Flexible Funding for Transit: Who Uses It?

Robert Puentes


Both the Intermodal Surface Transportation Efficiency Act (ISTEA) and its successor, the Transportation Equity Act for the 21st Century (TEA-21), have flexible funding provisions which enable certain program funds to be used for either transit or highway projects. This flexibility is intended to give planners and local decisionmakers the means to better meet local transportation needs and identify innovative solutions to transportation challenges. This survey examines the extent to which states are transferring funds from traditional highway programs to transit projects and what the “flexing” trends portend about the implementation of alternative transportation plans. The evidence from this survey suggests that many state and local leaders are missing the opportunity to take full advantage of flex funding.

Key Findings

An analysis of major federal highway funds that can be flexibly used for highway or transit programs between FY1992 and FY1999 found that:

  • Of $33.8 billion in flexible funding available for transfer from federal highway programs to transit projects, $4.2 billion or 12.5% was used from FY1992 to FY1999.

  • During those years, the District of Columbia, Massachusetts, New York, Oregon and California transferred more than a third of their available highway funds for transit use. On the other hand, Delaware, Kansas, Mississippi, North Dakota, South Dakota and Wyoming transferred none.

  • New York and California received 16.3% of all federal funds available for transfer, yet accounted for nearly half of all funds actually transferred from highway to transit programs.

  • Metropolitan areas with the largest, most well-established transit agencies took the most advantage of flexible funding provisions.