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entitled 'Surface and Maritime Transportation: Developing Strategies 
for Enhancing Mobility: A National Challenge' which was released on 
September 30, 2002.



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Report to the Committee on Environment and Public Works, U.S. Senate:



August 2002:



SURFACE AND MARITIME TRANSPORTATION:



Developing Strategies for Enhancing Mobility: A National Challenge:



GAO-02-775:



Letter:



Results in Brief:



Background:



Trends in Public Expenditures for Surface and Maritime Transportation 

Vary by Mode:



Passenger and Freight Travel Are Expected to Increase on All 

Modes:



Key Mobility Challenges Include Growing Congestion, Limited Access to 

the Transportation System for Certain Groups, and Effects on the 

Environment and Communities:



Strategies for Addressing Mobility Challenges Include Focusing on 

Systemwide Outcomes, Using a Full Range of Tools, and Providing Options 

for Financing Surface and Maritime Transportation:



Agency Comments and Our Evaluation:



Appendixes:



Appendix I: Expenditures for Capital, Operations, and Maintenance:



Appendix II: Travel Forecast Methodologies:



Appendix III: Factors Influencing Future Travel:



Appendix IV: Intelligent Transportation Systems:



Appendix V: Alternative Financing Methods:



Appendix VI: Scope and Methodology:



Appendix VII: GAO Contacts and Acknowledgements:



Table:



Table 1: Projected Average Annual Growth Rates for Vehicle Miles 

Traveled, 2000-2020:



Figures:



Figure 1: Total Public Sector Expenditures for Surface and Maritime

Transportation by Mode, Fiscal Years 1991-1999.:



Figure 2: Federal Government and State and Local Government Shares of 
Expenditures

on Public Roads (in millions of 1999 dollars):



Figure 3: Federal Government and State and Local Government Shares of 
Expenditures

on Public Transit (in millions of 1999 dollars):



Figure 4: Federal Government and State and Local Government Shares of 
Expenditures

on Waterborne Transportation (in millions of 1999 dollars):



Figure 5: Historical and Projected Vehicle Miles Traveled for Passenger 
Vehicles

on Public Roads, 1991-2010



Figure 6: Historical and Projected Passenger Miles Traveled on Transit, 
1991-2010



Figure 7: Freight Tons (in Billions) in 1998 and Projected to 2010 for 
Surface and

Maritime modes:



Figure 8: Purposes for Capital Outlays for Public Roads, Fiscal Years 
1993 and 2000:



Figure 9: Federal Expenditures for Construction and Operations and 
Maintenance of

Locks and Dams, Fiscal Years 1991-2000:



Abbreviations:



AASHTO: American Association of State Highway and Transportation 

Officials:



APTA: American Public Transportation Association:



Corps of Engineers: U.S. Army Corps of Engineers:



DOT: U.S. Department of Transportation:



FHWA: Federal Highway Administration:



FRA: Federal Railroad Administration:



FTA: Federal Transit Administration:



GARVEE: Grant Anticipation Revenue Vehicle:



HOT: high occupancy toll:



HOV: high occupancy vehicle:



HPMS: Highway Performance Monitoring System:



ISTEA: Intermodal Surface Transportation Efficiency Act of 1991:



ITS: Intelligent Transportation Systems:



MPO: Metropolitan Planning Organization:



NAS: National Academy of Sciences:



RABA: Revenue Aligned Budget Authority:



RRIF: Rail Rehabilitation and Improvement Financing Program:



SIB: State Infrastructure Bank:



TEA-21: Transportation Equity Act for the 21ST Century:



TIFIA: Transportation Infrastructure Finance and Innovation Act of 

1998:



TRB: Transportation Research Board:



WMATA: Washington Metropolitan Area Transit Authority:



Letter: 



August 30, 2002:



The Honorable James Jeffords

Chairman

The Honorable Robert Smith

Ranking Minority Member

Committee on Environment and Public Works

United States Senate:



The scope of the U.S. surface and maritime transportation systems--

which primarily include roads, mass transit systems, railroads, and 

ports and waterways[Footnote 1]--is vast. One of the major goals of 

these systems is to provide and enhance mobility, that is, the free 

flow of passengers and goods. Mobility provides people with access to 

goods, services, recreation, and jobs; provides businesses with access 

to materials, markets, and people; and promotes the movement of 

personnel and material to meet national defense needs. Among the social 

and economic benefits of enhanced mobility are improved economies and, 

for some, better quality of life and access to job opportunities. In 

2000, the surface and maritime transportation systems carried 2.7 

trillion miles of travel by passenger vehicles and trucks, 8.7 billion 

trips on public transit, 22.5 million trips on intercity passenger rail 

(Amtrak), and in 1998, about 13.5 billion tons of freight on all modes.



While the U.S. surface and maritime transportation systems provide many 

benefits, they have also generated some concerns about congestion and 

the burden they impose on the nation’s quality of life through wasted 

energy, time, and money; increased pollution and threats to public 

safety; barriers to transportation accessibility for certain population 

groups; and the level of financial resources available to address 

transportation problems. Several key pieces of legislation that 

authorize funding for federal surface transportation programs will 

expire soon. For example, the Transportation Equity Act for the 21st 

Century (TEA-21)[Footnote 2]--which authorizes federal funding for 

highways, mass transit, and a variety of other surface transportation 

programs--expires in fiscal year 2003 and the Amtrak:



Reform and Accountability Act of 1997[Footnote 3] that authorizes 

federal appropriations for Amtrak expires at the end of fiscal year 

2002. In addition, the federal funding processes and mechanisms for the 

maritime transportation system are currently under review by two 

interagency groups.[Footnote 4] As the Congress considers reauthorizing 

surface transportation legislation, it will weigh the structure, 

nature, and level of federal investment it will provide in future years 

to enhance mobility and support other surface and maritime 

transportation activities.



Given the social and economic importance of the surface and maritime 

transportation systems and to inform the Congress in its 

reauthorization deliberations, you asked us to provide information on 

the following questions:



1. What have been the trends over the past 10 years in surface and 

maritime transportation expenditures made by the public sector?



2. What are the projected trends in the levels of passenger and freight 

travel on surface and maritime transportation modes over the next 10 

years and what are the key factors that influence those trends?



3. What key challenges in maintaining and improving mobility have 

experts and other sources identified?



4. What are some key strategies for addressing the challenges?



In addressing the first two questions, we analyzed databases and other 

information obtained from the U.S. Department of Transportation (DOT) 

and the U.S. Army Corps of Engineers (Corps of Engineers).[Footnote 5] 

We did not verify the accuracy of these data. In addressing the third 

and fourth questions, we relied upon the results of two panels of 

surface and maritime transportation experts that we convened in April 

2002. The 22 experts were selected by the National Academy of Sciences 

(NAS) and its Transportation Research Board with input from us; they 

included a cross-section of representatives from all surface and 

maritime modes and from various occupations involved in transportation 

planning. We also reviewed reports prepared by federal agencies, 

academics, and industry groups to address the third and fourth 

questions. Appendix VI provides further information on our scope and 

methodology.



In this report we discuss three types of travel that have important 

distinctions: local passenger travel, intercity passenger travel, and 

freight travel. Local travel includes commuting trips to and from work, 

shopping trips, and other personal trips such as for school, social, or 

recreational purposes. The main types of vehicles and modes of 

transportation used for local trips include automobiles and mass 

transit, including city buses, commuter rail, subways, and ferries. 

Intercity passenger travel is different from local travel because it 

represents longer distances traveled, and it occurs on some different 

modes of transportation, primarily automobile, air service, intercity 

bus, and intercity rail. Freight generally moves by trucks on public 

roads; by barges and various cargo ships on the inland, intra-coastal, 

coastal, and Great Lakes waterways; by trains on rail on private right-

of-way; and by airplane. The choice of mode is influenced by the type, 

weight, and value of goods being shipped; available modes of 

transportation in the region; and cost, speed, and other service 

requirements.



Results in Brief:



During the past decade, total public sector spending (in 1999 

dollars)[Footnote 6] increased for public roads and transit, remained 

constant for waterways, and decreased for rail. Federal expenditures 

for public roads have substantially increased since the passage of TEA-

21 in 1998--from $21.2 billion in 1998 to $26.9 billion in 2000, an 

increase of 26.8 percent.[Footnote 7] Federal spending for transit 

decreased slightly between 1991 and 1999 and then increased by 21.5 

percent from $4.3 billion in 1999 to $5.2 billion in 2000. Federal 

spending stayed constant for waterways and decreased for rail during 

the period from 1991 to 2000. The state and local share of total public 

sector expenditures stayed relatively constant during fiscal years 1991 

through 1999[Footnote 8] for public roads, while modestly increasing 

for other modes.



Passenger and freight travel are expected to increase over the next 10 

years, according to DOT projections. Passenger vehicle travel on public 

roads is expected to grow by 24.7 percent from 2000 to 2010. Passenger 

travel on transit systems is expected to increase by 17.2 percent over 

the same period. Amtrak has estimated that intercity passenger rail 

ridership will increase by 25.9 percent from 2001 to 2010. Preliminary 

estimates by DOT indicate that tons of freight moved on all surface and 

maritime modes--truck, rail, and water--are expected to increase by 43 

percent from 1998 through 2010, with the largest increase expected to 

be in the truck sector. The key factors behind increases in passenger 

travel, and the modes travelers choose, are expected to be population 

growth, the aging of the population, and rising affluence. For freight 

movements, economic growth, increasing international trade, and the 

increasing value of cargo shipped may affect future travel levels and 

the modes used to move freight. However, several factors in the 

forecast methodologies limit their ability to capture the effects of 

changes in travel levels on the surface and maritime transportation 

systems. In particular, the key assumption underlying most of the 

national travel projections that we obtained is that capacity will 

increase as levels of travel increase; therefore, the projections are 

not limited by possible future constraints on capacity such as 

increasing congestion.



According to our expert panelists and other sources, with increasing 

passenger and freight travel, the surface and maritime transportation 

systems face a number of challenges that involve ensuring continued 

mobility while maintaining a balance with other social goals, such as 

environmental preservation. These challenges include:



* Preventing congestion from overwhelming the transportation system. 

Increasing travel has already been leading to increasing levels of 

congestion at bottlenecks and peak travel times in some areas. 

According to the Texas Transportation Institute,[Footnote 9] the 

average amount of time that roadways were congested increased from 

about 4.5 hours per day in 1982 to about 7 hours in 2000 in 75 

metropolitan areas that were studied. Freight mobility is affected by 

increasing congestion within specific heavily used corridors and at 

specific bottlenecks that tend to involve intermodal connections, such 

as border crossings, and road and rail connections at major seaports 

and within metropolitan areas. For example, one panelist said that 

railroads are beginning to experience more severe capacity constraints 

in areas where commuter and intercity passenger rail services share 

tracks with freight railroads.



* Ensuring access to transportation for certain underserved 

populations, including some elderly, poor, and rural populations that 

have restricted mobility. Policies and patterns of development that 

encourage automobile dependence and favor provision of transit services 

with inflexible routes and schedules--such as subway or bus--may 

disadvantage these groups by limiting their access to needed services 

and/or jobs.



* Addressing the transportation system’s negative effects on the 

environment and communities. Increasing travel can lead to degradation 

of air quality and other negative externalities. Passenger and freight 

vehicle emissions contribute to air and water pollution, particularly 

in congested areas, and the accompanying noise is also a form of 

pollution.



There is no one solution for the mobility challenges facing the nation, 

and our expert panelists indicated that numerous approaches are needed 

to address these challenges. From these discussions, we believe that 

the wide range of approaches discussed can be clustered into three key 

strategies that may aid transportation decisionmakers at all levels of 

government in addressing mobility challenges. These strategies include 

the following:



1. Focus on the entire surface and maritime transportation system 

rather than on specific modes or types of travel to achieve desired 

mobility outcomes. This strategy involves shifting the focus of 

transportation agencies at the federal, state, and local level from 

their current emphasis on single modes to consider performance outcomes 

of all modes in addressing mobility challenges, as well as recognizing 

interactions across modes, between passenger and freight traffic, and 

between public and private interests. This strategy offers promise to 

better target the specific mobility challenges identified above.



2. Use a full range of tools to achieve desired mobility outcomes. This 

strategy, which calls for using various tools--such as new 

construction, corrective and preventive maintenance, rehabilitation, 

operations and system management, and pricing--to address complex 

mobility challenges, offers promise to be more effective than placing 

emphasis on any one technique. For example, building new infrastructure 

can ease congestion in bottlenecks but is not always a viable solution 

due to cost, land, regulatory, or administrative constraints. Also, 

performing needed maintenance on existing transportation systems can 

improve the speed and reliability of passenger and freight travel, 

while instituting tolls or fees during peak travel times may lead 

people to schedule recreational trips or move freight during less 

congested times or by alternate routes.



3. Provide more options for financing mobility improvements and 

consider additional sources of revenue. This strategy--which involves 

providing options for targeting the financing of transportation 

projects to achieve desired mobility outcomes and to address 

transportation systems that face the greatest challenges--suggests the 

value of identifying more options for raising and distributing funds 

for surface and maritime transportation.



Background:



The U.S. surface and maritime transportation systems facilitate 

mobility through an extensive network of infrastructure and operators, 

as well as through the vehicles and vessels that permit passengers and 

freight to move within the systems. The systems include 3.9 million 

miles of public roads, 121,000 miles of major private railroad 

networks, and 25,000 miles of commercially navigable waterways. They 

also include over 500 major urban public transit operators in addition 

to numerous private transit operators, and more than 300 ports on the 

coasts, Great Lakes, and inland waterways.



Maintaining the transportation system is critical to sustaining 

America’s economic growth. Efficient mobility systems are essential 

facilitators of economic development--cities could not exist and global 

trade could not occur without systems to transport people and goods. 

DOT has adopted improved mobility--to “shape an accessible, affordable, 

reliable transportation system for all people, goods, and regions”--as 

one of its strategic goals. To achieve this goal, it has identified 

several desired outcomes, including (1) improving the physical 

condition of the transportation system, (2) reducing transportation 

time from origin to destination, (3) increasing the reliability of trip 

times, (4) increasing access to transportation systems, and (5) 

reducing the cost of transportation services.



The relative roles, responsibilities, and revenue sources of each 

sector involved in surface and maritime transportation activities--

including the federal government, other levels of government, and the 

private sector--vary across modes. For public roads, ownership is 

divided among federal, state, and local governments--over 77 percent of 

the roads are owned by local governments; 20 percent are owned by the 

states, including most of the Interstate Highway System; and 3 percent 

are owned by the federal government.[Footnote 10] While the federal 

government owns few roads, it has played a major role in funding the 

nation’s highways. For example, from 1954 through 2001, the federal 

government invested over $370 billion (in constant 2001 dollars) in the 

Interstate Highway System.



With the completion of the interstate system in the 1980s--and 

continuing with passage of the Intermodal Surface Transportation 

Efficiency Act of 1991 (ISTEA)[Footnote 11] and its successor 

legislation, TEA-21, in 1998--the federal government shifted its focus 

toward preserving and enhancing the capacity of the system. Under the 

Federal Aid Highway Program, the Federal Highway Administration (FHWA) 

provides funds to states to construct, improve, and maintain the 

interstate highway system and other parts of the U.S. road network and 

to replace and rehabilitate bridges. TEA-21 established, among other 

things, a mechanism for ensuring that the level of federal highway 

program funds distributed to the states would be more closely linked 

than before to the highway user tax receipts credited to the Highway 

Account of the Highway Trust Fund. These user taxes include excise 

taxes on motor fuels (gasoline, gasohol, diesel, and special fuels) and 

truck-related taxes on truck tires, sales of trucks and trailers, and 

the use of heavy vehicles. FHWA distributes highway program funds to 

the states through annual apportionments according to statutory 

formulas that consider a variety of factors including vehicles miles 

traveled on the interstate system, motor fuel usage by each state’s 

highway users, and other factors. The federal share for project funding 

is usually 80 percent but can vary among programs, road types, and 

states. State and local governments then “match” federal funds with 

funds from other sources, such as state or local revenues.



While the federal government’s primary role has been to provide capital 

funding for the interstate system and other highway projects, state and 

local governments provide the bulk of the funding for public roads in 

the United States and are responsible for operating and maintaining all 

nonfederal roads including the interstate system. The sources of state 

highway revenues include user charges, such as taxes on motor fuels and 

motor vehicles and tolls; proceeds of bond issues; General Fund 

appropriations; and other taxes and investment income. The sources of 

local highway revenues include many of the user charges and other 

sources used by state governments, as well as property taxes and 

assessments.



The U.S. transit system includes a variety of multiple-occupancy 

vehicle services designed to transport passengers on local and regional 

routes. Capital funding for transit came from the following sources in 

2000: 47 percent of the total came from the federal government, 27 

percent from transit agencies and other nongovernmental sources, 15 

percent from local governments, and 11 percent from states. In that 

same year, the sources of operating funds for transit included 

passenger fares (36 percent of operating funds); state governments (20 

percent); local governments (22 percent); other funds directly 

generated by transit agencies and local governments through taxes, 

advertising, and other sources (17 percent); and the federal government 

(5 percent).



The Federal Transit Administration (FTA) provides financial assistance 

to states and local transit operators to develop new transit systems 

and improve, maintain, and operate existing systems. This assistance 

includes (1) formula grants to provide capital and operating assistance 

to urbanized and nonurbanized areas and to organizations that provide 

specialized transit services to the elderly and disabled persons; (2) 

competitive capital investment grants for constructing new fixed 

guideway[Footnote 12] systems and extensions to existing ones, 

modernizing fixed guideway systems, and investing in buses and bus-

related facilities; (3) assistance for transit planning and research; 

and (4) grants to local governments and nonprofit organizations to 

connect low-income persons and welfare recipients to jobs and support 

services. Funding for federal transit programs is generally provided on 

an 80 percent/20 percent federal to local match basis. Federal support 

for transit projects comes from the Highway Trust Fund’s highway and 

transit accounts and from the General Fund of the U.S. 

