Transportation & the Environment
*********************************************************************
Economics for the Earth
A Friends of the Earth Publication
On Issues Linking People, Prosperity and the Planet
November 25, 1996
TRANSPORTATION FUNDING:
WHERE WE ARE, WHERE ARE WE GOING?
During the final months of the 104th Congress, powerful interests were
jockeying for position in preparation for the major debate next year
around the reauthorization of the Intermodal Surface Transportation
Efficiency Act of 1991 (ISTEA). Most of the developments focused on a
fundamental concern with money. A few examples:
* House Transportation Committee Chairman Bud Shuster (R-PA) led a
successful effort to take the transportation trust funds "off-budget" in
the House of Representatives. Although the initiative died in the
Senate, the measure would have removed the Highway Trust fund from the
budget restrictions imposed on other parts of the government. In other
words, highway spending would be exempt from the budget austerity facing
the federal government in the drive to achieve a balanced budget.
* Former Senate Majority Leader Bob Dole proposed to reduce the federal
gas tax by 4.3 cents per gallon. This portion of the federal gas tax is
not deposited in the Highway Trust Fund, but goes to reduce the federal
budget deficit. The tax was instituted in 1993. The proposal later
metamorphized: instead of eliminating the tax, the revenues would be
deposited in the Highway Trust Fund.
* House Ways & Means Committee Chairman Bill Archer (R-TX) created a
special task force to advise him on the tax treatment of transportation.
The task force will focus on the current structure of federal excise taxes
imposed on all transportation sectors -- aviation, highway, water and rail
-- and the reasons for that structure. Both the highway and aviation
trust fund excise taxes are scheduled to expire within the next year.
Future funding of the trust funds are dependent on action by the
Committee.
The battle over ISTEA will be intense, and advocates for more sustainable
transportation policies can expect efforts to roll back transit and other
measures to improve transportation planning. In the meantime, it's useful
to look at the snapshot produced this year.
Fiscal Year 1997 Appropriations
On September 20, President Clinton signed into law the annual Department
of Transportation and Related Agencies Appropriations bill for Fiscal Year
1997. The bill includes $20.3 billion for the Federal Highway
Administration, an increase of 1.4 percent over last year (FY96) and $800
million more than President Clinton requested. The bill provides $4.4
billion for the Federal Transit Administration, an increase of 8.2 percent
over FY96 and about $100 million more than Clinton requested.
The chart below shows historical funding for highways and transit over
the years. Over the last few years, highways have received the lion's
share of federal transportation funding while transit as been treated
like a neglected step-child.
[Chart showing historical funding levels for highways, transit, and airports]
Highways: Funding Keeps Coming
The meat of the federal highway program is the approximately $20 billion
per year which is distributed to the fifty states (and Washington, D.C.
and Puerto Rico) to be spent on highway construction and maintenance.
Almost all of the funding originates in the Highway Trust Fund which is
dedicated to this purpose. Although funding increases have not always
kept up with inflation, highway funding has generally climbed steeply
upward.
A major new thrust for the federal highway program recently is the
Intelligent Transportation Systems (ITS) program. The program includes a
variety of research and technology programs to address traffic problems
ranging from programming traffic lights and electronic toll collection to
new high-tech experiments. For FY97, ITS received $122 million, an
increase of $17 million over last year. Much of this increase is
dedicated to the Automated Highway System (AHS) which was targeted in the
Green Scissors '96 report http://www.foe.org/scissors96 as an example of
wasteful and environmentally harmful spending.
Transit:
Overall, transit funding has lost ground to inflation since the mid-1980s.
But the overall funding levels do not tell the whole story. The major
ongoing trend in federal transit funding is the phasing-down of operating
assistance. Operating assistance is funding to help transit systems
function from day to day and provide regular service. In FY97, funding
for operating assistance is $400 million, the same as last year. This is
20 percent less than President Clinton requested and is about half the
level of funding from just a few years ago. Many groups, including the
Surface Transportation Policy Project are concerned that funding at this
level will trigger service cuts and fare increases nationwide. An
estimated 80 million people do not drive due to economic circumstances,
age, or disability. Many of these people rely on transit for mobility.
While operating assistance is decreasing, funding for capital expenses is
increasing as a share of the total. However, new transit programs are
subject to more conditions than new highway projects are. For example, a
transit project must demonstrate that funds are available to maintain and
operate the program over the course of its life. Highway projects are
not required to show this.
Air & Rail:
Much smaller players in the federal funding game are air travel and
rail. The FY97 Transportation Appropriations bill provides a total of
$8.3 billion for the Federal Aviation Administration (FAA). This
includes $4.9 billion for air traffic services, aviation security, and
administration. An additional $3.3 billion funds construction and repair
of airports, equipment and facilities associated with air travel. This
funding derives from the Airport and Airway Trust Fund which is paid for
from taxes on air travel.
The FY97 Transportation Appropriations bill provides $890 million for the
Federal Railroad Administration. This includes $565 million for Amtrak
(the National Railroad Passenger Corporation), a cut of $70 million from
last year. Amtrak funding has been cut significantly in recent years and
is currently implementing significant cuts in service.
For more information, please contact:
David Hirsch (ext. 215, email: )
Gawain Kripke (ext. 212, email: )
Brian Dunkiel (ext. 230, email: )
Courtney Cuff (ext. 207, email: )
Friends of the Earth
1025 Vermont Avenue, NW
Suite 300
Washington, D.C. 20005
phone: (202) 783-7400
fax: (202) 783-0444
To see this document on the web: http://www.foe.org/Actions/transp97.html
Please contact us for a faxed version of this document.
message sent by infoterra@cedar.univie.ac.at
to signoff from the list, send an email to
majordomo@cedar.univie.ac.at
the message body should read
signoff infoterra your@email.address
BACK TO
*********************************************************************