And because state and local tax coffers are spilling over as the result of strong economic growth unaccompanied by inflation, surface transportation spending hasn't looked this good since the salad days of Interstate construction. 

TEA-21's predecessor bill -- the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) -- itself provided a big boost in federal highway program dollars. Nonetheless, federal highway spending has been flat in constant dollars for the last two decades. TEA-21 will change that. 

TEA-21 authorizes an astonishing $216 billion for highway and transit programs over six years. TEA-21 bill authorizes $175 billion for the highway program, with at least $165 billion in guaranteed spending. Transit is authorized at $41.4 billion, with $35 billion guaranteed to be spent. 

Federal funding for highway programs will rise from about $18 billion in 1998 to over $26 billion averaged annually through 2003. Because an average 20 percent share will be required of states, that total will push another one-fourth higher. Some states will have to raise their local gas taxes just to get their fair share. 

Amid this financial outpouring, suppliers to the industry may be hard pressed to staff expanded operations with qualified personnel. The squeeze already is on among consulting engineering firms and paving contractors, they report. 

And well-heeled state highway programs now should have plenty of money to pursue Superpave projects, with their rigid demands on contractors and materials suppliers. (see Superpave Restricted Zone Enters the Twilight Zone). 
 

A singular event 

TEA-21 represents a singular event in surface transportation funding history. It's a dream-come-true for highway program enthusiasts and the engineering and construction industry, not to mention state and local governments. It will reinforce residential construction as well as stabilize road work through 2003. 

"TEA-21 means the transportation sector will continue to be the most stable part of the U.S. construction market well into the next century," said Pete Ruane, president of the American Road
& Transportation Builders Association. 

"The bill will create approximately 500,000 new jobs and sustain the 1.5 million existing jobs in highway construction and related industries," he said. "This will benefit communities all across America as the increased purchasing power of working families will support other businesses and strengthen local economies." 

TEA-21 also is unique because "firewalls" built into the bill effectively preserve use of most of the gas tax money for the purpose for which it was collected, that is, surface transportation (if not highway construction). 

That funding is "guaranteed" because the bill ensures for the first time that the annual fuel tax revenues paid into the Highway Trust Fund will be spent on the nation's surface transportation system. This "firewall" was a compromise to the House's unflagging effort to get the Highway Trust Fund taken off-budget and its funds held independent of the U.S. General Fund. 

So-called "donor" states consistently send more gas tax money to 
Washington than get they back, and they threatened to derail reauthorization entirely via their competing STEP-21 and STARS 2000 reauthorization plans championed in 1997 by their respective legislators. 

For them, TEA-21 improves the "minimum allocation" to states so no state will receive less than 90.5 cents on each gas-tax dollar sent to Washington. That beats the 72 cents per dollar endured by South Carolina under ISTEA, or 80 cents by Tennessee and Virginia. 

TEA-21 as passed also includes some 1,850 "special projects", known popularly as "demonstration projects". 

These include projects in all 50 states, such as bike paths in Oregon, pre-Olympic renovations for Salt Lake City, and a new bridge for Senate Majority Leader Trent Lott's (R-Miss.) home town. These are expected to cost $7 billion, but are included under discretionary spending and will be subject to the obligation limitation. 
 

ISTEA structure retained 

TEA-21 retains ISTEA's essential structure, which many in the highway industry found repugnant in its liberal use of Highway Trust Fund money for transit via dedicated funds, block grants and Congestion Mitigation and Air Quality (CMAQ) funding; and so-called "transportation enhancements" unrelated to road building. 

ISTEA also permitted an unprecedented degree of control by metropolitan planning organizations (MPOs) over how state DOTs could program projects in their areas, to the everlasting irritation of some states. And because of its linking with the Clean Air Act Amendments of 1990, ISTEA could preclude highway capacity increases in metropolitan areas that did not meet air quality standards. 

The reason the Senate's ISTEA passed muster with highway interests in 1991 is that it brought so much more money to the table than preceding surface transportation bills that Congress simply could not pass on it. TEA-21 does the same, muffling "devolutionists" who would terminate the federal program, and those who complained that ISTEA's formulas unfairly favored northeastern states to the detriment of southeastern and midwestern states. 

As recently as January -- with the existing ISTEA expired Oct. 30, time running out on a six-month extension, and senators and representatives at war with each other over the formulas and the balanced budget resolution of 1997  -- passage of comprehensive surface transportation looked grim. 

But on May 22 the Senate passed the TEA-21 reauthorization conference agreement 88-5. The House passed the agreement by 297 votes to 86. And despite early indications that he would veto the bill because its budget authority would wreck the balanced budget agreement, Clinton signed the bill in early June. 
 

Strange bedfellows 

The massive funding levels of TEA-21 never could have come about without teamwork between traditional antagonists like the highway and mass transit lobbies, or private construction firms and government agencies. That surface transportation legislation receives profoundly bipartisan support helped ensure votes in every corner of Congress, and quelled a potential presidential veto. 

"It is truly remarkable how completely the Transportation Equity Act for the 21st Century fulfills the transit industry's key ISTEA reauthorization goals [of] the highest possible transit funding," gushed the American Public Transit Association. 

"The new law is a victory for America, because it restores integrity to the federal budgeting process," said Bill Fay, president of the American Highway Users Alliance. 

So when was the last time you heard transit and highway interests 
"singing from the same hymn book"? 

But what really made it possible was the realization early this year that the booming economy would improve the government's cash flow to the point that treasury wouldn't have to rely on daily cash from the federal gas tax to stay liquid. 