Treasury.[Footnote 13]



The respective roles of the public and private sector and the revenue 

sources vary for passenger as compared with freight railroads. With 

regard to passengers, the Rail Passenger Service Act of 1970 created 

Amtrak to provide intercity passenger rail service because existing 

railroads found such service unprofitable. Since its founding, Amtrak 

has rebuilt rail equipment and benefited from significant public 

investment in track and stations, especially in the Northeast corridor, 

which runs between Boston, Mass., and Washington, D.C. The federal 

government, through the Federal Railroad Administration (FRA), has 

provided Amtrak with $39 billion (in 2000 dollars)[Footnote 14] for 

capital and operating expenses from 1971 through 2002. Federal payments 

are a significant revenue source for Amtrak’s capital budget,[Footnote 

15] but not its operating budget. In fiscal year 2001, for example, the 

sources of Amtrak’s capital funding were private sector debt financing 

(59 percent of total revenues), the federal government (36 percent), 

and state and local transportation agencies (5 percent). In that same 

year, the sources of funding for Amtrak’s operating budget were 

passenger fares 

(59 percent of total revenues), other business activities and commuter 

railroads (34 percent), and the federal government and state 

governments (7 percent).[Footnote 16] The role of the federal 

government in providing financial support to Amtrak is currently under 

review amid concerns about the corporation’s financial viability and 

discussions about the future direction of federal policy toward 

intercity rail service.



With regard to freight, the private sector owns, operates, and provides 

almost all of the financing for freight railroads. Since the 1970s, the 

railroad industry has experienced many changes including deregulation 

and industry consolidation. Currently, the federal government plays a 

relatively small role in financing freight railroad infrastructure by 

offering some credit assistance to state and local governments and 

railroads for capital improvements.



The U.S. maritime transportation system primarily consists of 

waterways, ports, the intermodal connections (e.g., inland rail and 

roadways) that permit passengers and cargo to reach marine facilities, 

and the vessels and vehicles that move cargo and people within the 

system. The maritime infrastructure is owned and operated by an 

aggregation of state and local agencies and private companies, with 

some federal funding provided by the Corps of Engineers, the U.S. Coast 

Guard, and DOT’s Maritime Administration. The Corps of Engineers 

provides funding for projects to deepen or otherwise improve navigation 

channels, maintain existing waterways, and construct and rehabilitate 

inland waterway infrastructure, primarily locks and dams. Funding for 

channel operations and maintenance generally comes from the Harbor 

Maintenance Trust Fund supported by a tax on imports, domestic 

commodities, and other types of port usage. The costs of deepening 

federal channels are shared by the federal government and nonfederal 

entities. The Inland Waterways Trust Fund, supported by a fuel tax, 

funds one-half of the inland and intra-coastal capital investments. 

Coast Guard funding promotes (1) mobility by providing aids to 

navigation, icebreaking services, bridge administration, and traffic 

management activities; (2) security through law enforcement and border 

control activities; and (3) safety through programs for prevention, 

response, and investigation. DOT’s Maritime Administration provides 

loan guarantees for the construction, reconstruction, or reconditioning 

of eligible export vessels and for shipyard modernization and 

improvement. It also subsidizes the operating costs of some companies 

that provide maritime services and provides technical assistance to 

state and local port authorities, terminal operators, the private 

maritime industry, and others on a variety of topics (e.g., port, 

intermodal, and advanced cargo handling technologies; environmental 

compliance; and planning, management, and operations of ports).



Trends in Public Expenditures for Surface and Maritime Transportation 

Vary by Mode:



Public Sector Expenditures:



Public sector spending (in 1999 dollars) has increased for public roads 

and transit between fiscal years 1991 and 1999, but stayed constant for 

waterways and decreased for rail, as shown in figure 1.



Figure 1: Total Public Sector Expenditures for Surface and Maritime 

Transportation by Mode, Fiscal Years 1991-1999:



[See PDF for image]



Source: U.S. Department of Transportation, Bureau of Transportation 

Statistics (2002), Government Transportation Financial Statistics 

(Preliminary Data), Washington, D.C.



[End of Figure]



Total public sector spending for public roads increased by 18.4 percent 

between fiscal years 1991 and 1999,[Footnote 17] from $80.6 billion to 

$95.5 billion (in 1999 dollars).[Footnote 18] Of those totals, the 

relative shares contributed by the federal government and by state and 

local governments remained constant from 1991 to 1999, as shown in 

figure 2. Contributions from state and local governments’ own funds--

that is, independent of federal grants to state and local governments-

-were approximately 75 percent, with the federal government 

contributing the remaining 25 percent.[Footnote 19]



Figure 2: Federal Government and State and Local Government Shares of 

Expenditures on Public Roads (in millions of 1999 dollars):



[See PDF for image]



Source: U.S. Department of Transportation, Bureau of Transportation 

Statistics (2002), Government Transportation Financial Statistics 

(Preliminary Data), Washington, D.C.



[End of Figure]



The increases in total public spending for roads reflect federal 

programmatic spending increases resulting from ISTEA in 1992 and TEA-21 

in 1998, as well as increases in total state and local spending. In 

particular, since the passage of TEA-21, the federal government’s 

contribution to total public expenditures on roads increased by 26.8 

percent (in 1999 dollars) from $21.2 billion in fiscal year 1998 to 

$26.9 billion in fiscal year 2000, the latest year for which federal 

expenditure data are available. Although data on federal expenditures 

are not currently available for fiscal years after 2000, federal 

appropriations for fiscal years 2001 and 2002 reached $32.1 billion and 

$33.3 billion, respectively.[Footnote 20] Federal funding increases in 

those years largely resulted from adjustments required by the Revenue 

Aligned:



Budget Authority (RABA) provisions in TEA-21.[Footnote 21] Since TEA-

21, the federal government has shifted its focus toward preserving and 

enhancing the capacity of public roads, while state and local 

government expenditures have been focused on maintaining and operating 

public roads. Appendix I contains additional information on the levels 

of capital investment and maintenance spending by the public sector.



Total public spending for transit increased by 14.8 percent between 

fiscal years 1991 and 1999 to just over $29 billion (in 1999 dollars). 

This mainly reflects increases in state and local expenditures, as 

federal expenditures for transit actually decreased slightly over this 

period to $4.3 billion in 1999. In fiscal year 2000, however, federal 

spending on transit increased by 21.5 percent from $4.3 billion to $5.2 

billion (in 1999 dollars). Although federal data on expenditures are 

not currently available for fiscal years after 2000, appropriations for 

fiscal years 2001 and 2002 reached $6.3 billion and $6.8 billion, 

respectively. State and local expenditures, independent of federal 

grants, increased to over $24 billion in 1999, accounting for over 85 

percent of total public sector expenditures for transit, a share that 

has increased somewhat since 1991, as shown in figure 3.



Figure 3: Federal Government and State and Local Government Shares of 

Expenditures on Public Transit (in millions of 1999 dollars):



[See PDF for image]



Source: U.S. Department of Transportation, Bureau of Transportation 

Statistics (2002), Government Transportation Financial Statistics 

(Preliminary Data), Washington, D.C.



[End of Figure]



Public sector spending on ports and waterways has remained between $7.2 

and $7.9 billion (in 1999 dollars), between fiscal years 1991 and 1999. 

This spending pattern reflects fairly steady levels of federal spending 

by the Corps of Engineers, the Coast Guard, and the Maritime 

Administration for water transportation expenditures. Expenditures by 

the Corps of Engineers and the Coast Guard comprise the bulk of federal 

spending for water transportation, and have remained at about $1.5 

billion and $2 billion (in 1999 dollars) per year, respectively. State 

and local expenditures, however, increased by 27.7 percent, from $2.4 

billion in fiscal year 1991 to $3.1 billion in fiscal year 1999, and 

accounted for about 41 percent of total public water transportation 

expenditures in fiscal year 1999, having grown from about 34 percent of 

the total in fiscal year 1991, as shown in figure 4.



Figure 4: Federal Government and State and Local Government Shares of 

Expenditures on Waterborne Transportation (in millions of 1999 

dollars):



[See PDF for image]



Source: U.S. Department of Transportation, Bureau of Transportation 

Statistics (2002), Government Transportation Financial Statistics 

(Preliminary Data), Washington, D.C.



[End of Figure]



The public sector’s role in the funding of freight railroads is limited 

since the private sector owns, operates, and provides almost all of the 

financing for freight railroads. In addition, since public sector 

expenditures for commuter rail and subways are considered public 

transit expenditures, public expenditures discussed here for passenger 

rail are limited to funding for Amtrak. Federal support for Amtrak has 

fluctuated somewhat throughout the 1990s, but has dropped off 

substantially in recent years, with fiscal years 2001 and 2002 

appropriations of $520 and $521 million, respectively. Sufficient data 

are not currently available to characterize trends in state and local 

governments’ spending for intercity passenger rail.[Footnote 22]



Private Sector Expenditures:



The private sector plays an important role in the provision of 

transportation services in each mode. For example, while the private 

sector does not invest heavily in providing roads, it purchases and 

operates most of the vehicles for use on publicly provided roads. For 

freight rail, the private sector owns and operates most of the tracks 

as well as the freight trains that run on the tracks. In the maritime 

sector, many ports on the inland waterways are privately owned, as are 

freight vessels and towboats. Data on private sector expenditures on a 

national level are limited. However, available data show that private 

expenditures for transportation on roads, rail, and waterways rose 

throughout the 1990s. According to the U.S. Bureau of Economic 

Analysis’ Survey of Current Business,[Footnote 23] individuals and 

businesses spent about $397 billion in 2000 for the purchase of new 

cars, buses, trucks, and other motor vehicles, a 57-percent increase 

from 1993 levels (in 2000 dollars). In addition to the purchase of 

vehicles, the private sector also invests in and operates toll roads 

and lanes; however, data on these investments are not currently 

available on a national level. According to the Survey of Current 

Business, freight railroads and other businesses spent over $11 billion 

for railroad infrastructure and rail cars in 2000, a 66-percent 

increase from 1991 (in 2000 dollars). In addition, private sector 

investment on ships and boats more than doubled between 1991 and 2000, 

to about $3.7 billion (in 2000 dollars). However, private investment in 

waterways also includes port facilities for loading and unloading ships 

and for warehousing goods. Data on these investments are also currently 

not available on a national level.



Passenger and Freight Travel Are Expected to Increase on All Modes:



Federal projections show passenger and freight travel increasing over 

the next 10 years on all modes,[Footnote 24] due to population growth, 

increasing affluence, economic growth, and other factors. Passenger 

vehicle travel on public roads is expected to grow by 24.7 percent from 

2000 to 2010. Passenger travel on transit systems is expected to 

increase by 17.2 percent over the same period. Intercity passenger rail 

ridership is expected to increase by 26 percent from 2001 to 2010. 

Finally, preliminary estimates by DOT also indicate that tons of 

freight moved on all surface and maritime modes--truck, rail, and 

water--are expected to increase by about 43 percent from 1998 through 

2010, with the largest increase expected to be in tons moved by truck.



However, several factors in the forecast methodologies limit their 

ability to capture the effects of changes in travel levels on the 

surface and maritime transportation systems as a whole (see app. II for 

more information about the travel forecast methodologies). For example, 

a key assumption underlying most of the national travel projections we 

obtained is that capacity will increase as levels of travel increase; 

that is, the projections are not limited by possible future constraints 

on capacity such as increasing congestion. On the other hand, if 

capacity does not increase, future travel levels may be lower than 

projected.[Footnote 25] In addition, differences in travel measurements 

hinder direct comparisons between modes and types of travel. For 

example, intercity highway travel is not differentiated from local 

travel in FHWA’s projections of travel on public roads, so projections 

of intercity highway travel cannot be directly compared to intercity 

passenger travel projections for other modes, such as rail. For freight 

travel, FHWA produces projections of future tonnage shipped on each 

mode; however, tonnage is only one measure of freight travel and does 

not capture important aspects of freight mobility, such as the 

distances over which freight moves or the value of the freight being 

moved.



Travel on Public Roads Is Projected to Grow Fairly Steadily:



As shown in figure 5, vehicle miles traveled for passenger vehicles on 

public roads are projected to grow fairly steadily through 2010, by 

24.7 percent over the 10-year period from 2000 through 2010, with an 

average annual increase of 2.2 percent. This is similar to the actual 

average annual rate of growth from 1991 to 2000, which was 2.5 percent. 

At the projected rate of growth, vehicle miles traveled would reach 3.2 

trillion by 2010. The 20-year annual growth rate forecasts produced by 

individual states ranged from a low of 0.39 percent for Maine to a high 

of 3.43 percent for Utah.[Footnote 26] (See app. II for more detailed 

information on state forecasts.):



Figure 5: Historical and Projected Vehicle Miles Traveled for Passenger 

Vehicles on Public Roads, 1991-2010:



[See PDF for image]



Note: Automobiles include all passenger cars plus motorcycles. Light 

trucks are defined as other 2-axle 4-tire vehicles (such as vans, 

pickup trucks, and sport utility vehicles). Buses include commercial 

buses, school buses, and buses owned by federal, state, or local 

governments.



Source: Federal Highway Administration.



[End of Figure]



In addition to passenger vehicles, trucks carrying freight contribute 

to the overall levels of travel on public roads. Vehicle miles traveled 

by freight trucks are also projected to increase by 2010, but such 

traffic makes up a relatively small share of total vehicle miles 

traveled. According to forecasts by FHWA, freight truck vehicle miles 

are expected to grow by 32.5 percent from 2000 to 2010, but will 

constitute less than 10 percent of total vehicle miles traveled 

nationwide in 2010. However, within certain corridors, trucks may 

account for a more substantial portion of total traffic. The projected 

average annual growth rate for truck travel is 2.9 percent for 2000 to 

2010, compared to an actual average annual growth rate of 3.9 percent 

from 1991 to 2000. We discuss freight travel in more detail later in 

this report, after the discussion of passenger travel.



Transit Travel Is Projected to Increase:



For transit, FTA projects that the growth in passenger miles traveled 

between 2000 and 2010 will average 1.6 percent annually, for a total 

growth of 17.2 percent. Actual growth from 1991 through 2000 averaged 

2.1 percent annually. (See fig. 6.) At the projected growth rate, 

annual passenger miles traveled on the nation’s transit systems would 

be approximately 52.9 billion by 2010. The transit forecast is a 

national weighted average and the individual forecasts upon which it is 

based vary widely by metropolitan area. For example, transit forecasts 

for specific urbanized areas range from a -0.05 percent average annual 

decrease in Philadelphia to a 3.56 percent average annual increase in 

San Diego.



Figure 6: Historical and Projected Passenger Miles Traveled on Transit, 

1991-2010:



[See PDF for image]



Note: Types of transit included in this figure are: automated guideway 

(guided, fully automated vehicle), cable car, commuter rail, demand 

response (vehicle operating in response to calls from passengers), 

ferryboat, heavy rail, inclined plane (vehicle operating up and down 

slope on rail via a cable mechanism), light rail, bus, monorail, public 

trolley, and vanpool.



Sources: For 1991-2000: National Transit Database; for 2001-2010: GAO’s 

calculations based on the Federal Transit Administration’s annual 

growth rate projection.



[End of Figure]



Intercity Passenger Travel Is Projected to Increase:



Both DOT and Amtrak project future increases in intercity passenger 

travel. Although automobiles dominate intercity travel, FHWA’s 

projections of vehicle miles traveled do not separately report long-

distance travel in cars on public roads. After automobiles, airplanes 

and intercity buses are the next most used modes and intercity 

passenger rail is the least used.[Footnote 27] However, we do not 

report on air travel since it is outside the scope of this report, or 

on bus travel, because while FHWA projected increases in the number of 

miles traveled by all types of buses, we were unable to obtain specific 

projections of intercity ridership on buses. For intercity passenger 

rail, Amtrak predicts a cumulative increase in total ridership of 25.9 

percent from 23.5 million passengers in 2001 to 29.6 million passengers 

in 2010, a contrast with the relatively flat ridership of recent years, 

which has remained between 20 and 23 million passengers per year (see 

app. II for further details about Amtrak’s projections).[Footnote 28]



Factors Expected to Affect Future Passenger Travel Include Population 

Growth, Increasing Affluence, and Improved Communications:



According to FHWA, FTA, and many of our panelists, a number of factors 

are likely to influence not only the amount of travel that will occur 

in the future, but also the modes travelers choose. First, the U.S. 

Census Bureau predicts that the country’s population will reach almost 

300 million by 2010, which will result in more travelers on all modes. 

This population growth, and the areas in which it is expected to occur, 

could have a variety of effects on mode choices. In particular, the 

population growth that is expected in suburban areas could lead to a 

larger increase in travel by private vehicles than by transit because 

suburban areas generally have lower population densities than inner 

cities, and also have more dispersed travel patterns, making them 

harder to serve through conventional public transit. Rural areas are 

also expected to experience high rates of population growth and persons 

living there, like suburban residents, are more reliant on private 

vehicles and are not easily served by conventional public transit. 

While these demographic trends tend to decrease transit’s share of 

total passenger travel as compared to travel by private vehicle, the 

overall growth in population is expected to result in absolute 

increases in the level of travel on transit systems as well as by 

private vehicle. Another important factor that could affect mode choice 

is that the population aged 85 and over will increase 30 percent by 

2010, according to data from the Census Bureau. The aging of the 

population might increase the market for demand-responsive transit 

services[Footnote 29] and improved road safety features, such as 

enhanced signage.



Second, DOT officials and our panelists believed that the increasing 

affluence of the U.S. population would play a key role in future 

travel, both in overall levels and in the modes travelers choose. They 

noted that, as income rises, people tend to take more and longer trips, 

private vehicle ownership tends to increase, and public transit use 

generally decreases. Third, communication technology could affect local 

and intercity travel, but the direction and extent of the effect is 

uncertain. For example, telecommuting and videoconferencing are 

becoming more common, but are not expected to significantly replace 

face-to-face meetings unless the technology improves substantially. 

Finally, changes in the price (or perceived price), condition, and 

reliability of one modal choice as compared to another are also likely 

to affect levels of travel and mode choices. For example, changes in 

the petroleum market that affect fuel prices, or changes in government 

policy that affect the cost of driving or transit prices could result 

in shifts between personal vehicles and transit; however, it is 

difficult to predict the extent to which these changes would occur. 

Also, if road congestion increases, there could be a shift to transit 

or a decrease in overall travel. See appendix III for a more detailed 

discussion of these factors.



