History of the Federal-Aid Highway Program

The development of highways and highway transportation in the United States would not have been possible without a strong federal government role under the remarkably successful Federal-aid Highway Program.

The Early Years

The start of the federal-state joint highway effort began in 1916 with the passage of the Federal Aid Road Act. This landmark legislation, promoted by the national Good Roads Movement, marks the first time that the federal government provided assistance for state highway costs. The 1916 act is the forerunner of all federal highway assistance legislation over the years.

The Federal Aid Road Act provided funding for the improvement of any rural road over which the U.S. mail was carried. A key feature of the legislation was the requirement that the states must have a highway department capable of designing, constructing and maintaining designated roads in order to share in the appropriation.

The Federal Highway Act of 1921, together with the Post Office Appropriations Act of 1922, provided a multiyear plan of federal funding for the program. This federal-state partnership supported by a multi-year authorization bill and annual appropriations are essential to a continuous Federal-aid Highway Program that has endured to this day.

The Bureau of Public Roads, from which the Federal Highway Administration evolved in 1970, worked with the states to implement and administer the legislation beginning with the Federal Aid Road Act of 1916. In the early years, the Bureau held a tight rein in guiding development of the program including approval of project plans and specifications. This initial strong central control accomplished a major objective of uniformity in the administration of emerging regulations and procedures among the states, thus establishing federal-aid programs in each state on a common basis.


The Interstate

This successful federal-state partnership culminated in the building of the 46,871 mile Interstate Highway System between 1956 and the 1990s. While the origins of the Interstate Highway System can be traced back to the 1930s, it was not until 1956 when Congress made it official with the enactment of the Federal-aid Highway Act.

The new act prescribed the standards for the Interstate System and established a new method for apportioning Interstate funds. The interstate highways were built largely at federal expense in order to ensure the completion of expensive urban highways and an integrated national highway system. States had to contribute only 10 percent of the total cost of construction.

Another major feature of the legislation was the establishment of the Highway Trust Fund (HTF) and the assignment of specific motor-vehicle user taxes to this fund for the payment of highway construction costs. The act also required the Federal-aid Highway Program to operate on a “pay-as-you-go” basis, requiring Trust Fund revenues be adequate to meet all needs without drawing upon the General Fund of the U.S. Treasury.


The “TEA” Years

As the Interstate Highway System neared completion with the construction of the Boston Central Artery/Tunnel project, Congress debated the federal role in transportation. The first transportation legislation of the post-interstate era was approved by Congress in 1991. That legislation, known as ISTEA (The Intermodal Surface Transportation Efficiency Act), redirected the federal government to develop a national “intermodal” transportation system including public transportation, and improved access to ports and airports. While ISTEA boosted funding for highway construction, the legislation also gave states unprecedented flexibility for state and local governments to shift highway funds to pay for a broad array of non-highway programs.

TEA-21 (The Transportation Equity Act for the 21st Century) enacted in 1998 retained ISTEA’s essential features while boosting highway construction investments and created new budget accounts for highway and transit programs. The bill directed all fuel taxes to the HTF and gradually began drawing down on the unspent balance in the HTF.

In 2005, Congress enacted SAFETEA-LU (Safe, Accountable, Flexible, Efficiency Transportation Equity Act: A Legacy for Users), which maintained state spending flexibility while focusing on safety planning. The bill opened the door for more tolling and private sector financing of infrastructure projects. While previous highway bills contained “earmarks,” specific projects requested by members of Congress, SAFETEA-LU contained an excessive 6,300 earmarks damaging the image of the highway program and jeopardizing future funding bills.

Despite the bitterly partisan atmosphere that plagued the 112th Congress, in 2012 Congress passed MAP-21, a two-year, $105 billion surface transportation reauthorization that funds the program at FY ’12 levels plus inflation. MAP-21 contains historic policy reforms, but only financed the program at level funding for the length of the bill. It contains no earmarks in reaction to the “Bridge to Nowhere” and the overwhelming number of earmarks that were contained in SAFETEA-LU.

The pressing question continues to be how to ensure solvency of the Highway Trust Fund into the future. Most agree that continuation of the motor fuel user fees will be needed in the short-term while transitioning to a new funding mechanism.

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