New highway bill retains major TEA-21 programs

The new six-year highway and transit funding program President Bush signed into law in August doesn’t differ much from the previous plan that went into effect in 1998, according to a national transportation builders’ group.

The Safe, Accountable, Flexible and Efficient Transportation Equity Act: A Legacy for Users program, which authorizes federal investment in highway improvements, public transportation and highway safety programs for fiscal years 2005-2009, will retain the main programs from its predecessor, the Transportation Equity Act for the 21st Century, according to Dave Bauer, senior vice president of the American Road & Transportation Builders Association.

“For the highway program structure, really, there were no major changes,” Bauer said at a Sept. 7 press conference. “The core highway programs of TEA-21 have been retained. The major difference is the distribution of highway funds from other states.”

The bill ensures all states will see an increase in the funds they receive. Each state’s minimum rate of return on Highway Trust Fund contribution will ramp up from the current 90.5 percent to 92 percent by 2008. All states are also guaranteed a total six-year average highway funding increase of at least 19 percent compared to TEA-21 funding.

States that will gain the most from the new bill are ones that produce and sell a lot of ethanol motor fuel, Bauer said. “Donor states that previously put more money in fuel taxes into the federal fund than they got back in construction grants fought for – and won — more money for their districts.

SAFETEA-LU does provide some small changes.

“For the first time, it establishes a core safety infrastructure program,” Bauer said. Over the life of the bill, $5.06 billion is provided for infrastructure safety initiatives.

The law also will create a program titled Projects of National and Regional Significance. This will be used to “provide a pot of money to fund some of the large-cost projects so it won’t eat up an individual state’s budget,” Bauer said.

Legislators also slightly altered how the bill will be paid for.

“The highway program is funded in a unique way, different from almost anything the federal government does,” said Bill Buechner, vice president of economics and research for ARTBA. “Because highway funding is paid out of the Highway Trust Fund, there is no need for an appropriations bill.”

The money will therefore be available to distribute to states automatically on Oct. 1 each year. “The states take this new funding, add it to any amount they carried over, and that’s what they then have available to obligate to new highway structure projects,” Buechner said.

“The important thing is that the bills, both TEA-21 and SAFETEA-LU, establish budget firewalls and procedural hurdles that prevent the House and Senate from reducing the obligation ceiling that is set in SAFETEA-LU,” Buechner said. “This has become known as guaranteed funding because it is a level of funding that the appropriations process has to respect.”

Bauer said many of TEA-21’s aspects were too important not to include in SAFETEA-LU. “Clearly this bill builds on the innovative financing mechanisms that were established under previous legislation,” he added.