Page:America's Highways 1776–1976.djvu/236

 estimates for appropriations from the Highway Trust Fund must be confined to the estimated availability by the end of the fiscal year of sufficient revenues in the Fund to finance the appropriations.

With a few exceptions, the Federal Government does not pay for the entire cost of Federal-aid highway projects. Originally the States were required to match the Federal funds on a 50/50 basis, except in States with large areas of public lands where there have been statutory increases in the Federal share. In 1973 the matching basis was revised for most projects, other than Interstate, to be funded on a 70 percent Federal/30 percent State basis. The Inter- state System has been funded 90/10 since the 1956 Act, again with an increased Federal share in public lands States.

Although the Federal share of a project’s cost was established by law, there were periods when this provision was waived or temporarily suspended. In 1932, to aid in fighting the Depression, Congress authorized $120 million which could be used to provide the State share of a project’s cost. This advance of funds, or suspension of the matching requirements, was to be repaid over a 10-year period beginning with fiscal year 1938 by deductions from regular apportionments. There were several other acts authorizing additional funds during the Depression.

In 1958, again to fight a recession, additional authorizations for the Primary and Secondary Systems and their urban extensions were enacted. The Federal share for these supplemental funds was raised but a separate authorization was also made to assist the States in providing matching funds. The amounts used to increase the Federal share had to be repaid from future apportionments.

The latest example of increasing the Federal share occurred in 1975, and a recession was again the reason for it. In this instance, all matching was waived for a 6-month period in 1975 with the proviso that the State share be repaid by January 1, 1977. This repayment provision was extended by the 1976 Act to provide for a staggered repayment to be completed by January 1, 1979.

The Office of Management and Budget (OMB) of the Executive Office of the President has authority to establish obligational limitations for the highway program and to specify the maximum amount of obligations to be incurred in a given fiscal year. The OMB limitation also may specify the rate at which obligations can be permitted to be incurred.

The OMB limitation on obligations does not apply to any particular fiscal year’s apportionment, but rather applies to the sum of all obligations within a particular fiscal year. Because of the multiyear availability of funds, if funds for a fiscal year are not obligated in that fiscal year, they are still available until they lapse according to the law.

The highway program, like other Federal programs, is subject to overriding national concerns, such as the rising rate of inflation which has led to controls being placed on highway spending. From fiscal year 1966 through fiscal year 1975, the Office of Management and Budget, through authority delegated to it by the President, regulated the rate at which Federal-aid highway funds were obligated in a given time period. It must be stressed that limitation on obligations, or impoundment, of highway program funds is somewhat different from impoundments for other Federal programs since there is no refusal to spend funds, only a slowing down in the rate at which funds may be spent.

The appropriations acts usually contain the wording “not otherwise provided” because not all of the highway programs are reimbursed from the Highway Trust Fund. For example, until the 1970 Highway Act, the forest highways and public lands highway programs were not funded from the Trust Fund, but had separate funding authorizations from the General Fund. There are still numerous safety and other highway-related programs with separate funding accounts, some with contract authority and some that must await each annual appropriations act for budget authority to spend money. Thus, the appropriations acts provide liquidating cash with which to reimburse the States under the normal Federal-aid highway programs, provide budget authority for certain other programs, and may provide limitations on obligations equivalent to previous Executive Branch impoundments for specific programs.

Although most Federal-aid highway programs obtain their budget authority in the form of contract authority rather than through appropriations acts, in recent years Congress has made several major changes. The one that may have the most impact on the highway program was enactment of the Congressional Budget and Impoundment Control Act of 1974 (Public Law 93-344) which was an effort to gain budgetary control over “backdoor spending,” spending not subject to year-to-year congressional or executive scrutiny. The contract authority exercised by the Federal Highway Administration is considered a form of “backdoor spending.” The Budget Act requires that future Federal-aid highway acts contain provisions limiting new budget authority to the estimated amount provided in appropriations acts, and this was first done in the 1976 Federal-Aid Highway Act.

This requirement would seem to negate all contract authority, but Congress, recognizing that some programs require advance knowledge of the size of future Federal funding commitments, permitted several exceptions. One of these exceptions relates to programs whose new budget authority is derived from trust funds, 90 percent or more of whose receipts are user related taxes. The Highway Trust Fund, which is wholly supported by user taxes, meets the requirement, but its life term has been limited by law since 1956. Its term has been extended numerous times, the latest, in 1976, extended the Fund to September 30, 1979. Should the Trust Fund be terminated, or its uses or revenue altered so that it no longer meets the exception requirements, the highway program would have to obtain its budget authority through appropriations acts as other Federal agencies do. Of course, the appropriations acts could provide for multiyear funding, but this would be in opposition to the principle of annual review of expenditures.

The Federal-Aid Highway Act of 1976 has made other changes in the legal and financial management 230