IDAHO TRANSPORTATION DEPARTMENT
U.S. Senate Subcommittee on Transportation and Infrastructure
Field Hearings Relating To
SURFACE TRANSPORTATION PROGRAM REAUTHORIZATION
Coeur d'Alene, Idaho
March 22, 1997
Dwight Bower, Director

On behalf of the Idaho Transportation Department, I would first like to thank Senator Warner, Senator Kempthorne and Senator Baucus for holding this hearing in Idaho and for giving us the opportunity to personally present our positions concerning the upcoming reauthorization of the surface transportation program. I know how busy your schedules all are and I sincerely appreciate the great efforts that you and your staffs have made in setting up and attending this hearing. I would also like to acknowledge the members of the Idaho Transportation Board whose attendance here today emphasizes their commitment to improving transportation in Idaho.

As most of you are aware, the Idaho Transportation Department has for the last few years been working with the transportation departments of Montana, North Dakota, South Dakota and Wyoming to develop positions and advance the interests of our citizens in legislation to reauthorize Federal surface transportation programs. Marv Dye, Director of the Montana Department of Transportation has joined me here today. Together we will present reauthorization positions on behalf of all five states in our coalition. The full written statement of the 5 States has been provided to the Subcommittee and we understand it will be included in the record of this hearing. In our remarks today I will present our views on three key elements and Mr. Dye will follow with our views on three additional elements.

Before turning to specifics, I want to first begin by expressing our support for the "Surface Transportation Authorization and Regulatory Streamlining Act" or "STARS 2000" which will soon be introduced by Senators Kempthorne, Baucus, Thomas and others.

Senator Kempthorne, we at the Idaho Transportation Department feel that this bill will do more to improve transportation in Idaho than other Federal reauthorization legislation that has been proposed. It will allow us to deliver more transportation improvements to our citizens, including those in our cities. Senator Baucus, Senator Thomas and you have done this in a way which is broad in focus and is nationally responsible. You are to be commended for your work in developing this thoughtful initiative.

With our support for "STARS 2000" in mind, let me address the three key elements which this legislation will achieve:

1. Increase federal-aid highway program funding levels; 2. Emphasize funding for the National Highway System; and 3. Implement formulas for distribution of federal-aid highway funds to the states which are fair.

1. Increase Federal-aid Program Funding Levels: Highways are the primary way in which people and goods are transported from one part of our nation to another. Investment in surface transportation creates jobs and increases our competitiveness in international markets. America's economic well-being is critically dependent on an efficient transportation system. AASHTO's "Bottom Line" report of April, 1996, shows that current and future highway needs far exceed the amount of money now being invested in highways. Even with the additional high level of transportation funding now being supplied by state and local governments, critical needs are not being met and the condition of our country's infrastructure is continuing to deteriorate. At the current federal funding level for highways of approximately $20 billion per year, an additional $10.7 billion is needed annually just to maintain the existing system at its present condition and an additional $18.8 billion per year to upgrade the system's capacity and physical condition. Obviously, a higher level of federal investment is absolutely necessary to help resolve this deficiency, both nationally and in Idaho.

We strongly urge your support for a new surface transportation act which will authorize spending from the Highway Trust Fund at the highest level sustainable under the "Byrd Amendment." Given current levels of user taxes, that would be a level of approximately twenty- six to twenty-seven billion dollars ($26-27 billion) annually. Let me add, Senator Warner, that we appreciate that your proposal, as well as STARS 2000, also calls for a $26 to $27 billion level of investment. We appreciate your leadership, as well as that of Senators Baucus and Kempthorne on this issue. In addition, we also support transferring the 4.3 cents in Federal gas tax now going to the General Fund for deficit reduction to the Highway Trust Fund where those revenues can be used for transportation purposes. This transfer would allow an additional six billion dollar investment to be made in transportation.

2. Emphasize Funding for the National Highway System: We support adoption of a federal- aid highway program with two "core" funding programs - a National Highway System program and a Surface Transportation Program. We believe that sixty percent (60%) of the core program funds should be directed to the NHS program.

The National Highway System (NHS) consists of the Interstate System and those other principal arterials that were approved by Congress as having national significance. The Federal government must increase its investment in the NHS. There is a strong Federal interest in providing and maintaining a national transportation network which binds our nation together and which provides for economic growth and competitiveness, national defense and personal mobility. If we are to continue to prosper as a nation we must have a surface transportation system which connects regional, national and international production areas and markets together. We must be able to get agricultural products and raw materials to our metropolitan centers and manufactured goods to rural areas. An efficient and well-maintained National Highway System is crucial to Idaho and the nation.

Federal funding for the National Highway System should be increased. State and local governments already provide a majority of the total funding for transportation. It would cause serious problems for us in the West if Congress were to choose not to significantly increase funding for the NHS. Many states are unable to raise state fuel taxes sufficiently to provide the money necessary to support highways which are national in character and usage.

3. Implement Fair Formulas for Distribution of Federal-aid Funds: One of the most significant issues which the Congress will have to consider during the reauthorization of ISTEA is how to implement distribution formulas which apportion federal-aid funds to the states. The formulas chosen should fairly reflect the extent, usage and other specific characteristics of the nation's transportation system, both urban and rural. We are committed to work with the Congress and local governments to establish a fair and equitable distribution of federal-aid funding. A continuing partnership between federal, state and local governments is essential for achieving our common goals.

