Leaders of the House Transportation and Infrastructure Committee this week promised a bipartisan effort to fend off a "drastic $9.1 billion cut" in federal-aid highway funding.

In a joint statement, committee leaders said, "The Nation cannot afford this drastic $9.1 billion cut in our states' highway investments in these economic times. This cut could result in hundreds of thousands of Americans being thrown out of work when both sides of the aisle agree that we need more family-wage jobs."

The joint statement was issued by Committee Chairman Don Young (R-AK), Ranking Minority Member Jim Oberstar (D-MN), Highways and Transit Subcommittee Chairman Tom Petri (R-WI) and Ranking Minority Member Bob Borski (D-PA). It states that while the FY 2003 budget request is expected to provide the minimum amount required by federal highway legislation, it would be a drastic $9 billion reduction, cutting the highway program to $22.7 billion. The members state, "This unprecedented 29 percent cut in highway funding would severely disrupt state highway infrastructure investment programs and require states to postpone or abandon many scheduled projects."

The committee leaders pledge that they will work on a bipartisan basis "to ensure that highway investments continue to play a critical role in helping our Nation's economy in these tough times." The committee has asked the General Accounting Office to assess the validity of the model, calculations and assumptions made by the Treasury Department and the Office of Management and Budget to develop the budget figures.

The statement goes on to say that, because there is a balance of some $20 billion in the Highway Account of the Highway Trust Fund, the President's budget request "is the floor, not the ceiling available for highway programs - TEA-21 authorizes and the Highway Trust Fund can support a much higher level of highway funding." The members pledge to "continue to work to further the landmark principle of TEA-21 -- to unlock the Highway Trust Fund . . . Our goal is to unlock as much of that build-up as possible." The full text of the statement is available on the Committee web site at http://www.house.gov/transportation.

Action in the Senate Possible

In the meantime, there are activities taking place in the Senate to address the possible reduction in highway funding in FY 2003. A bipartisan group of senators is considering options to increase the obligation limitation for highways for FY 2003, perhaps by attaching an amendment to the economic stimulus package currently being considered on the Senate floor.

AASHTO Executive Director John Horsley this week urged Congress and the Bush Administration to take steps to prevent a nearly 30 percent cut in federal-aid highway funds in FY 2003.

"Our President and our Congressional leaders are searching for ways to stimulate the economy. At the same time, we are facing the loss of some $9.1 billion in federal funding for highways, which equates to as many as 144,000 jobs in a peak year. Immediate action to sustain highway funding levels will first of all preserve those jobs, and secondly will allow the delivery of transportation projects that are vital to our economic growth."

The $9.1 billion potential cut in FY 2003 highway funding below current levels is a result of a provision in the Transportation Equity Act for the 21st Century called revenue-aligned budget authority or RABA. It was intended to ensure that revenue collected in highway use taxes is spent for highway purposes. Because revenue collections to the Highway Trust Fund were lower than estimated, highway obligation authority for FY 2003 is projected to drop by $9.1 billion.

At a news briefing on Tuesday, Horsley said, "The good news is that there is currently an unobligated cash balance of $18.5 billion in the Highway Trust Fund which could be tapped to remedy this problem. The addition of about $2.7 billion in outlays for next year would keep the projects in the transportation pipeline moving. Since that could be funded entirely out of the Highway Trust Fund, solving this problem would not affect the general fund." (Because highway contracts are paid out over a period of several years, the addition of $2.7 billion in outlays would sustain the $9 billion in needed replacement funds.)

"The President has said that the American worker is eager for a paycheck, not a welfare check. There are 140,000 paychecks on the line here, and we want to see them, and the transportation investments they represent, continue," Horsley said. He added that AASHTO will be working with many committees "to see if Congress can fashion a solution that makes more sense" than a $9.1 billion highway funding reduction.

Job Losses Estimated

Bill Buechner, chief economist for the American Road and Transportation Builders Association, outlined the job impacts of the $9.1 billion cut. He noted that highway funding is typically spent over a seven-year period. He estimated that over seven years, 382,000 jobs would be affected, with the peak impact coming in FY 2003 and 2004. Buechner said that the cut in highway funding would effectively wipe out all the job gains that had been realized over the life of TEA-21.

An informal survey of the states by AASHTO -- reflecting the situation prior to the recent determination that cuts in federal-aid revenue-aligned budget authority (RABA) could cost the states another $9.1 billion -- shows that some are accelerating transportation projects while others are being forced to cut back plans. Highlights of state actions are summarized below.

States Increasing Transportation Investments for Economic Stimulus Florida

A $668 million transportation economic stimulus package is accelerating construction of 63 road building projects. Gov. Jeb Bush's State of the State Address included a call for $61.8 million to invest in components of Florida's transportation system that will meet the criteria of a Strategic Intermodal System, bringing the four-year total investment in the DOT's work program projects to $17.1 billion.

Against backdrop of cuts and other strategies to cover a $12 billion state budget funding gap, a proposed budget of $8.9 billion represents a $1.1 billion increase in transportation spending over the previous year and preserves earlier commitments made by Gov. Gray Davis and state lawmakers in a recent eight-year funding plan. Currently, $6 billion in transportation improvements underway.

