Bid to Save Highway Trust Fund to Resume

This story appears in the July 7 print edition of Transport Topics.

With the federal highway account rapidly running out of money, a Senate committee plans to vote this week on a bill that would provide more than $8 billion to pay for transportation projects around the country for the remainder of the year.

Sen. Ron Wyden (D-Ore.), chairman of the Finance Committee, has indicated he will bring up legislation he offered on June 24 that aims to keep the Highway Trust Fund solvent through December by tightening compliance with current tax laws.

Lawmakers are in session this month for just a few weeks before they recess for the month of August, leaving them with little time to approve a legislative fix to shore up the cash-strapped fund.

Rep. Dave Camp (R-Mich.), Wyden’s counterpart as chairman of the House Ways and Means Committee, is expected this week to unveil a short-term fix for the trust fund that would last longer than six months. Senior aides said Camp’s plan would seek bipartisan support. Senate Democratic aides in the tax-writing committee noted that they planned to meet with their Republican counterparts over the July 4 recess to draw up a proposal that could pass both chambers.

Bud Wright, executive director of the American Association of State Highway and Transportation Officials, said he was glad to see Congress taking the short-term solvency of the trust fund “very seriously.”

“We remain encouraged and supportive of ongoing discussions by Congress that would address the short-term solvency issue, which is critical to states,” Wright said.

According to recent projections from the Congressional Budget Office, the trust fund’s road building account will require about $6.6 billion in added revenue to meet spending demands though the end of the year.

The trust fund helps pay for thousands of highway projects nationwide, but those payments could stop as early as this month if the account approaches insolvency. Transportation Secretary Anthony Foxx has warned that, absent a congressional fix, his department would slow down payments to states beginning Aug. 1, when the fund’s shortfall is projected to occur. Foxx added that an insolvent trust fund would put at risk thousands of construction jobs.

At a June 26 hearing, Wyden sought to gain support from GOP colleagues by modifying his trust fund bill. The modifications included the removal of a heavy-truck provision, which would have changed the maximum heavy-vehicle use tax to $1,100 from $550. American Trucking Associations President Bill Graves said removing that provision “represents a very positive step toward development of a short-term solution.”

Wyden made other revisions, such as proposing a transfer of $750 million from the Leaking Underground Storage Tank Trust Fund to the Highway Trust Fund, cutting the tax rate for liquefied natural gas to 14.1 cents per gallon from 24.3 cents per gallon at the pump, as well as noting in the legislation that the Senate realizes the urgency to approve a long-term funding solution for the trust fund.

In the spring, Senate Democrats shot down a House Republican proposal to fund a one-year extension of highway funding by limiting the mail the U.S. Postal Service would deliver on Saturdays.

When Congress established the interstate highway system in 1956, it decided that the money to pay for it should come from users through a fuel tax. Since 1993, for every gallon of gasoline sold in America, 18.4 cents goes into the trust fund. The rate for diesel fuel is 24.4 cents per gallon. But an increasing reliance on mass transit and advances in fuel-efficient vehicles has slowed the increase in the amount of fuel that drivers consume.

With the slowing of fuel-tax revenue and increases in construction costs, Congress has transferred billions of dollars from the federal government’s general fund into the trust fund to keep it solvent.