Transportation Funding at a Standstill, Rescission Looms and Then What?

The House passed the 3-month extension to the highway funding authorization and the Senate still is looking at the 18-month extension as I reported here. The Senate bill has yet to be introduced. A repeal of the rescission was left out of the House measure because House rules would require an offset to pay for it through higher taxes or reduced spending elsewhere. The House couldn’t find the $12 billion.

In the meantime, only two legislative days remain before the current program expires on September 30. Without legislation, the budget rules require that the FY 2010 federal-aid highway, highway safety, motor carrier, and transit programs be cut by $12.1 billion, $11.9 billion of which will come from the highway program. The states have had to plan on the cutback, so many programs and projects have been slowed.

And adding to the mix of slowing down the transportation funding are reports that Senator Barbara Boxer (D-CA) and John Kerry (D-MA) will introduce the Climate Change bill with mark up scheduled by the Senate Environment and Public Works Committee in October. The funding allocations are not expected to be released until closer to the committee markup date. This could well be another contentious issue. For the transportation sector to play a greater role in reducing emissions and fuel consumption, the Senate bill will need to dedicate far more than 1% of its revenues to advance clean transportation projects.

All of this being said, state transportation departments remain up in the air and gasping for air….errrrrrrrrrrr funding.

Update (10/2) – I wasn’t as clear as I should have been in the original post above and a recent post by Stephen Lee Davis at the Transportation for America blog got the wrong idea about I was trying to say, so let me clarify the point I was trying to make.

I wrote that, at 1 percent, the Senate bill underestimates the funding commitment they would need to seriously advance “clean” transportation projects. But in no way did I mean to imply that the federal government should actually be funding these types of projects-in fact, they shouldn’t.

On the question of whether the transportation sector should be focused on reducing emissions and fuel consumption. The answer is a resounding “No,” as explained by Bob Poole in his excellent commentary explaining the issue. The highway transportation sector should be focused on providing mobility and eliminating the congestion.

A second question that arises is whether the federal government should be funding “clean transportation projects” such as transit and rail. Again, the answer is “No.” This is nothing but further diversion of monies from the federal Highway Trust Fund, which has had severe financial problems. The Highway Trust Fund has become the source of funding for all sorts of projects unrelated to highway users-such as transit, rail, enhancement grants, rails-to-trails, to name a few-that cost a lot but do little to enhance mobility.

If policymakers are going to prioritize “green projects” (transit, rail etc) ahead of infrastructure that efficiently moves goods and people, then they should stop looting highway funds to do so. Lawmakers should fund these green projects with general fund monies. At least this change would restore the original user-pays/user-benefits principle to the Highway Trust Fund. The trust fund should be used for projects that produce mobility and solve the congestion problems for the highway users. See Bob Poole’s thoughts on this here.

Shirley Ybarra is a former senior transportation policy analyst at Reason Foundation, a nonprofit think tank advancing free minds and free markets.