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An overview of how states spent Transportation Enhancement (TE) funds from FY 1992 through FY 2008. TE was established as a dedicated funding source in the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991.


Transportation Enhancements: Summary of Nationwide Spending as of FY 2008

xxx Download the full 36-page report with charts and illustrations (pdf 516 kb)


The high demand for TE funds and the variety and number of projects that have already been selected testify to the popularity of TE activities. Nationwide TE spending has shown a gradual increase over the life of the TE program. However, TE’s lower obligation and reimbursement rates relative to other Federal-aid highway programs, such as the National Highway System, indicate that state DOTs, FHWA divisions, and project sponsors still face considerable obstacles in implementing TE projects. State-specific hurdles, whether they be administrative priorities, political support, or sponsor preparedness, should be identifi ed and remedied to more efficiently deliver TE projects to communities. The American Recovery and Reinvestment Act of 2009 (ARRA) will also make about $800 million available to the states in addition to regular program funds.

Total Programmed Funds: $8.9 billion for 24,174 projects

Overall, the percentages by activity have shifted only slightly from previous years. The largest category by far was Bicycle and pedestrian facilities, which received nearly half of all programmed funds. The distribution of funds across all 12 activities for FY 2008:

48.7% - Pedestrian and bicycle facilities ($4.35 billion)
18.3% - Landscaping and Scenic Beautification ($1.63 billion)
9.5% - Historic Transportation Facilities ($845 million)
7.3% - Rail Trails ($654 million)
6.1% - Scenic/Historic Highway Programs ($543 million)
4.2% - Historic Preservation ($378 million)
2.6% - Acquisition of Scenic/Historic Easements ($228 million)
1.2% - Transportation Museums ($108 million)
1.1% - Environmental Mitigation ($94 million)
0.5% - Archaeological Planning/Research ($42 million)
0.4% - Bike/Ped Safety and Education programs ($35 million)
0.2% - Billboard Removal ($22 million)

Bicycle and Pedestrian Projects

Historically, bicycle and pedestrian facilities have had the largest percentage share of programmed TE funds. Off-road trails receive the most funding across these categories. Projects that focus on pedestrian facilities account for the second largest share of programmed TE funds, followed by on-road bicycle facilities and rail-trails. The average Pedestrian and bicycle facilitiy project funding award was $357,217, compared to the average TE project including all categories of $369,621. The average rail-trail project received $513,158 in TE funds.

The cumulative amount of TE funds devoted to rail-trails has dropped from 14% in FY 1999 to 7.3% in FY 2008. Most of the more straightforward rail trail projects have already been developed, and those that remain have complex ownership, valuation, and liability issues. In addition, the rate of railroad abandonment has decreased across the country as railroads have begun to retain corridors in hopes of restarting viable service. However, many extension and rail-with-trail projects remain.


In recent years, many states have made great strides in moving their programmed projects to completion and have developed more effective methods for obligating TE funds. For example, Kansas, which in 2003 had a large unobligated balance, has in the last three years obligated more than it was apportioned for the year. This has significantly reduced its unobligated balance. Likewise, Rhode Island, which obligated over 100% of its yearly apportionment from 2002 - 2006, reports prioritized and concentrated efforts to get TE projects accomplished as the key to their increased obligations. The national unobligated balance reached a peak in FY 2005 at over $2 billion. With the enactment of SAFETEA-LU, this figure declined significantly in both FY 2006 and FY 2007. However, the balance grew by 10% in FY 2008. Both timely reauthorization of the transportation authorization legislation and rigorous continued efforts to implement best practices in TE program management at the state level will help address this issue.

Three methods to help clarify spending patterns provide for a more complete understanding of TE spending trends.

Cumulative Obligation Rate: FHWA’s stated goal for the national cumulative obligation rate of the TE program is at least 75%. This goal was met in FY 2004. This year, the cumulative national obligation rate held constant from FY 2007 at 80%. However, this is partially because of rescissions of unobligated TE funds.

Obligation of Yearly Apportionment: Although many states have made clear progress in effi ciently implementing TE projects, yearly obligations continue to fall short of the 75% goal. Obligations of yearly apportionments fell in 2008 from 73.0% to 63.8%, comparable to the FY 2006 level (64.6%).

