STATEMENT OF SENATOR GEORGE V. VOINOVICH

SUBCOMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

FEDERAL HIGHWAY ADMINISTRATION

FISCAL YEAR 2004 BUDGET REQUEST

FEBRUARY 27, 2003

Thank you, Mr. Chairman, for conducting this hearing today on the Federal Highway Administration’s (FHWA) fiscal year 2004 budget request.

Mr. Chairman, as the infrastructure built in the 19^th and 20^th Centuries reaches the end of its useful life, we are now faced with the question of how to fulfill current requirements and make improvements to our infrastructure that will best serve the nation in the 21^st Century.

It is no secret that this nation has an aging transportation infrastructure. According to FHWA’s 2002 Conditions and Performance Report, the average annual investment level needed to make improvements to highways and bridges is projected to be $106.9 billion through 2020. This level of investment is required for system expansion and does not include the costs of routine maintenance. This amount is 65.3 percent higher than the $64.6 billion of total capital investments spent by all levels of government in 2000.

In Ohio, the costs to improve the state’s infrastructure are high. For example, the Brent Spence Bridge that carries Interstate 75 across the Ohio River into Kentucky is in need of replacement within the next 10 years at a cost of about $500 million.

The average annual investment level necessary to maintain the current condition and performance of highways and bridges is projected to be $75.9 billion through 2020. Again, this level of investment does not include the costs of routine maintenance. This amount is 17.5 percent higher than capital spending in 2000.

If we continue to ignore the upkeep, and allow the deterioration of our infrastructure, we risk disruptions in commerce and reduced protection for public safety, health, and the environment. In my view, it is the responsibility of Congress to ensure that funding levels are adequate and efficiently allocated to our nation’s priority needs.

The purpose of this hearing is to determine whether the Administration’s budget proposal and upcoming reauthorization proposal will be sufficientadequate to meet the nation’s transportation needs. I am concerned that under the Administration’s proposal, highway funding would not even reach current spending levels until fiscal year 2007.

In 1998 Congress recognized the importance of the nation’s transportation system through the enactment of the six-year Transportation Equity Act for the 21st Century (TEA-21). TEA-21), which increased by nearly 40 percent federal investment in highways and transit. Under TEA-21, Ohio received a 23 percent increase in transportation funding.

As Chairman of the National Governors Association, I was involved in negotiating TEA-21 and lobbied Congress to ensure that all Highway Trust Fund revenues were spent on transportation. I also fought to even out highway funding fluctuations and assure a predictable flow of funding to the states. TEA-21 achieved this goal with record, guaranteed levels of funding.

However, more recently, as evidenced by last year’s negative Revenue Aligned Budget Authority (RABA) calculation of $4.4 billion, we need to find a better way to smooth out the effects of fluctuating trust fund receipts for the long-term without adding to the federal budget deficit.

TEA-21 also dedicated nearly all highway gas taxes to transportation funding and guarantees that states will receive at least 90.5 percent of their share of their contribution to the highway account of the Highway Trust Fund. One of my top priorities for TEA-21 reauthorization is to increase Ohio’s minimum share to at least 95 percent. This increase in Ohio’s rate of return would generate an additional $140 million in transportation revenues for the State of Ohio, realizing that the states that have to give up that funding will have to be taken care of.

While TEA-21 has enabled states and localities to improve the condition of deteriorating and unsafe highways and to increase capacity and performance, the system is still aging, and in need of additional investment.

As a member of this Subcommittee – and its former chairman – I am eager to work on the reauthorization of the surface transportation program. I understand that certain groups are talking about funding levels of up to $60 billion a year, which is supported by the Performance and Conditions Report I mentioned earlier.

The short- and long-term viability of the Highway Trust Fund to meet our transportation needs is an issue that will be discussed in the coming months. In the short-term, we will have to determine the annual funding level the Highway Trust Fund can sustain and still meet its obligations. With our country’s finances already in the red, I do not think we can expect that additional resources outside the Highway Trust Fund will be available for highway projects.

In fact, in fiscal year 2002, we suffered a budget deficit of $317 billion. In other words, we spent the entire $160 billion Social Security surplus and then had to go out into the private markets and borrow an additional $158 billion.

And according to OMB’s numbers, even though we kept discretionary spending down in fiscal year 2003 and the President’s fiscal year 2004 budget keeps discretionary spending to an increase of 4 percent, we will still suffer budget deficits of close to half a trillion dollars ($468 billion and $482 billion, respectively) in each of fiscal years 2003 and 2004. This does not include what would happen if there is a war.

We must plan for the future based on the principle that the highway program is a fully user-fee based system that pays its own way. I will not support borrowing more money for highways and have my children and grandchildren pay for it. I believe everyone on this Subcommittee should support that position.

I am pleased the Administration’s budget request proposes that all revenue fromform gasohol taxes be deposited into the Highway Trust Fund rather than the General Fund of the Treasury, something many of my colleagues have asked for these last few years. This fix would provide Ohio with an additional $50 million a year in highway funding. I urge my colleagues to support the Administration’s proposal.

Mr. Chairman, another of my priorities for reauthorization is to enact an environmental streamlining provision which will actually expedite the project delivery process. I am disappointed with the implementation of the environmental streamlining provisions included in TEA-21, and I regret that we may have wasted an opportunity to realize the benefits of the expedited process that we envisioned five years ago.

In addition, as Chairman of the Clean Air Subcommittee, I will be looking closely at the effectiveness of conformity and the Congestion Mitigation and Air Quality Program (CMAQ).

Finally, I would like to thank Administrator Peters for testifying this morning on her agency’s budget request for fiscal year 2004. I hope the Administrator will also share with the Committee the highlights of the Administration’s reauthorization proposal and when that proposal might be sent to Congress for its consideration.

Again, thank you, Mr. Chairman, for holding this hearing. I look forward to working with you on reauthorization in the upcoming weeks and months on this reauthorization.

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