processes for 
Responding to Funding Instructions, GAO-08-209 (Washington, D.C.: Jan. 
31, 2008). 

[75] CBO, Status of the Highway Trust Fund: 2007 (Washington, D.C.: 
Mar. 27, 2007). 

[76] The unexpended balance in the Highway Account of the Highway Trust 
Fund grew from about $10 billion in 1995 to about $23 billion in 2000, 
according to the CBO. 

[77] GAO-07-310. 

[78] The most recent major restructuring of federal surface 
transportation policy occurred in 1991, with the passage of the 
Intermodal Surface Transportation Efficiency Act (ISTEA), which 
consolidated highway grant categories and substantially increased 
transfer flexibility between highway and transit funds. 

[79] The Equity Bonus Program provides the most funding to states on an 
annual basis. However, rather than providing funds directly to states 
for allocation to eligible projects like other highway programs, the 
Equity Bonus Program distributes funds to states through the other core 
highway programs. 

[80] GAO, Homeland Security: Effective Regional Coordination Can 
Enhance Emergency Preparedness, GAO-04-1009 (Washington, D.C.: Sept. 
15, 2004). 

[81] Public Sector Comparators are a quantitative analysis technique 
used to compare the cost of completing a project using public versus 
public-private partnership delivery methods. Value-for-Money analyses 
are often completed as part of that process, and calculate total 
project benefits and costs; they are not limited to financial aspects, 
and often examine factors that are hard to quantify, such as the 
quality of construction. For further discussion, see GAO, Highway 
Public-Private Partnerships: More Rigorous Up-front Analysis Could 
Better Secure Potential Benefits and Protect the Public Interest, 
GAO-08-44 (Washington D.C.: Feb. 8, 2008). 

[82] GAO-07-1210SP. 

[83] Only the lightest combination unit vehicles pay sufficient taxes 
and fees to cover the costs they impose on highways. 

[84] GAO, Freight Railroads: Industry Health Has Improved, but Concerns 
about Competition and Capacity Should Be Addressed, GAO-07-94 
(Washington, D.C.: Oct. 6, 2006). 

[85] GAO, Highway Public-Private Partnerships: More Rigorous Up-Front 
Analysis Could Better Secure Potential Benefits and Protect the Public 
Interest, GAO-08-44 (Washington, D.C.: Feb. 8, 2008). 

[86] GAO, 21st Century Challenges: Reexamining the Base of the Federal 
Government, GAO-05-325SP (Washington, D.C.: Feb. 1, 2005). 

[87] National Surface Transportation Policy and Revenue Study 
Commission, Transportation for Tomorrow (Washington, D.C.: Jan. 15, 
2008). 

[88] FHWA also conducts research activities at the Turner-Fairbank 
Highway Research Center. These activities are coordinated by FHWA's 
Office of Research, Development, and Technology. 

[89] Pub. L. No. 102-240 (Dec. 18, 1991). 

[90] This number includes division offices in Puerto Rico and the 
District of Columbia, as well as FLH division offices in Lakewood, 
Colo.; Sterling, Va.; and Vancouver, Wash. 

[91] The Highway Trust Fund is divided into two major accounts, the 
Highway Account and the Mass Transit Account. A portion of federal fuel 
taxes is deposited into the Mass Transit Account. For example, of the 
18.4 cents federal gas tax, 2.86 cents is deposited into the Mass 
Transit Account. 

[92] Operating assistance is limited to urbanized areas with a 
population of less than 200,000. 

[93] Some programs such as the Formula Grant Program for Other Than 
Urbanized Areas provide a greater federal share of funding if states 
have a high percentage of federal lands. This program also provides a 
higher federal match for projects that meet requirements of the 
American Disabilities Act, the Clean Air Act, or bicycle access 
projects. Lower federal matches include capital assistance from the 
Over the Road Bus Accessibility Program and federal assistance for 
operating expenses under the Formula Grant Program for Other Than 
Urbanized Areas and Urbanized Area Formula Grants, which are capped at 
50 percent. 

[94] The Over-the-Road Bus Accessibility Program also awards funds on a 
national competitive basis to help finance incremental capital and 
training costs associated with DOT's regulations on transit 
accessibility for disabled and special needs populations in rural 
areas. 

[95] Full federal oversight refers to federal oversight at the project 
level. 