Obligation of Available Balance: Obligations of available balance declined in 2008 from 25.5% to 22.1%. This statistic emphasizes the continuing accumulation of unobligated funds at the national level. However, it should be noted that many states do not have large unobligated balances. In fact, just 15 states receiving only 28% of apportionments in 2008 are responsible for half of the national unobligated balance.

Data indicate that there is a lag between selection and implementation of TE projects. The delay between project selection and obligation yields lower obligation rates compared to programming rates. Delays may be caused by: lengthy review processes; unprepared and inexperienced project sponsors; and state priorities and procedures for obligating TE projects. Of these, state priorities may be the most important as indicated by the higher obligation rates in nearly every other Federal-aid highway spending category. States have the fl exibility to prioritize and distribute obligation limitation among the various programs. This discretion has had an impact on the overall spending of TE funds.

It is clear that once projects become obligated, states are committed to completing them and being reimbursed by FHWA. Nationwide, the cumulative reimbursement rate is well above 80%. Unobligated funds, however, mean unrealized TE projects. These unrealized projects could bring social, economic and mobility benefi ts to communities. More remains to be done to make TE projects a greater priority and bring states’ obligation rates to the level of other Federal-aid highway programs.

Federal-Aid Financing Terminology

Apportionments are the funds distributed among the states as prescribed by statutory formula. Transportation Enhancement funds represent a minimum 10% set aside of each state’s Surface Transportation Program (STP) funds, plus 10% of the portion of Equity Bonus Program distributed to the STP. Programming is the fi rst step in the formal transportation spending process.

Programmed projects are those that have been approved at the state level by the appropriate jurisdiction, ruling body, or offi cial. This may be the TE advisory committee, state transportation commission, legislature, state Secretary of Transportation, or Governor. Upon approval TE projects are listed in the Statewide Transportation Improvement Program (STIP) and, if appropriate, in a metropolitan area TIP as well.

Obligations represent a second step in the spending process. An obligation is the formal commitment of a specifi ed amount of funding for a particular project. Technically speaking, it is an obligation of the FHWA to reimburse a state for eligible costs incurred. It represents a high level of commitment on the part of both the state DOT and the FHWA to fund a project. Obligations are typically made when a project or discrete project phase is ready to have consultants or contractors begin billable work. Obligations are tracked in the FHWA fi nancial accounting system known as the Fiscal Management Information System (FMIS). It should be noted that obligation fi gures by defi nition include a mix of both completed and soon-to-be completed work.

Reimbursements are the amount of funds FHWA has reimbursed to the states for completed work on TE projects, regardless of whether the project is only partially or fully complete. Reimbursement is essentially the last step in the spending process. While it is not necessarily the most accurate measure of completed projects, it is the only measure readily available on a nationwide basis.

Rescissions are funds removed from apportionments, by Act of Congress. When funds are removed in this manner, they are no longer counted as apportioned funds: it’s as though they never occurred. While Congress sets the total rescission amount, FHWA calculates the share each state is responsible for based on the original distribution of Federal-Aid funds. The states in turn are required to return those funds. In the past, states had discretion over how to assign the rescissions among their Federal-Aid programs. For the FY 2008 rescission, the 2007 Energy Independence and Security Act required that states distribute the rescission proportionately over their Federal-Aid programs, within a margin of 10%.

Transfers indicate the amounts of money transferred from the TE program to other transportation programs. The Uniform Transferability Provision (23 U.S.C. 126) limits the amounts of funds that can be transferred from TE to other Federal-aid highway programs in a given year. States can transfer up to 25% of the portion of the annual TE funding that is above the state’s FY 1997 TE apportionment level. States are also permitted to transfer TE funds to the Federal Transit Administration (FTA) under the requirements of Chapter 53 of title 49, U.S.C. There is no limit on the amount that can be transferred to FTA; however, the transferred funds must be used for TE-eligible activities. Transfers are tracked by FMIS.

For more information:

National Transportation Enhancements Clearinghouse
A Project of the Federal Highway Administration and Rails-to-Trails Conservancy
2121 Ward Court, 5th Floor, Washington, DC 20037
Toll Free: (888) 388-NTEC -

xxx Download the full 36-page report with charts and illustrations (pdf 516 kb)

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