The U.S. surface and maritime transportation systems facilitate mobility through an extensive network of infrastructure and operators, as well as through the vehicles and vessels that permit passengers and freight to move within the systems. The systems include 3.9 million miles of public roads, 121,000 miles of major private railroad networks, and 25,000 miles of commercially navigable waterways. They also include over 500 major urban public transit operators in addition to numerous private transit operators, and more than 300 ports on the coasts, Great Lakes, and inland waterways. Maintaining the transportation system is critical to sustaining America’s economic growth. Efficient mobility systems are essential facilitators of economic development—cities could not exist and global trade could not occur without systems to transport people and goods. DOT has adopted improved mobility—to “shape an accessible, affordable, reliable transportation system for all people, goods, and regions”—as one of its strategic goals. To achieve this goal, it has identified several desired outcomes, including (1) improving the physical condition of the transportation system, (2) reducing transportation time from origin to destination, (3) increasing the reliability of trip times, (4) increasing access to transportation systems, and (5) reducing the cost of transportation services. The relative roles, responsibilities, and revenue sources of each sector involved in surface and maritime transportation activities—including the federal government, other levels of government, and the private sector— vary across modes. For public roads, ownership is divided among federal, state, and local governments—over 77 percent of the roads are owned by local governments; 20 percent are owned by the states, including most of the Interstate Highway System; and 3 percent are owned by the federal government. While the federal government owns few roads, it has played a major role in funding the nation’s highways. For example, from 1954 through 2001, the federal government invested over $370 billion (in constant 2001 dollars) in the Interstate Highway System. With the completion of the interstate system in the 1980s—and continuing with passage of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) and its successor legislation, TEA-21, in 1998—the federal government shifted its focus toward preserving and enhancing the capacity of the system. Under the Federal Aid Highway Program, the Federal Highway Administration (FHWA) provides funds to states to construct, improve, and maintain the interstate highway system and other parts of the U.S. road network and to replace and rehabilitate bridges. TEA-21 established, among other things, a mechanism for ensuring that the level of federal highway program funds distributed to the states would be more closely linked than before to the highway user tax receipts credited to the Highway Account of the Highway Trust Fund. These user taxes include excise taxes on motor fuels (gasoline, gasohol, diesel, and special fuels) and truck-related taxes on truck tires, sales of trucks and trailers, and the use of heavy vehicles. FHWA distributes highway program funds to the states through annual apportionments according to statutory formulas that consider a variety of factors including vehicles miles traveled on the interstate system, motor fuel usage by each state’s highway users, and other factors. The federal share for project funding is usually 80 percent but can vary among programs, road types, and states. State and local governments then “match” federal funds with funds from other sources, such as state or local revenues. While the federal government’s primary role has been to provide capital funding for the interstate system and other highway projects, state and local governments provide the bulk of the funding for public roads in the United States and are responsible for operating and maintaining all nonfederal roads including the interstate system. The sources of state highway revenues include user charges, such as taxes on motor fuels and motor vehicles and tolls; proceeds of bond issues; General Fund appropriations; and other taxes and investment income. The sources of local highway revenues include many of the user charges and other sources used by state governments, as well as property taxes and assessments. The U.S. transit system includes a variety of multiple-occupancy vehicle services designed to transport passengers on local and regional routes. Capital funding for transit came from the following sources in 2000: 47 percent of the total came from the federal government, 27 percent from transit agencies and other nongovernmental sources, 15 percent from local governments, and 11 percent from states. In that same year, the sources of operating funds for transit included passenger fares (36 percent of operating funds); state governments (20 percent); local governments (22 percent); other funds directly generated by transit agencies and local governments through taxes, advertising, and other sources (17 percent); and the federal government (5 percent). The Federal Transit Administration (FTA) provides financial assistance to states and local transit operators to develop new transit systems and improve, maintain, and operate existing systems. This assistance includes (1) formula grants to provide capital and