---

National League of Cities

NLC supports the reauthorization of ISTEA, which has generated positive outcomes, fortifying its visionary objective to link all forms of transportation into a seamless web to serve the nation. The reauthorization of ISTEA would preserve a decision-making role for local governments over federal transportation funds to implement national transportation goals at the local level. NLC supports multimodalism to allow each city the option to select the best mode of transportation to promote a strong local economy and the most efficient service to citizens and businesses.

Background

The federal transportation program is set to expire September 30, 1997. Without strong support from local elected officials, the gains made from this landmark legislation could be lost.

In 1991, congress enacted the Intermodal Surface Transportation Efficiency Act (ISTEA). ISTEA was the first major rewrite of federal transportation policy in 35 years and represented landmark legislation that promotes all levels of government working together to implement the nation's transportation objectives.

For the first time, local governments had direct access to federal transportation funds. ISTEA established new programs, such as the Congestion Mitigation and Air Quality Improvement program (CMAQ) and the Surface Transportation Program (STP), which enabled local governments to fund transportation projects that met national transportation goals but filled local needs. In addition, ISTEA provided sub-allocated funds to metropolitan areas of more than 200,000 people, which local governments can spend on local transportation priorities.

ISTEA has also given local governments a meaningful role in transportation planning. In metropolitan areas of more than 50,000 people, planning is conducted by metropolitan planning organizations (MPOs). Although state departments of transportation are responsible for transportation planning activities, ISTEA requires states to work with MPOs, transit operators, other affected agencies, and the general public to develop statewide transportation plans.

ISTEA also removed disincentives to invest in mass transit by increasing its funding and by encouraging state and local governments to invest in mass transit projects. ISTEA attempted to equalize highways and mass transit by makinng the federal/stat/local funding match ratio the same for both highway and mass transit projects. In addition, ISTEA's flexible funding provisions enabled highway funds to be used for mass transit projects.

Key Issues

There are two main threats to ISTEA reauthorization: STEP 21 and Devolution. Although both proposals are different, the results would be the same --- the loss of decision-making by local governments and a re-emphasis on highways.

The STEP 21 proposal comes from state departments of transportation in states that are generally "donor" states. "Donor" states provide more money to the federal government in gas tax receipts than they receive from the federal government in transportation dollars. Their goal for ISTEA reauthorization is to assure that each state receives 95 percent of the funds it gives to the federal government. Their proposal "streamlines" ISTEA to reduce flexibility and programs in order to spread the funding farther. However, in their efforts to "streamline," they cut programs that grant local governments decision-making authority over federal funds.

With STEP 21, there is no guarantee that local governments will receive federal transportation funding or even be part of the planning process. Under STEP 21, many states may receive more federal transportation funding, but the state department of transportation would not be required to fund transportation projects in memtropolitan areas. In addition, it was found under ISTEA that many states allocated funding to local governments under STP --- as required by law --- at a significantly lower rate than other ISTEA programs. Without a federal law requiring states to provide funding to local governments, they may be excluded from the process. For localities, STEP 21 could easily result in a significant reduction in transportation funding at the local level and for less say by local governments about local priorities.

The second threat is devolution --- the elimination of the federal transportation program --- that is, eliminating most of the federal gas tax and leaving all transportation taxes and funding to each state. This proposal is sponsored by Sen. Connie Mack (R-FL) and Rep. John Kasich (R-OH). The federaal government would have no role in transportation policy. Each state would be able to decide to implement a gas tax to fund transportation projects. Local governments would confront 50 separate transportation policy objectives without the assurance of local government involvement. The results for local governments could be very similar to STEP 21 --- the elimination of virtually any local role. Additionally, devolution has dire consequences on the nation's economy by hampering development of a national multimodal transportation system.

NLC Policy

NLC supports federal legislative and regulatory efforts outlined in ISTEA that (1) encourage multimodalism in transportation planning and projects, and (2) allow local flexibility to direct limited fiscal reserves to meet local and regional needs. NLC endorses federal funding for programs like STP and CMAQ and encourages continued federal support for thse programs that put the fundamental responsibility for transportation planning and decision-making at the local level. NLC supports direct sub-allocation of federal ISTEA funds to MPOs. NLC urges Congress to grant small cities with populations less than 50,000 and rural communities the option to receive ISTEA funds directly. Federal regulatory flexibility is essential since local governments must stretch limited fiscal resources to solve regional and local transportation problems and meet needs.

NLC supports giving municipalities the ability to set their own priorities in transportation investment and giving communities greater voice and flexibility in influencing transportation plans that satisfy local needs. Federal policy must continue to recognize and acknowledge that local officials must play a preeminent role in local transportation planning. NLC policy also states that public transportation is an essential public service which should continue to be subsidized by a partnership of federa, state, and local governments.

| Main Page | What's ISTEA? | What's Next? | What's New? | What to do? | More Info! | You Asked? | Who says? |