Pursuant to a congressional request, GAO reviewed issues related to the flexible use of Intermodal Surface Transportation Efficiency Act (ISTEA) funds, focusing on the: (1) extent that states and localities use ISTEA funds to finance highway, mass transit, and nontraditional projects; (2) factors that influence the flexible use of ISTEA funds; and (3) adequacy of analytical tools for making transportation-investment decisions. GAO found that: (1) states' and localities' use of ISTEA funds to finance mass transit projects has been limited; (2) flexible use of ISTEA funds is facilitated by congestion and air quality concerns; (3) state fuel tax restrictions and infrastructure needs hinder the flexible use of ISTEA funds; (4) states will need time to adapt to changes resulting from ISTEA; (5) better tools are needed for making investment decisions; (6) common measures would enhance state and local governments' ability to make modal trade-offs; (7) improved travel demand models are needed to analyze the impacts of transportation projects on air quality; and (8) the travel model improvement program does not adhere to the Department of Transportation's (DOT) policy on coordinating program research with related efforts.

Transportation Infrastructure: Better Tools Needed for Making Decisions on Using ISTEA Funds Flexibly

GAO discussed the development of integrated transportation systems, focusing on: (1) funding flexibility provisions; (2) the factors that influence the flexible use of funds; (3) the effectiveness of transportation control measures (TCM) in attaining air quality goals; and (4) the adequacy of analytical tools for comparing transportation alternatives and measuring the impact of transportation projects. GAO noted that: (1) states and localities have made limited use of the Intermodal Surface Transportation Efficiency Act's (ISTEA) flexible funding provisions and have focused on congestion mitigation and air quality improvement; (2) the factors that influence the flexible use of ISTEA funds include congestion and air quality concerns, state restrictions on the use of fuel taxes, highway and mass transit infrastructure needs, and slow adaptation to program changes; (3) there is not adequate information available to make reliable projections of the impact of TCM and other transportation measures on air quality; (4) market-based TCM, although more effective than traditional TCM, are more costly and will generate more public resistance; (5) improved data and analytical tools are needed to make overall transportation investment decisions; (6) common measures for comparing transportation alternatives are not available; and (7) state and metropolitan planning organizations' transportation investment decisions are complex and involve the public's increasing reliance on automobiles to meet transportation needs, divergent interests, and acceptance of transportation alternatives.