Congressional Budget Office (CBO) projected balance of the federal Highway Trust Fund (HTF) as of March 2015, which indicates HTF insolvency by September 2015.
This week the focus of Congressional tax committees was on how to properly fund our nation’s roads, bridges and transit systems. The federal Highway Trust Fund (HTF) is supported by current federal gasoline tax receipts, which have failed over time to keep up with current federal transportation spending. Therefore, the HTF is facing an $8 billion shortfall for the remainder of this calendar year, and is expected to face a $90 billion shortfall over the next six years. A main reason for this discrepancy is that the federal gas tax rate has not been increased since 1993, not even to account for inflation or construction cost pressures.
The HTF is slated to be insolvent later this summer (see CBO chart above) and if the tone and tenor of the House and Senate hearings were any indication, Congress has a lot of work to do in short order to avoid this looming crisis. There was no consensus outlined in either hearing on a solution and member views ranged from supporting a 15-cent per gallon gas tax increase, to taxing foreign corporate earnings, to eliminating all current transit spending from the trust fund.
In the House hearing, Ways & Means Committee Chairman Paul Ryan (R-WI) noted that, “We [Congress] like doing six-year highway bills; that’s our goal … we need to find a real, long-term solution [to the HTF crisis].” Congressman Renacci (R-OH) made mention of his bill that would index the current gasoline tax to inflation, among other actions, which ASCE supports. Renacci said, “Short-term fixes are not the answer. We need to have a user fee program and we need to do something long-term.” Committee Democrats were vocal in their support for a fix, with Ranking Member Sander Levin (D-MI) stating, “All options should be on the table, except doing nothing.”
In the Senate, Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) agreed on the urgent need for a funding fix. “As chairman of this committee I will solve this problem,” said Senator Hatch. Senator Wyden went on to say, “You cannot have big league economic growth with little league infrastructure.” ASCE provided a written statement for the record to Senate Finance where we outlined our preference for an immediate increase in the federal motor fuels tax while remaining open to all options Congress would like to consider to increase revenues to the HTF. There was broad consensus during both hearings that user fees should support the future program and that the principle that “those who use the roads should pay for their upkeep” should be maintained. The American Road and Transportation Builders Association (ARTBA) this week unveiled a new study that concluded that a 15-cent per gallon gas tax increase would be a relatively insignificant pricing factor in the retail cost of gasoline.
Tax committees are slated to take another look at funding and financing options next week, as the July 31 deadline for action looms larger. tell your social networks about why Congress must #FixTheTrustFund and write your members of Congress and urge them to act now to solve this problem.