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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � 4 Comparison of Federal Roles in Highway, Air, and Marine Transportation The federal roles in the aviation and highway modes are discussed in this chapter, and they are compared with federal involvement in marine transportation. Differences in these roles stem from a number of factors, including each mode’s scale, scope, and patterns of use. History has also influenced the current federal roles. In the case of highways, the federal government began providing infrastructure and related services long after the private sector and other nonfederal entities had assumed key roles and responsibilities. State and local governments built and operated roads decades before the federal government, at the start of the automobile age less than 100 years ago, began contributing to highway funding and standard-setting. In contrast, almost from its inception

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � the federal government began constructing, maintaining, and operating the infrastructure of the nation’s waterways, most of which cross state boundaries. State, local, and private entities retained the responsibility of providing port facilities and other waterfront infrastructure to accommodate waterborne traffic. By the time aviation became a major mode of transportation after World War II, the federal government had established a role similar to the one in the marine domain. It preempted control of the airways while leaving the responsibility for providing airports and terminal facilities to state and local governments and the private sector. However, rapid advances in aircraft capacity and range, especially after the introduction of fast jet airliners, compelled the federal government to seek ways to influence airport development. Because traffic constraints at one airport can quickly affect air traffic throughout the system, the federal government had a strong interest in ensuring that local facilities were well equipped and well run. An appreciation of the unique history and characteristics of each mode is helpful in understanding the evolution of differences among the modes in federal involvement, institutional arrangements, funding, and divisions of public- and private-sector responsibility. There are also similarities, which suggests that some features of federal programs can be adapted to others. The aim of this chapter is to identify aspects of the federal role in the highway and aviation modes that have been beneficial and may have application for marine transportation. The chapter begins with an overview of the structural and institutional settings of the federal highway and aviation programs, including historical circumstances that have influenced them. Consideration is given to how decisions are made in these programs. The focus is on the role of user financing, national trust funds, and system performance information and analyses. The review does not cover the two other major modes of long-distance transportation, the railroad and pipeline sectors. Although they are important modes for freight movement, their infrastructure is paid for largely through private means. The aim of this chapter is to identify elements of other federal transportation programs that have proved valu-

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � able to federal decision makers and that may be transferable to the marine transportation system (MTS). Inasmuch as the federal roles in the highway and aviation sectors have more in common with the federal role in the maritime sector, they are the most suitable candidates for comparison. PROGRAM STRUCTURES AND INSTITUTIONS Federal Highway Program Today’s federal highway program is best understood in the context of its history, which can be divided into three distinct phases relating to the creation of the Interstate highway system. The pre-Interstate phase began in the decade before World War I, when automobiles began to proliferate and the federal government began to provide state and local governments with added resources to improve and connect their local and county road systems into a national system. In the decade after World War II, Congress greatly expanded this role by planning and funding the 44,000-mile Interstate highway system. Most of this freeway network was completed by the early 1980s. Over the past two decades, the federal government has continued its program of aid to state and local governments for highway and public transportation development, but with fewer stipulations on how the aid can be spent. During each phase, the level of federal involvement in the development of the highway system has changed, but the basic nature of this involvement has stayed the same. State and local governments continue to own and operate the nation’s highways, while the federal government provides technical advice and significant financial aid to improve their operations and safety and to increase their linkages with one another and with the nation’s other transportation modes. Congress began regularly authorizing federal aid to states for the construction and improvement of public roads beginning in 1912. In the decades that followed, it defined several important features of the federal-aid highway program that would have lasting effects on the federal role. One was that the federal agency administering the aid, then the Bureau of Public Roads (BPR), would not choose the highway projects of the states

