<DOC>
[105 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:46625.wais]
S. Hrg. 105-367
ISTEA: REAUTHORIZING TRANSPORTATION PROGRAMS FOR SIX MONTHS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
OF THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
ON
THE INTERMODAL SURFACE TRANSPORTATION EFFICIENCY ACT OF 1991 (ISTEA): A
PROPOSAL TO EXTEND AUTHORITY FOR SIX MONTHS IN THE ABSENCE OF A
PERMANENT MULTI-YEAR REAUTHORIZATION
__________
NOVEMBER 4, 1997
__________
Printed for the use of the Committee on Environment and Public Works
U.S. GOVERNMENT PRINTING OFFICE
46-625 cc WASHINGTON : 1998
_______________________________________________________________________
For sale by the U.S. Government Printing Office
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20402
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED FIFTH CONGRESS
JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma HARRY REID, Nevada
CRAIG THOMAS, Wyoming BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas BARBARA BOXER, California
WAYNE ALLARD, Colorado RON WYDEN, Oregon
JEFF SESSIONS, Alabama
Jimmie Powell, Staff Director
J. Thomas Sliter, Minority Staff Director
(ii)
C O N T E N T S
----------
Page
NOVEMBER 4, 1997
OPENING STATEMENTS
Baucus, Hon. Max, U.S. Senator from the State of Montana......... 3
Bond, Hon. Christopher S., U.S. Senator from the State of
Missouri....................................................... 4
Boxer, Hon. Barbara, U.S. Senator from the State of California... 30
Letters, ISTEA funding, California State agencies............ 31
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island 2
Kempthorne, Hon. Dirk, U.S. Senator from the State of Idaho...... 4
Lautenberg, Hon. Frank, U.S. Senator from the State of New Jersey 9
Reid, Hon. Harry, U.S. Senator from the State of Nevada.......... 12
Sessions, Hon. Jeff, U.S. Senator from the State of Alabama...... 8
Smith, Hon. Robert, U.S. Senator from the State of New Hampshire. 8
Thomas, Hon. Craig., U.S. Senator from the State of Wyoming...... 7
Warner, Hon. John W., U.S. Senator from the Commonwealth of
Virginia....................................................... 1
WITNESSES
Basso, Peter J., Acting Assistant Secretary for Budget and
Programs, U.S. Department of Transportation.................... 36
Prepared statement........................................... 55
Massie, Steve, Transportation Construction Coalition............. 39
List, member organizations, Transportation Construction
Coalition.................................................. 69
Prepared statement........................................... 66
Patton, Paul, Governor, Commonwealth of Kentucky................. 13
Letter, Urging Congress to reauthorize ISTEA, several
Governors.................................................. 15
List, Status of ISTEA Funding in the States.................. 17
Prepared statement........................................... 52
Scheinberg, Phyllis, Associate Director, General Accounting
Office......................................................... 38
Prepared statement........................................... 57
ADDITIONAL MATERIAL
Articles:
Delay of Woodrow Wilson Bridge Criticized, Washington Post... 72
Lack of Congressional Action Could Be Devastating to Iowa's
Transportation Program and Economy, Iowa Department of
Transporation.............................................. 73
Letters:
Association of Monterey Bay Area Governments................. 31
International Union of Operating Engineers................... 77
Kings County, California, Association of Governments......... 32
Oakland, CA, Metropolitan Transit Commission................. 31
San Diego Association of Governments......................... 33
San Luis Obispo, CA, Council of Governments.................. 32
Transportation Construction Coalition........................ 74
Statements:
American Consulting Engineers Council........................ 77
American Road and Transportation Builders Association........ 79
Transportation Construction Coalition........................ 70
ISTEA: REAUTHORIZING TRANSPORTATION PROGRAMS FOR SIX MONTHS
----------
TUESDAY, NOVEMBER 4, 1997,
U.S. Senate,
Committee on Environment and Public Works Subcommittee on
Transportation and Infrastructure,
Washington, DC
The subcommittee met, pursuant to notice, at 9:32 a.m. in
room 406, Senate Dirksen Building, Hon. John W. Warner
(chairman of the subcommittee) presiding.
Present: Senators Warner, Chafee, Kempthorne, Bond,
Sessions, Thomas, Smith, Baucus, Reid, Lautenberg, Boxer, and
Graham.
OPENING STATEMENT OF HON. JOHN W. WARNER, U.S. SENATOR FROM THE
COMMONWEALTH OF VIRGINIA
Senator Warner. Good morning, everyone.
First, I wish to express my appreciation to our
distinguished chairman. I approached him a week or so ago after
the fourth cloture vote we failed to get up what I regarded--
past tense--and still regard and always will regard as a
landmark piece of opposed legislation developed within this
committee, beginning with the subcommittee of which I'm
privileged to be the chairman, and then, under the leadership
of our distinguished chairman, a markup where it was unanimous,
together with Mr. Baucus of Montana, ranking member.
Nevertheless, that chapter is history, and the chairman and
I and other members of the committee believed, as did Mr.
Baucus, that we should listen in a very pragmatic way to an
assessment of those representing a diverse group in the
transportation business to determine exactly, as best we can,
exactly what is the status of the several States, all 50, not
only with respect to their funding, but their individual
capabilities to do contract work.
We're fully aware here on the committee that southern
States have a greater period of time within which to do their
highway and surface transportation work as compared to States
like the distinguished ranking member in Montana. The chairman
will have further words, as will the ranking member, but I just
want to thank all who worked so hard on the original bill. Bear
in mind that this is really, next to the Department of Defense
bill, the largest jobs bill that goes through the Congress.
In this time, where there still remain some economic
uncertainties in this country, I felt strongly that having this
jobs bill in place would add stability to our overall economic
situation, given that we authorized $145 billion over a 6-year
period for the repair, construction, new construction,
maintenance of our roads and bridges.
Nevertheless, we are here today to learn from the experts
exactly what is the situation among our several States.
Mr. Chairman, would you kindly add your words of wisdom?
OPENING STATEMENT OF HON. JOHN H. CHAFEE, U.S. SENATOR FROM THE
STATE OF RHODE ISLAND
Senator Chafee. Thank you very much, Mr. Chairman.
Like you, I shared a great enthusiasm and pride in the bill
which we reported out from this committee about 6 weeks ago. As
you mentioned, we reported out unanimously, and I'm proud of
the efforts that we had to come to an agreement on a very
difficult piece of legislation.
A number of events, as you mentioned, outside the control
of this committee prevented us from completing work on a 6-year
ISTEA reauthorization.
Now, during today's hearing we will focus on the status of
the Federal transportation programs in absence of a multi-year
and in absence of a 6-year bill, and we'll examine what we can
do to resolve the situation before us. Some members of the
Senate would like to adopt a 6-month extension that was
approved by the House earlier this month. I think members
should be aware of some consequences of action if we did that.
There are two potential pitfalls, as I see it. First of
all, for most of the States the House bill provides money for a
year's worth of instruction. The trouble with including funds
that will run out a year from now is that there will be no
pressure to enact a permanent ISTEA legislation until right
before the 1998 elections. And, as we all know, it is tough to
accomplish anything during an election year, and nearly
impossible to enact a reauthorization bill so close to the
House and Senate elections in 1998. That's the first problem.
The second problem is that the House 6-month extension
provides a smaller share of funding than the Senate 6-year bill
for 34 out of the 50 States. In other words, the formula is not
a favorable one for 34 out of 50 States. For that reason, the
House formula clearly would be unacceptable to a majority of
the members of the Senate.
Despite the differences of opinion over the House 6-month
extension, there are several things on which we can agree, I
believe. First, there are a number of States that will be hard-
pressed to survive under existing obligated highway funds
through the spring. That's the first point.
Second, Federal truck safety programs, such as a motor
carrier safety assistance program, which are outside the
jurisdiction of this committee have to be reauthorized.
Third, the budget of the Federal Highway Administration--
this is an important point--which relies on contract authority
from the highway trust fund--in other words, the budget for the
whole department and people that work in our States and
obviously those that work here--will be depleted before the
spring of 1998.
Failing to provide additional funds for the transit
program--this is another point--which is not in this
committee's jurisdiction could possibly have some negative
results.
So we're going to hear from some good witnesses, Mr.
Chairman, today, and I'm delighted that the Governor of
Kentucky will be here, as well as the other representatives,
and I look forward to hearing the testimony.
Thank you.
Senator Warner. Thank you, Mr. Chairman.
Mr. Baucus?
OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE
STATE OF MONTANA
Senator Baucus. Thank you very much, Mr. Chairman, and
thanks also to the chairman of the full committee.
How we deal with the funding issue over the next several
months will have immense consequences, obviously, for our
States, for our contractors, tens of thousands of workers, and,
indeed, all of our citizens. And the committee, under your
leadership, has put a lot of work into a 6-year reauthorization
bill of ISTEA, and I think all of us very much appreciate that.
After all, it passed the committee unanimously with a
bipartisan vote of 18 to zero.
With the campaign finance issue now resolved, I think most
of us look forward to acting on that bill early next year,
hopefully as the first order of business.
But we must now decide what to do in the interim, and here
is where we face some conflicting pressures.
First, we can assure continuity in the highway program.
There are a lot of workers whose livelihoods depend on highway
construction. And, furthermore, several Federal programs,
including safety programs, will be out of money at the end of
this year.
But, on the other hand, too much continuity could reduce
the incentive to pass a full 6-year reauthorization bill early
next year, and that would not be in our interest, either.
It seems we have several options. One is do nothing this
year and let the pressure build to pass a 6-year bill next
year. I think that is a dangerous course. We--or, more
correctly, the States--would be operating without any kind of
financial safety net. And, while the Senate might act
responsibly and pass a bill early next year, one cannot predict
what the other body may do or how long it may take to reach
agreement in conference. It also effectively shuts down several
Federal programs, so this approach has some problems.
Another alternative is the 6-month bill, which the House
has passed. This option provides more certainty for States, but
it involves the issue of formulas, as a chairman has suggested.
So my guess is that this approach would involve some extended
debate on the Floor. I'm not sure we have the time to do that.
There is also the suggestion that States be given the
authority to spend their unobligated balances. This would
provide States with some degree of certainty over the next few
months, but, since States could not continue indefinitely this
way, there still would be interest in passing a 6-year bill. It
also sidesteps the issue of formulas.
I hope each of our witnesses will level with us about what
they think of these options or any other suggestions they might
have to address the situation.
Again, I thank you, Mr. Chairman, for holding this hearing,
and look forward to ideas to help us form a solution that best
helps the States.
Senator Warner. Thank you, Mr. Baucus. I thought it was
very important to allow our members to express their views,
because they've worked very hard on both sides of the aisle. We
have excellent attendance this morning. I'm anxious to hear
from all of our members who have that desire. But bear in mind
we wish to get on with the hearing.
Senator Kempthorne?
OPENING STATEMENT OF HON. DIRK KEMPTHORNE, U.S. SENATOR FROM
THE STATE OF IDAHO
Senator Kempthorne. Mr. Chairman, let me commend you for
your leadership. We do have an outstanding bill, bipartisan,
and what a shame that that bill was not acted upon on the Floor
of the Senate. I think that you, Senator Chafee, Senator
Baucus, have very well laid out the predicament and options.
There is great risk to going with a short-term. So I will
refrain from any further statements. I look forward to hearing
from our panel this morning, but continuing our efforts as a
committee working together to find the right solution.
Senator Warner. I thank the Senator from Idaho.
Senator from New Jersey, do you have a comment or two?
Senator Lautenberg. I thank you very much, Mr. Chairman. I
would be more than willing to wait my turn, because I'm an
invited guest here.
Senator Warner. Thank you, sir.
Senator Bond?
OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, U.S. SENATOR
FROM THE STATE OF MISSOURI
Senator Bond. Thank you very much, Mr. Chairman. We
certainly appropriate your calling this hearing, and we look
forward to hearing from the important witnesses. But, following
on the very insightful statement and analysis of Chairman
Chafee and the comments of you, Mr. Chairman, and ranking
member and others, I want to take a moment just to throw out an
idea that we are drafting and putting in final form.
As has been stated, there are some Senators who are pushing
for a quick fix by saying we should pass the 6-month extension.
As has already been said, the 6-month extension passed by the
House has real problems. Others are saying that we should pass
a 6-month extension with the Senate formula.
I'm a strong supporter of what we passed out of this
committee. I think it is ultimately the best compromise. But I
don't think we can solve the formula issue for a 6-month
extension in the limited time period we have available. If I
recall, when the Senate bill was brought up, several Senators
went to the Floor to complain about the Senate formula, and it
was not unanimously endorsed or welcomed.
Second, I know that I cannot and will not agree to the
House formula, which is a continuation of the current formula,
which is horrible for my State of Missouri and many other
States. If we conference the House formula versus the Senate
formula for a 6-month extension, my prediction is we leave here
with nothing.
There are some who say we should hold fast and refuse to
pass anything to put the pressure on to pass a 6-year
reauthorization. With all due respect, I'm not about to tell
the folks in my State or other States, ``Tough luck if you run
out of money.''
Mr. Chairman, I throw out an idea that, as I say, we are
drafting for a 6-month extension that has one major key
distinction: no formula fight. The proposal would, first, be a
real 6-month extension, not 3 months of money to be spread over
6 months, and not 12 months of funding crammed into 6 months.
Second, it would provide flexibility to the States on the
use of their unobligated balances. I know there are some groups
who might have a concern with the States borrowing money from
the CMAQ program or the enhancements program. My proposal would
contain a payback provision upon enactment of a 6-year
reauthorization bill.
Third, the proposal provides 6 months of funding for the
safety programs, including the motor carrier safety program,
the national driver register. In addition, 6 months of funding
for transit and Department of Transportation operating costs.
Finally, one of the big concerns with the unobligated
balances is how they are distributed across the country. Many
States, including my State of Missouri, tend to obligate the
majority of their funds in the first 6 months of the fiscal
year, so they are in need of funding now. Others tend to
obligate the majority of their funds after the first 6 months,
so they are not feeling the pinch. My proposal would provide
what I guess I'll call a ``hold harmless'' provision. This
provision would allow States to obligate up to either the first
6 months of its obligation in the fiscal year 1996 or 1997,
whichever is greater. For States who would need this, it would
be a down payment on their fiscal year 1998 dollars that would
come from the 6-year bill.
Now, if that sounds complicated, it's not really. It's just
saying that this will allow them to go forward and they will
debit the amount of money provided against the full year's
obligation, based on the formula that is ultimately passed and
signed into law. I think it's the only way, at least that I can
see, to keep the money flowing, the construction going, the
doors open, and treat all States fairly.
Mr. Chairman, we've handed out a simple analysis of it for
my colleagues. We'd be happy to--and look forward to working
with this committee, but--and we'll be happy to hear the
witnesses' views on it. But I think it is important that we get
something in the hopper, and I would be--I would hope to be
able to introduce this measure within hours, or at least
certainly within the next day or so.
[The prepared statement of Senator Bond follows:]
Prepared Statement of Hon. Christopher Bond, U.S. Senator from the
State of Missouri
Mr. Chairman, thank you for calling this hearing. It is
important that we hear from our witnesses. However, I want to
take a moment to ``throw'' out my idea to get us around the
``roadblock'' we are in.
Mr. Chairman, as you are aware, there are some Senators
pushing a quick fix to the situation we now find ourselves in
by saying we should pass the 6-month extension passed by the
House. Others are saying that we pass a 6-month extension with
the Senate formula.
I don't think we can solve the formula issues for a 6-month
extension in the limited time period we have. First, if I
recall, when the Senate bill was brought up several Senators
went to the floor to complain about the Senate formula reported
from this committee. Second, I know that I cannot agree to the
House formula which is a continuation of the current formula
which is horrible for my State of Missouri. If we conference
the House formula versus the Senate formula for a 6-month
extension, we will leave here with nothing.
Still others are saying that we should hold fast and refuse
to pass anything to put the pressure on to pass a 6-year
reauthorization. With all due respect, I am not about to tell
my Missouri ``tough luck'' if they run out of money.
Therefore Mr. Chairman, I ``throw out'' my idea for a 6
month extension that has one major ``key'' distinction--no
formula fight!
My proposal is as follows:
First, it is a ``real'' 6 month extension. Not 3 months of
money to be spread over 6 months and not 12 months of funding
crammed into 6 months.
Second, it provides the flexibility to the States on the
use of their unobligated balances. I know that there are some
groups who might have a concern with the States ``borrowing''
money from the CMAQ program or the Enhancements program, etc.
My proposal will contain a ``payback provision'' upon the
enactment of a 6-year reauthorization bill.
Third, my proposal provides the 6 months of funding for the
Safety Programs, including the Motor Carrier Safety Program and
the National Driver Register. In addition, 6 months of funding
for transit and Department of Transportation operating costs.
Finally, one of the big concerns with the unobligated
balances is how they are distributed across the country. Many
States, including my State of Missouri, tend to obligate the
majority of their funds in the first 6 months of the fiscal
year so they are in need of funding now. Others tend to
obligate the majority of their funds after the first 6 months
so they are not feeling the ``pinch''. My proposal would
provide what I guess I will call a ``hold harmless'' provision.
This provision would allow States to obligate up to either the
first 6 months of its obligation in fiscal year 1996 or 1997,
whichever is greater. For States who would need this--this
would be a ``down payment'' on their fiscal year 1998 dollars
that would come from the 6-year bill.
This might sound a little complicated--but it is not
really. This is the only way I see to keep the money flowing,
the construction going, the doors open, and treat ``all''
States fairly.
Senator Warner. Mr. Reid?
OPENING STATEMENT OF HON. HARRY REID, U.S. SENATOR FROM THE
STATE OF NEVADA
Senator Reid. Mr. Chairman, I appreciate your convening
this meeting. I think it is instructive that we have someone
representing the National Governors Association. I appreciate
that very much.
For a State like Nevada, that is growing so rapidly, we
have some problems, and we do need a bill. I, of course, was a
very strong supporter of what came out of this committee. I
think we did an excellent job and I think, had we been able to
get the matter to the Floor, it would have been resolved very
quickly. It was a bill I think that we could have passed with
relative ease.
I'm concerned, having reviewed the testimony of the
Department of Transportation witness here today--I mean, they
have painted a pretty dire picture, at least the way that I
read this. FHWA wouldn't be able to process requests from a
number of States for Federal aid projects. That's very
important to Nevada. Federal Highway Administration wouldn't be
able to authorize Federal aid highway projects or obligate
balances of Federal aid highway funds for design and right-of-
way acquisition, construction projects. States couldn't begin
right-of-way acquisition, final design activities on projects
ready for their approval. And there's a long list that goes on
for 3 pages.
The impacts on Nevada suggest that the State would be OK
for a little while, a matter of really weeks. We have in April
a very large bond payment that is due in Nevada, which would
have to be paid out of State funds in the absence of
reauthorization.
The key impacts to Nevada would be no public land
discretionary money, and, as you know, the State of Nevada is
87 percent Federal land. There would be no liability for
damages. We couldn't pursue right-of-way, pay our right-of-way
balances in a timely fashion.
And then we have another concern all over the western part
of the United States, and there would be no emergency release
money. And with the possibility of El Nino causing more harm
than it already has, we have some problems.
So I look forward to working with the committee. I really
think we need to come up with something. I'm not sure that
Senator Bond's compromise is exactly right, but I compliment
him for trying to work our way out of this morass we're in and
I look forward to looking at his legislation and working with
you, Mr. Chairman and ranking member of the subcommittee, who
is also the ranking member of the full committee.
Senator Warner. Thank you very much, Mr. Reid.
Mr. Thomas?
OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM THE
STATE OF WYOMING
Senator Thomas. Thank you, Mr. Chairman. I think the
problem has been pretty well defined, and I will move quickly.
I think it is unfortunate we are having to have this
hearing, of course, and that a minority of people on the Floor
were able to hold off this important bill.
I certainly don't support anything that will allow this
procrastination to continue after we come back in January. I
think we ought to do something that will alleviate what appears
to be some real problems, but not allow us to go on by giving 6
months, which will really be a year. I don't think that's what
we ought to do.
I must say also, frankly, I'm a little critical. The
Department of Transportation comes up now with all this great
crisis, but they didn't have much to say when it was being held
up on the Floor, and the Administration could have helped move
that, had they been inclined to do so.
So I think we ought to find a solution. I don't support the
House's proposition at all. Whatever we do ought to bring us
back to getting this 6-year bill considered and passed
immediately after our return, Mr. Chairman.
[The prepared statement of Senator Thomas follows:]
Prepared Statement of Hon. Craig Thomas, U.S. Senator from the State of
Wyoming
Mr. Chairman, I must say that I am disappointed that this
hearing needs to be held today. The members of this
subcommittee worked very hard to craft a good 6 year bill to
reauthorize the Intermodal Surface Transportation Efficiency
Act (ISTEA), S. 1173 ``ISTEA II.'' It is unfortunate that the
product of these efforts was blocked from consideration by a
minority of senators.
I am sensitive to the concerns of State transportation
officials, the construction industry and others about the lack
of a reauthorization of ISTEA. However, the answer to this
problem is not extending the unfair formulas found in current
law, as the House bill, H.R. 2516, does. Further, passing a 6-
month extension will merely give some Members of Congress more
opportunities to delay consideration of a long-term
reauthorization of the law. ISTEA legislation has already
become a political football and formula fights on a 6-month
bill merely exacerbate the problem.
However, this subcommittee can and should explore some
legislative options that would keep the program running while
also maintaining the pressure on Congress to enact the bill
that passed this committee unanimously, 18-0. We can act
quickly on important funding, safety, highway, transit and
flexibility concerns while avoiding divisive and protracted
debate that a 6-month extension would create.
I look forward to exploring these options with today's
witnesses.
Senator Warner. Thank you very much.
Mr. Sessions?
OPENING STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR FROM THE
STATE OF ALABAMA
Senator Sessions. Mr. Chairman, thank you.
I was just looking at an Associated Press article in
Alabama, ``Congress' failure to pass a new highway bill has
State officials scrambling.'' It starts off saying that, ``When
the Department of Transportation awards interstate maintenance
contracts it is now preparing for November and December, there
will just be $7.10 left to spend on the rest of the work.'' In
other words, they will exhaust the contracting authority at
that time.
Governor James has written that he would like to see us
tackle some sort of authorization plan.
I commend you and I commend Senator Bond for the work that
you're trying to do to have some sort of interim relief,
because I do not think we need to allow to roll the dice on
some sort of bluff on this deal.
Thank you for your leadership.
Senator Warner. Thank you, Mr. Sessions.
Mr. Smith?
OPENING STATEMENT OF HON. ROBERT SMITH, U.S. SENATOR FROM THE
STATE OF NEW HAMPSHIRE
Senator Smith. Thank you very much, Mr. Chairman. I do have
a statement for the record, but I just want to commend you and
Senator Chafee for the job that you've done in trying your
darndest to get the ISTEA legislation through this year, and I
know it has been a frustrating experience and, regretfully,
other politics got into the situation, which I don't believe
should have happened. And I understand the concern among the
State Agencies, especially the construction industry and the
Federal Highway Administration about the lack of funds, but we
have to look at alternatives, I think, to the 6-month
extension. Otherwise, we're just going to get mired down into
the same formula battles that we had over the 6-year bill.
So I hope that we can work something out, Mr. Chairman, and
commend you for holding a hearing to make an attempt to do
that.
Senator Warner. Thank you, Mr. Smith.
[The prepared statement of Senator Smith follows:]
Prepared Statement by Hon. Robert Smith, U.S. Senator from the State of
New Hampshire
Thank you, Mr. Chairman. I want to commend you and Senator
Chafee for your hard work and diligence in getting a
responsible, 6-year ISTEA reauthorization bill to the Senate
floor. S. 1173 is a good bill and should be passed by the
Senate this year.
However, it now appears more and more likely that the
Senate will be unable to take up 5.1173 during the remainder of
this session, and, thus, the reason for today's hearing. In
light of this unfortunate predicament, it cannot go unstated
that we wouldn't be sitting here today listening to witnesses
about the impacts of not passing a transportation bill if
members on the other side of the aisle had acted responsibly
and allowed the Senate to consider a bill that was reported
unanimously out of this committee.
The Senate had an opportunity to take the high ground and
pass a responsible, 6-year bill that would give our States the
long-term funding certainty that they need, but a minority in
the Senate was able to prevent that from happening this year.
In lieu of passing a multi-year bill, several groups are
calling for a short-term extension, which I believe is also
fraught with problems.
While I certainly understand the concern among State
agencies, the construction industry, and the Federal Highway
Administration about the lack of new funds becoming available,
I believe we need to look at alternatives to passing a 6-month
extension, which could get mired in the same formula battles as
a 6-year bill.
The pressure must remain on Congress to pass a long-term
authorization bill. Many States have adequate funding through
February or March if given additional flexibility on how they
can spend their transportation dollars. Though I remain
committed to moving a 6-year bill, I'm willing to take a look
at various options to provide this additional flexibility, as
well as funding for important safety programs, without getting
us into a formula fight.
With that in mind, I look forward to hearing from our
witnesses on the impacts of the current situation and their
views on various proposals to provide interim funding. Thank
you, Mr. Chairman.
Senator Warner. Before we call our first witness, I----
Senator Lautenberg. Mr. Chairman, did you want to----
Senator Warner. You wish to now----
OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR
FROM THE STATE OF NEW JERSEY
Senator Lautenberg. If I may. I certainly wanted to step
aside while the subcommittee members had their say, and I
appreciate once again, Mr. Chairman, as you always want to do,
your fairness in enabling me or permitting me to be with you
today.
Senator Warner. You have taken a lead in transportation
matters on the Budget Committee, which is key to this. Thank
you. Your modesty is overwhelming this morning.
[Laughter.]
Senator Lautenberg. Just keep on talking.
[Laughter.]
Senator Lautenberg. Thank you very much. Now I'm subdued
totally. It's hard to be rude in the face of all that kindness.
Mr. Chairman, every State is going to be affected if there
is no extension of authority for transportation funding. I do
think the Senator from Missouri came up with a novel idea.
