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1 1 (March 1, 2021)

handle is hein.crs/goveckv0001 and id is 1 raw text is: Cogesoa esac evc Ifor min thelilaiedbt ince11 S Updated March 1, 2021 Reauthorizing Highway and Transit Funding Programs Surface transportation reauthorization acts fund federal highway and public transportation programs, along with transportation research, intercity passenger rail, and other programs. The five-year Fixing America's Surface Transportation Act (FAST Act; P.L. 114-94) authorized federal spending on highways and public transportation for FY2016-FY2020. A one-year FAST Act extension, through September 30, 2021, was enacted as part of the Continuing Appropriations Act, 2021, and other Extensions Act (P.L. 116-159). Infrastructure legislation could be considered in conjunction with FAST Act reauthorization. The Federal-Aid Highway Program The FAST Act, as extended, provides an average of about $45 billion annually for the 1,032,783-mile system of federal-aid highways. Although there are exceptions, federally funded projects are generally limited to this system that includes roughly 25% of all U.S. public road mileage. Of these funds, 92.5% are distributed to the states via formula. The states have nearly complete control over the use of these funds, within the limits of federal planning, eligibility, and oversight rules. Money is not provided up front. A state is reimbursed after work is started, costs are incurred, and the state submits a voucher to the Federal Highway Administration (FHWA). The highway program focuses on highway construction and planning, and does not support operations or routine maintenance. The federal share of project costs is generally 80%, but 90% for Interstate System projects. As part of COVID relief, the Consolidated Appropriations Act, 2021 (P.L. 116-260) provided an additional $10 billion from the general fund for highways and state transportation departments. The Federal Public Transportation Program The FAST Act, as extended, authorizes an average of $12.3 billion annually for the federal public transportation program. Most of this funding is distributed by formula to local transit agencies. The largest discretionary program is the Capital Investment Grants Program, more widely known as New Starts, which supports construction of new local rail, bus rapid transit, and ferry systems, and the expansion of existing systems. To date, during the COVID- 19 pandemic, the Federal Transit Administration (FTA) has received $39 billion in pandemic related assistance. Funding Issues Highway Trust Fund. Historically, all of the federal highway program and 80% of the public transportation program have been funded with revenues from the Highway Trust Fund (HTF). Revenues supporting the HTF come from a combination of fuel, truck, and tire taxes, but the fuel taxes provide about 85%-90% of the money. The excise taxes on gasoline and diesel are fixed in terms of cents per gallon (18.3 cents for gasoline and 24.3 cents for diesel), and do not adjust for inflation or change with fuel prices. The rates were last raised in 1993. Increases in fuel consumption kept revenues growing until the recession that began in 2007. Since that time, improving fuel efficiency and slower growth in vehicle mileage have led revenue to level off in most years, and spending from the HTF has consistently outrun highway user revenues. Unable to agree on revenue increases or program reductions, Congress began providing transfers to the HTF to prevent its insolvency. Since September 2008, Congress has provided $158 billion to the HTF, mainly from the Treasury general fund. This includes $83.6 billion of transfers authorized in the FAST Act as extended. Short-term issues. The Congressional Budget Office (CBO) estimates that the HTF has sufficient balances to cover expected outlays until summer 2022. Unless Congress authorizes additional revenues or transfers by then, the balance in the HTF could fall so low that the Department of Transportation may have to delay payments to states and transit agencies for work completed. In addition, highway tax revenues have declined due to the COVID-19 pandemic, as Americans have driven less. Long-term issues. More money will likely be needed if Congress wishes to continue the highway and public transportation programs at or above their current levels, adjusted for inflation, in a future multiyear reauthorization. CBO projects the annual difference between revenues and outlays to rise from $13 billion in FY2022 to $22 billion in FY2027 (see Figure 1). Figure I. HTF Revenue and Outlays ($ Billions) Actual (FY16-FY20) -- Projected (FY21-FY27) $708 $60- Outlays $508 Revenues and Interest* $306 i I I I I FY16 FY18 FY20 FY22 FY24 FY26 FY27 *Does not include transfers Source: CBO, Highway Trust Fund Baseline-February 2021. Based on current law, a future five-year reauthorization bill would need to cover a projected $70 billion shortfall, and a six-year bill would need to cover $92 billion. What Are Some Options? Continue reliance on general funds. Congress could choose to transfer money from the general fund to the HTF ittps://crsreports.congress.gt

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