United States General Accounting Office Washington, D.C. 20548 Resources, Community, and IIIDllllllllll III111111111111 158176 Economic Development Division B-276166 February 11, 1997 The Honorable John R. Kasich Chairman, Committee on the Budget House of Representatives The Honorable Connie Mack United States Senate As you requested, we are providing our analysis comparing what states received under the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) with what they might have received under the proposed Transportation Empowerment Act (TEA 2). On October 2, 1996, you requested that we verify the Federal Highway Administration's (FHWA) analysis of TEA 2. The verification of FHWA's analysis proved difficult, however, because the assumptions governing it were not documented, and at times FHWA officials were not certain how the data were derived or what financial categories were included. Nonetheless, with the cooperation of and data received from officials in FHWA's Office of Budget and Finance and Office of Policy, we corrected problems with FHWA's analysis and identified data sources and assumptions to use in our analysis. Our analysis is dependent on the assumptions inherent in TEA 2, such as that all states increase their state gas tax by the same amount that the federal tax is decreased. Our analysis is also based on the assumption GAO/RCED-97-73R, Transportation Infrastructure: Estimated Funding Under the Transportation Empowerment Act 868,11S r \C%8 j7 B-276166 that unpaid obligations from prior years are financed from federal fuel taxes,' with the remainder of thle tax revenues to be available to the states. The results of our analysis and the accompanying assumptions are presented in appendix I. We have also provided, as appendix II, that part of our analysis that shows what is available for distribution to the states after past obligations are paid off and funds go to the core federal program as proposed in TEA 2. Since our analysis assumes that the total tax receipts equal the total outlays, there is no expected impact on the federal budget. We provided FHWA with draft copies of our analysis for review and comment. We met with officials from FHWA's Office of Budget and Finance and Office of Policy, who agreed with the reasonableness of the analysis' approach and the appropriateness of the data used. We performed our work from October 1996 through February 1997. Please call me at (202) 512-3650 if you have any questions. Phyllis F. Scheinberg Associate Director, Transportation Issues 'The federal Highway Trust Fund was established in 1956 essentially as an accounting mechanism to finance the federal-aid highway program. When the Congress established the fund, it also established a safety mechanism, referred to as the Byrd Amendment, to ensure that sufficient funds would be available to liquidate commitments at the end of each fiscal year. As revised by the Surface Transportation Assistance Act of 1982, the Byrd Amendment permits the total of the projected unpaid highway commitments against the trust fund at the close of any fiscal year to exceed the end-of-year balance, as long as the projected income for the following 2 fiscal years will be sufficient to cover the commitments. 2 GAO/RCED-97-73R Transportation Empowerment Act Ct~~~~~~C <- z~~~~ wo< 0 L 0 Lli C' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Cu rn Z N W \ U MCO 4. n ·- 0 D co D C : 0 E UC CO0l 0- ~DM N-.-- MC -r-MMO N~~~~~~~~~~~~~~fl~~~~ -o~~~~~~~~~~~~~~~~~~~~~ c MN' MCSJ.- (ON U NCO ; .- NC 0 . 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Transportation Infrastructure: Estimated Funding Under the Transportation Empowerment Act
Published by the Government Accountability Office on 1997-02-11.
Below is a raw (and likely hideous) rendition of the original report. (PDF)