Energy & Transportation Update
An Information Service of the AFI Energy and Transportation Committee
January 25, 2002
Volume III, Number 2
States May See Reduction in FY2003 Federal Transportation Funding
A recent U.S. Treasury Department report estimates that states may experience a 28% reduction in federal highway and mass transit funding for FY2003. Downturns in gas tax collections, reduced trust fund estimates for FY2003 (when compared to TEA-21), slumping truck sales and increased gasohol purchases (taxed lower than gasoline) all contribute to this preliminary dismal trust fund analysis. These downturns could force state project delays, compel further prioritization and/or raise concerns for paying off state bond obligations.
Provisions in TEA-21 do not protect the federal highway trust fund from revenue downturns. Should the Treasury analysis prove accurate (some in Congress are calling for a General Accounting Office review), general revenue funds or use of old trust fund balances could compensate for the predicted $9.1 billion downturn. Appropriators, still smarting from the statutory "guarantees" in TEA-21 funding, may be reluctant to concede general revenues or social security/Medicare trust fund surpluses for highway and mass transit purposes. Furthermore, the President's anticipated FY2003 budget (due February 4) will target defense and homeland security for massive increases, thereby consuming trust fund balances and any general revenue growth as the federal budget returns to deficit spending.
NCSL will continue to provide updated information on the status of federal transportation trust funds and their potential impact on state budgeting for FY2003-FY2004.
Senate Holds First Hearing on TEA-21 Reauthorization
On January 24, 2002, the Senate Environment and Public Works Committee held a hearing on "lessons learned from TEA-21" from the federal, state and local level perspective. Transportation Secretary Mineta testified at the hearing explaining the Department of Transportation (DOT) intends to work closely with Congress, state and local officials and stakeholders in shaping the surface transportation reauthorization legislation. Secretary Mineta explained the DOT would focus on the following core principles while working to shape the reauthorization legislation:
- Assuring adequate and predictable funding for investment in the nation's transportation system, promoting long term health of the economy.
- Preserving funding flexibility to allow the broadest application of funds to transportation solutions, as identified by state and local governments.
- Expanding and improving innovative financing programs.
- Improving the safety of the nation's surface transportation system.
- Continuing efforts to streamline project approval and implementation.
Secretary Mineta said, "I am confident that, working together, the Department and Congress can preserve, enhance and establish surface transportation programs which will provide not only for a safer and more secure system, but one which is more efficient and productive and enhances the quality of life." Secretary Mineta addressed the senators concerns regarding the DOT's Jan. 18 announcement that the FY2003 calculated revenue aligned budget authority (RABA) to be released with the president's budget is negative $4.965 billion. Secretary Mineta responded to the concerns by stating he is unsure how the administration would deal with the problem because it is the first year since TEA-21 enactment that a revenue estimate is negative. Mineta said, "part of the legislative response could be to try to smooth out the drop in RABA so we don't have these peaks and valleys. I understand at the state and local levels predictability and consistency of federal funds for transportation projects are very important."
Energy & Transportation Update Main Menu
NCSL Staff:
Eileen Doherty
Committee Director
AFI Energy and Transportation Committee
(202)624-8687
Laurie Holmes
Committee Assistant
AFI Energy and Transportation Committee
(202)624-8695 |