[96] For program management process reviews, FTA officials or 
contractors review grant recipients' management systems and records to 
ensure recipients are adhering to statutory and administrative 
requirements such as federal planning, civil rights, and other 
provisions. FTA's project management reviews require federal oversight 
at the project rather than program level. Areas of review include 
grantee recipient's fiscal and management capacity to implement the 
project, project progress according to planned specifications, 
schedule, and budget levels, among others. 

[97] FTA also conducts reviews in specialized areas such as financial 
management, procurement, civil rights, and planning processes, among 
others. 

[98] Pub. L. No. 88-365, Â§10, 78 Stat. 307 (July 9, 1964). 

[99] Pub. L. No. 95-599, Â§ 313, 92 Stat. 2748 (Nov. 6, 1978) and Pub. 
L. No. 95-599, Â§323, 92 Stat. 2754 (Nov. 6, 1978). 

[100] Pub. L. No. 91-453, Â§16, 84 Stat. 967 (Oct. 15, 1970). 

[101] Pub. L. No.105-178, Â§ 3037, 112 Stat. 387 (June 9, 1998). 

[102] Pub. L. No. 109-59, Â§3021, 119 Stat. 1608 (Aug. 10, 2005). 

[103] NHTSA administers four grant programs that do not target specific 
accident factors. These include grants to prohibit racial profiling, 
and grants for innovative approaches to highway safety, state traffic 
safety systems, and highway safety research activities. 

[104] This program also sets aside funds for grants to the 10 states 
with the highest impaired-driving fatality rates. 

[105] Although highway infrastructure funds are transferred to states' 
Section 402 program funds, states may allocate transferred funds back 
to the Federal-Aid Highway Program for use on safety-related 
infrastructure improvements. 

[106] MCSAP basic grants also require states to maintain their average 
previous expenditure levels for commercial motor vehicle safety and 
traffic safety enforcement programs. 

[107] Some motor carrier safety grants such as State Safety Data 
Improvement grants and CVISN Core Deployment grants have statutorily-
defined criteria. For example, State Safety Data Improvement grants 
criteria include: conducting a comprehensive audit of data systems 
within the past 2 years, developing a plan that identifies and 
prioritizes safety data needs and goals, and identifying performance 
measures to track progress toward those goals. 

[108] A notable exception is the 55 mph speed limit enforcement 
spending provision, which was established first as an incentive/penalty 
grant in 1978 and then changed to a mandatory spending restriction on 
Section 402 funds in 1982 until its repeal in 1995. 

[109] Advisory Commission on Intergovernmental Relations, Devolving 
Selected Federal-Aid Highway Programs and Revenue Bases: A Critical 
Appraisal (Washington, D.C.: September 1987). 

[110] Program was created as the Disaster Relief Act of 1974, Pub. L. 
No. 93-288, 88 Stat. 143, May 22, 1974, and was later amended and 
renamed in 2000 by Pub. L. No. 106-390 Â§301, 114 Stat. 1572, Oct. 30, 
2000; 42 U.S.C. Â§ 5121 et seq. 

[111] GAO, Federal-Aid Highways: Increased Reliance on Contractors Can 
Pose Oversight Challenges for Federal and State Officials, GAO-08-198 
(Washington, D.C.: Jan. 8, 2008). 

[112] 49 CFR Part 26. 

[113] Many different variations of a turnback approach could be 
posited, including ones that retain some federal programs and some 
level of federal gasoline tax. These scenarios would yield different 
results. This analysis illustrates the potential fiscal impact of 
turnback by providing a common basis for comparing the state tax burden 
that would be necessary to maintain the same level of revenue in the 
absence of a federal grant program. 

[114] There are methodological limitations to this analysis. These 
results represent only 1 year of federal surface transportation 
programs, and shifts in fuel usage and other factors cause change from 
year to year. Sampling multiple years was not practical because the 
changeover from the TEA-21 authorization to the SAFETEA-LU 
authorization resulted in grant disbursement and fuel consumption data 
that are not equivalent across years. Also, discretionary programs were 
omitted because their grants typically last for only 1 or several 
years, and they represent a small portion federal grant funds. Finally, 
because this analysis only considers programs funded by the federal 
fuel tax via the Highway Trust Fund, the few programs financed from 
general funds--most notably the New Starts transit capital grant 
program--are outside the scope of analysis. 

[End of section] 

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