Senate Defense Appropriations bill includes highway fix

Pit & Quarry, August, 2004

The National Stone, Sand & Gravel Association reports that Senate appropriators quietly slipped a provision in the Defense Appropriations bill for FY 2004 that would add almost $314 million in allowable spending to the federal-aid highway programs to try and mitigate the political fall-out from an earlier legislative drafting error that is holding up may than $1 billion in earmarked highway projects. If the provision is enacted into law, the final obligation limitation on federal-aid highways for FY 2004 would be $33.955 billion.

The glitch occurred last year when appropriators increased the overall obligation limitation and ordered states to transfer unexpended balances of formula money to pay for $1.03 billion in new earmarked projects listed in the omnibus conference report. The appropriators misdrafted the provision allocating the obligation limitation for projects.

Because of the drafting error, each state's earmarked projects would be taken out of the state's percentage share of the obligation limit. States with senior appropriators got a much bigger percentage of the earmarked projects than they get out of the overall obligation limit. So, the drafting error caused the Federal Highway Administration to distribute the obligation limit in such a way that it penalized the states of senior appropriators

The appropriators attempted to fix this problem earlier, but fixing it without adding new money would reduce the obligation limit shares of high population states without senior appropriators (Illinois, California, Texas) and was a nonstarter with House Speaker Dennis Hastert (R-Ill.).

Adding new money holds harmless the states that would have lost out under the off-the-top calculation. House leaders opposed fixing this problem back when it would cost their states money. It is unclear if the Senate action will change their minds. It is clear that the issue will be dealt with quickly because the defense bill is on a fast track to the White House because it contains supplemental funding for Iraq.