Reserve fund may be put in place for surface transportation

The House and Senate Budget committees passed their respective budget resolutions providing a non-binding blueprint for FY 2010 federal spending and tax policy. The House and Senate will consider the resolutions next week, with final passage votes expected by the weekend. Both resolutions provide for level funding for surface transportation programs, but provide room for more spending if sufficient resources are made available in subsequent legislation. SAFETEA-LU expires at the end of FY 2009 and without an authorization in place the funding levels for the highway and transit programs are uncertain.

The House budget resolution includes a “reserve fund” for surface transportation reauthorization that allows Congress to revise spending for programs upward if Congress writes legislation that “establishes or maintains a solvent Highway Trust Fund over the period of fiscal years 2009 through 2015.” The provision leaves open the option of a transfer of general fund revenues to the Highway Trust Fund, “as long as the transfer of federal funds is fully offset.”

The Senate budget resolution includes a reserve fund for a broader array of infrastructure projects, including energy, water and public housing. It also allows for more spending on surface transportation if the “solvency of the Highway Trust Fund will be maintained for the length of the surface transportation authorization.”

Both resolutions reject the Administration’s proposal to change the budgetary treatment of the Highway Trust Fund, which would have eliminated the mechanism that allows the federal government to provide states with multiyear budget authority for their highway and transit programs and would have instead treated surface transportation programs like other federal programs which receive single-year appropriations.