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � receiving the aid. Funds would be apportioned among the states annually according to formulae defined in legislation and based on factors such as land area, highway mileage, population, and motor vehicle registrations. Rather than prescribing the use of funds for specific projects, Congress called on the states and BPR to define a system of primary highways that would take priority in the distribution of federal aid. Within these broad parameters, states could use the funds for eligible projects as they wished. BPR was thus given no role in deciding how much federal aid individual states would receive or precisely how they would use the aid. BPR was expected to work in a consultative and cooperative manner with the states. To a large extent, it did so and offered technical advice and guidance on major project selections and design decisions (Seely 1987). BPR found the mechanism of apportioning federal funds by statutory formula to be advantageous. Because it did not have to decide the amount of federal aid to be given to each state on a project-by-project basis, it was insulated from certain political conflicts. It could exercise oversight without having to be a regulatory agency committed to establishing the detailed parameters of the program. In fulfilling this stewardship role, BPR became comfortable with the use of research and information dissemination as instruments of policy and program guidance. Moreover, the agency engaged in a great deal of institution building. It sought to raise professional standards and the level of technical knowledge in the state highway departments. In the decade after World War II, Congress designated and began allocating funds for the construction of the Interstate highway system. This program brought important changes in the character of the entire federal highway program. By defining the specific routes to be included on the Interstate system, as opposed to simply specifying eligibility for federal aid, Congress substantially expanded the federal role. Nevertheless, many of the basic tenets of the federal-aid program were unchanged. For instance, Congress provided a statutory formula for apportioning funds among states for Interstate construction. Accordingly, BPR—which was later renamed and reorganized as the Federal Highway Administration (FHWA)—remained free from having to make politically sensitive

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � decisions about each state’s share of the federal distribution. Such policy decisions were left to the legislative process, where they remain today. In recent years, Congress has made additional changes in the federal-aid program, which were prompted in part by the winding down of the construction phase of the Interstate system. The states no longer had costly Interstate highway construction projects to drive their programs, and they faced increasing demands in many other areas, such as relieving highway congestion, maintaining an aging highway infrastructure, and addressing air quality and other environmental concerns. Therefore, they sought greater flexibility in how federal funds could be used. In passing the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), Congress granted this flexibility. The dominant theme of ISTEA was that states and local authorities should be allowed to choose the best ways to invest their federal aid to provide well-functioning and efficient surface transportation; investments could include public transit, bikeways, and walkways. ISTEA, therefore, created major block grant programs for states to use in improving their surface transportation systems, with the input and acceptance of local interests represented by metropolitan planning organizations. ISTEA also called for the designation of a 160,000-mile National Highway System that would encompass the Interstate highways and other major primary routes. Federal aid would go to the system,but states would have significant leeway to use the aid as they wished on the eligible segments. As in the past, the federal highway program today is largely run by the states, but with an increasing role for local interests through metropolitan planning organizations and other entities in more rural areas. FHWA serves mostly in a stewardship role centered on distributing and accounting for the federal aid and providing research and strategic planning. In fulfilling this role, FHWA conducts and encourages research and analysis and facilitates technology transfer and information dissemination. As discussed later in this chapter, the information developed by FHWA for measuring and monitoring the condition and performance of the nation’s highways has proved especially helpful to Congress and other federal decision makers.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � FHWA is joined in the U.S. Department of Transportation (DOT) by the National Highway Traffic Safety Administration (NHTSA) and the Federal Motor Carrier Safety Administration (FMCSA), both of which have highway-related roles. NHTSA’s main responsibility is to monitor and regulate the safety and fuel efficiency of motor vehicles, particularly the manufacture and design of passenger cars. FMCSA is responsible for monitoring and regulating the operation of intercity trucks and buses with regard to safety. Federal Aviation Program The aviation system has been influenced by the federal government to a greater extent than has the surface transportation system, either because it is so different in form and function or because it emerged at a much later date. It is helpful to review some of the history of air transportation in the United States to understand how the federal role has evolved to its present state. The United States had roads long before the federal government began helping with their financing and development into a national system. By the time the federal highway program started to take shape early in the 20th century, the automobile era had begun and Americans owned millions of motor vehicles (McShane 1988). In comparison, the federal government had a high profile earlier in the development of the aviation industry’s military and civil components. An active federal presence in the air transportation industry was viewed as essential, first to promote its technological and commercial development and then to ensure a consistently high level of safety and service. Like most other transportation modes, the aviation sector functions as a public- and private-sector enterprise. Federal, state, and local governments share many infrastructure and oversight responsibilities, and the private sector owns and operates the vehicles that use the infrastructure. Airport runways and terminal buildings are provided mostly by state and local authorities. Air traffic control services and navigation aids are provided by the federal government, which also regulates the safety of aircraft and their operations. These federal functions are comparable with