Unfortunately, the amount of unobligated funds throughout the
country is by no means equal, and some States have used their
funds almost to the last dollar, and that's a problem for them.
But I think we've got to enact a stop gap measure that
provides States with sufficient funding to meet their short-
term transportation needs.
ISTEA expired over a month ago, and some States, again, had
the carry-over funding, but not all. And the safety programs
will have been hard hit. Mass transit programs, which have
virtually no excess authority, will grind to a halt. It would
be, I think, almost irresponsible to adjourn for the year
without taking some action.
Now, I first called for a temporary extension of current
law because it was clear even then that Congress would not pass
a multi-year authorization bill before we adjourned. A 6-month
extension of current law is the easiest and the fastest way to
proceed. It is without political controversy because it doesn't
involve a battle over formulas. It provides the States with
certainty.
The House bill, which extends current law, is pending on
the Senate calendar, and I'd like to see us move it by
unanimous consent today, send it to the President for his
signature.
In contrast to some of my colleagues' statements about
procrastination, I don't see it quite that way. It's the other
side of the coin, as we know, and I see it as a chance to
evolve a structure that will satisfy, if not all the States,
many of the States that now feel left out of the thing. We are
particularly focused on some of the urban areas--the States
like New Jersey, mine, and Illinois, Massachusetts, other
States.
This isn't, in my view, an opportunity to get even. This is
an opportunity to move ahead and make adjustments that are
required and do something that has the support of almost all
the States, if not all.
I think we are looking at some problems ahead of us that
will become very serious in short order, and without some form
of reauthorization transit agencies, MPOs, local governments,
safety programs, State planning and bidding activities would
immediately be affected by Federal funding shortages.
The situation is even more bleak for other programs
authorized under ISTEA: the safety programs, intelligent
research transportation systems programs, research, and,
something very important to my State and many others, Federal
transit program.
While transit is not under the jurisdiction of this
committee, everybody here should know that, unlike the highway
program, nearly all of the excess contract authority for
transit was rescinded earlier this year in the Emergency
Supplemental Appropriations Act. So if there is no extension,
transit agencies will have to defer purchases of buses, rail
cars, other equipment, and transit project construction which
is going on in many places will be delayed, increasing overall
costs. States will not be able to spend the $400 million
provided in the fiscal year 1998 Transportation Appropriations
Act to purchase buses and contract construction of facilities
necessary to house those buses.
States cannot touch the $800 million provided for a fixed
guideway modernization program. The States can't take advantage
of the $2.3 billion for the programs which provide capital
funding for rural and urban areas for the elderly and for the
elderly and handicapped.
And perhaps the most frightening risk posed by our failure
to act is the safety of constituents--drunk driving prevention
programs, truck and bus safety requirements, bridge
inspections, highway rail crossing projects. They'll all come
to a halt, and we could be endangering lives if we fail to
simply enact the short-term extension of ISTEA. I hope that
we'll do it, relieve us of this crisis.
Mr. Chairman, in as much a good intention as we can supply
or as I can supply, I know that there are adjustments that are
going to be made. The question is, How do we phase in these
adjustments so that the pain, the difficulty of getting on with
smaller allocations is absorbable, instead of saying, ``OK,
here we are. We are at the end of this line. Now we're going to
change these things.''
And I would hope, Mr. Chairman, that we have a chance over
these next months and, once again, pledging as much as I can do
to resolve some of the sticky issues, give us a chance to talk
about it and get something new on the table.
[The prepared statement of Senator Lautenberg follows:]
Prepared Statement of Hon. Frank R. Lautenberg, U.S. Senator from the
State of New Jersey
Thank you, Mr. Chairman. I appreciate your leadership in
bringing this important issue before the committee. Every State
will be affected if there is no extension of authority for
transportation funding.
We must enact a stopgap measure to provide the States with
sufficient funding to meet their short-term transportation
needs. ISTEA expired over a month ago, and although some States
have carryover funding, other States are already struggling.
Highway safety programs have been particularly hard hit. Mass
transit programs, which have no excess authority, will grind to
a halt. It would be irresponsible to adjourn for the year
without taking action.
I first called for a temporary extension of current law,
because it was clear even then, that Congress would not pass a
multi-year authorization before we adjourned. A 6-month
extension of current law is the easiest and fastest way to
proceed, and is without political controversy because it will
not involve a battle over radical restructuring of formulas. It
provides the States with certainty. The House bill, which
extends current law, is pending on the Senate calendar. I urge
that we move it by unanimous consent today and send it to the
President for his signature.
Failure to temporarily extend IS TEA will immediately cause
all State transportation plans for new construction,
maintenance, and repair activities and projects to cease.
Without some form of reauthorization, transit agencies,
metropolitan planning organizations, and local governments,
safety programs, and, State planning and bidding activities
would be immediately affected by the Federal funding shortages.
The situation is even more bleak for all the other programs
authorized under ISTEA--the safety programs, Intelligent
Transportation Systems program, all research programs, and,
something very important to my State--the Federal transit
program. There are no left over, unobligated funds for these
programs.
While transit is not under the jurisdiction of this
committee, everybody here should know that, unlike the highway
program, nearly all the excess contract authority for transit
was rescinded earlier this year in the Emergency Supplemental
Appropriations Act.
If there is no extension, transit agencies will have to
defer new purchases of buses, rail cars, and other equipment,
and transit project construction will be delayed, increasing
overall costs. States will not be able to spend the $400
million provided in the fiscal year 98 Transportation
Appropriations Act to purchase buses and construct bus
facilities. States cannot touch the $800 million provided for
the fixed guideway modernization program. The States also
cannot take advantage of the $2.3 billion for the programs
which provide capital funding for rural and urban areas, and
for the elderly and handicapped.
Perhaps the most frightening risk posed by our failure to
act is the safety of our constituents, as drunk driving
prevention programs, truck and bus safety requirements, bridge
inspections, and highway/rail crossing projects come to a halt.
We could be endangering peoples' lives if we fail to simply
enact a short-term extension of ISTEA. We must enact an
extension, and relieve us of this crisis.
Senator Warner. Thank you.
Senator Bond. Mr. Chairman?
Senator Warner. Yes.
Senator Bond. I'd like 30 seconds to respond to the Senator
from New Jersey.
Under the proposal that we have sent around in the summary
form, the hold harmless provision would allow the obligation of
the higher amount obligating the first 6 months of fiscal year
1996 or 1997. That means for New Jersey the obligation
contracted would be $352 million, as opposed to your existing
unobligated balance of $275 million. So the option was put in
there to account for States who may be in different
circumstances in 1997 or 1996.
Senator Lautenberg. I appreciate the Senator's comment. New
Jersey is not terribly off, but there are States that are
almost clear out of money, and that would be a disaster.
Senator Warner. Well, we've got to get underway.
Senator Reid. Mr. Chairman, I'd like to ask that a full
copy of my statement be made part of the record.
Senator Warner. Without objection.
[The prepared statement of Senator Reid follows:]
Prepared Statement of Hon. Harry Reid, U.S. Senator from the State of
Nevada
At the beginning of this Congress, Chairman Chafee said
that one of the things he likes the most about the Committee on
Environment and Public Works is that it is quite possibly the
least partisan one in the Senate. I agree with him.
Over the years, this committee has successfully addressed
some of the stickiest, most controversial issues facing our
nation: Clean Air, Safe Drinking Water, Superfund. We have also
produced one of the most innovative pieces of legislation ever
when we wrote ISTEA in 1991.
Our stated goal was to turn over more spending power and
authority to the States and localities while maintaining a
strong national transportation system. In the last 6 years we
have made great progress and, when we are finally able to pass
a bill, feel confident that ISTEA 11 will carry us further in
the same direction.
Until we get to that point, I fear that we might be getting
ready do something unnecessary and unfair to the States: We
might go home without passing a short-term measure that ensures
that the State programs remain stable while we are finishing
work on the reauthorization.
ISTEA made the States partners with the Federal Government
in building and maintaining a strong transportation system.
Leaving them in the lurch now is no way to treat a partner.
I understand that we will have witnesses this morning that
will suggest that the average State will be able to make do and
cobble together a program between now and next March without
Congress doing anything other than funding the safety programs.
Senator Warner. Before our first witness, I want to express
appreciation--I'm sure my chairman and others join--for the
leadership given by Senator Lott. Throughout the deliberation
of this bill, he made it very clear to Chairman Chafee, myself,
and others that the Senate would act independently of
differences in the House and move ahead with a 6-year bill. No
better corroboration of that strong leadership and support can
be found than four times we went to a cloture vote.
Last night we met with Leader Lott, and again he said, ``If
there is some reasonable and acceptable solution, then show the
to me.'' So we are here today to see whether or not we can
assess the facts and, as a committee, present to our
distinguished leader an option.
Governor, would you kindly lead off?
Senator Chafee. Mr. Chairman, while the Governor is coming
up, I want to add to what you said about the majority leader.
He has been very helpful to us. He has really stood firm on a
6-year bill that we think is so important.
Senator Warner. Absolutely.
Governor, lead us out.
STATEMENT OF HON. PAUL PATTON, GOVERNOR, COMMONWEALTH OF
KENTUCKY, NATIONAL GOVERNOR'S ASSOCIATION
Governor Patton. Chairman Warner, Chairman Chafee, Senator
Baucus, and other members of the Senate present, I am Paul
Patton. I'm co-chairman of the National Governor's Association
Task Force on Transportation, and I appear this morning
representing the National Governor's Association. With me is
Ray Scheppach, the executive director of the National
Governor's Association.
I have submitted a detailed testimony for the record, but,
for the sake of brevity, I will try as best I can to summarize
our position.
Senator Warner. Your entire statement, of course, will be
placed in the record.
Governor Patton. Thank you, sir.
Our position is that the Nation should pass a
comprehensive, long-term, 6-year highway spending bill or
transportation spending bill that spends the total trust fund
on transportation issues. And our position is that it should be
passed this session of Congress before the adjournment. It
appears that that will be very difficult to do, but I would
like to take a moment to emphasize to you why we take that
position.
Senator Warner. Governor, if I could interrupt, we have
been handed, of course, the correspondence from the National
Governor's Association, which is signed by 39 Governors.
Governor Patton. Yes.
Senator Warner. You might wish to refer to that, and we'll
incorporate it in the record at the conclusion of your
statement.
Governor Patton. Yes, please.
As to our overall contention that the entire trust fund
should be spend on transportation issues, I think the record
will show that in the last 35 or 40 years we were spending
about .5 percent of the total gross domestic product on
transportation, and that is now reduced to less than .3
percent, while the use of the transportation facility has been
dramatically growing.
As individuals, I don't have an exact figure, but we spend
a tremendous amount of our very limited time in the
transportation facilities of this Nation, perhaps certainly
well in excess of 10 percent of our waking time, and time is
something that is very valuable to all of us and it is
something that is limited for all of us. And, to the extent
that that time is wasted, where we could be with our kids at a
soccer game or we could be working harder and producing more
for our family, or we could be at home with our family or doing
other things, it is vital that we have an efficient
transportation system for that reason, alone, in this Nation.
As business, fully 10 percent of our productive capacity is
tied up with our transportation portion of industry. And, as
many businesses made plain to the Governors this summer in
testimony, they are concentrating very hard on efficiency, on
cash-flow, on just-in-time delivery, and they are in command of
a lot of their facilities, their factory buildings, their
machinery, their labor. They, through good management, can
effect efficiency, but they can't change the efficiency of that
part of their production system that is dependent upon the
public transportation infrastructure. They are totally
dependent upon us in government. They pay the money through the
user fee, and they desperately need a more efficient system.
For those reasons, we continue to support the position that
all of the highway trust fund money be spent on transportation
infrastructure and operation.
But in appearing that that will not be possible to get a 6-
year program during this current session before adjournment,
then our position in the interim is the continuation of a
funding mechanism in the range of what it has been for a
reasonable period of time to allow the Congress to act
immediately after it returns in January.
Without endorsing a specific plan, we're not even endorsing
a specific timeframe, although it appears that 6 months would
be about the amount of time that would be necessary for prudent
action.
And let me give you just a little bit of our reasoning
which is contained in the statement. And, as you know, this
position is endorsed in the letter that has been or will be
delivered to all the members of the Senate today, signed by 39
Governors, and I believe that at least four other Governors
will be transmitting or have transmitted similar letters on
their own, and so we think that the vast majority of the
Governors support the basic fundamental position that we need
to have continued funding authorization for a temporary amount
of time in the magnitude of 6 months.
Let me take my own State as an example. I understand that
we have about 30 percent of our money unobligated. But the
problem is it takes us a period of time, after we've authorized
and spent the money, to get it obligated. We have to advertise
for bids, we have to prepare specifications, we have to wait,
we have to have time. We take the position that this money
should be invested as rapidly as possible to produce a product
which our people can use to get a return on their investment,
and that is a finished product.
And, to the extent that in Kentucky, at least, that we are
delayed much beyond today, we are beginning to delay the
delivery of a finished product to the citizens of Kentucky, and
we think that is not a prudent action for this country to take.
So we believe that a continued funding authorization is
vital, and we believe that it should be to give the Congress
reasonably accurate time after their return to address this
situation.
That's a general, brief summary of our position. I'll be
glad to address any questions that the members of the committee
would have.
[The prepared statement of Governor Patton and letter from
National Governor's Association follow:]
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>
National Association of Governors' Highway Safety Representatives
impact of federal highway safety grant funding lapse on state highway
safety programs
Alabama.--The State Highway Safety Office (SHSO) has halted all
safety programs. If funding lapse continues, then the office would be
closed in approximately 45 days.
Alaska.--The SHSO has had to prioritize funding for all planned
projects. All but priority highway safety projects will be put on hold.
Law enforcement training, equipment purchases and other non-essential
activities will be delayed. If the lapse continues, there will be only
minimal activity even in the priority areas.
Arizona.--The State has enough carryover funding to last 3-4
months. The SHSO hasn't executed any contracts for new projects with
any State or local agency because of the funding uncertainty. If the
funding lapse lasts until spring, then funding for projects which
continue current safety activities will be delayed or halted
altogether. Training, travel, and equipment purchases (for law
enforcement in particular) will be curtailed.
Arkansas.--The SHSO has delayed funding for new grant activities.
If the lapse continues, the State may suspend overtime enforcement and
try to limit funding to those projects that involve personnel.
California.--150 highway safety projects have been put on hold.
Equipment purchases (including speed radar guns and breath testing
equipment), sobriety checkpoints, safety belt checks, and highway
safety public information campaigns have been put on hold. Only
existing projects which continue previously funded safety activity are
being funded.
Colorado.--Only about 20% of contracts are being funded because of
their essential, high-priority nature. There are only enough funds to
pay personnel for 60 days. After that, State personnel will be
reassigned to other State employment. All travel and most training has
been suspended.
Connecticut.--As a result of the funding lapse, the SHSO has halted
all public information campaigns, purchase of new equipment (including
speed radar guns and breath testing equipment), and staff travel and
training. All new fiscal year 98 project proposals are on hold. No 402
funds are available for programming of law enforcement activities, such
as sobriety checkpoints, speed control, and safety belt checks. Safe
Community coordinators will cease operations by late November 1997. The
impact on the SHSO staff after March 1 is uncertain.
Delaware.--The SHSO is only funding salaries for staff and CTSP
coordinators, as well as essential administrative costs. All programs
have been put on hold and no equipment purchases are being made.
Carryover funding would last until March. After that, the impact on the
staff is uncertain.
District of Columbia.--No enforcement or public information
programs are being funded at this time. Funding problems have been
compounded by DC budget problems.
Florida.--Since Florida had only $64,000 in 402 carryover funds,
only one project with continuing salaries could be funded. For the
subgrantees with whom no contract has been entered, matching funds are
being used where available. However, the vast majority of subgrantees
have no matching funds and are therefore either working without pay,
working on non-safety related projects, or are not working at all. Of
the 114 subgrant contracts approved for funding in Florida, only 29
could be funded (28 projects with 410 funds and 1 with 402 funds).
Georgia.--The SHSO has about 2-3 months worth of carryover funding.
All programs would be shut down in mid to late January. Not long after
that, the SHSO would have to evaluate staff situation and make
necessary layoffs.
Idaho.--The SHSO has about 3-4 months worth of carryover funding.
High priority projects will be funded. Others would be funded on a
limited basis or not at all. Travel and equipment purchases are being
limited or delayed. At this point, the impact on the staff is
uncertain.
Illinois.--The highway safety program is not adversely by the
funding lapse. The State has already apportioned funding for the fiscal
year 98 program and will be reimbursed when the Federal highway safety
grant program is reauthorized and funds allocated to the state.
Indiana.--The SHSO has a sizable amount of carryover funding, so
the safety program is not affected at present. If the lapse continues,
the SHSO will delay some projects.
Iowa.--If the lapse continues, all contracts will be put on hold
except those which involve the funding of personnel. All funding for
travel, training, equipment purchases will be deferred. No funding will
be provided for new initiatives.
Kansas.--The SHSO may have enough carryover funding for several
months. Presently, only projects which continue current activities are
being funded. No new safety activities have been funded. All funding
for travel, training, purchases has been stopped. In the longer term,
funding for most projects will be suspended.
Kentucky.--Every new project is on hold. There is no funding for
travel, training, and equipment purchases. There is no funding for
overtime enforcement of impaired driving, occupant protection, speed
and other safety laws. Carryover funding is being used to some
enforcement activities and Safe Community activities.
Louisiana.--If there is no extension, all projects will be
suspended. Carryover funding will be utilized for salaries. However,
such funding will be depleted by February.
Maine.--The SHSO has enough carryover funding to last for nearly 12
months. Not in any immediate danger of having to eliminate programs or
staff.
Maryland.--The State has only enough carryover funding to continue
funding some grant activities through December. After December, there
will only be enough funding to support staff and provide severely
limited, if any, services. No funding will be available to inform the
public about the state's new primary belt law. Among other things,
Maryland has ordered child passenger safety educational materials for
all of the states in Region in (Maryland, Pennsylvania, Virginia, West
Virginia, Delaware and the District of Columbia.) There will be no
funds with which to make the purchase.
Massachusetts.--The funding lapse has had no impact on State
highway safety activities yet. However, if it continues, all program
operations will be suspended, starting next month.
Michigan.--If there is no extension, Michigan would immediately
suspend all new grants and maintain personnel only. The SHSO has enough
carryover funding to last until early January. After that, all current
programs and equipment purchases (including speed radar guns and breath
testing equipment) will be suspended. Staff situation would be
reevaluated with possible layoffs.
Minnesota.--The SHSO has enough carryover funding to continue
operations for approximately 3 months. At this point travel, training,
and equipment purchases have been severely cut. Funding will only be
used for staff salaries for next 3 months.
Mississippi.--Travel and training has been curtailed and some
projects are being delayed. The State has been forced to continue
normal safety activities by relying on other Federal grants it has
received (such as the 410 impaired driving incentive grant program.) If
program authority is not extended and funding is not made available,
then most safety grant activities would be put on hold.
Missouri.--SHSO has enough carryover funding to continue operations
for approximately 4 months. In the mean time, staff travel and training
has been severely restricted. Funding for new equipment (such as speed
radar guns and breath testing equipment) has been eliminated.
Educational materials will be distributed until supply is exhausted,
but no reorders will be placed. Expenditures by subgrantees have been
frozen until further notice, with the exception of personnel costs.
Montana.--The SHSO has halted all new highway safety projects,
including several planned public education campaigns. The SHSO has
enough carryover funding to maintain operations until approximately
February 1. Soon after that, all funding will run out and the office
will be faced with staff layoffs and the prospect of closing the doors.
Nebraska.--The SHSO has enough carryover funding to continue
operations for approximately 2-3 months. The State staff is ``slowing
down,'' warning grantees about funding problem. After carryover funding
runs out, public information and enforcement programs would cease.
Nevada.--The SHSO has halted all new highway safety programs.
Projects funded with carryover funding will continue until January 1.
After that, it is unknown what level and for how long the State will
fund State staff positions and office operating expenses.
New Hampshire.--State funding will cover State personnel costs in
the short term. Equipment purchases, overtime enforcement, seat belt
initiatives, judicial and prosecutorial training, school-based
education programs and highway safety public information campaigns have
all been put on hold. Very limited carryover funding has been applied
to existing contracts. By January, all funding will run out and the
office will be faced with staff layoffs or the prospects of closing the
doors.
New Jersey.--In the short term, the State can fund some impaired
driving activities (enforcement, public information campaigns) with its
fiscal year 97 Section 410 impaired driving incentive grant funding.
But that funding cannot be used for occupant protection purposes, so
little can be done to implement DOT's Buckle Up America program. New
projects and some continuation projects are not being funded. Travel
and equipment purchases have been halted.
New Mexico.--In the short term, essential projects (such as safety
belt enforcement, Safe Communities) are being funded, but most new
activities or expansion of existing safety activities are not. In the
long term, funding for most projects (except State crash data
collection) would be put on hold. The SHSO would ask the State for
assistance if necessary.
New York.--Impact uncertain.
North Carolina.--Projects which continue current safety activities
are being funded while all new projects are being put on hold. In the
longer term, the State could run out of Planning and Administration
(P&A) funding and be forced to lay off staff.
North Dakota.--Existing contracts are being restricted to 25% of
their fiscal year 98 budget and funded with carryover money. No new
major expenditures are allowed, which affects enforcement of highway
safety laws and community-level safety activities. Funding for
Emergency Medical Services (EMS) training, for local roadway safety
projects, for occupant protection programs have all been put on hold.
Ohio.--Ohio has enough P&A funding to fund State staff for the rest
of the year. However, if the lapse continues, then grant activities
will be limited to priority projects and funding for new projects will
be halted. (The State is currently reprioritizing grants, grant amounts
and cost categories in order to limit funding to the most important
grants. Low priorities such as travel, training, equipment purchases
will be limited if the lapse continues.) Travel is currently being
reviewed and limited on a case-by-case basis.
Oklahoma.--Presently, the SHSO is limiting subcontracts to a
portion budgeted funding. New projects will not be funded if there is
no new Federal funding. Travel, training, equipment purchases are being
curtailed. Subcontracts involving salaried personnel would be canceled
if the lapse continues.
Pennsylvania.--The State safety program is not feeling the impact
yet but will use up all its carryover funding by mid-December. All new
projects will be put on hold. The funding will be used to continue
current activities only. If the lapse continues, the SHSO will send
notices to local subgrantees that they will not be paid.
Rhode Island.--SHSO has enough carryover funding to continue
operations for approximately 2-3 months. After that all highway safety
projects would cease with potential of personnel cuts.
South Carolina.--The SHSO has warned all grantees of funding
problems. Staff and grantee travel has been eliminated and no new
equipment (such as speed radar guns and breath testing equipment) is
being purchased. Carryover funding would last until approximately
March.
South Dakota.--The highway patrol has had to reduce its drunk
driving enforcement efforts.. 1500 child safety seats which were
ordered have been put on hold because there are no funds with which to
make the purchase. EMS training and local roadway safety projects have
been given only limited funding for the short term. All grants for law
enforcement equipment (breath testing equipment, speed radar guns,
etc.) has been put on hold, as has funding for major EMS equipment. No
new highway safety projects have been allowed to start.
Texas.--SHSO staff are State funded, and the State has a sizable
amount of carryover funding, so there is no immediate impact. However,
full-time subcontractors could be affected in the long term. Under the
worse case scenario (a lapse of 6 months or more), up to 230 projects
as well as 17 local and 31 State subcontractors could be affected.
Utah.--No new projects have been staked. By using all the State
matching funding, the office could operate until mid-January but with
no grant activity at all. Safe Community coordinators and other
subgrantees wouldn't be funded. Many are already looking for other work
because of the funding uncertainty. It would take a long time for the
State to find and train new coordinators.
Vermont.--For the shorn term, the State is continuing 402-funded
law enforcement activities. All other current and new projects have
been suspended. All training, community-level grants, DUI grants,
education programs, safety belt and child restraint grant-funded
programs have been halted. Carryover funding will only last until
January 1.
Virginia.--The SHSOis forced to delay payments to State agencies.
The office has approximately 3 months of carryover funding remaining.
After carryover funding expires, they would not be able to honor
funding requests until Federal funding is allocated.
Washington.--2/3 of the fiscal year 98 planned safety projects have
been delayed. The remaining 1/3 of the projects have been put on notice
that funding will be available only through the end of October. If
there are funkier funding lapses, the State Highway Safety Office will
be able to operate only until January 1, 1998. After that, the office
will be forced to shut down.
West Virginia.--SHSO has very little carryover funding available.
All programs will be halted and of rice will be closed in December
1997.
Wisconsin.--The SHSO has delayed funding for all new grant
activities. Funding being dedicated to personnel costs. If funding
lapse continues, of rice would be closed and staff positions
eliminated.
Wyoming.--The SHSO has carryover funding that will last
approximately 3-4 months. All safety programs have been either
curtailed or put on hold so as to protect subgrantee staff from layoffs
for as long as possible. The SHSO of lice staff are funded through
State funds so they are protected from layoffs for the time being.
Senator Warner. I'll just proceed. Your words are very
carefully selected.
Governor Patton. I hope.
Senator Warner. Let's see if we can get a little more
definitive.
There are the unobligated accounts, and if we were to give
the States a greater degree of flexibility as to how to expend
those, do you think that would meet the request of the 39
Governors?
Governor Patton. Certainly would not in Kentucky, and I
can't--I think it would not the majority of the States,
although there evidently are States that do have large
unobligated balances that they perhaps could get by. But,
again, let me repeat that, in the average, it is going to take
Kentucky 3 months to spend money once it is authorized to
obligate the money, so that would be 25 percent of an annual
balance, and I understand we have a 30 percent balance. So it
would appear that we in Kentucky are doing what it is our
philosophy to do, which is to get this money to work for the
people of Kentucky as quickly as is reasonably and prudently
possible.
And it just takes time. Once you authorize us to obligate
the money, it just takes time to do that, about 3 months.
