Transportation funding runson empty

By Staff -- Logistics Management, 4/1/1998

Time is running out on the Intermodal Surface Transportation Efficiency Act, or ISTEA, the legislation that funds federal transportation programs.

Late last year, the House and Senate approved a six-month extension of current ISTEA legislation, which will expire on May 1, 1998. States may not obligate federal funds after that date until Congress passes reauthorization of surface transportation programs.

Faced with the deadline, congressional leaders say they are confident a new bill will pass. The Senate recently approved its version of the bill, ISTEA II, after seven days of floor debate. The $214 billion bill, S. 1173, reauthorizes programs through the year 2003. It increases spending levels by $59 billion, or 38 percent over the levels contained in the original ISTEA legislation enacted in 1991. That's substantially higher than earlier versions of the Senate bill.

ISTEA II provides $171 billion for highway and surface transportation programs. Another $41.3 billion will fund mass transit, and about $1.8 billion will be used for transportation safety programs. The legislation apportions $151.4 billion directly to the states.

The bill addresses concerns that some states will pay out much more than they receive by providing a funding formula that guarantees a 90-cent return to states for every dollar generated through the federal gasoline tax. That measure will not appease highway construction and freight-transportation interests, however. "It's a step in the right direction, but we want to see the transportation trust funds taken off budget," says Matt Jeanneret, a spokesman for the American Road and Transportation Builders Association.

Many supporters of the balanced-budget agreement prefer to use the funds to continue to offset the federal budget deficit, however. About $24 billion has accumulated in the Highway Trust Fund, an amount that would grow to $37 billion by the year 2002, according to the House Transportation and Infrastructure Committee. When the House debates its version of ISTEA, it will consider an amendment that would prevent growth in future trust fund balances by increasing spending to match revenues.

The House version of the transportation bill was scheduled to reach the floor early this month. Once it is passed, the Senate and the House will work on resolving differences in their bills in conference.

"We plan to have something signed before the extension runs out," says a source at the Transportation and Infrastructure Committee, adding, "[Committee Chairman Bud] Shuster can move fast when he needs to."