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � those in the marine sector; the divisions of responsibility among state, local, and federal authorities with regard to airside (federal) and landside (state, local, and private) elements were modeled after the divisions that had long existed in maritime domain for waterside and landside elements (Horonjeff and McKelvey 1983, 17). Although the federal roles in the aviation and maritime domains mirrored one another in basic design, the ways in which these roles have been carried out have followed markedly different paths. When Congress created the Federal Aviation Administration (FAA) in 1958, its aim was to consolidate the responsibility for air traffic control, navigation aids, and safety regulation into one federal agency. In little more than a decade, it greatly expanded the agency’s authorities and capabilities to influence the quality and capacity of the nation’s airports. To build an integrated and efficient national aviation system, Congress extended increasing amounts of financial aid to public airports to help them invest in longer and more durable runways, modern towers, and larger terminal facilities capable of handling the larger jet airliners. However, acceptance of this aid would obligate the airports to abide by federal criteria for the design and operation of their facilities, limits on the fees they could charge airlines and other aviation users, and restrictions on how they could spend their revenues. In addition, FAA control over air traffic, which was viewed as essential by Congress to achieve a safe and orderly system, meant that state and local authorities would have little control over the number, type, and scheduling of aircraft using their airports. This federal power became increasingly controversial as noise from jet aircraft impinged on the communities surrounding many large and growing urban airports. FAA’s main functions now encompass regulation, operations, and grant-making. Its regulatory role focuses on ensuring aviation safety and covers nearly all aspects of aviation production and operations. It regulates the design, testing, and manufacturing of aircraft in great detail. It sets the standards for pilot training and licensing, airline operations, and the use of general aviation aircraft. It has a major operational role in the daily running of the nation’s air traffic control system and in its planning and capital investment. The agency is responsible for certifying airports,

