The nation’s federal surface transportation investment policy has become increasingly complex, changing from a narrow focus on completing the nation’s interstate highway system to a broader emphasis on maintaining and more efficiently operating our highways, supporting mass transit, protecting the environment, and encouraging innovative technologies. With the interstate system largely completed in the 1980s—and continuing with the passage of ISTEA in 1991 and TEA-21 in 1998—the federal government has shifted its focus toward preserving and enhancing the capacity of the transportation system by supporting a large network of highway, mass transit, and other surface transportation programs and projects. The funding for transportation plans and projects comes from a variety of sources including federal, state, and local governments; special taxing authorities and assessment districts; and user fees and tolls. While metropolitan areas receive transportation funds from state and local sources, the federal government also is a significant funding source, using revenues from federal highway tax receipts and supplemented by general fund revenues. ISTEA and TEA-21 continued the use of the federal Highway Trust Fund—which is divided into a Highway Account and Mass Transit Account—as the mechanism to account for federal highway user tax receipts that fund various surface transportation programs. The Federal Highway Administration (FHWA) distributes highway program funds to state transportation departments that, in turn, allocate the funds to urban and rural areas on the basis of local priorities and needs. The Federal Transit Administration (FTA) sends most urban transit funds directly to local transit operators while state transportation departments administer rural transit funds. In some cases, Congress may designate specific transportation projects for funding. For example, TEA-21 allocated $9.4 billion over 6 years to 1,850 congressionally designated projects. Finally, ISTEA and TEA-21 also allowed the use of certain federal highway program funds for either highway or transit projects, referred to as flexible funding. Key issues—such as traffic congestion, air pollution, land use and sprawl, the economic viability of neighborhoods and commercial areas, and facilitating national economic growth—are significantly affected by decisions about how federal transportation funds are spent. These decisions grow out of an overall transportation planning and decision- making process involving states, MPOs, local governments, and other stakeholders. Federal laws and requirements specify an overall approach for transportation planning agencies to use in planning and deciding on projects. State, regional, and local government agencies must operate within these requirements to receive federal funds. The laws and requirements—which include ISTEA, TEA-21, and their associated regulations—establish certain requirements governing the way states and local governments plan and decide upon transportation projects. In particular, the requirements describe various planning tasks that states and MPOs must perform, including (1) involving a wide range of stakeholders in the process; (2) identifying overall goals and objectives and data to support transportation investment choices; (3) developing long- and short-range transportation programs and plans; (4) specifying financing for the transportation programs and projects; and (5) ensuring that the transportation planning and decision-making process reflects a variety of planning factors, such as environmental concerns. States and MPOs must consider a wide range of planning factors laid out in federal statutes and regulations. However, federal planning requirements generally do not provide specific guidance on how transportation planners should evaluate these factors. ISTEA and TEA-21 provided stakeholders with greater control over transportation decisions in their own regions than was done in the past and recognized that multiple agencies were responsible for planning, operating, and maintaining the entire transportation system. For this reason, the laws established a planning process that emphasizes cooperation and coordination among transportation stakeholders in the investment decision-making process. To achieve this goal, both ISTEA and TEA-21 sought to strengthen planning practices and coordination between states and metropolitan areas and between the private and public sectors and to improve connections between different forms of transportation. To foster involvement by all interested parties, states and MPOs are expected to provide opportunities for notice and public involvement throughout the planning and project selection process. For stakeholders and other interested parties (see table 1), federal regulations require a formal public involvement process that includes reasonable access to technical and policy information used in developing transportation plans as well as adequate periods for public comment. State departments of transportation—working with transportation organizations, local governments, and the public—develop state transportation goals and plans. Local governments, such as cities and counties, and regional entities, such as MPOs, carry out additional transportation planning and project implementation functions, especially for highway projects. Transit agencies, in addition to operating transit services such as bus, subway, light rail, commuter railroad, and other forms of mass transit, also plan and implement capital projects. Other organizations, such as nonprofit, environmental, and community organizations, are involved in transportation decision-making through the public participation process. Finally, private sector firms also may participate as advisors in the planning and decision-making process, especially when public decisions directly affect their interests. MPOs, which are regional