Donor states won a significant victory Friday, July 29th with the House of Representatives passage of the conference report for the reauthorization of the Transportation Equity Act for the 21st Century (TEA 21). SAFETEA LU (HR 3), was approved by the House with a bipartisan vote of 412 – 8. The Senate approved the conference report Friday evening, and President Bush is expected to sign the bill by August 10th.
While donor states had an original goal of 95% rate-of-return (ROR), in the end, the battle was much larger then could have been forecast. Donor states had to work with lower than hoped for funding levels, assaults on the scope of funding used to make the calculation and grow equity over TEA-21’s level of 90.5%.
In the end, Congress passed the largest bill possible within the current budget ($286.4 billion). While early versions of the reauthorization measure reduced the level of “scope”, this final bill’s “scope” was written to hold that coverage to the same level included within TEA-21. This Congress succeeded on holding scope to TEA-21’s level. Finally, on our main goal of rate-of-return, SAFETEA LU provides a ram-up to 92% – 90.5 in FY 05 & 06, 91.5% in FY 07 and 92% in FY 08 & 09.
Thank you for all your efforts over the past several years! This significant increase in rate-of-return is a credit to those efforts. This equity increase ensures that funds will be distributed more equitability for all states. Without your hard work in building our formidable coalition, this success would not have been possible. I hope that in the coming weeks, you thank your Congressional delegation members and this effort’s Congressional champion in House Majority Leader Tom DeLay (R-TX), all who have fought so hard to provide greater equity.
Michigan Specific Information
Under the agreement by the House and Senate, Michigan will receive more than $1.124 billion a year in highway and transit dollars through 2009, which is an average of 27% over the previous plan. This is an increase of about $239 million a year in transportation funding; Michigan received an average of $884 million annually under the last bill.
Formulas
The bill replaces the current law minimum guarantee program (with its state-by-state table of guaranteed percentage shares of total highway formula money) with a new equity bonus program with two primary criteria: all states must reach a minimum rate of return on Highway Account tax payments in each year, and all states must have an annual total apportionment in each year that exceeds the state’s average annual apportionment under TEA 21 by a fixed “floor” percentage. The guaranteed rates of return and floors are shown below:
YEAR: 2005 (ROR) = 90.5 2006 (ROR) = 90.5 2007 (ROR) 91.5
2008 (ROR) = 92.0 2009 (ROR = 92.0
Floor (% of TEA 21)
2005 = 117 percent 2006 = 118 percent 2007 = 119 percent
2008 = 120 percent 2009 = 121 percent
We have fought long and hard to guarantee Michigan’s fair share (we will continue to stay active on securing sufficient funding for our transportation needs) along with our friends on the Congress committee, please remember to send your “thanks” to Representative Hoekstra and Representative Ehlers.
Please contact Mike Nystrom at (517) 347-8336 with any comments or concerns.
