Statement of
Senator
James M. Inhofe
Environment
and Public Works Committee
Innovative
Finance
September
25, 2002
Thank
you Mr. Chairman. As we work on the
drafting of this reauthorization, I think it is safe to say that all the
members here recognize that this is a time of extraordinary challenge and
opportunity in the transportation sector.
The world of surface transportation is changing. It is now our job to work together to ensure
adequate funding for investment in the nations transportation system and
preserve state and local government flexibility to allow the broadest
application of funds to transportation solutions.
TEA-21 dramatically altered transportation funding
mechanisms. It provided greater equity
among states in Federal funding and record levels of transportation
investment.
For most Federal-aid projects, the law requires that 20
percent of the costs be derived from a non-Federal source. In order to maximize the use of all
available resources, states now have a range of options for matching the
Federal share of highway projects
. By providing
flexibility in the form that the non-Federal match might take, Federal dollars
can be leveraged more effectively.
What we have been taking advantage of in Oklahoma is the
toll credit match. We apply certain
toll revenue expenditures to build and improve our public highway facilities as
a credit toward the non-Federal matching share on particular projects.
However, transportation officials at all levels of
government still face a significant challenge when considering ways to pay for
improvements to transportation infrastructure.
It is apparent that traditional funding sources are insufficient to meet
the increasingly complex needs.
I remember when I was Mayor of Tulsa, we worked diligently
trying to focus on public private partnerships. I recognize that the implementation process is a complex undertaking with the
wide range of organizational and financing options but its important for public
agencies to evaluate all their alternatives.
Despite the record levels of investment, funding is not
keeping pace with demands for improvements to maintain the vitality of the
nation’s transportation system.
Some transportation projects are so large that their costs
exceed available current grant funding or would consume so much of these
current funding sources that they would delay many other planned projects.
ARTBA proposed a number of options for enhancing the
Highway Account revenues. Some included
indexing the motor fuels excise taxes for inflation, crediting the Highway
Account with gasohol tax revenues that currently go into the General Fund, and
expanding innovative financing programs.
I might also mention that since the enactment of TEA-21, interest
accrued on any obligation held by the fund does not get credited to the Highway
Trust Fund, the interest earned goes to the General Fund. This is obviously something that we need to
rethink during reauthorization. These
are all revenue enhancements that would increase the fund substantially.
With the Energy
bill pending in Conference, the Trust Fund will recoup an additional 2.5 cents
per gallon of ethanol currently being deposited into the general revenue. The Senator from Montana has been very aggressive at trying to make the
Trust Fund whole with respect to the current 5.3 cent per gallon ethanol
subsidy. Although he and I do not agree
on how to best address this issue, we are in agreement that the Highway Trust
Fund should not pay to subsidize any fuel source. Our surface transportation infrastructure needs are such that we
cannot afford to forego any revenue source.
Certainly one of
the key factors in the economic engine that drives our economy is a safe,
efficient transportation system. If our
economic recovery is going to continue to expand, we cannot ignore the
immediate and critical infrastructure needs of highways, bridges, and state/local
roadway systems.
Finally, I would encourage our witnesses to address the
current issues with funding dilemmas and how the use of innovative finance can
generate real economic returns by expediting project construction.
Thank
you Mr. Chairman. I look forward to
today’s
hearing and want to welcome all of our witnesses.