Transportation Bill Math Shows Neither Party Has the Money
An October 26 letter from Sen. Barbara Boxer (D-CA) to Rep. John Mica (R-FL) has brought to the surface the confusion over funding of the multiyear surface transportation authorization.
Boxer is chairman of the Senate Environment and Public Works (EPW) Committee. She asked Mica, chairman of the House Transportation and Infrastructure (T&I) Committee, to clarify "whether the proposal you support fully funds surface transportation programs at $339 billion over six years, or if news reports stating that you support funding levels of $286 billion are correct."
She added the Senate proposal for $109 billion would fund the programs "at current funding levels indexed for inflation" over two years. The committee, Boxer added, is seeking offsets of $12 billion—the estimated revenue shortfall of the Highway Trust Fund (HTF) over two years.
Boxer’s Funding Caveats
“I am willing to consider a six-year transportation bill at current funding levels plus inflation if it is fully paid for in a way that had bipartisan support and does not cut jobs elsewhere in the economy," she wrote.
In its latest (August 30) report, the Congressional Budget Office (CBO) estimated over the next six years (FY 2012-2017), dedicated taxes will generate approximately $234 billion in revenue and interest ($204 billion in the Highway Account and $30 billion in the Transit Account). This comes to annualized revenue of $39 billion.
CBO also estimated the HTF ended FY 2011 with approximately $14 billion in the Highway Account and $7 billion in the Transit Account. These unspent balances have made it possible for Boxer to come up with a two-year $109 billion budget even though HTF revenue over that period is expected to amount only to $78 billion. The remaining $31 billion is proposed to be covered with $19 billion in unspent Trust Fund balances and $12 billion in (as yet undetermined) offsets.
Billions in Offsets
According to Boxer, a six-year program "at current funding levels plus inflation," would require $339 billion and offsets of approximately $75 billion. CBO projects the six-year outlays at a somewhat lower level of $323.4 billion ($267.4 from the Highway Account, $56 billion from the Transit Account). At this level of expenditures, CBO estimates the six-year revenue shortfall requiring offsets would total $68 billion ($55 billion in the Highway Account, $13 billion in the Transit Account).
Although Mica has not been specific about the dollar amounts he is seeking for his six-year bill, he has been quoted as saying the House bill would be funded at the level of the "current bill."
Although the discussion of funding at a level close to the "current bill level" or at "current funding level" may appear to be semantic, it represents real dollars. Neither political party seems to have found the necessary extra money to achieve its funding goal.
C. Kenneth Orski (email@example.com) is editor and publisher of the transportation newsletter Innovation NewsBriefs, where an earlier version of this article was published. Used with permission.