Therefore, gas tax money could be returned to the states at a rate near that at which it is collected, instead of the conventional partial return, with the remainder being used to subsidize cash flow, and highway users being stuck with an I.O.U. 

And while the funding level exceeds that permitted by the balanced budget resolution, the bill counteracts that by identifying "offsets" of $23.4 billion, including the highly publicized denial of V.A. disability benefits for smoking illnesses unrelated to military service. 
 

Light rail to benefit 

TEA-21 has given transit a jump start by authorizing $41.4 billion for FY 1998 to 2003, with $35 billion guaranteed to be funded through 2003. TEA-21 authorizes transit "new starts" under Section 3030, Projects for New Fixed Guideway Systems and Extensions to Existing Systems. This section enumerates light rail and high-speed rail projects by name, schedule for development and the type of work to be done. 

Even maglev stays in the act. Maglev work was authorized in ISTEA, but was stonewalled because the money was never appropriated. TEA-21 authorizes up to $60 million over three years from the Highway Trust Fund for design work on one or more magnetic levitation train technology transfer projects, but requires at least a third of the cost to come from non-federal sources. 

But a Senate provision to allow states to use highway funds for Amtrak was dropped, along with a provision to allow Amtrak the same flexibility granted public transit agencies to put capital funding into maintenance activities. 
 

Demand management won't die 

Demand management is a transportation policy philosophy which would deal with traffic congestion by making it more difficult, not easier, to drive. Such academicians work to try to reduce the number of users, rather than increase highway capacity. 

With the weight of the environmental movement and "NIMBY" opponents of road construction squarely on their side and in their ranks, demand management researchers have been busy conjuring methods of imposing tolls where none exist, or forcing so-called "congestion pricing" on rush hour drivers to get them to use expressways at some other time. 

But Congress' boost in highway funding repudiates the little progress that demand-side managers had made "Inside-the-Beltway". Nonetheless, demand management lives on as a bad idea that won't go away. 

For example, TEA-21 includes a provision, under an Interstate 
Reconstruction and Rehabilitation Pilot Program, that would allow up to three states to impose tolls on portions of their interstates, so long as the toll revenues are used to reconstruct, improve or maintain the facility. 

While that has superficial appeal, we read the program's real purpose as establishment of a precedent in which for the first time, tolls are imposed on existing "free" highways. That was part of the Clinton administration's proposed reauthorization bill early in 1997, and would provide a platform from which congestion pricing could spread. 

And in an Orwellian twist, TEA-21 also includes a provision to rename the Congestion Pricing Pilot Program the Value Pilot Pricing Program, expanding the number of congestion pricing programs from five to 15, and lifting a restriction that only three projects could be conducted on the interstate system. These 
projects are expected to evaluate impacts on traffic congestion, air quality, transit use, and other social effects. 
 

Back and forth on metric 

As a result of TEA-21, the American highway industry's on-again, off-again love/hate relationship with metric is on the rocks. 

After years of training, arm-twisting and missed or extended deadlines, obligatory metrication of the federal highway program is dead as a doorknob. 

Section 1211 of  TEA-21 eliminates the Sept. 30, 2000 date for states to convert to metric. State DOT conversion to metric now is optional. 
 

TEA-21: Big money for a big job 

Under TEA-21, major highway programs would be funded as follows: 

Interstate Maintenance Program: $3.4 billion in FY 1998, rising to $4.2 billion in FY 2003 

National Highway System: $4.1 billion in FY 1998, rising to $5.0 billion in FY 2003 

Bridge Program: $2.9 billion in FY 1998, rising to $3.6 billion in FY 2003 

Surface Transportation Program: $4.7 billion in FY 1998, rising to $5.9 billion in FY 2003 

Congestion Mitigation and Air Quality Improvement Program: $1.1 billion in FY 1998, rising to $1.4 billion in FY 2003 

Transit Capital Program: $1.8 billion from the trust fund and $451 million from the general fund in FY 1999, rising to $2.4 billion from the Highway Trust Fund and $607 million from the General Fund in FY 2003. 

TEA-21 places the Appalachian Highway Development Program into the Highway Trust Fund, providing a total of $2.2 billion. To address NAFTA issues, TEA-21 creates a $700 million discretionary Corridor and Border Infrastructure Program. 

And it provides $900 million for replacement of the Woodrow Wilson Bridge (the "Beltway", I-495 over the Potomac River at Alexandria) in the Washington, D.C. metropolitan area. Because the Washington Post bitterly criticized TEA-21's pork barrel projects, while emphasizing the need for the Wilson bridge replacement, new support exists for the axiom that pork is not pork when it's in your own back yard. 

 
TEA-21 delays regional haze 

In yet another benefit to industry, new EPA plans to curb haze in 
parks and pristine areas will be delayed due to last-minute changes in TEA-21 bill, reported the American Association of State Highway & Transportation 
Officials (AASHTO). 

At the 11th hour, Sen. James Inhofe (R-Okla.) and Rep John Dingell (D-Mich.) changed a section of the bill to delay from six to nine years state compliance with the Clean Air Act's provision to eliminate haze in protected areas, AASHTO said. 

Now EPA can no longer require states to report their plans by next year on how they will conform to the new rules for improving visibility in those areas over the coming decades. 

The regulations, proposed last year, require 10 percent improvement of visibility per decade for 156 designated areas. Opponents say most of the haze comes from unpaved roads and forest fires, out of control by industry and society. 
 

The complete text of TEA-21 is available from the 
Federal Highway Administration.