[Congressional Record Volume 143, Number 130 (Thursday, September 25, 1997)]
[Senate]
[Page S9985]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page S9985]]
                 INTERMODAL TRANSPORTATION ACT OF 1997

 Mr. ABRAHAM. Mr. President, I rise to comment on the Senate 
Environment and Public Works Committee's report on S. 1173, the 
Intermodal Transportation Act of 1997. The sponsors of this legislation 
argue that it will provide an adequate level of federal highway funds, 
distributed equitably among the states, so as to meet our surface 
transportation needs over the next six years. I wish I could be as 
optimistic, but I have concerns that this bill will simply perpetuate 
the intolerable situation under which donor states, like Michigan, have 
been forced to suffer.
  There are two basic fundamental flaws with our current surface 
transportation funding process that must be addressed in order to 
provide every state the ability to meet its highway needs. First, the 
vast disconnect between how much an individual state contributes to the 
Highway Trust Fund and how much it receives in Federal highway aid must 
be bridged. Second, the vast disconnect between how much the Federal 
government takes into the Highway Trust Fund from gas taxes, and the 
total amount it distributes to the states in Federal highway aid must 
also be bridged. Until these two problems are properly addressed, donor 
states such as Michigan shall be forced to suffer under a inequitable 
system that is neither justified nor effective.
  The bill to be reported out of the Environment and Public Works 
Committee, S. 1173, the Intermodal Transportation Act attempts to 
rectify the problem of this unequal distribution among the states by 
allegedly guaranteeing each state a 90-percent return on the gas taxes 
it contributes to the Highway Trust Fund. Unfortunately, this will not 
be the case. In FY 98, Michigan is expected to contribute over $795 
million in gas taxes to the Highway Account of the Highway Trust Fund. 
Nonetheless, according to data provided by the sponsors of S. 1173, 
this new distribution formula will provide only $686 million in federal 
highway aid to Michigan, an 86-percent rate of return. And it only gets 
worse, for by FY 2003, when Michigan is projected to contribute $1.07 
billion in gas taxes, it will receive only $726 million in federal 
highway aid, down to a 68-percent rate of return. Even these funding 
levels are just $5.7 billion per year more than the average ISTEA 
levels for Michigan. This formula, Mr. President, is far away from what 
I would call a fair means of distributing this country's limited 
highway dollars. I will stand firmly against any measure that 
perpetuates this inequality.
  As for the issue of overall funding levels, S. 1173 does not address 
the Federal government's unfair practice of collecting gas taxes from 
American motorists, while refusing to expend them. We know this process 
to be a sleight of hand scheme by which the Federal government shirks 
the full burden of responsibility for the true size of the budget 
deficit. Years ago, American motorists were told that a gas tax would 
be collected as a ``user fee'' to provide a ``pay-as-you-go'' funding 
source for the Interstate Freeway System. They should expect the taxes 
they pay at the pump to be necessary to maintain the roads upon which 
they drive, and to be spent on those roads. In my opinion, when those 
taxes are not used for transportation purposes, the American motorist 
can rightfully conclude either those taxes are not necessary, or more 
likely, are being unjustly withheld from their proper use.
  The Taxpayer Relief Act of 1997 took an important step towards 
correcting this unjustified withholding by transferring gas tax 
revenues which previously were being directed to the general revenue 
back to the Highway Trust Fund. These 4.3 cents of gas tax represent 
almost $5 billion in additional revenue for the Trust Fund, an account 
that will grow to over $30 billion in annual revenue by 2003. Yet the 
Intermodal Transportation Act only authorizes funding levels of 
approximately $24 billion per year, continuing to withhold nearly $6 
billion per year in highway gas taxes to mask the deficit's true size, 
while allowing the continuation of wasteful government programs. Even 
under the unfair distribution formulas found in ISTEA, these $6 billion 
additional dollars would represent over $150 million in extra federal 
aid per year for Michigan, an increase of about 25 percent.
  Mr. President, it is clear what we must now do. Any successor 
legislation to ISTEA must guarantee each and every state at least 95 
cents in federal highway aid for every dollar it sends to Washington in 
gas taxes. The entire justification for this historically unfair 
distribution, a distribution scheme that forces states like Michigan to 
suffer as donor states, is rendered moot with the completion of the 
Interstate System, a declaration made six years ago in the very opening 
paragraph of ISTEA, to recognize America entering an era in which new 
construction transportation projects are started to fulfill regional, 
not national, demands.
  Furthermore, Mr. President, we must stop withholding highway funds 
from the states. The successor legislation to ISTEA must guarantee that 
all the states are provided the opportunity to use all the revenues 
raised by gas taxes. Therefore, we must ensure that legislation is in 
place that will force the Federal government to spend on our highways 
an amount at least equal to that amount raised in gas taxes. Absent 
that, we must provide an opportunity for the States to raise their own 
gas tax revenues by repealing that portion of the gas tax not needed to 
fund the federal aid highway program, thereby allowing the states to 
raise, and keep for their roads, the gas tax revenues that would 
otherwise be siphoned off to unscrupulously mask the true size of the 
federal deficit and unjustifiably continue unnecessary federal 
spending.
  Many of my colleagues are raising very similar concerns, Mr. 
President, and the next few weeks will likely see an intense debate on 
this issue. For my constituents in Michigan, no issue is more important 
than the federal road funding process, and I commit to them all my 
resources and efforts to rectify this inequitable situation. I will be 
joining many of my colleagues in proposing alternative methods of 
distributing our federal road funds so as to not only make it fairer 
for individual states, but also to ensure that the entire National 
Highway System, and our States' road system, are adequately maintained. 
And when Members of this Senate are able to score quick increases in 
their State's share of the federal dollar by threatening a filibuster, 
it makes the rest of us wonder what might be the most effective way for 
us to improve our States' situation. I plan to offer a series of 
amendments to address the fundamental issues I have discussed today, as 
well as proposals that will streamline. Only time will tell, Mr. 
President, but I trust we will be able to work together and derive an 
equitable and mutually beneficial funding solution.

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