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � distributing airport capital grants, and developing the specifications governing the design of airport facilities and equipment eligible for grants. The varied roles and responsibilities of FAA make it unique among the agencies responsible for federal transportation programs. The federal roles in the other modes are either more limited (as is the case for highways and public transit) or more dispersed among a number of agencies (as is the case for marine transportation). In no other mode of transportation are federal responsibilities so extensive and concentrated within one agency. USER FINANCING AND TRUST FUNDS Creation of Trust Funds for User Fees The federal highway and aviation programs are financed largely from the federal fees and taxes levied on the users of these transportation systems. Receipts from the fees are credited to national trust funds that cover most federal program costs. User financing of highways was first introduced by state governments and then adopted by the federal government to finance its federal-aid program. A number of states began taxing motor fuel soon after World War I, and by 1930 most were doing so. The first federal gasoline tax of 1 cent per gallon was enacted in 1932 to raise revenue to reduce the national deficit. The tax was barely changed over two decades. Just before congressional passage of the 1956 Highway Act, it stood at 2 cents per gallon. Increases in the federal fuel tax (to 3 cents per gallon) and the creation of a national Highway Trust Fund for the receipts from these tax revenues were part of the 1956 legislation underlying the funding of the Interstate highway program. Congress chose “pay-as-you-go” financing for the Interstate system; annual appropriations to states were based on the revenues generated by the fuel tax. Because many states and highway interests were concerned that Congress might divert fuel-tax revenues to nonhighway purposes, the Highway Trust Fund account was established as a political compromise (Rose 1979). Revenues from other highway-related excise taxes, including taxes on tires, tubes, and truck sales, were also credited to the account.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 The Highway Trust Fund has remained largely unchanged in function over the course of nearly five decades. Fuel tax rates have been raised and some other taxes have been added. Congress has changed the definition of eligible expenditures—for instance, to include public transit and bicycle and pedestrian facilities. Various groups of highway users (e.g., heavy trucks, urban motorists, rural motorists) account for different proportions of revenues, which are not necessarily directly related to a group’s level of system usage or to the benefits conferred on it. In general, however, the revenues generated from highway users have been devoted to the trust fund and spent on the federal highway and transit programs. The Highway Trust Fund, which was modeled after the Social Security Trust Fund, was the forerunner of trust funds for financing other federal transportation programs, including the federal aviation program. The Airports and Airways Trust Fund (commonly known as the Aviation Trust Fund) was established by Congress to credit the federal tax revenues generated from users of the aviation system. The principal tax on aviation users is the passenger ticket tax, which was first imposed during the early 1940s to help finance the war effort. A similar tax was imposed on intercity rail and bus tickets, and the revenues in all cases were credited to the general fund. The Aviation Trust Fund was created in 1970 for essentially the same reason that Congress created the Highway Trust Fund: to provide more predictable funding for the air traffic control and airport capital programs and to guard against diversion of revenues to nonaviation purposes. All passenger ticket tax revenues were credited to the account, along with the revenues generated from other aviation-related taxes, such as aircraft tire and tube taxes and impositions on aviation fuel. While Congress originally intended the Aviation Trust Fund to be used exclusively for funding capital improvements for the nation’s airports and air traffic control system, it gradually expanded its coverage to include most of FAA’s budget. Today, the trust fund covers more than 90 percent of the agency’s budget and provides more than $3.5 billion per year in aid to public airports for capital improvements.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � Effects of Trust Funds Both the aviation and the highway trust funds are more than just accounting devices for crediting revenues and debiting expenses. They have legal and political effects. In a legal sense, the trust funds provide long-term contracting authority. Because Congress authorizes the aviation and surface transportation programs on multiyear cycles, each reauthorization specifies annual obligation levels for the covered years. Contracting authority means an agency can obligate funds over the course of several years without having to wait for annual appropriations. This enables state and local transportation agencies to contract for multiyear highway and aviation projects and procurements with considerable assurance that the federal government will meet its obligation or risk causing state and local governments to default. In a political sense, the trust funds provide some predictability to the highway and aviation programs, at least in terms of the overall funding levels. The ability to estimate the magnitude of the revenue streams credited to the funds each year makes Congress more willing to vote for long-term authorizations that obligate use of the funds for several years. And because these revenue streams are derived from taxes and fees paid by users, there is a positive relationship between funding levels and usage of the system, which has a correlation to need. Of course, the establishment of a trust fund with dedicated revenue sources does not, by itself, guarantee that Congress will continue to reauthorize the revenue sources or devote all credited trust fund receipts to the targeted program. It can divert the funds to other uses. Nevertheless, the political influence of an established trust fund is significant. All trust funds have their origins in past political agreements that are difficult for Congress to reshape fundamentally. As a practical matter, Congress has more latitude in deciding how trust fund revenues will be allocated within the overall aviation or surface transportation programs during each reauthorization period. Revenues credited to both the aviation and highway trust funds are used for nearly all federal activities in their respective modes. During each reauthorization,

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � Congress must decide whether more or less money should go to safety initiatives, environmental programs, research and development, capacity enhancement, and other areas of interest. Apportionment formulae may be changed, new programs may be added, others programs may be ended, and funds may be shifted among activities. Congress makes these decisions with input from the administering agencies and the president and on the basis of its own assessments of priorities and needs. ISTEA provides an example of how Congress can change program emphasis and approaches in fundamental ways. In this landmark legislation reauthorizing the federal highway and transit programs in the post-Interstate phase, Congress emphasized flexibility and local (not just state) participation in the selection of projects eligible for federal funding. It encouraged states and localities to manage their transportation infrastructure by defining transportation objectives aimed at national goals, such as congestion mitigation and air quality improvements, and then to apply the most suitable means to achieve them. The act set aside funds for states to use for new and nontraditional investments and activities that had previously not been eligible for federal aid—for example, bicycle paths, carpooling incentives, and transit facilities. The act did retain limitations on the use of funds, especially for projects and programs that could not readily be linked to national highway and transit program goals and benefits. Because ISTEA-authorized funding was drawn from the Highway Trust Fund, highway user groups and other highway interests objected to the funds going too far afield. Nonhighway projects serving intermodal freight, such as a rail line to a port, were deemed ineligible unless the project could be shown to reduce motor vehicle pollutant emissions in a region not attaining federal air quality standards. In enacting ISTEA and thus expanding the scope of federal interest in the performance of the surface transportation system, Congress also began demanding that DOT provide more extensive information and analyses on highway and transit system performance and conditions. In making funds available to achieve a wider range of surface transportation goals through more flexible means, Congress recognized the importance of hav-

