LEXIS-NEXIS® Congressional Universe-Document

LEXIS-NEXIS® Congressional

March 21, 2000, Tuesday

SECTION: PREPARED TESTIMONY

LENGTH: 1405 words

HEADLINE: PREPARED TESTIMONY OF REPRESENTATIVE JOAN BRAY MISSOURI STATE HOUSE OF REPRESENTATIVES ON BEHALF OF THE NATIONAL CONFERENCE OF STATE LEGISLATURES

BEFORE THE HOUSE TRANSPORTATION AND INFRSTRUCTURE COMMITTEE SUBCOMMITTEE ON GROUND TRANSPORTATION

SUBJECT - "THE IMPACT ON TRANSPORTATION PROGRAMS OF REDUCING THE FEDERAL FUEL TAX"

BODY:
Mr. Chairman and members of the subcommittee, I am Representative Joan Bray, a member of the Missouri State House of Representatives. In the Missouri House I serve as chair of the Ways and Means Committee. I was also the chair of the National Conference of State Legislature's (NCSL) Energy and Transportation Committee last year. It is on NCSL's behalf that I appear before you today. I want to thank you, Mr. Chairman, for offering NCSL an opportunity to participate in this hearing. The National Conference of State Legislatures represents the state legislatures of the 50 states and the nation's commonwealths and territories. Much of the nation's transportation infrastructure has been constructed and maintained through user fees. The gas tax is perhaps the most visible "user" fee in that, when spent through trust funds, it produces tangible results. On that note, Congress made exceptional strides in 1998 when it enacted TEA-21. This historic legislation put a guarantee on the use of the "user fees" NCSL had long sought. It opened the door to address pressing road and bridge and mass transit needs. Now, proposals have been made to strip away some of the funds needed to accomplish TEA- 21's mission. In 1993, NCSL supported the 4.3-cent federal gas tax transfer to the Highway Trust Fund. State legislators knew it would help and believed it was publicly acceptable. Therefore, NCSL strongly opposes a repeal of any portion of the federal gas tax as proposed in such bills as H.R. 3844, H.R. 3881, H.R. 3982 and H.R. 4006 or in any FY 2001 budget resolution.

1. NCSL'S CONCERNS FOR STATE HIGHWAY REVENUES

As a legislator, like you, I must be responsive to my constituents. Therefore, I understand the political pressure you must feel to act on this issue and somehow reduce the price of gasoline. However, I submit that by repealing the 4.3-cent gas tax, the financial hurt caused to state highway and aviation projects, and to maintenance, repair and safety, would be greater than the questionable financial gain for gas consumers. There is no certainty that repeal of the gas tax would translate into lower prices at the pump. The federal tax is imposed at the refinery, not at the pump. Before gas reaches the pump, its price is influenced by sales transactions at the wholesale level that might result in no reduction in price for the consumer.

The 4.3-cent tax on gasoline and diesel produces approximately $7.2 billion for the Highway Trust Fund annually. This breaks down to $5.8 billion for highways and $1.4 billion for transit. According to the U.S. Department of Transportation, the proposed repeal of the gas tax would cost states $18.9 billion through FY 2003. As a result of the repeal, there could be significant losses in highway planning and construction, highway safety, transportation enhancements and high- priority projects.

Safety and repairs of our nation's highways could suffer as a result of the lost revenue. Annually, about 12,000 highway deaths are due to unsafe highway conditions. If gas tax revenues decline, many road improvement projects might be delayed, suspended or abandoned. Programs to fight drunk driving, encourage the use of seatbelts and hire truck safety inspectors might also be reduced.

Transportation jobs could also be sacrificed as a result of a repeal of the gas tax. According to the U.S. Department of Transportation, a billion dollars of highway spending supports approximately 42,000 jobs. As a result of the gas tax repeal, an average of 420,000 high- paying positions could be lost each year in 2002 and 2003. There might also be a significant negative economic impact on sale of construction materials.

Since enactment of TEA-21, states have benefited from the direct link established between the trust fund and funding distributed to the states for investment in transportation infrastructure projects. TEA- 21 and the formulas it established for returning gas tax revenues to states were negotiated in good faith and agreed to by all parties concerned. To reduce the gas tax now would have broad implications for state transportation funds and could jeopardize the financial stability of present and future surface transportation projects.

2. NCSL's CONCERNS FOR STATE TRANSIT FUNDING

The Mass Transit Account of the Highway Trust Fund used to support transit would be without funds in 2003. Continuation of the transit program at the TEA-21 funding levels would not be possible after TEA- 21 expires in 2003. States and cities that have bonded their anticipated future federal highway and transit funds would be forced to further cut programs.

3. NCSL's CONCERNS FOR STATE AVIATION FUNDING

In addition to the revenue losses experienced by states in the area of highway and transit funding, the repeal of the gas tax on aviation fuel would reduce the aviation trust fund by $700 million. Small state-run airports depend upon funding from the trust fund and it is likely that they would be the hardest hit by such a reduction. Also, by reducing the tax, the shortfall in the trust fund would require that the general fund contribution for FAA operations would need to be increased. Overall, the proposed repeal of the 4.3-cent gas tax as it relates to aviation could hinder realizing the goals of AIR-21. I testified here last year in favor of H.R. 1000. Taking into consideration that position and the recently negotiated, bipartisan, aviation agreement that was reached, I strongly caution the subcommittee against taking any action that could undo or undermine the good that could be accomplished through AIR-21.

And now I'd like to tell you what the impact of the proposed repeal would be for one state--Missouri.

4. THE IMPACT ON THE STATE OF MISSOURI

Repeal of the 4.3-cent gas tax would have a major impact on my home state of Missouri. The U.S. Department of Transportation says we would lose $168.5 million for fiscal year 2002 and $291.5 million for FY 2003, for a total loss of $460 million over the two years. Missouri is already contending with transportation funding woes that will likely only worsen if the gas tax is repealed.

In 1992 the Missouri Department of Transportation (MDOT) embarked on a major highway program, primarily in the rural areas of the state. Over the past few years that program has been woefully over-promised, while dramatically under-funded -- in the amount of approximately $15 billion. As a result, the department has suffered a huge loss of credibility and Missourians are angry at what they perceive to be state deceit and mismanagement.

It would be a further blow to the department's efforts to restore trust in its work to have projects delayed even longer by a significant cut in federal money that could be the result of the gas tax repeal. I am told by MODOT that the amount of funding for the St. Louis region that would be cut under this scenario could be about $110 million over the two years. I represent a district in the core of this region. My community of Richmond Heights was severed in two five decades ago by construction of U.S. Highway 40, now Interstate 64. That aging, deteriorating freeway -- whose design causes significant congestion and the resulting filthy air -- is due for major renovation in the next five years. Plans for community involvement and design options are underway. While these activities cause enough anxiety among my constituents, delaying the project because of lack of federal money would be even worse. My constituents, whose lives and property are affected by the project, need to have the ambiguity replaced by certainty. All of us who live in the region -- a non-attainment area for ozone pollution -- and whose health is affected by the foul air need relief.

Cuts in highway funding to be used for transit would have significant ramifications for Missouri. In the St. Louis region we are expanding our highly successful light rail system -- with federal and state money on the Illinois side, and with local money on the Missouri side. Our fear is that this gas tax cut could endanger completion of the Illinois project and would slow further plans for extensions with federal help on Missouri portions.

Thank you for this opportunity to appear before you today on behalf of the National Conference of State Legislatures. I welcome your questions on the testimony I have provided today.

END

LOAD-DATE: April 20, 2000