Congress has voted for a short-term fix that will replenish the evaporating Highway Trust Fund, but a long-term solution that will keep the fund solvent ”” and keep U.S. infrastructure up-to-date ”” is a battle for another day beyond the November elections.
On July 29, the U.S. Senate approved $8 billion to replenish the fund, which is used for transportation infrastructure projects. The move means the issue and debate will begin anew in December, which may not be a bad thing, according to the trade group the American Trucking Associations.
“ATA believes quickly passing a long-term, well-funded highway bill is in our national interest and we believe that a short-term patch to keep the Highway Trust Fund solvent is the best way to achieve that,” Bill Graves, ATA president and CEO, said in a statement. “A December deadline averts near-term Highway Trust Fund default and provides ample time for lawmakers to resolve the long-term challenge facing the trust fund.”
The country was headed for its latest “cliff” due to congressional gridlock, this one labeled “the highway cliff,” and it was set to take hold Aug. 1. Without federal action, the fund would have dipped below $4 billion in August, and as many as 112,000 projects, including highway repairs and bridge construction, would have been halted all over the country.
The Highway Trust, established in 1956, requires a structural change in the way it is financed, which today is almost exclusively through an 18-cent tax on every gallon of gas sold. That tax has not been increased since 1993, but the cost of transportation infrastructure building and repairs continue to climb while more fuel-efficient vehicles mean a decrease in the consumption of gas. The cost of projects is outpacing the amount of tax revenue by as much as $20 billion annually, according to the U.S. Department of Transportation
With political resistance to increasing the gas tax, especially from the Republican-led House, the debate leading up to the highway cliff was on funding alternatives including a new taxing plan that would tax drivers based on the amount of miles they drive.
According to Rep. Eliot Engel, a Bronx Democrat who represents parts of southern Westchester County, as much as 12 percent of New York”™s 17,000 bridges are structurally deficient and 27 percent are obsolete. An estimated 23 percent of public roads across the state are in poor condition, he said.
“But New Yorkers don”™t need statistics to tell them that the Tappan Zee Bridge is in dire need of a replacement, or that many of our highways are in need of repair,” Engel said. “These are longstanding issues that must be addressed.”
Sen. Charles Schumer, a Democrat, said there are 409 highway projects underway in upstate New York and Long Island with funding from the Highway Trust. In the Hudson Valley, he said, there are 63 projects in construction worth more than $321 million. Schumer has said a cutback in funding would be “a dagger to the heart of our economy.”
A Fiscal Times analysis said that New York received $1.7 billion from the fund in 2012, or 4.2 percent of the total money allocated to states. That was the fourth largest share behind California, Texas and Florida, which received $4.1 billion, $3.1 billion and $1.8 billion respectively, according to the report.
Even the last-minute approval of funds by the Senate came with a partisan faceoff. A House bill to replenish the fund was approved a week before the Senate”™s bill, but differed in a few key ways. The $11 billion bill would have kept the fund solvent through May 2015, paying for the patch through “pension smoothing,” which would have allowed companies to defer required contributions to their pension plans so that those companies could pay higher taxes. The Senate removed the pension smoothing provision and suggested tightening up tax-deduction loopholes.
House Speaker John Boehner, an Ohio Republican, told the Associated Press prior to the Senate vote that any changes to the House”™s plan wouldn”™t be acceptable. The House is expected to send yet another amended version back to the Senate. President Barack Obama is likely to sign any final measure that makes it through both houses of Congress.
