Highway Funding Another Test for Congress

Among its growing list of priorities, Congress must also deal with reauthorization of the surface transportation bill — in other words, how much money each state gets for highway needs. Transportation Secretary Ray LaHood and James Oberstar (D-Minnesota), chair of the House transportation and infrastructure committee, hint that something "big" is coming.

In fact, a six-year reauthorization of near $500 billion (compared to $286.4 billion in 2005) has been mentioned. One problem: Where is the money going to come from? Oberstar wants to raise the 18.4-cent federal gas tax, but general consensus is that new, innovative ideas (public-private partnerships and the like) must be part of the solution. LaHood says the White House will be providing guidance to Congress.

Indiana, of course, is among several "donor states" that already sends more to Washington in taxes than it receives back in the highway allocation.

Lawmakers hope to get a bill through the House in June. The current law expires in September.

Good luck. Past history, and current funding woes, indicate this will be a tough one.

Rep. Flake Proposes End of Donor States

Interesting analysis this week from Arizona congressman Jeff Flake and the Heritage Foundation’s Ronald Utt. Their message: donor states — those that pay more in federal fuel taxes than they receive back in highway funds (Indiana has been on that list for years) — need to band together when the transportation bill is reauthorized later this year.

They go so far as to suggest the following:

The most effective reform would be to cut out Washington regulators and bureaucracy altogether. Simply let each state keep the 18.3 cents per gallon federal fuel tax paid by motorists within its borders (as well as the diesel fuel tax paid by truckers). In turn, states would be held fully responsible for their own transportation programs. The upshot: State transportation agencies would have the funds and the flexibility needed to keep things running smoothly within their borders.

D.C.-based central-planning and financial management made sense back in 1956 when the sole task of the new federal program was to build the interstate highway system coast to coast and border to border. But that task was completed in the mid-1980s.

Don’t know if that is the answer, but it does make you think there has to be a better way. Read their full analysis.