Statement of the
Transportation Departments of
Montana, Idaho, North
Dakota, South Dakota, and Wyoming
Committee on Finance
Committee on Environment
and Public Works
United States Senate
Financing Surface
Transportation Programs
September 25, 2002
The
transportation departments of Montana, Idaho, North Dakota, South Dakota, and
Wyoming (“we” or “our”) submit this brief statement for the record of the joint
hearing held on this date by the Committee on Finance and the Committee on
Environment and Public Works.
We
are extremely pleased that, today, there is a consensus in the country that a
well funded highway program makes an important and positive contribution to our
nation’s economic prosperity and quality of life. But we urge the Congress not
to rest on that consensus, but to build upon it and increase today’s level of
Federal investment. As the Congress receives testimony and prepares to shape
legislation to reauthorize Federally assisted surface transportation programs,
it is important to keep foremost in mind that increased transportation
investments will truly advance the public interest and help all citizens and
all States.
The
two Committees are to be commended for holding this hearing. The nation’s
ability to achieve increased transportation investment requires increased
funding it requires an answer to the question of how the Federal Government
will finance its contribution to such an increase.
A
very important part of the answer is already before you. Earlier this year,
Chairman Baucus, with the co-sponsorship of Senators Crapo, Daschle, Thomas,
Craig, Enzi, Johnson, Warner, Reid, Graham, Bond, Harkin, and Carnahan, introduced
bi-partisan legislation, S. 2678, that would increase receipts into the Highway
Trust Fund without raising taxes.
We
support every provision of that legislation.
That
legislation would allow the Highway Account of the Highway Trust Fund, which
has foregone very significant revenue due to increased gasohol consumption, to
be properly credited. The bill would ensure that the 2.5 cents per gallon of tax on gasohol that currently is directed
to the General Fund of the Treasury would be deposited in the Highway Account.
In addition, the bill would credit the Highway Account with funds equal to the
amount of fuel taxes not imposed on gasohol due to the gasohol tax preference
(currently 5.3 cents per
gallon). The bill would not raise the tax imposed on gasohol. This approach
would make the Highway Account whole with respect to taxes either paid or
foregone with respect to gasohol consumption. It would allow the Highway
Account to finally receive treatment on this issue comparable to the treatment
on this issue currently given to the Mass Transit Account which, unlike the
Highway Account, already receives the same funding for a gallon of gasohol as
it does for a gallon of regular gas.
S.
2678 also properly would reinstate the principle that the Highway and Mass
Transit Accounts of the Highway Trust Fund should each be credited with
interest on their respective balances. The bill also includes a thoughtful
provision requiring a commission to look at long-term issues in financing the
surface transportation program.
So,
while witnesses today may be emphasizing various innovative ways of financing
increased Federal surface transportation investment, we wanted to emphasize our
support for the important and straightforward provisions included in S. 2678,
the “Maximum Economic Growth for America Through the Highway Trust Fund Act.”
As
to additional financing mechanisms, at this time we will limit ourselves to a brief
positive comment on a concept that we understand to be under development by
Senator Baucus. The approach would be for the Secretary of the Treasury to sell
bonds with the proceeds being deposited in the Highway Trust Fund. The General
Treasury would be responsible for the principal and interest. We welcome the
development of this additional approach as a means of serving our national
interest in increased investment in highways and transportation.
In
closing, we commend Chairman Baucus and Ranking Member Grassley of the Finance
Committee and Chairman Jeffords and Ranking Member Smith of the Environment and
Public Works Committee for holding this hearing on the important issues of
finding ways to finance increased Federal transportation investment. That
investment is certainly essential to the economic future of our States and we
appreciate this opportunity to offer views on how that might be achieved.