Nadler Opposes GOP Measure to Alter Gas Tax Funding Formulas in Transportation Reauthorization

WASHINGTON, D.C. – Today, Congressman Jerrold Nadler (D-NY), the senior Northeastern Member of the House Transportation and Infrastructure Committee, opposed a GOP motion, offered by Congressman Jeff Flake (R-AZ), that would increase minimum transportation formula guarantees from 92% to 95% of gas tax contributions from each state. Rep. Flake’s Motion to Instruct Transportation Reauthorization Conferees fails to take into account that, because gas tax funds have long been insufficient to national transportation needs and general treasury funds already supplement gas tax revenue, all states are already receiving more in transportation funding than is collected by the gas tax. Therefore, the motion is purely symbolic in nature.

Nevertheless, Nadler argued that the principle behind the motion is wrong. Funds needed for natural disasters, agriculture, transit, highways, and the arts, for example, will necessarily vary from state to state. Rep. Flakes’ motion seeks, in spirit, to further penalize energy efficient and pro-transit states like New York and would exacerbate inequitable distribution of federal transportation funding.

The following is the text of Nadler’s statement on the House floor, as prepared:

“Mr. Speaker, I rise in opposition to the Motion to Instruct Conferees offered by Mr. Flake. This motion directs the transportation reauthorization conferees to agree to a provision contained in the Senate bill increasing the guaranteed minimum percentage rate of return that each state receives in federal-aid highway formula funding from 92% to 95% of payments into the Highway Trust Fund collected through gas-tax contributions in that state.

“This is the same old donor/donee argument that we have been having for years, but it is becoming even more ridiculous now that all states are in effect ‘donee’ states. Frankly, I’m not quite sure what the realistic impact of a 95% minimum guarantee would be at this point. For several years, General Fund revenue has been filling the gap between what the Highway Trust Fund can support and current funding levels, so now every state gets back more from the program than the amount of gas taxes collected in that state. In effect, every state is a ‘donee’ state. The Senate bill continues to fund the program through non-gas tax related revenue. Unless my colleagues are proposing to raise the gas tax, and I don’t think they are, then this motion could be meaningless.

“But, the idea behind this motion is wrong in any event. It is highly irresponsible to pick out, and insist upon, one factor that affects the overall funding distribution to the states without a complete picture of how the programs will be funded and apportioned. The Senate did raise the minimum percentage to 95%, but within an overall framework that required that each state get the same percentage of funds it received in the last year of SAFETEA-LU. In the Senate bill, all states were held harmless. The Motion to Instruct does not insist on adopting the Senate’s funding structure. It cherry picks one factor to benefit certain states at the expense of others. I would caution against anyone voting for something that affects how much transportation funding will go to your state without knowing what the ultimate impact will be. We know that House Republicans would like a different formula than what is in the Senate bill as they took a different approach in HR 7. Depending on how the final bill is structured, and what the ultimate funding levels are for the program, raising the minimum to 95% could actually result in steep cuts to certain states.

“In TEA-21 and SAFETEA-LU, we opposed raising the minimum percentage, but ultimately we could live with it because the overall funding levels were increased and states were held harmless and given at least enough funding to keep up with inflation and the increased cost of construction. Each state got an increase in funding, just not as big of an increase as some others. Increased funding is highly unlikely in this environment, so this type of motion, although probably meaningless in the long run, is potentially dangerous.

“I’m sure that Mr. Flake and others will say that it is the principle of the matter; that those who contribute to the program deserve to benefit from it at the same level. Why then, do they just look at the gas tax? If they truly believe in the principle of user-pays, why shouldn’t that same theory apply it to all revenue that goes into the program? And why apply it to just the highway program? Because if you did that, you would find that certain states, like New York for example, contribute much more to the federal government than it receives in federal expenditures.

Make no mistake – this is not about ‘equity.’ This is about gaming the system by applying this principle to one aspect of one program to benefit certain states at the expense of others.

“And if you follow the logic through, what these ‘donor’ arguments are really saying is that each state should get a dollar back for every dollar it puts in to the federal system. If so, why do we need a federal government at all? I’m sure some of my colleagues would be happy to have no federal role in transportation, and devolve completely to the states, but that is not yet the policy of the United States Congress and I would caution my colleagues about going too far down that road.

“The fair thing to do is to spend federal funds where they are needed. We have a national transportation system that benefits everybody. These kinds of debates are illogical and divisive. Our time would be better spent working together to draft a bill that benefits all states. If the purpose of this bill is to create jobs and spur economic growth, we should ensure that all states benefit.”