Richard Nixon photo

Special Message to the Congress on Special Revenue Sharing for Transportation.

March 18, 1971

To the Congress of the United States:

When the early settlers first encountered the American wilderness, a man's mobility was dependent upon his strong legs and the sharp axe with which he cleared his path. But even in those pioneering times, Americans quickly came to realize that good roads and docks and bridges were community concerns.

Over the years, government has become increasingly involved in improving the Nation's transportation systems, from the building of post roads and canals in the early periods of our history, to the construction of airports and superhighways in recent years. The question we face today, therefore, is not whether government should participate in transportation matters, but how government should participate-and which levels of government should undertake which responsibilities. These are the central questions I am addressing in this message as I outline a new Special Revenue Sharing Program for Transportation.

GROWING TRANSPORTATION SYSTEMS AND GROWING PROBLEMS

As the demand for mobility has mushroomed and as new means of transportation have been invented in recent years, the size of our transportation system has reached staggering proportions. It has been less than 70 years, for example, since the Wright brothers flew at Kitty Hawk. In that time, our aviation system has grown to the point that last year it served over 173 million commercial passengers and handled more than 4 billion ton miles of air freight. An open field with a wind sock was a sufficient airport for most communities only a few decades ago. Today many airports are cities in themselves and air traffic is controlled by highly sophisticated electronic systems.

At the turn of the century there were only 8,000 automobiles in America. By 1920 nearly 8 million cars traveled our highways and today we have more than 100 million registered vehicles which travel over one trillion miles annually. The people of our Nation are driving more than twice as many automobiles as they did just 20 years ago.

These two technological developments-the airplane and the automobile-give dramatic evidence of both the successes and the failures of American transportation. The automobile and the airplane are mechanized masterpieces. The highways and airports which they use are often glowing displays of America's engineering genius. But behind the mystique of jet travel and the convenience of the family car lie serious problems that have been growing more acute in recent years.

The airplane means fast travel over great distances, to be sure. But it also can mean harmful noise and air pollution, congested terminals, misplaced luggage and airports that are difficult to reach. Highways that speed motorists between cities can become long and narrow parking lots where cars are stalled for hours within urban areas. It often takes longer to move by "horseless carriage" across our major cities today than it did by horse-drawn carriage a century ago. Efforts to improve this situation by building new highways often have the effect of destroying neighborhoods and disrupting lives. It is estimated, moreover, that automobiles are responsible for almost half of our air pollution--a growing problem that is slowly choking our central cities.

And there is another serious problem, as well. For with our heavy investment in automobiles and air transportation has come a sharp decline in rail passenger service and in public mass transit systems.

The first electric streetcar lines and the first subway appeared at about the same time as the automobile and, like the automobile, they grew in popularity during the first quarter of this century. In 1905, local urban transit systems carried 5 billion passengers. By 1926, ridership had more than trebled, but that was the peak of mass transit's popularity--except for a brief period during World War II. After 1945, public transit ridership, revenue and service declined steadily. In 1950, there were still some 1,400 urban transit companies operating 87,000 vehicles and carrying 17.25 billion passengers. By 1970, however, there were 327 fewer companies and 25,500 fewer vehicles carrying only 7.3 billion passengers.

Public transportation has been caught up in a vicious cycle of increasing costs, rising fares, shrinking profits, decreasing quality, and declining ridership. Ironically, this decline in mass transit has come at the same time that the need for fast, convenient, economical public transportation has become greater than ever before. This Nation has the technology to provide such transportation. If we can move three men a quarter million miles to the moon, then surely we can also find ways to move millions of men and women over short distances in our cities. This is another of the great transportation challenges of our time.

HOW HAVE THESE PROBLEMS BEEN MET?

All of these problems--pollution, congestion, inefficiency, and the lack of sufficient mass transit services--have been recognized for years. And for years the Federal Government has been working to alleviate them. In the past two years, this administration has recommended a number of new programs to improve American transportation. As a result, we now have an accelerated program to develop urban mass transit systems, new authorizations for the expansion and improvement of airports and airways, and a quasi-public corporation to operate a national rail passenger system.

It is clear, however, that more money and more regulations alone will not solve our transportation problems. Nor will they make the Federal Government more responsive to local needs and local aspirations. It is equally clear that the established relationships among Federal, State and local governments are unsuitable for achieving the goals we pursue.

What are those goals? They can be usefully described under the general heading of "balanced transportation."

