Government Transportation Investment

Government Transportation Investment

Gross government transportation investment,1 including infrastructure and vehicles, has increased steadily over the last decade. The Bureau of Transportation Statistics has estimated that total gross government transportation investment reached $86.1 billion in 2000, compared with $67.4 billion in 1990 (in chained 2000 dollars2), an average annual growth rate of 2.6 percent (figure 14-5). Government transportation investment grew faster than did other government investments. As a result, the share of transportation in total government investment increased from 24 percent in 1990 to 27 percent in 2000 [1, 2]. However, the share of government transportation investment in the Gross Domestic Product (GDP) changed little, remaining at almost 1 percent each year [2]. This indicates that funds allocated by government for improving and expanding transportation capital have been growing at the same pace as GDP.

State and local governments are the main investors in transportation infrastructure, but their relative role has decreased slightly over time. Direct federal infrastructure investment rose from $2.7 billion to $4.4 billion—an average annual growth rate of 5 percent between 1990 and 2000. State and local investment in transportation infrastructure grew from $56.9 billion to $72.1 billion, an average annual growth rate of 2.4 percent (figure 14-6).

Infrastructure accounted for 90 percent of the total government transportation investment during the 1990s, the bulk of which (almost three-quarters of the total) was allocated to highways (figure 14-7). Nevertheless, the share of highway investment in total infrastructure investment has gone down, whereas that for transit and air has gone up. Air investment grew at an average annual rate of 3.4 percent, faster than all other modes in the 1990s.


1. U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Account tables, available at, as of February 2003.

2. U.S. Department of Transportation, Bureau of Transportation Statistics, “Transportation Investment: Concepts, Data and Analysis,” draft, May 29, 2003.

1 Transportation investment is the purchase value of transportation equipment and the purchase or construction value of transportation facilities and structures, namely, roads, railways, airports, air traffic control facilities, water ports, pipelines, and so forth, that have a service life of longer than one year. The total purchase or construction value of new transportation capital in a year is gross investment. While investment increases the stock of transportation capital, the existing transportation capital stock depreciates or wears out over time. Therefore, gross investment minus depreciation provides net investment.

2 All dollar amounts are expressed in chained 2000 dollars, unless otherwise specified. Current dollar amounts (which are available in appendix B of this report) were adjusted to eliminate the effects of inflation over time.