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Heritage Action on Highway Trust Fund: There is No Crisis

Is Heritage Action in a state of denial? Keith Laing, The Hill's transportation reporter, reviews a recent blog from the powerful conservative group claiming that spending will decrease only 7% at most, thus no reason to increase taxes or spending.
July 5, 2014, 1pm PDT | Irvin Dawid
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"The conservative Heritage Action foundation is disputing whether there is a transportation funding crisis facing Congress," writes Laing. Heritage Action for America also has its own think tank, Heritage Foundation, "whose mission is to formulate and promote conservative public policies..."

While "lawmakers struggle to prevent the impending bankruptcy of the Highway Trust Fund," writes Laing, "Heritage Action said in a blog post on its website Wednesday (July 2) that the alarm was being sounded falsely."

Communications director Dan Holler refers to the July 1 letter that Transportation Secretary Anthony Foxx sent to all state DOTs warning of reduced federal transportation reimbursement payments effective August 1. 

"What exactly is the crisis," Holler continued. "In comments made earlier in the day, Foxx said states will, on average, see a 28 percent reduction in funding from the federal Highway Trust Fund. This figure is shockingly misleading though because the overwhelming majority of highway funding comes from state and local governments, not the federal government." 

Adrienne Lu of the Pew Charitable Trusts references an analysis her group did on just this subject in her July 2 piece for their newsletter, Stateline (also available on Governing). The findings are surprising, because the states most reliant on federal funding are red states.

States received anywhere from 14.9 percent (New York) to 58.9 percent (Montana) of their total highway and transit funding from the federal government in fiscal year 2011, according to an analysis by the Pew Charitable Trusts (Pew funds Stateline). Nearly half the states (24) received a third or more of their highway and transit funding from federal sources.  

Holler illustrates why he believes there is no transportation funding crisis. "The 28 percent reduction Foxx mentioned is of the federal share, which is about 25 percent," Holler continued. "In other words, the 'crisis' Obama is warning Americans about is a 7 percent reduction in total spending." 

However, is it really as simple as dividing 28 by 4 and saying the cut back will be minimal? Lu takes the case of Arkansas which is one of the relatively few states that increased transportation funding when voters approved a half-percent sales tax for highways in 2012.

“We’ve probably got up to $120 million in projects in Arkansas that we could have gone to bid with that we can’t go to bid with now because there’s no guarantee that we’ll be reimbursed,” said (state) Rep. Jonathan Barnett, a Republican from Siloam Springs. Barnett, who chairs the (Arkansas) House transportation committee, previously served as chairman of the state highway commission.

One of Heritage Action's main goals appears to prevent increasing the gas tax, a solution proposed to fund the reauthorization of the transportation spending bill known as MAP-21 when it expires on Sept. 30.

However, as Laing notes, Holler also opposes increasing spending, e.g. the "patch bill" before the Senate Finance Committee that must be approved by Congress in order to keep those federal payments going to states like Arkansas after August.

When state DOTs cut back on projects, particularly after August, will conservative members of Congress heed the advice of Heritage Action or will they listen to the concerns from their districts that see the effects of reduced transportation spending?

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Published on Wednesday, July 2, 2014 in The Hill
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