The Amount of Freight Moved Is Expected to Increase to 19.3 Billion 

Tons by 2010:



Trucks move the majority of freight tonnage and are expected to 

continue moving the bulk of freight into the future. FHWA’s preliminary 

forecasts[Footnote 30] of international and domestic freight tonnage 

across all surface and maritime modes project that total freight moved 

will increase 43 percent, from 13.5 billion tons in 1998 to 19.3 

billion tons in 2010. According to the forecasts, by 2010, 14.8 billion 

tons are projected to move by truck, a 47.6-percent increase; 3 billion 

tons by rail, a 31.8-percent increase; and 1.5 billion tons by water, a 

26.6-percent increase, as shown in figure 7.[Footnote 31] Trucks are 

expected to remain the dominant mode, in terms of tonnage, because 

production of the commodities that typically move by truck, such as 

manufactured goods, is expected to grow faster than the main 

commodities moved by rail or on water, such as coal and grain.



Figure 7: Freight Tons (in billions) in 1998 and Projected to 2010A for 

Surface and MaritimeB Modes:



[See PDF for image]



AThese forecasts are still in draft.



[B] FHWA’s maritime freight projections do not include international 

trade of bulk products and some inland domestic bulk shipments.



Source: Federal Highway Administration.



[End of Figure]



Tonnage is only one measure of freight travel and does not capture 

important aspects of freight mobility, such as the distances over which 

freight moves or the value of the freight being moved. Ton-

miles[Footnote 32] measure the amount of freight moved as well as the 

distance over which it moves, and historically, rail has been the 

dominant mode in terms of ton-miles for domestic freight. In 1998, the 

base year of FHWA’s projections, domestic rail ton-miles totaled over 

1.4 trillion, while intercity truck ton-miles totaled just over one 

trillion, and domestic ton-miles on the waterways totaled 672.8 

billion. Air is the dominant mode in terms of value per ton according:



to DOT’s Transportation Statistics Annual Report 2000,[Footnote 33] at 

$51,000 per ton (in 1997 dollars). However, in terms of total value, 

trucks are the dominant mode. According to the Annual Report, trucks 

moved nearly 

$5 trillion (in 1997 dollars) in domestic goods, as opposed to $320 

billion by rail and less than $100 billion by inland waterway.



International freight is an increasingly important aspect of the U.S. 

economy. For international freight, water is the dominant mode in terms 

of tonnage. According to a DOT report, more than 95 percent of all 

overseas products and materials that enter or leave the country move 

through ports and waterways.[Footnote 34] More specifically, 

containers, which generally carry manufactured commodities such as 

consumer goods and electrical equipment and can be easily transferred 

to rail or truck, dominate in terms of value, accounting for 55 percent 

of total imports and exports, while only accounting for 12 percent of 

foreign tonnage. Containers are the fastest growing segment of the 

maritime sector. While FHWA predicts that total maritime freight 

tonnage will grow by 26.6 percent, the Corps of Engineers projects that 

volumes of freight moving in containers will increase by nearly 70 

percent by 2010. In addition, ships designed to carry containers are 

the fastest growing segment of the maritime shipping fleet and are also 

increasing in size. Although freight vessels designed to carry bulk 

freight (e.g., coal, grain, or oil) are the largest sector of the 

freight vessel fleet, the number of containerships is increasing by 8.8 

percent annually, which is double the growth rate of any other type of 

vessel according to the Corps of Engineers. Also, most of the overall 

capacity of the containership fleet is now found in larger 

containerships, with a capacity of more than 3,000 twenty-foot 

containers, and ships with capacities of three times that amount are 

currently on order.



Factors Expected to Affect Freight Travel Include Increasing 

International Trade and Economic Growth:



According to reports by the Transportation Research Board and the 

Bureau of Transportation Statistics,[Footnote 35] increasing 

international trade and economic growth are expected to influence 

volumes of future freight travel. In addition, the increasing value of 

cargo shipped and changes in policies affecting certain commodities can 

affect overall levels of freight traffic as well as the choice of mode 

for that traffic. The North American Free Trade Agreement has 

contributed to the increases in tonnage of imports by rail (24-percent 

increase) and by truck (20-percent increase), from Mexico and Canada 

between 1996 and 2000, while expanding trade with the Pacific Rim has 

increased maritime traffic at west coast container ports. With 

increasing affluence, economic growth often results in a greater volume 

of goods produced and consumed, leading to more freight moved, 

particularly higher-value cargo. In addition, the increasing value of 

cargo affects the modes on which that cargo is shipped. High-value 

cargo, such as electronics and office equipment, tends to be shipped by 

air or truck, while rail and barges generally carry lower-value bulk 

items like coal and grains. Changes in environmental regulations and 

other policies also affect the amount, cost, and mode choice for moving 

freight. For example, a change in demand for coal due to stricter 

environmental controls could affect rail and water transportation, the 

primary modes for shipping coal. See appendix III for a more detailed 

discussion of the factors that influence freight travel.



Key Mobility Challenges Include Growing Congestion, Limited Access to 

the Transportation System for Certain Groups, and Effects on the 

Environment and Communities:



To identify key mobility challenges and the strategies for addressing 

those challenges that are discussed later in this report, we relied 

upon the results of two panels of surface and maritime transportation 

experts that we convened in April 2002, as well as reports prepared by 

federal and other government agencies, academics, and industry groups. 

According to our expert panelists and other sources, with increasing 

passenger and freight travel, the surface and maritime transportation 

systems face a number of challenges that involve ensuring continued 

mobility while maintaining a balance with other social goals, such as 

environmental preservation. Ensuring continued mobility involves 

preventing congestion from overwhelming the transportation system and 

ensuring access to transportation for certain underserved populations. 

In particular, more travel can lead to growing congestion at 

bottlenecks and at peak travel times on public roads, transit systems, 

freight rail lines, and at freight hubs such as ports and borders where 

freight is transferred from one mode to another. In addition, 

settlement patterns and dependence on the automobile limit access to 

transportation systems for some elderly people and low-income 

households, and in rural areas where populations are expected to 

expand. Increasing travel levels can also negatively affect the 

environment and communities by increasing the levels of air, water, and 

noise pollution.



Congestion Is Growing at Bottlenecks and at Peak Travel Times:



Many panelists explained that congestion is generally growing for 

passenger and freight travel and will continue to increase at localized 

bottlenecks (places where the capacity of the transportation system is 

most limited), at peak travel times, and on all surface and maritime 

transportation modes to some extent. However, panelists pointed out 

that transportation systems as a whole have excess capacity and that 

communities may have different views on what constitutes congestion. 

Residents of small cities and towns may perceive significant congestion 

on their streets that may be considered insignificant to residents in 

major metropolitan areas. In addition, because of the relative nature 

of congestion, its severity is difficult to determine or to measure and 

while one measure may be appropriate for some situations, it may be 

inadequate for describing others.



Congestion in Passenger Travel and on Freight Networks:



For local urban travel, a study by the Texas Transportation 

Institute[Footnote 36] showed that the amount of traffic experiencing 

congestion in peak travel periods doubled from 33 percent in 1982 to 66 

percent in 2000 in the 75 metropolitan areas studied. In addition, the 

average time per day that roads were congested increased over this 

period, from about 4.5 hours in 1982 to about 7 hours in 2000. 

Increased road congestion can also affect public bus and other transit 

systems that operate on roads. Some transit systems are also 

experiencing increasing rail congestion at peak travel times. For 

example, the Washington Metropolitan Area Transit Authority’s (WMATA) 

recent studies on crowding found that rail travel demand has reached 

and, in some cases, exceeded scheduled capacity--an average of 140 

passengers per car--during the peak morning and afternoon hours. Of the 

more than 200 peak morning rail trips that WMATA observed over a recent 

6-month period, on average, 15 percent were considered “uncomfortably 

crowded” (125 to 149 passengers per car) and 8 percent had “crush 

loads” (150 or more passengers per car).[Footnote 37]



In addition to local travel, concerns have been raised about how 

intercity and tourist travel interacts with local traffic in 

metropolitan areas and in smaller towns and rural areas, and how this 

interaction will evolve in the future. According to a report sponsored 

by the World Business Council for Sustainable Development, Mobility 

2001,[Footnote 38] capacity problems for intercity travelers are 

generally not severe outside of large cities, except in certain heavily 

traveled corridors, such as the Northeast corridor, which links 

Washington, D.C., New York, and Boston. However, at the beginning and 

end of trips, intercity bus and automobile traffic contribute to and 

suffer from urban congestion. In addition, the study said that 

intercity travel may constitute a substantial proportion of total 

traffic passing through smaller towns and rural areas. Also, according 

to a GAO survey of all states, state officials are increasingly 

concerned about traffic volumes on interstate highways in rural areas, 

and high levels of rural congestion are expected in 18 states within 

10 years.[Footnote 39]



Congestion is also expected to increase on major freight transportation 

networks at specific bottlenecks, particularly where intermodal 

connections occur, and at peak travel times, according to the 

panelists. They expressed concern regarding interactions between 

freight and passenger travel and how increases in both types of travel 

will affect mobility in the future. Trucks contribute to congestion in 

metropolitan areas where they generally move on the same roads and 

highways as personal vehicles, particularly during peak periods of 

congestion. In addition, high demand for freight, particularly freight 

moved on trucks, exists in metropolitan areas where overall congestion 

tends to be the worst.



With international trade an increasing part of the economy and with 

larger containerships being built, some panelists indicated that more 

pressure will be placed on the already congested road and rail 

connections to major U.S. seaports and at the border crossings with 

Canada and Mexico. For example, according to a DOT report,[Footnote 40] 

more than one-half of the ports responding to a 1997 survey of port 

access issues identified traffic impediments on local truck routes as 

the major infrastructure problem.



According to one panelist from the freight rail industry, there is 

ample capacity on most of the freight rail network. However, railroads 

are beginning to experience more severe capacity constraints in 

particular heavily used corridors, such as the Northeast corridor, and 

within major metropolitan areas, especially where commuter and 

intercity passenger rail services share tracks with freight railroads. 

Capacity constraints at these bottlenecks are expected to worsen in the 

future. The panelist explained that congestion on some freight rail 

segments where the tracks are also used for passenger rail service--for 

which there is growing demand--reduces the ability of freight railroads 

to expand service on the existing tracks to meet the growing demand for 

freight movements on those segments.



On the inland waterways, according to two panelists from that industry, 

there is sufficient capacity on most of the inland waterway network, 

although congestion is increasing at small, aging, and increasingly 

unreliable locks. According to the Corps of Engineers, the number of 

hours that locks were unavailable due to lock failures increased in 

recent years, from about 35,000 hours in 1991 to 55,000 hours in 1999, 

occurring primarily on the upper Mississippi and Illinois rivers. In 

addition, according to a Corps of Engineers analysis of congestion on 

the inland waterways, with expected growth in freight travel, 15 locks 

would exceed 80 percent of their capacity by 2020, as compared to 4 

that had reached that level in 1999.



Other Systemic Factors Contributing to Congestion:



According to our expert panelists, while increasing passenger and 

freight travel contribute to increasing congestion at bottlenecks and 

at peak travel times, other systemic factors contribute to congestion, 

including barriers to building enough capacity to accommodate growing 

levels of travel, challenges to effectively managing and operating 

transportation systems, and barriers in effectively managing how, and 

the extent to which, transportation systems are used.



At bottlenecks and at peak travel times, there is insufficient capacity 

to accommodate the levels of traffic attempting to use the 

infrastructure. One reason for the insufficient capacity is that 

transportation infrastructure, which is generally publicly provided 

(with the major exception of freight railroads), can take a long time 

to plan and build, and it may not be possible to build fast enough to 

keep pace with increasing and shifting travel patterns. In addition, 

constructing new capacity is often costly and can conflict with other 

social goals such as environmental preservation and community 

maintenance. As a result, approval of projects to build new capacity, 

which requires environmental impact statements and community outreach, 

generally takes a long time, if it is obtained at all.



In addition, a number of panelists indicated that funding and planning 

rigidities in the public institutions responsible for providing 

transportation infrastructure tend to promote one mode of 

transportation, rather than a set of balanced transportation choices. 

Focus on a single mode can result in difficulties dealing effectively 

with congestion. For example, as suburban expressways enable community 

developments to grow and move farther out from city centers, jobs and 

goods follow these developments. This results in increasing passenger 

and freight travel on the expressways, and a shifting of traffic flows 

that may not easily be accommodated by existing transportation choices. 

One panelist indicated that suburban expressways are among the least 

reliable in terms of travel times because, if congestion occurs, there 

are fewer feasible alternative routes or modes of transportation. In 

addition, some bottlenecks occur where modes connect, because funding 

is generally mode-specific, and congestion at these intermodal 

connections is not easily addressed. According to FHWA, public sector 

funding programs are generally focused on a primary mode of 

transportation, such as highways, or a primary purpose, such as 

improving air quality. This means that intermodal projects may require 

a broader range of funding than might be available under a single 

program.



Panelists also noted that the types of congestion problems that are 

expected to worsen in the future involve interactions between long-

distance and local traffic and between passengers and freight, and 

existing institutions may not have the capacity or the authority to 

address them. For example, some local bottlenecks may hinder traffic 

that has regional or national significance, such as national freight 

flows from major coastal ports, or can affect the economies and traffic 

in more than one state. Current state and local planning organizations 

may have difficulty considering all the costs and benefits related to 

national or international traffic flows that affect other jurisdictions 

as well as their own.



The concept of capacity is broader than just the physical 

characteristics of the transportation network (e.g., the number of 

lane-miles of road). The capacity of transportation systems is also 

determined by how well they are managed and operated (particularly 

publicly owned and operated systems), and how the use of those systems 

is managed. Many factors related to the management and operation of 

transportation systems can contribute to increasing congestion. Many 

panelists said that congestion on highways was in part due to poor 

management of traffic flows on the connectors between highways and poor 

management in clearing roads that are blocked due to accidents, 

inclement weather, or construction. For example, in the 75 metropolitan 

areas studied by the Texas Transportation Institute, 54 percent of 

annual vehicle delays in 2000 were due to incidents such as breakdowns 

or crashes. In addition, the Oak Ridge National Laboratory reported 

that, nationwide, significant delays are caused by work zones on 

highways; poorly timed traffic signals; and snow, ice, and 

fog.[Footnote 41]



In addition, according to a number of panelists, congestion on 

transportation systems is also in part due to inefficient pricing of 

the infrastructure because users--whether they are drivers on a highway 

or barge operators moving through a lock--do not pay the full costs 

they impose on the system and on other users for their use of the 

system. They further argued that if travelers and freight carriers had 

to pay a higher cost for using transportation systems during peak 

periods to reflect the full costs they impose, they would have an 

incentive to avoid or reschedule some trips and to load vehicles more 

fully, resulting in less congestion.



Effects of Congestion:



Congestion affects travel times and the reliability of transportation 

systems. As discussed earlier in this report, the Texas Transportation 

Institute found that 66 percent of peak period travel on roadways was 

congested in 2000, compared to 33 percent in 1982 in the 75 

metropolitan areas studied. According to the study, this means that two 

of every three vehicles experience congestion in their morning or 

evening commute. In the aggregate, congestion results in thousands of 

hours of delay every day, which can translate into costs such as lost 

productivity and increased fuel consumption. In addition, a decrease in 

travel reliability imposes costs on the traveler in terms of arriving 

late to work or for other appointments, and in raising the cost of 

moving goods resulting in higher prices for consumers.



Some panelists noted that congestion, in some sense, reflects full use 

of transportation infrastructure, and is therefore not a problem. In 

addition, they explained that travelers adjust to congestion and adapt 

their travel routes and times, as well as housing and work choices, to 

avoid congestion. For example, according to the Transportation 

Statistics Annual Report 2000, median commute times increased about 2 

minutes between 1985 and 1999, despite increases in the percentage of 

people driving to work alone and the average commuting distance. For 

freight travel, one panelist made a similar argument, citing that 

transportation costs related to managing business operations have 

decreased as a percentage of gross national product, indicating that 

producers and manufacturers adjust to transportation supply, by 

switching modes or altering delivery schedules to avoid delays and 

resulting cost increases.



However, the Mobility 2001 report describes these adaptations by 

individuals and businesses as economic inefficiencies that can be very 

costly. According to the report, increasing congestion can cause 

avoidance of a substantial number of trips resulting in a corresponding 

loss of the benefits of those trips. In addition to negative economic 

effects, travelers’ adaptation to congested conditions can also have a 

number of negative social effects on other people. For example, 

according to researchers from the Texas Transportation Institute, 

traffic cutting through neighborhoods to avoid congestion can cause 

community disruptions and “road rage” can be partly attributed to 

increasing congestion.



Certain Underserved Groups Have Limited Access to Transportation:



The FHWA and FTA’s 1999 Conditions and Performance report[Footnote 42] 

states that significant accessibility[Footnote 43] barriers persist for 

some elderly people and low-income households. In addition, several 

panelists stated that rural populations also face accessibility 

difficulties.



Elderly Persons:



According to the Conditions and Performance report, the elderly have 

different mobility challenges than other populations because they are 

less likely to have drivers’ licenses, have more serious health 

problems, and may require special services and facilities. According to 

1995 data, 45 percent of women and 16 percent of men over age 75 did 

not have drivers’ licenses, which may limit their ability to travel by 

car. Many of the elderly also may have difficulty using public 

transportation due to physical ailments. People who cannot drive 

themselves tend to rely on family, other caregivers, or friends to 

drive them, or find alternative means of transportation. As a result, 

according to the 1999 Conditions and Performance report and a 1998 

report about mobility for older drivers,[Footnote 44] they experience 

increased waiting times, uncertainty, and inconvenience, and they are 

required to do more advance trip planning. These factors can lead to 

fewer trips taken for necessary business and for recreation, as well as 

restrictions on times and places that health care can be obtained. 

Access to more flexible, demand-responsive forms of transit could 

enhance the mobility of the elderly, particularly in rural areas, which 

are difficult to serve through transit systems; however, some barriers 

to providing these types of services exist. For example, according to 

one of our panelists, some paratransit[Footnote 45] services are not 

permitted to carry able-bodied people, even if those people are on the 

route and are willing to pay for the service. As the elderly population 

increases over the next 10 years, issues pertaining to access are 

expected to become more prominent in society.



Low-Income Households:



Lower income levels can also be a significant barrier to transportation 

access. The cost of purchasing, insuring, and maintaining a car is 

prohibitive to some households, and 26 percent of low-income households 

do not own a car, compared with 4 percent of other households, 

according to the 1999 Conditions and Performance report. Among all low-

income households, about 8 percent of trips are made in cars that are 

owned by others as compared to 1 percent for other income groups. 

