DALLAS -- Sen. Barbara Boxer, D-Calif., chairman of the Senate Environment and Public Works Committee, said work will begin next week on a surface transportation bill that keeps federal spending at current levels plus inflation.
The top four Democratic and Republican senators on the committee have agreed on a long-term transportation funding law that will require an infusion of $18 billion into the Highway Trust Fund in addition to revenues from federal gasoline and diesel taxes, Boxer said Tuesday in testimony to the Senate Finance Committee.
Congress is unlikely to raise the gasoline tax or reform the corporate tax code to bolster the Highway Trust Fund, which is expected to be insolvent by late August at the current spending rate, she said.
"We must work together to find the sweet spot for a dependable, bipartisan source of funding for the Highway Trust Fund," Boxer said.
"We need you, with our help and support, to fix this bill, to figure out some way to pump $18 billion into the Highway Trust Fund," Boxer said. "Failure is not an option."
Finance Committee Chairman Sen. Ron Wyden, D-Ore., said a new program of taxable Build America Bonds could be part of the funding solution to boost transportation spending.
"There are hundreds of billions of dollars in private capital sitting on the American sidelines," Wyden said. "Surely some of that can be invested in American infrastructure."
The BABs program in the 2009 stimulus act was expected to generate up to $10 billion for infrastructure projects, he said, but instead provided $180 billion for projects across the country.
"I'd like to aim higher and do everything possible to build a bipartisan coalition for policies that generate $1 trillion in American infrastructure," he said. "You can't have a big-league quality of life or big-league economic growth with little-league infrastructure.
Keeping the Highway Trust Fund solvent for the next six years without raising the gasoline tax or finding some new source of highway funding would require an additional $100 billion, Wyden said.
"Fixing it in the short term will require $10 billion to keep the fund solvent through the calendar year," he said. "Getting through fiscal year 2015 will take another $8 billion."
The current two-year transportation funding law, Moving Ahead For Progress in the 21st Century, provided $52.5 billion a year for highway and transit projects. The law will expire Sept. 30 with the end of fiscal 2014.
MAP-21 relied on $18.8 billion from the general fund because revenues from the federal tax on gasoline of 18.4 cents per gallon failed to match expenditures.
Lawmakers have transferred a total of $54 billion from the Treasury's general fund to the Highway Trust Fund since 2008, said Joseph Kile, assistant director of microeconomic studies at the Congressional Budget Office.
Without additional revenue, he said, the HTF would not be able to fund new highway or transit projects in fiscal 2015. Meeting HTF requirements solely with the gasoline tax would require an increase of 10 cents to 15 cents beginning in fiscal 2015, Kile said.
The potential insolvency of the Highway Trust Fund would be disastrous for Virginia, said Aubrey Layne, the state's transportation secretary. Federal dollars account for half of Virginia's $1.2 billion of transportation capital improvements in fiscal 2015, he said.
Without funding for new projects next year, he said, 149 bridge replacements would be postponed, 350 other projects would grind to a halt, and 44 transit systems in rural Virginia would have to cease operations.
"I want to be clear," Layne told the Finance Committee. "If nothing is done to address this situation, the consequences will be dire."
Samara Barend, senior vice president and public-private partnership director at AECOM Capital, urged the committee to increase the cap on federal private activity bonds by at least $5 billion from the current total capacity of $15 billion.
The $15 billion has almost been exhausted, she said, proving the attractiveness of the tax-exempt bonds in funding transportation P3 projects.
"If this program expires, the pipeline of P3 transportation projects, currently estimated at nearly $30 billion, will likely not move forward," Barend said.
