DALLAS — Proposals to pump up the dwindling Highway Trust Fund without raising the federal gasoline tax offer a solution to the highway funding impasse, transportation industry leaders said last week.
Recent offerings from both President Obama and the chairman of the House Ways and Means Committee for a multi-year funding plan would help fund surface transportation spending with revenue from reforms to the United States tax code.
The $302 billion, four-year spending plan outlined by Obama Feb. 26 includes $63 billion of fill-in funding for the rapidly depleting HTF from reforms to the corporate tax code.
The tax code revamp proposed by Rep. David Camp, R-Mich., chairman of the House Ways and Means Committee, would provide $126.5 billion over eight years to the HTF. The new revenue would be generated by a one-time tax on some corporate earnings and offshore profits of foreign subsidiaries of U.S. corporations.
James Corless, director of Transportation for America, a coalition of local leaders that has proposed an increase in the gasoline tax, said both proposals support "a robust federal investment" in transportation.
"With the bankruptcy of our transportation trust fund just months away, this can't come soon enough," Corless said. "The message may finally be getting through."
Randall Over, president of the American Society of Civil Engineers, said the ASCE is interested in options aimed at restoring the Highway Trust Fund.
"President Obama's proposed $302 billion transportation plan is an encouraging step forward in addressing the impending cliff our nation faces this year with the Highway Trust Fund," he said. "As if the President's proposal weren't momentum enough, we were also happy to see a transportation proposal from chairman Camp."
The highway fund needs a long-term, sustainable revenue source, Over said. "When the Highway Trust Fund becomes insolvent later this year, road and bridge projects will cease, payments will stop, and the shockwaves throughout our economy will be significant," he said. "ASCE supports an 'all options on the table' approach to funding the Highway Trust Fund."
Allowing the HTF to run out of money before the end of fiscal 2014 would be a disaster, said Pete Ruane, chief executive officer of the American Road and Transportation Builders Association.
"Failure to act in a timely manner would deliver a crippling blow to the U.S. economy and the livelihoods of hundreds of thousands of American workers." Ruane said.
A funding solution must be found before the federal Department of Transportation has to curtail reimbursements to states for already approved projects as the HTF balance continues to shrink, he said.
"It is obvious the urgent need to fix the HTF is on the radar screen of the White House and leaders in the House and Senate from both parties," Ruane said.
However, House Speaker John Boehner, R-Ohio, said it is unlikely that a major revision of the tax code could get through Congress this year.
"We've got to find a funding mechanism to fund our infrastructure needs," he said Feb. 26 after a private meeting with President Obama. "I wish I could report to you that we've found it, but we haven't."
Sen. Barbara Boxer, D-Calif., who wants to tax gasoline at the refinery rather than the pump, told a gathering of state highway officials in Washington last week that her idea is not gaining traction in Congress. Boxer is chairman of the Senate Environment and Public Works Committee, which is working on a reauthorization for federal funding of transportation projects.
Congress will not increase the federal gasoline tax this year, Boxer predicted. The new four-year funding bill will keep expenditures at current levels plus inflation, she said.
The current two-year, $105 billion surface transportation funding bill, Moving Ahead For Progress in the 21st Century, required about $20 billion of general fund transfers to supplement anemic revenue collections from the gasoline tax.
Congress has transferred a total of $41 billion into the fund since fiscal 2008, according to the Congressional Budget Office, including $13 billion in fiscal 2014.
Sarah Puro, principal analyst with the CBO, said last week that the highway account of the HTF will receive tax revenues of $33 billion in fiscal 2014 while expenditures will total $45 billion. Revenues of $5 billion into the transit account won't keep pace with $9 billion of planned expenditures, she said.
