Sen. Hutchison Introduces Bill Allowing States to Opt Out of Federal Highway Program

Highway Reform Bill will Eliminate Funding Inequity for States & Cut Bureaucratic Tape

WASHINGTON, DC - To eliminate the long-obsolete Federal Highway Program funding formula, U.S. Senator Kay Bailey Hutchison (R-TX), Texas' senior Senator and ranking Republican on the Senate Commerce, Science, and Transportation Committee, recently introduced the Highway Fairness and Reform Act of 2011, S. 252, that will allow states to opt out of the federal program. Rather than receiving funding for highway maintenance and construction via the federal formula, opt-out states would instead be rebated gas tax dollars generated within their borders to use on surface transportation projects.

"The existing funding formula is no longer serving the best interests of each state or American motorists. With the Interstate Highway System long complete, our transportation mission should evolve to maintaining and improving this valuable infrastructure," said Sen. Hutchison. "We must add highway capacity in areas where population and commercial growth is exceeding what our infrastructure can withstand. Likewise, our funding structure must change to meet these shifting priorities."

"Our legislation would cut the overwhelming majority of federal strings attached, but would require that rebated taxes be spent on surface transportation projects. This option would allow all states to receive a more equitable distribution of gas tax dollars, while ensuring funds are directed toward improving transportation in high growth areas of our states in line with regional needs," said Sen. Hutchison.

The Highway Fairness and Reform Act of 2011, S. 252, would give states the option to opt out of federal highway program, which doles out funding on a revenue-sharing basis. Instead, opt-out states would receive a rebate on federal fuel taxes collected in their states. The bill is designed to ensure a dollar for dollar return on gas tax revenue generated by a state. Many states, including Texas, have been classified "donor states" because the current funding scheme sends a portion of their gas tax dollars to "donee" states. This places an unfair burden on donor states and diverts federal funding away from their own critical transportation needs.

Opt-out states would be required to maintain their Interstate Highway System, but could determine which federal programmatic requirements, such as highway enhancements and design standards, would be continued. To ensure that our nation's roads are safe for all American motorists, safety provisions under the Federal Highway Program, like the minimum drinking age, would continue to fall under the jurisdiction of the U.S. Transportation Secretary.

In order to opt out, a state's governor must certify to the U.S. Secretary of Transportation:

­ The state will maintain its portion of the Interstate Highway System;

­ The state has developed a plan to spend the funds;

­ The state will spend the funds only on surface transportation projects;

­ The state must inform the U.S. Transportation Secretary of which federal programmatic requirements it will continue;

­ The state must ensure that funds are distributed fairly between urban and rural areas.

The policy of revenue-sharing was instituted in 1956, because some states with a lot of land mass but lower populations were unable to generate enough revenue to build the roads comprising a truly national highway system. The Interstate Highway System was completed in 1992; yet states are still held to the revenue-sharing structure that was initially needed to build it.