Senator Warner. Just speaking for myself, I get the message
that the unobligated avenue is not sufficient. Is that it, in
short?
Governor Patton. We do not believe it addresses the
problem.
Senator Warner. And that means that you're going to have to
open the barn door and get some more money? Is that about it?
Governor Patton. For Kentucky to not interfere with the
delivery of the services to the people, that's necessary. And I
think the majority of the States that would be the case.
Senator Warner. How do we open the barn door to get some
more money without opening up all the formula disputes, all the
other disputes? That seems to me to be the issue.
Governor Patton. That is the issue. And let me note that
the National Governors Association has not taken the position
on the formula issue and on the distribution of the money.
Senator Warner. I understand that. You've sidestepped that.
But I just, for the moment, don't quite really understand how
we can--seems to me we can do some technical amendments and we
can deal with the unobligated, give more flexibility. But once
we move toward additional money, that seems to me to open up a
whole realm of issues. Therein is where I have my problem.
Governor Patton. We understand the difficulty of that
issue. That is an issue that the Congress must address, and I'm
confident you will eventually address it. I'm here to say that
in our State and in I believe the majority of the States,
further delay without new funding authorization will affect
delivery of the services.
As to the flexibility with existing funding, that doesn't
address issues. For instance, some of the transportation money
goes directly to local entities. They don't have additional
sources from which to draw funding to make up that. In
Kentucky's case, we're already, 1 month into this lapse,
probably any delay beyond the next week or two----
Senator Warner. Let me just go to a second question to
pursue my line. Many States have indicated, in the absence of
additional Federal funds, States can use advance construction
options and other State funds to proceed with these projects.
How widely used is advanced construction among the States? And
so many States have the ability to supplement the delay in
Federal funds with available State funds?
Governor Patton. I'm going to have to ask the staff to talk
to other States, but let me talk for Kentucky. We try to spend
our State funds as prudently and as rapidly and get them
working for the people as quickly as possible, so we have the
same problem with--we would not be able to supplement Federal
highway funds with State highway funds, and our State highway
funds are dedicated. I do not have the authority to take
surplus general fund moneys and spend it in the highway fund.
So for Kentucky that is not a viable option. And I don't know
how many other States that would be the case.
Senator Warner. It has been made known to the Chair here
that a survey by AASHTO's State transportation officials
indicated that many States would use advance construction to
continue operations.
Governor Patton. To the extent that funds are available.
Senator Warner. My concern is, if we go beyond the
unobligated funds and we deal with some sort of allocation, not
only have you opened up all of the debate and the question
about whether the Congress is going to remain in session long
enough to accommodate a proper debate on those subjects, but,
more seriously, I think you start piecemealing funds out,
you're going to further delay and delay and delay the absolute
duty of the Congress to come to grips with the 6-year funding
bill. That's my view.
Mr. Chairman?
Senator Chafee. Thank you, Mr. Chairman.
Here's the situation, Governor. There is about $12 billion
out there amongst the States, which is more than 6 months. In
other words, it is more than half the year's amount of money
that goes out to the States normally. The problem, of course,
is that it's not--each State doesn't have the same amount
proportionate to its normal amounts, and also it is locked up
in different accounts. Could be a CMAQ account, could be an
enhancement account, whatever.
Senator Bond has proposed in his second point flexibility
to the States on the use of their unobligated balances. In
other words, what Senator Bond would say, if Kentucky has got a
stack of money in the CMAQ account, they would be able to
borrow from that and put it in their highway construction
account, and subsequently, obviously, when they got their
moneys would pay it back.
Now, that's the first thing. And, after all, we're talking
substantial sums of money. As I say, there's $12 billion out
there.
In the first 6 months of each of the last 2 years, the
total amounts that the States has obligated has been around $9
or $10 billion, so we can see that when we talk to $12 billion
we're talking very substantial amounts of money compared to
what they have normally had.
What do you say to Senator Bond's point on that one? Are
you saying that wouldn't help you in Kentucky?
Governor Patton. Well, I'm saying that it takes some time
to get this money obligated once we're authorized to obligate
it, and so I would put that in the magnitude of 3 months. So
take the first 3 months of the 6-months that you're talking
about, on average, I think that may give you nationwide a 3-
month window, but that doesn't apply to Kentucky because we're
already down to 30 percent, I understand.
So the first thing you have to do is understand it's going
to take 3 months of money in the pipeline for us to get it
obligated. And so if there are 3 more months out there on
average, you may be correct. I would assume those States are
trying to invest their money as rapidly as is prudent to get
the service available to the people. That I would think would
be every State's objective. It is certainly our objective. And
so I would assume, if there are States that aren't able to
invest their money within 3 months, as Kentucky is, there is
probably a reason that they can't get it. I don't think it is
that people don't need the transportation facilities.
Senator Chafee. The other point Senator Bond has in his
suggestions is a hold harmless provision, which would allow the
States that were in a situation where they weren't helped by
this flexibility to borrow money from the Federal Government in
anticipation of the passage of ISTEA in next year, next
calendar year--it could be in February or early March if we get
right to it. The majority leader has indicated that this is
going to be the first piece of business when we come back. We
come back in the latter part of January. Certainly that gives
us all of February and the early part of March. So this bill is
going to be passed. Now, what happens in the House we don't
know, but I'm talking about the Senate.
Senator Bond, in the interim, would say to have this so-
called ``hold harmless'' provision, which the States that
weren't able to use the flexibility provision to their benefit,
there wasn't enough in the CMAQ account or the enhancement
account, or whatever it is, that didn't help them, because
perhaps they had spent that money in CMAQ or enhancement
programs.
So, under Senator Bond's proposal, he'd let the States
borrow some in anticipation. Now, what do you say to that?
Governor Patton. Well, I'd like to see the fine print of
it. Let me say personally that has some appeal. It would appear
on the surface to address the problems that I talk about, if I
understand correctly the Senator's proposal.
Senator Chafee. But he would have this--this would be
immediately. In other words, we would try and pass legislation
incorporating this this week or, if we're going to be here next
week, next week--in other words, before we go out.
Mr. Scheppach. Mr. Chairman, I might indicate that, on the
borrowing authority, there are some States that have State laws
or even constitutional restrictions, and so some States would
not be able to access that money, regardless of the
legislation. So there would still be some problems.
Senator Chafee. I mean, obviously you are more familiar
with these things than I am, but I would be surprised if they
couldn't have an advance from the Federal Government on what is
going to be their funds ultimately. I'd be surprised if they
couldn't handle that.
Governor Patton. I would think that we should research that
subject and provide the committee with a more definite opinion
later on today.
Senator Warner. I think that would be very helpful, Mr.
Chairman, because the Bond proposal is worthy of very serious
consideration.
Governor Patton. Yes, it is.
Senator Warner. Now, Mr. Baucus.
Senator Baucus. Thank you, Mr. Chairman.
Governor, you're basically saying doing nothing and hoping
that that puts more pressure on the Congress to pass the full
6-year bill early next year is not a gamble that you want to
take.
Governor Patton. Well, I am saying that the people of
Kentucky will suffer the delivery of timely delivery of
services if that is the option. It will affect the timely
delivery of transportation facilities in Kentucky.
Senator Baucus. So you're saying, regardless of taking the
gamble, the point is the people of Kentucky will lose anyway,
regardless----
Governor Patton. Yes.
Senator Baucus.--because you have only 30 percent left and
it takes 3 months, once you obligate, to get the dollars out on
the project.
Governor Patton. Yes.
Senator Baucus. Is it also true that delaying has the
effect of delaying larger projects? That is, that highway
commissions and States, in an uncertain period where there are
fits and starts and not a lot of certainty over a long period
of time, tend to put off and delay the longer-term projects for
the benefit of the shorter-term projects? Does that tend to
happen?
Governor Patton. Yes. And let me say that, in certain
cases, a 2-month delay could make a major delay in the project,
particularly in the States which have construction seasons. A
2-month delay could cause the project to go into two
construction seasons, increasing the cost of the project, or it
could delay it into a total new construction season, which
would delay the project for a year. So there are many nuances
to just a 2-month delay in the ability to have a program that
is planned and logical and sequential and in the efficient
obligation of this money.
Senator Baucus. Could you just explain that in a little
more detail so that this committee has a better feeling for
that?
Governor Patton. Say you are in a State that is in the
northern half of the country that has got maybe a 7-month
construction period, so you've got to----
Senator Baucus. In my State that's sometimes shorter.
Governor Patton. In Kentucky it is sometimes 7 months.
You've got your project designed to be built in 7 months, and
you don't get it started until 2 or 3 months into the season.
If you have to hold that project over during the winter, do
half of it this summer and half of it the next summer, it is
more expensive to do. The option might be to delay it to the
next construction season. That's just a nuance of the business.
Senator Baucus. I appreciate that, Governor. I want to take
more time just to say that I very much hope we can pass some
kind of interim provision here. I agree with the Senator from
Missouri that extension of the House bill is just not an
option, but he has come up with an approach which I think is on
the right track. It probably needs a little fine tuning. And
it's an approach, frankly, that others have talked about.
Governor Patton. We would like to study the details and
see, as Ray indicated, if there would be any legal inhibition
on some of the States' parts. I don't even know in my State
whether or not there would be a legal inhibition. As Senator
Chafee said, I suspect that we will be authorized to accept
advances from the Federal Government, but I would want our
legal counsel to check on that.
Senator Baucus. Back on advance construction, are you
saying that Kentucky has no ability to transfer State funds to
the Federal highway program?
Governor Patton. I'm not sure we have the State funds
available. No. We could--I believe that we would have the
authority to go ahead and build a project all with State money
with the understanding that we could replenish that money from
a Federal authorization. I'm not sure we've got the money to do
that. We try as best we can to get our money over a
construction season actually to work. And, assuming that we are
as low on State money as we are on Federal money--and I don't
have those figures--we wouldn't have the money to advance the
Federal side.
Senator Baucus. So you're saying you may have the
authority, but those other State funds are already committed to
or obligated.
Governor Patton. They very may well be. I don't happen to
have that particular figure for Kentucky.
Mr. Scheppach. Senator, I might indicate, too, that some of
this surplus that States have is in rainy day funds that cannot
be accessed just by the Governor. A lot of times it takes a
State legislature vote to release those funds in those surplus
rainy day funds.
Senator Baucus. Thank you.
Thank you, Mr. Chairman.
Senator Warner. Thank you very much.
Mr. Smith, we're just going to go in order here. Do you
want to go here? We didn't keep an early bird roster because
everybody showed up at one time, but you were a little tardy. I
don't think Mr. Kempthorne would mind.
Senator Smith. If you want to use the early bird rule, I've
been the victim of it before, Mr. Chairman.
[Laughter.]
Voice. Not if the record notes he was tardy.
[Laughter.]
Senator Smith. Golly, you guys are tough. My side of the
aisle, too.
Senator Chafee. The chairman said, ``I'm sure Senator
Kempthorne won't mind,'' without asking Senator Kempthorne.
Senator Smith. Let me just echo the comments made by my
colleagues regarding Senator Bond's attempted compromise here.
I think it is reasonable, and, considering the circumstances
we're in, it's something we ought to seriously consider.
I might also say, Governor, picking up on what Senator
Thomas had to say--I don't want to get into his turf, as I'm
sure he wants to ask some questions on this, but it would have
been nice if we'd had this letter 4 or 5 weeks ago when a
totally unrelated matter was holding up the entire highway bill
by some of our colleagues. It is a day late and a dollar short,
maybe literally. This is dated November 4th. When many of us
were saying it was not the right thing to do to take campaign
finance reform and tie it to an ISTEA authorization, that's
what happened, and that's why we're sitting here in this mess.
I wish we had gotten this letter. Perhaps it might have been
more effective.
Let me just ask one question, and then I'll yield. In terms
of a straight 6-month extension, which you talked about, it is
pretty difficult, isn't it, for the planners to lay out the
long-term plans that they want to use, the programs, the
projects that they want to do with that 6-month extension,
isn't it? I mean, just using your own State as an example, if
you get a 6-month extension, even with some of the flexibility
that's in the bond compromise, some decisions are not going to
be able to be made in terms of long-term project starts; isn't
that correct?
Governor Patton. Well, I know we would assume that the
Congress is going to pass a bill, and we--Kentucky, and I think
other States--assumed and hoped that it would be in this
session, and so we have continued our planning process and our
obligation process as if there would have been no interruption,
and so we're asking that we be able to continue to do that for
6 months. That would give the Congress about 2 months after
they return to actually pass a bill.
We certainly strongly support the passage of a bill. We've
written several letters over the past year urging our position
on the passage of a bill. We think the Governors have been
very, very strong with both the Administration and the Congress
in support of a passage of a long-term commitment bill.
And if there is a 6-month extension, I think most States
will assume that there's going to be a permanent bill after
that and they're going to continue as if there would be, but if
there doesn't then we'll have to stop at that point. But I
don't think we're going to assume that a 6-month extension is
the end and plan for an end. We're going to plan for the
Congress having passed a bill by that time.
Senator Smith. OK. That's important to understand, from
your perspective, then. You're saying that these programs--
nothing would be interrupted in a 6-month extension; you would
just simply project as if it were a 6-year authorization and
you would just go ahead and continue to do what you're doing,
project-by-project, without any change, just assuming that the
thing would be extended 6 months again from now?
Governor Patton. That's what we did in Kentucky. Up till
this past deadline, we continued to obligate as if there was
going to be a bill October 1st.
Senator Smith. Thank you, Mr. Chairman.
Senator Warner. Thank you, Mr. Smith.
The Senator from New Jersey.
Senator Lautenberg. Very briefly, Mr. Chairman, as I looked
at your letter--and I appreciate your testimony and your urging
us to get on with putting a bill into place for 6 months. That
extension I think is very, very important, also.
If I understood correctly, you said earlier you were
avoiding any formula discussion.
Governor Patton. Yes. The NGA does not have a position on
formula.
Senator Lautenberg. Right. So I just want to be clear. Are
you advocating a 6-month extension, even based on current
structure, just to keep the flow going?
Governor Patton. No, sir. We're advocating approximately a
6-month extension of some kind of a right to obligate, but in
the magnitude of what we could expect would be in a new bill.
In the magnitude----
Senator Lautenberg. So then you do present a point of view
about the reformulation of the distribution?
Governor Patton. No, because I don't think any formula is
not going to dramatically wipe anybody out or enhance anybody's
position.
Senator Lautenberg. We have a formula in place, Governor,
and, if you said just a 6-month extension, I draw the
implication that it would be based on current distribution.
Whatever money New Jersey got, Kentucky got, Wyoming, just
continue that for 6 months and make sure you don't interrupt
the cash-flow.
Governor Patton. We are not taking that position. We're
saying some kind of continuing authorization to obligate on the
magnitude of what we could expect. To me, Senator Bond's
proposal could fit into that category, as could the House
formula. And we're really just saying some kind of a
continuation authority in the magnitude of what we could
reasonably expect will be the final product.
Senator Lautenberg. OK. I guess it's not real clear to me,
when you say the Governors Association is not going to be
involved in any formula discussion, when, in fact, as we
discuss it now, it is clearly based on a new formulation that
has yet passed the final test, and that is to get turned into
law.
So would you be, therefore, willing to obligate your
State's funds to programs for which you may not be compensated?
I don't think so.
Governor Patton. We wouldn't expect any outrageous
difference in funding that Kentucky has received or would
receive under a continuation of ISTEA or some other variation,
perhaps as passed by this committee. It wouldn't be just a
tremendous difference in what we're going to get. We're going
to get about the same amount of money in relative terms, within
10 percent, no matter which formula is passed.
Senator Lautenberg. Well, I thank you very much, Mr.
Chairman. Thank you, Governor.
Senator Warner. Mr. Kempthorne.
Senator Kempthorne. Mr. Chairman, thank you very much.
Governor, I appreciate your testimony and your
representation of the Governors.
If I may, I'd like to quote from the letter which the
National Governor's Association has provided us, signed by 39
Governors. It says it is ``imperative for the Senate to
consider and pass short-term legislation providing funding for
highway, transit, and safety programs, and to complete a
conference on that legislation with the House of
Representatives.''
Imperative? Is it so imperative that the NGA would support
the Senate agreeing to the House 6-month extension?
Governor Patton. Again, the NGA does not wish to get
involved in that controversy. If you are saying if the only
choices were no extension or the House extension, then I think
that, in that case, we would support the House extension. But
are you saying, ``Would the NGA support Senator Bond's proposal
a proposed to the House bill,'' I think we would say that
either would be acceptable.
Senator Kempthorne. No. I think the first question is a
very pertinent question, and that is no extension versus the
House, because it would be interesting, among the 39 Governors
here, I don't know how many of them are from the 34 States that
will do worse by the House legislation than they would by the
formula that the Senate has come up with. So it puts our States
in a real dilemma.
Governor Patton. It does.
Senator Kempthorne. And I don't know that any deal is
better than a bad deal, because that's where I think we may be
headed.
Governor Patton. Well, let me say I'm one of those 34
States that would do better under the Senate bill than the
House bill, but I still believe that at this point in the game,
when it is obvious that--it appears obvious that Congress won't
enact a formula before adjournment, before recess, then to me,
if there is not an extension, the people of Kentucky are going
to suffer substantial loss of the use of this investigation,
and I don't think that they should do that. And hopefully, when
the Congress gets back, it will address this subject within a
couple of months and do it diligently, without regard to
whether or not we've had to use the tool of depriving our
citizens of services, prompt delivery of services, just to
force us to act.
Senator Kempthorne. And, Governor, I appreciate that.
Mr. Chairman, I think we have to be sensitive to States
such as Kentucky that are in a real dilemma, and yet my concern
is that if we now, because of this imperative need, go in and
change the formula, I think then, when we come back after the
first of the year, whatever formula we used as an interim
measure becomes the starting point, and I think we are all in
terrible shape if that's the situation.
So, again, I hope that we can be creative and innovative in
finding a solution, but the House 6-month extension to me is no
solution.
Senator Warner. I certainly concur with the Senator from
Idaho, and I'm listening very carefully as you speak about the
Governor and his role now.
Senator Kempthorne. May I have one final question?
Senator Warner. Yes, go ahead.
Senator Kempthorne. Governor, how do you like being
Governor?
[Laughter.]
Governor Patton. It's great. Good. I recommend it.
Senator Warner. Before turning to Mr. Graham, I'm going to
pose a question to Mr. Bond. Think about it a little bit. As
your proposal is being given very serious consideration, is the
downside risk to the--24 States, according to my calculation,
would be eligible under your formula. Is there a disadvantage
to the other 26 that are not eligible, and could it be written
in so that they could borrow if they so desire? We'll come back
to you in a moment.
Mr. Graham?
Senator Graham. Thank you, Mr. Chairman.
If I could take that same prerogative and ask a question,
and as one who arrived somewhat tardy, Senator Bond's proposal
starts with the phrase ``real 6-month extension to March 31,
1998.'' What does the word ``real'' mean?
Senator Bond. The House, Senator Graham, has a jacked-up
approach that tries to incorporate the entire year funding
formula. This proposal we have on the table is, I think,
responsive. And I want to follow this up with the Governor.
It's responsive to the Governor's need to say you can spend
money either up to your current unobligated balance, without
regard to the categories it's in, or, if your funding--if your
obligations in previous years for the first 6 months has been
greater than the total amount of your unobligated balances,
then you will get an advance allotment against whatever it is
that you're going to get under the finally passed bill.
So all States would get the flexibility. About probably a
little less than half of them would not have enough unobligated
balances, so it would not be borrowing. Missouri can't borrow.
Most States can't borrow without a vote of the people. But
there isn't anything that says that we can't give an advance on
funds to be allocated to the State subsequently and then simply
debit the amount that we have forwarded funded from their
further allocation. It has nothing to do with the credit of the
State. It does not obligate the citizens of the State to pay
back the money. It's their money, anyhow, because they paid it
in, but it's how we get it back to them.
Senator Graham. Mr. Chairman, if I could ask a followup
question. Would that indicate that--let's assume that we do
pass a new 6-year bill in March 1998.
Senator Bond. Let's hope we do.
Senator Graham. Then whatever that bill provided in terms
of distribution to the States would be retroactive to the 1st
of October 1997, and all of those benefits that your proposal
would provide would be debited against what the State would
receive retroactive to October 1, 1997, based on a formula
passed in March 1998. Is that----
Senator Bond. To be specific, Florida, according to October
1, 1997, statistics has $225 million available in unobligated
funds. No. 1, Florida, under the proposal that I have put
forward, would be able to move that from category to category
to whatever category it's needed. In addition, since in 1997
Florida obligated $239 million in the first 6 months, then the
Federal Government would advance roughly $14.5 million to
Florida so that Florida would be able to obligate, through
March 31, 1998, a full almost $240 million, which is what it
obligated last year.
When we cut the deal and get it signed into law, we hope,
early in 1998, then whatever amount is coming to Florida
subsequently will be debited by the $14,489,000 that had
already been advanced to Florida, and then Florida would pick
up and fill in the programs to the extent authorized under the
bill as passed and signed into law. But they would be able to
go ahead with contracting, the critical period being through
March 31.
Senator Warner. Wouldn't the short answer to the question
be yes?
[Laughter.]
Senator Warner. The Senator from Florida posed it, you
answered it, but it is yes.
Senator Bond. Mr. Chairman, you cut through it.
Senator Warner. Mr. Thomas? We've got to keep moving along.
Senator Thomas. Let the Senator from Missouri go. I'm
interested in more of his information than--if that's OK.
Senator Warner. Yes. Do you wish to----
Senator Bond. Thank you, Mr. Chairman. Just to followup--
and I commend the Governor and my old friend, Ray Scheppach,
for getting 39 Governors on to any kind of letter. Back in
years past I used to work with Ray doing that. It was like
trying to load frogs in wheelbarrows.
[Laughter.]
Senator Bond. And, Governor, if you think this is a
fractious bunch, wait till you join the National Governor's
Association. We do appreciate the viewpoint.
As I look at the figures before us, Governor, Kentucky has
unobligated balances of $314 million as of October 1 this past
year. That's more than you have obligated through the first 6
months in either of the past 2 years. So the measure that I'm
proposing--and I think you've gotten a copy. I think we've
given you a copy of it--would allow your transportation highway
transportation entity to obligate, to let contracts up to that
$134 million. You've got about $95 million in the surface
transportation program. You can move funds back and forth so
you can make the optimal use of that money.
You are not a State which would need to have the advance
funding formula that we described that would be debited against
your account in the rest of the year, so you would get full
flexibility to utilize that unobligated balance, which should
give you more than you've utilized in the last 2 years.
And, to be quite clear, in answer to Senator Lautenberg's
question, no formula is grandfathered in for 1998. This is
formula neutral, which is, I believe, the only way we're going
to get anything done, because if you try to cram a bad formula
down our throats--and every formula is bad to somebody--there
is going to be a real cat fight that is probably going to keep
us from enacting it into law.
So Mr. Scheppach's question, there is no borrowing; it is
an advance allocation. There is no problem in my State, and I'm
confident that no other State is going to have a problem
borrowing because they don't have to sign an obligation to
repay that. We're just going to debit whatever is advanced. And
it's only about $1.3 billion that would have to be debited,
according to the figures from the Federal Highway
Administration.
Senator Warner. And we thank you, Senator.
Senator Thomas. Would the Senator yield just for one quick
question?
Senator Warner. We want to hear from the Senator from
California, I think in fairness. Yes, Senator?
OPENING STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM THE
STATE OF CALIFORNIA
Senator Boxer. Thank you so much. I will go quickly.
Senator Smith of course raises the question of the fact
that this was delayed due to the fact that many of us teamed up
on both sides of the aisle and said we wanted to make a point
about campaign finance reform. I don't think it does much use
to go back and talk about that. The fact is we are where we are
now and we have time to deal with this now. We've got time to
deal with this. And, regardless of that whole issue, the House
only did a 6-month extension, which is anathema to many of us.
We would have been in a difficult position we wouldn't have
been able to move.
I want to compliment Senator Bond for, I think, coming up
with an idea that could lead us to some light here. I'm very
impressed with it. And also to Senator Warner for pressing
forward, regardless of the fact that he's tormented by the
choices that we have.
And I would join with you, Senator. In my case the House
formula is very bad for our State, and we need to do something
different.
I would offer an idea, if Senator Bond's idea doesn't move
forward. Maybe what we would think about doing--and this is
just something to think about--take the formula that this
committee decided on, take the formula the House has done, meet
somewhere in the middle in the 6-month extension, and then just
say that's just a starting place and we'll continue this fight
later. It's just a thought.
I would ask unanimous consent to place several letters into
the record from California.
Senator Warner. Without objection.
Senator Boxer. Thank you very much.
[The information to be supplied follows:]
Metropolitan Transit Commission,
Oakland, CA, October 29, 1997.
Senator Barbara Boxer,
United States Senate,
Washington, DC 20510.
Dear Senator Boxer: On behalf of the Metropolitan Transportation
Commission I am writing to express our desire to see the passage of a
short-term extension of ISTEA in the absence of a multi-year ISTEA
reauthorization bill in this session of Congress. The short-term
extension should maintain the structure and integrity of the landmark
ISTEA legislation that has a balanced and efficient transportation
system
As you know, ISTEA II (S. 1173) failed to achieve cloture after
four attempts and it appears that debate of the bill will be delayed
until the next session of the 105th Congress. While a short-term.
extension does not address the long-term planning needs of the San
Francisco Bay area, simply allowing the program to expire would be much
more harmful. The transit program would be traumatized without funding
for capital improvement projects that are underway and the highway
program would eventually shut down. The delays in construction would
impede economic development and compromise the safety of our roads and
bridges.
We thank you for your consideration of this issue. MTC is deeply
appreciative of your efforts on ISTEA reauthorization during the past
year. California's interests have been well-served by your involvement
in this legislation. We look forward to the next session of Congress.
If you require additional input concerning continuation of the
Federal highway and transit programs, please contact Tom Bulger, our
Washington Representative, at (202) 775-0074.
