Roadblocks to Reauthorization
Last year, as the HTF neared a zero balance, Congress passed legislation to reimburse it for $8 billion that was transferred to the General Fund in 1998. The fund, which could be depleted as soon as this month, is likely to be addressed via Congress and President Obama, but action may not be taken before its declining balance begins to impact state DOTs.
On June 24, Deputy Secretary of Transportation John D. Porcari sent a letter to state DOT officials warning them of the declining fund. “A cash shortfall will affect the ability of the FHWA to reimburse state grantees,” he wrote. “However, as the highway account balance drops — possibly as soon as early August 2009 — it may be necessary for FHWA to make payments to the states on a weekly or biweekly basis rather than daily, which is the current practice with many states… We are monitoring the cash status of the HTF on a daily basis and will continue to explore every possible technical procedure and policy tool available to manage the shortfall.”
Although no one on Capital Hill seems to want the HTF to zero out, vastly different approaches are being voiced.
In testimony before Congress, Jeffrey Paniati, FHWA acting deputy administrator, echoed the administration’s solution: a SAFETEA-LU extension. “Obviously, action is important and needed soon,” he said, noting that Secretary of Transportation Ray LaHood and President Obama want a comprehensive and fully developed approach to reauthorization. “Taking the time in the 18 months to deal with both the initial crisis and develop the comprehensive approach is the most appropriate way to proceed,” Paniati added.
Rep. James Oberstar (D-Minn.), chairman of the House Committee on Transportation and Infrastructure, soon scuttled the idea of party solidarity when he declared the best solution to the HTF crisis is to pass a new six-year transportation bill. “We’ve had no outreach from the administration, no participation, no discussion,” he said. “I’m personally offended by that.”
Peaks and valleys
Oberstar unveiled the committee’s proposal for a six-year, $450-billion surface transportation bill, The Surface Transportation Authorization Act of 2009 (STAA), a day after the administration called for the 18-month delay. Sponsored by Oberstar, committee ranking member John Mica (R-Fla.), Highways and Transit subcommittee chairman Peter DeFazio (D-Ore.), and subcommittee ranking member John Duncan (R-Tenn.), the group says the measure will create 6 million jobs. With six-year guaranteed funding of $350 billion for highways and highway safety, the bill would boost funding nearly 50 percent over the $234.1 billion that SAFETEA-LU allotted.
Various industry and political leaders have offered funding options to increase the ability to pay for the investment. In an interview with TransportationTV (see the full interview at transportationtv.org), National Stone, Sand & Gravel President and CEO Joy Wilson raised the idea of indexing the gas tax, noting that as the cost of maintenance for highways and bridges increases, so would the funds used to repair them. The gas tax is currently 18.4 cents per gallon and has remained at that level since 1993. In comparison, the tax for diesel fuel is currently 24.4 cents per gallon.
STAA sponsor Rep. Peter DeFazio has suggested implementation of a “contingent” tax such as that passed in his home state of Oregon. Under this funding mechanism, increases would only take effect after two consecutive quarters of economic growth and protects the public against a tax increase during a depressed economy.
President Obama and most senators on the Senate Environment and Public Works Committee, however, say they believe an extension makes more sense. Under the euphemism of “Stage I Reauthorization,” the U.S. Department of Transportation laid out the core principles of the extension. They include the following:
• A general fund transfer to the HTF is necessary to maintain its solvency.
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