ACHIEVING BALANCED TRANSPORTATION

A balanced transportation system is essentially one that provides adequate transportation not just for some of the people in a community but for all the people in a community. A balanced system also recognizes that an individual can have different transportation needs at different times. Such a system treats speed as only one of the factors in the transportation equation and does not ignore the importance of other qualities such as comfort, safety, and reliability.

Despite our technological capacity, we do not enjoy a fully balanced transportation system in modern America, particularly in our larger cities. We have relied too much in our cities on cars and on highways; we have given too little attention to other modes of travel. Approximately 94 percent of all travel in urbanized areas is by automobile, yet about 25 percent of our people-especially the old, the very young, the poor and the handicapped--do not drive a car. They have been poorly served by our transportation strategy.

DISTORTIONS CAUSED BY MATCHING REQUIREMENTS

One of the most disturbing elements in the present transportation picture is the fact that such inequities have often been reinforced and even precipitated by the Federal Government. One reason is that Federal dollars have been relatively easy to obtain for highway building but more difficult to obtain for other transportation purposes. The Federal Government now pays 90 percent of the costs for a new interstate expressway, for example, but only 67 percent of the costs for a new mass transit system and only 50 percent of the costs of building an airport. It is little wonder that State and local planners are encouraged to cover the landscape with ribbons of concrete. Such distortions of local priorities are among the major problems that this administration is seeking to correct.

EXCESSIVE FEDERAL CONTROL

But local priorities are not only distorted by Federal requirements concerning matching funds. Local determinations of what is needed most must constantly yield to Federal judgments about what a local community should do with the money it receives from Washington.

The Federal Government has a great influence on the particular mixture of transportation spending in any locale, for it carefully allocates so much of its money for one kind of transportation and so much for another. Each program is funded separately--and even at the State and local level, different agencies frequently administer monies which are designated for different purposes. As a result, it is extremely difficult to achieve sound intermodal planning of comprehensive transportation systems. There is no single place where sufficient resources and authority are available for making wise choices between various transportation alternatives. Nor can anyone effectively coordinate investments in any one mode of transportation with efforts in other transportation fields. We err, in short, by treating the transportation challenge as a series of separate problems rather than as a single problem with many interrelated parts.

The hard fact is that the best mixture of transportation modes is not something that remote officials in Washington can determine in advance for all cities, of all sizes and descriptions, in all parts of the country. Nor do the Federal officials who grant money for specific projects understand local needs well enough to justify their strong influence over how local projects should be planned and run.

As I have contended in a number of messages to the Congress in the past two years, our society has become too complex and too diversified to profit from such highly centralized control. This is not to deny that improving our transportation systems is a national concern. It is a national concern and that is why it should continue to be funded in part from Federal tax resources. But the specific manner in which any city or metropolitan area goes about achieving this goal is not something that can be most effectively determined at the Federal level. In fact, transportation needs are among the social and economic factors that vary most widely from one place to another. That is why many of our Federal transportation programs can profit so much from conversion to the Special Revenue Sharing approach.

Community organizations, concerned individuals and local units of government should not have to shout all the way to Washington for attention. Community standards and community transportation goals are changing and some of those who only five years ago welcomed the prospect of a new highway or airport are now protesting in front of bulldozers. Transportation planning and appropriations mechanisms must be flexible enough to meet the challenge of changing community values. This flexibility can best be achieved by concentrating more decision making power in the States and the localities.

The purpose of Special Revenue Sharing is to focus Federal resources on major public problems and at the same time maximize flexibility of choice at the State and local level. The Special Revenue Sharing approach provides an ideal means for addressing national problems that have local solutions.

A SPECIAL REVENUE SHARING PROGRAM FOR TRANSPORTATION

The proposal I am submitting today would establish a new Special Revenue Sharing Program for Transportation. In simplest terms, this program means returning Federal tax dollars to States and to local communities for investment in transportation without the usual Federal controls and restraints. It signals a philosophical return to the days when the man who best understood the local terrain was the man who blazed the trail.

FUNDING

I propose that the Special Revenue Sharing Program for Transportation become effective on January 1, 1972, and that it be funded initially at an annual level of $2.566 billion. All funds that would be included in this new program would come from twenty-three existing Federal grant-in-aid programs which are now grouped under five major headings: Urban Mass Transit Grants, Airport Grants, Highway Safety Grants, Federal Aid for Highways (but not the Interstate System), and Highway Beautification Grants. The size of these programs in my proposed budget for Fiscal Year 1972 is as follows:

Millions of dollars

Urban Mass Transit $525

Airport Grants 220

Highway Safety Grants 130

Federal Aid for Highways (Except for

the Interstate System) 1, 625

Highway Beautification Grants 66

$2, 566

The money for these programs presently comes from three different funding sources: general tax revenues, the Highway Trust Fund and the Airport and Airway Trust Fund. The two trust funds were established so that money could be collected directly from those who use highways or airports--through special taxes on gasoline and on air tickets--and then used to improve the related transportation mode.