Sincerely,
Lawrence D. Dahms,
Executive Director.
__________
Association of Monterey Bay Area Governments
Marina, CA, November 3, 1997.
The Honorable Barbara Boxer,
United States Senate,
Washington DC, 20510.
Dear Senator Boxer: We understand that the U.S. Senate is debating
whether to simply let ISTEA expire instead of extending it 6 months as
the House has already approved. If ISTEA expires, this would translate
to no Federal transportation funds until a new multi-year law is
enacted.
For the Monterey Ray region, this would have a drastic impact. As
the Metropolitan Planning Organization for the Central Coast
encompassing Monterey, San Benito and Santa Cruz Counties, the
Association of Monterey Bay Area Governments (TRIBAL) transportation
planning program would be virtually unfunded as the small amount of
local funding we have budgeted is primarily in-kind from other agencies
with whom we supplement with pass-through Federal planning funds. Any
further delay (regardless of three, Six or nine mouths) in extending
ISTEA in lieu of passage of new reauthorizing legislation would mean a
hiatus of our metropolitan planning program, and the products thereof
(e.g., long range plans, transportation improvement program, travel
demand model development, air quality conformity determinations,
population forecasts disaggregation, Geographic Information Systems
development, etc.), and the need to put our transportation planning
staff on unpaid leave of absence.
In addition to AMBAG, the public transit operators in the region
(Monterey-Salinas Transit, San Benito Transit, and the Santa Cruz
Metropolitan Transit District) would be adversely impacted cash-flow-
wise as Federal capital and operating funds provide a reasonably large
portion of their budgets and there are no temporary replacement
sources.
We urge your support in extending ISTEA now! I am available for
your staffs questions.
Sincerely,
Nicholas Papadakis,
Executive Director.
__________
Kings County Association of Governments
Hanford, CA, November 3, 1997.
Senator Barbara Boxer,
Senate Office Building,
Washington, DC 20510.
Subject: Extension of ISTEA
Dear Senator Boxer: Kings County has been monitoring legislation to
reauthorize the Intermodal Surface Transportation Efficiency Act
(ISTEA). Since ISTEA expired on September 30, 1997, and Congress is
scheduled to adjourn soon, it appears that a new multi-year
transportation funding package will not be enacted. An extension of
ISTEA has been proposed and should be enacted.
By not approving an extension to existing law, it could have a
direct impact on Kings County's ability to fund local transportation
projects. Kings County and its focal jurisdictions depend on Federal
transportation funds to continue the improvement and maintenance of the
local transportation system. Transit agencies also depend an Federal
funds to continue operating local transit systems that are essential in
less populated areas. Without transit operating funds, elderly,
disabled, low income, and other transit dependent persons can not get
to necessary services like medical care and employment.
Local agencies have prepared their budgets with the assumption that
new Federal reauthorization of ISTEA would be enacted prior to its
expiration, thereby continuing Federal funding for transportation
purposes. Local budgets of rural counties like Kings are already
severely impacted by the lack of funding to meet identified needs.
We urge Congress to act expeditiously to approve an extension of
ISTEA so that local jurisdictions can continue to fund needed local
transportation improvements and operate local transit systems.
I hope you find this information useful as you consider the impacts
of the Senates action on the reauthorization of ISTEA.
Sincerely,
William R. Zumwalt,
Executive Secretary.
__________
San Luis Obispo Council of Governments
San Luis Obispo, CA, October 31, 1997.
The Honorable Barbara Boxer,
United States Senate,
Washington, DC 20510.
Extension of ISTEA
Dear Senator Boxer: On Tuesday November 4, your committee, the
Senate Environmental and Public Works Committee, has scheduled a
hearing to consider the extension of the Intermodal Surface
Transportation Efficiency Act (ISTEA). Our agency is the Metropolitan
Planning Organization for San Luis Obispo County, responsible for
planning and programming all State and Federal transportation funds in
the region. We would urge you to approve a six month extension of the
existing law. consistent with action taken recently by the House of
Representatives.
Expiration of the existing law would result in the cessation of all
Federal transportation funds until a new multi-year law is enacted.
This would have a devastating impact to our agency, our region, and our
residents. One third of our agency funding comes from Federal funds.
Should Federal funds cease our staffing would have to be reduced by 40
to 50%. This would result in an inability for our region to comply with
State and Federal requirements.
At risk would be the FTIP, our Federal Transportation Improvement
Program, which controls the flow of $76.2 million of federally-funded
programs just in FY97/98, as well as important local projects, some of
which are currently under construction. With half the staff, all
projects would suffer. Moreover, most local and State transportation
projects are largely funded with Federal funding. Expiration of ISTEA
would delete all Federal funding creating significant financial
hardships for those projects under construction and would certainly
delay most others. The effects of such drastic funding cuts would
create undue local hardships not easily reconcilable.
We strongly urge you to approve a six month extension of ISTEA.
Thank you for your previous support and assistance. We look forward to
hearing from you on this urgent matter.
Sincerely,
Ronald L. De Carli,
Executive Director.
__________
San Diego Association of Governments,
October 31, 1997.
Senator Barbara Boxer,
United States Senate,
Washington, DC 20510.
Dear Senator Boxer: Rusty Selix of CALCOG requested that we provide
you an assessment of the possible impacts to the San Diego region
resulting from a three, six, or nine-month delay in the ISTEA
Reauthorization/ISTEA Extension.
Caltrans District 11 staff have heard that a 3-5 month extension
would probably have a minimal effect on the State highway program.
During this shorter timeframe the use of Advance Construction combined
with the current large State Highway Account cash balance would be able
to fund most programs and projects scheduled in this period.
If the ISTEA Reauthorization/Extension were to be delayed beyond a
six-month period some project delays could occur. SANDAG/Calrans have a
joint funded SR125 freeway project scheduled for construction in mid-
1998. This $23 million project could be delayed due to its need for
Federal Surface Transportation Program (STP) funding. Delays in Federal
funding beyond 6 months would begin to affect the Regional STP and
Congestion Mitigation and Air Qualifier (CMAQ) programs although we do
not have my major project delays identified at this time. Also Federal
funding delays beyond 6 months could begin to affect Federal
transportation planning activities in the region.
We have asked the San Diego Metropolitan Transit Development Board
staff for an assessment of the impacts any delay would have on their
programs. We will provide you any information at we receive from MTDB.
If you have further information needs please call me or Stuart
Shaffer at 619-595-5331.
Sincerely,
Bill Tuomi.
Senator Boxer. I certainly will not read from them, other
than to say they're all very concerned and upset. One of our
planning groups says they'll have to lay people off if we don't
do something. So I think it is very important.
Another point I wanted to raise to everyone here,
including, Mr. Chairman, you and Senator Bond, if I could catch
his eye for 1 second. It has been brought to my attention that
the Federal emergency aid part of ISTEA would be in deep
trouble. In other words, if we have a problem with El Nino or
any kind of flooding anywhere in the country--we've all been
involved with it--the Administration says FHWA would not be
able to approve and allocate available Federal aid emergency
relief funds, ER funds, to the States for necessary repairs to
damaged highways and bridges. So I would hope whatever we do we
would certainly include that extension, because we're apt to
face this December, January, and February.
So, wrapping it up, I just want to compliment my colleagues
from both sides for their work. I am ready to do whatever it
takes, the hard work, to stay here till we get something done.
Senator Warner. I thank you, Senator. I think we're having
a good bipartisan discussion here. We're beginning to isolate
the options, as I see them. I'll return to the Senator from New
Jersey in a moment.
Senator Boxer. Senator Warner, could we just hear if
Senator Bond included that emergency relief?
Senator Warner. Let me explain.
Senator Boxer. OK.
Senator Warner. In the first place, anything that moves
with regard to highways in the next whatever days of this
session will have technical fixes, and that will be one.
Senator Boxer. OK.
Senator Warner. We're really faced with the following
situation. The leadership has the ability to put into
legislative form technical fixes such as yours and to give
flexibility with the unobligated balances. The sheer line here
is whether we try to go a step forward and do something in the
nature of a freestanding type piece of legislation, as
advocated by the distinguished Senator from Missouri. That, to
me, is the balance before us.
And I would once again offer you the opportunity. What do
you tell the 26 Governors who do not have borrowing authority?
As you know, having been a Governor, the State next to you, the
highway folks say, ``You've got some money next door. We
didn't?'' How do we answer that?
Senator Bond. Very simply, Mr. Chairman. You're going to be
able to spend as much as you spent last year or the year before
in the first 6 months, and if you do get an advance, if you're
one of the States that gets an advance, it's coming out of your
next year's allocation, whatever the formula is.
Senator Warner. I understand that, but if you can't----
Senator Bond. For example, Virginia has $212 million
unobligated balance as of October 1.
Senator Warner. That's because of very prudent and careful
planning.
Senator Bond. In the last 2 years, the most you've ever
spent in the first 6 months is $183 million.
Senator Warner. I've made my point. But in the real world
when half get and half don't get, you've got----
Senator Bond. Let me ask the Governor to comment on that. I
mean, you can spend as much as you spent in the past, and you
can even gear it up. Governor, does that make sense?
Senator Warner. I think we've framed the question, and I'm
not so sure Governor Patton hadn't----
Governor Patton. I would like the opportunity to clarify,
if I may, because the Senator's explanation of his proposal
means that I didn't understand it as well as I thought I did
and I'm not quite as enamored with it as I was because----
[Laughter.]
Governor Patton.--it takes about 3 months to spend the
money, to obligate the money, after I know I have it, and that
is the problem.
Senator Bond. That's why we want to give it to you now, so
you can have--so I hope before we go home, before November is
over, you're going to know how much money you can spend through
March 31.
Governor Patton. But let's say that we do all that. What
about in the next quarter? I can't begin to advertise
expenditure in the next quarter. I can't begin to do that. So
let's say that we go ahead and do that and we spend that money
and obligate it and sign contracts for it in the first 6
months. I'm going to be another 3 months that I don't obligate
anything because--say you pass a law, and let's say you pass
the law by the end of March that gives me more authority. The
fact is I've got about 3 months that I can't do anything
because I can't--I have to prepare, I have to advertise. I have
to prepare all this stuff. It takes about 3 months, and that
is, the way I now understand your proposal, what would happen
in Kentucky.
Senator Warner. We've got to move along. Governor, we thank
you very much.
Senator Baucus. If I could make just one very quick point
or two. There are some States delay huge balances because they
have big projects, a lot bigger than average, coming down the
line, too, and some of those States might be in that situation.
Senator Warner. There is a real diversity among the several
States here.
Thank you very much, Governor.
Governor Patton. Thank you, Mr. Chairman.
Senator Warner. Senator Thomas?
Senator Thomas. I guess I was going to ask the Governor,
before you get away, it seems to me that you all ought to be
supportive of--we're going to end up here in March with the
same thing again unless we do something that is an interim
thing. I mean, you tend to sound like you want to go ahead and
make the permanent arrangement. We'll be right back here in
March unless we do something that gives you a real tie over the
time, but that we're still forced to come up with a decision.
I presume you want a long-term decision?
Governor Patton. Yes.
Senator Thomas. So I hope that you give some thought to
that so that this interim one will be one that drives us to do
something in March and that you don't insist on doing something
that's so permanent that in March we'll be right where we are
again and have to go through this whole damn formula business
again.
Governor Patton. And that's the reason the concept of the
Senator's proposal of getting an advance against whatever it is
that we would get under a formula is attractive. My problem is,
as I understand it, there's that delay that will affect. I say,
as I understand it.
Senator Thomas. And I understand that. And we need to do
something. But I guess all I'm saying is I hope that we're
willing--there's going to be a little pain here. We are where
we are, regardless of Senator Boxer's notion that we shouldn't
talk about it. We're where we are, and it is a tough situation,
and we need to solve it, and there may be some pain for all of
us to do that. I hope we don't look for a totally painless
operation so that it goes on forever and we're back right where
we were again.
I appreciate your being here.
Senator Warner. Senator Thomas, those are very wise words
of wisdom to conclude this first witness.
Senator Thomas. Thank you, sir.
Senator Warner. Thank you very much. Aren't you glad you
came, Governor?
Governor Patton. Thank you, Senators.
Senator Warner. Now we have Mr. Basso, acting Assistant
Secretary for budget and programs, U.S. Department of
Transportation.
Mr. Basso, you've been through many years of experience
here. I had the privilege of discussing this issue at great
length yesterday in my office.
We'd like to also introduce Ms. Scheinberg, Associate
Director of the General Accounting Office; and Steve Massie,
Transportation Construction Coalition. Give us a viewpoint of
those that are out there right on the front lines of this issue
trying to improve our surface transportation.
We'll lead off with you, Mr. Basso. And we'll ask each
witness to limit their testimony to 5 minutes, and I'll ask the
clerk to use the light for that purpose.
Thank you very much.
STATEMENT OF PETER J. BASSO, ACTING ASSISTANT SECRETARY FOR
BUDGET AND PROGRAMS, U.S. DEPARTMENT OF TRANSPORTATION
Mr. Basso. Thank you very much, Mr. Chairman. I will be
brief and summarize my statement.
Mr. Chairman and members of the committee, I do appreciate
the opportunity to appear before you to discuss the potential
consequences if surface transportation programs under the
Intermodal Surface Transportation Efficiency Act are not
reauthorized.
I have submitted my prepared statement in great detail for
the record, but let me hit the high points of that. I think I
can summarize that into three major issues.
First of all----
Senator Warner. I want to make clear in our discussion,
you've consulted with the Secretary of Transportation, and the
statement which you're about to make is one that reflects the
Secretary's views?
Mr. Basso. It reflects the Secretary's views, Mr. Chairman,
and the Administration's position.
First and foremost, the question of safety. The highway
safety programs, including the State and community highway
safety program, the motor carrier safety assistance program,
and the outlaw programs administered by the Traffic Safety
Administration have, in fact, no unobligated balances and are
running at the State levels on what little carry-over funds
there were from fiscal year 1997.
In the case of the motor carriers safety assistance
program, there's approximately 3,600 State employees that are
paid from these funds, and we've been told that, in fact, many
of those States will run out of money during this first 2- to
3-month period, and just a couple of examples. States have
pointed out to us that they will have to lay off personnel or
furlough personnel as early as the end of November. Rhode
Island, Mr. Chairman, is one area that I picked up, and there
are three others that have told us that, and there are probably
many others that will follow suit.
On the State and community highway safety program,
important programs that provide for safety, provide for alcohol
countermeasures, provide for seat belt measures, and other
areas, clearly will be strapped. Again, from my own experience,
I know personnel in those programs are often financed out of
these funds, and States, again, have indicated to us after the
first quarter they're going to have to make substantial
decisions about not only cutting back in programs, but the
personnel that administer them.
Let me turn my attention, if you would, to the internal
problems of the Department of Transportation. The
administrative funds that run the Federal Highway
Administration, and also the Bureau of Transportation
Statistics, and the Traffic Safety Administration's grant
programs depends on in fact will run out, and we estimate in
early January that we will have to basically furlough or shut
down the operations of the Federal Highway Administration, the
BTS, and about 100 employees that administer grant programs in
the Traffic Safety Administration.
These are real concerns, not only because there are
personnel, but, more to the immediate point, these are the
people who will authorize the $12.3 billion and approve those
programs and make payments to the States, who will not be on
board, Mr. Chairman, to do those functions. And there are
virtually no reasonable alternatives to that.
The last point on the question of States which is, I think,
paramount in this discussion, in addition to the other issues,
clearly the Administration is for a multi-year authorization
bill. It has become clear to the Secretary and certainly to
myself that that's not possible at this juncture, so the
question becomes what steps need to be taken.
And one of the things that I can say with virtual certainty
is that the Administration clearly supports, first and
foremost, dealing with the safety issues and what's necessary
to keep those programs running, the matters that are necessary
to keep these agencies running so they can both deal with the
questions of what the States need out of them and also,
candidly, what the Congress needs in terms of technical
support, which we provide substantial amounts. And, finally, to
assure that infrastructure programs are moving forward as best
they can, because it does mean jobs. More importantly, it is
critical to the economy.
Thank you, Mr. Chairman. I'd be happy to answer questions.
Senator Warner. They're all here. All of those problems,
which I place in what we call the technical category of fixes,
are in this statement. Yes, sir. Thank you very much.
Senator Warner. Ms. Scheinberg?
STATEMENT OF PHYLLIS SCHEINBERG, ASSOCIATE DIRECTOR, GENERAL
ACCOUNTING OFFICE
Ms. Scheinberg. Thank you, Mr. Chairman and members of the
subcommittee.
I'd like to introduce my colleague, Yvonne Pufahl. We
appreciate the opportunity to appear this morning to discuss
the status of Federal surface transportation programs in the
absence of funding from a new highway reauthorization act.
In order to respond to your request for information, we
compared unobligated Federal highway fund balances at the
beginning of this fiscal year with the highway funds that
States obligated during the first part of last fiscal year.
Our comparison is based on Federal Highway Administration
data on total obligations for Federal highway projects for all
50 States. In addition, we contacted nine States to obtain
their views on how they would operate without new Federal
highway funds in the short term.
Because of our focus, we did not address other important
areas that Mr. Basso raised, such as the potential effects on
the operations of the agencies within the U.S. Department of
Transportation or the effects on particular programs such as
safety. In addition, we did not look at the impact on transit.
We found that the total unobligated balance of over $12
billion available to the States at the beginning of this fiscal
year exceeds the total actual obligations of over $8 billion
that all States combined made during the first 6 months of
fiscal year 1997. However, a comparison of individual State
unobligated balances with their actual fiscal year 1997
obligations reveals that some State highway programs may
experience financial difficulties by the middle of the fiscal
year if their obligations are compared to last year.
The analysis indicates that, while most States have
unobligated balances that are greater than their actual Federal
highway obligations in the first 6 months of fiscal year 1997,
14 States have an unobligated balance that is lower than their
actual obligations during the 6-month period.
Tables comparing the States' unobligated balances and their
1997 obligation levels for all 50 States for 4 months, 5
months, 6 months, and 7 months are attached to my written
statement.
It is important to note, when making these types of
comparisons, that the level of obligations that States incurred
in fiscal year 1997 may not correspond to their plans for
obligating Federal highway funds in this fiscal year. Further,
some States may be limited in their ability to use available
unobligated balances because of the restrictions on the
specific type of highway programs that the funds can be used
for.
Nonetheless, the comparisons do indicate that, while many
States may be able to continue financing highway projects for
some time, some States may have difficulty with even a short-
term absence of new Federal highway funds.
There are a number of strategies that could help the States
respond to the absence of new Federal highway funds in the
short term. For example, the Congress could provide States with
the flexibility to use their unobligated balances across the
range of Federal highway programs, rather than keeping the
balances tied to specific highway funding categories and
demonstration projects. As a result, some States would be
better positioned to more fully use their unobligated balance
funds.
The individual States could also consider a number of
strategies, such as temporarily substituting State funds for
Federal highway funds. The States could also begin highway
projects by using advance construction, under which a State
obtains capital from a variety of sources, including its own
funds and private capital, and later receives reimbursement
from Federal highway obligations. However, many of these
strategies may delay other planned projects within the
individual States.
Furthermore, these strategies may not be feasible for some
States or for an extended period of time. Clearly, all States
are likely to be impacted to some degree by the absence of a
highway reauthorization. The level of the impact will differ in
the various States, based on their individual circumstances,
resources, and the spending priorities. But those States with
relatively small unobligated balances compared to their past
obligation levels may face particularly acute problems.
This concludes my statement. I'd be happy to answer any
questions.
Senator Warner. Are you sure you were able to include it
all, irrespective of the light?
Ms. Scheinberg. Yes.
Senator Warner. This is exceedingly valuable testimony that
you're contributing here.
Ms. Scheinberg. Thank you.
Senator Warner. Now, does your colleague have any
supplementary comments?
Ms. Scheinberg. Not at this time, but she can answer
questions.
Senator Warner. Fine.
Mr. Massie, from down in the trenches and the front, how is
it going to affect contracting?
STATEMENT OF STEVE MASSIE, TRANSPORTATION CONSTRUCTION
COALITION
Mr. Massie. Mr. Chairman and fellow members of the
subcommittee, thank you for this opportunity to appear before
you all.
My name is Steve Massie. I'm a highway contractor from
Williamsburg, Virginia. Today I am testifying on behalf of the
26 member organizations of the Transportation Construction
Coalition, which is known as TCC. I appreciate the opportunity
to testify before you concerning the importance of the Federal
aid highway program. I will keep my comments brief, but I would
like to have my entire statement and attachments made a part of
the record.
Senator Warner. Without objection.
Mr. Massie. The TCC supports a multi-year reauthorization
of the Federal surface transportation program funded at the
highest level that can be supported by the highway trust fund.
Because this is not possible before Congress adjourns this
year, it is essential that the programs in ISTEA be temporarily
extended until a new multi-year authorization can be passed.
It is imperative that the program not be allowed to lapse
any longer. State DOTs are largely dependent on the Federal aid
highway program for capital funding. On average, Federal funds
account for 44 percent of highway capital investment. I have
heard some in Washington, D.C., claim that a short-term
extension of the ISTEA legislation is not necessary because all
States have unobligated balances that they can use until a
multi-year bill is completed next year. This is not true.
The TCC estimated earlier this year that by March 1998, 26
States will expend all unobligated balances. By the end of
February, 11 States, including Florida, Alabama, Arkansas,
Missouri, New York, and Oregon are expected to run out of
budget authority. In March, California, Connecticut, Idaho,
Maine, Nevada, Virginia, and Wyoming will also run out of
funds.
It should be noted that this is the brightest scenario, and
it assumes that the States will be granted full flexibility in
manipulating their accounts.
Also critical in our eyes is what the available funding can
be used for. In Virginia, for example, we have less than $3
million in the national highway system account, $4 million in
the interstate maintenance account, and $50 million in the
bridge account, totaling $57 million in usable highway
construction funds.
Due to Virginia's use of advanced construction funding, my
State will not have another complete letting with federally
funded projects until a reauthorization bill or extension is
enacted, thereby potentially crippling our State's construction
industry.
In Virginia, the failure to temporarily extend ISTEA will
impact 281 projects valued at $255.7 million in the first two
quarters of fiscal year 1998.
DOT has estimated that for every $1 billion invested in
highway construction, 42,100 jobs are created. So, using
AASHTO's survey estimates, Congress is jeopardizing over
300,000 jobs in the first 3 months of fiscal year 1998.
If no bill is enacted by July 1 of 1998, the total amount
of projects delayed is estimated at $11 billion, which would
impact over 470,000 jobs.
If there is no bill through the month of January, we will
lose the entire spring construction season. In the likely event
there is no bill until June 1998, we will lose the entire
spring and summer construction seasons. This would be
absolutely devastating to the construction industry. At the
very least, it would result in massive layoffs, and, in worst-
case scenarios, many small family owned companies would go out
of business.
Without an extension of the Federal aid highway program, I
will begin laying off my employees in January 1998. I will not
be able to rehire them until a bill is enacted, and I won't use
them again until 45 or 60 days after the bill is signed.
A delay in reauthorizing the Federal aid highway program
will also put lives at risk. According to FHWA, poor road
design and conditions were factors in 30 percent of the 42,000
fatalities on the Nation's highways last year. The temporary
extension of ISTEA will enable the States to continue to
improve our highway system and, in turn, will reduce fatalities
on our roadways.
Due to this winter's looming budget battle and several
controversial amendments to the reauthorization bill, it is
unlikely that a multi-year reauthorization bill will be passed
until the second quarter of fiscal year 1998. Since 26 States
will be out of funding by March, it is imperative that Congress
pass a bill that provides funding for the highway program until
a new multi-year bill is enacted.
Hundreds of thousands of American jobs and the safety of
our Nation's roads are in Congress' hands. This program is too
important to our Nation's productivity and our economic well-
being to leave it unfunded for the coming months. Please do not
go home without passing an extension to the Federal highway
program.
Thank you, again, for the opportunity, Senator. I would be
happy to answer any questions you have.
Senator Warner. I'm going to first ask of all witnesses to
take a look at the Bond proposal and supplement your testimony
today with regard to your comments on the Bond proposal. That
seems to be one that has, on both side of the aisle, engendered
a good deal of interest here, and certainly the Chair is quite
interested in it, but I have so many unanswered questions that
I'm not ready to take a position at the moment.
You've assured the Chair that this statement by the
Administration covers all the technical fixes. I categorize
them as ``technical'' because I'm confident the joint
leadership of the Senate will see that those can be put in
place legislatively.
My great concern is to whether or not any freestanding
proposal of the magnitude of $1 to $2 billion, as espoused by
Mr. Bond, can get through. My immediate concern is what do I
say to those Governors of 26 States, assuming that the 24
calculation is about the number eligible under the Bond
proposal, how they would react to this and transmit that
reaction back to their Senators. We'll have to view this.
Do you have any initial reaction to that proposal, Mr.
Basso?
Mr. Basso. Mr. Chairman, let me say I haven't had the
opportunity to review the proposal, but let me make this
observation.
Senator Warner. And I hope that you can do it in a very
short turn-around time.
Mr. Basso. I will do that, sir. I'll do it as soon as we
leave here.
But let me mention one thing that I think I should point
out to the committee, on the question of flexibility, I was
doing a little calculation. There is, as we mentioned, about
$12 billion out there to be obligated. Of that, in excess of $9
billion is that which falls in the obligation limitation, about
$2 billion in demonstration projects and a little bit in
minimum allocations, $600 million.
The point I'd like to make very briefly, Mr. Chairman, is
that there is substantial flexibility in a number of those
categories. For example, the largest----
Senator Warner. Existing under law today?
Mr. Basso. Yes, sir. The most substantial component of the
unobligated balances subject to the limitation is the surface
transportation program, as there are much smaller balances in
interstate maintenance, in the national highway system program.
There's about a billion in the area of congestion
mitigation air quality. There's close to a billion in other
transportation enhancement areas which are, in fact,
restricted. And the Administration feels, I think, very
strongly about the environmental programs and preserving them.
