GAO: States contributing greater share for highway funding

| 9/1/2004

The nation’s investment in the highway system has doubled the past 20 years, with states and localities contributing more than the federal investment, GAO reported in an August. 2004 report.

Between 1982 and 2002, state and local capital investment increased 150 percent from $15.5 billion to $30.7 billion. Sen. Harry Reid, D-NV, the ranking minority member of the Subcommittee on Transportation and Infrastructure, requested the report, “Federal Aid Highways – Trends, Effect on State Spending, and Options for Future Program Design.”

The report described the downside to this funding trend.

“The preponderance of evidence suggests that federal aid highway grants have influenced state and local governments to substitute federal funds for state and local funds that otherwise would have been spent on highways,” the report said.

GAO added that this “substitution trend” may be limiting the effectiveness of Congressional strategies to meet the federal aid highway goals.

The agency suggested some possible solutions: Increasing the required state match; rewarding states that increase their spending; and requiring states to maintain investment levels over time that could help reduce substitution.