The coming budget will allocate $4.9 billion for 142 projects to relieve congestion and improve the movement of goods. The legislature, with the endorsement of the governor, has placed on the March 5 statewide ballot a proposed constitutional amendment to fully dedicate the state sales tax on gasoline for transportation use.

Hard-hit by the decline in tourism, Hawaii will use public investment and construction to facilitate economic recovery. This includes construction and enhancement of transportation infrastructure.

For fiscal 2002-03, the Airports, Harbors, and Highways Divisions have added capital improvement projects of approximately $175 million, $18 million, and $94 million respectively. Approximately $96 million in state special funds and $37 million in state revenue bonds will be used for these projects.

Despite projected deficits of $600 million, cuts to transportation programs have been minimal. No funding was cut from highways, and only $5.5 million from public transportation and rail freight. In spring of 1999, Gov. George H. Ryan successfully passed an infrastructure program (Illinois FIRST) that boosted five-year highway program from $6.95 billion to $10.5 billion, through increased bonding for transportation and an increase in motor-vehicle registration fees. Illinois FIRST also included an increase in bonds for public transportation capital projects, providing $96 million. Of that, $20 million was for high-speed rail and $35 million went to aviation capital projects throughout the state. Included in the $35 million is $15 million for land acquisition for a third Chicago-area airport.

The state faces a $2 billion shortfall, but Gov. Jesse Ventura is strongly supportive of transportation, proposing $120 million in bonding last week for the state's first commuter-rail line. However, transportation funding is also proposed to be transferred to the general fund to help address the shortfall, including returning $245 million in general fund revenue allocated to transportation in 2000. To maintain projects, $245 million in bonding authority is proposed, backed by a five-cent increase in the gas tax and indexing the gas tax to the rate of inflation.

To stimulate the state's economy, Gov. Jeanne Shaheen directed the Bureau of Public Works to speed up the projects included in the state's capital budget. As a result, more than $87 million in capital projects will be put out to bid by July 1st.

The budget bill passed in September authorizes NCDOT to use a portion of its cash balances for maintenance during the next three years and will let the department invest about $420 million in highway maintenance across the state, including $153 million for the first year of funds to improve more than 400 miles of highway.

Gov. John Kitzhaber has asked the legislature to increase vehicle-registration fees to provide revenue for city and county transportation needs. Further, $750 million in bonding authority will be sought for road and bridge projects, and $400 million in bonding was approved last year.

The state faces a revenue shortfall of about $600 million by the close of its fiscal year June 30. Gov. Mark Schweiker has frozen roughly $300 million in spending in the current fiscal year. He also expects to dip into the state's $1 billion "rainy-day" fund to help offset the red ink. None of this has affected highway and bridges because they are not paid for out of the general fund. Mass transit, on the other hand, does face some impact there, as it taps the general fund.

Revenues into the Motor License Fund, which underwrites highway construction, are holding steady. Then-Gov. Tom Ridge and the Legislature agreed in 1997 to a $400-million-a-year increase in highway and bridge investment through a gas tax and fee increase. That combined with TEA-21 funding has allowed Pennsylvania to mount record levels of construction and maintenance, with letting of a record $1.5 billion in highway and bridge projects last year and a similar level of contracting expected in this calendar year.

State Transportation Program Reductions Connecticut

For Fiscal Year 2002, proposed state transportation cuts total $22.0 million out of a capital and operating annual budget of $580.0 million.

In the FY 2002-2006 Transportation Improvement Program, the Iowa Department of Transportation deferred a total of $200 million in highway construction projects. Total revenues for the highway program are forecast to be about $300 million less than previously anticipated for 2002-2006. Gov. Tom Vilsack, in his proposed FY 2003 budget, calls for $60 million to be transferred from the state Road Use Tax Fund to the state General Fund.

Kansas, which faces a budget shortfall of about $426 million overall, is in year three of a $13.7 billion, 10-year Comprehensive Transportation Program (CTP), adopted by Gov. Bill Graves and the 1999 Legislature. About $7 billion is the highway construction component. Going into the 2002 legislative session, the CTP is facing a deficit of about $300 million dollars at the end of the 10-year program (about 1.8 percent of total program). If deficit projections hold, KDOT will not be able to complete the program as originally passed in 1999, and projects will need to be cut.

Gov. Bob Holden already has reduced this year's state budget by more than $500 million. Funding for the DOT in FY 2003 has been proposed at $1.7 billion compared to $2.2 billion in FY 2002. No funds are proposed for Amtrak or waterways. Funding cuts are proposed for elderly and handicapped transportation assistance and for transit.

New Mexico has six-year transportation needs that total $5.08 billion (including alternative transportation modes). The Statewide Transportation Improvement Program (STIP) must be held to available revenue, and the $1.675 billion in projects currently programmed in the six-year STIP come nowhere near meeting the six-year transportation needs. Unbonded ("base level") federal revenue and state matching funds are expected to total no more than $1.2 billion over the next six years. This means current federal and state revenues cover less than 20 percent of needs for improvements to roads eligible for federal funds, and those funds have already been allocated. Currently, no other funds are available Over a 20-year period, the Long Range Plan anticipates revenues totaling $6.6 billion, while projected needs for improvements to state highways ($12.3 billion) and economic development ($1.2 billion) total $13.5 billion.

