Highway Trust Fund: Running on Empty


…..Tuesday morning, the House Subcommittee on Highways and Transit met to discuss the status of the Highway Trust Fund (HTF) and the effects its impending insolvency would have on transportation projects nationwide. As it stands, the HTF receives almost 90% of its revenue from taxes on motor fuels. As CAFE standards increase the number of fuel-efficient vehicles on our roadways, less gasoline is purchased and revenue going into the HTF decreases. Making the problem worse is the trend of people moving into cities where personal cars are being abandoned in favor of more practical mass transit, walking, or bicycles.

…..Witnesses Polly Trottenberg, Undersecretary for Policy at the USDOT, and Kim Cawley of the Congressional Budget Office (CBO) provided a number of proposals to keep the HTF solvent beyond 2015 when it is anticipated to be unable to pay its bills. Mr. Cawley reported that the HTF will need to increase gas taxes by 10 cents per gallon, receive a $15 billion transfer from General Funds, and cut spending, or some combination of all three in order to continue. Ms. Trottenberg also noted that with the wars in Iraq and Afghanistan winding down, there are hundreds of billions of dollars that can be diverted into transportation infrastructure projects instead. Especially given the low interest rates, now is a good time to invest, she said.

…..If the Trust Fund does not receive sufficient revenue to fulfill all its obligations to grantees, states will likely face cuts and delays in crucial projects. Several states depend heavily on federal contributions for their transportation and infrastructure project budgets. In many rural or smaller states, federal money can make up over half of a state’s annual budget. With revenues declining, legislators at all levels of government are looking to MAP 21’s streamlining initiatives to reduce completion times and lower costs as part of a many-pronged solution to the crisis. Whatever the solution is, the Highway Trust Fund is in serious need of a long-term fix, not just “another Band-Aid”.

…..ASCE also submitted testimony for consideration to the Subcommittee, which may be found here: http://www.asce.org/uploadedFiles/Government_Relations/Testimony_and_Correspondence/2012/ASCE%20Statement%20on%20the%20Status%20of%20the%20HTF%20072313.pdf

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