Furthermore, the same uncertainties and inconveniences apply to this 

group as to the elderly regarding relying on others for transportation. 

Transportation access is important for employment opportunities to help 

increase income, yet this access is not always available. This is 

because growth in employment opportunities tends to occur in the 

suburbs and outlying areas, while many low-income populations are 

concentrated in the inner cities or in rural areas. In case studies of 

access to jobs for low-income populations, FTA researchers found that 

transportation barriers to job access included gaps in transit service, 

lack of knowledge of where transit services are provided, and high 

transportation costs resulting from multiple transfers and long 

distances traveled.[Footnote 46] Another problem they noted was the 

difficulty in coordinating certain types of work shifts with the 

availability of public transportation service. Without sufficient 

access to jobs, families face more obstacles to achieving the goal of 

independence from government assistance. Limited transportation access 

can also reduce opportunities for affordable housing and restrict 

choices for shopping and other services.



Rural Populations:



Rural populations, which according to the 2000 Census grew by 10 

percent over the last 10 years, also face access problems. Access to 

some form of transportation is necessary to connect rural populations 

to jobs and other amenities in city centers or, increasingly, in the 

suburbs. The Mobility 2001 report states that automobiles offer greater 

flexibility in schedule and choice of destinations than other modes of 

transportation, and often also provide shorter travel times with lower 

out-of-pocket costs. The report also notes that conventional transit 

systems are best equipped to serve high levels of travel demand that is 

concentrated in a relatively limited area or along well-defined 

corridors, such as inner cities and corridors between those areas and 

suburbs. Trips by rural residents tend to be long due to low population 

densities and the relative isolation of small communities. Therefore, 

transportation can be a challenge to provide in rural areas, especially 

for persons without access to private automobiles. A report prepared 

for the FTA in 2001[Footnote 47] found that 1 in 13 rural residents 

lives in a household without a personal vehicle. In addition, the 

elderly made 31 percent of all rural transit trips in 2000 and persons 

with disabilities made 23 percent. However, according to a report by 

the Coordinating Council on Access and Mobility,[Footnote 48] while 

almost 60 percent of all nonmetropolitan counties had some public 

transportation services in 2000, many of these operations were small 

and offered services to limited geographic areas during limited times.



Transportation’s Effects on the Environment and Communities Are a 

Growing Concern:



While ISTEA and TEA-21 provided funds aimed at mitigating adverse 

effects of transportation, concerns persist about such effects on the 

environment and communities. As a result of the negative consequences 

of transportation, tradeoffs must be made between facilitating 

increased mobility and giving due regard to environmental and other 

social goals. For example, transportation vehicles are major sources of 

local, urban, and regional air pollution because they depend on fossil 

fuels to operate. Emissions from vehicles include sulfur dioxide, lead, 

carbon monoxide, volatile organic compounds, particulate matter, and 

nitrous oxides. In addition, the emission of greenhouse gases such as 

carbon dioxide, methane, and nitrous oxide are increasing and 

greenhouse gases have been linked to reduction in atmospheric ozone and 

climate changes. According to Mobility 2001, improved technologies can 

help reduce per-vehicle emissions, but the increasing numbers of 

vehicles traveling and the total miles traveled may offset these gains. 

In addition, congested conditions on highways tend to exacerbate the 

problem because extra fuel is consumed due to increased acceleration, 

deceleration, and idling. Vehicle emissions in congested areas can 

trigger respiratory and other illnesses, and runoff from impervious 

surfaces can carry lawn chemicals and other pollutants into lakes, 

streams, and rivers, thus threatening aquatic environments.[Footnote 

49]



Freight transportation also has significant environmental effects. 

Trucks are significant contributors to air pollution. According to the 

American Trucking Association, trucks were responsible for 18.5 percent 

of nitrous oxide emissions and 27.5 percent of other particulate 

emissions from mobile sources in the United States. The Mobility 2001 

report states that freight trains also contribute to emissions of 

hydrocarbons, carbon monoxide, and nitrous oxide, although generally at 

levels considerably lower than trucks. In addition, while large 

shipping vessels are more energy efficient than trucks or trains, they 

are also major sources of nitrogen, sulfur dioxide, and diesel 

particulate emissions. According to the International Maritime 

Organization, ocean shipping is responsible for 22 percent of the 

wastes dumped into the sea on an annual basis. Barges moving freight on 

the inland waterway system are among the most energy efficient forms of 

freight transportation, contributing relatively lower amounts of 

noxious emissions compared with trucks and freight trains, according to 

the Corps of Engineers. However, the dredging and damming required to 

make rivers and harbors navigable can cause significant disruption to 

ecosystems.



Noise pollution is another factor exacerbated by increasing levels of 

transportation. While FHWA, FTA, and many cities have established 

criteria for different land uses close to highways and rail lines to 

protect against physically damaging noise levels, average noise levels 

caused by road traffic in some areas can still have adverse 

consequences on people’s hearing. In addition, several studies have 

found that residential property values decrease as average noise levels 

rise above a certain threshold. Freight also contributes to noise 

pollution. According to Mobility 2001, shipping is the largest source 

of low-frequency, underwater noise, which may have adverse effects on 

marine life, although these effects are not yet fully understood. These 

noise levels are particularly serious on highly trafficked shipping 

routes. In addition, dredging also contributes to noise pollution.



Growing awareness of the environmental and social costs of 

transportation projects is making it more difficult to pursue major 

transportation improvements. According to a number of panelists, the 

difficulty in quantifying and measuring the costs and benefits of 

increased mobility also hinders the ability of transportation planners 

to make a strong case to local decisionmakers for mobility 

improvements. In addition, transportation planning and funding is mode-

specific and oriented toward passenger travel, which hinders 

transportation planners’ ability to recognize systemwide and multi-

modal strategies for addressing mobility needs and other social 

concerns.



Strategies for Addressing Mobility Challenges Include Focusing on 

Systemwide Outcomes, Using a Full Range of Tools, and Providing Options 

for Financing Surface and Maritime Transportation:



The panelists presented numerous approaches for addressing the types of 

challenges discussed throughout this report, but they emphasized that 

no single strategy would be sufficient. From these discussions and our 

other research, we have identified three key strategies that may aid 

transportation decisionmakers at all levels of government in addressing 

mobility challenges and the institutional barriers that contribute to 

them. These strategies include the following:



1. Focus on the entire surface and maritime transportation system 

rather than on specific modes or types of travel to achieve desired 

mobility outcomes. A systemwide approach to transportation planning and 

funding, as opposed to focus on a single mode or type of travel, could 

improve focus on outcomes related to customer or community needs.



2. Use a full range of tools to achieve those desired outcomes. 

Controlling congestion and improving access will require a strategic 

mix of construction, corrective and preventive maintenance, 

rehabilitation, operations and system management, and managing system 

use through pricing and other techniques.



3. Provide more options for financing mobility improvements and 

consider additional sources of revenue. Targeting financing to 

transportation projects that will achieve desired mobility outcomes 

might require more options for raising and distributing funds for 

surface and maritime transportation. However, using revenue sources 

that are not directly tied to the use of transportation systems could 

allow decisionmakers to bypass transportation planning requirements 

which, in turn, could limit the ability of transportation agencies to 

focus on and achieve desired outcomes.



Focus on the Entire Surface and Maritime Transportation System Rather 

Than on Specific Modes or Types of Travel to Achieve Desired Mobility 

Outcomes:



Some panelists said that mobility should be viewed on a systemwide 

basis across all modes and types of travel. Addressing the types of 

mobility challenges discussed earlier in this report can require a 

scope beyond a local jurisdiction or a state line and across more than 

one mode or type of travel. For example, congestion challenges often 

occur where modes connect or should connect--such as ports or freight 

hubs where freight is transferred from one mode to another, or airports 

that passengers need to access by car, bus, or rail. These connections 

require coordination of more than one mode of transportation and 

cooperation among multiple transportation providers and planners, such 

as port authorities, metropolitan planning organizations 

(MPO),[Footnote 50] and private freight railroads. Some panelists 

therefore advocated shifting the focus of government transportation 

agencies at the federal, state, and local levels to consider all modes 

and types of travel in addressing mobility challenges--as opposed to 

focusing on a specific mode or type of travel in planning and 

implementing mobility improvements.



Some panelists said that current transportation planning institutions, 

such as state transportation departments, MPOs, or Corps of Engineers 

regional offices, may not have sufficient expertise, or in some cases, 

authority to effectively identify and implement mobility improvements 

across modes or types of travel. They suggested that transportation 

planning by all entities focus more closely on regional issues and 

highlighted the importance of cooperation and coordination among modal 

agencies at the federal, state, and local level, between public and 

private transportation providers, and between transportation planning 

organizations and other government and community agencies to address 

transportation issues. For example, several panelists said that the 

Alameda Corridor in Los Angeles is a good example of successful 

cooperation and coordination among agencies. This corridor is designed 

to improve freight mobility for cargo coming into the ports of Los 

Angeles and Long Beach and out to the rest of the country. Planning, 

financing, and building this corridor required cooperation among 

private railroads, the local port authorities, the cities of Los 

Angeles and Long Beach, community groups along the entire corridor, the 

state of California, and the federal government.



Several panelists said that a greater understanding of the full life-

cycle costs and benefits of various mobility improvements is needed to 

take a more systemwide approach to transportation planning and funding. 

The panelists said the cost-benefit frameworks that transportation 

agencies currently use to evaluate various transportation projects 

could be more comprehensive in considering a wider array of social and 

economic costs and benefits, recognizing transportation systems’ links 

to each other and to other social and financial systems.



Many panelists advocated a systemwide, rather than mode-specific, 

approach to transportation planning and funding that could also improve 

focus on outcomes that users and communities desire from the 

transportation system. For example, one panelist described a 

performance oriented funding system, in which the federal government 

would first define certain national interests of the transportation 

system--such as maintaining the entire interstate highway system or 

identifying freight corridors of importance to the national economy--

then set national performance standards for those systems that states 

and localities must meet. Federal funds would be distributed to those 

entities that are addressing national interests and meeting the 

established standards. Any federal funds remaining after meeting the 

performance standards could then be used for whatever transportation 

purpose the state or locality deems most appropriate to achieve state 

or local mobility goals. Another panelist expanded the notion of 

setting national performance standards to include a recognition of the 

interactions between transportation goals and local economic 

development and quality of life goals, and to allow localities to 

modify national performance goals given local conditions. For example, 

a national performance standard, such as average speeds of 45 miles per 

hour for highways, might be unattainable for some locations given local 

conditions, and might run contrary to other local goals related to 

economic development.



Some panelists described several other types of systems that could 

focus on outcomes. For example, one panelist suggested a system in 

which federal support would reward those states or localities that 

apply federal money to gain efficiencies in their transportation 

systems, or tie transportation projects to land use and other local 

policies to achieve community and environmental goals, as well as 

mobility goals. Another panelist described a system in which different 

federal matching criteria for different types of expenditures might 

reflect federal priorities. For example, if infrastructure preservation 

became a higher national priority than building new capacity, matching 

requirements could be changed to a 50 percent federal share for 

building new physical capacity and an 80 percent federal share for 

preservation. Other panelists suggested that requiring state and local 

governments to pay for a larger share of transportation projects might 

provide them with incentives to invest in more cost-effective projects. 

If cost savings resulted, these entities might have more funds 

available to address other mobility challenges. Some of the panelists 

suggested reducing the federal match for projects in all modes to give 

states and localities more fiscal responsibility for projects they are 

planning. Other panelists also suggested that federal matching 

requirements should be equal for all modes to avoid creating incentives 

to pursue projects in one mode that might be less effective than 

projects in other modes.



Use a Full Range of Tools to Address Mobility Challenges:



Many panelists emphasized that using a range of various tools to 

address mobility challenges may help control congestion and improve 

access. This involves a strategic mix of construction, corrective and 

preventive maintenance, rehabilitation, operations and system 

management, and managing system use through pricing or other 

techniques. Many of the panelists said that no one type of technique 

would be sufficient to address mobility challenges. Although these 

techniques are currently in use, panelists indicated that planners 

should more consistently consider a full range of techniques.



Build New Infrastructure:



Building additional infrastructure is perhaps the most familiar 

technique for addressing congestion and improving access to surface and 

maritime transportation. Several panelists expressed the view that 

although there is a lot of unused capacity in the transportation 

system, certain bottlenecks and key corridors require new 

infrastructure. However, building new infrastructure cannot completely 

eliminate congestion. For example, according to the Texas 

Transportation Institute, it would require at least twice the level of 

current road expansion to keep traffic congestion levels constant, if 

that were the only strategy pursued. In addition, while adding lanes 

may be a useful tool to deal with highway congestion for states with 

relatively low population densities, this option may not be as useful 

or possible for states with relatively high population densities--

particularly in urban areas, where the ability to add lanes is limited 

due to a shortage of available space. Furthermore, investments in 

additional transportation capacity can stimulate increases in travel 

demand, sometimes leading to congestion and slower travel speeds on the 

new or improved infrastructure.



Increase Infrastructure Maintenance and Rehabilitation:



Other panelists said that an emphasis on enhancing capacity from 

existing infrastructure through increased corrective and preventive 

maintenance and rehabilitation is an important supplement to, and 

sometimes a substitute for, building new infrastructure. In 1999, the 

President’s Commission to Study Capital Budgeting reported that, 

because infrastructure maintenance requires more rapid budgetary 

spending than new construction and has a lower visibility, it is less 

likely to be funded at a sufficient level.[Footnote 51] However, one 

panelist said that for public roads, every dollar spent on preventive 

maintenance when the roads are in good condition saves $4 to $5 over 

what would have to be spent to maintain roads in fair condition or $10 

to maintain roads once they are in poor condition. Maintaining and 

rehabilitating transportation systems can improve the speed and 

reliability of passenger and freight travel, thereby optimizing capital 

investments.



Improve Management and Operations:



Better management and operation of existing surface and maritime 

transportation infrastructure is another technique for enhancing 

mobility advocated by some panelists. Improving management and 

operations may allow the existing transportation system to accommodate 

additional travel without having to add new infrastructure. For 

example, the Texas Transportation Institute reported that coordinating 

traffic signal timing with changing traffic conditions could improve 

flow on congested roadways. In addition, according to an FHWA survey, 

better management of work zones--which includes accelerating 

construction activities to minimize their effects on the public, 

coordinating planned and ongoing construction activities, and using 

more durable construction materials--can reduce traffic delays caused 

by work zones and improve traveler satisfaction.[Footnote 52] Also, 

according to one panelist, automating the operation of locks and dams 

on the inland waterways could reduce congestion at these bottlenecks. 

Another panelist, in an article that he authored, noted that shifting 

the focus of transportation planning from building capital facilities 

to an “operations mindset” will require a cultural shift in many 

transportation institutions, particularly in the public sector, so that 

the organizational structure, hierarchy, and rewards and incentives are 

all focused on improving transportation management and 

operations.[Footnote 53] He also commented on the need to improve 

performance measures related to operations and management so that both 

the quality and the reliability of transportation services are 

measured.



Several panelists suggested that contracting out a greater portion of 

operations and maintenance activities could allow public transportation 

agencies to focus their attention on improving overall management and 

developing policies to address mobility challenges. This practice could 

involve outsourcing operations and maintenance to private entities 

through competitive bidding, as is currently done for roads in the 

United Kingdom. In addition, by relieving public agencies of these 

functions, contracting could reduce the cost of operating 

transportation infrastructure and improve the level of service for each 

dollar invested for publicly owned transportation systems, according to 

one panelist.



Developing comprehensive strategies for reducing congestion caused by 

incidents is another way to improve management and operation of surface 

and maritime transportation modes. According to the Texas 

Transportation Institute, incidents such as traffic accidents and 

breakdowns cause significant delays on roadways. One panelist said that 

some local jurisdictions are developing common protocols for handling 

incidents that affect more than one mode and transportation agency, 

such as state transportation departments and state and local law 

enforcement, resulting in improved communications and coordination 

among police, firefighters, medical personnel, and operators of 

transportation systems. Examples of improvements to incident management 

include employing roving crews to quickly move accidents and other 

impediments off of roads and rail and implementing technological 

improvements that can help barges on the inland waterways navigate 

locks in inclement weather, thereby reducing delays on that system.



Increase Investment in Technology:



Several panelists also suggested that increasing public sector 

investment in technologies--known as Intelligent Transportation 

Systems (ITS)--that are designed to enhance the safety, efficiency, and 

effectiveness of the transportation network, can serve as a way of 

increasing capacity and mobility without making major capital 

investments. DOT’s ITS program has two major areas of emphasis: (1) 

deploying and integrating intelligent infrastructure and (2) testing 

and evaluating intelligent vehicles. ITS includes technologies that 

improve traffic flow by adjusting signals, facilitating traffic flow at 

toll plazas, alerting emergency management services to the locations of 

crashes, increasing the efficiency of transit fare payment systems, and 

other actions. Appendix IV describes the different systems that are 

part of DOT’s ITS program.



Other technological improvements suggested by panelists included 

increasing information available to users of the transportation system 

to help people avoid congested areas and to improve customer 

satisfaction with the system. For example, up-to-the-minute traffic 

updates posted on electronic road signs or over the Internet help give 

drivers the information necessary to make choices about when and where 

to travel. It was suggested that the federal government could play a 

key role in facilitating the development and sharing of such 

innovations through training programs and research centers, such as the 

National Cooperative Highway Research Program, the Transit Cooperative 

Research Program, and possible similar programs for waterborne 

transportation. However, panelists cautioned that the federal 

government might need to deal with some barriers to investing in 

technology development and implementation. One panelist said that there 

are few incentives for agencies to take risks on new technologies. If 

an agency improves its efficiency, it may result in the agency 

receiving reduced funding rather than being able to reinvest the 

savings.



