Revenue Principles for TEA 21 Reauthorization

January 29, 2003

The Honorable Don Young
Chairman
House Committee on Transportation & Infrastructure
2165 Rayburn House Office Building
Washington, DC 20515-6256

Dear Chairman Young:

Thank you for your leadership in recognizing and proposing a variety of ways (including an increase in Highway Trust Fund user fees) to fund a much needed increase in the federal investment in highways and public transportation infrastructure.

In that regard, I am pleased to advise you that the APTA Executive Committee has unanimously adopted revenue principles that commit APTA to supporting -

• indexing the motor fuels taxes to account for inflation;

• crediting the Highway Trust Fund and Mass Transit Account with interest on unspent balances;

• increasing the motor fuels tax sufficient to support our proposal to double the federal investment in public transportation to $14.3 billion a year by FY 2009; and

• managing more effectively the cash flow that supports the program.

APTA took this action now in response to your strong advocacy on behalf of increased investment in highways and public transportation in TEA 21 reauthorization, and we look forward to working under your leadership in that regard in the months ahead. A copy of our formal policy statement is enclosed for your information.

Thank you for your clear commitment to improving America’s transportation and economic future.

Sincerely yours,

William W. Millar

President

WWM/cbo

Enclosure

Revenue Principles for TEA 21 Reauthorization

 

With public transportation ridership at the highest levels in forty years, and with documented transit needs in excess of $43 billion a year, APTA proposes to double the federal transit program to a $14.3 billion program level by FY 2009. In support of that effort, APTA adopted the following principles on January 16, 2003:

1. As the transit program grows, the federal transit program should continue to be funded with a combination of Trust Funds and General Funds, maintaining the current 80/20 proportionate split.

2. The TEA 21 funding guarantees must be continued, and must apply to both the Trust Fund and General Fund portions of the transit program.

3. Motor fuels taxes should be indexed to account for inflation.

4. Interest should be credited to the Highway Trust Fund and Mass Transit Account balances.

5. Outlays from the Mass Transit Account should be scored in the same manner as outlays are scored from the Highway Account. Such a change in current federal accounting requirements would positively affect the cash balance of the Mass Transit Account. Further, APTA supports the pay-as-you go cash management program as recommended by the American Road and Transportation Builders Association (ARTBA).

6. Just as the highway program has a specific RABA provision for its Highway Trust Fund, APTA supports a specific RABA provision for the Mass Transit Account portion of the Highway Trust Fund. This shall not substitute for General Funds. RABA needs to be adjusted to prevent wide swings year to year.

7. The gap between the $65.7 billion needed to fund APTA’s six-year reauthorization proposal and revenues available through the sources identified above should be bridged through an increase in motor fuels taxes not inconsistent with the historic 80/20 ratio in new motor fuels tax revenues between the Highway Trust Fund and the Mass Transit Account.

8. The program funding levels recommended by APTA’s Reauthorization Task Force will continue to fund the same programs as are funded under the current, highly successful TEA 21 law.

9. APTA supports several additional ideas for enhancing the Highway Trust Fund in ways that may not specifically benefit the Mass Transit Account. These include crediting the Highway Account with gasohol tax revenues that currently go into the General Fund, or reimbursing the Highway Trust Fund from the General Fund for the cost of the subsidy.

10. APTA supports innovative financing programs. The transit program must be structured to attract and / or leverage private investment. One specific recommendation is to reduce the TIFIA threshold of $100 million / project to a new threshold of $25 million / project.

11. The TEA 21 reauthorization bill should establish a "blue ribbon" panel to study the long-term ability of the Highway Trust Fund to continue to provide sufficient resources for transportation investment. Such panel should include adequate representation from the public transportation industry.