President Barack Obama’s budget could let money raised from the federal gas tax be spent on programs other than building roads and supporting transit.
Obama’s fiscal year 2010 budget would eliminate the “contract authority” that lays out how much the federal government will distribute in highway and transit aid over a six-year period, said Tom Walker, director of government affairs for the Wisconsin Transportation Builders Association.
The change would basically lump money collected from the federal gas tax and truck-related taxes in with other government revenue and leave that money available for use in other areas, he said. Now, money collected from the gas tax is put in the Highway Trust Fund and must be spent annually, Walker said. Eighty percent of the trust fund is used for road projects, and 20 percent is used for transit projects, he said.
Obama’s proposal would let the Highway Trust Fund fluctuate annually and make it “virtually impossible” for state governments to plan long-term road projects, Walker said. It might even result in less money being set aside for highway projects, he said.
It also brings up issues of fairness, Walker said. If someone pays a fee at a national park, that person expects the fee to support the park, he said. The same is true of the Highway Trust Fund.
“The system has worked since 1956 for crying out loud,â€ Walker said. â€œWhy change it?”
In his budget proposal, Obama said the change will make the U.S. Department of Transportation’s budget more transparent. It also will more accurately reflect how much it costs to maintain the nation’s roads and bridges, according to the proposal.
Both are necessary because the Highway Trust Fund is running a deficit due to declining revenue from the gas tax, according to a 2008 study by the U.S. Government Authority Office.
The federal gas tax in 2008 was 18.3 cents per gallon of gasoline and 24.3 cents per gallon on diesel.
But Tom Howells, president of the 1,150-member Wisconsin Motor Carriers Association, said it should be a simple issue. Trucks, buses and cars using highways pay the taxes for the Highway Trust Fund, and that money should go back into maintaining highways.
“Our members pay a lot in highway user fees, and that’s OK because we use the highways,” Howells said.
“Our members get frustrated when they see those fees being used for something else.”
Opponents of Obama’s budget proposal say it will eliminate a “firewall” enacted in 1998 to prevent federal highway money from being spent elsewhere in the government.
U.S. Rep. Tom Petri, R-Wis., signed on to a letter written by the American Trucking Association opposing the change. Petri helped pass the “firewall” to protect highway money, said his press secretary, Niel Wright.
“If the firewall is destroyed, there will be less money in trust fund, and everybody gets less,” Wright said.
“That is objectionable. Our highways are crumbling. We need more money than we’re getting to make our highways safe and for the economic benefit a safe system provides.”
Republicans and Democrats signed on to the letter opposing the change. Obama’s proposal would have to be stripped out of the budget by the House or Senate, Wright said.