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AASHTO Journal

Many Questions, Few Answers About Paying for Obama's 6-Year Plan
Where will the Obama administration and Congress come up with the $556 billion to pay for the president's six-year transportation budget proposal? That was the big unanswered question raised during numerous panels at this week's American Association of State Highway and Transportation Officials Washington Briefing.

From the first panel of budget experts at the opening plenary Wednesday morning to the last workshop on financing options Thursday afternoon, the question of how to fill the need for additional revenue in the president's budget came up time and time again.

House Transportation and Infrastructure Committee Chairman John Mica, R-Florida, said during a Wednesday morning keynote speech that he would first look to stabilize the Highway Trust Fund, "look at every dollar that hasn't been used, any program that doesn't work," do some "creative financing and leveraging," and "speed up the process and the projects."

Observing that the money tree in Washington has died, Mica suggested that spending limits could be tied to whatever gas-tax revenues are in the Highway Trust Fund.

U.S. Transportation Secretary Ray LaHood said during a Wednesday morning keynote address that he was looking to them to identify new ideas and needed their leadership in defining new revenue strategies.

"We need you as partners," he said, saying that transportation would benefit from the president's "big, bold vision" for the next generation.

Bill Graves, president of the American Trucking Associations and former governor of Kansas, argued during a Wednesday luncheon presentation that tolls should not be a leading option.

"We are teetering on the brink of some serious consequences" without new revenues, Graves said.

He noted the extra costs associated with collecting tolls and the need for any private-sector partner to not only cover costs but to also make a profit. The ATA has supported increasing the 24.4-cent-per-gallon federal tax on diesel fuel because "our members understand that roads aren't free and they're not cheap," Graves said. But he acknowledged that his proposal is off the table due to opposition from LaHood, Mica, and others.

"So as a user, I am paying more ... because of a lack of political courage," Graves said.

During a Wednesday morning panel with three House and Senate committee staff, Washington state Transportation Secretary Paula Hammond challenged the notion that states must "do more with less."

Hammond said in her experience, when there is less funding available for transportation projects, that means "less is done with less." Speakers suggested that by consolidating or eliminating programs and taking a hard look at the environmental review process, more federal funds would be freed up for the states to use at their discretion.

One administration proposal contained in the budget would consolidate 55 federal highway programs into five to allow state DOTs greater flexibility in spending their federal grants. When asked how the five programs would be apportioned to the states, however, Federal Highway Administrator Victor Mendez responded by saying the details would be provided later.

LaHood Questioned in Senate Over Way to Fund Administration's Proposal

Secretary LaHood appeared before the Senate Budget Committee on Thursday. Committee members on both sides of the aisle questioned LaHood closely on the lack of any specific recommendations on ways to close the funding gap included in the president's budget proposal, National Journal reported.

Senate Budget Committee Chairman Kent Conrad, D-North Dakota, raised many of the same questions posed at the AASHTO meeting including, "What are the options for closing this [funding] gap and what's your assessment of how realistic those various options are?"

LaHood told the committee that it is "essential to America's economy that we find a way to repair our national infrastructure where we must and build for the future where we can." He added the administration wants to be "part of the conversation" with Congress on finding new transportation revenue streams.

3/4/2011
Questions regarding this article may be directed to editor@aashtojournal.org.