Since the Transportation Equity Act for the 21st Century became law, fiscally strapped states and localities trimmed their own spending on highways, the Government Accountability Office says. In a report issued Aug. 31, GAO--formerly called the General Accounting Office--says that evidence suggests states and localities substituted more federal road aid for their own. That means total spending on roads and bridges from all government sources didn’t rise as much as some had hoped.


From 1998 through 2002, GAO says inflation-adjusted state and local highway spending fell 4%, from $37 billion to $35.7 billion while federal aid jumped 40%, from $21.9 billion to $30.7 billion.

Substituting federal for non-federal road funds isn't new, but appears to have increased, the report says. GAO says its analytical model suggests that in the 1990s states substituted about 60¢ of each dollar increase in federal aid for their own funds that would gone to highways. That compares with a substitution of 18¢ from 1983 to 1986, it says.

GAO said that in comments on a draft of its report, officials at the U.S. Dept. of Transportation "said that to the extent substitution occurred and increased during the 1990s, it was also likely due to changes in states' revenues and priorities," and noted that the federal share of highway capital spending decreased from more than 55% in the early 1980s to about 45% now.

GAO said that DOT officials "further stated that substitution may reflect appropriate resource allocations by states and that preserving states' flexibility has been a priority of the federal-aid highway program and is a goal of DOT's [transportation] reauthorization proposal."