LaHood Watch: Reauthorization Could Cost $600 Billion

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BY RANDAL O’TOOLE – Congress must reauthorize the law on how federal gas tax revenues are spent every six years. The last reauthorization expired in 2009 and has been given short-term extensions since then. From the Obama administration’s viewpoint, the ideal time to reauthorize it would have been when Democrats were in firm control of Congress, but the administration unaccountably asked Congress to delay reauthorization until 2011.

Now that Republicans have taken over the House, Immobility Secretary LaHood is saying that reauthorization could take place and be signed by August 2011. But he also says that reauthorization should include $500 billion to $600 billion funding, which is more than twice as much as the existing federal gas tax is expected to produce over the next six years.


House Democrats had proposed a $500 billion bill, which included $50 billion for high-speed rail that they were careful to say would come out of funds other than gas taxes. But even the remaining $450 billion was far more than expected gas tax revenues, and their proposal foundered on the lack of money to pay for it.

Prior to 1982, 100 percent of federal gas tax revenues went to highways. Since 1982, when Congress began diverting gas taxes from highways to transit, the critical question in any reauthorization bill has been how much will go for highways and how much for transit. The initial compromise was that 20 percent of all increases in gas taxes after 1982 would be dedicated to transit. Since taxes have been increased from 4 cents to 18.3 cents a gallon since then, that means about 15.5 percent of federal gas taxes go to transit.

The 1991 reauthorization came up with the idea of “flexible funds,” meaning money that states could spend on either highways or transit. Currently, about 15 percent of funds are flexible, and states spend about a third on transit, so transit gets a little more than 20 percent of the total.

The 1982 bill also saw the first earmarks — 10 in that year, 100 in the next bill, growing to more than 7,000 in the 2005 bill. Congress has agreed to a moratorium on earmarks for the next two years, but that doesn’t mean there won’t be any earmarks in a reauthorization bill. Republican Representative Michele Bachmann thinks transportation earmarks are not really earmarks. “Advocating for transportation projects for ones district in my mind does not equate to an earmark,” she says.

Given uncertainties about these and many other issues, it seems unlikely that the reauthorization bill can be passed by August. At least some Republicans are leaning toward the idea of deleting transit from the reauthorization bill and refocusing gas taxes exclusively on highways. Others are suggesting that the bill should be delayed another two years.

Strategically, it makes more sense for fiscal conservatives to look to pass reauthorization in this Congress, meaning 2011 or 2012. Since there is a possibility that the Democrats could retake the House in 2013, it wouldn’t pay to wait another two years.

Significant links:

LaHood proposes reauthorization by August:

LaHood projects reauthorization should cost $500 billion to $600 billion:

Earmark moratorium:

Michele Bachmann on transportation earmarks:

Heritage Foundation proposal to postpone reauthorization for two years:

Reason Foundation proposal to rededicate federal gas taxes exclusively to highways:

Randal O’Toole, a frequent visitor to Hawaii and past guest on Hawaii Reporter’s television news show, writes for The Antiplanner at