Wednesday, May 07, 2003

The Caterpillar Steamroller

WASHINGTON - The road and transportation industry is already rolling its heavy equipment into town to lobby for the reauthorization of the Transportation Equity Act for the 21st Century, which is set to expire this September.

The law authorizes the U.S. federal government's 45% share--now $38.8 billion a year--of all capital spending on highways and mass transit. But the industry wants more.

Some background: When the transportation act, known as TEA-21, was enacted in 1998, it tied spending levels to revenue collected by the government from highway user fees (various taxes on fuels, tires and so on) and credited to the highway account of the Highway Trust Fund. At the time, this was considered a victory for the highway lobby, since Congress had been allowing unspent money to accumulate in the Trust Fund to make the federal budget deficit look smaller. After TEA-21, the federal government spent what it collected.

But in 1999, just a year after TEA-21 went into effect, the American Road and Transportation Builders Association (ARTBA) began preparing for their next offensive. Those preparations have gotten intense. Last week, ARTBA, along with the Associated General Contractors of America, held a legislative "fly-in": 500 people signed up, representing 28 construction and building associations and union groups.

Fanning out on Capitol Hill, those groups carried the standard of one of ARTBA's primary goals: to move TEA-21 from a receipts-driven, "revenue in/spending out" setup toward more of a needs-driven approach. What that means is the road builders want spending determined by various assessments from the Department of Transportation and others of what's needed to maintain and improve the transportation infrastructure in the U.S. If receipts coming into the Highway Trust Fund fall short of those needs, the lobby argues Congress should close the gap.

Highway and transit builders have a strong reason to want to focus on needs rather than receipts. Starting in 2002, receipts from user fees began to drop significantly, thanks largely to the impact of a slower economy and increased sales of gasahol, an Ethanol-based fuel that isn't taxed for the Highway Trust Fund and is heavily subsidized--thanks to the farm lobby and the efforts of Archer Daniels Midland.

Full story at Forbes.com