Preserve Federal Highway and Transit Commitments

AGC Message:

• SAFETEA-LU guaranteed at least $198.8 billion for federal highway program investments through fiscal year 2009. However, this investment level was predicated on a forecast of anticipated revenues collected for the Highway Account of the Highway Trust Fund over the life of SAFETEA-LU. The U.S. Treasury now forecasts that revenues for the Highway Account will fall short of meeting these commitments by $3.7 billion during FY 2009.

Background:

• As a result of this shortfall, Highway Account revenues would only be able to support a $29.2 billion highway program in FY 2009, which is nearly $14 billion--or 34 percent--below the amount guaranteed by SAFETEA-LU.  The table below further outlines this situation.  The U.S. Treasury previously reported in August 2007 an estimated shortfall of $4.3 billion. The Bush Administration’s budget request to Congress proposes to avoid a cut in highway funding by borrowing $3.3 billion from the Mass Transit Account of the Highway Trust Fund.

• Funding Was Authorized in SAFETEA-LU to Meet the Nation’s Infrastructure Needs. SAFETEA-LU authorizes $43.2 billion for federal-aid highways and $10.3 billion for public transportation for FY 2009.  Given the huge transportation needs faced by all states, and realizing that state departments of transportations have already developed long-term transportation investment plans based on anticipated SAFETEA-LU guaranteed funding levels, cutting spending should not be considered.
• Additional Revenue Measures must be used to Fund the Program in FY 2009. In order to ensure that the SAFETEA-LU guarantees will be met in FY 2009, measures to raise revenues for the Highway Account must be put in place. The Senate Finance Committee has already approved such a plan.  The proposal would:
  • Credit the Highway Account for emergency expenditures paid out of the Highway Trust Fund since 1998.
  • Restructure current fuel tax exemptions/refunds provided to state and local governments, local transit systems, and for agricultural purposes to be General Fund-supported activities, instead of costs borne by the Highway Account ($1 billion).
  • Implement addition mechanisms to further crack down on fuel tax evasion ($1 billion).
• Borrowing from the Mass Transit Account is not the Solution. The Administration does not propose how the Mass Transit Account will be repaid, putting at risk highway and mass transit spending beyond FY 2009.

AGC Press Releases:

• 07/24/2007 - Industries Unite to Address Looming Transportation Crisis
• 07/11/2007 - Budget Forecast Shows Potential for $16 Billion in Cuts to Highway Funding - Will Hamper States’ Abilities to Improve Infrastructure  AGC Calls on Bush Administration and Congress to Maintain Commitments to Current Transportation Bill

AGC Letters:

• 11/14/2007 - AGC Urges the House to Vote “YES” on H.R. 3074, FY 08 Transportation Funding (AGC Key Vote Letter)