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Highway and Bridge Finance

Transit Finance

Highway Capital Outlay Expenditures - 1997

Federal agencies directly spent $0.3 billion on highway capital outlay in 1997, 0.5 percent of the $48.7 billion spent on capital outlay by all levels of government. Federal grants to State and local governments for highways totaled $19.8 billion, the equivalent of an additional 40.6 percent of total capital spending. Since most Federal highway grants are restricted to being used for capital outlay, it is estimated that the Federal share of total funding for capital outlay was 41.1 percent in 1997.

State governments directly spent $35.7 billion on highway capital outlay in 1997, which was partially financed by the $19.0 billion States received in grants from the Federal Government for highways. State government capital outlay is concentrated on the higher-order functional systems, and State direct expenditures comprise a majority of all capital outlay on each functional class except rural minor collectors, rural local, and urban local. Local governments control most of the mileage on these lower-ordered functional systems and make most of the capital improvements on them. [See Exhibit 6-12].

Exhibit 6-12. Highway Capital Outlay by Functional System, 1997

Total 1997 highway capital expenditures by all levels of government amounted to $5,914 per lane-mile and 1.9 cents per VMT. Capital outlay per lane mile was highest for the higher-ordered systems, and was higher on urban roads than rural roads. Capital outlay per VMT ranged from 1.3 cents on urban minor arterials, to 2.8 cents on rural other principal arterials, to 2.9 cents on rural and urban local. On a cents per VMT basis, capital outlay for rural roads is 12 percent higher than on urban roads.

Capital Outlay by Improvement Type

States provide detailed data on direct State capital outlay on arterials and collectors, classifying expenditures on each functional system into 17 improvement types. These capital improvement types are combined in this report into three major groupings, System Preservation, System Expansion, and System Enhancement. Exhibit 6-13 shows how the $32.1 billion of direct State expenditures on arterials and collectors were assigned to these categories.

The Federal Government and local governments spent an estimated $6.8 billion on arterials and collectors. Detailed data on these expenditures are not available, so the combined $38.9 billion of capital outlay on arterials and collectors by all levels of government, was classified based on the State government expenditure patterns.

There is little information available on the types of improvement that are being made with the $9.9 billion invested by all levels of government in 1997 on local functional class roads. For the purposes of developing an estimate for the improvement type breakdown for the total $48.7 billion invested in 1997 on all systems, it was assumed that the expenditure patterns on the local functional class were roughly equivalent to those observed for arterials and collectors.

In 1997 an estimated $23.2 billion was spent on system preservation, 47.6 percent of total capital outlay on all systems. System preservation as defined in this report does not include routine maintenance. An additional $26.3 billion was expended during 1997 on maintenance and traffic services.

An estimated $7.6 billion (15.6 percent) of total capital outlay went for new roads and bridges in 1997. An additional $14.0 billion (28.8 percent) is estimated to have been used to add lanes to existing roadways. Frequently, when roads are widened, the existing lanes are repaired and enhanced as well. The portion of widening projects estimated to be attributable to work on the existing lanes is not included as part of system expansion in this report.

Exhibit 6-13. Highway Capital Outlay by Improvement Type, 1997

Capital Outlay by Functional Class and Improvement Type

Exhibit 6-14 shows there are significant variations in the types of capital expenditures made by States on different functional classes. The portion of capital outlay devoted to system preservation ranges from 39.0 percent on "other urban freeways and expressways" to 62.8 percent on rural major collectors. System preservation's share is generally higher on rural arterials and collectors (52.9 percent) than on those in urban areas (43.7 percent). The portion of capital outlay used for construction of new roads and bridges is highest on rural other principal arterials, at 24.9 percent. The portion of capital outlay used for other system expansion is highest on urban other principal arterials (34.8 percent). On other arterials generally, other systems expansion's share of total capital outlay is 32.0 percent, higher than its share on Interstate (23.9 percent) and collectors (26.3 percent).

Exhibit 6-14. Distribution of Capital Outlay by Improvement Type and Functional Class, 1997