WASHINGTON — A Senate committee will vote during the week of July 20 on an extension to prevent the dwindling highway trust fund from going broke before Congress can pass a multi-year reauthorization bill, its chairman said yesterday.
The announcement by Sen. Barbara Boxer, D-Calif., chairman of the Senate Environment and Public Works Committee, came as state transportation officials warned that a shortfall in the trust fund would threaten their ability to issue and pay off debt.
Transportation Secretary Ray LaHood and representatives of various stakeholder groups told committee members at a hearing yesterday that an extension is necessary to keep state programs moving, despite threats from the House Transportation Committee to stymie attempts to extend the current law and delay passage of a new multi-year bill.
LaHood proposed an 18-month extension of the current law, which would cost $20 billion and include some “initial, but critical, program reforms” such as cost-benefit analyses and a metropolitan mobility program. Boxer has said she would support the extension.
LaHood said the White House opposes a gas tax increase during the recession, but added that the trust fund will run out of money in August.
If the trust fund becomes insolvent this year, states will likely suspend new projects, Jack Basso, financial director of the American Association of State Highway and Transportation Officials, told the committee.
North Carolina officials said in a recent AASHTO survey that a reduction “could affect [its] Garvee abilities and may influence the rate of our upcoming sale.”
Rhode Island officials said a significant shortfall would prevent them from starting new capital projects in fiscal 2010 because funding would have to be used to pay debt service on Garvee bonds, or grant anticipation revenue vehicles.
Boxer said she will pursue a “dual-track” approach to funding the transportation program, meaning the short-term extension would be followed by “many, many hearings starting in the fall” on the multi-year bill.
She said an extension is necessary because there is no consensus on revenue sources to pay for an overhaul of the federal transportation program.
The bill, expected to be voted on in July by the House Transportation Committee, would require nearly twice as much funding as was authorized by the current law, which expires Sept. 30. That measure does not specify revenue sources, but tax-writing committees in the House and Senate have jurisdiction over the revenues.
AASHTO has recommended Congress consider imposing a mileage tax of two to three cents per mile, plus fuel taxes, tax-credit bonds, freight charges, and other revenue sources, Basso said.
Meanwhile, members of the House Ways and Means oversight and select revenue measures subcommittees at a hearing yesterday called for alternative approaches to the gas tax to replenish the ailing highway trust fund.
The panel’s chairman, Richard Neal, D-Mass., suggested a Build America Bonds type of program could be used to finance transportation projects.
William Buechner, vice president of economics and research for the American Road and Transportation Builders Association, said Congress should increase the private-activity bond volume cap for highways and intermodal projects to $50 billion from its current $15 billion.