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � aviation programs have been described in this chapter. Program comparisons will be made in this section. First, however, the influences of the basic physical and transportation use characteristics of each system on the federal role will be reviewed. Nature and Extent of the Transportation Systems The scale and scope of the highway system are enormous. It extends into every jurisdiction of the country and involves a large number and diversity of users; there are 4 million miles of public roads in the United States and more than 200 million vehicles operating on them. Highways are used for passenger transportation, freight movement, and the provision of services, both local and long-distance. In addition, highways are the most interconnected of all the transportation modes. They are linked to one another and to every other major mode of transportation. Almost all freight shipments and most travelers make at least part of their journey on highways, whether in an automobile, a truck, or a transit bus. The ubiquity and diversity of use, as discussed later, have had implications for the highway system’s organizational and institutional structures. The aviation system also extends widely. Almost every county in the United States has an airport, whether a large commercial complex or a small general aviation facility. The aviation system is both national and international in scope, and it is a highly connected network. Traffic flows in one part of the network affect flows elsewhere, especially since the advent of the hub-and-spoke system for airline operations. However, the air transportation network is less dense; it has fewer nodes and limited interconnectivity with other transportation systems, especially in comparison with the highway system. About 500 public airports account for nearly all commercial air transportation of passengers and freight in the country, while about 4,500 others open to public use serve general aviation (TRB 2003, 9–13). The latter facilities are used mainly for local and short-distance flights. The aviation system is much more manageable in scale and scope than the highway system. The users of the aviation system, both general and commercial, are much smaller in number and more uniform than is true of the highway system. And the aviation sector has much less inter-

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � connectivity with other modes of transportation than either the marine or highway systems. These characteristics have enabled the federal government to wield greater influence and control over the aviation system. The MTS has its own particular physical and use characteristics. First, it comprises two largely separated networks: the inland and ocean systems. The inland waterways form a series of transportation corridors in their own right. The Mississippi River system, in particular, traverses thousands of miles and passes through multiple states and jurisdictions. However, the inland system is not nearly as extensive as the highway system, and its transportation uses are less diverse, consisting largely of long-haul bulk freight movements. The ocean system primarily serves long-distance freight movements and is international in scope. The ocean ports are nodes not only on the MTS but also on the networks of the nation’s highways, railroads, pipelines, and inland waterways. The ports are more than a part of the MTS; they integrate this system with all other major freight transportation systems. Basis for Federal Involvement in Each Mode The physical and use characteristics described above have influenced the nature and scope of the federal role. Because highways are ubiquitous and used for so many transportation activities, they are built and presided over by multiple jurisdictions. They directly affect the daily lives of Americans—where they work, live, shop, and socialize. As a result, the public demands a high degree of control over this transportation infrastructure by state and local governments, where public influence is most direct. The federal role has focused largely on ensuring uniformity and connectivity of main highways across state lines. These goals are implemented through funding assistance and incentives and the provision of information and research support. The federal aim has been to encourage the building of a national system for longer-distance travel and commerce, while respecting the prerogative of state and local governments to design their highways, locate them, and operate them as they see fit. In contrast, the aviation system is used largely for longer-distance transportation that, by its very nature, crosses state and international borders.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � The federal government has taken a much more direct role in its provision, especially in the design, governance, and operation of the airways. All of the nation’s airspace is under federal control. Although airports are primarily state and local enterprises, the federal government has jurisdiction over the operation of most of the airside components, including runways, traffic control towers, and navigation aids. It has a strong interest in ensuring that airports operate efficiently, because shortcomings in capacity at a single large airport can have immediate implications for air traffic flows throughout the national, and even international, airways. The federal government has sought to improve airports by regulating them, providing them with funding assistance for capital improvements, and prescribing how they are to be designed and operated. The MTS shares some important characteristics with the aviation system, and the federal role in the maritime sector set an early precedent for the federal role in aviation. Like the airways, the waterways cross state and international borders and function primarily as a long-distance means of transport. The federal government has thus taken the lead in building, maintaining, and operating the waterways, as it has for the airways. As discussed in more detail below, the implementation of these roles differs, but the basic roles themselves are quite similar. The federal government has left the responsibility for airports to state and local governments; similarly, it has left the responsibility for providing and operating marine ports and their landside facilities to state and local governments and private entities. A notable difference between the two modes is that the federal government provides little funding for marine port and terminal development. Perhaps because of a tradition of belief that ports serve mostly local markets, the federal government has avoided such involvement, in contrast to its active role in providing airports with funding assistance and standards for design, equipage, and operations. Implementation of the Federal Roles Agency Responsibilities and Use of Trust Funds The federal roles in the marine transportation system are dispersed among several federal agencies in a number of cabinet-level departments. The

