Analysis of Unobligated Balances in the Urban Mass Transportation Fund

All of the Urban Mass Transportation Administration's (UMTA) programs include grants to state or local governments since UMTA does not itself operate transit services or construct transit facilities. Unexpended balances in the UMTA account at the close of fiscal year 1977 involved $12.6 billion, $9.6 billion of which represented unobligated balances and $3.0 billion of which represented unliquidated obligations. The 1979 budget forecasts that unliquidated obligations will exceed unobligated balances at the end of that year by $576 million.

The large unobligated balance in the UMTA program exists primarily because of the way Congress funds and controls UMTA programs. UMTA funding has taken the form of contract authority which does not lapse at the end of the fiscal year in which it was authorized. This method was chosen to provide for advanced funding for UMTA programs. UMTA believes that, at the present level of program option, it will utilize almost all of the unobligated funds available by the end of 1980, as most of these funds will likely be committed by administrative reservation even if they are not formally obligated. Increases in UMTA unliquidated balances are due primarily to the funding of projects for new rail systems. Issues related to congressional consideration of new legislation for UMTA programs involve: how to provide advanced budget authority, how much funding to provide for new heavy rail systems, and how to simplify the complex appropriation program.