I want to make it clear that, for the formulas to serve national interests and the interest of our states and local governments, there must continue to be a "donor/donee" relationship among the States. There are at least three compelling reasons why we believe that states like ours should continue to receive a higher percentage of highway funds from the Highway Trust Fund than they contribute: a) Low population density, b) Federal lands and c) "Bridge" state status.

Low Population Density - Because of their inability to generate sufficient tax revenues, rural Western states and some small states with low populations are often "donees." These states do not have a population base which is sufficient to generate tax revenues which will support an adequate transportation system. Idaho, for example, has a land area of over 83,000 square miles, but a population of just over one million. The result of this low population density is an inordinate tax burden on our citizens. Idaho ranks fourth in the nation in total state and federal fuel taxes paid per capita. Our state fuel tax is 25 cents per gallon, one of the highest in the nation. As a result, Idahoans pay $316 per capita in fuel taxes annually, compared to the national average of $220 per year. This is nearly $100 dollars more per person than the national average that our citizens must pay per year.

Federal Lands - In the Western states the inability to raise sufficient tax revenues is compounded by the fact that a large percentage of their lands are under Federal ownership and cannot be taxed by the states. In Idaho, Federal lands make up sixty-four percent (64%) ,or nearly two-thirds of the total land area. In spite of the Western states inability to receive tax revenues from Federal lands, our state and local governments are responsible for maintaining many thousands of miles of highways which pass through and provide access to these public lands and their resources.

"Bridge" States - Many of the Western states also serve as "bridge" states, providing a vital link for commerce and travel between the East and West coasts and also as north-south trade corridors between Canada and Mexico. In Idaho, US-95 has become a major route for the transportation of Canadian goods into the United States. In 1987 approximately 22,000 trucks were crossing the Canadian border into Idaho annually at Eastport. By 1995 that figure had almost doubled to 40,000 a year and rose to nearly 46,000 in 1996, an increase of 6,000 in just one year. Nearly two-thirds of the truck traffic traveling across southern Idaho on Interstate-84 is cross state traffic. Under Federal law, the cost of maintaining these and other Idaho routes which serve both national and international interests, must be borne by the citizens of Idaho, but the nation benefits.

Distribution Formulas and Policies:

I will now turn to the five points we feel should be made concerning distribution formulas for federal highway program funds:

1)~ NHS~: Sixty percent (60%) of the funds for the two core highway programs should be provided for the National Highway System. This system carries a majority of the nation's commerce and traffic and is critical to our economy, national defense and mobility.

2) Federal Lands: States with a significant percentage of Federal lands should be compensated for their inability to tax those lands by using that percentage as a factor in determining the distribution of federal funds. Also, funding for the Federal Lands programs should be increased and the use of program funds should be more flexible.

3) NHS and STP formulas: These formulas should reflect the actual extent and useage of the nations transportation system, both urban and rural. NHS factors should include (1) lane-miles, (2) vehicle miles of travel (VMT) and (3) a special fuels factor. The STP formula should include (1) Federal-aid system lane-miles and VMT, (2) bridge surface area, (3) percent of Federal lands, and factors such as (4) air quality, (5) freeze/thaw conditions and ( 6) population/lane mile.

4) Apportionment Adjustments: We believe that it is also fair and equitable that small and low- population density states receive a minimum percentage of program funding approximately equal to the percentage specified in the "hold harmless" provisions of Section 1015 of ISTEA.

5) Minimum Allocation: If the four points I have just stated are included in the reauthorization legislation, then in the context of proposals such as "STARS 2000", increasing the minimum allocation percentage from ninety (90%) to ninety-five percent (95%) and applying it to a larger percentage of the overall program is possible.

In reference to the proposed "STARS 2000" legislation, we believe that all five of these key points concerning federal-aid distribution formulas and policies have been fairly and adequately included.

In closing, I would like to comment again on the efforts of Senator Kempthorne, Senator Baucus and Senator Thomas to introduce into Congress the "STARS 2000" act which would reauthorize ISTEA in a manner that will ensure that our nation's surface transportation program will be strong and efficient into the next century. "STARS 2000" fully represents the principles I have presented to you today such as increased federal funding to the states, consideration for the special circumstances of small and low-population density states by guaranteeing them a minimum percentage of program funds and a fair share of the national surface transportation program funds for our states. The legislation which has been introduced by Senator Warner has many of the same principles and program improvements which are contained in "STARS 2000" and we appreciate the willingness of the Chairman and the others who sponsored and worked on his legislation to work with our coalition and to listen to our concerns. We hope to continue this cooperation and willingness to work together throughout the Congressional reauthorization process.

Again, I want to reemphasize our support for the "Surface Transportation Authorization and Regulatory Streamlining Act" or "STARS 2000" which will soon be introduced by Senator Kempthorne, Senator Baucus, Senator Thomas and others. I congratulate the Senators and their staffs on the thought and preparation that went into producing this legislation. The Idaho Transportation Department and the other members of the 5-State Coalition fully support this legislation and would urge everyone here to give this bill their support also.

In conclusion, I thank you once again for giving me this opportunity to present our testimony to the Subcommittee. Marv Dye, Director of the Montana Department of Transportation, will present the 5-State Coalition's remaining three key positions on reauthorization.