House Committee Releases Multi-Year Funding Plan for Highways, HMT

(The foundation of the U.S.' system for funding highway and transit projects is the Highway Trust Fund (HTF). User fees (gas taxes) are deposited into the HTF and distributed to states and transit agencies to be reinvested in projects that improve highways, bridges, and transit systems. The last multi-year law that funded surface transportation programs, SAFETEA-LU, expired in October 2009. Since then, Congress has passed various short-term extensions. In March 2011, the President signed a bill (H.R. 662) which extended funding to September 30, 2011.)

Although the Committee has issued its proposal, a transportation reauthorization bill has not yet been introduced. The following are highlights of the Committee's proposal:

Proposal Would Balance Transport Expenditures with Revenues Collected

This proposal would align transportation expenditures with revenues by authorizing approximately $230 billion over six years from the Highway Trust Fund (HTF), a funding level consistent with the amount of revenue being collected.

(In 2010, the HTF brought in $35 billion in revenue, but $50 billion in spending was authorized. The Committee states that if spending continues at this rate, the HTF will be bankrupt in 2013 and will need to rely on general federal revenues and unpredictable annual appropriations for transportation funding.)

No Increase in Gas Tax Planned, Even Though Receipts Inadequate

The Committee states that other options¹ are not fiscally responsible or realistic as neither Congress nor the Administration will support an increase in the gas tax (which constitutes the HTF's revenue). One Committee leader has recently stated that several factors, such as the growing fuel efficiency of the U.S.' vehicle fleet and the increased use of alternative fuels, have contributed to the declining ability of the gas tax to adequately finance U.S. infrastructure needs.

Would Ensure Harbor Maintenance Tax Is Used for Intended Purposes

The proposal aims to ensure that the revenues deposited into the HTF are used for their intended purposes. It would also unlock other existing revenue sources that are not being fully utilized for their intended purpose, such as the Harbor Maintenance Trust Fund (HMTF). The HMTF is based upon a user fee² collected from shippers that utilize the nation’s coastal ports. The revenues from the fees collected are deposited into the HMTF, from which Congress appropriates funds to dredge harbor channels to their authorized depths and widths.

(Despite growing maritime infrastructure needs, the Committee states these funds are not being used to maintain U.S. ports. In FY 2010 the HMTF grew by $1.3 billion, but only $828.6 million was spent. If the status quo continues, the HMTF is estimated to have a balance of $6.93 billion at the end of FY 2012. This proposal aims to ensure that dedicated funds, such as the HMTF, go to their intended infrastructure programs.)

Would Consolidate or Eliminate About 70 Surface Transport Programs

Rather than applying spending cuts evenly across all existing surface transportation programs, this proposal would consolidate or eliminate approximately 70 programs that are duplicative or do not serve a federal purpose.

States Could Toll New Capacity on Interstate Highways, Spend More Flexibly

Under this proposal, existing lanes on the Interstate Highway System would remain toll-free; however states would have the ability to toll new capacity on the Interstate System. States would also have greater flexibility to toll non-Interstate highways.

States would also no longer be required to spend highway funding on non-highway activities. States would be permitted to fund such activities if they chose, but would be provided the flexibility to identify and address their most critical infrastructure needs.

Would Eliminate Differing State Requirements for Hazmat Transport, Etc.

Regarding the transportation of hazardous materials, the proposal would eliminate differing state requirements for notification, enforcement, and permitting that hinder the free-flow of commerce and do not increase safety levels. Among other things, the proposal would also (i) eliminate overlapping federal jurisdiction; (ii) ban certain regulations whose cost-effectiveness is unproven; (iii) ensure no new user fees will be imposed on the industry; (iv) eliminate unnecessary package inspections that burden commerce; and (v) ensure penalties are fairly imposed on those entities responsible for violations.

¹Earlier in 2011, the Department of Transportation requested that its fiscal year 2012 budget include a $556 billion six-year surface transportation reauthorization. (See ITT's Online Archives or 02/17/11 news, 11021722, for BP summary.)

²Referred to as the Harbor Maintenance Fee (HMF) or Harbor Maintenance Tax (HMT)

(See ITT's Online Archives or 06/16/11 news, 11061614, for BP summary of a representative stating that he was disturbed that Congress has been unable to use all of the HMT revenues for their intended use.

See ITT's Online Archives or 02/18/10 news, 10021815, for BP summary of a Congressional Research Service report, which found that despite a large HMTF surplus, the busiest U.S. harbors are under-maintained. The latest CRS report on HMTF expenditures is available here.

See ITT's Online Archives or 03/07/11 news, 11030741, for BP summary of the President extending funding for surface transportation through September 30, 2011.)

Committee proposal is available here.

Committee press release on the proposal is available here and press release on the gas tax is available here.

American Trucking Associations press release applauding the release of this proposal is available here.