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Status of the Nation’s Highways, Bridges, and Transit:
2002 Conditions and Performance Report

Chapter 6: Finance

Chapter 6 Table of Contents

  • Summary
  • Highway and Bridge Finance
    • Revenue Sources
      • Historical Revenue Trends
    • Highway Expenditures
      • Types of Highway Expenditures
      • Historical Expenditure and Funding Trends
      • Constant Dollar Expenditures
      • Constant Dollar Expenditures per VMT
    • Highway Capital Outlay Expenditures
      • Capital Outlay by Improvement Type
  • Transit Finance
    • Transit Funding
    • Level and Composition of Public Funding
      • Federal Funding
      • State and Local Funding
    • Level and Composition of System-Generated Funds
    • Trends in Public Funding
    • Funding in Current and Constant Dollars
    • Capital Funding and Expenditures
    • Operating Expenditures
    • Operating Expenditures by Transit Mode
    • Operating Expenditures by Transit Operations
    • Rural Transit
  • Innovative Finance
    • TIFIA
    • State Infrastructure Banks
    • GARVEE

Summary

Exhibit 6-1 compares the key highway and transit statistics discussed in this chapter with the values shown in the last report. The first data column contains the values reported in the 1999 C&P report, which were based on 1997 data. Where the 1997 data have been revised, updated values are shown in the second column. The third column contains comparable values, based on 2000 data.

    
Exhibit 6-1

Comparison of Highway and Transit Finance Statistics with Those in the 1999 C&P Report

STATISTIC
1997 DATA
2000 DATA
1999 REPORT
REVISED
Total Funding for Highways (all govts.)
$106.5 bil
107.4 bil
$128.7 bil
Total Funding for Transit
$26.0 bil
 
$30.8 bil
Total Public Funding for Transit
$17.5 bil
 
$21.0 bil
Percent of Public Funding for Transit Funded by Federal Government
27%
 
25%
Total Highway Expenditures (all govts.)
$101.3 bil
$102.0 bil
$127.5 bil
Percent of Total Highway Expenditures Funded by Federal Government
20.8%
 
21.7%
Total Highway Capital Outlay (all govts.)
$48.7 bil
$48.4 bil
$64.6 bil
Percent of Total Highway Capital Outlay Funded by Federal Government
41.1%
41.6%
39.9%
Percent of Total Highway Capital Outlay Used for System Preservation
47.6%
 
52.0%
Total Transit Capital Outlay
$7.6 bil
 
$9.0 bil
Percent of Total Transit Capital Outlay Funded by Federal Government
54%
 
47%
Percent of Total Transit Capital Outlay Used for Rail
66%
 
63%
Total Highway-User Revenues (motor-fuel and vehicle taxes and tolls)
$89.9 bil
 
$100.6 bil
Highway-User Revenues used for roads
$64.7 bil
$66.3 bil
$81.0 bil
Total Transit Fares and Other System-Generated Revenue
$8.4 bil
 
$9.8 bil

Highways and Bridges

All levels of government generated $128.7 billion in 2000 to be used for highways and bridges. Of this total, $1.3 billion was placed in reserves for future expenditures, so cash outlays for highways and bridges in 2000 totaled $127.5 billion. Highway expenditures increased 25.0 percent between 1997 and 2000. Highway expenditures grew more quickly than inflation over this period, rising 14.4 percent in constant dollar terms (based on the FHWA Construction Bid Price Index for highway capital outlay, and the Consumer Price Index for all other types of highway expenditures). Since 1997, highway capital expenditures by all level of government grew 33.7 percent to $64.6 billion in 2000. The Federal government contributed $25.8 billion (39.9 percent) of total highway capital expenditures.

It is interesting to note that, despite the increases in Federal highway funding under the Transportation Equity Act for the 21st Century (TEA-21), the Federal share of highway funding has fallen from 1997 to 2000, as the combined capital spending of State and local governments has grown more quickly. The Federal share of highway capital outlay had ranged from 41 to 46 percent between 1987 and 1997. However, in 1998, the Federal share of highway capital outlay fell below 40 percent for the first time since 1959, and it has remained below that level ever since.

In 2000, 52.0 percent of highway capital outlay was used for system preservation, up from 47.6 percent in 1997. Highway user revenues (the total amount generated from motor-fuel taxes, motor-vehicle taxes and fees, and tolls) rose 11.9 percent from $89.9 billion in 1997 to $106 billion in 2000. Of this total, $81.0 billion (80.5 percent) was used for highway programs.

Transit

Transit is funded by Federal, State, and local governments, as well as with system generated revenues. Overall total transit funding increased by 18.7 percent between 1997 and 2000. Although Federal funding for transit increased to $5.3 billion in 2000, 10.9 percent higher than in 1997, Federal funds accounted for only 17 percent of total expenditures on transit in 2000, down from 18 percent in 1997. This decrease in the Federal share was driven by dramatically increased investments by State and local governments in transit, as well as increases in system-generated revenue. Between 1997 and 2000, States and local governments increased their funding in transit by 23.6 percent to $15.7 billion. In 2000, State governments provided 18 percent of total transit funding, and local governments provided 33 percent of total funding. Systemgenerated revenue jumped by 16 percent to $9.8 billion in 2000, and accounted for 32 percent of total transit funding in 2000.

In areas with populations over 200,000, Federal funds may not be spent on operating expenses. This limitation means that a higher proportion of Federal funds are spent on capital investments, while State local and system-generated funds are more likely to be spent on operating expenses. Nevertheless, as local governments significantly increased their funding for capital investments between 1997 and 2000, the Federal share of total capital expenditures for transit fell from 54 percent in 1997 to 47 percent in 2000.

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