By Ron Thaniel
April 14, 2003

A draft version of the Bush Administration's proposed surface transportation bill would authorize about $242.3 billion over the next six years for highway, transit, rail and safety programs, far less than Congress is contemplating. Highways will receive a modest increase of $29.3 billion in FY 2004 to $35 billion in the last year of the bill. Funding for transit remains flat at $7.4 billion over six years. The Administration's proposed funding level would be a modest increase from the $218 billion TEA-21 law, which expires this fall.

Details of this draft measure to succeed the Transportation Equity Act for the 21st Century (TEA-21) are circulating in the Washington transportation community reflecting far less than the $375 billion proposed by House transportation leadership or the $310 billion adopted two weeks ago in the Senate budget resolution. The House transportation leaders have proposed a gas tax increase of as much as 12 cents a gallon to pay for a $375 billion reauthorization. The approved Senate budget resolution, including the $310 billion reauthorization, does not mention gas tax increases.

SAFETEA, which stands for Safe and Flexible Transportation Efficiency Act of 2003, is slated to be formally sent to Congress sometime late April or early May. Closely mirroring the President's FY 2004 budget request, the measure does retain many important elements of TEA-21, including the budgetary firewalls to protect the Highway Trust Fund, drawing down the reserves in the Highway Trust Fund, and would maintain a key feature of TEA-21, known as the revenue-aligned budget authority (RABA).

Introduced in TEA-21, there was a concern that not all transportation revenues (fuel, taxes, vehicle taxes) were being spent on transportation projects. Instead, they were going into the General Fund. To remedy this, TEA-21 included a guarantee that these revenues would go into the Highway Trust Fund and would be committed to transportation projects. Since these revenues could not be exactly anticipated for the six years covered by the bill, RABA was created to align spending in actual revenues.

However, when revenue dropped, it meant that highway spending was supposed to be cut. The Administration proposed reducing spending in the FY 2003 budget per the RABA formula; however, Congress restored spending to fiscal 2002 levels.

As a result, the Administration is proposing to eliminate the part of the RABA formula that estimates future tax receipts.

The Administration's measure does not include any federal user fee increases or a proposal to index the gasoline tax to the Consumer Price Index, options currently being considered by Congress to significantly boost revenue to the Highway Trust Fund.

The Administration's measure proposes significant changes to the transit program in SAFETEA. Programmatically, the measure would collapse many programs into formula grants, including elimination of the discretionary bus program. In addition, the Administration is determined to reduce the federal/state/and local cost share for new transit projects "New Starts", to 50/50 from the current 80/20 share making it more difficult for local government to pursue transit projects over highway projects. Maintaining the current matching share is a priority for the Conference, the American Public Transportation Association (APTA), New Starts Working Group and other pro transit interest.

The Administration is proposing several new highway programs including the Infrastructure and Performance and Maintenance Program proposed funding at $1 billion annually. The program would provide grants to states for "ready-to-go" highway projects that address congestion and improve infrastructure. The Conference welcomes this initative; however, argues that congestion is a local problem best addressed by local decision makers and therefore would request that this new program be suballocated to local government as opposed to the state.

The Conference has been working with Congress and other interest groups in the development of a congestion relief program that would target existing and new funds for metropolitan areas to combat congestion. Highlights of the congestion relief plan includes increasing and suballocating the Congestion Mitigation and Air Quality Program, increase and suballocate the Surface Transportation Program, and require states to suballocate National Highway System funding to metropolitan areas per lane miles in metropolitan areas for congestion relief as well as substantially greater resources for transit.

The Administration's measure also calls for streamlining environmental reviews and would expand projects eligible for the Transportation Infrastructure Finance Innovation Act by reducing the eligibility from $100 million to $50 million.

The Administration's environmental streamlining measure is strongly opposed by environmental groups because it proposes to reduce environmental reviews of highway projects.

The Administration's bill also emphasizes safety programs and homeland security, including a new highway safety improvement program and a blue-ribbon commission to study highway safety. The measure would also clarify the eligibility of transportation security projects, and would establish a 100 percent federal match for certain security projects. Security could run into difficulty from road and transit interests if the Administration plans to pay for them by diverting funds from the Highway Trust Fund.

For more information on the U.S Conference of Mayors TEA-21 reauthorization priorities, please visit our website at usmayors.org