Funding problems for the highway bill
The Senate Environment & Public Works (EPW) Committee is in charge of drafting a surface transportation reauthorization bill, commonly referred to as the highway bill. The current highway bill expires at the end of September 2014, but it is uncertain whether Congress can come together on a full five- or six-year reauthorization or even a short-term extension.
The American Soybean Association was one of several organizations that has sent letters to committee leaders and members stressing transportation priorities. The ASA letter can be viewed by clicking here.
At a hearing last week held by the Senate Finance committee, which has jurisdiction over funding and financing portions of the highway bill, EPW Chair Barbara Boxer (D-Calif.) testified that $94 billion in new revenue would be needed to support a six-year bill that replenishes the Highway Trust Fund. Finance Committee Ranking Member Orrin G. Hatch (R-Utah), responded that such a large sum would be difficult to accommodate.
Just stabilizing the trust fund to cover existing levels of highway, bridge and transit spending through fiscal year 2015 would require $18 billion, according to Congressional Budget Office estimates presented to the Finance Committee, with an additional $13 billion to $18 billion a year needed after that.
EPW Chair Boxer and Transportation Secretary Anthony Foxx also warned at different hearings that the trust fund levels will fall to levels this summer that will force the Department of Transportation to start slowing its project reimbursement payments to states. To avoid funding disruptions Congress will need to find some way to add $18 billion into the highway trust fund.
Options that have been discussed to shore up the highway trust fund include using revenues generated through corporate tax reform, expanding alternative finance options, authorizing the sale of infrastructure bonds, or greater use of public- private partnerships. Increasing the federal gas tax, which is the current primary revenue source for the trust fund, does not have much support from Congress or the Administration. The Congressional Budget Office estimates that the tax would need to be increased by 10-15 cents per gallon to keep road and transit programs at current levels.
The trust fund has needed more than $50 billion in bailouts from general tax revenues since 2008. For fiscal year 2014, the fund’s highway account received a general revenue transfer of almost $10 billion; however, House Speaker John Boehner (R-Ohio) has previously stated that he does not believe that House Republicans would support another transfer to get the account through fiscal year 2015. The House Transportation Committee is not expected to move forward on their draft bill for several more weeks.
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