Sen. Hutchison Says Highway Funding Formula No Longer Serves Best Interests of States

Introduces Bill Allowing States to Opt Out of Federal Highway Program

April 28, 2009

WASHINGTON, D.C. – Senator Kay Bailey Hutchison (R-Texas), the Ranking Member on the Senate Commerce, Science, and Transportation Committee, made the following statement today during a Commerce Committee hearing on the future of surface transportation.


“Thank you Mr. Chairman.  I do thank you for holding this hearing today.  It is the first hearing of this committee to consider the many important issues we confront in reauthorizing our nation’s surface transportation programs, which expire in September.  I believe there is a proper federal role in promoting the safety and security of our national transportation system and I hope this hearing marks the beginning of a thorough debate on this issue.  It is my hope, that we can reform the federal role in a manner that will better meet our states’ transportation priorities.  I want to welcome, Secretary LaHood, and also Ned Holmes, who will be on the second panel, who serves on the Texas Transportation Commission and is chairman of the Transportation Transformation Group.


“It’s been more than fifty years since President Eisenhower signed legislation to create the Interstate System and construction on the final span of national highway was finished nearly twenty years ago.  Yet highway users in all fifty states are still paying into the national highway system through a formula designed around the now obsolete purpose of completing the Interstate System.  Many of those states, including Texas, are forced to shoulder an unfair burden through the current funding scheme, whereby a far greater portion of our gas tax dollars are being diverted away from critical transportation needs in our state.  In my view, the existing funding formula is no longer serving the best interest of each state and the traveling public.  Our transportation mission should evolve to maintain and improve this valuable infrastructure.  We must add highway capacity in areas where population and commercial growth is exceeding what our infrastructure can withstand.  Our funding structure must change to meet these shifting priorities.  That is why today I am introducing the Highway Fairness and Reform Act of 2009, along with Senators Martinez, Cornyn, and Kyl.  Our bill would give states the choice to opt-out of the Federal Highway Program and instead be rebated federal fuel taxes collected within our borders.  It would cut the overwhelming majority of federal strings attached, but would require that rebated taxes be spent on surface transportation projects. This option would allow all states to receive a more equitable distribution of gas tax dollars, while ensuring funds are directed toward improving transportation in the high-growth areas within those states.


“The policy of revenue sharing was instituted in 1956 because some states with a lot of land mass but lower populations were unable to generate enough revenue to build the roads comprising a truly national highway system. Even though the highway system is complete, the current formula continues to send some states excess revenues while the roads and residents of “donor states,” those paying in more than they are receiving back, are shortchanged. In short, the gas tax revenues of states like Texas, Arizona, Florida, Ohio, and more, could be spent on bike trails in Vermont or bridges in Madison County, rather than on crumbling or congested highways in Miami or Cincinnati. 


“I also think that as we address the proper federal role in transportation, we need to alleviate states from the unnecessary burdens that have accumulated over the years.  For example, of the federal funding that states do receive, there are no fewer than 108 federally mandated programs that must be factored into decisions on how the money will be spent. Once a state decides to begin a transportation project using some of its federal highway funding, it takes an estimated 12 to 15 years of bureaucratic process before a state can even break ground.  This level of federal micromanagement fails to acknowledge that our state and local leaders are best positioned to carry out the present transportation mission which should be maintenance and improvement.


“My legislation is designed to ensure interstate equity and to allow states that will be able to maintain and improve their highways most efficiently, while removing unnecessary regulatory burdens.  Opt-out states would be required to maintain their Interstate Highway System, but could determine which federal program requirements could be eliminated.


“So, Mr. Chairman, I thank you for calling this hearing.  I think this is the time to start this debate and I hope that we can come to agreement on what is equitable for all of our states, not just for some.  Thank you.”




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