operating assistance to urbanized and nonurbanized areas and to organizations that provide specialized transit services to the elderly and disabled persons; (2) competitive capital investment grants for constructing new fixed guideway systems and extensions to existing ones, modernizing fixed guideway systems, and investing in buses and bus-related facilities; (3) assistance for transit planning and research; and (4) grants to local governments and nonprofit organizations to connect low-income persons and welfare recipients to jobs and support services. Funding for federal transit programs is generally provided on an 80 percent/20 percent federal to local match basis. Federal support for transit projects comes from the Highway Trust Fund’s highway and transit accounts and from the General Fund of the U.S. Treasury. The respective roles of the public and private sector and the revenue sources vary for passenger as compared with freight railroads. With regard to passengers, the Rail Passenger Service Act of 1970 created Amtrak to provide intercity passenger rail service because existing railroads found such service unprofitable. Since its founding, Amtrak has rebuilt rail equipment and benefited from significant public investment in track and stations, especially in the Northeast corridor, which runs between Boston, Mass., and Washington, D.C. The federal government, through the Federal Railroad Administration (FRA), has provided Amtrak with $39 billion (in 2000 dollars) for capital and operating expenses from 1971 through 2002. Federal payments are a significant revenue source for Amtrak’s capital budget, but not its operating budget. In fiscal year 2001, for example, the sources of Amtrak’s capital funding were private sector debt financing (59 percent of total revenues), the federal government (36 percent), and state and local transportation agencies (5 percent). In that same year, the sources of funding for Amtrak’s operating budget were passenger fares (59 percent of total revenues), other business activities and commuter railroads (34 percent), and the federal government and state governments (7 percent). The role of the federal government in providing financial support to Amtrak is currently under review amid concerns about the corporation’s financial viability and discussions about the future direction of federal policy toward intercity rail service. With regard to freight, the private sector owns, operates, and provides almost all of the financing for freight railroads. Since the 1970s, the railroad industry has experienced many changes including deregulation and industry consolidation. Currently, the federal government plays a relatively small role in financing freight railroad infrastructure by offering some credit assistance to state and local governments and railroads for capital improvements. The U.S. maritime transportation system primarily consists of waterways, ports, the intermodal connections (e.g., inland rail and roadways) that permit passengers and cargo to reach marine facilities, and the vessels and vehicles that move cargo and people within the system. The maritime infrastructure is owned and operated by an aggregation of state and local agencies and private companies, with some federal funding provided by the Corps of Engineers, the U.S. Coast Guard, and DOT’s Maritime Administration. The Corps of Engineers provides funding for projects to deepen or otherwise improve navigation channels, maintain existing waterways, and construct and rehabilitate inland waterway infrastructure, primarily locks and dams. Funding for channel operations and maintenance generally comes from the Harbor Maintenance Trust Fund supported by a tax on imports, domestic commodities, and other types of port usage. The costs of deepening federal channels are shared by the federal government and nonfederal entities. The Inland Waterways Trust Fund, supported by a fuel tax, funds one-half of the inland and intra-coastal capital investments. Coast Guard funding promotes (1) mobility by providing aids to navigation, icebreaking services, bridge administration, and traffic management activities; (2) security through law enforcement and border control activities; and (3) safety through programs for prevention, response, and investigation. DOT’s Maritime Administration provides loan guarantees for the construction, reconstruction, or reconditioning of eligible export vessels and for shipyard modernization and improvement. It also subsidizes the operating costs of some companies that provide maritime services and provides technical assistance to state and local port authorities, terminal operators, the private maritime industry, and others on a variety of topics (e.g., port, intermodal, and advanced cargo handling technologies; environmental compliance; and planning, management, and operations of ports). Public sector spending (in 1999 dollars) has increased for public roads and transit between fiscal years 1991 and 1999, but stayed constant for waterways and decreased for rail, as shown in figure 1. Total public sector spending for public roads increased by 18.4 percent between fiscal years 1991 and 1999, from $80.6 billion to $95.5 billion (in 1999 dollars). Of those totals, the relative shares contributed by the federal government and by state and local governments remained constant from 1991 to 1999, as shown in figure 2.