So my point briefly, Mr. Chairman, is that there is
considerable flexibility in parts of the money that is there
now.
Senator Warner. Yes, but I want to make sure. Does the
Administration take the position that there is in place in law
today sufficient flexibility regarding the $12 billion, and
therefore you would not support Congress giving additional
flexibility to the several States?
Mr. Basso. Mr. Chairman, I don't think I could go that far.
I think I can say that we would like to examine, obviously, the
Bond proposal or any other proposal this committee has. But I
did want to point out certainly in part----
Senator Warner. What you're pointing out is, in your
professional judgment, there's a good deal of flexibility, but
that you decline at this time to say whether or not the
Administration would oppose Congress giving additional
flexibility with regard to the unobligated balance?
Mr. Basso. That's correct, Mr. Chairman. I'll need to
consult.
Senator Warner. Fine. Thank you.
Ms. Scheinberg, what's your view of the Bond proposal? And,
specifically, my concern is to how the Governors of 26 States
would react hearing that they are not going to be a beneficiary
because they have presumably some sufficient funds.
Ms. Scheinberg. Senator, I'd like to take some time and get
back to you after the hearing on that, but I would just say, in
general, that the Bond proposal provides more flexibility and--
--
Senator Warner. Wait a minute. Let's isolate. More
flexibility with regard to the $12 billion?
Ms. Scheinberg. Well, also, even beyond my understanding of
it, unless I'm missing it, is that it gives the States an
option to use more than the $12 billion by getting the advance.
Senator Warner. That's correct.
Ms. Scheinberg. And so the States would have even more
flexibility than they would certainly currently and if the
Congress were to give the States the flexibility to spend their
$12 billion across programs.
Senator Warner. Yes.
Ms. Scheinberg. And our view is that, to get through the
short-term period without reauthorization, as much flexibility
as possible would be best.
Senator Warner. Yes?
Ms. Pufahl. If I may interject, the flexibility to use the
unobligated balances, a number of States told us that there is
a problem now because of the way those balances are aligned.
Missouri was one of the States that we talked to, and they said
that they would be able to use less than a third of their
unobligated balances because of the categorization of the
funds.
We also looked at where these unobligated balances lie as
far as program categories. For the national highway system, it
is less than 3 percent of the $12.1 billion. Mr. Basso is right
in saying that there is a certain degree of flexibility, such
as with STP funds, but even within that broad category there
are set-asides such as enhancements.
If you look at the enhancements set-aside, which is for
activities such as bikeways and pedestrian walkways and
landscaping, there's about $1 billion. And you look at the NHS,
and it's less than half that amount.
So that is obviously why States are complaining and asking
for more flexibility.
Even if you gave them flexibility, though, it would be
limited if you didn't advance some States money. When we just
compared what they had obligated in the past to the 6-months in
1997, what we found was that 14 States would come up with a
shortfall. But, if I understand his proposal correctly, then by
providing for an advance you'd be loaning money to those 14
States.
Also, we were concerned that perhaps fiscal year 1997 would
not be typical, so if you looked at what is the greater of
fiscal year 1996 or 1997, you circumvent that problem.
Thank you.
Senator Warner. Mr. Massie, I presume that the bond
proposal would go a long way to meet the concerns that you very
clearly expressed on behalf of the professionals that have to
do the work.
Mr. Massie. It would, and the flexibility is the biggest
deal in there. To allow the States to manipulate the accounts,
that would be absolutely critical. Just like you just finished
saying, the unobligated funds in the CMAQ and the enhancements
are sitting there. States cannot get to them. And I guess,
realizing that those funds are so large, maybe that would put
into question the idea of really having to repay them even.
Senator Warner. Thank you.
Mr. Chafee?
Senator Chafee. Thank you, Mr. Chairman.
Ms. Scheinberg, I'd like to refer to page 3 of the
testimony that you handed out. It seems to me that what you're
saying there--and, by the way, I think your testimony is
excellent, and I want to commend everybody who has testified.
It has been very helpful here.
What you say is in the middle of page 3 in your testimony,
some States may be limited in their ability to use available
unobligated balances because of restrictions. In other words,
you're addressing that. And then you get on to say, ``The
comparisons indicate, while many States may be able to continue
financing, some States may have difficulty dealing even with
short-term.''
So you address two problems. First, you address the
flexibility problem in the bottom of the page. ``Congress could
provide the States with flexibility to use their unobligated
balances across the range of Federal highway programs--''
exactly what Senator Bond is suggesting in his point two,
flexibility to States on use of their unobligated balances.
That's the first thing.
I think it's clear that after reauthorization Congress
could reimburse the appropriate funded categories. In other
words, presumably there would be a provision in there you can't
strip CMAQ and then use it all on highways. You can under the
flexibility, but then you've got to repay the CMAQ account, and
that's fair enough. I'm for that.
And then you get into--at the top of that page you talk
about those who have unobligated balances lower than their
actual obligations during the same period. In other words, you
take 1996, and that's where you come up with your 14 States.
And I don't know where people are getting these 26 States, but
I--does that figure arise from the amount, if you take not 1997
but you take 1996 and try to have them to have as much as they
had in either of those years?
Ms. Scheinberg. No. We looked at 1997, the first 6 months
of 1997, but the 14 States assumes that they would have
flexibility we assume that Congress would provide the States.
Senator Chafee. And even with that flexibility they don't
still have enough to compare with what they did in the first 6
months of 1997. Is that what you're saying?
Ms. Scheinberg. Yes.
Senator Chafee. OK. And Senator Bond deals with that. He
has a hold harmless provision, which allows States to obligate
up to either the first 6 months of its obligation in fiscal
year 1996 or 1997, whichever is greater. So I see a lot of
merit in the Bond proposal. Obviously, it has got to pass both
branches, clearly, but it seems to me we take care--that
Senator Bond has taken care of the problems that could arise.
Do you see some gap he's left?
Now, let's assume that we've taken care of what Mr. Basso
addressed, namely, the safety and the way of paying the
Department of Transportation employees and so forth--which, by
the way, Mr. Basso, I think each quarter of the Department of
Transportation employees is about $70 million. Am I right?
Mr. Basso. Yes, sir.
Senator Chafee. So, therefore, it would be $140 million to
carry them from October 1 through the end of March?
Mr. Basso. Yes, sir.
Senator Chafee. The first two quarters.
What do you say to all of this, Ms. Scheinberg?
Ms. Scheinberg. Well, we would need to do the analysis
against the 1996, the first 6 months actual obligations against
1996, to see how that compared with the 14 States which showed
up comparing to the 1997. So I'd like to do some analysis and
get back to you, Senator.
Senator Chafee. Because you just used 1997?
Ms. Scheinberg. Exactly.
Senator Chafee. Yes. OK. There's a vote on. I can't tell.
Are they in the second part?
Senator Lautenberg. They're down to about 4 minutes.
Senator Chafee. All right. Do you want to ask some
questions now or do you want to go vote?
Senator Lautenberg. I don't want to speak that fast.
Senator Chafee. Take all the time you want.
Senator Lautenberg. I have some rather complicated
questions.
Senator Chafee. I would suggest, as John Warner suggested,
that we take a little recess and come back.
[Recess.]
Senator Warner. The hearing will resume.
Chairman Chafee, you were questioning at the time we
adjourned for the vote. Had you completed?
Senator Chafee. I had, and Senator Lautenberg was next up
at bat.
Senator Warner. He is to return.
Mr. Baucus, you go ahead.
Senator Baucus. Thank you, Mr. Chairman.
I'd like to ask Mr. Massie if it isn't true--actually, I'll
get back to you in a minute. Ms. Scheinberg, the chairman asked
whether there are any holes or any problems with the Bond
proposal, do you see any at least questions that might be
addressed, and we were discussing your statement, and in some
respect isn't the answer to that question the middle paragraph
of the statement, beginning with the first sentence, ``It is
important to note, when making these types of comparisons--''
that is, comparing 1997 and 1996 and 1998, etc.--``that the
rates at which States obligate funds in fiscal year 1997 may
not correspondence to their plans for obligating Federal
highway funds in fiscal year 1998.''
Ms. Scheinberg. Right. That was a big assumption that we
had to make, that 1997 was a typical year or typical of this
year, in fact. I mean, it seems like the Bond proposal is
trying to even that out a little bit by using 1996. In the best
of all worlds, you know, you might look at a longer period of
time and get the average over many years.
But I think from the State's perspective every year is a
little different because of weather, because of projects, the
mix of the program.
This is the best--in the sense of fortune telling, this is
the best that we can do, but you're absolutely right that every
year is different and it's very hard to predict.
Senator Baucus. So some States have higher unobligated
balances now because they have big projects in mind; is that
right?
Ms. Scheinberg. That's possible. Yes.
Senator Baucus. Is it also true that the Bond proposal tend
to favor the donor States because the minimum allocation comes
off the top and is a separate limitation compared with the
limitation that otherwise would apply to obligated balances?
Senator Warner. Feel free to take that important question
for the record before you launch out on it, because that's a
key, key question.
Ms. Scheinberg. Yes. Maybe we'll take that one for the
record.
Senator Baucus. That's fine.
Ms. Scheinberg. I'd like to think about it a little.
Senator Baucus. Yes.
Senator Warner. Can we have the question again?
Senator Baucus. Yes. The basic question is: without getting
into the degree as to how much, doesn't the Bond proposal tend
to favor donor States that receive a minimum allocation amount,
that that limitation, off the top of the program and also
separately from the limitation that States receive, generally
receive on their obligated authority.
That is, the way the program is written, minimum allocation
is a separate limitation from the regular limitation, and
that's----
Senator Warner. It's a key question.
Senator Baucus. It's my understanding that, without getting
to the degree to which it tends to favor those States, there
would be that tendency.
Ms. Scheinberg. We can provide more details for the record.
What we did look at was where the unobligated balance is
coming from, and, of the $12.1 billion, $652 million is coming
from minimum allocation, and minimum allocation, as you know,
can be used for a wide range of programs, whether it's the NHS
or STP or whatever.
Senator Baucus. But that's separate. That's a separate
account, minimum allocation.
Ms. Scheinberg. That is correct, but there's a lot of
flexibility in there for using the funds.
Senator Baucus. OK. It's my understanding that when ISTEA
is under-funded, obligated balances grow, and under-funding
affects non-donor States, but it does not to the same degree
affect donor States. That is when ISTEA is under-funded. Is
that correct?
Ms. Scheinberg. You're talking about obligation
limitations?
Senator Baucus. Yes.
Ms. Pufahl. There would be a difference, but there is a
fairly large chunk of the unobligated balance that's just
coming from demonstration projects, nearly $2 billion, and
that's exempt from any obligation limits.
Senator Baucus. But still, the point I make is true.
Ms. Pufahl. Still, yes.
Senator Baucus. It's true. Mr. Massie, one of the key
fundamental questions we're facing here is how far to go in a
short-term bill. We want to go far enough to maintain a
continued continuity in the program. We don't want to go too
far to take pressure off of a 6-year bill. And I'm just curious
of your general feeling, representing contractors. Would you
advise us to err more going to short-term to put more pressure
on 6-year bill, or would you urge us to go longer, which tends
to put less immediate pressure on passing the 6-year bill.
Mr. Massie. As a contractor, I think you should err on
having too long of an extension. The continuity of the program
is absolutely critical. When you get it down to the contractor
level, the majority of the contractors that build these
highways are small businesses. We do long-term planning. We do
our financing long-term. And the interruption in the program
would kill some of the companies.
The way we do our business, we all operate in a season. We
have a working season. In Virginia we generally lose January
and February, but we can plan our work around that and do some
things in the ground for those 2 months. We're not as fortunate
as Florida, who work year-round, but we're definitely better
off than your State.
And so we plan around everything. We plan our work around
Mother Nature. It is very difficult to plan our work around
Congress.
[Laughter.]
Senator Baucus. It's difficult for us to plan our work
around Congress.
Ms. Scheinberg, as you understand the Bond proposal,
roughly how long will that allow States to maintain the
continuity without turning and twisting and contorting into all
sorts of different gyrations?
Ms. Scheinberg. My understanding is that it is to allow the
States to feel comfortable for the 6-months to have a full 6-
month program. Of course, what happens at the end of that 6
months is an unknown, and how they project at the end of that
6-month period for the future could be an issue. But it seems
like it would give the States a full 6-month program.
Senator Baucus. And it tends to avoid the formula fight.
Ms. Scheinberg. Exactly.
Senator Baucus. Which I think is very helpful and very
important.
Thank you, Mr. Chairman.
Senator Warner. I've just been advised by Senator Bond's
senior staff person that the bill will be completed this
afternoon and available for some distribution. That will help
various expert witnesses, like yourself, to give your
independent professional judgment to Members of Congress.
Now, our distinguished colleague from New Jersey.
Senator Lautenberg. Thank you kindly, Mr. Chairman. Once
again, I appreciate the opportunity to participate.
I wonder whether anybody here, based on what we've heard
about Senator Bond's proposal, can tell us whether--where would
the funds come from that--the authorization for the funds to
obligate them for the States that need financing in less than 6
months? Does it have to be drawn from other accounts? We would
have to be talking about a specific sum, wouldn't we, to carry
the obligation authority for a 6-month period?
Ms. Pufahl. I would assume that the advance that he's
talking about would just be tapped through the highway trust
fund.
Senator Lautenberg. Well----
Senator Warner. In a sense it would be new money under from
that fund.
Senator Lautenberg. Well, I mean, that does have some
effects. I mean, it's not without some consequence. That money
has got to be appropriated and would have to be----
Senator Baucus. It has all been appropriated.
Senator Warner. That's correct.
Senator Baucus. Per year. That's right. There's no
appropriation necessary.
Senator Warner. But authorization would be.
Senator Baucus. Right.
Senator Lautenberg. OK. Now, the various States would have
different dates at which time they would need further funding,
and so we'd have to have an open-ended thing that would say
that there would have to be some understanding of what could be
drawn down from the fund.
Senator Warner. You mean in terms of amount?
Senator Lautenberg. Right. Because those States that would
be--we have an example or two of States that are very short-
term, have very little in their unobligated balances. They
technically would be getting an advantage that other States do
not have.
If State ``A'' had sufficient unobligated balances to carry
them for 4 or 5 months, State ``B'' has only enough to carry
them a month into the year, then State ``B'' would have gotten,
technically, a bonus because they would have gone beyond their
original formula calculations. Is that correct?
Ms. Pufahl. I agree with your observation about technically
it seems like they would be getting an advantage, but what they
would essentially be doing is borrowing on their future their
own money that would be forthcoming to them.
In some respects I see all States benefiting because it is
giving them flexibility to more fully use the unobligated
balances.
Senator Lautenberg. Yes. And if we fail to pass a bill
before the fiscal year has expired, we would be then proceeding
under the allocation of funds that was put through the
Appropriations Committee, and that might or might not be
enough, depending on what we do with the formula, that there
would be certainly questions for each State.
Would you think that an extension would have to be reviewed
in the context of changed formulas or operating at the same
level that we currently do to see where we'd be?
I mean, if we took a 6-month extension--and I don't want to
drag any of you into this. Mr. Massie, you might be drawn in,
but you don't work for the same company that we all work for.
I'm not going to ask you whether you prefer old formula or new
formula. I don't think it's fair to you.
But I think there is some information, as we heard from the
chairman, that Senator Bond will be delivering a more-complete
explanation. We'll take a look then. Meanwhile, I want to ask
Mr. Basso a question.
You testified States will be able to use their full
obligation authority; that under a more-flexible program that
$12 billion roughly would be available for highways; is that
correct?
Mr. Basso. That's correct.
Senator Lautenberg. OK. What happens with transit, Mr.
Basso? Is there any unobligated authority for transit? It has
been wiped out, as we understand it, by previous legislation,
right?
Mr. Basso. That's correct, Senator. Transit, unlike
highways, really only has carry-over unobligated balances that
are already committed to the States. It's about $1.4 billion.
All of the excess, a similar situation to what we would have in
highways, was wiped out in the rescissions.
Senator Lautenberg. So we don't have the same opportunity
to extend any funding there?
Mr. Basso. I would say this: we don't have the same ability
to use flexibility.
Senator Lautenberg. One of the things that you mentioned
that I think needs a little focus is the shut-down of some of
the facility that would be necessary to take care of the
implementation and enforcement of programs, etc.
Mr. Basso. Yes, sir.
Senator Lautenberg. That's a pretty serious situation, and
we'd have to guard against any of that. We tried shutting down
parts of government once, and we didn't like it. The public
didn't like it, either. So what would we do? How would we carry
on if we didn't provide the funding?
Mr. Basso. Senator, if we don't provide the funding,
there's absolutely no choices left to us to carry on.
Basically, the personnel who deal with these programs, both the
Federal aid authorizations and all that goes with that and the
safety programs that I mentioned, would have to be laid off and
those programs would have to be shut down. It's a matter of
law. Anything else would be a violation of the Anti-Deficiency
Act.
Senator Lautenberg. If we----
Senator Warner. If I could just intervene, I'm sure that we
have the assurance of Republican leaders and Democrat leaders
that these technical things will be cared for. I would hate to
have this hearing have a word out of it that people are going
to get laid off and fired. I just feel we have that
responsibility. It's important to bring it up and I want to
speak to that. Certainly our leader has assured me that somehow
this can be fixed.
Senator Lautenberg. I think that's an important point, Mr.
Chairman, but I wanted to make sure that, even though Mr. Basso
said it earlier, I want to make sure that it's clearly
understood the consequences are serious.
Mr. Basso, how might we carry out the basic tenets of
ISTEA, because if there is money shifted around to just provide
for highway construction--and I'm for continuing that, Mr.
Massie. Let me at least make sure that record is clear. How do
we know that programs for the environment, interstate
maintenance, MPOs--how do we know that those programs are going
to be carried on?
Mr. Basso. Senator, I would say that I think the question
really resides on where the balances that are there are applied
and whether flexibilities are applied to them. To be more
specific, congestion mitigation air quality program has about a
billion dollars in it. It's about one-twelfth of the total $12
billion that we're talking about.
Senator Lautenberg. Right. But if it could be used
elsewhere, this State may want to continue using the funds for
congestion mitigation, whereas this State might not want to use
it.
Mr. Basso. That's correct.
Senator Lautenberg. That's a problem.
Mr. Basso. The Administration clearly is concerned about
anything that would degrade the environmental programs.
Senator Lautenberg. I just want to ask Mr. Massie a
question. You recognize that there is some tension here among
those who want to continue the formula as it is or have their
concerns about a change in mid-stream here, and it is a change
in mid-stream, and my State is one of those affected by it. And
I'm aware enough that changes may be made, but a sudden change
like that which is proposed would be quite unsatisfactory in
our case. Maybe if it was in the transition phase over the next
6 years so that we wouldn't just drop off the cliff, we might
feel differently about it.
But, in your opinion, Mr. Massie, what is the fastest,
easiest way to keep the program going? I mean, do you have a
concern about whether or not we extend on present formula or
new formula as an organization?
Mr. Massie. In the short time that's left, if anybody
starts talking about formula it's dead. And that's just----
Senator Lautenberg. Yes.
Mr. Massie. You cut it to the chase, sir. If anybody talks
about it, it's over. It will not happen. Everybody will go
home. We will lay people off.
And another thing, you know, when we talk about the
construction industry laying people off, we already have a
shortage of people in the industry, and if we lay people off
and we do not hire them back in the spring, they will go find
work elsewhere.
Senator Lautenberg. Absolutely.
Mr. Massie. Then we are in the process of training all over
again, finding a new work force and training them and bringing
them up to speed. That hasn't been mentioned here at all, and
that is a huge, huge problem.
And if you're going to have an extension of the program,
the simplest way to do it, in the eyes of a dirt mover, is you
just take a current program and you extend it for 6 months.
We've lived with it for 6 years. We will live with it for 6
years and 6 months. We'll give you all the opportunity to work
through all the nuances of a new program.
Senator Lautenberg. That's a frank response, and I'm frank,
and I would say that it would be my earnest desire to work with
those who advocate change to try and get it done in that 6-
month period.
I think, if the 6-month extension is done in such a rigid
manner that there is not automatic extensions, then perhaps
that's the kind of size pebble we need in the shoe to get this
thing done.
Thank you very much. Thanks, Mr. Chairman.
Mr. Massie. Thank you.
Senator Warner. Unless there are further questions----
Senator Chafee. Let me just ask a quick question here. I'm
just not sure I see all these problems. And I'm going back to
the Bond proposal.
First, the flexibility on the unobligated balances. Mr.
Basso, you indicated some concern that the CMAQ fund might be
raided, and you're concerned about the environment, which I
share, but the arrangements would be that when this flexibility
went into effect that they have to pay it back. So the CMAQ
might have, in one State, $50 million account in it. They want
to use that for highways. When they get their money, they're
going to get money next year, that would be repaid. So I set
that worry aside.
Second, when you compare what the State spent or obligated
in the first 6 months of 1996 and the first 6 months of 1997
and you take the highest amount, and if they don't have that
money, then there would be an account under the Secretary that
they could borrow from. Are we on the same wavelength, Ms.
Scheinberg?
Ms. Scheinberg. They would get an advance against----
Senator Chafee. That's right. We shouldn't use the term
``borrow.'' They'd get an advance because the money is
obviously going to be there when we finish this program. And so
I think that's the so-called ``hold harmless'' provision which
Senator Bond talks about in his provision.
As for the safety in the Department of Transportation and
the transit programs, just go ahead and give them whatever they
spent in the first 6 months, what it cost them for the first 6
months. You indicated $70 million per quarter for the DOT
payroll, so that's $140 million that they would get that would
be out there to be approved for the payment of the employees.
I'm not sure I see all the problems here. Are you and I in
sync here, Ms. Scheinberg?
Ms. Scheinberg. Yes, Senator. I think----
Senator Chafee. Is there something I'm missing?
Ms. Scheinberg. My quick analysis of this, based on what
we've talked about this morning, is that the Bond compromise
seems, just from what we've said, to address the problems that
I identified in my statement. It talks about flexibility, it
provides flexibility. The advance would help the States that
have a shortfall or potentially have a shortfall in the next 6
months. And if last year was not a good comparison, it gives
them the comparison of the 1996 alternative.
So I think the issues that we have raised seem to be
addressed from as much as we know right now.
Senator Chafee. And when he talks, his first point, a real
6-month extension to March 31, I take it that, as of that date,
you can't do any more drawing down getting advances, and that's
where the payments that have gone to the Department of
Transportation for safety, truck inspections, and all that, it
ends then.
And therefore the virtue of this proposal, which obviously
I think there's a lot of merit to, is that when we--we're
coming back here, I believe, on January 26th. The leader has
said this is the first program on the Floor. We go on the
Floor. We've got a little time in January. We've certainly got
all of February and we've got all of March to not only pass it
but to go to conference and get that ironed out.
Senator Warner. That's assuming the House----
Senator Chafee. All right. But if the House doesn't want to
act, that's always a problem. We face that no matter what we
do. But I can't believe that the House is going to say, when
the Senate passes a bill and it's ready to go to conference,
the House is going to say, ``No, we don't want the go to
conference. We'll let Mr. Massie and his people suffer through
without contracts and without jobs.'' I can't believe the House
is going to do that.
Senator Warner. I share your views.
I think we've pretty well exhausted the witnesses on this,
and what I would urge each of you to do--and we will facilitate
transmitting to you a copy--is to reply to the chairman's
request that your comments are forthcoming as quickly as
possible.
I think you have, in a very splendid way, given us your
strong professional opinions, and I believe it provides us with
enough factual guidance to determine the policy considerations
that have to be done to put in place something to avoid the
really catastrophic consequences as outlined by Mr. Massie. Of
course, that only relates to the contractors, and there are
many other facets of the transportation industry that will
suffer irreparable damage, not the least of which is the
people, themselves, of this country who look to the Congress to
accept the responsibility to keep in place an adequate funding
stream to provide for the modernization of our transportation
system.
Speaking for myself, and I'm sure my good friend and
lifelong friend the chairman here, we're going to do our very
best, and we have the support of the Republican leaders to do
something on this.
Thank you.
[Whereupon, at 12:07 p.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]
[Additional statements submitted for the record follow:]
Statement of Hon. Paul E. Patton, Governor of the Commonwealth of
Kentucky, on behalf of the National Governors' Association
Good morning. I am Paul Patton, Governor of Kentucky, and I am here
today to present the views of the National Governors' Association on
the critical issue of transportation funding. With me is Raymond
Scheppach, Executive Director of the National Governors' Association. I
would like to thank the chairman, the ranking member, and the other
Senators of this subcommittee for inviting me to testify on the
potential impact of the current lapse in the authorization of the
Federal highway, transit and highway safety programs. I would
especially like to thank the many Senators who have worked hard to
increase Federal transportation investment. Governors stand ready to
work with you next year to ensure that transportation is fully funded.
Transportation is Critical to the Economy
Before I describe the impact on States of a continued lapse in
highway, transit, and highway safety programs, I would like to take a
moment to outline the Governors' position on transportation funding.
Transportation is critical to the productivity of the U.S. economy and
the competitiveness of our businesses. Governors have heard a clear,
consistent message from all types of businesses--large and small,
manufacturers, retailers, and farmers. These businesses are investing
billions of dollars in just-in-time production and distribution to
speed their products to market. They fully understand that time is
money. They can, through good management, control the cost of capital
and the productivity of labor.
The public transportation systems are just as much a part of the
system of production as labor and capital, yet businesses are powerless
to remove congestion caused by a transportation facility whose use has
exceeded its capacity. Businesses and individual citizens are paying
the user fees necessary to build a much improved system but the system
is not being improved. In fact, we are falling behind.
These businesses and individuals are relying on us in government to
make sure the roads, ports, and airports are in good condition and free
of congestion. We cannot let them down, not this year, not next year,
and not in the years ahead. We must fully fund our transportation
programs. Today's levels of transportation funding are inadequate to
maintain current conditions. There is an $18 billion annual gap between
current transportation spending by all levels of government and that
required simply to maintain the current performance of our nation's
highways, bridges and public transit systems.
