Bush’s Budget: $9.1 Billion Cut in Highway Funds

A battle is brewing over President Bush’s 2003 budget – sent to Congress in early February – that would reduce highway funding by $9.1 billion, a move transportation officials and highway builders are scrambling to reverse.

The cut, nearly 30 percent, would reduce spending from $31.8 billion in 2002 to $22.7 billion next year, and matches a steep fall of highway user tax revenues. Tax collections on fuel, tolls and even truck purchases fell in 2001 as the economy slowed. The government collected $2 billion less on new truck excise taxes alone last fiscal year, as trucking companies went out of business or bought used trucks instead of new.

Democrats and Republicans on the U.S. House Transportation Committee have pledged to fight for more funding. “The nation cannot afford this drastic $9.1 billion cut in our states’ highway investments in these economic times,” Transportation Committee Chairman Don Young, R-Alaska, and ranking Democratic member Jim Oberstar, D-Minn., said in a joint release. “This cut could result in hundreds of thousands of Americans being thrown out of work when both sides of the aisle agree that we need more family-wage jobs.”

For its part, the Bush administration says it is being fiscally responsible by spending only the revenue that is coming in, according to published reports. Transportation Committee members counter that other funds could be used to augment highway user revenues, and the president should allocate more of his budget to transportation building projects.

Road builders and state transportation officials are also fighting the budget proposal. “Our president and our congressional leaders are searching for ways to stimulate the economy,” said John Horsley, executive director of the American Association of State Highway and Transportation Officials. “At the same time, we are facing the loss of some $9.1 billion in federal funding for highways, which equates to as many as 144,000 jobs in a peak year.”

Another big concern for states is that projects already in the pipeline could be suspended or cut altogether. The cut in highway funding would “severely disrupt state highway infrastructure investment programs and require states to postpone or abandon many scheduled projects,” Young and Oberstar said.

AASHTO says 36 states are currently facing deficits in their own budgets, and would be hard-hit by the drop in federal highway funding.

AASHTO is asking the Bush administration to use part of the $18.5 billion in the Highway Trust Fund not currently allocated for other projects. “The addition of about $2.7 billion in outlays for next year would keep the projects in the transportation pipeline moving,” Horsley said. “Since that could be funded entirely out of the Highway Trust Fund, solving this problem would not affect the general fund or the deficit.”

The American Road & Transportation Builders Association is also fighting the cut and asking the Bush administration to dip into the Highway Trust Fund coffers. “A 30 percent reduction in federal investment would have devastating impacts on highway safety, congestion mitigation and American jobs,” said ARTBA Chairman John Wight. “And it is unnecessary when there is a $19 billion balance in the Highway Trust Fund.”

The groups and the Transportation Committee say they will ask the administration to increase funding because the current proposed budget meets only the bare minimum funding required by law. Congress and the president can allocate more funds than the Transportation Equity Act for the 21st Century (TEA 21), the law governing the Highway Trust Fund, requires.

“The amount is the floor, not the ceiling, available for highway programs – TEA 21 authorizes, and the Highway Trust Fund can support, a much higher level of highway funding,” Young and Oberstar said.

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