Intelligent transportation system (ITS) development has been heavily underwritten by the federal government for the past several years. But the budget resolution passed by the House several weeks ago zeros out ITS funding. The congressional action has thrown the U.S. DOT's plans for developing uniform ITS highway applications and other programs into jeopardy. Although much of the "smart highway" technology is being developed in public/private partnerships, the end of federal funding would be a critical blow to the private sector ITS establishment (consisting of high-tech companies and defense contractors) that rapidly emerged when the scope of federal largesse in the field became apparent. A source at Hughes Aircraft recently told a Tri-State Transportation Campaign member that the vast majority of private-sector ITS programs are focused on boosting arterial traffic flows. Most transportation reform advocates appear willing to go along with elimination of ITS funding -- especially since it will mean the death of boondoggle pilot projects like the Automated Highway System (which, if ever successfully developed, would allow specially-equipped cars to somehow hook onto a fast-moving guideway) and an end to a large source of dedicated funding for measures mainly designed to boost highway capacity. If the budget action becomes final, the technology's proponents will have to make the case for investment in direct competition with other transportation needs and projects.