AASHTO Journal, 14 February 2014
Senate Environment and Public Works Chairman Barbara Boxer (D-CA) announced this week that she hopes to have a new transportation authorization before her committee by April in an effort to give the Senate Finance Committee ample time to consider funding options for a new surface transportation bill.
Sen. Boxer’s comments came during the Senate EPW hearing, “MAP-21 Reauthorization: The Economic Importance of Maintaining Federal Investments in our Transportation Infrastructure,” which included testimony from American Association of State Highway and Transportation Officials President and Kentucky Transportation Cabinet Secretary Mike Hancock, U.S. Chamber of Commerce President and CEO Thomas Donohue, American Road and Transportation Builders Association President and CEO Pete Ruane, National Association of Manufacturers President and CEO Jay Timmons, and AFL-CIO President Richard Trumka.
“It is critical for our nation to continue investing in our aging infrastructure. Therefore, preserving the Highway Trust Fund needs to be our number one priority in this committee, in other committees, and in the Senate and the House,” Boxer said. “We must work together to find the sweet spot for a dependable, bipartisan source of funding for the Highway Trust Fund.”
Hancock told the committee that the impending insolvency of the federal Highway Trust Fund poses a threat to state budgets, the construction industry, and the overall economy that is real and that is even closer than originally estimated.
In his testimony, Hancock emphasized the importance of federal funding for necessary transportation improvements and noted that recent efforts at the state level to increase funding for transportation are not a substitute for a strong federal program.
“We could face serious economic disruptions as early as this summer if the U.S. Department of Transportation delays reimbursements to states for projects already completed,” Hancock said. “Also, unless Congress acts to either increase Highway Trust Fund revenues or provide additional General Fund support, the states will be unable to obligate any new federal funds in Fiscal Year 2015.”
Hancock said the Federal-Aid Highway program apportions about $40 billion a year to state transportation departments for road and bridge construction projects. In Kentucky, federal funding accounts for roughly half of the state’s surface transportation construction program. If Kentucky were unable to obligate any new federal funding in FY 2015, Hancock said the state would be required to postpone more than $350 million in FY 2015 construction lettings and delay the state’s entire FY 2015 capital program for one year.
Donohue, who has often said that the U.S. Chamber of Commerce supports keeping all funding options on the table to increase transportation investment, stressed that his organization preferred an increase in the gas and diesel taxes to generate revenue for transportation.
“The gas tax is not dead,” Donahue said. “However, the current levels have not changed since 1993. The obvious solution is to increase and index these user fees to produce sustainable, predictable, and growing cash flows until a new revenue structure can be identified and implemented.”
Ruane said that Congress needed to address the HTF as soon as possible to avoid an even bigger dilemma than exists now.
“The Highway Trust Fund has been facing the same problem with virtually the same alternatives for action for more than five years,” Ruane said. “One thing that has been proven certain in those five years—more time has not made any of the choices before you easier. No matter how difficult some may perceive the current HTF dilemma to be, it pales in comparison to the incredible value the U.S. surface transportation network provides all Americans and the nation’s economy.”
Hancock seconded Ruane’s remarks on the importance of transportation in a healthy economy.
“There is ample evidence that shows infrastructure investment is critical for long-term economic growth, increasing productivity, employment, household income, exports and overall quality of life. However, the outlook for the Highway Trust Fund and federal surface transportation program is unsustainable because the current federal surface revenues are simply not enough,” Hancock said. “We believe that the only solution is to find and implement a viable set of revenue solutions that will prevent this summer’s Highway Account cash shortfall and ensure the long-term solvency of the Highway Trust Fund.”
Additional information on the hearing, including all written testimony and a video of the event, is available here.