House of Representatives soon will consider the Building Efficiency
Through Surface Transportation and Equity Act, or BESTEA (H.R.
2400), a bill to reauthorize the federal government's highway
program for another six years. The Senate passed its version of the
highway bill in early March. Included in the House version is a
provision to set aside as much as $9 billion (or 5 percent) of the
$179 billion in highway spending over the next five years for
hundreds of earmarked "demonstration" projects throughout the
country. The House should reject efforts to include these
Washington, D.C.-mandated demonstration projects in the bill, and
instead allow each state to use its share of the highway trust fund
for projects that meet locally determined needs and priorities.
Because BESTEA stipulates that the money
for these mandated demonstration projects would come out of the
funds apportioned to the states, each state's allocation of the
trust fund money would be reduced, on average, by the 5 percent
skimmed off for these pet projects of federal lawmakers. As a
result, states have fewer funds to devote to meeting locally
determined priorities. Meanwhile, "donor" states, which already
receive less than their fair share of the federal fuel taxes their
citizens pay into the highway trust fund, are hit particularly
General Accounting Office has determined that 31 states plus the
District of Columbia and Puerto Rico would have received more
funding if the now-expiring 1991 highway bill (the Intermodal
Surface Transportation Efficiency Act) demonstration projects had
been redistributed as federal aid highway program
examples of the demonstration projects included in the last highway
bill are a parking facility in Newark, New Jersey; the construction
of a bike path in Tennessee; turning lanes and sign upgrades in
Babylon, New York; and improved access to an industrial park in
Pennsylvania. None of these projects are of any significance to the
national transportation system; the decision on their construction
should be left to the states, and funding should come from each
addition to misdirecting existing federal funds, earmarked
demonstration projects require states to put up their own funds to
match the federal grant, further limiting the ability of each state
to use its own funds to meet local priorities. The funding match
requirement on these low-priority projects has led some states even
to refuse to spend such federal aid on unnecessary demonstration
projects. Although the 1991 highway bill contained 538 location
specific projects totaling $6.23 billion, at present approximately
$1.66 billion (27 percent) of the funds authorized for these
projects remains unobligated because states do not want to waste
their matching funds.2
effort to ameliorate the inequities created by the demonstration
projects, the Senate recently included as part of its highway bill
an amendment by Senator John McCain (R-AZ) that would require the
mandated demonstration projects to be funded out of each state's
apportionment rather than out of a separate fund taken off the top
of the trust fund. Under this arrangement, the typical state would
not have to bear any unnecessary loss of funding due to an
inequitable and wasteful allocation of demonstration projects among
the favored Members of Congress and congressional delegations.
Representatives Dan Miller (R-FL) and David Minge (D-MN) are
sponsoring a similar effort to reform BESTEA.
Although the McCain-Miller-Minge effort
falls short of eliminating potentially wasteful projects, it
concentrates the cost of such waste on the pork-laden districts and
states that obtain a disproportionate share of the projects.
Moreover, it protects the needs and safety of motorists throughout
the country by concentrating more decision making in the hands of
the states and communities, which are best able to establish and
fulfill local priorities.
Dr. Ronald D.
Utt is a Visiting Fellow in Economic Policy Studies at The
Geoffrey Freeman is a
former Research Assistant at The Heritage Foundation.
U.S. General Accounting
Office, Highway Demonstration Projects, GAO/RCED-93-193R, August
U.S. Department of
Transportation, Federal Highway Administration, "Federal-Aid
Highway Program Funds--U.S. Summary as of March 18, 1998."