Surface Transportation:

Restructured Federal Approach Needed for More Focused, Performance-Based, and Sustainable Programs

GAO-08-400: Published: Mar 6, 2008. Publicly Released: Mar 6, 2008.

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Surface transportation programs need to be reexamined in the context of the nation's current unsustainable fiscal path. Surface transportation programs are particularly ready for review as the Highway Trust Fund faces a fiscal imbalance at a time when both congestion and travel demand are growing. As you requested, this report (1) provides an overview of the federal role in surface transportation and the goals and structures of federal programs, (2) summarizes GAO's conclusions about the structure and performance of these programs, and (3) provides principles to assess options for focusing future surface transportation programs. GAO's study is based on prior GAO reports, stakeholder reports and interviews, Department of Transportation documents, and the views of transportation experts.

Since federal financing for the interstate system was established in 1956, the federal role in surface transportation has expanded to include broader goals, more programs, and a variety of program structures. To incorporate additional transportation, environmental and societal goals, federal surface transportation programs have grown in number and complexity. While some of these goals have been incorporated as new grant programs in areas such as transit, highway safety, and motor carrier safety, others have been incorporated as additional procedural requirements for receiving federal aid. Broad program goals, eligibility requirements, and transfer provisions give states and local governments substantial discretion for allocating most highway infrastructure funds. For transit and safety programs, broad basic grant programs are augmented by programs that either require a competitive selection process or use financial incentives to directly target federal funds toward specific goals or safety activities. Many current programs are not effective at addressing key transportation challenges such as increasing congestion and freight demand. They generally do not meet these challenges because federal goals and roles are unclear, many programs lack links to needs or performance, and the programs often do not employ the best tools and approaches. The goals of current programs are numerous and sometimes conflicting. Furthermore, states' ability to transfer highway infrastructure funds among different programs is so flexible that some program distinctions have little meaning. Moreover, programs often do not employ the best tools and approaches; rigorous economic analysis is not a driving factor in most project selection decisions and tools to make better use of existing infrastructure have not been deployed to their full potential. Modally-stovepiped funding can impede efficient planning and project selection and, according to state officials, congressionally directed spending may limit the states' ability to implement projects and efficiently use transportation funds. A number of principles can help guide the assessment of options for transforming federal surface transportation programs. These principles include: (1) ensuring goals are well defined and focused on the federal interest, (2) ensuring the federal role in achieving each goal is clearly defined, (3) ensuring accountability for results by entities receiving federal funds, (4) employing the best tools and approaches to emphasize return on targeted federal investment, and (5) ensuring fiscal sustainability. With the sustainability and performance issues of current programs, it is an opportune time for Congress to more clearly define the federal role in transportation and improve progress toward specific, nationally-defined outcomes. Given the scope of needed transformation, it may be necessary to shift policies and programs incrementally or on a pilot basis to gain practical lessons for a coherent, sustainable, and effective national program and financing structure to best serve the nation for the 21st century.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: In 2008 GAO reported that since 1956, the federal role in surface transportation has expanded to include broader goals, more programs, and a lack of link between funding and performance. Therefore, GAO recommended that Congress consider refocusing surface transportation programs to have well-defined goals with direct links to an identified federal interest and role. On July 6, 2012, President Obama signed into law P.L. 112-141, the Moving Ahead for Progress in the 21st Century Act (MAP-21), which instituted a performance-based approach to surface transportation programs to focus the federal role on achieving national transportation goals and related performance standards for certain transportation infrastructure with a federal interest. To implement this approach, the Act established national performance goals for federal highway programs in several areas?including goals for the safety of all roads, the condition of Interstate pavement and National Highway System bridges, as well as the congestion levels of the National Highway System. The Act also required the establishment of performance measures and targets for states and local partners to achieve the federal goals, and it enhanced the federal oversight role by requiring states to report on their progress meeting targets. If a state fell below minimum standards for certain pavement and bridge conditions, it would be required to spend a specified portion of its funds for that purpose until the minimum standard was exceeded. Finally, the Act required state and metropolitan planning organizations to incorporate performance goals, measures, and targets into the process of identifying needed transportation improvements and project selection. GAO?s work helped encourage the Congress to enhance accountability for results by establishing a defined set of national performance goals, with related performance measures, national standards, and targets to monitor states? progress in achieving federal objectives. As a result, the Department of Transportation will have the information it needs to hold states and other recipients of federal funds accountable for results and improvements to the nation?s surface transportation infrastructure.

    Matter: To improve the effectiveness of the federal investment in surface transportation, meet the nation's transportation needs, and ensure a sustainable commitment to transportation infrastructure, Congress may wish to consider reexamining and refocusing surface transportation programs to be responsive to these principles so that they have well-defined goals with direct links to an identified federal interest and role.

  2. Status: Closed - Implemented

    Comments: In 2008, GAO reported that most federal surface transportation programs lacked links between funding and performance and that most highway funds are distributed without relationship to the performance of the recipients. GAO's report identified options for transforming federal surface transportation programs including achieving greater accountability for results by entities receiving federal funds and reported that outcomes clearly linked to program goals could provide a strong foundation for holding grant recipients responsible and for measuring overall program performance. GAO recommended that Congress consider instituting processes to make grantees more accountable by establishing more performance-based links between funding and program outcomes. On July 6, 2012, President Obama signed MAP-21 (P.L. 112-141) into law. The Act (a) established national performance goals for federal highway programs in several areas; (b) required the Secretary of Transportation, in consultation with states and others, to establish performance measures for pavement and bridge conditions, injuries and fatalities, traffic congestion, and in other areas; and (c) required states and other grantees to report their progress in achieving these targets. The Act further required that if a state's report showed inadequate progress in some areas, most notably in key condition and safety measures, that the state would be required to take corrective actions. Also, if a state fell below minimum standards for certain pavement and bridge conditions, the state would be required to spend a specified portion of its funds for that purpose until the minimum standard was exceeded. Finally, the Act required state and metropolitan planning organizations to incorporate performance goals, measures, and targets into the process of identifying needed transportation improvements and project selection. GAO's work helped prod the Congress to enhance accountability for results by creating a performance based highway program and holding grantees accountable for results.

    Matter: To improve the effectiveness of the federal investment in surface transportation, meet the nation's transportation needs, and ensure a sustainable commitment to transportation infrastructure, Congress may wish to consider reexamining and refocusing surface transportation programs to be responsive to these principles so that they institute processes to make grantees more accountable by establishing more performance-based links between funding and program outcomes.

  3. Status: Open

    Comments: On July 6, 2012, President Obama signed MAP-21 (P.L. 112-141) into law. Although the Act made significant, performance-based revisions to the surface transportation programs, it did not address the current imbalance between federal surface transportation revenues and spending.

    Matter: To improve the effectiveness of the federal investment in surface transportation, meet the nation's transportation needs, and ensure a sustainable commitment to transportation infrastructure, Congress may wish to consider reexamining and refocusing surface transportation programs to be responsive to these principles so that they institute tools and approaches to that emphasize the return on the federal investment.

  4. Status: Open

    Comments: On July 6, 2012, President Obama signed MAP-21 (P.L. 112-141) into law. Although the Act made significant, performance-based revisions to the surface transportation programs, it did not address the current imbalance between federal surface transportation revenues and spending.

    Matter: To improve the effectiveness of the federal investment in surface transportation, meet the nation's transportation needs, and ensure a sustainable commitment to transportation infrastructure, Congress may wish to consider reexamining and refocusing surface transportation programs to be responsive to these principles so that they address the current imbalance between federal surface transportation revenues and spending.

 

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