Bush budget released; proposed highway spending lower than House, Senate plans

Pit & Quarry, March, 2004

The Bush administration released its 2005 budget proposal to Congress, including the surface transportation reauthorization proposal, the Safe, Accountable, Flexible and Efficient Transportation Equity Act of 2003 (SAFETEA).

The Bush budget proposes increasing spending on highway and transit infrastructure to $43 billion in 2005 and $256 billion over six years. The administration points out that this marks a 21-percent increase over the TEA-21 six-year spending totals and $9 billion over the spending level originally proposed in SAFETEA and the 2004 budget.

However, Bush's six-year plan is $119 billion less than the proposal being worked on by the House (TEA LU) and also much less than the $311 billion plan proposed by the Senate. The National, Stone, Sand & Gravel Association says, "If the two sides fail to bridge these differences the only option will be some sort of one-year or two-year extension. While this would seriously hinder planning, it could be less unacceptable than barebones funding or a gas tax hike."

The Bush administration's SAFETEA proposal would establish a new highway pilot program where states could manage their Interstate Maintenance, National Highway System, Surface Transportation (except for the Transportation Enhancement funds), Highway Safety Improvement, Highway Bridge and Minimum Guarantee program funds as a block grant.

Under the pilot program, states would be required to work with the Department of Transportation (DOT) to develop and meet specific system performance measures. The Bush administration continues to support constructing new facilities and improving the condition of existing systems without requiring an increase in the federal gas tax, which is the primary mechanism for financing the federal program. A gas tax increase would have a negative impact on consumers and the economy, says the administration.

Beyond spending more on construction, SAFETEA would fund the research, development and implementation of Intelligent Transportation Systems technologies. Through advanced traffic management techniques, these technologies can improve the performance and operation of existing transportation systems.

In addition, SAFETEA would allow states to establish user fees on federal-aid highways, including the Interstate System, provided that the funds are reinvested to improve highways. The user fees must be established as part of a program to manage congestion or improve air quality. SAFETEA would also allow states to permit Single Occupancy Vehicles (SOVs) on High Occupancy Vehicle lanes, as long as time-of-day variable charges are assessed on SOVs for such access.

To address congestion around freight facilities, SAFETEA would dedicate a portion of National Highway System funds to intermodal freight facilities, such as ports and rail transfer facilities. In addition, Surface Transportation Program funds could be used for publicly owned intermodal freight transportation projects that address economic, congestion, security, safety and environmental issues associated with freight transportation gateways.

SAFETEA would also make freight transfer facility projects eligible for innovative finance funding, including credit assistance and tax-exempt private activity bonds.

DOT says it remains committed to ensuring that urban and rural travelers have alternatives to highway commuting. In 2005, the Federal Transit Administration's (FTA) Performance Incentive Program will provide $103 million to urban areas and $11 million to rural areas to promote transit ridership.

The program provides a financial reward to transit systems that are able to increase ridership, thereby linking program performance to funding enhancements. In total, SAFETEA provides $43.6 billion for FTA transit programs over the six-year reauthorization.