Transit capital expenditures totaled $7.636 billion in 1997. This total is well below the estimated annual investment requirements for the 20-year period from 1998-2017. The estimated annual capital investment that would be necessary to Maintain Conditions and Performance is 41 percent greater than actual 1997 spending by all levels of government. The investment required to Improve Conditions and Performance is more than double actual 1997 capital spending by Federal, State and local governments. The relative differences between actual spending and the investment requirement scenarios are similar to those estimated in the 1995 and 1997 reports.

The percent difference between spending and investment requirements is larger for investments in vehicles than in non-vehicles under the Maintain Conditions and Performance scenario, while the opposite is true under the Improve Conditions and Performance scenario.

TEA-21 authorizes substantial increases in Federal funding for mass transit. This increase in funding is expected to lead to large increases in capital spending by transit operators.

At the guaranteed funding levels specified in TEA-21, total annual transit capital expenditures are projected to grow from $8.1 billion in 1998 to $12.3 billion ($10.8 billion in 1997 dollars) in 2003.

This increase in transit capital expenditures under TEA-21 would substantially reduce the gap between actual expenditures and investment requirements. Investment requirements to Maintain Conditions and Performance exceed projected capital spending for the period 1998–2003 by just 13 percent, while the investment needed to Improve Conditions and Performance is 68 percent larger than projected expenditures.

Investment requirements under both the Maintain and the Improve Conditions and Performance scenarios are slightly backloaded, with greater investment in the latter half of the 20-year period. Substantial investment also occurs in the initial 5-year period, as the backlog of existing vehicle and infrastructure deficiencies is eliminated.