House Panel Rejects Obama Plan to Fund Transportation Projects

This story appears in the March 21 print edition of Transport Topics.

The House Transportation and Infrastructure Committee voted last week to not support the Obama administration’s transportation budget proposals because administration officials have not identified revenue sources to fund multibillion dollar increases for existing and new programs.

The committee’s budget overview also said the administration wants to convert the current Highway Trust Fund into a broader Transportation Trust Fund that would add two new accounts, high-speed passenger rail and the National Infrastructure Bank. The trust fund currently covers only highway and public transit programs.

According to the administration’s plan, money for those new accounts would not come from the highway fund’s traditional sources — fuel taxes and excise taxes on transportation-related sales — but the committee said the administration did not identify a revenue source.

Because the president’s $129 billion fiscal 2012 transportation budget “fails to recognize the need to link trust fund revenues to spending to adequately establish the user-fee-based premise of the trust fund,” the Republican-dominated committee said it would not support the administration’s proposal.

Transportation and Infrastructure  Committee Chairman John Mica (R-Fla.), said that the panel planned last week to forward its 30-page “views and estimates” document to the House Budget Committee. The document outlines the committee’s legislative and budgetary policy priorities for fiscal 2012 and beyond.

The document said the panel would “closely examine” programs within its jurisdiction to determine ways to “cut costs, streamline programs, consolidate facilities, eliminate waste and create efficiencies.”

The committee also said it plans to explore “innovative financing” and public-private partnerships and hopes to reduce transportation costs by “major improvements” to the highway project delivery process.

Although the administration’s 2012 budget proposal said the renamed Transportation Trust Fund would continue to dedicate fuel tax and other highway revenue sources only to highway and public transit programs, it did not say how it planned to fund the new accounts for rail and the infrastructure bank — estimated to cost more than $12 billion in 2012 alone.

In addition, the administration did not indicate how it planned to pay for a $50 billion reauthorization “jump start” in 2012 to foster job creation and fund improvements for highway, rail, transit and aviation systems.

The 2012 transportation budget represents a 66% increase above the fiscal 2010 budget, the last enacted appropriated level, a plan that cannot be supported by trust fund revenues, the committee said.

For the same reasons, the committee said it would not support the president’s yet-to-be-made-public $556 billion, six-year reauthorization program that Department of Transportation officials said includes multibillion dollar increases for urban mass transit and high-speed passenger rail projects.

The administration’s proposal to reauthorize would create a $435 billion revenue gap over a 10-year period, the committee said.

“The committee is prepared to evaluate the administration’s proposal for paying for these funding increases when the administration transmits their full reauthorization proposal to Congress,” the committee stated.

The most recent long-term reauthorization of the federal surface transportation program expired Sept. 30, 2009. Since then, federal highway, highway safety and public transportation programs have been operating under a series of short-term extensions, the most recent of which extended the programs through Sept. 30.

The Highway Trust Fund is facing ongoing solvency problems, because of a drop in fuel sales and rising highway construction costs.

The committee said one of its “highest priorities” is to ensure that revenues raised by various transportation trust funds, including the Highway Trust Fund, are “used for their intended purposes — to rebuild our nation’s infrastructure.”

A committee spokesman said that so far the administration has been “silent” on how it would expand revenue coming into the broader Transportation Trust Fund.

“Although we have not seen many details regarding this proposal or the overall reauthorization proposal from the administration, I do not believe the committee would support opening up the Highway Trust Fund, as it is, to additional types of expenditures,” said Justin Harclerode, spokesman for committee Republicans.

The document, which the panel adopted in a voice vote, was not supported by some committee Democrats.

Rep. Nick Rahall of West Virginia, ranking Democrat on the committee, said he would not support the document since Democrats were not allowed any input. He called it a “departure” from past bipartisan budgetary policy statements.

Mica said he would give committee members until March 18 to offer their views. 

DOT Secretary Ray LaHood has testified several times this month to House and Senate committees on the administration’s $129 billion 2012 budget proposal, calling the president’s reauthorization proposal “big and bold.” 

However, LaHood has not identified possible revenue streams to pay for the large increases in spending, although he has said that the administration opposes increasing fuel tax rates.

Last week, Olivia Alair, a DOT spokeswoman, said the department was “committed to working with Congress in a bipartisan manner to advance a transportation bill that is fully paid for and does not add to the deficit.”

The committee said it is committed to writing a long-term surface transportation authorization bill that keeps the Highway Trust Fund solvent, avoiding any cash infusions from the general fund.