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SURFACE TRANSPORTATION ACT HAS UNLIMITED POTENTIAL FOR ECONOMY -- HOWEVER, FUNDING SHORTFALL, NEW TAXES COULD BE ITS UNDOING, SAYS ABC

 WASHINGTON, April 26 /PRNewswire/ -- Efforts to rebuild the nation's infrastructure could be seriously weakened by new energy taxes and Congress' failure to fully fund the highway reauthorization package, according to the Associated Builders and Contractors.
 In testimony before a House surface transportation subcommittee, ABC spokesman Cork Peterson said that unless Congress remains faithful in its pledge to fully fund the Intermodal Surface Transportation Efficiency Act passed last year, it could "fall short of reaching its potential."
 Peterson, president of Peterson Contractors in Reinbeck, Iowa, expressed concern that, since the passage of the ISTEA, appropriations have failed to meet authorizations by some $4.3 billion. "State and local governments which developed their transportation programs based on a fully-funded five-year federal transportation program have had to make several adjustments because of the shortfall," he said.
 Peterson noted that ABC is pleased, however, that the Department of Transportation has recommended $20.6 billion for the Federal Highway Administration to fully fund the program for FY 1994.
 In his comments, Peterson urged the committee to give serious consideration to repeal the ethanol exemption from the motor fuels tax. He explained the exemption made more sense years ago when the subsidy was meant to promote the use of environmentally friendly fuels. However, now that Congress has mandated its use, the subsidy is no longer necessary and is costly to the Highway Trust Fund -- $500 million each year with an additional $200 million diverted from state and local transportation needs, he said.
 Another possible impediment to the ISTEA, Peterson said, is President Clinton's proposed Btu tax on energy. He explained that the subsequent drop in gas sales from a tax increase, would result in a still greater decrease in gas tax receipts, "thus throwing into doubt the likelihood that the funds will be available to fully fund the ISTEA."
 Perhaps the best feature of the ISTEA, said Peterson, is its plan to designate a National Highway System to better link the nation's towns and cities. The system would consist of 155,000 miles of roadway including all interstate routes, urban and rural principal arterials, the defense strategic highway network and strategic highway connectors. States are required to submit their individual maps to Congress by December 1993. Congress then must approve the map by 1995, or the program funding would be lost. Peterson said the NHS is an absolute necessity if the United States is going to increase its productivity. "An integrated urban rural system that connects major population centers, international border crossings, ports, airports and public transportation facilities will greatly enhance America's commerce and business distribution."
 Another positive feature of the ISTEA, according to Peterson, is that it gives states and localities the ability to decide the best use of their allotted funds. In some cases, however, he said states have


allocated funds to projects which stray too far from their intended purposes -- such as restoring historic railroad stations and acquisition of scenic, historic or archaeological sites. Peterson said that it is estimated that as much as $500 million could be transferred to non- highway projects this year.
 ABC is a national construction association representing 16,000 construction and construction-related firms in 80 chapters across the United States.
 -0- 4/26/93
 /CONTACT: Dick Haas or Mike Henderson of the Associated Builders and Contractors, 202-637-8800/


CO: Associated Builders and Contractors, Inc. ST: District of Columbia IN: OIL CST TRN SU: ECO

DC-KD -- DC021 -- 0799 04/26/93 14:27 EDT
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Date:Apr 26, 1993
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