RABA -- an "Inside the Beltway" acronym for "Revenue-Aligned Budget Authority" -- is going to tack an additional $1.456 billion on to TEA-21's federal obligation ceiling for FY 2000, raising it from a record $26.2 billion to an astonishing $28.4 billion when mandatory spending programs are included.

As a result, 1999's supercharged level of highway construction and reconstruction actually will accelerate in the year 2000.

What happened?
 

Love affair with cars

America's often-demeaned "love affair" with its automobiles -- and lately, gas-guzzling SUVs -- deserve most of the credit for the $1.5 billion bonus. Also getting credit should be improved petroleum industry techniques which squeeze more oil out of existing wells, and more gasoline out of a barrel of crude oil, keeping gasoline prices low. Finally, there are more vehicles and more drivers on U.S. roads than ever before, including trucks.

The result was extraordinarily high levels of gasoline consumption in 1999 in the United States. Because fuel prices remained low in 1999, more gasoline was absorbed by American drivers than in the previous fiscal year, resulting in even more federal gas tax revenue to the Highway Trust Fund than was anticipated by TEA-21. That additional gas tax revenue now will be provided to state departments of transportation for road improvements.

RABA is significant because it increases the federal highway obligation ceiling for FY 2000, and if driving trends continue, each year through TEA-21's expiration after FY 2004. For any fiscal year, the obligation ceiling is the maximum amount that can be obligated from the U.S. Treasury for highway projects launched that year and running through future years.

When TEA-21 was crafted, each year's obligation ceiling or limitation was written into the legislation. That alone is significant because preceding surface transportation legislation -- such as the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), or the Surface Transportation Assistance Act of 1987 (STAA) -- typically would set high levels of "budget authority", only to have significantly lower obligation ceiling set each year by budget appropriation committees.

"Every year there was a big fight," said William R. Buechner, vice president, economics and research, American Road & Transportation Builders Association, at the fourth annual North American Construction Forecast (NACF) conference in Washington, D.C., in late October. "But TEA-21 sets the obligation limitation right in the legislation, so the appropriations committees don't have the control they once had."

Also, procedural obstacles that keep a year's transportation funds comparatively immune from Congressional cuts are built into TEA-21. That's the next best thing to taking the money totally "off-budget" and out of the federal government's "Unified Budget", the highway lobby's Holy Grail, now thought to be a political impossibility.
 

Revenues go up, funding goes up

TEA-21 ties overall federal highway investment each year to incoming revenues to the Highway Trust Fund's Highway Account. As revenues increase or  decrease, the highway spending targets set in TEA-21 are to be adjusted up or down each year.

Now, RABA in TEA-21 provides a means of redistributing to state DOTs those federal gas tax revenues to the Highway Trust Fund collected in excess of the amount forecast when TEA-21 was written. For FY 2000 it comes to an additional $1.456 billion that will be distributed to the states.

RABA is triggered whenever revenues into the highway account exceed projections, Buechner said. It automatically increases the obligation limitation for highways by the RABA amount, and distributes the money among programs and states according to established TEA-21 formulas.

With RABA thrown in, TEA-21 will provide the states with $28.4 billion in FY 2000. And with estimated RABA revenues, it's projected to provide $29.5 billion in FY 2001, with gradual increases to an sensational $31.4 billion in FY 2004, at which time new surface transportation legislation will have to be enacted.

Based on these assumptions, and depending on how well state and local governments can raise matching funds, total national highway spending for FY 2000 is expected to be some $56.8 billion, and for FY 2001 $59.9 billion, with gradual increases to $66.5 billion in FY 2004, assuming a RABA contribution each year, but with states raising their matching funds by cutting other road spending.
 

Fight with administration

But good things don't come easy. Predictably, when this surplus was first forecast last February, the Clinton administration tried to use this "found" money for "transportation-related" activities that had nearly nothing to do with placing concrete or asphalt.

In February 1999, it was thought the Clinton administration's proposed FY  2000 transportation budget would shortchange state highway capital improvement programs by nearly $1 billion of RABA-protected funds, ARTBA reported at the time. As we know that amount swelled another 40 percent by fall 1999.

Rather than funneling the additional money through the core programs as required by law, however, the Clinton administration proposed that it be used to boost spending for earmarked non-construction activities. These included:

o The Congestion Mitigation & Air Quality Program

o Federal Highway Administration research and technology programs, not a bad end use, considering they were underfunded by TEA-21

o Intelligent Transportation System research and development activities

o The Transportation and Community and System Preservation pilot program

o Operation and research activities for the National Highway Traffic Safety Administration not funded through TEA-21

o Federal Railroad Administration programs

o Federal Transit Administration (FTA) formula grants and research and technology programs, and

o FTA Job Access and Reverse Commute Grants.

The highway lobby fought bitterly against the administration's hijacking of the money. "The additional funds can't be earmarked the way the administration is proposing without Congress changing TEA-21," said ARTBA president Pete Ruane in February 1999.

"We share the administration's view that some of the proposed new expenditures are worthy investments," Ruane said. "We don't agree, however, with this approach which creates a `zero-sum' game between additional, needed highway capital improvements and research, mass transit support and environmental programs."

Ruane pointed out that the U.S. Department of Transportation's biennial report on highway conditions and investment requirements showed a shortfall in public investment relative to needs, even with TEA-21.

"You can't say all highway capital needs have been met," he said. "The administration should be joining ARTBA in asking the appropriations committees of the Congress to fund these programs through the almost $20 billion in non-guaranteed TEA-21 authorizations."

Instead of the healthy boost the industry will experience in 2000, Clinton's budget would only grow core highway programs by 2.9 percent under the proposed budget, ARTBA reported.

But that's a moot point now. The highway industry now must learn a new acronym, and it will be better off for it.
 

Portions of this article originally appeared in Pavement Magazine