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � U.S. Army Corps of Engineers (Department of Defense) has a lead role in providing the channels and other waterway infrastructure on both the coastal and inland systems. The Coast Guard (Department of Homeland Security) regulates the traffic on these systems. The National Oceanic and Atmospheric Administration (Department of Commerce) supplies the nautical charts and hydrographic information needed for safe and efficient navigation. The Maritime Administration (Department of Transportation) promotes the merchant marine, among other responsibilities. Other federal agencies provide other marine services and infrastructure. In most cases, separate congressional committees have jurisdiction over these programs, which are reauthorized in separate legislation and funded through separate appropriations. This mix of agency roles and responsibilities has evolved from more than 200 years of federal involvement in the maritime sector. In comparison, the federal government’s roles in the highway and aviation systems are concentrated in a smaller number of agencies, all housed in DOT. FHWA has most of the responsibility for the federal highway program,2 whereas FAA has almost exclusive responsibility for the federal aviation program. This program concentration is accompanied by a similar concentration in congressional committee jurisdictions, and thus in the legislation authorizing the programs and in funding appropriations. Congress enacts comprehensive legislation authorizing each of these two programs, in contrast to the process for the MTS. Funding for the federal surface transportation and aviation programs is also concentrated. The funding is derived from national trust funds, which represent the revenues generated from a variety of federal taxes on system users and cover nearly all program expenditures for all federal spending categories. There are no separate trust funds or user fees dedicated specifically to funding particular kinds of activities (e.g., bridge construction, safety programs) or particular components of the system (general aviation airports, commercial-service airports). The funding sources and the uses 2 NHTSA and FMCSA have responsibility for safe motor vehicle design and operations. Both are housed in DOT.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � of the funds are broad-based. In seeking to program these funds effectively among areas of need, both the agencies and Congress have invested in information on system use, conditions, and performance. DOT’s biennial highway, bridge, and transit C&P report, required by Congress, is the most prominent example of such efforts. The federal marine transportation programs are also funded in part from fees derived from users and applied to national trust funds. However, in contrast to the highway and aviation trust funds, these trust funds have more limited purposes and are derived from a more limited set of user fees. The two most significant funds are the Inland Waterways Trust Fund (IWTF) and the Harbor Maintenance Trust Fund (HMTF). The purpose of the former is to help pay for the federal cost of constructing inland waterway infrastructure, especially lock and dam improvements. The revenues are derived exclusively from taxes on the users of the inland waterways. The purpose of the latter trust fund is to cover part of the federal cost of maintaining the dredged channels in harbors. Revenues are derived from taxes on harbor users. Both trust funds have much more limited purposes than either of the trust funds used for the federal aviation and highway programs. They are intended for specific kinds of activities only (lock construction and harbor channel maintenance). Comparative Effects of Trust Funds Because of the limits placed on the trust fund uses in the federal marine transportation program, Congress and the executive branch have less latitude to use the funds for other marine-related activities. For example, the HMTF is not viewed as a source of funds for new harbor dredging projects, Coast Guard harbor safety initiatives, or National Oceanic and Atmospheric Administration charting activities. Funds for these activities are drawn from the general fund. Whereas the highway and aviation trust funds cover the array of federal programs in each mode, the two major marine trust funds are separate and largely uncoordinated accounts administered by one federal agency (the Corps of Engineers) among the several involved in the federal marine transportation program. Even most of the

