Double whammy

News TRIP February 07, 2002
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Many states face a double whammy to their transportation funding as the budget released earlier this week by the Bush administration calls for an $8.6 billion cut in federal highway funding. It hits at the same time that states have significant budget shortfalls that could lead to large cuts in state transportation budgets as well.

"The cuts could not come at a worse time because 361,000 people may lose their jobs at a time when the nation’s economy is struggling," said William M. Wilkins, executive director of The Road Information Program (TRIP).

TRIP’s analysis of U.S. Department of Transportation data shows that 360,961 jobs will be lost in the states if the federal cuts take place, based on the U.S. DOT projection that every $1 billion in highway investment generates 42,100 jobs. Moreover, hundreds of thousands of additional jobs could be at risk if states are forced to make similar cuts to their state funding.

However, Wilkins said, there is a way the federal money could be restored.

"More than $18 billion now sits in the Federal Highway Trust Fund," Wilkins said. "The $8.6 billion cut could be offset by drawing that amount from the existing Highway Trust Fund which, after all, is money that was paid by highway users to be used for transportation improvements."

The Bush administration budget would drop the overall federal highway program from $31.8 billion in 2002 to about $23.2 billion in the 2003 fiscal year. Federal transportation dollars are distributed to the states, and the proposed cuts are partly the result of a recent dip in federal motor fuel and related transportation taxes as reported by the U.S. Treasury.

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