by Michelle Blackston
Remember that school classmate who always whined "told you so" whenever things turned out badly? Well, it pains us to play the role of that nagging egghead, but ... we told you so. On Friday, Sept. 5, the Associated Press put out a one-line news alert that read: US Transportation Secretary Peters says Highway Trust Fund will run out of money this month.
In her press release, Secretary Mary Peters blames Congress for ignoring the dwindling fund. Peters went as far as to say: "Time and again, the President has warned Congress of the pending shortfall and submitted fiscally prudent budgets to close the gap. Americans cannot afford to have Congress play 'kick the can' with highway funding for another year, another month, or frankly, another week."
Up until last week, however, the Administration opposed and threatened to veto the very legislation this Department is "recommending." The immediate action Secretary Peters is calling for includes: 1- Legislation that will transfer $8 billion from the general fund to the highway account; 2- Pay states a proportional reimbursement until the $8 billion transfer is approved.
The Highway Trust Fund pays for a portion of the nation's roads, bridges and interstate system. In fact, the money for road repairs has already been spent and the federal government reimburses states for this work. Now, it looks as though states will only receive 75% of their reimbursements, if any at all.
While the problem is urgent now, in July at Legislative Summit, NCSL's Surface Transportation Reauthorization Working Group raised red flags in letters sent to Capitol Hill. At this meeting, NCSL adopted a policy asking the federal government to work with states to find new ways to finance surface transportation systems before the Highway Trust Fund went broke. In the short term, this policy called for an increase in the federal gas tax. It also encouraged Congress and the president to develop new funding strategies. For years, state legislatures have led the way in developing funding solutions to keep roads drivable and safe.
Some innovative steps include establishing toll roads, raising registration fees, monetizing road assets, bonding, and others. State legislatures have been making the hard decisions in the face of federal inaction in order to make sure they can maintain and construct the needed highway infrastructure.
"Our current method of collecting revenue and paying for transportation projects is broken, especially at $4 per gallon gas prices," said Oregon state Senator Bruce Starr, who helped draft the policy and leads NCSL's Surface Transportation Reauthorization Working Group. "Our policy calls on Congress to maintain the Highway Trust Fund, which is depleting at a rapid rate, and to do this they will have to increase the federal gas tax."
The federal gas tax has served as a key resource for the Highway Trust Fund. Since the federal gas tax was last increased in 1993, inflation and international competition for the materials used in transportation infrastructure have severely eroded the purchasing power of this fund. And now it will be down to zero at the end of the month.
However, we'll be the first to say the time has passed to point fingers and take credit for predicting the HTF shortfall. NCSL urges Congress and the administration to act quickly on this issue and then to consider alternative funding strategies.
We never like being an egghead.
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