{
  "id": "R40451",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R40451",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 346327,
      "date": "2009-03-19",
      "retrieved": "2016-04-07T02:38:34.314147",
      "title": "The Donor-Donee State Issue: Funding Equity in Surface Transportation Reauthorization",
      "summary": "Few issues in the history of the Federal-Aid Highway Program have raised such heated debate as the argument over how closely the program\u2019s payments to the individual states should match the amount of federal highway taxes each state\u2019s highway users pay to the highway account of the Highway Trust Fund (HTF). Referred to as the donor-donee state issue, it is expected to re-emerge during the debate over the reauthorization of federal surface transportation programs. The current authorization, under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users (SAFETEA; P.L. 109-59), expires on September 30, 2009.\n\u201cDonor states\u201d are states whose highway users are estimated to pay more to the highway account of the HTF than they receive. \u201cDonee states\u201d receive more than they pay. The basic donor state argument is a relatively straightforward call for what they view as equity or fairness. Donor state advocates generally contend that for too many years they have been subsidizing the repair and improvement of donee state infrastructure, especially the older highway infrastructure in the Northeast.\nDonee state advocates argue that fairness is in the eye of the beholder and should not be separated from needs. They assert that the age of their highway infrastructure, especially in the Northeast, the high cost of working on heavily congested urban roads, and also the limited financial resources of large sparsely populated Western States justify their donee status. They further argue that there are needs that are inherently federal rather than state, and that a national highway network cannot be based solely on state or regional boundaries.\nA number of interest groups and State Departments of Transportation (state DOTs) are expected to propose that reauthorization increase the rate-of-return guarantee (currently 92%) and expand the scope of the statutory guarantee to cover more Federal-Aid Highway Program funding. This may be difficult to achieve in a tight budget environment. The Equity Bonus (EB) program, which is the principal means by which the rate-of-return adjustment is facilitated, is already the largest federal highway program. Others would restructure, modify or eliminate the EB altogether.\nThe Federal Highway Administration\u2019s (FHWA) donor-donee figures indicate that for FY2007 all 50 states were donee states. For FY2006 there were 41 donee states and no donor states fell below a  91% rate-of-return (based on a dollar in-dollar out calculation method). Some donor state advocates argue that this situation is anomalous and have argued for a method of calculation that relies on share percentages, rather than dollars, because this would eliminate the modifying effect of the recent drawing down of the unexpended balances of the HTF.\nNear the end of FY2008, the balance in the highway account of the HTF had fallen to the point that Congress provided for a transfer of roughly $8 billion from the Treasury\u2019s general fund to the highway account of the HTF in the hope that the transfer would be sufficient to support the guaranteed funding authorized in SAFETEA for FY2009. This transfer of general fund monies has no connection to the transportation taxes paid by highway users to the HTF and raises questions about basing an equity guarantee primarily on the states\u2019 shares of payments to the HTF.",
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      "typeId": "REPORTS",
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