(The following Reuters article was posted on May 6.)
WASHINGTON — The Bush administration will send a six-year, $274 billion highway funding plan to Congress in the coming days with no proposals to increase fuel taxes to help pay for road improvements, Transportation Secretary Norman Mineta said on Tuesday.
Mineta told a House appropriations subcommittee the administration is committed to a user-based funding strategy that will not raise taxes or stress other federal resources.
The massive funding plan will face opposition in Congress, especially in the House of Representatives where some lawmakers are considering a hike in fuel taxes from 18 cents to 23 cents a gallon to give the highway program more heft.
The tax paid by motorists is the main resource of the Highway Trust Fund, which finances federal contributions to road construction programs.
The tax is not indexed to inflation, which highway advocates complain has eaten away at the true value of the money available for road projects over the years.
But Mineta said the administration’s plan would not propose increasing the fuel tax or indexing it to inflation. The Highway Trust Fund currently has a cash balance of $18 billion.
Mineta said the Bush administration would instead encourage the private sector and the states to take a bigger role in helping to underwrite highway programs, a financing theme that is cutting across White House proposals for transportation priorities.
For instance, last week Mineta’s agency proposed a greater role for states and business in the operation of city-to-city passenger rail service. The proposal to break-up Amtrak is aimed at reducing federal subsidies for passenger rail which total more than $1 billion this year.
The administration’s highway plan proposes to spend $29.3 billion in 2004.
One crucial funding change for the six-year plan would remove all gasohol tax receipts from general budget accounts and place them in the trust fund to ensure they were spent on highway programs. Mineta said this would mean $600 million in guaranteed funds each year.