States Clash Over Transportation Money

Southern lawmakers vie with Northeast for federal dollars

Political parties and ideology alone don't determine what goes on in the nation's capital. The upcoming battle royal over highway funding is a reminder that regional interests are at least as important.

In a huge continental nation such as the United States, clashes between varying regions are never far from the surface. Regional coalitions form, split apart, and reform, depending on the issue. But nothing is guaranteed to stir up tensions more than tussles over who's going to get federal money - Washington's famous pork.

The granddaddy of pork and regional politics this year goes by the unlikely name of ISTEA (pronounced "ice tea"), the Intermodal Surface Transportation Efficiency Act of 1991. The complex law, which is up for renewal this year, determines how billions in federal gas taxes are doled out to states and cities for such job-creating projects as building new roads, fixing old bridges, and subsidizing commuter rail and buses. Hearings on the measure resume today and continue over the next two weeks.

In state and regional congressional delegations, the developing donnybrook is sweeping aside party divisions.

"It's very, very rare that an issue unites Democrats and Republicans as much as this issue has ... both in the House and in the Senate," says Sen. John Breaux (D) of Louisiana, who wants the funding formula changed.

Until 1991, federal highway funds were distributed using arcane formulas and old postal routes. ISTEA modified these formulas, which heavily favored Northeastern states, the former population center. It also provided money directly to cities aimed at helping them implement mass-transit measures - to help comply with the Clean Air Act.

But much of the old system remained. Under ISTEA, states receive an annual chunk of highway funds based on a calculation so complex it might strain the abilities of even the best calculus student. Among the factors taken into account are a state's interstate highway miles, the state of repair of its bridges, the severity of its air pollution levels, and the amount of federal highway money the state has received in the recent past.

This number is then adjusted further by several financial guarantees, such as one that holds each state get a minimum percentage of the overall highway pot.

"ISTEA was based on a continuation of funding formulas from the 1987 Highway Act, which included a hodgepodge of formula adjustments that had been made over the previous 60 years," Kentucky Gov. Paul Patton (D) complained at a recent congressional hearing. That means about 25 "donor states," mostly in the South, pay the federal government more than they get back in highway funds - often far less than the 90 cents on the dollar ISTEA was supposed to ensure.

Now a bipartisan coalition is sponsoring legislation to rewrite the formula so that states would get back at least 95 percent of gas-tax revenues distributed by Washington. Called STEP-21 (Streamlined Transportation Efficiency Programs for the 21st century), the proposal would give 60 percent of the revenues to the states in equal shares. The other 40 percent would go into the national highway system to be handed out to states using a modernized formula. Almost 80 senators and representatives are co-sponsors.

A coalition of 15 states that benefit from the status quo, called ISTEA WORKS, adamantly opposes the proposal. Under STEP-21, these states would lose $1 billion yearly in federal funds.

"The new formula that Congress will develop must recognize that states such as New Jersey, New York, Pennsylvania, Rhode Island, and Illinois have older and more complex transportation systems than states in the South and West," said coalition spokeswoman Gov. Christine Todd Whitman (R) of New Jersey. "And it must consider their higher maintenance costs because of heavy usage, extreme weather conditions, and old age."

Caught in the middle are geographically large states with small populations, mostly in the mountain West. They need special help to maintain miles of freeway that are crucial to interstate trade and national defense.

Congress must come to grips with this dispute: fairness to donor states versus concerns for the Northeast's older infrastructure.

"I think there are two fundamental, very legitimate issues in relation to [the formula]," says Rep. Bud Shuster (R) of Pennsylvania, chairman of the House Transportation and Infrastructure Committee. "And they are inherently in conflict with each other." Mr. Shuster would like to smooth over the conflict by getting more money from the highway trust fund, but deficit hawks are sure to oppose that, since the trust fund's surplus is used to lower the government's red ink.

Rep. John Kasich (R) of Ohio and Sen. Connie Mack (R) of Florida propose the "Transportation Empowerment Act." It would eliminate most highway trust fund programs and drastically lower the gas tax over a two-year period. States would then raise their own taxes as their needs dictate.

Meanwhile, highway advocates are wrangling with environmentalists and mass-transit advocates over the amount of highway funds that should be diverted to mass transit. Those who want more spent on road and bridge repair say ISTEA spends too much on environmental problems to the detriment of the nation's crumbling infrastructure - a position hotly denied by their opponents, who want to increase funding for public transportation.

A game of political hardball is likely to ensue. "I dare say this legislation will not see the light of day unless fairness is brought about in that formula," warns Sen. John Warner (R) of Virginia, a STEP-21 proponent. "It's as simple as that."