REGION: Area could lose one-third of federal highway money

Congress may come to rescue; legislation to plug gap passes House

By DAVE DOWNEY - Staff Writer | Wednesday, July 23, 2008 6:11 PM PDT ∞

With tens of millions of transportation dollars at stake for San Diego and Riverside counties, Congress moved Wednesday to stave off a collapse of the federal Highway Trust Fund that pays for highway construction and maintenance, as well as mass transit operations.

The House voted 387-37 to pass legislation to plug a gap in the highway fund with an infusion of $8 billion from the federal government's main bank account, the general fund. The bill, House Resolution 6532, now goes to the Senate.

Rep. Brian Bilbray, R-Solana Beach, was one of those who cast his ballot for the bill, in a bipartisan vote that has a large enough margin to overcome a threatened veto from President Bush.

Bilbray said the shift was not only necessary to keep the highway fund solvent, but warranted.

"It looks like the trust fund has a claim on this," he said, noting that 10 years ago the same amount was taken out of the highway pot to plug a hole in the general fund and was never repaid. The general fund pays for national defense and the daily operations of most federal agencies, among other things.

"When you're flush with cash, it's easy to let your relatives borrow money from you," Bilbray said in a telephone interview Tuesday. "But when you're having a hard time paying the mortgage, you have to go back to them and say, 'I need the money now,' "

Over the long haul, however, Congress must find a better way to fund highways because the current formula isn't sustainable, Bilbray said. While stopping short of proposing a solution, he said it may be time to base the gasoline tax on a percentage of the price of a gallon of gas rather than on the fixed amount of 18.4 cents per gallon.

With the record-high gasoline prices, one might assume federal coffers are overflowing with cash. But actually, the reverse is occurring.

The take from the federal excise tax on fuel is plunging because the high gas prices are spurring commuters to trade in gas-guzzling sport utility vehicles and trucks for compact cars and hybrids, to park their cars and board trains, and to work from home more often.

As a result, motorists are paying less in federal gas taxes.

"We're using less gas," Bilbray said. "But we forget that less money is going into the Highway Trust Fund when we're doing it. It's an unintended consequence of conservation."

Stakes are high

If the Senate fails to follow the House's lead or the president successfully carries out his veto threat, the amount of money available nationwide from the gas tax will plummet from $35.3 billion this year to $24.4 billion in the new federal fiscal year that begins Oct. 1, according to an analysis by the American Road & Transportation Builders Association, a Washington-based trade group.

What's at stake for California is $928 million in crucial federal funding and more than 32,000 jobs, the association estimates.

Given that San Diego County typically receives about 8 percent of the state total and Riverside County gets 5 percent (based on a formula that reflects population and miles of highways), local officials say the counties could lose about $74 million and $46 million, respectively. That's about one-third of what the region receives annually.

"It's kind of uncharted territory to have that much federal money to be in play like this," said John Standiford, a spokesman for the Riverside County Transportation Commission. "If you take a big chunk out, it can really screw up a lot of things down the road."

If the money is taken away, the planned French Valley interchange at Interstate 15 in Temecula and a 22-mile extension of a Metrolink commuter rail line from Riverside to Perris could be delayed, Standiford said.

He said it is unlikely that the funding lapse would slow anticipated work to widen Interstate 215 through Murrieta from four to six lanes, because that project received funding from the big $20 billion state transportation bond. But the loss of federal funding could jeopardize the timely completion of a segment to the north, between Scott Road and Highway 74.

In San Diego County, the funding lapse could affect projects such as the express lanes on Interstate 15, the car-pool extension on Interstate 5 and the widening of Highway 52, said Gary Gallegos, executive director of the San Diego Association of Governments, a regional transportation planning agency.

In the case of I-15, the loss wouldn't delay the 2012 projected completion date, he said. But he said it could mean the region wouldn't be reimbursed later for a portion of the $1.3 billion it is spending on the project.

Highway 76 said to be safe

Gallegos said the planned widening of Highway 76 from two to four lanes from Melrose Drive in Oceanside to I-15 also is in line for federal funding, but if that disappears, the road will proceed on schedule.

"It's one of the lock-box projects that we have said we are going to move even if we don't move anything else," he said. "If it is built with only (TransNet) sales tax money, it will be built."

But that could have repercussions later, triggering the delay of other projects, Gallegos said.

He said a funding lapse also could rock already strapped operational budgets for North County Transit District's Coaster and Sprinter trains, and Breeze buses.

He said San Diego County receives more than $200 million a year for transit and highways.

Despite the concerns, he said, "We remain optimistic that Congress will fix this."

The federal excise tax isn't the only tax people pay at the pump; they also pay a state excise tax that is fixed at 18 cents a gallon.

On top of that, commuters pay 7.75 cents in state and local sales taxes on every dollar they pull out of their wallets at the service station ---- or about 34 cents per gallon, at today's prices.

Collections of state excise taxes and state/local sales taxes are declining as well.

While the higher price of gasoline is multiplying sales tax receipts at the pump, transportation officials say, because of the flagging economy, the increase is more than being offset by declines in sales at malls and big-box stores. That's because service stations account for a small fraction of all sales tax collections ---- 8.5 percent in San Diego County, for example.

And, consequently, transportation funding sources such as San Diego County's TransNet and Riverside County's Measure A are losing, not gaining.

Contact staff writer Dave Downey at (760) 745-6611, Ext. 2623, or ddowney@nctimes.com.

First name only. Comments including last names, contact addresses, e-mail addresses or phone numbers will be deleted. Attempts to misrepresent your identity or impersonate any person will not be approved. All comments are screened before they appear online, so please keep them brief. Comments reflect the views of those commenting and not necessarily those of the North County Times or its staff writers. Click here to view additional comment policies.