House subcommittee approves record 2007 transportation funding

News AGC of America May 31, 2006
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The House Transportation Appropriations Subcommittee last week sent to the full Appropriations Committee the FY 2007 transportation funding measure that provides $39.1 billion for the highway program, which is a 9.7% increase over FY 2006 funding. This is the level requested by President Bush in his budget submission in February and includes both the $38.244 billion obligation limit authorized in the SAFETEA-LU law and an additional $842 million in revenue aligned budget authority (RABA) spending.

RABA is the mechanism established in TEA-21, and reauthorized in SAFETEA-LU, that requires a look back and adjustment to ensure that each year's funding matches actual Highway Trust Fund revenue. SAFETEA-LU changed the way in which RABA is distributed by requiring the additional funding first be used to help donor states reach a 92% rate of return. Therefore, the additional funds are expected to go to the following 20 donor states: Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Maryland, Michigan, New Jersey, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and Washington.

Any funds left after these states achieve 92% return should be distributed according to the funding formula. The subcommittee rejected a request in the president's budget for $100 million for a pilot program for states to test the viability of alternatives to the gasoline fuel tax for financing highway construction and managing congestion.

Also rejected was a proposal to fund $100 million of the National Highway Traffic Safety Administration's (NHTSA) budget from the Highway Trust Fund that has traditionally come from general fund revenue. AGC actively opposed this proposal.

The subcommittee's bill provides an obligation limitation for the Federal Aviation Administration's Airport Improvement Program (AIP) of $3.7 billion, the full amount authorized. In doing so the subcommittee rejected the president's budget request, which proposed cutting AIP funding to $2.75 billion. AGC worked to have AIP funding at the fully authorized level, which is a 5% increase over FY 2006 $3.515 billion level.

The Federal Transit Administration would receive $8.875 billion in FY 2007, $370 million more than in FY 2006 (4.4%). The primary account (formula and bus grants) would receive $7.263 billion, the amount authorized in SAFETEA-LU. The new starts program would be funded at $1.566 billion, the SAFETEA-Lu level and $100 million more than recommended in the Bush budget.

The bill provides $900 million for Amtrak, the amount requested by the president. Also as requested by the president, the bill splits the Amtrak money into two accounts: $500 million for capital spending and $400 million for operating grants that are at the discretion of the Secretary of Transportation, not of Amtrak itself. The $900 million total is down $394 million (30%) from the FY 2006 level.

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