Connecting state and local government leaders

Highway Trust Fund Casts Shadow Over Infrastructure Debate

A gas station at night in Florida, during 2014.

A gas station at night in Florida, during 2014. shutterstock


Connecting state and local government leaders

Meanwhile, House Transportation and Infrastructure Chairman Bill Shuster says the "lame duck" session after this year's election could provide a window to pass a public works package.

WASHINGTON — Long-term uncertainty about the finances of a main federal account for funding highways and mass transit looms large as discussions continue here in the nation's capital about the possibility of passing major infrastructure legislation this year.

U.S. Rep. Bill Shuster, a Pennsylvania Republican who chairs the House Transportation and Infrastructure Committee, emphasized Wednesday that the five-year federal law currently keeping the Highway Trust Fund solvent will lapse in about two years and seven months.

The Trump administration did not attempt to tackle the trust fund's fiscal problems in an infrastructure proposal it released Feb. 12.

Shuster indicated that he would like a financial fix for the fund included in any infrastructure legislation that does take shape in the months ahead. “I think it has to have something,” he said in response to a question about whether he wants to see the fund's finances addressed in any forthcoming public works package.

The congressman made his remarks a day after the No. 2 Republican in the Senate, John Cornyn, said his chamber of Congress would be pressed to find time this year to move a major infrastructure bill. 

But Shuster, who has said he does not plan to seek reelection this year, doesn't appear to be giving up hope for legislation. He suggested there could be a window of opportunity for passing a public works bill in the "lame duck" congressional session after this fall's election.

“Maybe we could pass it before August recess, hopefully we can,” he told a group of state transportation officials gathered here for a meeting. In September and October, he said, “political knives” would come out in the run-up to the November election.

“It could be a lame duck strategy. That we do it after the election,” Shuster added. He also cautioned: “If we don’t deal with it now, the trust fund runs out of money in October of 2020. I don’t know how in the world we do it next year.”

Money for the Highway Trust Fund comes mostly from federal fuel taxes on gasoline and diesel. In recent years, these revenues have lagged, creating shortfalls for the fund.

Congress has not acted to raise the gas tax in over two decades and it remains on par with its 1993 level. The federal tax on gasoline is 18.4 cents per gallon. The rate for diesel is 24.4 cents per gallon.

The 2015 Fixing America’s Surface Transportation, or FAST, Act provided for $70 billion in general fund transfers to the Highway Trust Fund over the five-year life of the act to backfill the account.

Using such transfers to supplement the fund will have been de facto federal funding policy for 12 years when the FAST Act expires, according to a Congressional Research Service report from January.

President Trump this month pitched the idea of a 25-cent gas tax increase during a meeting with lawmakers. But this proposal is failing to win support from some pivotal Republicans.

Asked Wednesday about increasing the gas tax, Sen. John Barrasso, a Wyoming Republican who chairs the Environment and Public Works Committee, reiterated his position that the idea is a “non-starter.”

Gains in vehicle fuel efficiency, and the emergence of electric-powered and shared vehicles are some of the trends that threaten to further undermine gas tax revenues in the years ahead.

Shuster argues though, that for now, fuel taxes remain the most realistic way to raise money for transportation spending.

As for mileage-based fees, he said, "I don't believe that's ready for prime time." Although he conceded it's probably "a generational thing" and that future lawmakers and motorists may be more likely to embrace the idea of vehicle-miles-travelled charges. In the meantime, he said, "we can do something that's a shorter-term fix."

"The president said 25 cents, I've been talking 15 cents," Shuster told reporters, referring to a gas tax increase. "If you take 15 cents, that's about two dollars a week for the average American."

The infrastructure plan the Trump administration issued earlier this month calls for a total of $200 billion of federal spending, mostly on a suite of new grant programs. It aims to generate about $1.5 trillion of investment over a decade in roads, water systems and other infrastructure, when factoring in state, local and private dollars.

Trump’s proposal did not identify new revenue streams to pay for spending on programs he proposed. Sen. Tom Carper, of Delaware, the top Democrat on the Environment and Public Works Committee told the state transportation officials that figuring out how to pay for added infrastructure spending is “the 800 pound gorilla in the room.”

Peter DeFazio, of Oregon, the ranking member on the House Transportation and Infrastructure Committee, offered a similar assessment of where progress on an infrastructure package is at.

"There is no money," he said.

DeFazio said he'd stand behind a proposal like the one Trump floated for a 25-cent gas tax increase.

John Schroer is commissioner of the Tennessee Department of Transportation, and the current president of the American Association of State Highway and Transportation Officials, the group that Shuster, along with the other lawmakers, spoke to on Wednesday.

Schroer worries the funding and attention needed to ensure the Highway Trust Fund remains solvent in the coming years could get undercut if focus among lawmakers and the administration tilts too much toward new programs like those the White House has proposed.

"In the president’s package the word 'trust fund' was never mentioned," he told Route Fifty. "I’m concerned about that."

Schroer sees the best pathway forward on infrastructure as combining a solution for Highway Trust Fund revenue shortfalls, with some funding for grant programs like those described in Trump's proposal. 

"Shore up the trust fund, maybe with a tax increase," he said, "and then find some other pay-fors to do the grant programs."

Bill Lucia is a Senior Reporter for Government Executive's Route Fifty and is based in Washington, D.C.

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