Financing Transportation in the 21st Century

March 12, 2008 - The Intergovernmental Forum on Transportation Finance released a report entitled "Financing Transportation in the 21st Century: An Intergovernmental Perspective."  The Forum was convened by the National Academy of Public Administration (NAPA), on behalf of the Intergovernmental Cooperation Consortium of which NCSL is a member.  The following are excerpts from the report's executive summary:

A Major Financial Problem

In recent years, the financing of America’s highway and transit systems has become out of step with the performance that Americans expect of those systems. Present financing mechanisms consist of a complex set of federal, state, and local revenue sources, federal and state aid programs, and public-private partnerships. Spending constraints at all levels of government are also an issue. These financial arrangements are no longer sufficient to maintain existing facilities and services, or to meet changing demands and improve services to people and businesses. Revenues and investments have not kept pace with growing and shifting populations, inflation, changing technologies, evolving patterns of travel, current trends in globalization, and new policies that address energy conservation and environmental protection.

Of immediate concern is the fact that the federal Highway Trust Fund, which funds both highway and transit programs, is being spent-down at a rate that could make it insolvent in the near future unless Congress acts. Two separate National Commissions have been created by Congress to address the long-term sustainability of funding for highway and transit programs, and many national organizations have prepared or are preparing reports to contribute to this national dialogue. One of these commissions issued its final report on January 15, 2008, and the other is expected to release its findings and recommendations later in 2008. As the dialogue proceeds, it is important to consider the intergovernmental implications of efforts to modernize highway and transit financing mechanisms at all levels of government so they can sustain the current and future program needs.

The purpose of this Forum report is to provide a more fully developed intergovernmental perspective on options being considered for strengthening the nation’s transportation finances.

Briefly stated, the report's principal six recommendations are:

  1. Congress and the Administration should take immediate action to ensure the sustainability of the federal Highway Trust Fund, and should work with the nation’s state and local governments to ensure sustainable financial resources adequate to maintain existing surface transportation infrastructures and operations in the future, as well as to support the increased capacity needed to improve performance.

  2. National surface transportation performance goals and the intergovernmental roles and responsibilities needed to achieve these goals should be established collaboratively.

  3. All levels of government should maintain the revenue-raising principle that the users and beneficiaries of surface transportation systems and services should pay as much as possible of the costs of providing established levels of service.

  4. In establishing intergovernmental and public-private roles and responsibilities for raising needed surface transportation funds, public policymakers should examine a wide range of sources and scenarios.

  5. When examining these revenue raising scenarios, public policymakers should consider the intergovernmental impacts of proposed actions for each level of government, relative to the other levels of government.

  6. When the federal and state governments make major changes in their surface transportation financial assistance programs, they should provide transition time to allow the governments receiving assistance to adjust to these shifts.

Click to download a full copy of the 116 page report Adobe PDFFinancing Transportation in the 21st Century. To read portable document format (.pdf) files, you must install Adobe Acrobat Reader.

Last Updated April 4, 2008