As a percentage of Gross Domestic Product (GDP), Federal
transportation investment has declined from nearly 0.5 percent in 1977
to less than 0.3 percent today. This decline would continue through
2002 under the spending assumptions in the 1998 congressional budget
resolution. At the same time that Federal investment is declining,
revenues from the Federal gas tax have been rising. These dedicated
transportation revenues will grow rapidly over the next several years,
and are sufficient to support significant increases in Federal
transportation spending. If current revenue and spending projections
hold true, the unspent balance in the Highway Trust Fund, which today
stands at $24 billion, would increase to $90 billion by 2003.
Disinvesting in our national transportation system while the user-
tax revenues are dramatically increasing will undermine the moral and
legal commitment on which these taxes are based.
If we do not increase our Federal investment in transportation the
result will be deteriorating roads, increased congestion, lower
economic productivity and profitability of U.S. firms, loss of
employment for U.S. workers, and ultimately lower tax revenues to
Federal, State, and local governments.
Congress must pass a short-term funding mechanism prior to
adjournment The importance of transportation to our growing economy is
the reason the National Governors' Association has made it a priority
to urge the Congress to significantly increase the Federal investment
in our nation's transportation infrastructure. To that end, Governors
would like Congress to pass a multi-year highway, transit and highway
safety authorization bill where contract authority is set equal to the
revenues coming into the trust fund.
It does not appear that Congress has sufficient time remaining in
this legislative session to accomplish this goal. Therefore, Governors
respectfully request that Congress pass short-term legislation which
continues funding for highway, transit and safety programs. If the
current lapse in authorization continues into 1998 the impacts on State
transportation programs could be severe. This is a serious concern for
Governors from all regions of the country, regardless of party
affiliation.
In the past week many Governors have written to Congress in support
of short term funding for transportation programs. This morning NGA
delivered the following letter, signed by 39 of my fellow Governors, to
Senate Majority Leader Trent Lott and Minority Leader Thomas Daschle. I
would like to share copies of the letter with members of this
subcommittee. The text of the letter reads, in its entirety: ``It is
imperative for the Senate to consider and pass short-term legislation
providing funding for highway, transit, and safety programs and to
complete a conference on that legislation with the House of
Representatives before adjourning for the year. Such legislation will
minimize the interruption in funding to State and local governments,
and would avoid the disastrous effects that a several-month lapse in
authorization would have on many States' transportation programs.''
The Potential Impact of a Continued Lapse in Transportation Funding
Let me now turn to the impact on State transportation programs of a
continued lapse in authorization of these Federal programs. The impact
of any lapse will vary among States and will greatly depend on the
length of time without a reauthorization. While a few larger States
would not be significantly affected by a delay in authorization well
into 1998, such an extended lapse would have a severe impact on most
States' transportation programs, resulting in:
<bullet> Delays in thousands of highway and transit construction
projects valued in the billions of dollars;
<bullet> Increased project costs as delayed projects are extended
into two construction seasons;
<bullet> Layoffs among truck and bus safety inspectors, and
reduced enforcement of impaired driving laws; and
<bullet> Potential increased accident losses.
The American Association of State Highway and Transportation
Officials (AASHTO) conducted a recent survey to determine the impact on
State transportation programs of a lapse in authorization of the
Federal highway program. AASHTO found that in the first quarter of the
Federal fiscal year nearly 2,000 projects nationwide, valued at over $3
billion, could be affected. If the lapse continued through the second
quarter of the year an additional 2,926 projects, valued at $4.4
billion could be affected. If the lapse in authorization continued
through the third quarter of the fiscal year an additional 2,729
projects valued at $3.8 billion could be affected. Finally, if the
lapse continued for the entire fiscal year yet another 2,130 projects
valued at over $4 billion could be affected.
Based on the U.S. Department of Transportation's estimate that $1
billion of highway spending supports 42,000 jobs, more than 126,000
jobs could be lost during the first quarter of the year alone. More job
losses would result from a lapse beyond December 31 of this year.
Highway and Truck Safety
Highway and truck safety programs have already been affected by the
current lapse in authorization, as States have begun to curtail truck
and bus inspections and impaired driving enforcement. Truck and bus
safety and hazardous material inspection programs will come to a
complete halt in most States by the end of this calendar year. A lapse
in authorization through the end of March 1998 would result in 500,000
fewer roadside truck inspections nationwide. If highway safety programs
are not reauthorized soon States will begin to lay off personnel, and
drunk driving and speed enforcement will be jeopardized during a
critical time of the year, Thanksgiving to New Year's Eve.
Individual examples of the impact of a lapse on State safety
programs include:
<bullet> In my own State of Kentucky, all new highway safety
projects are currently on hold. There is no funding for overtime
enforcement of impaired driving, occupant protection, speed and other
safety laws.
<bullet> The Nevada State Highway Safety Office has halted all
highway safety programs as a result of the funding lapse, and will have
to close down in early 1998 if no additional funds are provided.
<bullet> In Florida forty highway safety contractors have not been
paid, none of the planned projects for fiscal 1998 are funded, and
staffs of several highway safety contractors have been working the past
month without pay.
Public Transit
Nearly $4.3 billion of Federal transit funding for fiscal 1998 will
be unavailable to transit agencies unless an authorization is enacted.
A continued lapse in authorization would force transit agencies to
defer new construction, the purchase of new equipment, and maintenance
of existing equipment, and most transit agencies would not be able to
fund new capital projects. Rural and smaller transit agencies will be
especially hard hit, as they may not have adequate funding to operate
their systems beyond December of this year, forcing reductions in
service.
<bullet> In Kentucky, our rural transit agencies are already
cutting back service. Particularly vulnerable are the new welfare-to-
work services provided by our rural transit operators.
<bullet> New York City is already experiencing a detrimental
impact on its Elderly and Persons with Disabilities transit program.
<bullet> In St. Louis, Missouri, funding for the expansion of that
city's light rail system will be jeopardized by a continued lapse in
the transit authorization.
Highway Construction
Many States will experience minimal impacts on their highway
construction programs through the end of 1997. However, if no
authorization is provided by early 1998, State transportation agencies
will be forced to delay planning and bidding activities. Some Northern
States could face the loss of an entire construction season if bid
advertising is delayed beyond December of this year. Here are a few
examples of the impact on individual States.
<bullet> Kentucky's unobligated balance of $134 million is equal
to much less than half of our fiscal 1998 Federal highway funding. If
the current lapse in the highway program continues several months into
1998 many Federal-aid highway projects will be postponed, including a
$169 million modernization and safety improvement to US 119 in Pike
County, as well as widening and safety improvements to Interstate 75
south of Cincinnati and the widening of the Paris Pike between
Lexington and Paris.
<bullet> Connecticut has already suspended advertising of all new
highway projects, and eight previously advertised projects totaling $52
million cannot be awarded until authorizing legislation is passed.
<bullet> Reconstruction of the Stevenson Expressway (I-15) in
Chicago, Illinois may have to be delayed a full year if a
reauthorization bill is not enacted by December.
<bullet> In Iowa, failure to reauthorize the Federal aid highway
program has already caused that State's transportation director to
postpone by 30 days his decision to proceed with the February contract
letting, while the decision to proceed with the March letting has been
postponed indefinitely.
<bullet> In Nevada the planned widening of Interstate 15 in Las
Vegas to provide congestion relief, and maintenance of Interstate 80
could be delayed or postponed if the current lapse continues well into
1998.
<bullet> A lapse in authorization into 1998 may force Oklahoma to
delay or postpone reconstruction of several regionally significant
congestion relief projects including: US-281 from Interstate 40 North,
US-283 North of Altus, and State Highway 99 from State Highway 9 North.
<bullet> Oregon's unobligated balance of $91 million is $26
million short of the Federal funding needed to carry out the highway
projects scheduled through March 1998. More immediate will be the
postponement of eight local bridge projects totaling $3.4 million.
Conclusion
In closing, I urge you again to enact short-term legislation
providing funding for highway, transit, and safety programs. While I
admire the dedication and commitment of the members of this committee
to pass a full ISTEA reauthorization in early 1998, I must caution you
that the effectiveness of State highway, transit and safety programs
must not rest on that commitment alone. As Governors of the States we
understand the difficulty and unavoidable delays of the legislative
process, but as the executives responsible for the nation's roads, we
are very concerned about the failure of the Congress to act, and the
impact this inaction would have on such a vital government service.
We ask for a long term commitment to full funding for the national
transportation program as quickly as possible, but until that program
can be enacted we ask for short-term legislation providing funding for
highway, transit, and safety programs. This interim program will not
prejudice the outcome of the debate over funding formulas or program
structure. But failure to enact a short-term funding mechanism will
jeopardize program efficiency, hinder timely project development,
unnecessarily increase the cost of repairing our roads, bridges and
transit systems, and perhaps cost the economy tens of thousands of
jobs.
Mr. Chairman, we cannot now afford these costs. I will be happy to
answer any questions.
__________
Statement of Peter J. Basso, Acting Assistant Secretary for Budget and
Programs, U.S. Department of Transportation
Mr. Chairman and members of the committee. I appreciate the
opportunity to appear before you today to discuss the potential
consequences for our surface transportation programs if the Intermodal
Surface Transportation Efficiency Act of 1991 (ISTEA) is not
reauthorized by the end of this session of Congress.
There will be adverse impacts on safety programs, potential
construction delays with associated job losses, and adverse impacts on
transit operations if the Federal highway, traffic safety, and transit
programs are put on hold. The Administration continues to support
enactment of multi-year ISTEA reauthorization legislation as soon as
possible and believes its NEXTEA proposal forwarded last March provides
a sound basis for action. While some construction activity will be able
to continue with carryover highway and transit grant funds, we will see
increasing impacts in States and local communities as these carryover
balances--unevenly distributed across the country and across programs--
are drawn down. The need is even greater, though, in the case of safety
grants and operating funds to keep the Federal Highway Administration
and the Bureau of Transportation Statistics in business.
Let me summarize some of the most significant problems that will
result from continued lapse in this important legislation.
Safety Programs
Several critical highway safety programs are completely without
funding this fiscal year. This means that Federal support has ceased
for major safety initiatives such as safety belt use, child seat use,
and drunk driving countermeasures. The net effect would be a reduction
in lives saved and injuries avoided. Highway safety grant programs have
no unobligated balances available from prior years' authorizations.
These include Section 402 (State and community safety grants), Section
410 (impaired driving incentive grants program), and the National
Driver Register (NDR). With no contract authority for the Section 402
program for fiscal year 1998, new funding has not been available since
October 1 for the States to initiate highway safety and Safe
Communities projects. States are operating with funds obligated in
fiscal year 1997, and most States have sufficient funding to last only
an estimated 2-3 months. Once these balances are exhausted, many State
highway safety offices may have to close. Some States are already
making adjustments by delaying or curtailing projects.
Kentucky, California, Louisiana, Florida and North Carolina, for
example, have placed some or all of their highway safety programs on
hold pending new authorizations. Special alcohol and seat belt
enforcement programs by dedicated State police are being particularly
hard hit and could result in police officers being laid off if new
funding is not forthcoming in the near future.
The Section 410 (impaired driving) program has also been operating
with funding obligated in fiscal year 1997, and that will run out in
the early spring, forcing the program to be shut down. This means that
NHTSA would be unable to carry out statutory requirements to provide
incentive grants to encourage States to deal more effectively in
reducing drunk driving.
Also, the National Driver Register (NDR) would have to be shut
down. The NDR is operating on funds obligated in fiscal year 1997.
Since funding for the NDR contract runs out in March, the program will
have to be shut down and staff dismissed. This means that State motor
vehicle agencies will not be able to query the NDR to avoid licensing
problem drivers. In addition, the shutdown will be felt by other
transportation-related organizations, such as the Federal Aviation
Administration, Federal Railroad Administration, United States Coast
Guard, air carriers and employers, who are authorized to use the NDR in
determining whether to hire or certify operators of motor vehicles or
other transportation conveyances.
In addition, there is no Federal funding for the approximately
3,200 State enforcement personnel funded exclusively by the Motor
Carrier Safety Assistance Program (MCSAP). States may be limited
severely in their ability to perform driver or vehicle inspections or
compliance reviews, thereby permitting potentially unsafe commercial
motor vehicles and unqualified drivers to operate undetected on our
Nation's highways. The safety impact of the lack of reauthorization
legislation is beginning to be felt now. For example, South Carolina is
already out of MCSAP funds, and Rhode Island will have to lay off
inspectors at the end of November. Without Federal funds, we are
advised that the New Mexico, Ohio, and Nebraska motor carrier safety
enforcement programs will shut down on November 15. Several other
States have reduced roadside safety inspections just as pre-holiday
freight movements are peaking. Many States are using State funds to
support motor carrier programs, but national safety objectives may not
be met. By January 1, most motor carrier safety programs could come to
a complete halt without additional authorizations.
Because 80 percent of MCSAP pays the salaries of State safety
investigators, States will likely have to lay off these employees.
Highway safety could be severely jeopardized without the important
enforcement activities conducted by safety investigators, including:
reviews of truck and bus companies to ensure they are complying with
safety regulations and have an effective safety management program,
roadside inspections of vehicles and drivers, hazardous materials
enforcement, special safety investigations, traffic enforcement, drug
interdiction, and truck size and weight enforcement.
dot operations
Federal Highway Administration
The Federal Highway Administration (FHWA) has only enough funds to
continue to pay salaries to its full staff during the first quarter of
fiscal year 1998. Without some relief, FHWA will be forced to shut down
in early January when all carryover funds are estimated to be depleted.
This could result in 3,600 employees being furloughed, including over
2,600 employees who work in FHWA division and regional offices across
the country in every State.
When FHWA shuts down, even though the States will still have
Federal-aid highway funds to use, the Federal-aid program will
essentially stop since there will be no FHWA personnel to carry on the
legally required steps related to authorizing Federal projects. This
means that:
<bullet> The FHWA would not be able to process requests and
reimburse States for Federal-aid projects already under construction,
or participate in the operating cost of traffic management centers.
Since reimbursements are made electronically--with some States being
reimbursed daily and many others being reimbursed weekly--a cut-off in
reimbursements would immediately affect States' cash flow and their
ability to pay contractors (with potential layoffs resulting), purchase
equipment, materials, and supplies, and meet State payrolls or other
commitments.
<bullet> The FHWA would not be able to authorize Federal-aid
highway projects or obligate balances of Federal-aid highway funds for
design, right-of-way acquisition, or construction projects. States also
use Federal-aid highway funds for inspections of major bridges, and
obligations for those inspections could not be approved.
<bullet> States could not begin right-of-way acquisition or final
design activities on projects that are ready for this approval. States
also rely on the FHWA for coordination with other Federal agencies in
advancing projects through the NEPA process and obtaining other reviews
and clearances. Last year about 50-75 major projects were advanced with
an environmental impact statement (EIS), and 500 intermediate scale
projects were advanced with a finding of no significant impact (FONSI).
If this trend continues in fiscal year 1998, a shutdown would have
proportionate impacts on projects that would otherwise be advanced this
year.
<bullet> In the event that new natural disasters or catastrophic
failures occurred, FHWA would not be able to approve and allocate
available Federal-aid Emergency Relief (ER) funds to the States for
necessary repairs to damaged highways and bridges. Furthermore, staff
would not be available to process reimbursements to States for repairs
from previous disasters already completed.
There would be no funds for the Federal motor carrier safety
program. No Federal staff will be available to review State grants or
to conduct safety inspections, compliance reviews, and other
enforcement activities performed by the approximately 230 Federal motor
carrier safety investigators.
FHWA's research and technology activities will be severely
curtailed. Since there cannot be an administrative takedown from new
authorizations until after a reauthorization bill is enacted, new
funding for research and technology activities, such as Intelligent
Transportation System operational tests and technical assistance to
communities throughout the Nation, financed through FHWA's General
Operating Expenses, cannot be made available.
National Highway Traffic Safety Administration
By early February 1998, NHTSA's regional and Headquarters State and
Community Services staff, who administer the Section 402 program, will
have to be furloughed since the largest portion of their salaries is
funded from the Section 402 program.
Bureau of Transportation Statistics
There is no new funding for the Department's Bureau of
Transportation Statistics (BTS), since it is financed from contract
authorizations from the Highway Trust Fund. By deferring staff
increases, delaying programs, and rescheduling some repayments, BTS has
enough carryover to last through the first quarter of fiscal year 1998,
at which point, without new spending authority, it will have to shut
down. In addition to furloughs of more than 40 BTS employees, 60
contractor staff will have to be let go. There will be long-term
impacts from such short-term effects as contractor employees seek work
elsewhere. There will be interruptions in data collection, which will
seriously impact the overall quality of data.
Federal Transit Administration
Administrative funds for FTA are provided in the DOT Appropriations
Act and therefore we do not face the same problem that we do with FHWA
and NHTSA grant program administrative costs.
Federal-aid Highway Program
States will be able to continue their infrastructure programs by
using the $12.25 billion in unobligated balances from prior year
apportionments and allocations of Federal-aid highway funds. This total
will permit the States, in aggregate, to operate at the 1997 levels for
more than half the year and at the 1998 level for approximately one-
half of the year. However, these balances vary greatly among States and
program categories.
Transit Programs
Both FTA's discretionary and formula grant programs are affected by
the lack of legislation. These programs will have available about 14
percent of the funding that they could otherwise expect in fiscal year
1998, including $240 million in general funds provided in the fiscal
year 1998 DOT Appropriations Act and $392 million for New Starts
discretionary grants carried over from previous years because of
obligation limitations. This $392 million would be distributed based on
the fiscal year 1998 Appropriations Act. Other unobligated balances
already apportioned or allocated to grantees will be available pre
current law, but the availability of these funds is uneven across the
country and across programs.
summary
Failure of Congress to take some action to address safety funding
needs and FHWA, NHTSA and BTS administrative costs before it recesses
will have significant impacts on both critical programs and DOT
personnel. The Administration continues to support enactment of multi-
year ISTEA reauthorization legislation as soon as possible. However,
time is running out on this session of Congress. Under these
circumstances, we believe that Congress must take action before
adjourning for the year, to temporarily provide sufficient funds and
authority to address the critical safety and other urgent programmatic
needs set forth in this testimony.
That completes my prepared statement. I would be pleased to answer
any questions you may have.
__________
Statement of Phyllis Scheinberg, Associate Director for Transportation
Issues, Division of Resources, Community, and Economic Development,
General Accounting Office
Mr. Chairman and members of the subcommittee: We appreciate the
opportunity to provide information on the status of Federal surface
transportation programs in the absence of funding from a new Federal
highway reauthorization act. As you know, in 1991, the Intermodal
Surface Transportation Efficiency Act of 1991 (ISTEA) authorized over
$122 billion in Federal funds for highway programs for fiscal years
1992 through 1997. This authorization expired on September 30, 1997,
and no new Federal highway funds have been authorized for fiscal year
1998. The States can, however, use their unobligated balances that
remain from the ISTEA authorization period. For all 50 States, these
Federal-aid highway balances totaled $12.1 billion at the beginning of
fiscal year 1998.
Specifically, you asked that we compare unobligated Federal highway
fund balances at the beginning of fiscal year 1998 with the highway
funds that the States obligated during the first part of fiscal year
1997. We performed this analysis using actual obligation data for
Federal-aid highway projects during the first 4 through 7 months of
fiscal year 1997. For illustrative purposes, however, this testimony
will focus on the 6-month period. (Details for the 4- through 7-month
periods are presented in apps. I and II.) At your request, our
testimony will also address strategies that could temporarily help the
States continue to fund highway programs in the absence of a Federal
highway authorization act.
Our work is based on the Federal Highway Administration's (FHWA)
obligation data for all 50 States. In addition, we contacted 9 States
to obtain their views on how they would operate without new Federal
highway funds in the short term. When we analyzed FHWA's obligation
data for the 50 States, the analysis was limited to total obligation
levels for Federal highway projects. We did not address other important
areas, such as the potential effects on the operations of agencies
within the U. S. Department of Transportation or the effects on
particular programs, such as transportation safety programs. In
addition, we did not look at the impact on transit programs.
In summary, we compared the level of unobligated highway fund
balances available at the beginning of fiscal year 1998 with the actual
obligations that the States made during the first part of fiscal year
1997. The total unobligated balance of $12.1 billion exceeds the total
actual obligations of $8.1 billion that all States combined made during
the first 6 months of fiscal year 1997. However, a comparison of the
unobligated balances of individual States with their actual fiscal year
1997 obligations reveals that some State highway programs may
experience financial difficulties by the middle of fiscal year 1998 if
their obligation rates for this year are comparable to those for fiscal
year 1997. The analysis indicates that while most States have
unobligated balances that are greater than their actual Federal highway
obligations in the first 6 months of fiscal year 1997, 14 States have
an unobligated balance that is lower than their actual obligations
during that same period. The nine States that we contacted identified
various strategies that they would use to try to continue their highway
operations, such as relying more extensively on State funds. However,
some of these States also noted that they would soon be postponing
highway projects if new Federal funds are not available within the next
few months.
It is important to note when making these types of comparisons that
the rates at which States obligated funds in fiscal year 1997 may not
correspond to their plans for obligating Federal highway funds in
fiscal year 1998. Furthermore, some States may be limited in their
ability to use available unobligated balances because of restrictions
on the specific types of highway programs that the funds can be used
for. Nonetheless, the comparisons do indicate that while many States
may be able to continue financing highway projects for some time, some
States may have difficulty dealing even in the short term with the
absence of new Federal highway funds.
A number of strategies could help the States respond to the absence
of new Federal highway funds in the short term. For example, the
Congress could provide the States with the flexibility to use their
unobligated balances across the range of Federal highway programs,
rather than keeping the balances tied to specific highway funding
categories and demonstration projects. Then, after reauthorization, the
Congress could ``reimburse'' the appropriate funding categories. The
individual States could also consider a number of strategies, such as
temporarily substituting State funds for Federal highway funds. The
States could also begin highway projects by using advance construction,
which enables a State to access capital from a variety of sources,
including its own funds and private capital, and later receive
reimbursement through Federal highway obligations. However, such
strategies may delay other planned projects within individual States.
Furthermore, these strategies may not be feasible for some States or
for an extended period of time.
background
ISTEA authorized over $122 billion for highway programs for fiscal
years 1992 through 1997. The authorization was funded primarily through
Federal highway user taxes such as those on motor fuels (gasoline,
gasohol, and diesel), tires, and trucks. Funds from these sources are
collected from users and credited to the Highway Trust Fund for highway
and mass transit projects or related activities. The fund is divided
into a highway account and a mass transit account.
Except for a few minor deductions, such as those for Federal
administrative expenses, Federal highway funds are provided to the
States through FHWA, which is part of the U. S. Department of
Transportation. The money is generally distributed to the States
through various formula calculations. The current formula, established
by ISTEA, determines the distribution of funds for 13 funding
categories, such as the Interstate Maintenance, the National Highway
System, and the Congestion Mitigation and Air Quality (CMAQ) programs.
During the ISTEA authorization period, FHWA annually apportioned to
the States authority to obligate funds. And, if the Congress took no
further action, the States could proceed to obligate all the authority
apportioned to them by FHWA. However, the Congress also imposed an
annual obligation limitation as part of the appropriation process on
most elements of the Federal highway program. These limits did not take
back spending authority that was already apportioned to the States;
rather, the obligation limits acted to control the obligation rate.
The congressionally imposed obligation limits acted to control
total obligations but left the States with some discretion to decide
how they would use their obligation authority across the range of
Federal-aid programs. For example, in a particular year, a State could
obligate all its Interstate Maintenance and National Highway System
funds. But the State would then have to compensate by obligating a
smaller part of its Federal highway funds from other categories. In
addition, a few categories of highway funding are exempt from
obligation limitations--the two largest are minimum allocation and
demonstration projects.
Once FHWA approves a project that a State proposes, the Federal
share of the project's cost is considered ``obligated'' against the
State's apportionment. The State then proceeds--doing detailed design
engineering, advertising for bids, and selecting a contractor for the
construction work. The State incurs costs, pays the bills, and then
seeks reimbursement of the Federal share from FHWA. Federal outlays--
that is, actual expenditures--do not occur until the State is
reimbursed. Furthermore, the funds are outlayed over a number of years.
comparing unobligated highway balances with previous obligations
At the beginning of fiscal year 1998, the total unobligated Federal
highway fund balance for all States was $12.1 billion. This unobligated
balance came from two sources. First, $9.6 billion in unobligated
balances exists because the Congress annually imposed an obligation
limit during the ISTEA period to control spending for most Federal
highway funding categories. Second, another $2.5 billion in unobligated
authority remains for a few highway funding categories that were exempt
from the obligation limitation. The two largest exempted programs were
minimum allocation ($0.65 billion) and demonstration projects ($1.85
billion).
From a national perspective, the total unobligated highway balance
of $12.1 billion at the beginning of fiscal year 1998 (including
program funds exempt from obligation limits) is nearly 1.5 times the
$8.1 billion that all States obligated during the first 6 months of
fiscal year 1997. This does not mean, however, that each State's
unobligated balance is greater than its obligations during the first 6
months of fiscal year 1997. FHWA's data show that the unobligated
balances for each of 14 States fall short by 1 percent to 30 percent or
by $1 million to almost $82 million of its actual obligations during
the first 6 months of fiscal year 1997. Several States were in the 20
to 30 percent range. For example, Indiana's total unobligated balance
is over $80 million less than its total highway obligations during the
first 6 months of fiscal year 1997. This represents about a 28-percent
difference. Similarly, North Carolina's total unobligated balance is
about $94 million less than the amount it obligated during this same
period in fiscal year 1997--a difference of about 26 percent. (App. I
provides a State-by-State comparison of the fiscal year 1998
unobligated balance of $9.6 billion (from highway programs subject to
the obligation limit) to actual State obligations during the first 4
through 7 months of fiscal year 1997. App. II provides a similar
comparison based on the combined total unobligated balance of $12.1
billion.)
