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Before ISTEA, up to 2 cents per gallon of the gas tax

had been available for transit.  But ISTEA greatly expands

transit's share: after deducting 4.3 cents dedicated to

deficit reduction, the law dedicates nearly half of remain-

ing gas taxes to either transit or "flexible" funds that may

be spent on either transit or highways.  That creates a

shortfall in funds for highway improvements.

Essence of ISTEA

At nearly 138,000 words in eight different titles,

ISTEA is the size of a medium-length book.  The most impor-

tant titles are Title I, Surface Transportation, and Title

III, Transit.  Between them, those two titles account for

more than two-thirds of ISTEA's verbiage and over 90 percent

of its spending.

Title I, which deals mostly with highways, contains two

or three provisions that market advocates might cheer.  It

allows toll roads, whereas previously tolls were not allowed

for federally funded highways (except where they had been

charged before federal funds were received).  It specifical-

ly allows up to five experiments with congestion pricing--

tolls that are higher during rush hours than during other

hours of the day.  And it allows experiments with private

construction of roads.

Otherwise Titles I and III stick with the same old

command-and-control, central planning process that has

caused most transportation problems in the first place.  The

two titles earmark billions of dollars for hundreds of

highway, rail, transit, bridge, and other projects in every

state.

The titles also create a new set of planning processes.

To be eligible for federal funding, each state and urban

area is required to prepare transportation plans with sig-

nificant public involvement.  While public involvement

supposedly prevents "backroom decisions" that are closed to

the public, in practice all it really means is that a dif-

ferent set of special-interest groups ends up dominating the

process.

ISTEA authorizes funding for 1991 through 1997 and must

be reauthorized next year so that congressional appropria-

tors can continue to spend money from the highway trust

fund.  Reflecting the decline in discretionary spending,

ISTEA's reauthorization is the biggest pork barrel in the