But this report is coming at a time that election year politics is
undermining support for federal fuel taxes in Congress. Since April, at least once in the House, and three times in the Senate, supporters 
of surface transportation programs have beaten back attempts to eliminate or suspend the federal gas tax, most recently in mid-July.
 

Federal fuel taxes attacked, again

In this election year, the highest gas and diesel fuel prices in memory, especially in the upper Midwest, have triggered attacks on the federal fuel taxes which power most of the capacity improvements in our
nation's highway system.

That the prices spiked in the industrialized upper Midwest is an
irony for Vice President Al Gore's candidacy, as he is depending on strong labor support there to win those states this November.

High fuel prices there make him especially vulnerable to charges
that U.S. energy policy has been mismanaged by Clinton-Gore, that Gore cast the deciding vote in the last gas tax increase, and that Gore favors a tax on fuels to fight global warming and save the environment, as described in his bestseller, Earth in the Balance, and affirmed last year.

Therefore it's no wonder that Republicans have led the fight to lift
federal gas taxes, if only until after the November elections. As predicted here in April , Republicans in July tried and failed once again to roll back federal fuel taxes.

On April 6, the Senate passed a nonbinding resolution opposing a
4.3-cent gas tax roll-back by a near-two-to-one margin, 66-34. The "Sense of the Senate" amendment reinforced House opposition to cutting the gas tax expressed earlier. Five days later, on April 11, the U.S. Senate voted 56 to 43 to block a fuel tax repeal bill sponsored by Senate Majority Leader Trent Lott (R-Miss.).

And on July 13, another effort -- the Motorists Relief Act of 2000
-- was beaten back in a vote of 40 to 59.

The act was introduced by Sen. Spencer Abraham (R-Mich.), who was joined by Sens. Peter Fitzgerald (R-Ill.), Rod Grams (R-Minn.), and Kay Bailey Hutchison (R-Tex.). Of those four, only Fitzgerald is not up for re-election this November.

"American motorists are paying a high price for failed energy
policies," Hutchison said in a slam against the administration, in
introducing a similar bill in June. "We need to break this cycle of energy dependence by getting our domestic oil and gas production back on-line."

The act was offered as an amendment to the Estate/Death Tax
legislation passed by the Senate that day, and was defeated on a point of order, 40 to 59. The act would have suspended the entire 18.4-cent per gallon gasoline tax, and the 24.4-cent diesel fuel tax for 150 days, or just beyond the election.

The roadbuilding community again mobilized as it did in April.
Lobbying groups such as the American Road & Transportation Builders Association (ARTBA), the Associated General Contractors (AGC) and the American Highway Users Alliance (AHUA) worked hard inside the Beltway while encouraging stakeholders to contact their senators.

Like the April skirmishes, the vote was moderately bipartisan, with
15 Republicans joining 44 Democrats in voting against the amendment, including leading Republican Sens. George Voinovich (Ohio), Kit Bond (Mo.), Chuck Hagel (Neb.), John Warner (Va.) and Pete Domenici (N.M.).

"This tax is more acceptable to the public than any other tax," said
Warner, like Voinovich and Bond, a member of the Senate Transportation and Infrastructure Subcommittee. "They see their dollar go directly from the gas pump to the project and employment in the state."

But in this election year, it ain't over yet. ARTBA president Pete
Ruane warned that gas tax repeal could resurface as an amendment to other "must-pass" legislation, such as an omnibus appropriations bill.
 

EPA memo: Regs spiked gas prices

Even as the G.O.P. tried to nail the Democrats on federal fuel
taxes, the Clinton-Gore administration was blaming "Big Oil" for high fuel prices. But an EPA memo revealed July 14 showed they already had known better.

The day after the Senate vote on the fuel tax, Patrice Hill in The
Washington Times reported that a June 5 internal Energy Department memo showed the Clinton Administration knew its own environmental regulations were a major reason gas prices spiked in the Midwest in June, even as the administration and his allies in Congress were publicly blaming price gouging by "big oil".

The memo was written for Energy Secretary Bill Richardson by the
department's acting policy director, Melanie Kenderdine, as a clamor was rising over gas prices as high as $2.50 a gallon for the reformulated gasoline that the EPA required in the Chicago and Milwaukee areas this summer.

The memo reflects what analysts and oil company executives had been saying all along, that "high consumer demand and low inventories have caused higher prices for all gasoline types" at a time when crude-oil prices were hovering near record highs.

Instead, by mid-June, three federal agencies had initiated investigations into collusion and price-fixing by oil companies, Hill reported. And by the end of the month, the administration had enlisted the Federal Trade Commission in its investigative war against the industry.

The problem was exacerbated in the upper Midwest -- particularly the Milwaukee and Chicago areas -- by EPA-mandated reformulated gasoline that proved difficult to produce, combined with lower gasoline inventories relative to the rest of the country, high regional demand, and limited transportation links.

The memo was written to help EPA administrator Carol Browner
determine whether those metro areas should be exempted from the clean fuel regulations, Hill wrote in The Washington Times. But while those cities were spurned, the St. Louis area -- home to House Minority Leader Rep. Dick Gephardt (D-Mo.) -- got a waiver.
 