Use Demand Management Techniques:



Finally, another approach to reducing congestion without making major 

capital investments is to use demand management techniques to reduce 

the number of vehicles traveling at the most congested times and on the 

most congested routes. For public roads, demand management generally 

means reducing the number of cars traveling on particularly congested 

routes toward downtown during the morning commuting period and away 

from downtown during the late afternoon commuting period. One panelist, 

in a book that he authored, said that “the most effective means of 

reducing peak-hour congestion would be to persuade solo drivers to 
share 

vehicles.”[Footnote 54]



One type of demand management for travel on public roads is to make 

greater use of pricing incentives. In particular, many economists have 

proposed using congestion pricing that involves charging surcharges or 

tolls to drivers who choose to travel during peak periods when their 

use of the roads increases congestion. Economists generally believe 

that such surcharges or tolls enhance economic efficiency by making 

drivers take into account the external costs they impose on others in 

deciding when and where to drive. These costs include congestion, as 

well as pollution and other external effects. The goal of congestion 

pricing would be to charge a toll for travel during congested periods 

that would make the cost (including the toll) that a driver pays for 

such a trip equal or close to the total cost of that trip, including 

external costs. These surcharges could help reduce congestion by 

providing incentives for travelers to share rides, use transit, travel 

at less congested (generally off-peak) times and on less congested 

routes, or make other adjustments--and at the same time, generate more 

revenues that can be targeted to alleviating congestion in those 

specific corridors. According to a report issued by the Transportation 

Research Board, technologies that are currently used at some toll 

facilities to automatically charge users could also be used to 

electronically collect congestion surcharges without establishing 

additional toll booths that would cause delays.[Footnote 55] Peak-

period pricing also has applicability for other modes of 

transportation. Amtrak and some transit systems use peak-period 

pricing, which gives travelers incentives to make their trips at less 

congested times.



In addition to pricing incentives, other demand management techniques 

that encourage ride-sharing can be useful in reducing congestion. Ride-

sharing can be encouraged by establishing carpool and vanpool staging 

areas, providing free or preferred parking for carpools and vanpools, 

subsidizing transit fares, and designating certain highway lanes as 

high occupancy vehicle (HOV) lanes that can only be used by vehicles 

with a specified number of people in them (two or more). HOV lanes can 

provide an incentive for sharing rides because they reduce the travel 

time for a group traveling together relative to the time required to 

travel alone. This incentive is likely to be particularly strong when 

the regular lanes are heavily congested. Several panelists also 

recommended use of high occupancy toll (HOT) lanes, which combine 

pricing techniques with the HOV concept. Experiments with HOT lanes, 

which allow lower occupancy vehicles or solo drivers to pay a fee to 

use HOV lanes during peak traffic periods, are currently taking place 

in California. HOT lanes can provide motorists with a choice: if they 

are in a hurry, they may elect to pay to have less delay and an 

improved level of service compared to the regular lanes. When HOT lanes 

run parallel to regular lanes, congestion in regular lanes may be 

reduced more than would be achieved by HOV lanes.



Demand management techniques on roads, particularly those involving 

pricing, often provoke strong political opposition. Several panelists 

said that instituting charges to use roads that have been available 

“free” is particularly unpopular because many travelers believe that 

they have already paid for the roads through gasoline and other taxes 

and should not have to pay “twice.” Other concerns about congestion 

pricing include equity issues because of the potentially regressive 

nature of these charges (i.e., the surcharges constitute a larger 

portion of the earnings of lower income households and therefore impose 

a greater financial burden on them).[Footnote 56] In addition, some 

people find the concept of restricting lanes or roads to people who pay 

to use them to be elitist because that approach allows people who can 

afford to pay the tolls to avoid congestion that others must endure. 

Several of the panelists suggested that tolls might become more 

acceptable to the public if they were applied to new roads or lanes as 

a demonstration project so that the tolls’ effectiveness in reducing 

congestion and increasing commuter choices could be evaluated.



Provide Options for Financing Mobility Improvements and Consider 

Additional Sources of Revenue:



Several panelists indicated that targeting the financing of 

transportation to achieving desired mobility outcomes, and addressing 

those segments of transportation systems that are most congested, would 

require more options for financing surface and maritime transportation 

projects than are currently available, and might also require more 

sources of revenue in the future.



Increase Funding Flexibility:



According to many panelists, the current system of financing surface 

and maritime transportation projects limits options for addressing 

mobility challenges. For example, several panelists said that separate 

funding for each mode at the federal, state, and local level can make 

it difficult to consider possible efficient and effective ways for 

enhancing mobility, and providing more flexibility in funding across 

modes could help address this limitation. In addition, some panelists 

argued that “earmarking” or designation by the Congress of federal 

funds for particular transportation projects bypasses traditional 

planning processes used to identify the highest priority projects, thus 

potentially limiting transportation agencies’ options for addressing 

the most severe mobility challenges. According to one panelist, 

bypassing transportation planning processes can also result in logical 

connections or interconnections between projects being overlooked.



Expand Support for Alternative Financing Mechanisms:



Several panelists acknowledged that the public sector could expand its 

financial support for alternative financing mechanisms to access new 

sources of capital and stimulate additional investment in surface and 

maritime transportation infrastructure. These mechanisms include both 

newly emerging and existing financing techniques such as providing 

credit assistance to state and local governments for capital projects 

and using tax policy to provide incentives to the private sector for 

investing in surface and maritime transportation infrastructure (see 

app. V for a description of alternative financing methods). The 

panelists emphasized, however, that these mechanisms currently provide 

only a small portion of the total funding that is needed for capital 

investment and are not, by themselves, a major strategy for addressing 

mobility challenges. Furthermore, they cautioned that some of these 

mechanisms, such as Grant Anticipation Revenue Vehicles,[Footnote 57] 

could create difficulties for state and local agencies to address 

future transportation problems, because agencies would be reliant on 

future federal revenues to repay the bonds.



Consider New Revenue Sources:



Many panelists stated that a possible future shortage of revenues 

presents a fundamental limitation to addressing mobility 

challenges.[Footnote 58] Some panelists said that, because of the 

increasing use of alternative fuels, revenues from the gas tax are 

expected to decrease in the future, possibly hindering the public 

sector’s ability to finance future transportation projects. In 

addition, one panelist explained that MPOs are required to produce 

financially constrained long-range plans, and the plans in the 

panelist’s organization indicate that future projections of revenue do 

not cover the rising costs of planned transportation projects.



One method of raising revenue is for counties and other regional 

authorities to impose sales taxes for funding transportation projects. 

A number of counties have already passed such taxes and more are being 

considered nationwide. However, several panelists expressed concerns 

that this method might not be the best option for addressing mobility 

challenges. For example, one panelist stated that moving away from 

transportation user charges to sales taxes that are not directly tied 

to the use of transportation systems weakens the ties between 

transportation planning and finance. Counties and other authorities may 

be able to bypass traditional state and metropolitan planning processes 

because these sales taxes provide them with their own sources of 

funding for transportation.



A number of panelists suggested increasing current federal fuel taxes 

to raise additional revenue for surface transportation projects. In 

contrast, other panelists argued that the federal gas tax could be 

reduced. They said that, under the current system, states are receiving 

most of the revenue raised by the federal gas tax within their state 

lines and therefore there is little need for the federal government to 

be involved in collecting this revenue, except for projects that affect 

more than one state or are of national significance. However, other 

panelists said that this might lead to a decrease in gas tax revenues 

available for transportation, because states may have incentives to use 

this revenue for purposes other than transportation or may not collect 

as much as is currently collected.



Given that freight tonnage moved across all modes is expected to 

increase by 43 percent during the period from 1998 to 2010, new or 

increased taxes or other fees imposed on the freight sector could also 

help fund mobility improvements. For example, one panelist from the 

rail industry suggested modeling more projects on the Alameda Corridor 

in Los Angeles, where private rail freight carriers pay a fee to use 

infrastructure built with public financing. Another way to raise 

revenue for funding mobility improvements would be to increase taxes on 

freight trucking. According to FHWA, heavy trucks (weighing over 55,000 

pounds) cause a disproportionate amount of damage to the nation’s 

highways and have not paid a corresponding share for the cost of 

pavement damage they cause. This situation will only be compounded by 

the large expected increases in freight tonnage moved by truck over the 

next 10 years. The Joint Committee on Taxation estimated that raising 

the ceiling on the tax paid by heavy vehicles to $1,900 could generate 

about $100 million per year.[Footnote 59]



Another revenue raising strategy includes dedicating more of the 

revenues from taxes on alternative fuels, such as gasohol, to the 

Highway Trust Fund rather than to the U.S. Treasury’s General Fund, as 

currently happens. Finally, panelists also said that pricing 

strategies, mentioned earlier in this report as a tool to reduce 

congestion, are also possible additional sources of revenue for 

transportation purposes.



Agency Comments and Our Evaluation:



We provided DOT, the Corps of Engineers, and Amtrak with draft copies 

of this report for their review and comment. We obtained oral comments 

from officials at DOT and the Corps of Engineers. These officials 

generally agreed with the report and provided technical comments that 

we incorporated as appropriate. In addition, officials from the Federal 

Railroad Administration within DOT commented that the report was timely 

and would be vital to the dialogue that occurs as the Congress 

considers the reauthorization of surface transportation legislation. 

Amtrak had no comments on the report.



Our work was primarily performed at the headquarters of DOT and the 

Corps of Engineers (see app. VI for a detailed description of our scope 

and methodology). We conducted our work from September 2001 through 

August 2002 in accordance with generally accepted government auditing 

standards.



As agreed with your offices, unless you publicly announce the contents 

of this report earlier, we plan no further distribution until 30 days 

after the date of this report. At that time, we will send copies of 

this report to the congressional committees with responsibilities for 

surface and maritime transportation programs; DOT officials, including 

the Secretary of Transportation, the administrators of the Federal 

Highway Administration, Federal Railroad Administration, Federal 

Transit Administration, and Maritime Administration, the Director of 

the Bureau of Transportation Statistics, and the Commandant of the U.S. 

Coast Guard; the Commander and Chief of Engineers, U.S. Army Corps of 

Engineers; the President of Amtrak, and the Director of the Office of 

Management and Budget. We will make copies available to others on 

request. This report will also be available on our home page at no 

charge at http://www.gao.gov.



If you have any questions about this report, please contact me at 

heckerj@gao.gov or Kate Siggerud at siggerudk@gao.gov. Alternatively, 

we can be reached at (202) 512-2834. GAO contacts and acknowledgments 

are listed in appendix VII.



JayEtta Z. Hecker

Director

Physical Infrastructure Issues:

Signed by JayEtta Z. Hecker:



[End of section]



Appendixes:



Appendix I: Expenditures for Capital, Operations, and Maintenance:



Comparing the proportion of public spending devoted to various purposes 

across modes is difficult due to differences in the level of public 

sector involvement and in the definition of what constitutes capital 

versus operations and maintenance expenses in each mode. For example, 

the operation of public roads is essentially a function of private 

citizens operating their own vehicles, while operations for mass 

transit includes spending for bus drivers and subway operators, among 

other items. In addition, maintenance expenditures can differ greatly 

from one mode to another in their definition and scope. For example, 

maintenance for a public road involves activities such as patching, 

filling potholes, and fixing signage, while maintenance for channels 

and harbors involves routine dredging of built up sediment and disposal 

or storage of the dredged material. Given these significant differences 

in scope, different modes classify and report on maintenance expenses 

in different ways.



For public roads, capital expenditures (which includes new 

construction, resurfacing, rehabilitation, restoration, and 

reconstruction of roads) constituted about one-half of total annual 

public sector expenditures over the last 10 years, with small increases 

in recent years. Of total capital expenditures in fiscal year 2000, 52 

percent was used for system preservation, such as resurfacing and 

rehabilitation, while 40 percent was used for construction of new roads 

and bridges and other system expansions. These percentages have 

fluctuated somewhat throughout the 1990s. However, as shown in figure 

8, the percentage of capital outlays spent on system preservation 

expenses increased from 45 percent to 52 percent between fiscal years 

1993 and 2000, while construction of new roads and bridges and other 

system expansions declined from 49 percent

to 40 percent over the same period.



Figure 8: Purposes for Capital Outlays for Public Roads, Fiscal Years 

1993 and 2000:



[See PDF for image]



Source: Federal Highway Administration.



[End of Figure]



For transit, capital expenditures accounted for about 26 percent of 

total annual public sector expenditures in 1999. The federal government 

spends more heavily on capital than on operations for transit. The 

federal share of capital expenditures fluctuated throughout the 1990s 

but in fiscal year 2000 stood at about 50 percent, the same as it was 

in fiscal year 1991. The federal share of total operating expenses 

declined from about 5 percent in fiscal year 1991 to about 2 percent in 

fiscal year 2000.[Footnote 60]



Federal government support to Amtrak for operating expenses and capital 

expenditures has fluctuated throughout the 1990s. Annual operating 

grants fluctuated between $300 and $600 million and capital grants 

between $300 and $500 million. In addition to these grants, the 

Taxpayer Relief Act of:



1997[Footnote 61] provided Amtrak with $2.2 billion for capital and 

operating purposes in fiscal years 1998 and 1999. Federal support 

declined in fiscal years 2000 and 2001, however, with the federal 

government providing grants to Amtrak of $571 and $521 million, 

respectively.



For water transportation, spending by the U.S. Army Corps of Engineers 

(Corps of Engineers) for construction of locks and dams for inland 

waterway navigation[Footnote 62] fell while expenditures for operations 

and maintenance remained at around $350 to $400 million, as shown in 

figure 9.



Figure 9: Federal Expenditures for Construction and Operations and 

Maintenance of Locks and Dams, Fiscal Years 1991-2000:



[See PDF for image]



Source: U.S. Department of Transportation, Bureau of Transportation 

Statistics (2002), Government Transportation Financial Statistics 

(Preliminary Data), Washington, D.C.



[End of Figure]



By contrast, Corps of Engineers expenditures for the construction, 

operations, and maintenance of federal channels and harbors have 

increased over the past decade. During fiscal years 1991 through 2000, 

construction expenditures increased from $112 million to $252 million 

(in 2000 dollars), while operations and maintenance expenditures 

increased from $631 million to $671 million (in 2000 dollars). In 

addition to the Corps of Engineers, the U.S. Coast Guard and the 

Maritime Administration also spend significant amounts for water 

transportation, although these agencies have limited responsibility for 

construction or maintenance of water transportation infrastructure.



[End of section]



Appendix II: Travel Forecast Methodologies:



Demographic factors and economic growth are the primary variables 

influencing national travel projections for both passenger and freight 

travel. However, the key assumption underlying most of these travel 

projections is that the capacity of the transportation system is 

unconstrained; that is, capacity is assumed to expand as needed in 

order to accommodate future traffic flows.[Footnote 63] As a result, 

national travel projections need to be used carefully in evaluating how 

capacity improvements or increasing congestion in one mode of 

transportation might affect travel across other modes and the entire 

transportation system.



Passenger Travel on Public Roads:



Future travel growth will be influenced by demographic factors. A 

travel forecast study conducted for the Federal Highway Administration 

(FHWA) used economic and demographic variables such as per capita 

income and population to project a 24.7 percent national cumulative 

increase in vehicle miles traveled for passenger vehicles on public 

roads between 2000 and 2010. The study estimated that for every 1-

percent increase in per capita income or population, vehicle miles 

traveled would increase nearly 1 percent.[Footnote 64]



This forecast is unconstrained, however, in that it does not consider 

whether increased congestion or fiscal constraints will allow travel to 

grow at the rates projected. In part to deal with this limitation, FHWA 

uses another model to forecast a range of future vehicle miles traveled 

based on differing levels of investment. These projections recognize 

that if additional road capacity is provided, more travel is expected 

to occur than if the capacity additions are not provided. If congestion 

on a facility increases, some travelers will respond by shifting to 

alternate modes or routes, or will forgo some trips entirely. These 

projections are not available at this time but will be included in the 

U.S. Department of Transportation’s (DOT) 2002 report to Congress 

entitled Status of the Nation’s Highways, Bridges, and Transit: 

Conditions and Performance.



While it is clear that travelers choose between modes of travel for 

reasons of convenience and cost, among other things, none of the FHWA 

travel forecasts consider the effects of changes in levels of travel on 

other modes, such as transit or rail. FHWA officials said that they 

would like to have a data system that projects intermodal travel, but 

for now such a system does not exist. The models also cannot reflect 

the impact of major shocks on the system, such as natural disasters or 

the terrorist attacks of September 2001.



Passenger Travel on Transit:



The Federal Transit Administration (FTA) makes national-level forecasts 

for growth in transit passenger miles traveled by collecting 15-to 25-

year forecasts developed by metropolitan planning organizations 

(MPO)[Footnote 65] in the 33 largest metropolitan areas in the 

country.[Footnote 66] FTA calculates a national weighted average using 

the MPO forecasts and regional averages.[Footnote 67] MPOs create their 

forecasts as part of their long-range planning process.[Footnote 68] 

Unlike the first forecast for road travel discussed above, the 1999 

Conditions and Performance report[Footnote 69] stated that the MPO 

forecasts for vehicle miles traveled and passenger miles traveled 

incorporate the effects of actions that the MPOs are proposing to shape 

demand in their areas to attain air quality and other developmental 

goals. The MPO plans may include transit expansion, congestion pricing, 

parking constraints, capacity limits, and other local policy options. 

MPO forecasts also have to consider funding availability.



Intercity Passenger Travel:



Amtrak provided us with systemwide forecasts of ridership, which are 

based on assumed annual economic growth of between 1 and 1.5 percent, 

fare increases equal to the national inflation rate, and projected 

ridership increases on particular routes, including new or changing 

service on certain routes scheduled to come on line over the forecast 

period. For short-distance routes, Amtrak uses a model that estimates 

total travel over a route by any mode, based on economic and 

demographic growth. The model then estimates travel on each mode 

competing in the corridor based on cost and service factors in each 

mode. For long distance routes, Amtrak uses a different model that 

projects future rail ridership using variables

that have been determined to influence past rail ridership, such as 

population, employment, travel time for rail, and level of service for 

rail. This model does not consider conditions on other competing modes.



Freight Travel Across Modes:



In forecasting growth in national freight travel, models developed by 

FHWA and the U.S. Army Corps of Engineers (Corps of Engineers) use 

growth in trade and the economy as key factors driving freight travel. 

Projected growth in each particular mode is determined by growth in the 

production of the specific mix of commodities that historically are 

shipped on that mode. Therefore, any projected shift in freight 

movement from one mode to another is due to projected changes in the 

mix of commodities, or projected changes in where goods are produced 

and consumed.



Because current or future conditions and the capacity of the freight 

transportation system cannot be factored into the national forecasts, a 

number of factors--including growing congestion, as well as the 

benefits of specific projects that might relieve congestion--are not 

considered in the projections.[Footnote 70] In addition, future trends 

in other factors that affect shippers’ choices of freight modes--such 

as relative cost, time, or reliability--are not easily quantifiable and 

are also linked to each system’s capacity and the congestion on each 

system. As such, these factors are not included in FHWA’s or Corps of 

Engineers’ national forecasting models.