transportation policy bodies composed of representatives from various governmental and other organizations, are key players in the coordination of transportation plans and projects. MPOs are designed to provide a setting for impartial transportation decision- making by facilitating evaluation of alternatives, development of long- and short-range planning documents, and public involvement. In particular, MPOs provide the forum for the various providers of transportation facilities to come together to develop a more comprehensive approach to meeting regional transportation needs. Finally, DOT oversees state and metropolitan transportation planning and provides advice and training on transportation issues. In initiating the transportation planning process, states and MPOs are expected to have a long-term vision that articulates broad goals for the future of the transportation systems in the state or region. DOT guidance states that in developing the long-term vision, states and regions are to consider several factors, including projected population growth and economic changes, current and future transportation needs, maintenance and operation of existing transportation facilities, preservation of the human and natural environment, and projected land uses. States and MPOs may also conduct investment and planning studies to identify major transportation corridors in the state or region. In deciding which proposed transportation projects meet the needs and reflect the long-range vision of the state or region, states and MPOs are required to establish a process for collecting and analyzing data to evaluate different transportation alternatives and using the resulting information to establish priorities for improving the area’s transportation assets. As part of this process, transportation planners may develop performance measures and transportation models to evaluate existing or proposed projects. Performance measures are important indicators of how well the transportation system is operating. Some examples of user- oriented performance measures are average trip travel time, length of delay, and reliability of trip making. Transportation models are simulations of the “real world” that can be used to show the impact of changes in a metropolitan area on the transportation system (such as addition of a new road or transit line or increases in population or employment). Specific types of transportation models are not required by federal planning regulations. After articulating a vision of overall transportation goals and considering alternative ways of reaching those goals, federal laws and regulations require that states and metropolitan areas document their decisions about future transportation needs and their selection of federally funded surface transportation projects through long-range transportation plans and short- range programs. A metropolitan long-range transportation plan identifies transportation needs for at least the next 20 years, but does not necessarily identify specific projects. It is expected to include a description of congestion management strategies as well as capital investments and other measures necessary to (1) ensure the preservation of the existing transportation system and (2) make the most efficient use of existing transportation facilities to relieve congestion and enhance the mobility of people and goods. A state long-range plan is expected to be developed in cooperation with MPOs in the state and to be intermodal and statewide in scope. (see fig. 1). In contrast to the long-range plan, a short-range program covers a more limited time frame—usually about 3 years—and describes specific transportation projects or phases of an included project, including the scope and estimated costs of those projects. In a metropolitan short-range Transportation Improvement Program (TIP), MPOs are required to identify the criteria and process for prioritizing proposed transportation projects, including the extent to which comparisons among modes were considered. In addition, all surface transportation projects that are to receive federal funding must be included in the metropolitan and state programs to receive federal funds. At the state level, each state DOT is expected to work cooperatively with its MPOs to develop a single State Transportation Improvement Program (STIP), which is an intermodal program of projects encompassing all the areas of the state. The STIP incorporates TIPs developed by the MPOs within the state, and a project in a metropolitan region must be included in the TIP before it may be included in the state program. Once adopted by the state, the STIP is concurrently submitted to FHWA and FTA for approval at least once every 2 years. In addition to approving the STIP, FHWA and FTA are also responsible for certifying that the state planning processes are conducted in accordance with all applicable federal requirements. Under federal requirements, states and MPOs must specify funding amounts and sources for transportation programs and projects. States and MPOs must consider funding needs for both new projects and the maintenance and operation of the existing transportation system. Financial planning is part of both the short- and long-range planning processes and includes identification of resources that are reasonably expected to be available. Projects in the TIP and STIP are specifically linked to funding sources and additional strategies for securing funds are included in the plan. While federal requirements specify that all MPOs have an analytical process in place to help prioritize and select projects, how projects originate and are selected for inclusion in transportation plans and programs may vary in different regions. In some instances, state DOTs are heavily involved in the metropolitan planning process. For example, the Illinois DOT heavily influences the planning process in metropolitan Chicago.