Audit Reports

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Growth in Highway Construction and Maintenance Costs

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On September 26, we issued our report on the growth in highway construction and maintenance costs. Our audit was conducted at the request of the House Committee on Transportation and Infrastructure. The objectives of our audit were to determine: (1) the extent of recent cost increases for highway construction and maintenance projects, (2) whether the cost increases are the product of transitory factors or indicative of longer term structural changes that need to be incorporated into future transportation funding plans, and (3) the degree to which the cost increases are subject to regional variations. We found that highway construction and maintenance costs nationwide grew approximately three times faster from 2003 through 2006 than their fastest rate during any 3–year period between 1990 and 2003, substantially reducing the purchasing power of highway funds. These increases are largely the result of escalation in the costs of commodities used in highway projects, such as steel and asphalt, and reflect structural, not transitory, economic changes. Consequently, we expect these commodity costs to remain elevated, and possibly continue expanding, in the near term. Finally, we found that highway project cost growth varied across states due primarily to differences in costs of transporting commodity inputs.