This principle would continue to be observed under Special Revenue Sharing. In the first year of operation, Special Revenue Sharing money would be drawn from the two trust funds and from general revenues in the same proportion as under the existing categorical grant system, though it could be spent as the localities see fit. After that, however, the portion of the Special Revenue Sharing Program for Transportation derived from the trust funds in any year would equal the portion of the program that was used for highways and for aviation-related purposes in the preceding year. Thus the money in the trust funds would still go to achieve the general purposes for which the funds were established. General funds would pay for all other transportation activities.

The National System of Interstate and Defense Highways would not be included in this Special Revenue Sharing Program. This 42,500-mile system is now 74 percent finished and is scheduled for completion in 1978. The Interstate highways that have been built under this program have helped to open America to new dimensions of intercity travel. The system has advanced the cause of highway safety while at the same time permitting unparalleled individual mobility. In my judgment, it would not be in the national interest to alter the basic funding mechanism for the construction of this system at this time.

Although all Special Revenue Sharing funds would be assigned to governmental units, the recipient government could, in turn, channel the funds to private enterprises which meet public transportation needs. This would include the many urban bus systems that are privately owned and operated.

No State or local matching funds would be required under this program. The Federal Government would not rigidly apportion funds among a variety of narrow transportation programs nor would it approve specific local projects. Thus the Special Revenue Sharing Program for Transportation would stimulate State and local governments to take the initiative in meeting transportation needs, to experiment with new and more creative projects, to listen to local opinion and to mobilize local energies which are often stifled under present arrangements.

I would emphasize in addition that each State would receive at least as much money from the new Special Revenue Sharing Program for Transportation as it has been receiving under the current categorical grant programs. Each State would thus be "held harmless" against any reduction in the overall level of support it receives from programs which become a part of this Special Revenue Sharing fund.

TWO FUND ELEMENTS

The Special Revenue Sharing Program for Transportation would consist of two elements, one for General Transportation activities and one for Mass Transit Capital Investment.

GENERAL TRANSPORTATION ELEMENT

The General Transportation element would total $2.041 billion for the first full year of revenue sharing. This money could be spent for the planning, construction, acquisition, improvement, operation and maintenance of a broad spectrum of transportation systems and services, including highway, aviation and mass transit.

The money in this General Transportation element would be distributed in the following manner: Ten percent would be allocated among the States and localities at the discretion of the Secretary of Transportation. This money would be used to encourage planning, to fund research development and demonstration projects, and to finance other activities related to the development and implementation of national transportation objectives.

The remaining 90 percent of this General Transportation element would be allocated to the States according to the following four-part formula: 25 percent of this remainder would be distributed according to the ratio of each State's total population to the total population of the United States; 35 percent would go to States according to the ratio of their population in urban places (over 2,500 in population) to the Nation's total population in urban places; 20 percent would be given out according to the ratio of the geographic area of each State to the total area of the United States; and the remaining 20 percent would be allocated according to the ratio of each State's star and rural post route mileage to the total of that mileage in the country.

This formula, which resembles formulas which are used under current categorical grants, would provide the best means for distributing Special Revenue Sharing funds in a similar pattern as under the present system. In addition to the guarantee that it would be held harmless against any reduction in support, each State would be guaranteed a minimum allocation of one-half of one percent of this General Transportation element.

As I have noted above, a percentage of the General Transportation element would be distributed among the States according to their share of the Nation's population that lives in urban areas. Each State would be required to pass along its share of this money directly to its communities of more than 2,500 persons to spend as their local governments think best. If we are to restore confidence in local government then we must give public officials at the local level a reasonable opportunity to make sound plans and courageous investment decisions. This means that they must be able to rely upon a certain amount of funding. Our "pass-through" formula is designed to provide this needed assurance.

MASS TRANSIT CAPITAL INVESTMENT ELEMENT

The second part of the new Special Revenue Sharing fund is the Mass Transit Capital Investment element--which would total $525 million for the first full year. This money would be distributed to each State according to its share of the Nation's population that lives in Standard Metropolitan Statistical Areas (SMSA). An SMSA is defined as an area which contains a central city or cities with an aggregate population of 50,000 or more and those surrounding counties which have a metropolitan character and are socially and economically integrated with the central city. There are 247 such areas in the United States.