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � corps’ navigation budget is derived from the federal government’s general fund rather than from the user-financed trust fund accounts. The aviation and highway trust funds have been in existence for several decades. The users of the respective transportation systems have come to expect that the trust fund revenues that they contribute through user fees will be reinvested in their systems. For the most part, these expectations have been met, although individual groups of users (e.g., trucking companies, airlines) may take issue with how funds are programmed at any given time and political debates have led to delays in authorizations and appropriations. The multiyear authorizations accompanying the use of these trust funds and giving multiyear project contracting authority to fund recipients have obligated the federal government to appropriate funds on an annual basis that are commensurate with the authorized (and contractually committed) levels. The trust funds employed for the federal MTS have tended to be more controversial among users. In the case of the IWTF, Congress established a Users Board consisting of shippers and carriers to advise on project spending priorities. However, because Congress has seldom appropriated all of the collected revenues for their intended purpose, inland waterway users have repeatedly raised concern about the efficacy of the trust fund and the associated user charges. Similar concerns have arisen with regard to the HMTF. In neither instance does Congress authorize spending from the trust funds on a multiyear basis, as it does for the highway and aviation trust funds. Funding from both of the marine trust funds is authorized and appropriated by Congress on a project-by-project basis. The multiyear authorizations and resulting contracting authorities that are used for the aviation and highway programs have, in effect, limited the ability of Congress to withhold spending or divert significant trust fund revenues to other uses. Informing Decisions State and local government contributions to construction projects have long been required in both the federal highway and aviation grant pro-

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � grams. They are intended in part to encourage good decisions on project selection, and they allow federal funds to be spread among more projects. The harbor dredging program administered by the Corps of Engineers similarly requires that nonfederal interests contribute a portion of the cost of deep dredging projects. These cost-share requirements, enacted in 1986, are intended to compel project sponsors to assess project benefits and then to demonstrate confidence in their assessment by contributing their own funds to the project. As the Interstate highway program has moved toward completion, the federal government has explored other ways of instilling such discipline in project selection. One example is the use of innovative financing programs aimed at attracting more private capital to transportation infrastructure projects, which guides expenditure decisions by adding a market test of project viability. The above devices are examples of how the federal government has, in effect, sought to inform its decisions at the project level. To the extent that a project is successful in attracting capital from public and private sponsors, the federal government shares project risks and has greater assurance that the project is viable, at least compared with a project paid for in full with federal funds. Other methods of informing decisions, such as formal benefit–cost studies, are also used for decisions at the project level, especially by the Corps of Engineers for navigation projects. FAA employs benefit–cost analyses as part of its own capital investment decisions and in reviewing applications for capital grants from airports. To a great extent, FHWA lets states prioritize their projects by whatever means they prefer. How the federal government makes decisions at the overall program level—that is, about the amount of resources that should go into the federal aviation, highway, and marine transportation programs and their major activity areas—may be even more important than how decisions are made at the individual project level. The differences in the federal transportation programs in this regard are significant. Federal responsibilities in the MTS are fragmented among several congressional committees and administering agencies. The resulting dispersion of program authorizations, budgeting, and funding has led to fragmentation in the information

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � collected and analyzed by the federal government on the performance, conditions, and needs of the system. Each agency has come to rely on different sets of information and analytical tools to inform its decisions. For the most part, this information is not coordinated in a way that allows for federal funding and investment priorities to be examined with regard to national interests or across the federal agencies with relevant responsibilities. The result is that no single entity has the responsibility to gather and analyze information on system performance and needs or the ability to act on this information in a comprehensive way. The situation differs in the federal aviation and highway programs. Each of these programs is administered largely by a single agency and under the jurisdiction of a relatively small number of congressional committees, and comprehensive information on system performance and needs can be collected by one organization. As demonstrated by congressional requests for DOT to produce the national highway, bridges, and transit C&P report, there is a demand for such information. The federal agencies responsible for aspects of the MTS do collect a great deal of information helpful to decision making. The data collected and analyzed by the Corps of Engineers on the performance of the inland waterways and the Coast Guard’s safety and environmental databases are particularly useful. Some of this information, and what can be learned from it about MTS performance and needs, is discussed in the next chapter. However, a comprehensive effort to integrate and analyze this information in support of federal decisions across agencies and for the MTS as a whole is needed. SUMMARY ASSESSMENT The nation’s aviation, highway, and marine transportation systems differ in scale, use, and history. All these differences have influenced how the modes have developed and how the federal government has taken on responsibility for providing the infrastructure and support services for each. The federal role in the highway mode is large but less direct than is its role in the aviation or marine modes. Highways are viewed primarily as

