Adjusting to fiscal and political realities
Innovation Briefs, now in their 22nd year of publication, are published by Ken Orski. Cascadia Prospectus reprints them with permission. The content of Innovation Briefs does not necessarily represent the view of Cascadia Center of Discovery Institute.
While we do not know the exact level of funding the House Transportation and Infrastructure Committee will propose in its draft legislation, to be unveiled in the first week of July and marked up the following week, we do know it is going to be far less than the current (FY 2010) funding of $52 billion ---$41 billion for highways and $11 billion for transit. What will be the consequences?
That the Federal Government "must learn to live within its means" has become the fiscal conservatives' elliptical way of stating their opposition to deficit financing. This principle found its way into the House T&I Committee's "Views and Estimates for Fiscal Year 2012" report and has been reaffirmed since in countless statements and briefings by congressional sources.
The practical implications of this policy for the federal-aid transportation program are unambiguous: federal budget authority in FY 2012 and beyond will be limited to tax receipts flowing into the Highway Trust Fund. Those revenues (plus interest) will amount to an estimated $36.9 billion in 2011, according to the Congressional Budget Office (CBO)-- $31.8 billion will be credited to the Highway Account and $5.1 billion to the Transit Account. Over the next ten years, CBO estimates these revenues will grow at an average rate of a little more than one percent per year, largely reflecting expected growth in motor fuel consumption. ("The Highway Trust Fund and Paying for Highways," testimony of Joseph Kile, Asst. Director of CBO, before the Senate Finance Committee, May 17, 2011).