The Senate headed toward approval of major legislation Wednesday that would increase federal highway funding by $26 billion over the next six years, giving Florida and Texas a windfall by ensuring that states get back at least 91 percent of all transportation dollars they send to Washington.
The legislation also would guarantee that most of the 4.3 cents per gallon tax on gasoline goes directly into the nation’s Highway Trust Fund for use on transportation projects instead of being diverted into other programs, as much of it has been since the 1980s.
“By dedicating every penny of the gasoline taxes to build roads, nationwide, we are going to increase the money for highway construction over the next six years, as compared to the last six years, by 45 percent,” said Sen. Phil Gramm, R-Texas.
“Every American is being cheated out of 25 cents of every dollar they pay in. It says right on the pump (the gas tax) is going for highways, and it’s not,” Gramm said, adding that while some states may not get back every penny they pay in, “they will be substantially better off than they are now.”
Gramm, along with Sen. Robert Byrd, D-W.Va., hammered out the deal, which is designed to correct some of the long-standing inequities in the formula for distributing highway and other transportation-related dollars. Under the current formula, so-called donor states like Florida and Texas pay in far more than they get back each year, while more densely populated Northeastern states such as Massachusetts and New York have been receiving up to two times more than they pay in.
Although the Senate has not yet approved the amendment that contains the Gramm-Byrd blueprint for funding, it is expected to pass, possibly today, as the Senate tries to complete work on the 6-year, $173 billion highway spending bill known as the Intermodal Surface Transportation Efficiency Act, or ISTEA.
Under the Senate bill, donor states could reap huge windfalls to help pay for new highway construction and upkeep on existing federal and state roadways.
House legislation calls for a 90- to 95-cent return on every dollar paid into the trust fund. The House has yet to take up its own version of the bill, which calls for spending $181 billion over six years.