Statement of Senator Bob Graham
Environment and Public Works Committee
Transportation and Infrastructure Subcommittee
Implementation of the Transportation Equity Act for the 21st Century April 15, 1999

I thank the distinguished Subcommittee Chairman for holding this important hearing today to highlight the TEA-21 legislation nearly a year after the Congress enacted it. TEA-21 is a landmark piece of legislation. This Committee, working with our House colleagues, were able to pass legislation that accomplished many of my goals and the goals of my state. TEA-21 provides for a record level of transportation investment. TEA-21 moved the federal highway program formula a step in the right direction toward true equity for all states. TEA-21 created many new programs which will help close the gap between the infrastructure needs of our country and traditional transportation funding, including the Transportation Infrastructure Financing and Innovation Act (TIFIA). TEA-21 also provided an opportunity to make the federal highway and transit program more efficient and effective by streamlining environmental review.

Last year, throughout the debate on TEA-21, I always focused on one goal: to be able to promise my constituents that by 2003, the last year of TEA-21, our roads and bridges would be in better shape than they are today. In 1991, when ISTEA passed, I was not able to make that pledge, because I knew that the United States Department of Transportation had already estimated that the level of funding in the ISTEA bill would not close the gap between highway needs and money to meet those needs.

TEA-21 established a new budget category for the funding the highway program which calls for funding levels each year to match the intake of gas taxes the year prior. This will be the first year we test the philosophy that we can commit to spending user fees exclusively to keep up the system. I'm dismayed by the President's 2000 budget proposal which called for the diversion $1.456 billion in revenue aligned budget authority which resulted from increased tax receipts deposited into the highway trust fund. I expressed my concerns to Chairman Domenici, and am happy to know that he has strong plans to stick to the TEA-21 framework.

Thanks to low gas prices and a great economy, Americans have been taking more trips. TEA-21 specifically designed the RABA to account for this type of unpredictable change in the gas tax receipts. I do not believe that if gas tax receipts in the future drop dramatically, the Administration will be proposing to divert funds from other discretionary spending to keep the transportation budget at its current level. The diversion of the new money away from the formula programs would have had a very detrimental effect on my state and all donor states. My state would have dropped below the 90.5 cent Minimum Guarantee we fought so hard for last year.

I've spent six years since the passage of ISTEA I fighting for a better rate of return for my state and all donor states. Not only were we fighting for an increase in the guarantee, but that the guarantee actually give states the rate we agreed upon. TEA-21 is a delicate balance of programs and formulas which cannot be tampered with without having serious consequences for someone. In the Administration's case, those affected are donor states like Florida.

TEA-21 provided my state with a 57 percent increase in funding over the ISTEA years. Our rate of return increased from 79 cents per dollar contributed to the Highway Trust Fund to 90.5 cents per dollar on formula programs, and a minimum of 85 cents per dollar on total funds made available to states. As you may recall, in the past donor states were penalized when they received federal discretionary funds. Money would be taken out of their equity guarantee. Now that this penalty is eliminated, the Florida Department of Transportation is free to apply for any discretionary grants, and they are vigorously doing so.

Thanks to the average $1.2 billion per year that Florida is now receiving in federal highway funding, many projects in my state have been able to be accelerated, and now much needed transportation improvements will be completed at an earlier date.

Unfortunately, even the increase in gas tax money and the unprecedented amount of funding in TEA-21 is still not enough to maintain and enhance the quality of roads in Florida, or any other state. Traditional grant programs will be unable to ever meet the infrastructure needs of the nation. We must look at innovative solutions to our congestion problems. We need to use innovative methods to finance construction projects.

The distinguished Chairman and I worked very hard to develop the TIFIA Program. I want to thank United States Department of Transportation for working closely with us on the TIFIA program, and for shepherding it through the implementation process. I believe U.S. DOT will be ready to take application for the program as early as this summer. As you are all aware, the program will extend federal credit to major, high cost transportation projects so as to enhance the project's ability to acquire private credit. The TIFIA program authorized $530 million to be extended in federal credit over six years. The $530 million can be used to leverage up to $10.6 billion in private loans and lines of credit. The TIFIA program offers the sponsors of major transportation projects a means to amplify federal resources up to twenty times. The objectives of the program are to stimulate additional nonfederal investment in our nation's infrastructure, and encourage private sector participation in transportation projects. I am very excited about the prospects for the TIFIA program. I believe that we must continue to look for new and innovative ways to meet our nation's infrastructure needs.

Senator Wyden and I also worked on ways to make the process of reviewing transportation projects more coordinated and streamlined. In our original discussions, we established a goal of trying to get all affected federal agencies which have responsibilities for approving transportation projects to come to the table at the earliest possible time to identify any ``fatal flaws'' to a transportation plan. We also discussed the idea of rewarding states for doing exceptional environmental review on the state level, and trying to not make them subject to a duplicative review at the federal level. This is where we started, and I unfortunately do not believe this is where we ended up. I know the distinguished Subcommittee Chairman is planning to hold a hearing to specifically focus on this issue later this month. I look forward to hearing the thoughts and concerns of the customers of the system, the Administration, and my colleagues.

I once again thank Senator Voinovich for having this hearing today and I look forward to the testimony.