It is important to note that these comparisons imply that the
State's obligation rates for fiscal year 1997 correspond to those for
fiscal year 1998, which may or may not be the case for individual
States. Furthermore, the total unobligated balance of $12.1 billion
includes balances from programs that were not subject to the obligation
limitation. As of October 1, 1997, seven States had little or no
unobligated balances in these program categories.
strategies that could help the states in the short-term
A number of strategies could help the States get through a short
period without a new highway funding authorization. At the Federal
level, the Congress could provide the States with the flexibility to
use their unobligated balances across the range of Federal highway
programs, rather than keeping the balances generally tied to specific
highway programs and demonstration projects. At the State level, some
States may be able to obtain State, local, or private resources to
begin projects and later seek Federal reimbursement for these costs
through advance construction authority.
Flexibility Needed if Unobligated Balances Are to Be Fully Used in the
Short Term
The unobligated balance of $9.6 billion (from programs subject to
the obligation limit) represents the sum of the unobligated balances
remaining from specific programs, such as the Interstate Maintenance,
National Highway System, Surface Transportation, and CMAQ programs.
These balances may now generally be obligated in accordance with the
individual program categories.
Throughout the ISTEA period, the obligation limits acted to control
``total'' obligations, thus leaving the States discretion to decide how
they would use their obligation authority across the range of specific
Federal-aid highway programs. For example, in a particular year, a
State could have opted to obligate all of its available National
Highway System funds, but it would have had to make up for its full use
of these funds by obligating less in another funding category, such as
the CMAQ program.
Differences in the priorities that the States assigned to different
highway programs are now reflected in significant variances in the
unobligated balances that remain from ISTEA authorizations for these
programs. For example, the National Highway System had a total
unobligated balance of over $426 million at the beginning of fiscal
year 1998, which represents only about 13 percent of the total fiscal
year 1997 apportionment for this program. In comparison, the Surface
Transportation program started fiscal year 1998 with an unobligated
balance of $4.2 billion, or nearly half of the fiscal year 1997
apportionment for this program. Furthermore, the CMAQ program had an
unobligated balance of $1 billion, or 108 percent of the fiscal year
1997 apportionment for this program. Because of the variances in the
unobligated balances remaining across Federal highway programs, these
balances may not be consistent with State funding priorities or
projects that the States planned for this year.
To identify any problems that the States might have in using their
unobligated balances and to identify strategies that the States may use
to help them respond to the absence of new Federal highway funds in the
short term, we contacted nine States--Arkansas, Connecticut, Indiana,
Iowa, Missouri, New York, North Carolina, North Dakota, and South
Dakota. These differed in the extent to which they expected that their
unobligated Federal highway balances would help them respond to any
short-term absence of new Federal highway funds. Several of the States
did note that the usefulness of these unobligated balances will be
somewhat limited because they are tied to specific programs. For
instance, a Missouri transportation finance and budget manager
estimated that in early fiscal year 1998, the State will be able to use
only $50 million of its total of $169 million in unobligated funds
because the balance of the money is for categories such as CMAQ or
transportation enhancements in which the State does not have projects
ready to go. Similarly, the Transportation Director of Program
Management for New York commented that it is very difficult to say
exactly when the State will use its unobligated balance because some of
this money is limited to programs that (1) are not a State priority or
(2) do not have projects that are ready to go.
If the Congress were to enact legislation that would give the
States the flexibility to use unobligated balances interchangeably
among Federal highway programs, then some States would be better
positioned to more fully use their unobligated Federal highway funds.
In addition, while minimum allocation funding can be used for numerous
Federal highway programs, demonstration project funds must be used only
for the specific projects for which the funds were authorized under
current law. These demonstration project funds, which generally were
not subject to the obligation limits, ended fiscal year 1997 with a
total unobligated balance of about $1.9 billion. If the Congress were
to provide the States with the flexibility to use program as well as
demonstration project funds to meet other highway program needs, a
later reauthorization could provide for reimbursement to the borrowed
fund account.
States May Have to Rely More on State Funding for Highways
Federal highway funding represents one of the many financial
sources used to support the nation's highways. The Department of
Transportation's statistics indicate that the revenue available for
highways totaled $92.5 billion in 1995, the latest year for which data
are available. About $59.6 billion of this revenue came from highway
user taxes--$18.3 billion from Federal highway user taxes, $39.3 from
State highway user taxes, and $2 billion from local highway user taxes.
The balance came from a variety of sources, such as $5.1 billion from
property taxes and assessments and $7.6 billion from bond receipts.
To compensate for the lack of new Federal highway funds being
available for part of fiscal year 1998, some States may be able to fund
a proportionately larger share of their planned highway projects in
early fiscal year 1998 with State funds. Later in fiscal year 1998,
these States could use the Federal funds made available to them. This
assumes that at some unspecified time in fiscal year 1998, new Federal
highway funds will be available; however, this uncertainty poses
problems for some States. A few of the nine States we contacted noted
that they would be postponing highway projects if new Federal funds are
not available within the next few months.
The States also differ in their ability to provide greater funding
in fiscal year 1998. For instance, the Commissioner of North Dakota's
Department of Transportation stated that the disastrous flood this year
left North Dakota without any additional State funds to pay for highway
projects. In contrast, Indiana's Deputy Commissioner for Finance stated
that the State does not face a financial crisis in early fiscal year
1998. He noted that Indiana's Department of Transportation has, if
necessary, the ability to use $600 million in bonding authority to
begin projects in fiscal year 1998. However, if the States draw on
their own resources, they may have to delay other planned projects.
Also, this short-term solution could have a defined payback period. For
instance, a Missouri transportation official noted that the State
expects to award highway contracts through December 1997, using $100
million of State funds. He noted that this State money will be borrowed
from other State programs and must be returned to the other accounts by
June 30, 1998, the end of the State's fiscal year.
One financial tool that may help some States is advance
construction. Under advance construction, a State can begin a highway
project by obtaining capital from a variety of sources, including its
own funds and private capital, and later receive reimbursement through
Federal highway obligations. Indiana's Deputy Commissioner for Finance
stated that without new Federal funds, Indiana will begin its highway
program using advance construction with State funding. New York also
indicated that it would turn to advance construction to help with its
highway financing. The New York Transportation Director of Program
Management remarked that he expects to keep the State's planned highway
projects on schedule in early fiscal year 1998 through the use of
advance construction. He stated that New York will use State money to
keep the projects on schedule and then backfill with Federal funds once
a new authorization is passed.
In July 1997, the American Association of State Highway and
Transportation Officials (AASHTO) conducted a survey to determine the
possible effects of a delay in the reauthorization of the Federal
surface transportation program on State transportation programs. Many
States reported to AASHTO that they would use advance construction to
continue operations and project schedules. However, AASHTO noted that
advance construction will not help some States that have already
heavily relied on this technique.
Mr. Chairman, this concludes my testimony. I would be pleased to
respond to any questions that you or other members of the subcommittee
may have.
UNOBILIGATED FEDERAL HIGHWAY BALANCES (SUBJECT TO THE OBLIGATION LIMITATION) AT THE BEGINNING OF FISCAL YEAR 1998 COMPARED WITH OBLIGATIONS FOR THE FIRST 4 TO 7 MONTHS OF FISCAL YEAR 1997
Dollars in thousands
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Unobligated Difference between unobligated Difference between unobligated Difference between unobligated Difference between unobligated
balance balance and fiscal year 1997 4- balance and fiscal year 1997 5- balance and fiscal year 1997 6- balance and fiscal year 1997 7-
subject to month obligation total month obligation total month obligation total month obligation total
State obligation -------------------------------------------------------------------------------------------------------------------------------
limit as of 10/
01/97 Amount Percent Amount Percent Amount Percent Amount Percent
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama......................................... $142,290 $70,523 98 $54,933 63 $18,011 14 -$13,762 -9
Alaska.......................................... 94,192 59,601 172 12,980 16 -5,331 -5 -19,351 -17
Arizona......................................... 144,747 61,638 74 48,153 50 35,920 33 27,297 23
Arkansas........................................ 87,129 -11,524 -12 -28,961 -25 -32,323 -27 -40,468 -32
California...................................... 816,665 535,661 191 494,274 153 406,101 99 215,761 36
Colorado........................................ 117, 689 73,357 165 14,684 14 -1,177 -1 -28,065 -19
Connecticut..................................... 166,353 11,568 7 -12,887 -7 -32,651 -16 -117,730 -41
Delaware........................................ 54,052 48,091 807 46,936 660 40,646 303 20,332 60
Florida......................................... 225,197 136,682 154 75,480 50 -14,489 -6 -258,506 -53
Georgia......................................... 293,339 184,098 169 158,972 118 118,093 67 83,185 40
Hawaii.......................................... 139,085 a a a a a a a a
Idaho........................................... 50,407 22,596 81 5,743 13 5,457 12 39 0
Illinois........................................ 255,153 146,891 136 82,100 47 -14,927 -6 -236,031 -48
Indiana......................................... 182,028 47,488 35 -50,888 -22 -102,013 -36 -124,776 -41
Iowa............................................ 115,924 13,004 13 415 0 -25,943 -18 -27,335 -19
Kansas.......................................... 128,419 57,528 81 51,050 66 45,803 55 35,262 38
Kentucky........................................ 134,226 92,030 218 60,001 81 11,759 10 -12,999 -9
Louisiana....................................... 270,665 211,548 358 196,015 263 192,316 245 176,085 186
Maine........................................... 48,887 16,706 52 57 0 -10,845 -18 -10,548 -18
Maryland........................................ 158,942 116,473 274 41,191 35 20,355 15 -29,096 -15
Massachusetts................................... 793,225 614,708 344 374,672 90 298,761 60 256,679 48
Michigan........................................ 217,146 93,236 75 52,661 32 11,239 5 -15,783 -7
Minnesota....................................... 178,687 141,349 379 38,120 27 28,273 19 16,178 10
Mississippi..................................... 102,719 46,798 84 38,873 61 7,882 8 -6,233 -6
Missouri........................................ 168,587 26,114 18 -67,796 -29 -100,490 -37 -111,528 -40
Montana......................................... 88,072 73,364 499 41,622 90 33,642 62 13,022 17
Nebraska........................................ 77,809 47,919 160 39,276 102 -5,837 -7 -7,870 -9
Nevada.......................................... 55,011 46,620 556 11,803 27 -1,210 -2 -3,184 -5
New Hampshire................................... 59,340 43,848 283 34,426 138 11,932 25 3,535 6
New Jersey...................................... 274,799 85,692 45 41,416 18 28,863 12 -28,507 -9
New Mexico...................................... 69,402 44,746 181 42,160 155 38,298 123 24,543 55
New York........................................ 477,584 123,935 35 -57,004 -11 -121,836 -20 -154,403 -24
North Carolina.................................. 214,972 -15,865 -7 -90,838 -30 -143,299 -40 -178,181 -45
North Dakota.................................... 50,447 5,887 13 -2,979 -6 -24,791 -33 -32,363 -39
Ohio............................................ 356,246 231,419 185 200,963 129 158,654 80 79,029 29
Oklahoma........................................ 159,309 74,298 87 57,668 57 47,037 42 15,515 11
Oregon.......................................... 92,166 42,543 86 24,747 37 15,926 21 -397 -0
Pennsylvania.................................... 456,826 325,819 249 298,829 189 213,084 87 84,355 23
Rhode Island.................................... 65,379 51,918 386 36,309 125 30,320 86 20,101 44
South Carolina.................................. 179,141 101,532 131 27,858 18 16,615 10 8,401 5
South Dakota.................................... 69,729 12,996 23 -8,395 -11 -22,791 -25 -33,301 -32
Tennessee....................................... 196,644 67,328 52 20,013 11 -22,553 -10 -81,974 -29
Texas........................................... 619,695 193,004 45 136,984 28 58,399 10 -25,147 -4
Utah............................................ 89,670 66,048 280 35,048 64 27,477 44 18,313 26
Vermont......................................... 71,618 58,166 432 50,025 232 36,629 105 26,728 60
Virginia........................................ 212,321 99,361 88 68,801 48 28,694 16 2,329 1
Washington...................................... 204,873 167,859 454 87,103 74 68,522 50 -493 -0
West Virginia................................... 120,166 84,653 238 37,892 46 12,857 12 -13,368 -10
Wisconsin....................................... 163,333 -10,469 -6 -63,820 -28 -74,008 -31 -82,887 -34
Wyoming......................................... 53,579 7,042 15 -6,478 -11 -15,180 -22 -23,071 -30
Total..................................... $9,563,884 $4,987,272 109 $2,893,616 43 $1,295,871 16 -$590,668 -6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note 1: Bold type indicates that previous obligations exceed the unobligated balance.
Note 2: The comparison represents data for the States only and does not include data for the District of Columbia, American Samoa, Puerto Rico, the Virgin Islands, Guam, and the North
Marianas.
a. Not available.
Source: GAO's analysis based on FHWA's data.
UNOBILIGATED FEDERAL HIGHWAY BALANCES (SUBJECT TO THE OBLIGATION LIMITATION) AT THE BEGINNING OF FISCAL YEAR 1998 COMPARED WITH OBLIGATIONS FOR THE
FIRST 4 TO 7 MONTHS OF FISCAL YEAR 1997
Dollars in thousands
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unobligated Difference between Difference between Difference between Difference between
balance unobligated balance and unobligated balance and unobligated balance and unobligated balance and
subject to fiscal year 1997 4-month fiscal year 1997 5-month fiscal year 1997 6-month fiscal year 1997 7-month
State obligation obligation total obligation total obligation total obligation total
limit as of -------------------------------------------------------------------------------------------------------
10/01/97 Amount Percent Amount Percent Amount Percent Amount Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama............................ $198,888 $127,121 177 $111,531 128 $74,609 60 $42,836 27
Alaska............................. 94,192 59,601 172 12,980 16 -5,331 -5 -19,351 -17
Arizona............................ 184,093 100,984 122 87,499 91 75,266 69 66,643 57
Arkansas........................... 153,005 54,352 55 36,915 32 33,553 28 25,408 20
California......................... 1,091,527 810,523 288 769,136 239 680,963 166 490,623 82
Colorado........................... 117,689 73,357 165 14,684 14 -1,177 -1 -28,065 -19
Connecticut........................ 167,954 13,169 9 -11,286 -6 -31,050 -16 -116,129 -41
Delaware........................... 54,052 48,091 807 46,936 660 40,646 303 20,332 60
Florida............................ 298,813 210,298 238 149,096 100 59,127 25 -184,890 -38
Georgia............................ 487,021 377,780 346 352,654 262 311,775 178 276,867 132
Hawaii............................. 148,605 a a a a a a a a
Idaho.............................. 82,813 55,002 198 38,149 85 37,863 84 32,445 64
Illinois........................... 284,971 176,709 163 111,918 65 14,891 6 -206,213 -42
Indiana............................ 203,799 69,259 51 -29,117 -13 -80,242 -28 -103,005 -34
Iowa............................... 136,787 33,867 33 21,278 18 -5,080 -4 -6,472 -5
Kansas............................. 147,075 76,184 107 69,706 90 64,459 78 53,918 58
Kentucky........................... 157,586 115,390 273 83,361 112 35,119 29 10,361 7
Louisiana.......................... 339,687 280,570 475 265,037 355 261,338 334 245,107 259
Maine.............................. 57,472 25,291 79 8,642 18 -2,260 -4 -1,963 -3
Maryland........................... 166,683 124,214 292 48,932 42 28,096 20 -21,355 -11
Massachusetts...................... 799,910 621,393 348 381,357 91 305,446 62 263,364 49
Michigan........................... 250,289 126,379 102 85,804 52 44,382 22 17,360 7
Minnesota.......................... 238,211 200,873 538 97,644 69 87,797 58 75,702 47
Mississippi........................ 116,125 60,204 108 52,279 82 21,288 22 7,173 7
Missouri........................... 187,257 44,784 31 -49,126 -21 -81,820 -30 -92,858 -33
Montana............................ 88,072 73,364 499 41,622 90 33,642 62 13,022 17
Nebraska........................... 84,959 55,069 184 46,426 120 1,313 2 -720 -1
Nevada............................. 55,012 46,621 556 11,804 27 -1,209 -2 -3,183 -5
New Hampshire...................... 63,770 48,278 312 38,856 156 16,362 35 7,965 14
New Jersey......................... 331,142 142,035 75 97,759 42 85,206 35 27,836 9
New Mexico......................... 71,431 46,775 190 44,189 162 40,327 130 26,572 59
New York........................... 529,008 175,359 50 -5,580 -1 -70,412 -12 -102,979 -16
North Carolina..................... 264,629 33,792 15 -41,181 -13 -93,642 -26 -128,524 -33
North Dakota....................... 58,999 14,439 32 5,573 10 -16,239 -22 -23,811 -29
Ohio............................... 495,754 370,927 297 340,471 219 298,162 151 218,537 79
Oklahoma........................... 173,644 88,633 104 72,003 71 61,372 55 29,850 21
Oregon............................. 98,712 49,089 99 31,293 46 22,472 29 6,149 7
Pennsylvania....................... 968,126 837,119 639 810,129 513 724,384 297 595,655 160
Rhode Island....................... 85,502 72,041 535 56,432 194 50,443 144 40,224 89
South Carolina..................... 201,518 123,909 160 50,235 33 38,992 24 30,778 18
South Dakota....................... 74,690 17,957 32 -3,434 -4 -17,830 -19 -28,340 -28
Tennessee.......................... 225,294 95,978 74 48,663 28 6,097 3 -53,324 -19
Texas.............................. 770,416 343,725 81 287,705 60 209,120 37 125,574 19
Utah............................... 92,600 68,978 292 37,978 70 30,407 49 21,243 30
Vermont............................ 88,085 74,633 555 66,492 308 53,096 152 43,195 96
Virginia........................... 333,797 220,837 196 190,277 133 150,170 82 123,805 59
Washington......................... 204,887 167,873 454 87,117 74 68,536 50 -479 -0
West Virginia...................... 307,110 271,597 765 224,836 273 199,801 186 173,576 130
Wisconsin.......................... 181,199 7,397 4 -45,954 -20 -56,142 -24 -65,021 -26
Wyoming............................ 53,579 7,042 15 -6,478 -11 -15,180 -22 -23,071 -30
Total.............................. $12,066,439 $7,489,827 164 $5,396,171 81 $3,942,319 49 $2,055,720 21
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note 1: Bold type indicates that previous obligations exceed the unobligated balance.
Note 2: The comparison represents data for the States only and does not include data for the District of Columbia,
American Samoa, Puerto Rico, the Virgin Islands, Guam, and the North Marianas.
a. Not available.
Source: GAO's analysis based on FHWA's data.
Statement of Steve Massie, Williamsburg, VA, on behalf of the
Transportation Construction Coalition
Good morning. My name is Steve Massie. I am a highway contractor
from Williamsburg, Virginia. Today, I am testifying on behalf of the 26
member organizations of the Transportation Construction Coalition
(TCC). A list of the coalition's membership is aftached. I appreciate
the opportunity to testify before you today concerning the importance
of the Federal-aid Highway program to my company, its 80 employees and
their families, and thousands of construction companies, construction
supply companies, engineering and design companies, and the skilled
construction labor that really implement this program where the rubber
meets the road. I will keep my comments brief, but would like to have
my entire statement made part of the record.
The Transportation Construction Coalition supports a multi-year
reauthorization of the Federal surface transportation program funded at
the highest level that can be supported through the Highway Trust Fund.
If this is not possible before Congress adjourns this year, however, it
is essential that the programs in the Intermodal Surface Transportation
Efficiency Act of 1991 (ISTEA) be temporarily extended until a new
multi-year authorization can be passed.
Construction is a major force in the national economy. The last
Census of the Construction Industry tallied 572,851 construction
companies with a total employment of 4.6 million persons, annual
estimated payroll of $118 billion and value of work put in place of
about $528 billion annually in the United States. Because the
construction industry puts in place the infrastructure that keeps
America's economy on track, derailing the construction industry is
tantamount to derailing the nation's economy.
More specifically, for this hearing, I want to discuss the
disastrous impact an extended delay of highway reauthorization
legislation will have on the highway construction industry and the
American economy, and why we believe a short-term extension of the
program is crucial.
As you know, on September 30, the authorization for the nation's
highway and transit programs expired. Until Congress approves a new
highway bill, or at least extends the expired bill, the U.S. Department
of Transportation (DOT) cannot release new highway funds to the States.
It is imperative that the program not be allowed to lapse any longer.
The highway construction industry is largely dependent on the Federal-
aid highway program for capital funding. On average, Federal funds
account for 44 percent of highway capital investment.
While it appears that a multi-year reauthorization bill is not
possible this year, I want to impress upon you why an extension of the
program is essential. I would like to use an example from Saturday's
Washington Post. The article, ``Delay of Wilson Bridge Funding
Criticized'' quotes Virginia DOT Secretary Robert Martinez saying, ``if
everything goes right, we are right at the brink of a major, regional
transportation crisis.'' AAA President, Robert L. Darbelnet seems to
agree saying, ``With each passing day 172,000 vehicles pass over the
bridge, making it a little less structurally sound and bringing it
closer to the day when traffic restrictions will have to be imposed.''
I know what you are thinking--a short term bill would not fix the
Woodrow Wilson Bridge. I understand that. The Wilson Bridge is a
popular and proximate example for the infrastructure problems facing
our country. Nearly \1/3\ of the nearly 600,000 bridges on our nation's
Federal-aid eligible highways are rated deficient. While a short term
bill would not fix the Woodrow Wilson Bridge, the problems that smaller
structures face are similarly exacerbated by delays.
I have heard some in Washington, D.C. claim that a short-term
extension of the ISTEA legislation is not necessary because all States
have unobligated balances they can use until a multi-year bill is
completed next year. This is absolutely not true. The Transportation
Construction Coalition estimated earlier this year that by March 1998,
assuming the States could flex all unobligated balances into needed
accounts, 26 States will expend all unobligated balances. By the end of
February, 11 States are expected to run out of budget authority
including Florida, Alabama, Arkansas, Missouri, New York and Oregon. In
March, California, Connecticut, Idaho, Maine, Nevada, Virginia and
Wyoming will run out of funds. It should be noted that this is the
brightest scenario, if States are granted complete flexibility.
Also critical in our eyes is what the available funding can be used
for. While it is true that the Federal Highway Administration (FHWA)
estimates that as of September 30 States had $10 billion in unobligated
highway account balances, only $2.6 billion of that funding is
available in the core highway construction accounts of Interstate
Maintenance, National Highway System, and Bridge. In fact, 17 States
had less than $1 million in funding for the National Highway System. In
my State of Virginia, for example, we have only $2,967,000 in the
National Highway System account, $3,851,000 in the Interstate
Maintenance account, and $50,873,000 in the Bridge account--totaling
$57,691,000 in useable highway construction funds. Virginia will not
have another letting with Federal funds until a reauthorization bill is
enacted, thereby crippling our State's construction industry.
To illustrate what the actual impact of not passing any
reauthorization legislation will be to the States, the American
Association of State Highway and Transportation Officials (AASHTO)
conducted a survey and found that 1,982 transportation construction
projects valued at $3.07 billion will be affected in the first quarter
of fiscal 1998 (Oct.-Dec. 1997). During the second quarter of the
fiscal year, an additional 2,926 projects valued at $4.4 billion will
be affected by the delayed authorization. In Virginia, this will impact
281 projects, valued at $255.7 million, in the first two quarters of
fiscal 1998.
DOT has estimated that every $1 billion invested in highway
construction creates 42,100 jobs. So, using the AASHTO estimates,
Congress is jeopardizing over 300,000 jobs in the first 6 months of
fiscal 1998 (Oct. 1997--March 1998). If no bill is enacted by July 1,
1998, the total amount of projects delayed is estimated at $11 billion,
which would impact over 470,000 jobs. A short-term extension of the
program would alleviate much of this unnecessary pain because Federal
funds would flow to the States, the Federal-aid highway program would
continue, and hundreds of thousands of jobs would not be lost.
The reauthorization legislation is vital to States because States
will delay the planning and bidding of highway construction projects
until legislation authorizes new money to flow to the States. The
delays directly impact the American economy because States do not make
progress on needed construction work, which, in turn, puts construction
contractors and suppliers out of business. Without work, construction
companies will not be able to provide jobs and will have difficulty
making payments on machinery and facilities. In Virginia, without an
extension of the Federal-aid highway program, I will begin to lay off
my employees beginning in January, 1998, and I will not be able to
rehire them, until a bill is enacted. Furthermore, I will stop using my
concrete, pipe, steel, cement, asphalt and guardrail suppliers
beginning in March 1998, and I wont use them again until 45-60 days
after the bill is signed.
If there is no bill through January, we will lose the entire spring
construction season. In the likely event that there is no bill until
June 1998, we will lose the entire spring and summer construction
seasons, which would put many construction companies out of business.
Construction does not operate like an assembly line that we can just
shut down. The design and construction of highway projects are
carefully planned months in advance. Projects to be constructed in
April or May, must be planned and funded by January or February.
Virginia has the following lettings of Federal-aid highway funds
scheduled for December, 1997 through August, 1998 that will be canceled
without an extension of the highway program.
Letting Date Value of Work
------------------------------------------------------------------------
------------------------------------------------------------------------
December, 1997................................. $ 31,250,000
January, 1998.................................. 15,790,000
February, 1998................................. 25,225,000
March, 1998.................................... 61,260,000
April, 1998.................................... 12,420,000
May, 1998...................................... 9,880,000
June, 1998..................................... 17,260,000
July, 1998..................................... 107,510,000
August, 1998................................... 49,185,000
Total.................................... $329,780,000
------------------------------------------------------------------------
Without an extension of the highway program, the FHWA, which
oversees the Federal-aid highway program, the motor carrier safety
program, and research programs, will be shut down at the end of
December. The 3,700 FHWA employees that approve projects and actually
keep the Federal-aid highway program going, including the State's
ability to obligate funds in a timely manner, will be laid off.
