Senator Seeks “Opt Out” for Highway Trust Fund

Sen. Kay Bailey Hutchison, R-Texas, introduced a bill that would allow states to opt out of the federal highway program, which apportions fuel tax revenue from the Highway Trust Fund to all 50 states.
The Highway Fairness and Reform Act of 2009 would allow states to receive a rebate for their share of fuel tax revenue.

States would be obligated to maintain the interstate highway system, but each could diverge from federal standards in such things as enhancements and design. Issues of safety would remain under the U.S. Department of Transportation jurisdiction.

States such as Texas, Florida and Arizona complain that they pay more into the trust fund than they get back in money for highway projects. Senators from all three gave their support to the bill.
The battle between donor and donee states over Highway Trust Fund spending was one factor that delayed passage of the last surface transportation bill.

In 2004, Texas Republican Rep. Tom DeLay, then House majority leader, thrust the issue front and center, throwing up roadblocks before a bill already stuck in gridlock.
Lawmakers resolved the issue in 2005 by increasing the guaranteed minimum donor states would receive back to 92 cents on the dollar, up from 90.5 cents.

Hutchison announced her bill on April 28 during a hearing on the future of national transportation policy. She said that the Highway Trust Fund formula had been created to expedite the completion of the interstate highway system. Yet all states still pay into the fund. Since the interstate system is complete, the formula is obsolete, she said.

“In my view, the existing funding formula is no longer serving the best interest of each state and the traveling public. Our transportation mission should evolve to maintain and improve this valuable infrastructure,” Hutchison said. “We must add highway capacity in areas where population and commercial growth is exceeding what our infrastructure can withstand. Our funding structure must change to meet these shifting priorities.”

Sen. John Thune, R-S.D., another donee state, argued that the trust fund should be preserved: “While some have suggested that the trust fund be eliminated or significantly altered, I feel this is unwise and would have a particularly negative effect on large, rural states such as mine and, in turn, travelers throughout the country.”

Thune said there are fewer South Dakota residents per mile of interstate highway than the average population density per mile, which means his constituents pay nearly half again as much per capita in fuel taxes as in the average state.

“So clearly, there is a lot more to consider than simply coining one state as a ‘donee’ and another a ‘donor,’” Thune said. It is far more complicated and would result in enormous ramifications to the transportation system as we know it if we make knee-jerk changes to the distribution from the Highway Trust Fund without considering the far-reaching implications to the traveling public.”

Source: Journal of Commerce