I will divide our comments on TEA-21 implementation into two categories.
First is the performance of USDOT in implementing the portions of TEA-21 over which it has discretion. We give them a generally good score on the work done so far, recognizing that some of the most sensitive decisions have yet to be made.
Efforts to implement the new funding programs created by TEA-21-including those for community planning, innovative finance and others-seem to be going in the right direction. However, the success of these programs must ultimately be judged according to the projects chosen for funding. Good projects make a good program. So far, no final funding decisions have been made in any of the discretionary programs, and so we will all have to wait and see.
In addition, USDOT must write several new sets of regulations that will guide the expenditure of funds at the state level. The most important of these are for planning at the state and metropolitan level, and streamlining of the project approval process. This subcommittee will hold a hearing on the question of streamlining in a few weeks, and so I will hold my comments on that subject until then.
As to the planning regulations, again it is too early to say where USDOT will come down. An options paper has been released, but the range of possibilities it describes is so broad as to make any conclusions about how the final regulations will look is impossible. Nonetheless, I will briefly address two planning issues.
First is something called the Major Investment Study. Since 1992, USDOT has required states and MPOs to use a reasonably rigorous process of assessing the costs and benefits of various investment options when major new highway or transit capacity is proposed. In general, this process applies only too large projects in the range of $100 million or more. The Major Investment Study (MIS) has been an important part of the shift created by ISTEA and sustained by TEA-21 towards basing spending decisions on performance rather than preconceptions. The MIS is a reform adopted in 1991 to the process that existed previously to assess the advisability of major new projects. For new transit investments, USDOT required years of study and rigorous cost/benefit analysis before work could proceed. For new highways, no cost/benefit analysis was required needless to say this was not a level playing field.
Much attention has been given to ISTEA and TEA-21 roles in opening up our transportation program to new ideas, and the Major Investment Study is where this happens. USDOT is coming under pressure from some quarters to scale back or eliminate the MIS process. This would be a terrible mistake.
Another important planning issue is the process for deciding on the allocation of funding between metropolitan and rural areas within each state. TEA-21 calls on USDOT to assure that funds are divided up inside each state according to a process that is accessible to local officials. The data presented by Mayor Barr, which shows the large inequities that can exist within a state even as the debate over "equity" has dominated the debate over transportation in Washington, point to the need for a rational, transparent process for drawing the outlines of in-state allocations.
Indeed, far more troubling than USDOT's efforts since TEA-21's enactments are the spending trends we are seeing in the field. As you have heard from Mayor Barr, the funding categories that embody the groundbreaking nature of both ISTEA and TEA-21-funds for safety, transportation enhancements and air quality, to name a few-are being consistently shortchanged at the state level in spite of the specific agreements by the authors of the bill, both the House and Senate, to assure minimum funding levels for these programs.
This disconnect is possible because of the new budget authority that TEA-21 creates when tax payments to the Highway Trust Fund exceed the levels projects when the bill was written. TEA-21 goes beyond assuring that there is enough spending authority to use any new money coming in, and instead assures that there is always more spending authority given to the states than is available for actual spending.
This creates a permanent shortfall between expectation, reality, and TEA-21's environmental and safety programs are always the losers. TEA-21 will not live up to its promise until this loophole is closed.
This concludes my statement. Thank you.