Eighty percent of the funds in this Mass Transit Capital Investment element would be distributed according to each State's share of the Nation's population that lives in SMSAs of over one million persons. The remaining 20 percent would be allocated according to each State's share of the Nation's population that lives in SMSAs of less than one million persons. Every State would be guaranteed a minimum allocation of $250,000.

In the Mass Transit Capital Investment element as in the General Transportation fund element, I propose that a portion of the funds be passed through the States directly to urban areas. Of the 80 percent distributed to States on the basis of SMSAs of more than one million in population, I propose that half go directly to the local governments within these SMSAs to spend for mass transit purposes as they see fit. The other half of this money would also have to be spent within these same larger SMSAs, but it would be spent at the State's discretion. Currently, there are 33 SMSAs with more than a million persons in the United States and these are the areas that would automatically receive "pass-through" funds for Mass Transit Capital Investment.

In 1969, I submitted to the Congress a proposal for establishing an Urban Mass Transportation Assistance program. The passage of that legislation helped to create a significant momentum for the rejuvenation of public transit systems. I feel very strongly that this momentum must not be lost and that is why I propose that a part of this new Special Revenue Sharing Program for Transportation be devoted to this purpose.

I believe that this Mass Transit Capital Investment element would assure continued support and enthusiasm for mass transit initiatives. It would also provide fast relief for many systems which now suffer from inadequate equipment, allowing them to undertake the essential work of modernization without further delay.

COMBINING OLD AND NEW STRENGTHS

Special Revenue Sharing would strengthen our transportation efforts in many significant ways without sacrificing the strengths of our present programs. Any transportation project that is working well today could be continued, and in all probability expanded, under the new arrangements. While narrow grant categories would be eliminated, none of the programs which they now support need be discontinued if the State or locality believes they are worthwhile.

In recent years, governments at all levels--and private groups and individuals as well--have become more sensitive to problems such as transportation safety and the environmental impact of transportation. Our whole society can be proud, for example, of the fact that there were no fatalities from commercial airline accidents in the United States last year. We can be grateful, too, that despite increasing traffic on our highways, automobile fatalities in 1970 decreased significantly for the first time since 1958.

We have also become more alert to the effects which transportation has on the beauty of the landscape and the quality of the environment. Our traditional economic concerns have been complemented by our growing esthetic concerns and the result has been a strong effort at all levels of society to improve the quality of American life.

There is no reason why growing sensitivity on matters such as safety and environmental quality should not continue to grow under this new Special Revenue Sharing program. State and local governments, after all, have often been particularly responsive to citizen pressure in these areas and they have frequently acted as bold pioneers in meeting these concerns. I am confident that as more responsibility is given to governments closer to the people, the true and abiding interests of the people will be even better reflected in public policy decisions.

I would emphasize again, as I have in presenting each of my revenue sharing programs, that there could be no discrimination in the use of any of these monies. All of the funds included in this Special Revenue Sharing Program for Transportation would be subject to the provisions of Title VI of the Civil Rights Act of 1964•

THE IMPORTANCE OF PLANNING

No transportation system---on the national, regional, or local level--can serve the public with maximum effectiveness unless there is a great deal of cooperative planning between various modes of conveyance and between various levels of government. A multitude of government jurisdictions, public authorities and private companies must learn to work closely together if our needs are to be met in a comprehensive manner. The legislation I present to the Congress will therefore require that transportation plans be developed in coordination with the development plans prepared under my proposed Special Revenue Sharing Programs for Urban and Rural Community Development.

RECOGNIZING DIVERSITY

Just as each unique individual has unique transportation problems, so do cities, States and other governmental jurisdictions. The single most important fact about our Special Revenue Sharing Program for Transportation is that it recognizes this diversity. It combines the resources of the Federal Government with the flexibility of State and local governments. It provides the best way to meet the problems which diversity implies by utilizing the energies which diversity produces.

RICHARD NIXON

The White House

March 18, 1971

Note: On the same day, the White House released the transcript of a news briefing by Secretary of Transportation John A. Volpe and two fact sheets on the program.

On April 6, 1971, the White House released the transcript of a news briefing by Edwin L. Harper, Special Assistant to the President, on the hold harmless base line figures for States and localities under special revenue sharing, and a fact sheet on the figures for transportation special revenue sharing.

Richard Nixon, Special Message to the Congress on Special Revenue Sharing for Transportation. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/241107

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