South Dakota has experienced a significant reduction in revenues that include the State motor-fuel tax and the vehicle excise tax in 2001. That decrease is reflected in the deferral of $55 million in projects in 2002 and 2003.

The legislature is completing a revised FY02 budget that cuts $202 million from original funding levels. State transportation revenues had a slight decline for FY02 and a very modest increase is projected for FY03. Over $100 million has been cut from the transportation program over three years (FY02 - FY04). In 1997 the Legislature implemented a 10-year $2.6 billion transportation initiative constructing 41 projects statewide. The Legislature has bonded every year to keep that program going; it is likely lawmakers will have to increase bonding this year due to decreased revenues.

The State of Wisconsin, for FY 2002, faces a $1.1 billion shortfall in general purposes revenue (GPR). A $1 billion shortfall in GPR is expected in SFY 2003 as well. The Department of Transportation is required to transfer approximately $21 million (during the 2001-03 biennial budget) from the Transportation Fund ( used exclusively for transportation purposes) to the General Fund to backfill for reduced general tax dollars.

The order is of particular significance because Atlanta is on the leading edge of an issue facing many other areas in the nation. The heart of the dispute is the meaning of "conformity" for areas that did not attain the ozone standard by the date prescribed by the Clean Air Act Amendments of 1990 (which required "serious" non-attainment areas to attain the standard by November 14, 1999). Like many other non-attainment areas, Atlanta is significantly affected by the problem of ozone transport, and its progress toward attainment has been delayed by legal impediments to EPA's institution of nationwide ozone-transport controls. Plaintiffs essentially argued that no transportation plan could be found to "conform" to the requirements of the Clean Air Act under these circumstances.

On January 18, 2002, the U.S. District Court for the Northern District of Georgia entered summary judgment dismissing these claims. In a 55-page order, Judge Beverly B. Martin ruled against the plaintiffs on each claim and every significant point.

This development breaks a long string of victories by Environmental Defense, which has had considerable success in using litigation and the threat of litigation to negotiate sweeping settlements in Georgia and other states. Georgia's success in this case, George DOT officials say, can be attributed in large part to the support of Governor Barnes. The governor consistently argued that the transportation plan is good for air quality and complies with the letter and spirit of the law. He backed the plan with significant bond financing and defended the case in court with strong political and resource commitment -- including his own testimony as a witness.

The sources also told AP that Amtrak may cut some long-distance train service if it cannot get assistance from Congress in meeting its deficit. The passenger railroad, under pressure to improve its finances, faces a possible restructuring by Congress. Federal legislation requires Amtrak to end its reliance on yearly operating subsidies by the end of this year.

However, the most recent report on the likelihood of that by the U.S. Department of Transportation's Office of Inspector General - released last week - states that self-sufficiency is no closer for Amtrak than it was in 1998, and reports that Amtrak lost $1.1 billion in 2001, the most in the rail line's three decades in service.

The sources told AP that 300 of the 700 people to be laid off will be managers. Amtrak also plans to scale back train-car maintenance, repairing immediate problems only rather than making all needed repairs to a rail car when it is taken in to be serviced.

Nonetheless, UAL Corp.'s loss was not as steep as airline analysts had expected. The carrier, hard-hit like other airlines by recession and reduced travel following the Sept. 11 terrorist attacks on the United States, attributed the brighter-than-expected results to cost-cutting and a pickup in air travel. United officials have made public plans to add 127 daily flights beginning in April, which will increase the airline's travel schedule by about 7 percent.

The chief executives of American Airlines and British Airways announced late last week they would not continue efforts to create an alliance, after learning that the U.S. Department of Transportation would require them to give up more than 200 flights to do the deal.

However, United Airlines and BMI-British Midland were tentatively granted permission for a marketing alliance that will let United fly round trip between Boston and Heathrow, in exchange for some giving-up of slots by the British partner. Interested parties were given 31 days from last Friday to comment on the order before it becomes permanent.

"We made it clear from the start that we would not conclude the deal if the regulatory price was too high," said American Chairman Don Carty and British Airways Chief Executive Rod Eddington, in a joint statement obtained by the Associated Press. "Regrettably, this has proved to be the case."

U.S. DOT said it would tentatively grant the two airlines antitrust immunity for a pact that would let them sell each other's tickets and set rates and routes together. But the price of doing so was for the two airlines to make available to other airlines 224 takeoff and landing slots for travel between several cities in the United States and London's Heathrow Airport. Now only four airlines - American, British Airways, United Airlines and Virgin Atlantic - make such trips.

The driver of the wrecked 18-wheel rig - Tracy Webb Johnson, 37, of Truth or Consequences, N.M. - was taken to the Clear Creek County Jail after being cited for driving under the influence of alcohol, careless driving, damaging a highway and spilling a load on the highway, according to the News. She also faces two felony charges, including substantially contributing to a hazardous substance incident and reckless causing a hazardous-materials incident, the News reported.