Summer blockbuster

Highway industry seeks another record funding package

Article July 22, 2003
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It's summertime in the nation's capital and things are
heating up as Congress prepares to debate the future of the nation's highway
and transit systems. There's a great deal at stake for the U.S. transportation
construction industry. Here's a snapshot of where things stand on the
"road to reauthorization."

House Transportation & Infrastructure (T&I)
Committee Chairman Don Young (R-Alaska) and Ranking Democrat Jim Oberstar
(Minn.) March 12 announced their intention to pursue a six-year, $375 billion
highway and transit investment proposal as part of the reauthorization of the
Transportation Equity Act for the 21st Century (TEA-21). The investment levels
in their plan are aimed at what the U.S. Department of Transportation's (U.S.
DOT) 2002 "Conditions & Performance" report says are necessary to
maintain current conditions and begin making improvements to the nation's
surface transportation network. The increased investments in the plan also
would help allow Congress to address the federal highway funding distribution
formula.

Major provisions include:

* Drawing down the existing balance in the Highway Trust
Fund (HTF), which currently stands at about $18 billion;

* Restoring the interest to the HTF, which could generate as
much as $12 to $14 billion;

* Eliminating user-fee evasion, which would add $3 to $4
billion;

* Directing all revenues from existing gasohol user fees to
the HTF, which would generate another $3 to $4 billion;

* Ensuring the HTF is fully compensated for the use of
gasohol, which would generate $7 to $8 billion; and

* Restoring and preserving the purchasing power of the motor
fuel user fee by linking the user fee to the Consumer Price Index. This would
generate between $70 to $75 billion over six years.

Senate Environment and Public Works (EPW) Committee Chairman
James Inhofe (R-Okla.) indicated in late April his panel plans to proceed with
a reauthorization bill that provides a total of $311 billion in surface transportation
authorizations--$255 billion for highways and $56 billion for
transit.

This investment level is the amount called for in the
Senate-approved EPW Committee amendment to the FY 2004 budget resolution that
would have provided an average core highway program of $39 billion and transit
program of $9.3 billion over the next six years. According to Inhofe, these
investment levels are above the amounts assumed in the final FY 2004 budget
resolution and, therefore, his plans may have to overcome procedural hurdles
later this year.

On May 14, the Bush administration sent its TEA-21
reauthorization proposal, the "Safe, Accountable, Flexible and Efficient
Transportation Equity Act of 2003" (SAFETEA), to Congress. style="mso-spacerun: yes">

The proposal would utilize all forecasted revenues to the
HTF, transfer revenue from a portion of the federal excise on gasohol sales
(2.5 cents per gallon) from the General Fund to the HTF and slightly draw down
the HTF cash balance. It would finance a six-year, $247 billion federal
investment in highway and transit programs. Unfortunately, the proposal
underscores the inadequacy of the existing user revenue stream to meet the
nation's surface transportation needs outlined in the U.S. DOT report. style="mso-spacerun: yes">

The revenue streams utilized in the proposal would result in
a significant three-year drop in federal highway investment below the current
year's $31.6 billion level. SAFETEA would fund the highway program at $29.3
billion in FY 2004, $30.3 billion in FY 2005 and $31.3 billion in FY 2006. The
highway program would grow to $32.3 billion in FY 2007, ramping up to $33.9
billion in FY 2009. Under the proposal, federal investment in transit programs
would be frozen next year and then increase by about $200 million per year over
the life of the bill, growing from $7.2 billion in FY 2004 to $8.2 billion in
FY 2009.

Providing insight

Since 2000, the American Road & Transportation Builders
Association (ARTBA) has been working with Congress and the Bush administration
to stimulate discussion about the need to raise federal user fees to meet the
highway and transit needs identified by the U.S. DOT.

ARTBA uses time-tested political tools to support its
legislative agenda in Washington. Our direct lobbying is supported by
grassroots education and mobilization, issue research, public opinion polling
and message testing, advocacy advertising, development and distribution of
issue education materials, media relations and coalition building, management
and financial support. Last year, ARTBA launched the "Transportation Makes
America Work!" (TMAW) campaign to raise financial support from the
membership for these critical activities.

On the coalition front, ARTBA helped organize and now plays
a leadership role in two groups that are helping push the industry's transportation
investment agenda--the Transportation Construction Coalition (TCC) and
Americans for Transportation Mobility (ATM). The TCC, which ARTBA co-chairs
with the Associated General Contractors (AGC) of America, includes 28 national
associations and unions representing transportation construction market
interests. The ATM operates under the banner of the U.S. Chamber of Commerce
and is directed at national education and mobilization of the general business
community.

The TCC has been working to build support for the House
T&I Committee bipartisan leadership proposal. At a May 13 news conference
with Chairman Young, the TCC released an analysis by Global Insight--the
world's leading econometric forecasting firm--which found the committee
proposal would add $290 billion to the nation's Gross Domestic Product over the
next six years.

Global Insight (formerly DRI-WEFA), a forecasting company
with over 3,000 industry, finance and government clients, said the T&I Plan
also would generate a $129 billion increase in consumer disposable income; a
$98 billion increase in consumer spending which would benefit small American
businesses; and an increase of $102 billion in federal tax receipts and an
additional $140 billion in state and local tax receipts due largely to increased
employment and corporate profits.

The Global Insight study is being distributed to all members
of Congress, the Bush administration, national and local news media and other
key policy makers. The full report
is available at www.artba.org.

TCC co-chair Pete Ruane, ARTBA president and CEO, and TCC
co-chair Steve Sandherr, chief executive officer of AGC, held a May 21 news
conference at the National Press Club in Washington, D.C., to unveil an
advertising campaign designed to build congressional support for the House
T&I Committee proposal by directly responding to some conservative
opponents of a highway user-fee increase. It includes print ads with excerpts
from President Ronald Reagan's 1982 national radio address announcing his
successful plan to raise the federal gas tax by five cents per gallon to
finance expanded highway and mass transit investments. style="mso-spacerun: yes">

The main message of the ad campaign: "It's OK to be a
conservative and support an increase in the federal highway user fee for the
right reasons." The ads will be appearing in the coming weeks in Capitol
Hill publications and other Washington, D.C.-based newspapers. style="mso-spacerun: yes">

You can do it

There are a number of things you can do now to help build
support for the House T&I Committee leadership proposal. style="mso-spacerun: yes">

First, get fully informed on reauthorization issues by
visiting the "Government Affairs" section of the ARTBA website at
www.artba.org.

Second, communicate directly with your congressman and senators.
You can be a source of information for members of Congress from your state. As
a voting constituent, your legislators are very interested in what you have to
say. Participate in town hall meetings or host a member of Congress at your
business. The push for a needs-based TEA-21 reauthorization plan is a
"heavy lift" that will not be successful without a strong support at
the grassroots level by our industry.

Third, use the toll-free ARTBA Information Highway-Action
Hotline (888/448-2782) to call your members of Congress or receive audio
updates on important developments.

Fourth, take the messages about the positive impacts of
transportation investment beyond our industry and directly to the community by
contacting your local media and with letters to the editor.

Finally, you can provide support for the TMAW campaign to
help ensure we have the necessary financial resources to wage a sustained and
effective advocacy campaign on the industry's behalf. You can contact ARTBA at
202/289-4434 to learn more.

About the author: 
Jeanneret is vice president of communications for ARTBA, Washington, D.C.
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