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In Defense of the House Highway Bill

Posted by Ken Orski on Monday, February 13th, 2012

Innovation NewsBriefs
Vol. 23, No.6

According to the latest (January) CBO estimates, the Highway Account of the Trust Fund is projected to be credited with $168.4 billion in gas tax revenue and interest over the next five years (FY 2012-2016) and the Transit Account with $24.8 billion. Since the House Ways and Means Committee has proposed to transfer the transit program (along with the Congestion Mitigation and Air Quality Improvement (CMAQ) Program) to a new “Alternative Transportation Account” to be funded from the General Fund, the entire sum of $193.2 billion would become available to the highway program.

This sum is only $4.9 billion short of the cost of the highway and safety portion of the House five-year program ($206.6 billion). In other words, the whole highway program budgeted at current spending levels could be funded with revenues from the Trust Fund plus a mere $4.9 billion in offsets. If this sounds surprising, recall that in this scenario, the CMAQ program (assumed at  $8.5 billion over five years) would no longer be a charge against the Trust Fund.

Some critics charge that shifting the transit program out of the Trust Fund would subject transit agencies “to the whims of the congressional appropriations process.” Others contend that under this change it would be difficult for transit agencies to enter into contracts and make long-term investment decisions. They forget that the transit capital program and its Full Funding Grant Agreements (“New Starts”) has always been funded from the General Fund, and that most federal programs are funded through annual appropriations. This includes defense, health, housing, environment and welfare.

To continue sheltering transit from the discipline and scrutiny of an annual appropriations process simply because “we’ve been doing this for the past 30 years” is to imply that even now, after three decades of protection, transit is unable to fend for itself. It is to ignore the fact that during those 30 years, transit has firmly secured its place in the federal budget and has acquired a large and vocal constituency in Congress that can be counted upon to defend its interests.

Restoring the Highway Trust Fund to its original mission of providing a source of funds solely for the federal-aid highway program would accomplish several things. First, the program would no longer need to rely on speculative royalties from future oil and gas leases, as currently proposed in the House bill. Second, the Trust Fund would not need to be periodically propped up with contributions from the General Fund. Third, the principle of the highway program paid for with user fees would be maintained.

Lastly, the House bill would return the federal-aid highway program to its original roots. It would restore the program’s lost sense of purpose and  focus Trust Fund resources on what they always were meant to do— preserve and renew the nation’s prized asset, its interstate highway system.

 

C. Kenneth Orski is a public policy consultant and former principal of the Urban Mobility Corporation. He has worked professionally in the field of transportation for over 30 years, in both the public and private sector. He is editor and publisher of Innovation NewsBriefs, now in its 22nd year of publication.

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