Underlying the commodity forecasts used by FHWA and the Corps of 

Engineers are a number of standard macro-economic assumptions 

concerning primarily supply side factors, such as changes in the size 

of the labor force and real growth in exports due to trade 

liberalization. Changes in border, airport, and seaport security since 

September 11 may affect assumptions that are imbedded in these 

commodity forecasts. For example, increased delays and inspections at 

the border or at a port may create problems for shippers to meet just-

in-time requirements, possibly resulting in a short-term shift to an 

alternative mode, or a limiting of trade.



Although current national freight forecasts are not capacity-

constrained, FHWA is developing a “Freight Analysis Framework” to 

provide alternative analyses, assessing certain capacity limitations. 

The main impediment to developing this capability is determining 

capacity on each mode. There are commonly accepted measures of road 

capacity that are being incorporated, but rail and waterway capacity is 

not as easily measured.



State Forecasts of Vehicle Miles Traveled:



FHWA provided us with state-level forecasts of total vehicle miles 

traveled on public roads from 2000 to 2010, derived from data in the 

Highway Performance Monitoring System (HPMS) sample data set.[Footnote 

71] This data set contains state-reported data on average annual daily 

traffic for approximately 113,000 road segments nationwide. For each 

sample section, HPMS includes measures of average annual daily traffic 

for the reporting year and estimates of future traffic for a specified 

forecast year, which is generally 18 to 25 years after the reporting 

year. It should be noted that the HPMS sample data do not include 

sections on any roads classified as local roads or rural minor 

collectors.



Because the individual HPMS segment forecasts come from the states, we 

do not know exactly what models were used to develop them. According to 

officials at FHWA, the only national guidance comes from the HPMS Field 

Manual, which says that future average annual daily traffic should come 

from a technically supportable state procedure or data from MPOs or 

other local sources. The manual also says that HPMS forecasts for 

urbanized areas should be consistent with those developed by the MPO at 

the functional system and urbanized area level.



Table 1: Projected Average Annual Growth Rates for Vehicle Miles 

Traveled, 2000-2020:



State: Alabama; Rural: 2.94; Urban: 3.18; State total: 3.06.



State: Alaska; Rural: 2.34; Urban: 2.12; State total: 2.23.



State: Arizona; Rural: 1.60; Urban: 1.42; State total: 1.48.



State: Arkansas; Rural: 2.54; Urban: 2.23; State total: 2.43.



State: California; Rural: 3.09; Urban: 2.25; State total: 2.42.



State: Colorado; Rural: 2.22; Urban: 1.94; State total: 2.05.



State: Connecticut; Rural: 1.71; Urban: 1.28; State total: 1.38.



State: Delaware; Rural: 1.33; Urban: 0.86; State total: 1.05.



State: District of Columbia; Rural: N/A; Urban: 1.69; State total: 

1.69.



State: Florida; Rural: 1.85; Urban: 1.63; State total: 1.69.



State: Georgia; Rural: 0.60; Urban: 0.86; State total: 0.75.



State: Hawaii; Rural: 1.62; Urban: 1.46; State total: 1.51.



State: Idaho; Rural: 3.07; Urban: 3.08; State total: 3.08.



State: Illinois; Rural: 1.17; Urban: 1.36; State total: 1.30.



State: Indiana; Rural: 3.07; Urban: 2.69; State total: 2.88.



State: Iowa; Rural: 1.95; Urban: 2.24; State total: 2.06.



State: Kansas; Rural: 1.88; Urban: 2.14; State total: 2.00.



State: Kentucky; Rural: 2.90; Urban: 2.12; State total: 2.55.



State: Louisiana; Rural: 1.93; Urban: 1.73; State total: 1.84.



State: Maine; Rural: 0.31; Urban: 0.58; State total: 0.39.



State: Maryland; Rural: 2.82; Urban: 2.56; State total: 2.64.



State: Massachusetts; Rural: 1.02; Urban: 1.06; State total: 1.05.



State: Michigan; Rural: 2.22; Urban: 1.63; State total: 1.86.



State: Minnesota; Rural: 2.23; Urban: 2.09; State total: 2.16.



State: Mississippi; Rural: 2.77; Urban: 2.71; State total: 2.75.



State: Missouri; Rural: 1.67; Urban: 1.96; State total: 1.82.



State: Montana; Rural: 2.49; Urban: 2.75; State total: 2.55.



State: Nebraska; Rural: 2.48; Urban: 2.08; State total: 2.33.



State: Nevada; Rural: 2.16; Urban: 2.08; State total: 2.11.



State: New Hampshire; Rural: 2.10; Urban: 2.24; State total: 2.16.



State: New Jersey; Rural: 1.77; Urban: 1.25; State total: 1.36.



State: New Mexico; Rural: 2.29; Urban: 1.28; State total: 1.93.



State: New York; Rural: 1.76; Urban: 1.83; State total: 1.81.



State: North Carolina; Rural: 2.68; Urban: 2.64; State total: 2.66.



State: North Dakota; Rural: 1.76; Urban: 2.31; State total: 1.90.



State: Ohio; Rural: 1.64; Urban: 1.23; State total: 1.39.



State: Oklahoma; Rural: 2.21; Urban: 2.32; State total: 2.26.



State: Oregon; Rural: 2.19; Urban: 1.91; State total: 2.06.



State: Pennsylvania; Rural: 2.90; Urban: 2.49; State total: 2.66.



State: Rhode Island; Rural: 1.28; Urban: 1.09; State total: 1.12.



State: South Carolina; Rural: 2.44; Urban: 2.28; State total: 2.38.



State: South Dakota; Rural: 1.47; Urban: 1.48; State total: 1.47.



State: Tennessee; Rural: 2.18; Urban: 2.37; State total: 2.29.



State: Texas; Rural: 2.63; Urban: 2.27; State total: 2.40.



State: Utah; Rural: 3.25; Urban: 3.54; State total: 3.43.



State: Vermont; Rural: 1.62; Urban: 1.04; State total: 1.48.



State: Virginia; Rural: 2.60; Urban: 2.01; State total: 2.27.



State: Washington; Rural: 1.80; Urban: 2.03; State total: 1.96.



State: West Virginia; Rural: 2.80; Urban: 2.32; State total: 2.67.



State: Wisconsin; Rural: 2.21; Urban: 2.21; State total: 2.21.



State: Wyoming; Rural: 2.07; Urban: 1.06; State total: 1.83.



State: Puerto Rico; Rural: 2.30; Urban: 1.67; State total: 1.83.



State: Total; Rural: 2.27; Urban: 1.97; State total: 2.09.



Source: Federal Highway Administration, as reported by states in the 

Highway Performance Monitoring System database.



[End of section]



Appendix III: Factors Influencing Future Travel:



Local and Intercity Travel:



For both local and intercity passenger travel, population growth is 

expected to be one of the key factors driving overall travel levels. 

Where that growth will occur will likely have a large effect on travel 

patterns and mode choices. According to the U.S. Census Bureau, the 

U.S. population will grow to almost 300 million by 2010.[Footnote 72] 

Although this represents a slower growth rate than in the past, it 

would still add approximately 18.4 million people to the 2000 

population, and will likely also substantially increase the number of 

vehicles on public roads as well as the number of passengers on transit 

and intercity rail.



The Census Bureau reported that since 1990, the greatest population 

growth has been in the South and West. According to one panelist, these 

regions’ metropolitan areas traditionally have lower central city 

densities and higher suburban densities than the Midwest and East. 

These areas are therefore harder to serve through transit than 

metropolitan areas with higher population densities, where transit can 

be more feasible. However, according to some transportation experts, it 

may not be possible to build new transit infrastructure in these areas 

due to environmental or other concerns. The population growth that is 

expected in suburban areas could lead to a larger increase in travel by 

private vehicles than by transit because suburban areas generally have 

lower population densities than inner cities, and also have more 

dispersed travel patterns, making them less easy to serve through 

conventional public transit. Although overall population growth will 

likely be greatest in suburban parts of metropolitan areas, high rates 

of growth are also predicted for rural areas. As is the case in 

suburbs, these rural areas are difficult to serve with anything but 

private automobiles because of low population densities and 

geographical dispersion of travel patterns, so travel by private 

vehicle may increase. Immigration patterns are also expected to 

contribute to changes in travel levels, but the extent will depend on 

immigration policies. For example, according to a senior researcher 

with the American Public Transportation Association, higher rates of 

immigration tend to increase transit use.



In addition to overall population growth, another demographic trend 

that will likely affect mode choices is the aging of the population. 

According to data from the U.S. Census Bureau, the number of people 

aged 55 and over is projected to increase 26 percent between 2001 and 

2010. The most rapidly growing broad age group is expected to be the 

population aged 85 and older, which is projected to increase 30 percent 

by 2010. According to the Federal Highway Administration and Federal 

Transit Administration’s 1999 Conditions and Performance 

report,[Footnote 73] the elderly have different mobility issues than 

the nonelderly because they are less likely to have drivers’ licenses, 

have more serious health problems, and may require special services and 

facilities. According to a report prepared for the World Business 

Council for Sustainable Development (Mobility 2001),[Footnote 74] cars 

driven by the elderly will constitute an increasing proportion of 

traffic, especially in the suburbs and rural areas, where many elderly 

people tend to reside. Increases in the number of older drivers can 

pose safety problems, in that the elderly have a higher rate of crashes 

per mile driven than younger drivers, and that rate rises significantly 

after age 85. The Mobility 2001 report also says that the driver 

fatality rate of drivers over 75 years of age is higher than any other 

age group except teenagers. Growth of the elderly population may 

therefore increase the importance of providing demand-responsive 

transit services[Footnote 75] and improving signs on public roads to 

make them clearer and more visible.



Along with population growth, the increasing affluence of the U.S. 

population is expected to play a key role in local and intercity 

passenger travel levels and in the modes travelers choose. The 1999 

Conditions and Performance report states that rates of vehicle 

ownership are lower in low-income households, leading those households 

to rely more on transit systems. According to Federal Transit 

Administration (FTA) officials and Mobility 2001, transit use--

particularly use of buses--generally decreases as income increases. 

Increasing affluence also influences intercity travel levels. The 1999 

Conditions and Performance report says that people with high incomes 

take approximately 30 percent more trips than people with low incomes, 

and the trips tend to be longer. Long-distance travel for business and 

recreation increases with income. Also, as income increases, travel by 

faster modes, such as car and air, increases, and travel by intercity 

bus tends to decrease.



Several participants in our surface and maritime transportation panels 

(see app. VI) also indicated that improvements in communication 

technology will likely affect the amount and mode of intercity travel, 

but the direction and extent of the effect is uncertain. One panelist 

said that there is no additional cost to communicating over greater 

distances, so communications will replace travel to some extent, 

particularly as technologies improve. However, two other panelists said 

that communication technology might increase travel by making the 

benefit of travel more certain. For example, the Internet can provide 

people with current and extensive information about vacation 

destinations, potentially increasing the desire to travel. According to 

Mobility 2001, it is unclear whether telecommunications technology will 

substitute for the physical transportation of people and goods. 

Telecommuting and teleconferencing are becoming more common, but 

technological improvements would have to be significant before they can 

substitute for actual presence at work or in face-to-face meetings. In 

addition, while home-based workers do not have to commute, they tend to 

travel approximately the same amount as traditional workers, but differ 

in how their travel is distributed among trip purposes.



The terrorist attacks on the United States on September 11, 2001, are 

expected to have some effect on passenger travel levels and choices 

about which mode to use, but U.S. Department of Transportation (DOT) 

officials and participants in the panels did not believe the long-term 

changes would be significant, provided that no more attacks occur. 

Federal Highway Administration and Federal Railroad Administration 

officials speculated that increased delays in air travel due to 

stricter security procedures might shift some travel from air to other 

modes, such as car or rail, although they expected this effect to be 

negligible in the long term unless additional incidents occur.



Finally, changes in the price (or perceived price), condition, and 

reliability of one modal choice as compared with another are also 

likely to affect levels of travel and mode choices. For example, 

changes in the petroleum market that affect fuel prices, or changes in 

government policy that affect the cost of driving or transit prices, 

could result in shifts between personal vehicles and transit; however, 

it is difficult to predict the extent to which these changes will 

occur. According to Mobility 2001, automobiles offer greater 

flexibility in schedule and choice of destinations than other modes of 

transportation, and often also provide shorter travel times with lower 

out-of-pocket costs. However, if heavy and unpredictable road 

congestion causes large variations in automobile travel time, there 

could be a shift to transit or a decrease in overall travel.



Freight Travel:



According to several reports by DOT and transportation research 

organizations, increasing international trade, economic growth, the 

increasing value of cargo shipped, and changes in policies affecting 

certain commodities are expected to influence future volumes of freight 

travel and the choice of mode by which freight is shipped.



Increasing international trade and national trade policies are expected 

to affect commodity flows, volumes, and mode choice.[Footnote 76] 

According to the Transportation Statistics Annual Report 2000,[Footnote 

77] the globalization of businesses can shift production of goods sold 

in the United States to locations outside of the country, increasing 

total ton-miles[Footnote 78] and changing the average length of haul of 

shipments. This shift in production could also affect freight mode 

choice, with more commodities being shipped by multiple modes as 

distances increase. According to Mobility 2001, truck transportation 

tends to be cheaper, faster, and more energy efficient than rail and 

barges for shipping high-value cargo. However, as distances increase, 

rail and intermodal transportation (linking rail and truck travel) 

become more cost-efficient options. Various trade policies also affect 

freight flows and volumes. For example, the North American Free Trade 

Agreement has contributed to the increased volume of trade moving on 

rail and highways. According to data from the Bureau of Transportation 

Statistics’ Transborder Surface Freight Database, between 1996 and 

2000, tonnage of imports by rail from Mexico and Canada increased by 

about 25 percent, and imports by truck increased 20 percent. In the 

maritime sector, expanding trade with the Pacific Rim increased traffic 

at west coast container ports.



According to the Transportation Statistics Annual Report 2000, economic 

growth results in a greater volume of goods produced and consumed, 

leading to more freight moved. As the economy grows, disposable income 

per capita increases and individual purchasing power rises, which can 

cause businesses to ship more freight per capita. According to the 

report, freight ton-miles per capita increased more than 30 percent, 

from 10,600 in 1975 to 14,000 in 1999.



The increasing value of cargo and the continuing shift toward a more 

service-oriented economy and more time-sensitive shipments has affected 

the volume of freight shipments and the choice of modes on which 

freight is shipped. According to the Transportation Statistics Annual 

Report 2000, there is a continuing shift toward production of high-

value, low-weight products, which leads to changes in freight travel 

levels and mode choice. For example, it takes more ton-miles to ship 

$1,000 worth of steel than it does to ship $1,000 worth of cell phones. 

High-value cargo, such as electronics and office equipment, tends to be 

shipped by air or truck, while rail and barges generally carry lower-

value bulk items, such as coal and grain.[Footnote 79] According to 

Mobility 2001, the growth of e-commerce and just-in-time inventory 

practices depend upon the ability to deliver goods quickly and 

efficiently. A report prepared for the National Cooperative Highway 

Research Program[Footnote 80] states that the effects of just-in-time 

inventory practices are to increase the number of individual shipments, 

decrease their length of haul, and increase the importance of on-time 

delivery. Both reports indicate that such practices may shift some 

freight from slower modes, such as rail, to faster modes, such as truck 

or air. In addition, the Mobility 2001 report states that as the demand 

for specialized goods and services grows, the demand for smaller, more 

specialized trucks increases. Items ordered from catalogs or on-line 

retailers are often delivered by specialized trucks.



Policies affecting particular commodities can have a large impact on 

the freight industry. For example, policies concerning greenhouse gas 

emissions can affect the amount of coal mined and shipped. Because coal 

is a primary good shipped by rail and water, reduction in coal mining 

would have a significant effect on tonnage for those modes. Changes in 

the type of coal mined as a result of environmental policies--such as 

an increase in mining of low-sulfur coal--can also affect the regional 

patterns of shipments, resulting in greater ton-miles of coal shipped. 

Also, increasing emissions controls and clean fuel requirements may 

raise the cost of operating trucks and result in a shift of freight 

from truck to rail or barge. For example, according to Mobility 2001, 

recently released rules from the Environmental Protection Agency 

implementing more stringent controls for emissions from heavy-duty 

vehicles are predicted to increase the purchase price of a truck by 

$803. Other environmental regulations also affect the cost of shipping 

freight, as when controls on the disposal of material dredged from 

navigation channels increase the costs of expanding those channels. 

Policies regarding cargo security may also affect the flow of goods 

into and out of the United States. For example, several of our 

panelists indicated that implementing stricter security measures will 

increase the cost of shipping freight as companies invest in the 

personnel and technology required. Tighter security measures could also 

increase time necessary to clear cargo through Customs or other 

inspection stations.



[End of section]



Appendix IV: Intelligent Transportation Systems:



The U.S. Department of Transportation’s (DOT) program of Intelligent 

Transportation Systems (ITS) offers technology-based systems intended 

to improve the safety, efficiency, and effectiveness of the surface 

transportation system. The ITS program applies proven and emerging 

technologies--drawn from computer hardware and software systems, 

telecommunications, navigation, and other systems--to surface 

transportation. DOT’s ITS program has two areas of emphasis: (1) 

deploying and integrating intelligent infrastructure and (2) testing 

and evaluating intelligent vehicles. Under the first area of emphasis, 

the intelligent infrastructure program is composed of the family of 

technologies that can enhance operations in three types of 

infrastructure: (1) infrastructure in metropolitan areas, (2) 

infrastructure in rural areas, and (3) commercial vehicles. Under the 

ITS program, DOT provides grants to states to support ITS activities. 

In practice, the Congress has designated the locations and amounts of 

funding for ITS. DOT solicits the specific projects to be funded and 

ensures that those projects meet criteria established in the 

Transportation Equity Act for the 21st Century.



