DALLAS — Failure by the incoming Congress to quickly develop funding for a long-term transportation bill early next year could lead to another self-imposed highway crisis in a few months, a coalition of construction groups warned as the federal fiscal year began Oct. 1.
Momentum that had been building towards a multi-year surface transportation funding measure was interrupted when Congress passed a short-term patch for the almost-insolvent Highway Trust Fund and then recessed in late July, the Transportation Construction Coalition said Wednesday.
That built-up momentum, which was put on hold again after Congress recess for the mid-term elections in early November, will evaporate without an agreement in early 2015 on how to fund federal spending on highways and transit over the long term, the group's leaders said. Long-term legislation cannot proceed without agreement on how to pay for transportation projects, they said.
"We worked hard to build broad consensus within a deeply divided Congress for investing in the nation's aging roads, bridges, and transit systems," said Stephen E. Sandherr, co-chair of the 31-member TCC and head of the Associated General Contractors of America.
Both the House and Senate overwhelmingly approved the 10-month, $10.8 billion patch of the Highway Trust Fund that should keep the HTF solvent through the end of May 2015 despite almost-total partisan gridlock, he said.
"Members of Congress can either take advantage of that momentum or add transportation funding back to an already-long list of self-created crises threatening our economic vitality," Sandherr said.
The current funding situation is not acceptable, said Peter Ruane, chief executive officer of the American Road & Transportation Builders Association and the other co-chair of TCC.
"Status-quo funding levels would simply perpetuate worsening traffic congestion and the inadequate physical condition of the nation's highway and transit network," he said.
Keeping the HTF solvent from late May through the final four months of fiscal 2015 would require an additional $7 billion from the general found or some other source in addition to the revenues from federal fuel taxes, he said.
Gasoline and diesel taxes, the main support of the HTF, cannot continue to be the main source of federal highway and transit funding, Ruane said. Maintaining current highway spending into the future will require an additional $16 billion a year, he said, which is the equivalent of an increase of 10 cents per gallon in the federal gasoline tax of 18.4 cents.
Lawmakers have transferred almost $65 billion to the highway fund from the general fund and other supplemental sources in five moves over the past seven years, the coalition said. The recent $10.8 billion short-term patch required a $9.8 billion transfer from the general fund and $1 billion from a federal fund for the repair of leaking underground gasoline storage tanks.
"Congress needs to 'keep the horse before the cart' and address the trust fund's long-term revenue problem as was done in the 1997 and 2004 tax bills," Ruane said. "Then it can develop and properly fund a six-year program bill early in 2015."
An August projection by the Congressional Budget Office showed highway spending at $45 billion in fiscal 2015 with $8 billion of transit grants but only $38 billion of revenues into the HTF. By 2024 highway spending is predicted by CBO to be $49 billion a year with transit funding at $10 billion but fuel tax revenues totaling the same $38 billion as in fiscal 2015.
Movement towards a long-term transportation bill in the early days of the new 114th Congress may be possible, House Speaker John Boehner, R-Ohio, said in an appearance on the ABC Sunday news program This Week.
"Tax reform, a big highway bill, certainly are in the realm of doable," Boehner said to host George Stephanopoulos.
Boehner said he expects a larger Republican majority in the House and a Republican-controlled Senate after the November election.
Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee who is not seeking another term Congress, has proposed using $126.5 billion from a revamp of the corporate tax code for six years of highway funding. The Camp plan is similar to President Obama's tax overhaul plan that would bring in $150 billion in one-time revenues to help fund his $302 billion, four-year highway bill.
Congress will look at new ways of funding transportation next year, said Sen. James Inhofe, R-Okla., in August at a regional transportation association meeting in Fort Smith, Ark.
"You'll see a new funding mechanism that is going to change how we are funding our roads and highways," said Inhofe, a member of the Senate Environment and Public Works Committee.
"This is not an announcement on my part, because I still maintain opposition to any new tax increases," he said in declining to be more specific. "However, it's more of a user fee than a tax increase."
