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Highway Trust Fund could need as much as $17 billion to stay in the black

Flickr photo originally uploaded by Madison Guy

In September last year, Congress had to provide an emergency infusion of $8 billion to the Highway Trust Fund for the first time in history to keep it from going broke. This transfer of cash from the general fund to an account that is supposed to be completely self-supporting showed us that our transportation system is in serious financial trouble.

Unfortunately, we’re expecting the Highway Trust Fund to run out of money even sooner this year.

News broke yesterday that the Obama administration is telling members of the U.S. Senate that the fund — which pays for projects approved in the transportation bill — will go broke by August if an emergency infusion of at least $7 billion isn’t approved. And it could need as much as $10 billion more to make it through the next fiscal year, which ends in September 2010.

With Congress talking about a transportation bill this year in the range of $450 billion and current gas tax revenues failing to cover the costs of the last $286 billion transportation bill, it’s clear that we need a new method of paying for our transportation infrastructure. We’re driving less and less, not just because of expensive gas, but also due to changing demographics and consumer preferences, and it’s unlikely that gas tax revenues will go up any time soon.

Predictably, many sensible voices are calling for the gas tax to be raised, which has been going down in real terms as inflation increases and the tax stays fixed at 18.4 cents per gallon. Both of the Congressionally-mandated transportation study commissions recommended an increase in the gas tax. But while we certainly more money from some somewhere to pay for the transportation investments we need, it’s imperative that we change the broken system before we pour new money into it.

The way things works now, states are esssentially encouraged have their residents drive more to increase gas tax revenues, which allows them to contribute more to the federal government and get more money back in return. We need a system that encourages states to improve mobility and safety, reduce congestion, and meet other performance measures, instead of building new roads to increase miles driven.

We need a federal transportation system that works, not the same broken thing at twice the price.

No new money without reforming the broken system.

No Comments

  1. Eric Fredericks

    15 years ago

    Amen, Steve. Hope you guys continue to be successful in this authorization process.