Roads getting better

Even as these political feuds unfolded, the U.S. Congress learned in
a biennial report released June 1 that our highway infrastructure has
improved as investment has increased in recent years, but an annual
investment of over $35 billion is needed to fully improve the nation's
highway system.

And an analysis of the report by ARTBA found a positive conclusion
of the report -- that the gap between adequate and poor pavements can be narrowed in 20 years -- will require more money than the report maintains.

The report, The 1999 Status of the Nation's Highways, Bridges and
Transit: Conditions and Performance, said the nation should be investing $94 billion annually in its road and bridge system and $16 billion annually in its public transit system -- $110 billion combined, over the next 20-year period. This investment level refers to capital investment only and does not include maintenance, research, policing or administrative expenditures.

In 2000 total capital investment nationally by all levels of government is expected to be $58 billion annually in roads and bridges and another $8 billion in public transportation -- $66 billion combined.

The report's executive summary said Vehicle-Miles-Traveled (VMT)
increased on system, and urban use remains dominant. However, from 1995 to 1997, rural highway VMT grew 7.2 percent, compared to urban highway VMT growth of 4.1 percent.

"The trip to work is going to take even longer in the future unless
we're willing to pay for improved roads and transit systems," said Will Wilkins, executive director of The Road Information Program (TRIP). "Relieving traffic congestion in our communities is going to take a combination of increased investment, better traffic management and good local planning."

"The report supports the positive impact of increased spending on
conditions and performance improvements of our nation's highways and transit," said AASHTO executive director John Horsley. "This report is invaluable as we focus on reauthorization to propose adequate investments for the highway and transit systems for the next several years."

According to the report, total highway and bridge spending in 1997
-- the most recent year for which firm stats are available -- was $101.3 billion, with $21.1 billion (20.8 percent) funded by the federal government, $52.7 billion (52.1 percent) by the states, and $27.5 billion (27.1 percent) by local governments. This includes all road-related expenditures, including legal and administrative expenses, for example.

This $101.3 billion for highways and bridges in 1997 represents an
8.4 percent increase over 1995. Of this total, $48.7 billion was for capital improvements, a 10.2 percent increase. The feds contributed 41.1 percent of the capital outlay, down from 44.5 percent in 1995, the report said.

Pavement condition has improved due to a rising level of investment
at all levels of government, and the amount of pavement in "poor" condition declined from 8.6 to 6.6 percent since 1993.

Acceptable ride quality of interstate pavement rose from 91.2 to
92.4 percent from 1993 to 1997. While the increments are small, it's still a major accomplishment, given our country's total road mileage of 4 million miles.

Bridge conditions saw even greater improvement than pavements. Since 1992, the total percentage of structurally deficient and functionally obsolete bridges dropped from 34.6 to 29.6 percent, while deficiency of interstate bridges declined from 25.3 to 21.6 percent.

The report is available online in different formats at 
http://www.fhwa.dot.gov/policy/1999cpr/.
 

ARTBA says report understates need

After the report was released, ARTBA analyzed its data and
determined just maintaining current physical conditions and levels of safety and traffic flow on the nation's highway network will cost $26 billion more per year over the next decade than what the report indicates.

ARTBA said the report focuses attention on its assertion that annual
investments of $56.6 billion over the next two decades will be required to maintain the system's physical condition.

But ARTBA found that the report assumes a significantly lower rate
of highway travel growth (2.14 percent) than actual growth over the last 20 years (2.84 percent). The report therefore assumes motor vehicle traffic growth will significantly decrease over the next 20 years.

That's not likely to happen, ARTBA says, pointing to Census Bureau
data estimating the U.S. population will grow by 60 million between 1995 and 2020. Therefore, despite national pavement conditions, traffic times will continue to grow under the report's scenario.

Dr. William R. Buechner, ARTBA vice president of economics and
research, said current trends suggest there will be 246 million motor
vehicles on America's highways by 2009, a 14 percent increase over 10 years. By 2015, highway travel, he projects, will increase 40 percent above the current level by 2015.

Buechner said a more realistic estimate for maintaining current
conditions is "buried" in the report, showing the agency believes an
additional $17 billion per year in highway capacity investment is needed -- in addition to $9 billion annually for pavement improvements -- just to maintain current pavement conditions and travel times for highway users.

Making up the $26 billion per year highway investment shortfall
ARTBA identified in the U.S. DOT report will likely require a combination of remedies, the association said. They include:

  o Changing current federal budget law so that the balance in the
Highway Trust Fund's Highway Account -- which will grow to $25 billion by 2003 -- can be drawn down for additional highway capital investment.

  o Increasing state and local government investment in roads and
bridges above the current growth rate of about five percent annually.

  o Increasing the federal motor fuels tax. Each penny of this excise
generates almost $2 billion for highway and mass transit investments, and some 15 percent of federal gas tax revenue is earmarked for mass transit programs.

But recent experience with higher gas prices -- and attempts to roll
back federal fuel taxes -- shows just how hard raising the fuel tax would be.

ARTBA's analysis of the U.S. DOT report to Congress is available as an Adobe Acrobat Portable Document Format (*.pdf) file off the internet at http://www.artba.org/pdf/1999_Needs_Report_Analysis.pdf/.