President's Budget Requests Full SAFETEA-LU Funding

President Bush submitted his FY 2008 budget request to Congress. For the Federal-aid highway program the Administration has requested a $39.6 billion obligation limit, the amount specified in the SAFETEA-LU authorization legislation. The Administration did not include in its request the annual Revenue Aligned Budget Authority (RABA) funding which is the mechanism that adjusts the authorized funding level to reflect actual revenue received by the Highway Trust Fund. For FY 2008 the RABA adjustment should be $631 million. The Administration says that it proposes not to provide the RABA funding increase in order to preserve the solvency of the Highway Trust Fund. The FY 2008 request is a slight increase over the 2007 obligation limit of $39.1 billion contained in the Continuing Resolution that should be approved by the Senate this week. RABA funding was also not provided in FY 2007.

The Administration's budget also proposes a new highway congestion initiative that will enable a limited number of select cities to test comprehensive congestion reduction strategies that include innovative approaches to manage traffic and facilitate improvements to major interstate corridors. The program would be funded at $175 million in FY 2008. The "innovative approaches" include: congestion pricing (tolls charged at different rates based on the amount of traffic), commuter transit services, commitments from employers to expand work schedule flexibility, and faster deployment of real-time traffic information.

Highway Trust Fund solvency remains a concern. Projections from both the Office of Management and Budget and the Congressional Budget Office indicate that HTF revenue may not be sufficient to fully fund SAFETEA-LU levels through FY 2009, the life of the authorization legislation. The budget documents submitted do not add any clarification. Charts in the document show the HTF remaining solvent but these projections were not based on the anticipation that the highway program would be funded in FY 2007 at the same level as in FY 2006 ($34.7 Billion). The pending continuing resolution instead funds the highway program this year at the SAFETEA-LU level of $39.1 billion. Hearings on the budget this week may clarify projections on HTF status. 

Funding for the transit program is $9.422 billion which is $309 million below the SAFETEA-LU authorized level.

The budget proposal requests an obligation limitation of $2.75 billion for the Airport Improvement Program (AIP), $765 million less than the total contained in the pending FY 2007 CR.  The budget documents also include some information about what the President will be recommending in his proposal to reauthorize Federal Aviation Programs, which is expected to be submitted to Congress by the end of February.  The proposal indicates changes in the way FAA programs are to be funded.