Maneuvering the Money Maze
by Hannah Twaddell
Does Safe Tea lead you to thoughts of Earl Grey or Darjeeling? If so, you've been out-of-touch with the costly and complex world of federal transportation funding. Hannah Twaddell will help get you up to speed.
From PCJ #59, Summer 2005
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There's no way around it. It takes money -- a lot of money -- to pay for good transportation systems. Given the high stakes involved, it should come as no surprise that funding for transportation is a very political and complex process. My goal in the next 1,500 or so words is to provide you with a (relatively) concise overview of the most important funding issues facing America's transportation system. While the focus will be on the federal transportation bill, up for renewal as of this writing, I'll also touch on some interesting -- and sometimes controversial -- new directions being explored by states, nonprofits, and the private sector.
Navigating the Federal System
The federal gas tax, currently pegged at 18 cents per gallon, provides a major source of funding for roadway and transit projects nationwide. Monies flow from the gas pumps in every state to the federal Transportation Trust Fund (TTF), and then are distributed back out to states and regions through a complex array of categories and formulas. But over the past few years, the TTF has not grown in sync with transportation funding needs. There are four primary reasons for this shortfall:
Every six years (or so) Congress updates the transportation bill, which identifies amounts, formulas, programs, and rules for federal transportation funds. The Transportation Equity Act for the 21st Century (TEA-21) , passed in 1998, was due to expire in 2003. Fierce battles over the new bill, dubbed "SAFETEA" (short for "Safe, Accountable, Flexible, and Efficient Transportation Equity Act") have raged for more than two years now because there just isn't enough money to come close to making everyone happy. The current bill has been extended twice, and probably will be for another year, making it hard for state, regional, and local officials to plan very far into the future.
According to an April 2005 bulletin from the Association of Metropolitan Planning Organizations (AMPO), "several sticky issues remain for a transportation reauthorization bill, including donor-donee concerns, tolling provisions, and transit funding, not to mention the fundamental position of the overall funding level and funding mechanisms."
Ah, "donor-donee" -- now there's a nice bit of insider transportation jargon you can impress people with at your next cocktail party. "Donor" states are those which contribute the most gas tax money to the trust fund, usually because they're the most heavily populated. "Donee" states are those which, thanks to minimum funding formulas, get more TTF money back than they send in.
Since transportation is expensive whether you're big or small, this addresses an important equity issue. But the donor states are fighting hard to get more equitable treatment from their point of view, given pressing needs generated by fast-growing traffic and large urban transit systems. They'd like to get 95 cents back for every dollar they put in; at this point it looks like the highest Congress will go is 92 cents, which would still be a 15 percent increase over the amounts they have been allocated under TEA-21.
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