WASHINGTON — The federal government will run out of money for transportation and other infrastructure projects in late July or August, roughly two months later than expected, Transportation Secretary Anthony Foxx said Thursday.
"The latest I have is that the extension will run out in May. There will still be funding available through probably late July or August," Foxx said, according to the The Hill. "But probably in the July timeframe, we would have to start to go into cash management," he continued, adding, "That's the score as I see it."
Foxx said funds will be available longer than expected because the snow storms and other bad weather this winter slowed down some construction projects. As a result, fewer federal reimbursements to governments were made from the Highway Trust Fund.
Foxx's remarks come as members of Congress are scrambling to come up with an extension of the current transportation funding law keeping the HTF solvent, which expires on May 31.
Industry groups, state and local government officials and some members of Congress have been pushing House and Senate leaders to fight for a long-term extension of the funding law. States have been curtailing transportation projects because of the uncertainty of future funds.
But members of Congress are divided over how to pay for legislation.
The HTF's main source of funding has been the $18.4 cents per gallon federal gasoline tax and a 24.4 cents tax per gallon diesel tax, which have not been increased since 1993. Revenues from those taxes have fallen as fuel efficiency has increased and the high gas prices before the past year curtailed driving. The HTF has been supplemented with general fund transfers in recent years.
There have been 32-short-term extensions of the highway funding law during the last six years, Foxx noted.
President Obama recently released a revised $478 billion six-year Grow America Act 2.0 for transportation, which would include $317 billion for road projects, an increase of 29% from current funding, and $116 billion for mass transit, an increase of 76%. The funding would be paid for with $240 billion of fuel tax revenues and $238 billion from a new mandatory transition tax corporate offshore earnings. The initiative would allow states to levy variable tolls on existing roads to alleviate traffic congestion and would remove the long-standing ban on tolling interstate highways.
Republicans have balked at the proposal. Lawmakers have proposed a number of bills to increase transportation funding.
Rep. Steve Stivers, R-Ohio, recently proposed a bill that would fund transportation and water projects from the lease fees and royalty revenues generated by increased offshore oil and gas production in federal areas now off-limits of energy exploration.
Rep. Earl Blumenauer, D-Ore., has legislation pending that would almost double the federal taxes on gasoline and diesel fuel to general $210 billion of revenue over 10 years for roads, bridges and transit. But most members of Congress don't want to raise taxes.
Reps. John Delaney, D-Md., and Mike Fitzpatrick, R-Pa. have reintroduced a bill to capitalize a $50 billion national infrastructure bank with sales of 50-year taxable bonds bearing 1% interest. Corporations would have incentive to buy the bonds because for every dollar of bonds they purchase, they would be allowed to repatriate a certain amount of their overseas earnings on a tax-free basis.
But none of these proposals, or others that have been discussed or introduced, have gained a lot of support.
