Federal, state, and local governments continue to struggle to keep pace with the nation's transportation needs for providing new capacity and maintaining the current systems. Developing sufficient sustainable financial resources to meet those needs is key to the nation's economic future and quality of life. The need for increased investment in transportation is clear as the following examples illustrate:

• Demand for transportation is increasing rapidly and exceeding available capacity.
• Congestion causes major adverse economic impacts on America's urbanized areas by substantially increasing commuting times and hurting the quality of life.
• There is a need for more efficiency in the system to ensure mobility and freight capacity.

Current options for financing (e.g., user fees, tolls, bonding, use of general revenue, and other innovative techniques allowed by Federal legislation) are not sufficient to meet well-documented future needs. The Federal Highway Trust Fund is not able to keep pace with the currently authorized highway and transit programs--much less growing programs. And states and local governments are also experiencing difficulties financing their programs.

In preparation for making these essential investments, the American Association of State Highway and Transportation Officials (AASHTO) seeks an analysis of future funding options to meet highway and transit needs. This project will respond to these needs by providing necessary data on traditional options and new ways to increase investment at all levels of government.

This project was intended to present options for all levels of government to close the highway and transit investment deficits on a sustainable basis.

The consultant team structured their work in three phases:

PHASE 1. Establish the needs and available investment levels by comparing documented needs with estimated revenues available at all levels of government.
(1.) Based on information available from the U.S. Department of Transportation (U.S. DOT), AASHTO, and other sources, summarize and, to the extent necessary, extrapolate investment needs over the next 12 years (2006 to 2017) to maintain and improve the nation's highway and transit systems. (2.) Summarize and estimate investment levels from existing revenue and financing options based on information available from the U.S. DOT, AASHTO, and other sources over the same period. (3.) Compare the results of Tasks 1 and 2, and identify the shortfall.

PHASE 2. Analyze options that could be used to close the funding shortfall, considering the advantages and limitations of revenue-generation and financing options, such as the ability to maintain purchasing power over time, ease of acceptance and deployment, and collection efficiency.
(4.) Analyze information on user fees (including fuel taxes, tolls, motor-vehicle fees, and transit fares), bonding, existing innovative financing tools, value capture techniques (such as impact and development fees), and new financing options. Collect information on new options being considered, particularly, at the state and local levels to increase investment. This task will also compile information on options used in other countries to increase highway and transit investment. (5.) Suggest prospective new funding options and discuss approaches for removing barriers to implementation. (6.) Submit an interim report to document Tasks 1 through 5 for review by the NCHRP.

PHASE 3. Discuss how options could be blended to reduce the shortfall, to suggest what a portfolio of funding options might look like at various governmental levels.
(7.) Discuss how the traditional and new funding options can be blended to close the funding gaps identified in Phase 1. Discuss the implementation costs, risks, and barriers associated with the options. In addition, develop methods to ensure that the purchasing power of options can be maintained automatically. (8.) Submit a final report that documents the entire research effort.

PRODUCT AVAILABILITY: The project final report is available as NCHRP Web-Only Document 102.