Metropolitan intelligent transportation systems focus on deployment and 

integration of technologies in urban and suburban geographic areas to 

improve mobility. These systems include:



* Arterial management systems that automate the process of adjusting 

signals to optimize traffic flow along arterial roadways;



* Freeway management systems that provide information to motorists and 

detect problems whose resolution will increase capacity and minimize 

congestion resulting from accidents;



* Transit management systems that enable new ways of monitoring and 

maintaining transit fleets to increase operational efficiencies through 

advanced vehicle locating devices, equipment monitoring systems, and 

fleet management;



* Incident management systems that enable authorities to identify and 

respond to vehicle crashes or breakdowns with the most appropriate and 

timely emergency services, thereby minimizing recovery times;



* Electronic toll collection systems that provide drivers and 

transportation agencies with convenient and reliable automated 

transactions to improve traffic flow at toll plazas and increase the 

operational efficiency of toll collection;



* Electronic fare payment systems that use electronic communication, 

data processing, and data storage techniques in the process of fare 

collection and in subsequent recordkeeping and funds transfer;



* Highway-rail intersection systems that coordinate traffic signal 

operations and train movement and notify drivers of approaching trains 

using in-vehicle warning systems;



* Emergency management systems that enhance coordination to ensure the 

nearest and most appropriate emergency service units respond to a 

crash;



* Regional multimodal traveler information systems that provide road 

and transit information to travelers to enhance the effectiveness of 

trip planning and en-route alternatives;



* Information management systems that provide for the archiving of data 

generated by ITS devices to support planning and operations; and:



* Integrated systems that are designed to deliver the optimal mix of 

services in response to transportation system demands.



Rural Intelligent Transportation Systems are designed to deploy high 

potential technologies in rural environments to satisfy the needs of a 

diverse population of users and operators. DOT has established seven 

categories of rural intelligent transportation projects. They are as 

follows:



* Surface Transportation Weather and Winter Mobility - technologies 

that alert drivers to hazardous conditions and dangers, including wide-

area information dissemination of site-specific safety advisories and 

warnings;



* Emergency Services - systems that improve emergency response to 

serious crashes in rural areas, including technologies that 

automatically mobilize the closest police, ambulances, or fire fighters 

in cases of collisions of other emergencies;



* Statewide/Regional Traveler Information Infrastructure - system 

components that provide information to travelers who are unfamiliar 

with the local rural area and the operators of transportation services;



* Rural Crash Prevention - technologies and systems that are directed 

at preventing crashes before they occur, as well as reducing crash 

severity;



* Rural Transit Mobility - services designed to improve the efficiency 

of rural transit services and their accessibility to rural residents;



* Rural Traffic Management - services designed to identify and 

implement multi-jurisdictional coordination, mobile facilities, and 

simple solutions for small communities and operations in areas where 

utilities may not be available; and:



* Highway Operations and Maintenance - systems designed to leverage 

technologies that improve the ability of highway workers to maintain 

and operate rural roads.



The Commercial Vehicle ITS program focuses on applying technologies to 

improve the safety and productivity of commercial vehicles and drivers, 

reduce commercial vehicles’ operations costs, and facilitate regulatory 

processes for the trucking industry and government agencies. This is 

primarily accomplished through the Commercial Vehicle Information 

Systems and Networks--a program that links existing federal, state, and 

motor carrier information systems so that all entities can share 

information and communicate with each other in a more timely and 

accurate manner.



The second area of emphasis in DOT’s ITS program--testing and 

evaluating intelligent vehicles--is designed to foster improvements in 

the safety and mobility of vehicles. This component of the ITS program 

is meant to promote traffic safety by expediting the commercial 

availability of advanced vehicle control and safety systems in four 

classes of vehicles: (1) light vehicles, including passenger cars, 

light trucks, vans, and sport utility vehicles; (2) commercial 

vehicles, including heavy trucks and interstate buses; (3) transit 

vehicles, including all nonrail vehicles operated by transit agencies; 

and (4) specialty vehicles, including those used for emergency 

response, law enforcement, and highway maintenance.



[End of section]



Appendix V: Alternative Financing Methods:



Transportation officials at all levels of government recognize that 

funding from traditional sources (i.e., state revenues and federal aid) 

does not always keep pace with demands for new, expanded, or improved 

surface and maritime transportation infrastructure. Accordingly, the 

U.S. Department of Transportation (DOT) has supported a broad spectrum 

of emerging or established alternative financing mechanisms that can be 

used to augment traditional funding sources, access new sources of 

capital and operating funds, and enable transportation providers to 

proceed with major projects sooner than they might otherwise. These 

mechanisms fall into several broad categories: (1) allowing states to 

pay debt financing costs with future anticipated federal highway funds, 

(2) providing federal credit assistance, and (3) establishing financing 

institutions at the state level. In addition, state, local, and 

regional governments engage in public/private partnerships to tap 

private sector resources for investment in transportation capital 

projects. The federal government helps subsidize public/private 

partnerships by providing them with tax exemptions.



The federal government allows states to tap into Federal-aid highway 

funds to repay debt-financing costs associated with highway projects 

through the use of Grant Anticipation Revenue Vehicles (GARVEE). Under 

this program, states can pledge a share of future obligations of 

federal highway funds toward repayment of bond-related expenses, 

including a portion of the principal and interest payments, insurance 

costs, and other costs. A project must be approved by DOT’s Federal 

Highway Administration to be eligible for this type of assistance.



The federal government also provides credit assistance in the form of 

loans, loan guarantees, and lines of credit for a variety of surface 

and maritime transportation programs, as follows:



* Under the Transportation Infrastructure Finance and Innovation Act of 

1998 (TIFIA), the federal government provides direct loans, loan 

guarantees, and lines of credit aimed at leveraging federal funds to 

attract nonfederal coinvestment in infrastructure improvements. This 

program is designed to provide financing for highway, mass transit, 

rail, airport, and intermodal projects, including expansions of multi-

state highway trade corridors; major rehabilitation and replacement of 

transit vehicles, facilities, and equipment; border crossing 

infrastructure; and other investments with regional and national 

benefits.



* Under the Rail Rehabilitation and Improvement Financing Program 

(RRIF), established by the Transportation Equity Act for the 21st 

Century (TEA-21) in 1998, the federal government is authorized to 

provide direct loans and loan guarantees for railroad capital 

improvements. This type of credit assistance is made available to state 

and local governments, government-sponsored authorities, railroads, 

corporations, or joint ventures that include at least one railroad. 

However, as of June 2002, no loans or loan guarantees had been granted 

under this program.



* Under Title XI of the Merchant Marine Act of 1936, known as the 

Federal Ship Financing Guarantees Program, the federal government 

provides for a full faith and credit guarantee of debt obligations 

issued by (1) U.S. or foreign shipowners for the purpose of financing 

or refinancing U.S. or eligible export vessels that are constructed, 

reconstructed, or reconditioned in U.S. shipyards; and (2) U.S. 

shipyards for the purpose of financing advanced shipbuilding 

technology.



A third way that the federal government helps transportation providers 

finance capital projects is by supporting State Infrastructure Banks 

(SIB). SIBs are investment funds established at the state or regional 

level that can make loans and provide other types of credit assistance 

to public and private transportation project sponsors. Under this 

program, the federal government allows states to use federal grants as 

“seed” funds to finance capital investments in highway and transit 

construction projects. The federal government currently supports SIBs 

in 39 states.



In addition to these alternative financing mechanisms directly 

supported by the federal government, state, local, and regional 

governments sometimes engage in public/private partnerships to tap 

private sector resources for investment in transportation capital 

projects. The federal government also helps subsidize public/private 

partnerships by providing them with tax subsidies. One such subsidy is 

specifically targeted towards investment in ground transportation 

facilities--the tax exemption for interest earned on state and local 

bonds that are used to finance high-speed rail facilities and 

government-owned docks, wharves, and other facilities. In addition, a 

Department of the Treasury study indicates that the rates of tax 
depreciation 

allowed for railroads, railroad equipment, ships, and boats are likely 
to 

provide some subsidy to investors in those assets.[Footnote 81]



Partnerships between state and local governments and the private sector 

are formed for the purpose of sharing the risks, financing costs, and 

benefits of transportation projects. Such partnerships can be used to 

minimize cost by improving project quality, maintaining risk-

management, improving efficiency, spurring innovation, and accessing 

expertise that may not be available within the agency. These 

partnerships can take many forms; some examples include:



* Partnerships formed to develop, finance, build, and operate new toll 

roads and other roadways;



* Joint development of transit assets whereby land and facilities that 

are owned by transit agencies are sold or leased to private firms and 

the proceeds are used for capital investment in, and operations of, 

transit systems;



* “Turnkey” contracts for transit construction projects whereby the 

contractor (1) accepts a lower price for the delivered product if the 

project is delayed or (2) receives a higher profit if the project is 

delivered earlier or under budget; and:



* Cross-border leases that permit foreign investors to own assets used 

in the United States, lease them to an American entity, and receive tax 

benefits under the laws of their home country. This financing mechanism 

offers an “up front” cost savings to transit agencies that are 

acquiring vehicles or other assets from a foreign firm.



[End of section]



Appendix VI: Scope and Methodology:



Our work covered major modes of surface and maritime transportation for 

passengers and freight, including public roads, public transit, 

railways, and ports and inland waterways. To determine trends in public 

expenditures for surface and maritime transportation over the past 10 

years, we relied on U.S. Department of Transportation (DOT) reports and 

databases that document annual spending levels in each mode of 

transportation. We analyzed trends in total public sector and federal 

expenditures across modes during the 10-year period covering fiscal 

years 1991 through 2000, and we compared the proportion of public 

expenditures devoted to capital activities versus operating and 

maintaining the existing infrastructure during that same time period. 

We adjusted the expenditure data to account for inflation using 

separate indexes for expenditures made by the federal government and 

state and local governments. We used price indexes from the Department 

of Commerce’s Bureau of Economic Analysis’ National Income and Products 

Accounts.



To determine projected levels of freight and passenger travel over the 

next 10 years, we identified projections made by DOT’s modal 

administrations, the U.S. Army Corps of Engineers, and Amtrak for the 

period covering calendar years 2001 through 2010. We interviewed 

officials responsible for the projections and reviewed available 

documentation to identify the methodology used in preparing the 

projections and the key factors driving them. We also obtained data on 

past levels of freight and passenger travel, covering fiscal years 1991 

through 2000, from DOT’s modal administrations, the U.S. Army Corps of 

Engineers, and Amtrak. We analyzed the factors driving the trends for 

three types of travel--local, intercity, and freight--that have 

important distinctions in the types of vehicles and modes used for the 

travel.



To identify mobility challenges and strategies for addressing those 

challenges, we primarily relied upon expert opinion, as well as a 

review of pertinent literature. In particular, we convened two panels 

of surface and maritime transportation experts to identify mobility 

issues and gather views about alternative strategies for addressing the 

issues and challenges to implementing those strategies. We contracted 

with the National Academy of Sciences (NAS) and its Transportation 

Research Board (TRB) to provide technical assistance in identifying and 

scheduling the two panels that were held on April 1 and 3, 2002. TRB 

officials selected a total of 22 panelists with input from us, 

including a cross-section of representatives from all surface and 

maritime modes and from various occupations involved in transportation 

planning. In keeping with NAS policy, the panelists were invited to 

provide their individual views and the panels were not designed to 

build consensus on any of the issues discussed. We analyzed the content 

of all of the comments made by the panelists to identify common themes 

about key mobility challenges and strategies for addressing those 

challenges. Where applicable, we also identified the opposing points of 

view about the challenges and strategies.



The names and backgrounds of the panelists are as follows. We also note 

that two of the panelists served as moderators for the sessions, Dr. 

Joseph M. Sussman of the Massachusetts Institute of Technology and Dr. 

Damian J. Kulash of the Eno Foundation, Inc.



* Benjamin J. Allen is Interim Vice President for External Affairs and 

Distinguished Professor of Business at Iowa State University. Dr. Allen 

serves on the editorial boards of the Transportation Journal and 

Transport Logistics, and he is currently Chair of the Committee for the 

Study of Freight Capacity for the Next Century at TRB. His expertise 

includes transportation regulation, resource allocation, income 

distribution, and managerial decisionmaking and his research has been 

published in numerous transportation journals.



* Daniel Brand is Vice President of Charles River Associates, Inc., in 

Boston, Mass. Mr. Brand has served as Undersecretary of the 

Massachusetts Department of Transportation, Associate Professor of City 

Planning at Harvard University, and Senior Lecturer in the 

Massachusetts Institute of Technology’s Civil Engineering Department. 

Mr. Brand edited Urban Transportation Innovation, coedited Urban Travel 

Demand Forecasting, and is the author of numerous monographs and 

articles on transportation.



* Jon E. Burkhardt is the Senior Study Director at Westat, Inc., in 

Rockville, Md. His expertise is in the transit needs of rural and small 

urban areas, in particular, the needs of the elderly population in such 

areas. He has directed studies on the ways in which advanced technology 

can aid rural public transit systems, the mobility challenges for older 

persons, and the economic impacts of rural public transportation.



* Sarah C. Campbell is the President of TransManagement, Inc., in 

Washington, D.C., where she advises transportation agencies at all 

levels of government, nonprofit organizations, and private foundations 

on transportation issues. Ms. Campbell is currently a member of the 

Executive Committee of the TRB. She was a founding director of the 

Surface Transportation Policy Project and currently serves as chairman 

of its board of directors.



* Christina S. Casgar is the Executive Director of the Foundation for 

Intermodal Research and Education in Greenbelt, Md. Ms. Casgar’s 

expertise is in transportation and logistics policies of federal, 

state, and local levels of government, particularly in issues involving 

port authorities. She has also worked with the TRB as an industry 

investigator to identify key issues and areas of research regarding the 

motor carrier industry.



* Anthony Downs is a Senior Fellow at the Brookings Institution. Mr. 

Downs’s research interests are in the areas of democracy, demographics, 

housing, metropolitan policy, real estate, real estate finance, “smart 

growth,” suburban sprawl, and urban policy. He is the author of New 

Visions for Metropolitan America (1994), Stuck in Traffic: Coping with 

Peak-Hour Traffic Congestion (1992), and several policy briefs 

published by the Brookings Institution.



* Thomas R. Hickey served until recently as the General Manager of the 

Port Authority Transit Corporation in Lindenwold, N.J. Mr. Hickey has 

23 years of public transit experience, and he is a nationally 

recognized authority in the field of passenger rail operations and the 

design of intermodal facilities.



* Ronald F. Kirby is the Director of Transportation Planning at the 

Metropolitan Washington Council of Governments. Dr. Kirby is 

responsible for conducting long-range planning of the highway and 

public transportation system in the Washington, D.C., region, assessing 

the air quality implications of transportation plans and programs, 

implementing a regional ridesharing program, and participating in 

airport systems planning in the region. Prior to joining the Council of 

Governments, he conducted transportation studies for the Urban 

Institute and the World Bank.



* Damian J. Kulash is the President and Chief Executive Officer of the 

Eno Transportation Foundation, Inc., in Washington, D.C. Dr. Kulash 

established a series of forums at the Foundation addressing major 

issues affecting all transportation modes including economic returns on 

transportation investment, coordination of intermodal freight 

operations in Europe and the United States, and development of a U.S. 

transportation strategy that is compatible with national global climate 

change objectives. He has published numerous articles in transportation 

journals and directed studies at the Congressional Budget Office and 

the TRB.



* Charles A. Lave is a Professor of Economics (Emeritus) at the 

University of California, Irvine where he served as Chair of the 

Economics Department. Dr. Lave has been a visiting scholar at the 

Massachusetts Institute of Technology and Harvard University, and he 

served on the Board of Directors of the National Bureau of Economic 

Research from 1991 through 1997. He has published numerous articles on 

transportation pricing and other topics.



* Stephen Lockwood is Vice President of Parsons Corporation, an 

international firm that provides transportation planning, design, 

construction, engineering, and project management services. Mr. 

Lockwood is also a consultant to the American Association of State 

Highway and Transportation Officials (AASHTO), the Federal Highway 

Administration (FHWA), and other transportation organizations. Prior to 

joining Parsons, he served as Associate Administrator for Policy at 

FHWA.



* Timothy J. Lomax is a Research Engineer at the Texas Transportation 

Institute at Texas A&M University. Dr. Lomax has published extensively 

on urban mobility issues and he developed a methodology used to assess 

congestion levels and costs in major cities throughout the United 

States. He is currently conducting research, funded by nine state 

transportation departments, to improve mobility measuring 

capabilities.



* James R. McCarville is the Executive Director of the Port of 

Pittsburgh Commission. He also serves as the President of the trade 

association, Inland Rivers’ Ports and Terminals, Inc., and is a member 

of the Marine Transportation System National Advisory Council, a group 

sponsored by the U.S. Secretary of Transportation. Mr. McCarville 

previously served as a consultant to the governments of Brazil, 

Uruguay, and Mexico on matters of port organization, operational 

efficiency, and privatization.



* James W. McClellan is Senior Vice President for Strategic Planning at 

the Norfolk Southern Corporation in Norfolk, Va., where he previously 

held positions in corporate planning and development. Prior to joining 

Norfolk Southern, he served in various marketing and planning positions 

with the New York Central Railroad, DOT’s Federal Railroad 

Administration, and the Association of American Railroads.



* Michael D. Meyer is a Professor in the School of Civil and 

Environmental Engineering at the Georgia Institute of Technology and 

was the Chair of the school from 1995 to 2000. He previously served as 

Director of Transportation Planning for the state of Massachusetts. Dr. 

Meyer’s expertise includes transportation planning, public works 

economics and finance, public policy analysis, and environmental impact 

assessments. He has written over 120 technical articles and has 

authored or co-authored numerous texts on transportation planning and 

policy.



* William W. Millar is President of the American Public Transportation 

Association (APTA). Prior to joining APTA, he was executive director of 

the Port Authority of Allegheny County in Pittsburgh, Pa. Mr. Millar is 

a nationally recognized leader in public transit and has served on or 

as Chair of the executive committees of TRB, the Transit Development 

Corporation, APTA, and the Pennsylvania Association of Municipal 

Transportation Authorities.



* Alan E. Pisarski is an independent transportation consultant in Falls 

Church, Va., providing services to public and private sector clients in 

the United States and abroad in the areas of transport policy, travel 

behavior, and data analysis and development. He has served as an 

advisor to numerous transportation and statistics agencies and 

transportation trade associations. He has also conducted surface 

transportation reviews for AASHTO and FHWA.



* Craig E. Philip is President and Chief Executive Officer of the 

Ingram Barge Company in Nashville, Tenn. He has served in various 

professional and senior management capacities in the maritime, rail, 

and intermodal industries and has held adjunct faculty positions at 

Princeton University and Vanderbilt University. Dr. Philip serves on 

the Executive Committee of the American Waterways Operators 

Association, the Marine Transportation System National Advisory 

Council, and the National Academy of Sciences’ Marine Board, and he is 

immediate past Chairman of the National Waterways Conference.



