Regions vie for bigger share of federal jobs-bill revenue
The national debate on the new 5-cent gasoline tax bill has been couched largely in terms of the number of Americans it will put back to work and the number of bridges and potholes it will fix.Skip to next paragraph
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In the halls of Congress, however, there is another equally critical dimension: Just where will the revenues from this measure flow and where will these new jobs be created?
As a result, the version of this legislation that passed the House a week ago has become the latest shot fired in an increasingly divisive political war of the states. It is setting region against region over who gets how much of a generally shrinking federal pie. This struggle rarely makes the evening news because it involves the unglamorous, nuts-and-bolts level of lawmaking: the formulas that determine the way federal money is doled out to the states.
In the case of the new highway tax, the House version passed Dec. 6 substantially alters these formulas while the Senate bill, which was approved by committee Dec. 8, maintains the traditional approach. The House changes would affect revenues disbursed in the primary highway and Interstate 4R programs. The former provides funds for the construction of non-Interstate roads and the latter supports repair and maintenance of the Interstate system.
In the past, the primary highway funds have been distributed to states based on four factors - land area, urban population, rural population, and the number of postal route miles - while Interstate 4R money has been allocated according to the number of lane miles and vehicle miles traveled in a state. Of these, the population factors and vehicle miles traveled tend to favor Eastern states, while land area, postal route and lane miles favor larger, less populous Western states.
But in the House bill the formulas have been changed so the new revenue will be distributed on the basis of factors that favor the East. The funds put into the primary highway program would be disbursed according only to population and the Interstate 4R money in accord with vehicle miles traveled plus gasoline and diesel fuel consumption.
The Senate version maintains the traditional allocation formulas and has administration backing. It is now stalled by a filibuster of several conservative Republicans. The only change is the addition of a provision that each state will get back at least 85 percent of the revenues from the tax collected within its boundaries.
This 85 percent provision is also in the House bill and is based on one of the controversial tenants of the architects of these formula changes, members of the Northeast-Midwest Congressional Coalition: that the measure of the equity of federal programs is the ratio of federal spending in a state to the amount of federal taxes collected there. On this basis, coalition members have been pushing changes in allocation formulas for virtually every federal program, ranging from housing to the windfall profits tax to the gasoline tax. The region that stands to loose the most from these changes is the West.
Thus, coalition efforts have sparked a response among Western governors, working primarily through the Western Governors' Policy Office. ''We're under attack to a degree we've never seen before,'' remarked South Dakota Gov. William Janklow at a recent WESTPO meeting.
The current regional cause celebre - the highway gasoline tax - demonstrates the financial stakes involved. WESTPO staff member Chris McKinnon has been following it for member governors, who represent all the Western states except California and Oregon. According to Mr. McKinnon, the House-sponsored changes in the gas tax allocation formulas would reduce revenues from the new tax in the WESTPO states by as much as $400 million a year.
Differences between the Senate and House bills will be settled in joint committee. While the results of this process are often unpredictable, the Senate generally has a slight edge. At this writing, Sens. Pete V. Domenici (R) of New Mexico and Steven D. Symms (R) of Idaho have both asked to be conferees.
While the outcome of this particular political test of regional strength will be settled soon, this regional struggle is certain to continue and to complicate congressional efforts at solving the nation's economic and fiscal problems.