DALLAS -- States would have to scale back or delay major highway and transit projects unless lawmakers take action now to raise the revenues needed to prevent the Highway Trust Fund from going broke in 2020, a coalition of 34 transportation and labor groups said in a letter to members of the Senate Budget Committee.

Collections dedicated to the HTF will continue to fall short of expected expenditures unless more revenue is provided, with an average shortfall of nearly $20 billion per year expected between existing revenue and the funding needed to prevent cuts in state highway and public transportation spending when the Fixing America’s Surface Transportation (FAST) Act expires at the end of fiscal 2020, the coalition said in the letter sent last week.

Signers included executives of the U.S. Chamber of Commerce, the American Road and Transportation Builders Association, the American Association of State Highway and Transportation Officials, the Laborers’ International Union of North America, and the American Society of Civil Engineers.

The groups urged the lawmakers to include a provision in the fiscal 2018 budget resolution to restore all the authorized funding for fiscal 2017 and ask the relevant committees to “develop legislation to permanently address the trust fund’s structural revenue deficit.”????

The five-year, $305 billion FAST Act, enacted in late 2015, required the transfer of $70 billion from the general fund and elsewhere to support the authorized funding because revenues from federal gasoline and diesel taxes were insufficient. Some $140 billion has been transferred into the HTF since 2008 to compensate for anemic revenues from the federal gasoline tax of 18.4 cents per gallon and diesel tax of 24.4 cents per gallon.

“Failure to address the HTF’s revenue shortfall as part of a comprehensive measure would increase the likelihood of Congress again shifting funds from elsewhere in the budget to support another in a long- string of one-time trust fund infusions,” according to the letter.

Industry groups fear that states will be unable to afford major highway projects if future federal transportation funding is crippled by a bankrupt HTF.
Industry groups fear that states will be unable to afford major highway projects if future federal transportation funding is crippled by a bankrupt HTF.
courtesy TxDOT

Revenues generated through tax reform could support additional infrastructure funding, the coalition said.

“The HTF’s revenue challenges … warrant a long-term solution to stabilize and grow federal surface transportation investment as part of any tax reform initiative,” the letter said.

States have been struggling for years with the structural shortfall in the HTF, said T. Carter Ross, a spokesman for coalition member the National Asphalt Paving Association.

"The amount of money that comes in from fuel taxes is not enough to meet the country's needs,” Ross said. "If they can address the structural shortfall in this funding, that would be fantastic."

The best way to restore the health of the HTF would be a 10 cent per gallon increase in federal fuel taxes, said Chicago Mayor Rahm Emanuel. Emanuel last week rejected a proposal for a five-cent increase in fuel taxes while taking questions at an April 12 Washington gathering sponsored by the Wall Street Journal that focused on infrastructure.

"I'm for your nickel and I'll up you a nickel," Emanuel said. "I'm for a dime."

President Trump’s proposal for some $130 billion of tax credits as an incentive for private investments in infrastructure is not enough to repair the nation’s crumbling infrastructure, he said.

"It's fairy dust by itself," Emanuel said. "You can't do it on tax credits. We need additional new money to get this done."

President Trump’s infrastructure adviser DJ Gribbin during his remarks at the meeting declined to be specific about when the Trump proposal would be unveiled or the amount of direct federal funding in it.

“The goals are a trillion dollars, economic growth, increased productivity, and jobs but not necessarily in that order," said Gribbin, who was general counsel for the Transportation Department under President George W. Bush.

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