STATEMENT OF SENATOR JOHN H. CHAFEE
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
SUBCOMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Oversight Hearing on the Reauthorization of the
Intermodal Surface Transportation Efficiency Act.
February 26, 1997

Thank you, Mr. Chairman. I would like to welcome all of our distinguished witnesses and especially to congratulate the newly confirmed Department of Transportation Secretary, Rodney Slater. I am pleased to participate in this, the second hearing this year on reauthorization of the Intermodal Surface Transportation Efficiency Act.

The purpose of today's hearing is to receive testimony on the Administration's proposal for ISTEA reauthorization and ISTEA program performance.

As all of you know, there is a strong federal interest in the smooth and safe operation of the nation's transportation system. ISTEA provided us with the laudable goals of intermodalism, efficiency, and flexibility to balance the strong national interest with the diverse needs of States and localities.

I would like to commend the Department for preserving and building on the key goals of ISTEA in its reauthorization proposal. Transportation policy would be a great deal simpler if it concerned only one or two factors, such as minimizing travel time for commuters. In the real world, however, transportation is but one part of a complex web of competing and often conflicting demands. The Administration's proposed program structure addresses these conflicting interests and maintains the delicate balance between national standards and State and local flexibility in carrying out those standards.

I am also pleased about the Department's decision to include strong innovative finance provisions in its proposed bill. Fiscal constraints compel us to reach out for creative ways of financing our substantial infrastructure needs. Innovative financing provides an opportunity for new revenue sources to address transportation needs, freeing the more traditional funding sources such as gas taxes to be invested in the maintenance of transportation investment already in place. The Administration's decision to expand the State Infrastructure Bank or "SIB" program and to create a new infrastructure credit program demonstrates a solid commitment to getting the most out of limited federal resources. These ideas, along with others, such as the legislation to encourage private sector participation introduced by Senators Warner, Moynihan, Bond and I, will help strengthen the role of innovative finance solutions in surface transportation.

Now let me turn to the controversial issue of funding formulas. Although the details of the Administration's proposed formula structure are not clear this time, I am concerned about the apparent focus of its formula on gasoline taxes and other trust fund contributions.

I believe that gas taxes are a simple and efficient way to raise revenue for transportation. In fact, Senator Bond and I are co-sponsoring a bill to strengthen the relationship between gas taxes and other trust fund contributions and transportation spending.

Gasoline taxes and other contributions, however, should not drive national policy. Rather, our national transportation program should focus also on needs, as do almost all other federal programs.

Using gas tax contributions as the primary means of distributing funds provides incentives that undermine ISTEA's goal of efficiency. Under a tax-driven scenario, States that use the most gas receive more money and are wrongly perceived to have greater needs than States that move people and goods more efficiently. Moreover, this policy discourages innovation. I am hopeful that we can continue to accommodate fairness and needs in funding surface transportation and look forward to working with the Department to ensure that all of the nation's transportation needs are addressed.