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Monday, March 4, 2024
March 4, 2024

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Highway Trust Fund rescue ideas dying off

Less driving, more fuel-efficient cars means less funding

The Columbian

WASHINGTON — Five months before the U.S. Highway Trust Fund may be unable to pay its bills, top policymakers are shooting down the only ideas that can prop it up in time.

Boosting the nation’s 18.4 cents-a-gallon gasoline tax can’t pass the House, lawmakers say. Barbara Boxer, a California Democrat drafting the Senate’s highway bill, Wednesday said her idea for a levy on oil at refineries isn’t getting traction either. And House Speaker John Boehner said he rejects the idea of a taxpayer bailout of the trust fund.

President Barack Obama and Rep. Dave Camp, the Michigan Republican who leads the House Ways and Means Committee, Wednesday proposed separately to use one-time tax savings to pay for transportation projects. While that idea was praised by some lawmakers and trade groups, it would require a tax-code rewrite that congressional leaders said would be almost impossible in 2014.

“We’ve got to find a funding mechanism to fund our infrastructure needs,” Boehner, a Ohio Republican, told reporters after a private meeting Tuesday with Obama. “I wish I could report to you that we’ve found it, but we haven’t.”

The Federal Highway Administration has projected that the Highway Trust Fund, supplied by gasoline and diesel fuel taxes, will have to begin as soon as August juggling reimbursements to states for work already done. The fund has been running out of money as people drive less and use more fuel-efficient vehicles.

Business groups have said infrastructure spending is needed to boost the U.S. economy, while benefiting construction companies including Caterpillar Inc.

A week before his fiscal 2015 budget plan is released, Obama on Wednesday proposed a four-year, $302 billion transportation measure to succeed the current bill that expires Sept. 30. About half that would be paid for by temporary changes in business taxes. The remaining amount is about what the trust fund takes in from taxes at current levels.

Under Camp’s plan, U.S. multinational companies would they would pay a one-time tax on assets they’ve accumulated outside the U.S. under the current system, with the proceeds dedicated to the Highway Trust Fund.

Transportation Secretary Anthony Foxx told reporters that the administration wants to get beyond the “Band-Aid” solution of temporarily funding roads, bridges and rail lines.

“The one thing nobody wants to do is see the highway trust fund go insolvent,” he said.

Yet the lack of consensus on any way to avoid that points to a temporary extension of the current measure using general taxpayer funds to supplement the trust fund, said Joshua Schank, president and chief executive officer of the nonpartisan Eno Center for Transportation in Washington.

“Congress does not look like it wants to do much of anything this year,” Schank said. “To the extent that corporate tax reform is on the table, it’s not getting a lot of support from leadership in either house right now. So prospects for that funding source are not looking great right now. And authorization bills always take time.”

Prospects for a longer-term agreement in 2015 or later may be improving, he said. Obama and Camp both proposed ideas to raise more money for transportation projects through general tax revenue rather than user fees, a change in approach that Schank said hints at a possible deal.

“It is heartening that both President Obama and Chairman Camp recognize the critical need for revenue to finance infrastructure improvements,” Bill Graves, president and CEO of the American Trucking Associations, said in a statement Wednesday.

“While a sustainable source of long-term, funding would be preferable, given the apparent reluctance to embrace traditional, user-funded revenue streams, ATA is prepared to keep an open mind when looking at financing options,” he said.