Letter Urging Cosponsorship of the
MEGA Trust Act

Dear Colleague:

Next year, the Congress must reauthorize highway and transit programs and the system of Federal financing for them. This is a very important issue for the nation. Transportation is the lifeblood of the economy. Highway and transit programs are crucial in every state for moving goods and people. Highways and transit are key to our growth and our ability to connect to one another. This country needs good, safe highways in order to cross great distances and highway and transit construction and maintenance is an important part of every state's economy.

In order to facilitate our work in reauthorizing these programs, we are introducing a proposal concerning revenues for the Highway Trust Fund. Ensuring adequate resources in the Trust Fund will be a major challenge in the coming years. This bill addresses how this country will help pay for our highway and transit needs over the next several years.

Given the importance of transportation to our nation's economic growth, this bill will be known as the Maximum Economic Growth for America through The Highway Trust Fund Act or The MEGA TRUST Act.

The MEGA TRUST Act represents an important step in the effort to strengthen our Nation's economy, and improve its quality of life, by investing in transportation and ensuring the solvency of the Trust Fund. It would increase revenues into the Highway Trust Fund by several billion dollars annually by making some needed corrections in the way Federal revenues are credited to the Highway Trust Fund. Nothing in the bill increases any tax.

Federal dollars to help states and localities improve their highways and transit systems are derived largely from the Federal Highway Trust Fund. This Trust Fund mechanism has been widely regarded as successful. But, as always, we must make adjustments to meet new challenges.

This bill would improve and extend this important financing mechanism, principally by making sure that certain revenues not currently credited to the Highway Trust Fund are placed in the Fund.

The MEGA TRUST Act would:

1. ensure that taxes paid on gasohol are fully credited to the Highway Account of the Highway Trust Fund, by crediting the Highway Account with the 2.5 cents currently going to the General Fund.

2. ensure that the General Fund of the Treasury, not the Highway Account of the Highway Trust Fund, would shoulder the cost of the gasohol tax preference. Accordingly, this section of the bill would leave the gasohol tax rate preference in place but credit the Highway Account of the Highway Trust Fund with the 5.3 cents in revenue equal to that forgone to the Treasury by the gasohol tax preference.

3. credit the Highway Account of the Highway Trust Fund with interest on its balance, which it currently does not receive.

4. credit the Mass Transit Account of the Highway Trust Fund with interest on its balance, which it currently does not receive.

5. extend the basic highway user taxes and the Highway Trust Fund, so that they do not expire.

6. require an important study concerning the future financing of our Federal highway and transit programs.

In sum, through this MEGA TRUST Act we pursue ways to increase revenue into the Highway Trust Fund without raising taxes. We will need increased Highway Trust Fund resources to help us all structure a successful reauthorization bill. This bill responds to that need. We hope we can count on your sponsorship.

Sincerely,

Max Baucus (R-MT)
Senate Finance Committee Chairman

Jean Carnahan (D-MO)

Mike Crapo (R-ID)

Tom Daschle (D-SD)

Tom Harkin (D-IA)

Harry Reid (D-NV)

John Warner (R-VA)