* Arlee T. Reno is a consultant with Cambridge Systematics in 

Washington, D.C. Mr. Reno has expertise in performance-based planning 

and measurement, multimodal investment analysis, urban transportation 

costs, alternative tax sources, and revenue forecasting for highway 

agencies. He has conducted reviews for the FHWA, AASHTO, and numerous 

state transportation agencies.



* Joseph M. Sussman is the JR East Professor in the Department of Civil 

and Environmental Engineering and the Engineering Systems Division at 

the Massachusetts Institute of Technology. Dr. Sussman is the author of 

Introduction to Transportation Systems (2000) and specializes in 

transportation systems and institutions, regional strategic 

transportation planning, intercity freight and passenger rail, 

intelligent transportation systems, simulation and risk assessment 

methods, and complex systems and he has authored numerous publications 

in those areas. He has served as Chair of TRB committees and as the 

Chairman of its Executive Committee in 1994, and he serves on the Board 

of Directors of ITS America and ITS Massachusetts.



* Louis S. Thompson is a Railways Advisor for the World Bank where he 

consults on all of the Bank’s railway lending activities. Prior to 

joining the Bank, Mr. Thompson held a number of senior positions in 

DOT’s Federal Railroad Administration, including Acting Associate 

Administrator for Policy, Associate Administrator for Passenger and 

Freight Services, Associate Administrator for Intercity Services, and 

Director of the Northeast Corridor Improvement Project. He has also 

served as an economics and engineering consultant.



* Martin Wachs is the Director of the Institute of Transportation 

Studies at the University of California, Berkeley and he holds faculty 

appointments in the departments of City and Regional Planning and Civil 

and Environmental Engineering at the university. Dr. Wachs has 

published extensively in the areas of transportation planning and 

policy, especially as related to elderly populations, fare and subsidy 

policies, crime in public transit, ethics, and forecasting. He 

currently serves as Chairman of the TRB and has served on various 

transportation committees for the state of California.



[End of section]



Appendix VII: GAO Contacts and Acknowledgments:



GAO Contacts:



JayEtta Z. Hecker (202) 512-2834

Katherine Siggerud (202) 512-2834:



Acknowledgments:



In addition to the above, Christine Bonham, Jay Cherlow, Helen 

DeSaulniers, Colin Fallon, Rita Grieco, Brandon Haller, David Hooper, 

Jessica Lucas, Sara Ann Moessbauer, Jobenia Odum, and Andrew Von Ah of 

GAO, as well as the experts identified in appendix VI, made key 

contributions to this report.



FOOTNOTES



[1] In this report, we define the surface transportation system as 

highways, mass transit systems, and railroads; and the maritime 

transportation system as ports, inland waterways, and the intermodal 

connections leading to them. Pipelines were not part of our review.



[2] P.L. 105-178 (June 9, 1998).



[3] P.L. 105-134 (Dec. 2, 1997).



[4] The two groups are the Interagency Committee on the Marine 

Transportation System and the Marine Transportation System National 

Advisory Council.



[5] The DOT data on expenditures included spending by the U.S. Coast 

Guard and the St. Lawrence Seaway Development Corporation for 

transportation.



[6] We adjusted the expenditure data to account for inflation using 

separate indexes for expenditures made by the federal government or 

state and local governments. We used price indexes from the U.S. Bureau 

of Economic Analysis’ National Income and Products Accounts.



[7] Throughout this report, the percentage calculations are based on 

amounts that have not been rounded.



[8] Data on state and local expenditures are only available through 

fiscal year 1999, while federal expenditures data are available through 

fiscal year 2000.



[9] David Shrank and Tim Lomax, 2002 Urban Mobility Report (College 

Station, TX: Texas Transportation Institute, June 2002).



[10] These include roads in national forests and parks and on military 

and Indian reservations.



[11] P.L. 102-240 (Dec. 18, 1991).



[12] Fixed guideway systems use and occupy a separate right-of-way for 

the exclusive use of public transportation services. They include fixed 

rail, exclusive lanes for buses and other high-occupancy vehicles, and 

other systems.



[13] The General Fund contains receipts that are not earmarked by law 

for a specific purpose, such as almost all income tax receipts.



[14] In nominal dollars, the Congress provided Amtrak with about $25 

billion from 1971 through 2002.



[15] Amtrak’s capital revenues are used to acquire property, plant, and 

equipment.



[16] In addition, Amtrak used a portion of its federal capital funding 

to pay for operating expenses related to overhauling equipment.



[17] As of May 2002, state and local government expenditures were not 

available for fiscal years after 1999. Therefore, total public sector 

expenditures are only reported through fiscal year 1999. Federal 

expenditure data are available for fiscal year 2000, but only 

appropriations data are available for fiscal years 2001 and 2002.



[18] Throughout this report, the percentage calculations are based on 

amounts that have not been rounded.



[19] State and local governments’ highway expenditures reported by the 

Bureau of Transportation Statistics are slightly lower than those 

reported in the FHWA’s Highway Statistics, because data from the FHWA 

include outlays for activities--such as law enforcement and patrols and 

policing of streets and highways--not included in the Bureau of 

Transportation Statistics’ data.



[20] Appropriations are not directly comparable to expenditures. 

Appropriations provide the authority to make obligations, which 

eventually turn into expenditures. However, those expenditures might 

not be made in the same fiscal year as the appropriations.



[21] Under the RABA provision, the annual spending levels that are 

guaranteed for most federal highway programs are to be adjusted upward 

or downward during each fiscal year if the receipt levels in the 

Highway Account of the Highway Trust Fund increase or decrease from 

those projected in TEA-21.



[22] However, Amtrak estimates that states will contribute $223 million 

to Amtrak routes and infrastructure in 2002.



[23] Data were compiled from issues of the survey released between 1994 

and 2001 (tables B-4, B-5, B-6, 5.6, and 5.8) and were adjusted for 

inflation using separate indexes from U.S. Bureau of Economic Analysis’ 

National Income and Products Accounts for individual expenditures on 

new vehicles or business expenditures on transportation equipment. The 

survey data do not include overall private investment in transit 

systems.



[24] The projections used in this report were developed by the DOT 

modal administrations, the Corps of Engineers, and Amtrak. We did not 

verify the data used in making projections, and we do not endorse the 

projections as accurate.



[25] Other factors also influence travel but were not always included 

in travel projections. For example, growth in miles driven on public 

roads is influenced by shifts in population to less populated 

residential areas, transit ridership is affected by levels of 

immigration, and freight travel is affected by technological 

innovations that improve transportation efficiency, but the influence 

of these factors is not taken into account. In addition, investments in 

additional transportation capacity can stimulate corresponding 

increases in travel demand. Consequently, these national travel 

projections need to be used carefully in evaluating how capacity 

improvements or other changes in one mode of transportation might 

affect travel across other modes and the transportation system as a 

whole.



[26] FHWA provided us with forecasts for total (passenger and freight) 

vehicle miles traveled from individual states, the District of 

Columbia, and Puerto Rico (see app. II). These project future travel 

through 2020 rather than through 2010.



[27] In 2000, the latest year for which comparable data are available, 

domestic airlines carried about 657 million passengers, intercity buses 

carried about 359 million passengers, and Amtrak carried about 22.5 

million passengers.



[28] The national Amtrak ridership statistics, however, mask some 

regional trends. Combined ridership in the Northeast corridor and on 

the West Coast has grown by about 2 million passengers since 1994, 

while ridership on the rest of the intercity passenger rail system has 

generally decreased.



[29] According to the American Public Transportation Association, 

demand response modes are passenger cars, vans, or buses with fewer 

than 25 seats operating in response to calls from passengers or their 

agents to the transit operator, who then dispatches a vehicle to pick 

up the passengers and transport them to their destinations.



[30] Numerous projections of freight travel have been produced for 

particular modes, corridors, or commodities. For example, the Corps of 

Engineers has produced projections for tons moving on the inland 

waterways, while the Latin America Trade and Transportation Study 

contains projections of trade patterns between the United States and 

Latin America. For this report, we relied on projections produced by 

FHWA, because these are the only projections that predict national 

freight travel on all modes.



[31] Some freight may be moved by more than one mode before reaching 

its destination, such as moving by rail for one segment of the trip, 

then by truck to its final destination. This may result in tons being 

counted on more than one mode in FHWA’s projections. In addition, 

FHWA’s maritime freight projections do not include international trade 

of bulk products and some inland domestic bulk shipments.



[32] Ton-miles are calculated by multiplying the total number of tons 

moved by the total miles traveled.



[33] Bureau of Transportation Statistics, Transportation Statistics 

Annual Report 2000 (Washington, D.C.: U.S. Department of 

Transportation, 2001).



[34] An Assessment of the U.S. Marine Transportation System 

(Washington, D.C.: U.S. Department of Transportation, September 1999).



[35] “Characteristics and Changes in Freight Transportation Demand: A 

Guidebook for Planners and Policy Analysts,” prepared for the National 

Cooperative Highway Research Program, Project 8-30 Phase II 

(Washington, D.C.: Transportation Research Board, June 19, 1995). 

Bureau of Transportation Statistics, Transportation Statistics Annual 

Report 2000 (Washington, D.C.: U.S. Department of Transportation, 

2001).



[36] David Shrank and Tim Lomax, 2002 Urban Mobility Report (College 

Station, TX: Texas Transportation Institute, June 2002).



[37] U.S. General Accounting Office, Mass Transit: Many Management 

Successes at WMATA, but Capital Planning Could Be Enhanced, GAO-01-744 

(July 2, 2001).



[38] Massachusetts Institute of Technology and Charles River 

Associates, Inc., Mobility 2001: World Mobility at the End of the 

Twentieth Century and Its Sustainability, (World Business Council for 

Sustainable Development, August 2001).



[39] U.S. General Accounting Office, Status of the Interstate Highway 

System, GAO-02-571 (May 31, 2002).



[40] An Assessment of the U.S. Marine Transportation System 

(Washington, D.C.: U.S. Department of Transportation, September 1999).



[41] Several sources of nonrecurring delays were not considered in this 

study, including special events, rain, rail crossings, and toll booths. 

S.M. Chin, O. Franzese, D.L. Greene, H.L. Hwang, and R. Gibson, 

Temporary Losses of Capacity Study and Impacts on Performance, Report 

No. ORNL/TM-2002/3 (Oak Ridge, TN: Oak Ridge National Laboratory, May 

2002).



[42] Federal Highway Administration and Federal Transit Administration, 

1999 Status of the Nation’s Highways, Bridges, and Transit: Conditions 

and Performance (Washington, D.C.: U.S. Department of Transportation, 

2000).



[43] The Bureau of Transportation Statistics’ Annual Report 2000 

defines accessibility as a measure of the relative ease with which 

people and businesses can reach a variety of locations.



[44] Jon E. Burkhardt, Arlene M. Berger, Michael Creedon, and Adam T. 

McGavock, Mobility and Independence: Changes and Challenges for Older 

Drivers (July 1998). This report was developed under a cooperative 

agreement with the U.S. Department of Health and Human Services (DHHS), 

under the auspices of the Joint DHHS/DOT Coordinating Council on Access 

and Mobility.



[45] Paratransit is a service where individuals who are unable to use 

the regular transit system independently (because of a physical or 

mental impairment) are picked up and dropped off at their destinations.



[46] Federal Transit Administration, Access to Jobs: Planning Case 

Studies (Washington, D.C.: U.S. Department of Transportation, September 

2001).



[47] Community Transportation Association of America, Status of Rural 

Public Transportation-2000 (April 2001).



[48] Coordinating Council on Access and Mobility, Planning Guidelines 

for Coordinated State and Local Specialized Transportation Services 

(Washington, D.C.: U.S. Department of Transportation, Dec. 20, 2000).



[49] See U.S. General Accounting Office, Environmental Protection: 

Federal Incentives Could Help Promote Land Use That Protects Air and 

Water Quality, GAO-02-12 (Washington, D.C.: Oct. 31, 2001).



[50] MPOs are organizations of city, county, state, and federal 

officials that provide a regional forum for transportation planning.



[51] Report of the President’s Commission to Study Capital Budgeting, 

President’s Commission to Study Capital Budgeting (Washington, D.C.: 

Government Printing Office, February 1999).



[52] Federal Highway Administration, Moving Ahead: The American Public 

Speaks on Roadways and Transportation in Communities, FHWA OP-01-017 

(Washington, D.C.: U.S. Department of Transportation, February 2001).



[53] Joseph M. Sussman, “Transitions in the World of Transportation: A 

Systems View,” Transportation Quarterly 56 (2002): 21-22.



[54] Anthony Downs, Stuck in Traffic: Coping with Peak-Hour Traffic 

Congestion (The Brookings Institution: Washington, D.C.: 1992) p.64.



[55] National Research Council, Transportation Research Board, Curbing 

Gridlock: Peak-Period Fees to Relieve Traffic Congestion (Washington, 

D.C.: 1994).



[56] Proponents of congestion pricing, however, such as the Committee 

for Study of Urban Transportation Congestion Pricing of the 

Transportation Research Board, have noted that all income groups can 

benefit if there is an appropriate distribution of the revenues 

obtained through congestion pricing.



[57] Grant Anticipation Revenue Vehicles allow states to pay debt 

financing costs with future anticipated federal highway funds.



[58] However, one panelist believed that increased spending on 

transportation would never alleviate congestion and that such spending 

increases would reduce the funds available for dealing with other 

problems.



[59] See U.S. General Accounting Office, Highway Financing: Factors 

Affecting Highway Trust Fund Revenues, GAO-02-667T (Washington, D.C.: 

May 9, 2002).



[60] Because some capital funds from the federal Urbanized Area Formula 

program were used to pay for operating expenses, the 2 percent 

operating expense figure may be somewhat understated and the 50 percent 

capital expenditure figure may be somewhat overstated.



[61] P.L. 105-34 (Aug. 5, 1997).



[62] Locks and dams serve other purposes in addition to navigation, 

including irrigation, flood control, and recreation.



[63] The exception is the national projection of passenger miles 

traveled on transit, which is actually an aggregate of local 

projections that are capacity-constrained and may consider interactions 

among modes.



[64] A separate model was developed for buses, using population growth 

as the independent variable.



[65] MPOs are organizations of city, county, state, and federal 

officials that provide a regional forum for transportation planning.



[66] According to FTA, the 33 metropolitan areas account for 

approximately 90 percent of the nation’s transit use, so they should 

provide a reasonable approximation of national-level forecasts.



[67] There is no forecast for New York City, so FTA substituted the 

average growth rate for the other major east coast cities, which is 

1.32 percent.



[68] Methodologies used by the MPOs to derive their forecasts vary, 

although officials at FTA told us that there are two common types. One 

type uses a standard four-step modeling process involving data on how 

many trips people make, where people are going, the modal split of 

trips, and actual routes. The second type is econometric, in which 

regional forecast data on income and demographics are fed into a model 

to derive travel projections.



[69] Federal Highway Administration and Federal Transit Administration, 

1999 Status of the Nation’s Highways, Bridges, and Transit: Conditions 

and Performance (Washington, D.C.: U.S. Department of Transportation, 

2000).



[70] Local freight travel forecasts done by the Corps of Engineers’ 

district offices for use in specific project feasibility studies do 

consider possible diversion to other alternative modes as a result of 

increasing congestion.



[71] HPMS also includes data from the District of Columbia and Puerto 

Rico.



[72] These projections have not yet been updated with data from the 

2000 Census.



[73] Federal Highway Administration and Federal Transit Administration, 

1999 Status of the Nation’s Highways, Bridges, and Transit: Conditions 

and Performance (Washington, D.C.: U.S. Department of Transportation, 

2000).



[74] Massachusetts Institute of Technology and Charles River 

Associates, Inc., Mobility 2001: World Mobility at the End of the 

Twentieth Century and Its Sustainability (World Business Council for 

Sustainable Development, August 2001).



[75] According to the American Public Transportation Association, 

demand response modes are passenger cars, vans, or buses with fewer 

than 25 seats operating in response to calls from passengers or their 

agents to the transit operator, who then dispatches a vehicle to pick 

up the passengers and transport them to their destinations.



[76] The U.S. economy has become increasingly integrated with the 

global economy, as domestic and foreign companies manage worldwide 

production and distribution systems. For example, auto manufacturers 

may locate their factories and warehouses in separate countries or 

continents from their retail outlets. See Characteristics and Changes 

in Freight Transportation Demand: A Guidebook for Planners and Policy 

Analysts, prepared for the National Cooperative Highway Research 

Program, Project 8-30 Phase II (Washington, D.C.: Transportation 

Research Board, June 19, 1995).



[77] Bureau of Transportation Statistics, Transportation Statistics 

Annual Report 2000 (Washington, D.C.: U.S. Department of 

Transportation, 2001).



[78] Ton-miles are calculated by multiplying the tons of commerce being 

moved by the number of miles moved.



[79] The Mobility 2001 report states that inland waterways can move 

very large shipments of grain or lumber with a minimal expenditure of 

energy. For example, on the lower Mississippi River, 40 or more 10-ton 

barges can be lashed together into a single tow for movement down the 

river. Rail is also cost-efficient for shipping low-value bulk 

commodities long distances. However, because both of these modes are 

slower than truck travel on highways, and are limited to fixed 

waterways or tracks, trucks are more often used for transporting high-

value goods and for local deliveries. Ocean shipping is the dominant 

mode for overseas freight tonnage because extremely large ships 

operating with small crews can move great tonnages vast distances at 

minimal costs.



[80] “Characteristics and Changes in Freight Transportation Demand: A 

Guidebook for Planners and Policy Analysts,” prepared for the National 

Cooperative Highway Research Program, Project 8-30 Phase II 

(Washington, D.C.: Transportation Research Board, June 19, 1995).



[81] A subsidy is provided when the tax deductions that investors are 

permitted to claim for depreciation of assets are larger (in present 

value terms) than the amount of true economic depreciation of those 

assets. Although economic depreciation is difficult to estimate, the 

Department of the Treasury study suggests that tax depreciation exceeds 

economic depreciation for certain transportation assets. (See 

Department of the Treasury, Report to the Congress on Depreciation 

Recovery Periods and Methods, July 2000.)



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