Federal Funding Uncertainty in State, Local, and Regional Departments of Transportation: Impacts, Responses, and Adaptations (2022) / Chapter Skim
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14 C H A P T E R 2 2.1 The 20th-Century Federal-Aid Highway Program, Funding, and Structure The establishment of the Federal-Aid Highway Program in the second half of the 20th century reflected a national consensus on the need to respond to an evolving economy, regional growth, transportation-dependent industries, and the concern for defense logistics. Together these needs supported the imperative of creating a core national network of interstate highways -- and later major metropolitan transit investments -- backed by an assured, significant, sustainable, and predictable flow of funds generated by federal fuel taxes in an era of ever-growing demand for mobility.
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The History of Federal Transportation Funding Uncertainty 15 2.2.1 Formula Programs In addition to the interstate program, three other programs existed with funding to be distributed according to formulas dating back as far as 1916: • Primary System: funds apportioned using three formula factors -- a state's share of the national land area, population, and rural post road mileage, each weighted equally. • Secondary System: funds apportioned based on each state's share of national land area, rural population, and rural postal route mileage.
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16 Federal Funding Uncertainty in State, Local, and Regional Departments of Transportation: Impacts, Responses, and Adaptations 2.2.3 Funding Levels and Stability/Predictability During the interstate era, the real-dollar value of Federal-Aid increased continuously based on fuel tax increases, growing vehicle miles traveled (VMT) nationwide, and modest improvements in fuel efficiency (EIA 2012)
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Apportionments (nominal $) Population Apportionment per Capita (nominal $)
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18 Federal Funding Uncertainty in State, Local, and Regional Departments of Transportation: Impacts, Responses, and Adaptations • Recognition of the growing burden of preservation, maintenance, reconstruction, and operations • Consideration of the negative environmental and community externalities of transportation facilities development and operations • Heightened recognition of mobility and service availability inequities, and an increased sensitivity to cross-subsidies among economic, social, and geographic interests The consequent changes in the context for Federal-Aid transportation programs included increasingly obvious and competing differences among states and metropolitan regions regarding their transportation improvement priorities and fiscal capacity to support them (highway, transit, freight)
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The History of Federal Transportation Funding Uncertainty 19 • Political delays and uncertain time frames -- at several levels -- for authorization, appropriation, budgeting, and obligation • Project development and approval delays and uncertainties due to new laws and regulations and overlapping departmental jurisdictions • Waves of consolidation and fragmentation regarding specific program funding categories • Addition of transit programs to the eligible recipients of the Highway Trust Fund Together, these developments have led to a fragmentation in the national consensus on surface transportation among various interest groups regarding the appropriate focus of Federal-Aid among systems, modes, jurisdictions, and geographies. At the same time, competing federal priorities in health, education, defense, and social support have stressed the national budget dialogue.
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20 Federal Funding Uncertainty in State, Local, and Regional Departments of Transportation: Impacts, Responses, and Adaptations was tied to non-transportation emergency legislation associated with the war in Afghanistan, which was another break with the traditional predictable approach provided by stand-alone transportation authorization acts. At the same time, authorization acts and appropriations measures were tied up in complex congressional politics that delayed actual appropriations and required a series of continuing resolutions to continue the reliable flow of federal transportation funding.
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The History of Federal Transportation Funding Uncertainty 21 2.5.3 Impact of Uncertainty on State Programs With each delay and change in funding structure, industry associations and lobbyists encouraged state DOTs to provide arguments that could be used to keep pressure on Congress to act and bridge the funding gap. However, it appears not all DOTs felt seriously threatened.
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22 Federal Funding Uncertainty in State, Local, and Regional Departments of Transportation: Impacts, Responses, and Adaptations larger. As the recession continued, the 2-year Moving Ahead for Progress in the 21st Century (MAP-21)
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The History of Federal Transportation Funding Uncertainty 23 The current extent of the federal deficit and the broad range of looming social and environmental program costs suggests few opportunities to resort to general funding transfers to keep the Highway Trust Fund from defaulting. The resolution of these issues is uncertain.
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24 Federal Funding Uncertainty in State, Local, and Regional Departments of Transportation: Impacts, Responses, and Adaptations 2030 is expected to be almost $8 billion lower, or nearly 20% less, exclusively because of changes in fuel e ciency and the early stages of electric vehicle penetration. A reduction of almost 39% is expected by 2040, and most likely 50% by 2050 (Regan 2021)
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