Conditions and Performance Chapter Listing

Conditions and Performance Home Page

Introduction

Summary

Highway and Bridge Finance

Transit Finance

Total Highway Expenditures - 1997

When discussing the roles of each level of government in highway funding, this chapter focuses primarily on which level of government provides the revenues, rather than on the level of government that ultimately makes the expenditure. However, there are significant intergovernmental transfers of funds occurring from the Federal Government to State and local governments ($19.8 billion in 1997), from State governments to local governments ($11.6 billion), and from local governments to State governments ($1.4 billion). Depending on the specific grant program involved, State and local recipients of transfer payments from other governments have a varying degree of autonomy and discretion in how they use the funds. The implication of this is that the relative degree of influence that each level of government has on what individual projects are funded and what types of highway expenditures are made is not necessarily consistent with the share of highway funding that each level of government provides.

While the Federal Government funded $21.1 billion (20.8 percent) of the total highway expenditures of $101.3 billion in 1997, the majority of the Federal Government's contribution to highways consists of grants to State and local governments. Direct Federal spending on capital outlay, maintenance, administration and research amounted to only $1.3 billion (1.3 percent). State governments combined $19.0 billion of Federal funds with $41.1 billion of State funds and $1.4 billion of local funds to make direct expenditures of $61.5 billion (60.8 percent). Local governments combined $0.8 billion of Federal funds with $11.6 billion of State funds and $26.1 billion of local funds to make direct expenditures of $38.4 billion (37.9 percent). (Note that all figures cited as expenditures, spending, or outlays in this report all represent cash expenditures, rather than authorizations or obligations.) [See Exhibit 6-7].

Exhibit 6-7. Direct Expenditures for Highways, by Expending Agencies and by Type, 1997

Types of Highway Expenditures

Current highway expenditures can be divided into two broad categories: non-capital and capital. Non-capital highway expenditures include maintenance of highways, highway and traffic services, administration, highway law enforcement, highway safety, and interest on debt. Highway capital outlay consists of those expenditures associated with highway improvements, including land acquisition and other right-of-way costs; preliminary and construction engineering; new construction, reconstruction, resurfacing, rehabilitation, and restoration costs of roadways, bridges, and other structures; installation of traffic service facilities such as guard rails, fencing, signs, and signals. Bond retirement is not part of current expenditures, but is included in the figures cited for total highway expenditures in this report.

In 1997, all levels of government spent $48.7 billion on capital outlay, 48.1 percent of total highway expenditures. Current non-capital expenditures consumed $47.8 billion (47.2 percent), while the remaining $4.8 billion (4.7 percent) went for bond redemption. Most Federal funding for highways goes for capital items. Non-capital expenditures are funded primarily by State and local governments. In 1997, State and local non-capital expenditures were roughly equal, as State governments spent $23.3 billion, while local governments spent $23.4 billion. The majority of spending on highway maintenance occurred at the local government level, which expended $12.8 billion, 61.2 percent of the $20.9 billion total.

Highway capital outlay expenditures are discussed in more detail later in this chapter.