After the Bush 2003 budget projected that falling gas tax revenue would cause a $9 billion reduction in FY03 federal highway aid to states, legislators in both the House and Senate scrambled to introduce legislation to restore highway funding.AASHTO, the national organization of state highway agencies, clearly was effective in sounding the alarm on Capitol Hill. During the first week of February, identical bills with prominent bipartisan sponsorship were introduced to restore $4.4 billion of the lost funding.The restoration would add pressure to the Bush Administration’s budget plan.The president’s position on making up some of the highway fund with other revenue so far is not clear.In testimony to Congress, FHWA Administrator Mary Peters said the cuts were a function of gas tax revenues, not a policy decision.

Most federal transportation funding to state DOTs comes through the Highway Trust Fund.It is automatically adjusted according to gas tax receipts and big-rig truck sales — a feature known as Revenue Aligned Budget Authority (RABA).When this system was established under the Transportation Equity Act of 1998, mass transit agencies opted out of the RABA process, choosing guaranteed funding levels thatdo not fluctuate based on revenue.Until this year, RABA had boosted federal highway coffers as gas tax receipts exceeded projections.Indeed, the projected $9 billion reduction is from upwardly-adjusted RABA levels.If one takes TEA-21 authorized levels as the starting point, the cut is closer to $5 billion.The legislation in Congress would come close to restoring highway spending to those levels.

While funding reaching transit agencies via the Federal Transit Administration is not affected, federal highway funds that are “flexed” to transit programs may be at risk. Transportation Enhancements and Congestion Mitigation/Air Quality (CMAQ) funds, which support non-highway projects like bicycle and pedestrian improvement projects, are subject to RABA.Enhancements tend to be spent at a slower rate by states than other funds, and may see further neglect if funds lessen.The Bush budget also targets CMAQ for a specific cut. NYC Transit uses a significant portion of the CMAQ funds coming to NYC.

Support forthe legislation to restore some of the RABA-affected funds is gaining in Congress. Republican Senator Pete Domenici, ranking member of the Senate Budget Committee, announced his support last week. In the House, the bill has 227 co-sponsors, including 74 of the 75 members of the Transportation and Infrastructure Committee.However, House Appropriations Committee spokesman John Scofield told the Las Vegas Review Journal that several members of that committee oppose the bill.

Nebraska Governor Mike Johanns told the Lincoln Journal Star that a coalition of governors is putting pressure on the Bush administration and Congress for restoration of the full $9 billion shortfall.In response to these developments, it is likely that states will develop proposals to “smooth out” swings in revenue for the federal highway program for next year’s debate over the reauthorization of TEA-21.

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