AASHTO Journal, 26 July 2013
The future of the federal Highway Trust Fund was on the minds of congressional leaders this week.
The House T&I Committee’s Subcommittee on Highways and Transit held a hearing Tuesday on the financial status of the Highway Trust Fund. Just two days later, Senate Environment and Public Works Chairman Barbara Boxer (D-CA) held a news conference to “sound the alarm” about the need to increase HTF revenues.
Kim Cawley, Natural and Physical Resources Cost Estimates Unit chief at the Congressional Budget Office, told the Highways and Transit subcommittee that current estimates show the HTF, which supports highway and transit programs, will be unable to meet its obligations sometime in FY2014. “The current trajectory of the Highway Trust Fund is unsustainable,” Cawley said.
Most of the revenue deposited in the HTF comes from fuel taxes – 18.4 cents a gallon on gasoline and 24.4 cents a gallon on diesel fuel. Spending from the trust fund has outstripped revenues, according to experts, due in part to a combination of higher mileage vehicles and a decline in vehicle miles traveled that have affected fuels tax receipts.
Polly Trottenberg, Under Secretary for Policy, U.S. Department of Transportation, told the House committee that in a situation in which the highway account of the HTF experiences a cash shortfall, the Federal Highway Administration might slow reimbursements to states or provide only partial or pro-rated reimbursements based on the cash available in the HTF.
Trottenberg said that the Obama Administration has proposed investing $50 billion from anticipated war savings on transportation infrastructure. However, subcommittee members showed little support for the idea.
“The peace dividend is not a long-term solution. That’s still a Band-Aid approach,” said T&I Committee Ranking Member Nick Rahall (D-WV).
Rep. Janice Hahn (D-CA) suggested that as Congress considers shoring up the HTF, it consider “looking outside the gas tax box as we go forward.” She pointed out that alternative fuel vehicles such as hybrids or electric vehicles use the roads, but pay much less in taxes. “Just because buying gas doesn’t mean using highways more,” Hahn said.
“Sounding the Alarm”
Boxer, meanwhile, backed by representatives from the American Society of Civil Engineers, Associated Equipment Distributors, American Association of State Highway and Transportation Officials, American Road and Transportation Builders Association, and the National Construction Alliance, told reporters that she, Commerce Committee Chairman Jay Rockefeller (D-WV), and Banking Committee Chairman Tim Johnson (D-SD) were sending a letter to their Senate colleagues “sounding the wakeup call” over the anticipated HTF shortfall.
Senator Barbara Boxer (D-CA) hosts a news conference this week to “sound the wakeup call” over anticipated Highway Trust Fund shortfalls. She is joined by (l-to-r) Rob Victor, American Society of Civil Engineers Board Member; Ray Poupore, National Construction Alliance Executive Vice President; Bud Wright, AASHTO Executive Director; Tim Watters, Associated Equipment Distributors; and Steve Wright, American Road & Transportation Builders Association Chairman.
“This problem must be addressed in this Congress,” said Boxer. “A strong transportation system is vital to ensuring our nation’s economic competitiveness, and this requires maintaining federal investments in our infrastructure. Our needs are only going to grow, because you cannot have a world class economy unless you can move goods and people efficiently and safely.”
Boxer said the Senate EPW Committee will hold a hearing in September to discuss financing for the highway and transit programs. She also said that the Senate Finance Committee, which recommends funding options, is reviewing how states are funding transportation investments to identify HTF revenue options.
Boxer said there are many HTF revenue options for Congress to consider including supplementing the existing gas tax or doing away with the gas tax and replacing it with other use fees.
“This is a basic bread and butter issue,” Boxer said. “It [transportation] is a basic need and we all need to pay something.”
Video of Sen. Boxer’s news conference is available here.
The Subcommittee hearing and written testimony is available here.