file photo Boyd Loving
The Federal Highway Trust Fund Is Going Broke. Here’s Why That Could Be a Good Thing.
Elizabeth Nolan Brown|July 14, 2014
This week President Obama is putting the hard sell on raising highway and transit aid, as the federal Highway Trust Fund (HTF) warns that it’s bound by early August to run out of sufficient money to meet state obligations. The White House says Obama will discuss the matter Tuesday in Virginia, where he’s expected to propose a “pro-growth business tax reform” solution. In Delaware on Thursday, he’ll announce an initiative to increase private-sector investment in transportation.
About 27 percent of highway and transit spending currently comes from the federal government, via the HTF, while states kicking in about 38 percent and 35 percent coming from municipalities. The HTF isn’t set to “run dry” in August, as many are reporting, but it did tell states to expect an average 28 percent reduction in aid at that point unless Congress acts. The fund faces a $15 billion gap between projected spending and the money it will collect in 2015.
House and Senate committees began addressing ways to shore up HTF funding last week, both in the short-term and the long-term. The existing two-year funding measure expires at this end of this September. Legislators are now looking at bills that would provide about $11 billion to the HTF through May 2015 and address long-term funding separately in the future.
State governors still say Congress isn’t acting fast enough, and it’s hindering their ability to plan and build major highway and bridge projects. From Reuters:
Republicans and Democrats who gathered in Nashville during the weekend for a National Governors Association (NGA) meeting said that at minimum Congress should approve a short-term fix before the federal highway account becomes insolvent by the end of August. Yet they want a longer solution to remove uncertainly that could stop or delay projects worth an estimated $3.6 trillion to fix crumbling roads and bridges.
The inability of Congress to agree increases pressure on states to find alternative financing for their share, governors said. It affects the work needed to create jobs and boost the economy while repairing outdated infrastructure to avoid disasters such as the 2007 Minneapolis bridge collapse that killed 13 people and injured 145.
According to the American Society of Civil Engineers, the U.S. needs $3.6 trillion by 2020 to maintain highways, bridges, and other infrastructure. One way to raise some funds would be to raise fuel taxes, relied on heavily by states and the federal government to fund infrastructure projects—and untouched by Congress since 1993.
Yet there’s nothing stopping states from taking this matter into their own hands. Since 2013, seven states have raised fuel levies, reports Reuters, while Wisconsin Gov. Scott Walker is considering substituting sales tax and Indiana Gov. Mike Pence is pushing public-private partnerships. Other governors at the NGA conference also said they were looking at alternative funding solutions.
When left a little more to their own devices, it seems states get innovative. They develop localized solutions. They experiment.
https://reason.com/24-7/2014/07/14/obama-to-ask-congress-for-more-transport
Sure, privatize the interstate system.
Replacing government inefficiency with corporate greed doesn’t always work out in the public’s best interests. Roadways, like power companies, are local monopolies, and need to be regulated as such…or else you get a situation like here in North Jersey where it can cost $20 in tolls alone for a night out, and hundreds a month to commute.
little late already does , you really should get out a little more
Its costs $20 in tolls because of pure union greed. Look at how mismanaged the PA is, and look at how ridiculously expensive it is to repave roads in Bergen. There is millions in waste, all going to the fat cat union members and PA appointees who have no interest in privatizing anything. Taxpayers and commuters, as always, are the losers, but they’re too busy just trying to keep their heads above water to pay attention to what’s really going on here. The Federal Highway Trust Fund (HTF) is just a black hole, with no focus whatsoever on efficiency or cost performance. Throwing more money at it withouit addressing the root of the problem helps no one.