Furthermore, since the program expired, States have already begun
to lay off truck safety enforcement officers because funding is no
longer available in the Motor Carrier Safety Assistance Program (MCSAP)
in many States. There are virtually no unobligated balances of grant
funds or new Federal funds available to the States for motor carrier
safety activities. According to the Commercial Vehicle Safety Alliance
(CVSA), by the end of December, up to 8,000 inspectors nationwide
funded by MCSAP will be in jeopardy. Nearly 170,000 inspections per
month, training, hazardous materials, and other enforcement activities
supported by the Federal program would be cut back or cease altogether.
A delay in reauthorizing the Federal-aid highway program will also
put lives at risk. According to the FHWA, poor road design and
conditions were factors in thirty percent of the 42,000 fatalities on
the nation's highways last year. The inability of States to make
improvements to our nation's highways will likely result in increased
fatalities.
Mr. Chairman, one of the major problems with letting the Federal
highway program lapse is the uncertainty it is causing for all of us in
the industry. It is easy for Congressional leaders in Washington to say
``wait until next year'' and use the highway program as a political
football. But that is like telling us and our employees to wait until
next March, or so, for our paychecks. We can't survive like that.
Except for a few large highway contractors, most of us are small
firms and we are going to be badly hurt by a shutdown of the program.
This uncertainty is already having a psychological effect on our
outlook for the future. Contractors are putting off hiring and
purchasing decisions until we have a better idea of where the highway
program is going. This is going to have a strong ripple effect
throughout the economy. If highway contractors aren't hiring or buying,
some other firm isn't selling, and that is going to cause production
and jobs to decline.
It is not just highway contractors and their workers who will be
hurt if Congress does not extend the highway program. The highway
program also affects a lot of other industries. There are engineering
firms that help design and manage highway projects. There are suppliers
of concrete, aggregates and other highway materials. There are
manufacturing firms that build highway construction equipment. Shutting
down the highway program will be like taking a knife to the heart of
these industries.
Research conducted recently by a TCC member took a look at how the
Federal highway program affects two important industries--the
aggregates industry and the construction equipment manufacturing
industry--and I would like to submit the results of those studies for
the hearing record. Concerning the construction machinery industry, the
research found that each $1 billion of government highway construction
spending generates about $300 million of equipment sales. Important
companies like Caterpillar, JI Case, Cummins Engine and a lot of others
are going to take a real pounding if there is no highway program.
Without the $23 billion in highway money enacted for 1998, sales of
construction machinery could go down as much as $6 to $7 billion from
the current level, and that means a hundred thousand people or more
could be temporarily laid off in this industry until Congress acts.
Since the multi-year reauthorization bill is likely to be entangled
in the looming budget battle this winter, it is unlikely that a multi-
year reauthorization bill will be passed until after the second quarter
of fiscal year 1998. I am sure Senator Domenici and members of the
Budget Committee will want to discuss the overall ISTEA authorization
levels in the context of the budget resolution next year. Additionally,
many controversial amendments to the reauthorization bill will still
need to be debated. From what I understand, they will not proceed in
the House until after the budget resolution is completed. Noting that
26 States will be out of funding by March, it is imperative that
Congress pass a bill that provides funding for the Federal-aid highway
program until the multi-year bill is enacted. This expected, extended
delay to reauthorizing the highway program is what makes this a true
crisis to the construction industry.
I am disappointed that the 6-year reauthorization bill was
sacrificed by the insistence that it be the vehicle for campaign
finance reform. Thousands of American jobs and the safety of our
nation's roads are in Congress' hands. This program is too important to
leave unfunded for the months ahead. Please do not leave for the year
without passing an extension of the Federal-aid highway program.
I would like to ask that in addition to our statement the record
include two letters in support of a short-term extension from the
Laborers and Operating Engineers unions; a TCC letter to senators that
describes some of the issues we have discussed in more detail; a FHWA
chart indicating unobligated balances as of September 30, 1997; an
analysis of when States will run out of Federal highway funding; a
Washington Post article entitled, ``Delay of Wilson Bridge Funding
Criticized''; news release from the Iowa Department of Transportation;
and copies of the economic studies I have referenced.
Thank you again for the opportunity to testify. I would be happy to
answer any questions you may have.
__________
Additional Statement from Transportation Construction Coalition
Concerning Senator Bond's Proposal
On behalf of the TCC, I would like to express our gratitude to
Senator Bond for his work in crafting a proposal to extend the Federal-
aid highway program for 6 months. Within one week of unveiling the
proposal, the Senate passed a modified version of the Bond proposal.
Most importantly, the legislation allows States to continue to let
contracts through the spring construction season, thereby saving
hundreds of thousands of jobs.
The TCC strongly supports the flexibility that the legislation
grants to the States to transfer funds from one account to another. As
I mention in my statement, only a limited amount of the unobligated
balances as of October 1, 1997 are available in the core highway
construction accounts of Interstate Maintenance, National Highway
System, and Bridge. Significant balances, however, remain in the
smaller Congestion and Mitigation and Air Quality (CMAQ) and
Enhancement accounts. The CMAQ account has over $1 million in
unobligated balances, while the Enhancement account, within the Surface
Transportation Program (STP) account, has over $900 million. Both the
unobligated balance in the CMAQ and Enhancement accounts exceed what
the accounts were apportioned for the entire fiscal year 1997. The
ability to transfer funds to the needed accounts will enable States to
maximize the use of the limited funds.
While the TCC supports the freedom to transfer funds within the
various categories, we question the need to require States to repay the
accounts from where money is transferred. The reason States will
transfer money from the accounts with large unobligated balances,
namely the CMAQ account and Enhancement account, is because States do
not plan to use that money, as is evident from the large unobligated
balances, and States have much more crucial needs improving their
interstate and national highway system roads and bridges. This debate
has certainly underscored the need to provide States the flexibility to
use their Federal funds to meet their States unique needs and
priorities. While this legislation temporarily provides States this
needed flexibility, we believe next year's multi-year reauthorization
should include permanent flexibility. As our highways and bridges are
crumbling, CMAQ and Enhancement funds are set aside and used, or not
used as is demonstrated by the large balances, for such non-highway
purposes as pedestrian or bicycle facilities, landscaping and
beautification, rehabilitation and operation of historic buildings, or
other non-highway purposes.
Although we would make the aforementioned alteration to the ``Bond
proposal,'' the TCC commends Senator Bond for developing the six-month
compromise legislation and ensuring the continuation of federal-aid
highway program.
__________
Transportation Construction Coalition
member organizations
American Road & Transportation Builders Association (co-chair)
Associated General Contractors of America (co-chair)
American Coal Ash Association
American Concrete Pavement Association
American Concrete Pipe Association
American Consulting Engineers Council
American Portland Cement Alliance
American Subcontractors Association
American Traffic Safety Services Association
Asphalt Emulsion Manufacturers Association
Asphalt Recycling & Reclaiming Association
Associated Equipment Distributors
Construction Industry Manufacturers Association
Equipment Manufacturers Institute
International Slurry Surfacing Association
International Union of Operating Engineers
Laborers-Employers Cooperation and Education Trust
Laborers' International Union of North America, AFL-CIO
National Asphalt Pavement Association
National Association of Surety Bond Producers
National Ready Mixed Concrete Association
National Aggregates Association
National Stone Association
National Utility Contractors Association
Precast/Prestressed Concrete Institute
The Road Information Program
__________
Supplemental Statement by the Transportation Construction Coalition
how soon will states run out of federal highway funding if the highway
program is not reauthorized by september 30, 1997?
If Congress fails to reauthorize the Federal-aid highway program
before the Intermodal Surface Transportation Efficiency Act expires on
September 30, 1997, States will start running out of contract authority
early in 1998, according to an analysis of Senate Appropriations
Committee and Federal Highway Administration (FHWA) data conducted for
the Transportation Construction Coalition (TCC) by the American Road &
Transportation Builders Association's Economics and Research Division.
This would bring to a halt Federal funding for new projects to repair
or construct highways.
Florida is projected to be the first State to run out of regularly-
apportioned Federal highway funds, exhausting its existing unobligated
balance in January, 1998.
Another 10 States will exhaust their Federal highway funds in
February, including Illinois, Michigan and New York.
The majority of States, including California and Texas, are
projected to be out of money by March and almost all will be out of
funds by May.
Without a timely reauthorization of the Federal-aid highway
program, most States will run out of highway funds during the peak of
the spring and summer repair and construction season, according to the
TCC's analysis, causing further deterioration of our nation's highways
and job loss for thousands of highway construction workers.
The TCC analysis is based on data from the Senate Appropriations
Committee and the Federal Highway Administration, and the FHWA's
recently-announced interim allocation of obligation limitation.
If Congress fails to reauthorize the Federal highway program by
September 30, the FHWA plans to distribute an interim first-quarter
Federal-aid obligation limitation among the States, according to
Department of Transportation (DOT) Assistant Secretary for Governmental
Affairs Steven Palmer. \1\
---------------------------------------------------------------------------
\1\ As explained in a July 29, 1997, letter to Senators Bob Graham
and Carl Levin.
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This plan would distribute the obligation limitation appropriated
for FY 1998 (approximately $21.8 billion less administrative and other
expenses) among the States based on each State's share of FY 1997
contract authority under current ISTEA distribution formulas States
would be permitted to obligate one-fount, of the computed amount during
the first quarter of FY 1998. After new authorizing legislation is
enacted, the interim distribution would be adjusted to reflect any
changes in the distribution formulas, so that the full-year
distribution would be under the new formulas.
Although FHWA has not issued plans for distributing obligation
authority past the first quarter of FY 1998 if new authorizing
legislation is not enacted before December 31, 1997, the ARTBA team has
used the interim first quarter formula to project the date at which
each State would exhaust its existing unobligated balance and run out
of authority to spend money on highways if reauthorization is delayed.
The results are presented in the attached table
The first column shows each State's projected allocation for FY
1998 as computed by the Senate Committee on Appropriations, based on
current law distribution formulas and the obligation limit included in
the Senate-passed version of the DOT appropriations bill. These figures
may change slightly when Congress passes the final DOT appropriations
bill this fall.
The second column shows the expected unobligated balance for each
State or. October 1, 1997, (the start of FY 1998) based on data from
FHWA.
The third column shows how much each State would be permitted to
obligate during the first quarter of FY 1998 under FHWA's interim plan.
The final column projects when each State would exhaust its
unobligated balance--and thus run out of new highway funds--assuming
the interim program formula is continued for the rest of the year. \2\
---------------------------------------------------------------------------
\2\ The projections assume States will fully obligate the reminder
of their FY 1997 limitation and the interim obligation limitation for
the first quarter of FY 1998. States that do not fully obligate up to
their limit may be able to extend the date on which they exhaust their
unobligated balances. Since the Federal-aid highway program consists of
separate programs with separate allocations, States will exhaust the
unobligated balance for some programs before the indicated date and
some after. To the extent that a State's unobligated balance is in low-
priority program areas, the State will exhaust funds for high-priority
projects sooner than shown.
---------------------------------------------------------------------------
This does not mean States would have to shut down their highway
program on the date in the fourth column. They would be able to
continue work on existing projects to the extent they were funded out
of earlier allocations or out of State money. But no new projects
dependent on Federal funding could be started.
For most States, the exhaustion of contract authority will occur
just at the peak of the highway repair and reconstruction season,
causing serious disruptions in State programs. Without timely
reauthorization, the delay will cause further deterioration in our
nation's highways.
Questions on the analysis should be directed to Dr. William
Buechner, ARTBA's director of economics and research, at 202-289-4434.
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[From the Washington Post, November 1, 1997]
Delay of Wilson Bridge Funding Criticized
span 's limited life puts region on ``brink'' of crisis, area leaders
say
(By Richard Tapscott)
Washington area leaders said yesterday that Federal delays in
providing money for a replacement Woodrow Wilson Bridge threaten to put
the region on the ``brink'' of a transportation crisis.
With highway legislation bogged down on Capitol Hill, the leaders
called on U.S. Transportation Secretary Rodney E. Slater to develop a
comprehensive funding proposal that Congress can consider when it
returns to work early next year. They asked Slater to name a commission
that would draft a detailed plan within 90 days.
Frustrated that a year has elapsed since plans were unveiled for a
near, 12 lane Wilson Bridge, local business, highway and consumer
groups said it may be difficult to build a replacement in time to avoid
banning trucks or imposing other weight restrictions on the aging span
over the Potomac on the Capital Beltway.
Virginia Transportation Secretary Robert E. Martinez said the
Wilson Bridge, which links Alexandria with Prince George's County, has
seven to nine more years of ``useful life.'' At a news conference
yesterday, Martinez emphasized the time it would take to build a new
bridge. Even if everything goes right," he said, we are right at the
brink of a major, regional transportation crisis."
A spokesman for Slater's department said he could not say whether a
commission will be appointed but added that Slater looks forward to
working with local authorities to ensure the success of the project."
The Wilson Bridge, which is owned by the Federal Government and is
the only drawbridge on the interstate highway system, carries 172,000
vehicles daily, more than twice its design capacity. Because it is six
lanes wide, it is a continual traffic bottleneck for vehicles entering
from the eight lane Beltway on either end. Critics also say the Wilson
Bridge is among the reasons Washington has the second most-congested
highways in the nation.
David L. Instead, Maryland's transportation secretary, said local
officials have done their part in coming to an agreement on a $1.6
billion bridge plan as the replacement. We still don't have a critical
Federal response.'' Winstead: said.
In a letter to Slater, AAA President Robert L. Darbelnet decried
the fact that the project had come to a standstill. ``With each passing
day 172,000 vehicles pass over the bridge, making it a little less
structurally sound and bringing it closer to the day when traffic
restrictions we have to be imposed.
Restrictions could force Interstate 95 truck traffic onto already
congested alternate routes through the District or into Maryland via
the American Legion Bridge.
A Senate highway construction measure, fashioned by Sen. John W.
Warner (R-VA), would set aside $900 millon for a replacement bridge.
The House counterpart bill contains no dollar figure for the bridge.
Both bills have been stymied by unrelated issues and are not expected
to be acted upon until next year. The Clinton administration had
proposed only $400 million for the bridge, an amount that Martinez
yesterday ceded ``ridiculous."
If the money for building a replacement span were available now and
construction went perfectly, Martinez said a new bridge might be built
before weight restrictions had to be imposed.
John J. Collins, a senior vice president of the American Trucking
Associations, said the bridge has the highest accident rate on the
Beltway. His organization, Collins said, wants the Federal Government
to pay for a bridge and opposes tolls for safety reasons.
Lon Anderson, a spokesman for AAA Potomac, said disaster is still
preventable. However, he added, ``We have no money, and time is running
out.''
__________
[From the Iowa Department of Transportation, October 30, 1997]
Lack of Congressional Action Could Be Devastating to Iowa's
Transportation Program and Economy
dot schedules news conference
Ames, IA.--The failure of Congress to pass a Federal highway
financing bill may prove devastating to Iowa's sound economy, public
safety, and future highway improvements.
Tuesday, October 28, 1997, the Senate apparently abandoned its
efforts to authorize a new highway and transit bill denying Iowa and
other States essential funds for construction of highways and bridges,
highway safety programs, and for mass transit programs. According to
reports, Senate Majority Leader Trent Lott of Mississippi pronounced
the highway measure "apparently dead for the year."
To reveal the potentially disastrous impact on Iowa's
transportation program and the construction industry the DOT will be
holding a special news conference Friday, October 31. DOT Director
Darrel Rensink will speak about how a lack of Federal funding will
affect bid lettings scheduled for January through March 1998.
Representatives from the Associated General Contractors of Iowa,
Iowa Concrete Paving Association, Asphalt Paving Association of Iowa,
and the Iowa Limestone Producers Association, Inc. will share their
organization's reaction to the news.The news conference will be held at
the State Capitol, Room 118, in Des Moines, beginning at 10:30 am.
______
Ames, IA.--Tuesday, October 28, 1997, the Senate apparently
abandoned its efforts to authorize a new highway and transit bill
denying Iowa and other States essential funds for construction of
highways and bridges, highway safety programs, and for mass transit
programs. According to reports, Senate Majority Leader Trent Lott of
Mississippi pronounced the highway measure ``apparently dead for the
year.''
Iowa receives over $200 million in Federal funds for highway and
bridge construction each year. Without Federal funding, the DOT will be
unable to proceed with the planned contract lettings for next year.
Additionally, contracts planned by counties and Sties will also be
impacted.
According to Darrel Rensink, director of the Iowa Department of
Transportation, ``Iowa has enough money in the pipeline to last through
the month of January 1998. However, I'm going to postpone my decision
about whether to proceed with the February letting for 30 days. The
decision about whether to hold the March letting, and those beyond, is
being postponed indefinitely.),
Delaying contracting of projects could postpone the completion of
many projects for another year. The DOT's current schedule shows over
$233 million in highway and bridge construction projects being let in
January through March of 1998.
A lack of Federal funds will directly affect the continued
development of Iowa's six mayor highway corridors included in the DOT's
Transportation Improvement Program. The six corridors are Avenue of the
Saints, Des Moines to Burlington, Iowa 5 in Polk and Warren Counties,
Iowa 60 from Sioux City to the Minnesota State line, Iowa 330 from Des
Moines to Marshalltown, and U.S. 151 from Cedar Rapids to Dubuque.
Since the Federal highway program expired September 30, Iowa has
been using unobligated Federal funds to keep as many programs going as
possible. However, the DOT is running out of Federal money and a fiscal
impasse is expected early next year.
__________
Transportation Construction Coalition,
Washington, DC, October 30, 1997.
The Honorable John W. Warner, Chairman
Subcommittee on Transportation and Infrastructure
Senate Office Building
Washington, DC. 20510
Dear Senator Warner: The 26 member organizations of the
Transportation Construction Coalition support a multi-year
reauthorization of the Federal surface transportation program funded at
the highest level that can be supported through the Highway Trust Fund.
If this is not possible before Congress adjourns this year,
however, it is essential that the programs in the Intermodal Surface
Transportation Efficiency Act of 1991 (ISTEA) be temporarily extended
until a new multi-year authorization can be passed. To minimize
disruption to the program, which would compromise highway safety and
cause economic hardships to our industry, we suggest that such a
temporary extension by Congress include the following provisions:
The duration of the extension should be a minimum of 6 months,
preferably at least 8 months. State departments of transportation must
make funding and contracting plans well in advance of the typical
March-October peak construction and maintenance period. That requires
an assured source of timely Federal support. If Congress adjourns
without either enacting new multi-year authorizing legislation or
extending the current program at least 6 months, most States will lose
much or all of the 1998 construction season.
The Federal Highway Administration must remain operational. Failure
to provide additional spending authority for the highway program could
result in a virtual shutdown of the Federal Highway Administration in
the near future. The agency's administrative operations are largely
financed by set-asides from funds authorized for individual highway
construction programs. Just as there are some unobligated funds
available for State construction activities, the agency has a limited
amount of carry-over funds for operations. These funds are likely to be
exhausted by the end of 1997 and FHWA could be forced to shut down.
Such a situation would end the agency's oversight of program activities
and would prohibit the payment of salaries to FHWA employees. A short-
term extension of ISTEA would prevent a shutdown of the Federal Highway
Administration.
If Congress does not pass a multi-year reauthorization bill this
year, an extension of the existing ISTEA legislation should temporarily
allow States to flex money among the various categorical programs to
meet their most pressing transportation needs. Since an extension will
provide new budget authority for only a short period of time, States
should be allowed to use the money where it is most needed by
temporarily transferring spending authority from lower-priority
programs. When a new multi-year program is passed, the States that made
use of this flexibility could be required to restore the categorical
balances.
Any extension of the current program should allocate apportioned
funds to the States according to a timetable designed to support their
construction needs. The six-month extension passed by the House of
Representatives (H.R. 2516) instructs the Secretary of Transportation
to distribute half of the obligation limitation for FY 1998 on October
1, 1997, and half on July 1, 1998. July 1, however, comes too late for
the 46 States which have fiscal years that begin on July 1 and end on
June 30. Many of these States would have only half of their FY 1998
distribution in time to accomplish their FY 1998 construction programs.
We urge that the second distribution be made on April 1, 1998, giving
the States the funds they need in a timely manner and without
interruption.
The attached correspondence is offered for your background. We hope
these suggestions are helpful.
Sincerely,
The Transportation Construction Coalition
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International Union of Operating Engineers,
Washington, DC, November 3, 1997.
Senators John H. Chafee and Max Baucus,
Senate Committee on Environment and Public Works
Washington, DC 20510
Dear Chairman Chafee and Ranking Member Baucus: The International
Union of Operating Engineers (IUOE) represents 400,000 members
throughout the country, the majority of whom are skilled heavy
equipment operators in the construction industry. We have been actively
engaged with other building trades unions, as well as our construction
industry counterparts, in seeking reauthorization of ISTEA. While you
both have worked diligently to pass a comprehensive six-year bill in
the Senate. other extraneous political issues thwarted that effort As a
result, the Senate now faces the choice of a short-term extension or no
extension of ISTEA in the final days of this session of Congress.
On behalf of our hard-working members who earn their livelihood
building the transportation infrastructure of this country, we strongly
encourage you to advocate passage of six-month ISTEA extension similar
to what the House has passed. While a six-month bill may be less than
ideal in addressing the range of transportation infrastructure issues
which a more comprehensive bill should to, nonetheless Congress must
ensure that badly needed highway and transit funds keep flowing to the
States. The IUOE will continue to aggressively work with you in the
coming months as Congress considers and passes the necessary multi-year
ISTEA reauthorization.
Thank you again for your continued leadership on this critical
piece of legislation.
Sincerely,
Frank Hanley,
General President.
__________
Statement of James R. Thomas, Jr., P.E., FACEC, President, American
Consulting Engineers Council
Mr. Chairman and members of the Committee, thank you for the
opportunity to share with you the views of those who, working in
partnership with State transportation departments, plan and design our
nation's surface transportation systems. My name is Jim Thomas and I am
a managing partner of George, Miles & Buhr Engineers-Architects in
Salisbury, Maryland.
The American Consulting Engineers Council (ACEC) is the largest
trade organization of its kind, representing over 5,700 consulting
engineering firms from across the country, employing some 250,000
people. Our members are consultants to public and private entities, and
furnish professional services in planning, engineering, maintenance,
and operation of our nation's transportation systems.
Our message today is a simple one. Congress should not adjourn its
First Session without completing one of its basic responsibilities, the
reauthorization of the Intermodal Surface Transportation Efficiency Act
of 1991 (ISTEA).
Mr. Chairman, ACEC testified this past March before the
Transportation and Infrastructure Subcommittee that the delivery of
transportation projects in this country is taking too long and is
costing American taxpayers in terms of delayed safety, convenience and
economic vitality. We submitted a number of recommendations that would
shorten the average delivery time of projects from 10 years to 7 years
without weakening our environmental laws or limiting public or agency
participation in the planning of projects.
Our proposals were embraced by Senators and Members of Congress on
both sides of the aisle and have been included in the underlining ISTEA
reauthorization bills pending in both the House of Representatives and
the U.S. Senate.
When ACEC made its recommendations and estimated the impact they
would have on the project delivery schedule, a key underlining
assumption was that ISTEA would be reauthorized before the September
30, 1997 expiration date. Should Congress adjourn without even enacting
a temporary extension of the ISTEA program, then the gains that might
have been made with respect to the ``timesaving'' project delivery
schedules included in both S. 1173 and H.R. 2400 will be lost in both
the short- and long-run.
I want to share with you what ACEC members, many of them small
business owners, are saying about the impact shutting down the ISTEA
program will have on their lives, jobs, and the nation's transportation
system. These quotes are from actual letters sent to their Senators on
this very issue.
A Professional Engineer from Missouri writes: ``I am very concerned
that a new Highway Bill has not passed or the current ISTEA Program
extended. With the start of the new fiscal year, I am already seeing
projects that are ready to be constructed being held up due to funding
issues in Washington. Further delays may hurt the economy due to lack
of construction projects; and, with the coming of winter, jobs may also
be lost.''
A Civil Engineer from Wisconsin writes: ``Congress' non-support
(for enacting a short-term extension) will have an economic impact. I
am President of a consulting firm in Wisconsin, employing over 200
people, and a lack of funding for road and highway projects will cause
a real loss of jobs. We will not have sufficient work to keep our staff
of Transportation Engineers and Technicians gainfully employed.''
A Professional Engineer and Chairman of the Board for a consulting
engineering firm in Florida writes: ``A six-month loss of Federal
funding would have an unacceptable negative impact on our economy,
costing up to 42,000 jobs for every $1 billion delayed, would increase
the level of public health and safety concerns, and would significantly
increase the cost of delayed projects. This company will personally
feel that impact, as we are currently performing approximately $3
million in annual services for the Florida Department of
Transportation.''
Mr. Chairman, these are not isolated comments but just a mere
sampling of the hundreds of letters ACEC members have been sending
their Senators about the impact of not reauthorizing ISTEA.
ACEC members are not alone in their views. The American Association
of State Highway and Transportation Officials surveyed the States on
the impact to department operations of letting the program lapse.
Idaho, for example, reports that postponing Federal project development
activity would have disastrous consequences for the timely progress of
projects. Moreover, federally assisted preliminary engineering,
(including consultant contracted work), right-of-way acquisition, and
planning activities would no longer proceed.
Mr. Chairman, stopping the program even for a brief period will
also impact project delivery schedules in the long-run. If preliminary
engineering and design work is not allowed to proceed, then
construction will not occur and, in fact, be deferred into a second
construction season, thus crowding out and delaying projects that were
planned for the second year. The effect would be a rippling delay that
may take years for States to fully recovery. More importantly, projects
that effect safety will be deferred.
In closing, Mr. Chairman, ACEC urges you and the other
distinguished members not to let ISTEA's program lapse. There is still
time for the Senate to do its job to enact a short-term extension of
ISTEA so that ACEC members may continue do our job, which is to design
high quality and safe highways, bridges and transit systems for the
American people.
Thank you, Mr. Chairman, for giving ACEC this opportunity to
include our views for the record.
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