Highway Demonstration Projects

Pursuant to a congressional request, GAO reviewed funding alternatives for highway demonstration projects authorized under the Intermodal Surface Transportation Efficiency Act (ISTEA). GAO noted that: (1) one alternative that considered the impact on individual states' total funding levels of redistributing ISTEA demonstration project funding tended to favor states that received little funding for demonstration projects relative to their overall federal-aid highway funding; (2) the second alternative assumed that the distribution of ISTEA demonstration project funding would remain unchanged and that these demonstration projects would be brought under the annual obligation limitation; (3) under the second alternative, all states would benefit from the increased flexibility resulting from bringing demonstration projects under the obligation limitation; and (4) the flexibility inherent in the second alternative would result in less available funding for some states.