FLEXIBLE FUNDING: TRENDS AND POSSIBILITIES

Finding the funds to pay for transportation projects is an important component of the planning process. As transportation demands increase around the country, finding the funds from local, state and federal sources becomes an increasingly greater challenge for transportation planners. However, the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) and the Transportation Equity Act for the 21st Century (TEA-21) have opened up some opportunities to direct federal funds to where they are most needed through flexible funding provisions. Taking advantage of flexible funding opportunities is one way transportation planners can meet the challenge of finding the funds to pay for planned projects. ISTEA legislation created the opportunity for metropolitan planning organizations (MPOs) to flex some federal funds between the Federal Highway Administration and the Federal Transit Administration based on locally identified transportation needs. Because flexible funding has broad appeal at the local level, this mechanism was reauthorized under TEA-21. Transportation agencies around the country have flexed as much as $6 billion dollars since this mechanism first became available. This paper investigates the trends in the use of this mechanism and the possibilities for greater use of it. In identifying trends the authors explore which types of MPOs are flexing funds, how much money is being flexed, what types of projects and expenses the funds are being flexed for, and what sources of funds are being tapped for flexing. This paper also explores how much money that could be flexed is being flexed, and what can be done to encourage the use of this funding mechanism so that the maximum amount of money is flexed each year. The authors rely on their earlier work in the area of flexible funding as well as build on such studies as the Brookings Institution's report titled Flexible Funding for Transit: Who uses it? This paper enhances transportation planners' knowledge of flexible funding and how to use it to best meet the needs of their communities.