Financing the Nation's Transportation System

As a result of concerns regarding the financing of the nation's transportation system, GAO designated this area as high risk in 2007. In its January 2009 high risk update, GAO continued to cite the funding of the nation's surface transportation system as a high risk area. The efficiency of our nation's surface transportation infrastructure is threatened by increasing demand for transportation services, and revenue from traditional funding mechanisms is unable to keep pace.

Highlights of GAO-07-310 (PDF), Highlights of GAO-09-271 (PDF)

• In particular, the fiscal sustainability of the Highway Trust Fund, which provides over $50 billion annually for highway, transit, and safety programs is a pressing issue. (About 82 percent of this amount goes toward highway infrastructure, 15 percent toward transit assistance, and 3 percent toward highway and motor carrier safety.) Addressing the sustainability of surface transportation finance is a crucial component to re-examining and restructuring DOT's surface transportation programs. Expenditures now exceed revenues for the Fund and, to prevent a funding shortfall, Congress recently authorized two infusions from the general fund of the Treasury to the Fund--$8 billion in September 2008 and $7 billion in August 2009. Without major changes in funding levels or planned spending, deficits will continue to occur. In addition, the federal budget is on an unsustainable path—heightening concern about the solvency of the Highway Trust Fund because other federal revenue sources may not be available to help address the nation's current transportation challenges.

  Highlights of GAO-08-744T (PDF), Highlights of GAO-09-845T (PDF)

• The existing intercity passenger rail system is in poor financial condition, and the current structure does not effectively target federal funds to where they provide the greatest public benefits, such as transportation congestion relief. In addition, the Department of Transportation has $8 billion in Recovery Act funds to distribute for high speed and other intercity passenger rail projects. Since the expected costs of many of the high speed rail projects far exceed amounts available, care needs to be taken to provide for the best investments that will maximize social benefits.

  Highlights of GAO-07-15 (PDF), Highlights of GAO-09-317 (PDF)

• The freight rail industry is projected to grow substantially, but the ability of private railroads to find the capacity needed to meet this projected growth is uncertain. The federal government, as well as state governments, face the challenge of investing public funds in freight rail projects in a way that reflects public priorities and maximize public benefits.

  Highlights of GAO-08-460T (PDF)

• With the declines in airline passenger traffic, aircraft operations, and fuel consumption, the excise taxes that fund Airport and Airway Trust Fund revenues have been lower than previously forecasted. If the actual revenues into the fund continue to fall below forecasted levels, there could be a risk of over committing available resources from the Trust Fund—meaning revenues could be insufficient to cover all of the obligations that FAA has the authority to incur. Although FAA received additional General Fund money in its fiscal year 2009 appropriation to offset lower-than-anticipated Trust Fund revenues, the Trust Fund's uncommitted balance could potentially fall close to zero in the near future, warning FAA that funds may not be available to start or continue some projects for which appropriations have been made.

  Highlights of GAO-09-393 (PDF)

^ Back to topWhat Needs to Be Done

• 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, GAO has called for a fundamental re-examination of our surface transportation policies.
• The federal approach to surface transportation should be restructured based on the following principles: (1) ensuring goals are well-defined with direct links to an identified federal interest and role (2) ensuring accountability for results by entities receiving federal funds, (3) using the best tools and approaches to emphasize return on targeted federal investment, and (4) ensuring fiscal sustainability

  Highlights of GAO-08-400 (PDF)

• Given the inherent uncertainty of forecasting revenues and the deteriorating uncommitted balance of the Airport and Airway Trust Fund, GAO proposed that Congress consider working with FAA to develop alternative ways to reduce the risk of over committing budgetary resources from the Trust Fund, thus reducing the risk of disruptions in funding for aviation projects and programs.

^ Back to topKey Reports

High Speed Passenger Rail

Highway Trust Fund

Commercial Aviation

High Speed Passenger Rail

Transportation Programs

Highway Public-Private Partnerships

Airport Finance

More Reports