Tom Warne Report, 21 September 2012
What if federal funding for major highway projects dwindles to the point of becoming completely nonexistent? The question is posed by a report released this week by the Bipartisan Policy Center (BPC) and Eno Center for Transportation, entitled The Consequences of Reduced Federal Transportation Investment. The report focusing on this debate point focuses on the impact of a 35% decline in federal surface transportation funding on transit authorities and state agencies, and what the result of such a reduction might be.
“Current fiscal and political realities suggest that federal spending will be stagnant – or even declining – for many years,” said BPC Visiting Scholar Emil Frankel. “This report, while speculative, seeks to make informed judgements about the impact of such a declining pattern of federal support for transportation investment. It is clear that, in these circumstances, the reforms that we have advocated are even more urgent.”
Joshua Schank, president and CEO of the Eno Center said the 35% federal funding reduction figure comes from what is needed to bring spending up to the level of the current Highway Trust Fund revenues from fuel taxes, which results in a reduction of some $13.8 billion in annual distributions to the states.
“Our research indicates that States DOTs and even more so public transportation authorities, will be unable to replace the substantial portion of the funds that they would lose if federal funding is cut,” said Schank. “The effect on our economy – in particular interstate commerce and metropolitan transportation – from a substantial federal funding cut would likely be devastating.”
Schank noted that the cuts would not be evenly disbursed among the states, as some states depend more heavily on federal funds than others. For instance, 14 state rely on the federal government for more than 40% of their transportation dollars, 27 states rely on federal funding for 25% to 40% of their overall transportation spending, and 10 states rely on the feds for less than 25% of their spending.
The full report can be viewed here at bipartisanpolicy.org.