TRANSPORTATION

In July 2005, Congress passed a five-year surface transportation reauthorization bill to keep commerce and traffic flowing smoothly across our nation. Senator Levin helped lead the fight to address the inequity in past highway bills by increasing states’s minimum return on contributions to the Highway Trust Fund in gas taxes. Donor states like Michigan have historically sent more federal gasoline tax dollars to Washington than they receive back therefore subsidizing the road and bridge projects of other states. Under this bill, Michigan's rate of return would reach 92 percent. This would be an increase from the previous level of 90.5 percent.

The bill provided a total of $286 billion in highway and transit funding. Michigan will receive an average of $1.123 billion in highway funding per year. This is an increase of $239 million from the previous law (TEA-21.) In addition to the $1.123 billion per year, Senator Levin helped secure an additional $100 million in funding for Michigan's highway Projects of Regional and National Significance. The bill is expected to create over 61,500 new jobs in Michigan.

The formula that distributes federal highway funds to states is antiquated and inequitable and has discriminated against Michigan and other states for 50 years since the interstate system was first legislated. Historically, about 20 states, including Michigan, have been “donor” states, sending more gas tax dollars to the Highway Trust Fund in Washington than are returned in transportation infrastructure spending. The remaining 30 states, known as “donee” states, have received more transportation funding than they paid into the Highway Trust Fund.

This unfair practice began in 1956 when small states and large Western states banded together to develop a formula for distributing federal highway dollars that advantaged themselves and disadvantaged the remaining states. Once that formula was in place, they have tenaciously defended it.

At the beginning, there was some legitimacy to the concept that large, low-population, and predominately Western states needed more funding than they contributed to the system. It was necessary in order to build a national interstate highway system. However, with the national interstate system completed, the formulas used to determine how much a state will receive from the Highway Trust are simply unfair.

Each time the highway bill has been reauthorized, Senator Levin, along with colleagues from other donor states, have fought to correct this inequity in highway funding. Over the years, through these battles, some progress has been made. For instance, in 1978, Michigan was getting around 75 cents back on our federal gas tax dollar. The 1991 bill brought us up to approximately 80 cents per dollar, and the 1998 bill guaranteed a 90.5-cent minimum return for each state. This bill will bring Michigan to 92 cents per dollar by fiscal year 2008.

In its effort to pass a new highway bill, the Senate twice passed bills that would have been even better for Michigan and other donor states in terms of the rate of return than the final bill. The first Senate-passed bill died in conference due to President Bush’s veto threat and his unwillingness to accept the funding levels in either the House or Senate bill. The second Senate-passed bill was modified in the conference with the House of Representatives.

The bill that was signed into law by the President has less overall funding than either of the Senate passed bills and does not go as far as it should in closing the funding gap. However, the legislation still allows Michigan to make a little progress toward achieving equity. Michigan will go from a current 90.5 percent minimum rate of return on its gas-tax contributions to the Highway Trust Fund to 91.5 percent in fiscal year 2007 and to 92 percent in fiscal years 2008 and 2009.