Intermodal Surface Transportation Efficiency Act

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The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) was the first comprehensive federal surface transportation bill enacted as completion of the interstate highway system neared. Signed into law on December 18, 1991, it was one of the few innovative domestic bills passed during the administration of President George H. W. Bush. The legislation authorized spending $151 billion over six years in a variety of programs folded into the bill, and alleviated fears of transportation officials and state leaders that the federal government would significantly reduce its role in surface transportation after the interstate highway system was finished.

ISTEA represented a new approach to surface transportation programs by placing more responsibility in the hands of state and local governments and metropolitan planning organizations (MPOs) by adding flexibility to move funds from one program to another, and by encouraging decision makers at all levels of the federal system to see the relationship of surface transportation to issues of clean air, urban sprawl and congestion, and economic growth. Although the federal government retained a major role in implementing the legislation, a major impact of ISTEA was to decentralize decision making to state and local officials and MPOs, which for the first time were able to spend federal monies directly.

ISTEA provided federal funding for most programs at an 80 percent federal/20 percent state level, and provided in its different programs support for a surface transportation block grant program, a 155,000-mile National Highway System composed of the 44,000-mile Interstate Highway System and other major highways, a mass transit program, a program to build and repair bridges, and several smaller programs. Although it increased the role of state, local, and regional officials, it also included 538 demonstration projects (also called “set-asides”) favored by Congress.

Experts agree that ISTEA marked a turning point in the relationship of the federal government to states, local governments, and regional organizations in transportation. ISTEA also broadened the role of planners in transportation, encouraged more interested parties to participate in transportation decisions, brought goods movement and intermodal projects more prominently into consideration for funding, and reinforced the need for state transportation departments to move from a strict highway orientation to a multimode perspective in statewide planning. The balancing of power between the levels of government made ISTEA the model for surface transportation legislation in the postinterstate era. Its basic structure was retained in the reauthorization of the succeeding six-year surface transportation bill, the Transportation Efficiency Act for the Twenty-first Century, or TEA-21, in 1998.


Robert J. Dilger, “ISTEA: A New Direction for Transportation Policy,” Publius: The Journal of Federalism 22 (Summer 1992): 67–78; and Robert W. Gage and Bruce D. McDowell, “ISTEA and the Role of MPOs in the New Transportation Environment: A Midterm Assessment,” Publius: The Journal of Federalism 25 (Summer 1995): 133–54.

Jeremy Plant

Last updated: 2006

SEE ALSO: Transportation Equity Act for the Twenty-first Century; Transportation Policy