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Analysis Shows Highway User Revenue Could Support $32 Billion/Year Federal Highway Program

For Immediate Release

(WASHINGTON, D.C.) -As Congress prepares legislation to reauthorize the federal surface transportation programs, a new analysis shows Washington could boost state and local aid for highway and bridge improvements by more than $12 billion annually over the next five years without raising the gas tax.

A transportation construction industry group says a $32 billion per year program is possible if Congress utilized all revenue currently generated by federal highway user fees like the motor fuels excise. According to a U.S. Department of Transportation report to Congress, an additional $15 billion per year investment is necessary just to maintain existing highway and bridge conditions.

The analysis, released by the Transportation Construction Coalition (TCC), was prepared by Dr. William Buechner, director of economics and research for the American Road & Transportation Builders Association (ARTBA). Buechner looked at current and projected receipts to the Highway Trust Fund and the revenue stream derived from the 1993 4.3 cent federal motor fuels tax hike that is now used for non-transportation purposes.

The analysis shows:

Projected highway user fee receipts alone would support a highway and bridge improvement program averaging $22.8 billion per year—about $3 billion per year more than President Clinton proposed in his FY 1998-2002 budget sent to Congress last month.
Spending incoming user fee revenue plus the interest income earned on the Highway Trust Fund Highway Account balance would finance a $23.6 billion highway program.
Also spending down the current balance in the trust fund’s Highway Account (now about $10 billion) over the five-year period 1998-2002 would permit an annual program of $25.6 billion.
Additionally redirecting to the trust fund and spending the revenue raised each year by the 1993 4.3 cents-per-gallon motor fuels tax hike would support a $32.3 billion program.

The federal mass transit capital assistance program could also be boosted to approximately $6 billion per year if all revenues to the Highway Trust Fund’s Mass Transit account were invested in the program. The Clinton budget, which would suppress highway and mass transit investments and continue to use the 1993 4.3 cents gas tax revenue stream for non-transportation purposes, would balloon the Highway Trust Fund balance to $43.4 billion by the end of Fiscal Year 2002.

The Transportation Construction Coalition (TCC), which includes 24 national associations and labor unions, is distributing the analysis to all Congressional offices. The TCC is supporting legislation introduced in the House—H.R. 4—that would take the four federal transportation trust funds out of the unified federal budget.

That action would help ensure that all incoming federal highway user fees are invested in transportation improvements and not impounded to mask the true size of the federal deficit. The group is also seeking redirection of the 4.3 cents motor fuels tax revenue stream to the Highway Trust Fund.

The federal surface transportation program must be reauthorized by Congress by October 1, 1997, or all federal aid to the states for highway improvements will cease.