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � state and local responsibilities, and the federal role has focused primarily on providing funding assistance to encourage greater system uniformity and interconnectivity. Because states and localities have long held responsibility for building and operating highways, the federal agency that administers the federal highway program, FHWA, serves mainly in an advisory and grant-making capacity. It administers federal aid to be used by state and local governments within broad expenditure categories defined by Congress. In comparison, the federal role in the aviation system is much more extensive, and many authorities are concentrated in one federal agency, FAA. Early in the development of the nation’s aviation sector, Congress placed most federal aviation activities and authorities in one agency to better ensure system safety and capacity. The federal aviation and highway programs are both financed from taxes on users of the systems. The revenues from the taxes are credited to trust funds, which Congress reinvests in the two systems. Decisions about how to spend the trust funds are made by Congress in multiyear program authorizations. The trust funds and the multiyear authorizations have helped ensure that user-generated revenues are spent and not diverted to other federal programs. The spending decisions are informed in part by objective evaluations of transportation system use, conditions, and performance by each of the administering agencies and DOT. Congress often shifts program priorities to improve certain aspects of system performance, in part on the basis of these system-level evaluations. The commitment demonstrated by the legislative and executive branches to better understand system performance and needs, coupled with research aimed at improving performance, has helped in assuring users that their contributions will be invested in the system. The federal role in the MTS is dispersed among several federal agencies, each having responsibility for different components and aspects of system performance and under the jurisdiction of different congressional committees. Funding for these programs is likewise dispersed, coming from different groups of users and the general fund. Program coordination is complicated by this fragmentation of agency responsibilities, congressional

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � jurisdictions, and funding sources. While each agency has an interest in improving the performance of its element of the MTS, none is responsible for monitoring and furthering the performance of the system as a whole. Reshaping the federal marine transportation program to emulate the single-agency structures of the federal highway and aviation programs would present challenges. The multiagency institutional structure of the MTS has deep roots. Nevertheless, some of the important features of these other transportation programs may be applicable and helpful to the federal marine transportation program. Routinely monitoring and assessing the condition and performance of the MTS is one such feature. Congress has mandated the development of system-level information in the other modes, and legislative action may be desirable to ensure its provision and use for decision making in the federal marine transportation program. Comprehensive information on system performance that helps guide federal decisions has helped assure users of the highway and aviation systems that the taxes and fees they contribute to help pay for the system are well spent. This assurance has been accompanied by a willingness by Congress to reinvest these user-generated revenues back into the systems, prompted in part by multiyear authorizations and contractual obligations of trust fund revenues. Congress has not demonstrated a similar commitment to reinvest all user-generated revenues back into the MTS; the experience of these other modes suggests ways to bring about such a commitment. REFERENCES Abbreviation TRB Transportation Research Board Horonjeff, R., and F. X. McKelvey. 1983. Planning and Design of Airports, 3rd ed. McGraw-Hill, New York. McShane, C. 1988. Urban Pathways: The Street and Highway, 1900–1940. In Technology and the Rise of the Networked City in Europe and America (J. A. Tarr and G. Dupuy, eds.), Temple University Press, Philadelphia, Pa.

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The Marine Transportation System and the Federal Role: Measuring Performance, Targeting Improvement - Special Report 279 � � � � � � Rose, M. H. 1979. Interstate: Express Highway Politics, 1941–1956. Regents Press of Kansas, Lawrence. Seely, B. E. 1987. Building the American Highway System: Engineers and Policy Makers. Temple University Press, Philadelphia, Pa., 315 pp. TRB. 2003. Special Report 272: Airport Research Needs: Cooperative Solutions. National Research Council, Washington, D.C.