Department of Transportation:

Flexible Funding Within Federal Highway Programs

RCED-97-233R: Published: Aug 15, 1997. Publicly Released: Aug 15, 1997.

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Pursuant to a congressional request, GAO determined the extent to which the states have used the funding flexibility available for the National Highway System, the Interstate Maintenance Program, and the Highway Bridge Replacement and Rehabilitation Program, focusing on: (1) comparing the actual funds transferred from the three major programs with the maximum funds that could have been transferred with and without the approval of the Secretary of Transportation; (2) the number of states transferring funds from each of the three major highway programs; and (3) the total amount of funds that can be used or transferred to the Surface Transportation Program (STP).

GAO noted that: (1) from October 1, 1991, through June 30, 1997, the states transferred a total of $3.4 billion, or only about 8 percent of the funds they could have transferred, with and without the approval of the Secretary of Transportation, from the three major highway programs; (2) at their discretion, the states could have transferred $18.5 billion of the $48.3 billion apportioned to them for the three major highway programs for fiscal years 1992 through 1997; (3) another $21.7 billion of these funds could have been transferred if the states had obtained approval from the Secretary of Transportation; (4) thus, a total of $40.2 billion could have been transferred from the three programs; however, the states generally limited their transfers to amounts that did not require the approval of the Secretary of Transportation; (5) from October 1, 1991, through June 30, 1997, 32 states, the District of Columbia, and the Commonwealth of Puerto Rico transferred funds from at least one of the three major highway programs; (6) most of these (23 states and Puerto Rico) transferred funds from the bridge program; (7) the total amount transferred from the bridge program was $1.8 billion; (8) 17 states, Puerto Rico, and the District of Columbia transferred $0.9 billion from the Interstate Maintenance Program; and 8 states and the District of Columbia transferred $0.7 billion for the National Highway System; (9) STP is a block grant program that may be used by the states and localities for a wide range of activities, including the construction of highways and bridges and the capital costs associated with certain transit projects, such as bus terminals; (10) potential funding that could be used for STP is nearly four times the amount authorized for the program; (11) this is because the STP authorization of $21.7 billion can be supplemented by other highway funding, commonly referred to as equity adjustments; (12) in addition, funds from the three major highway programs can be transferred for STP purposes--$18.5 billion without the approval of the Secretary of Transportation and an additional $21.7 billion with the Secretary's approval; and (13) states actually transferred about $2.4 billion, or only about 6 percent of the $40.2 billion they could have transferred ($18.5 billion at their discretion and $21.7 billion with the approval of the Secretary of Transportation) from the three major highway programs to STP.

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