Highway Trust Fund legislation made official
Jeff Berman, Group News Editor -- Logistics Management, 10/1/2008
WASHINGTON — Federal highway funding received a much-needed boost when the U.S. House of Representatives voted last month to sign off on H.R. 6532, the Highway Trust Fund (HTF) Restoration Act, which was officially signed into law by President George W. Bush.
This bill calls for a transfer of more than $8 billion from the United States Treasury General Fund to the HTF. This news comes at a time when the future of the HTF was dire, as it was facing the prospect of running out of money entirely. At the end of July, the U.S. House of Representatives approved H.R. 6532 to restore more than $8 billion to the HTF balance, which the White House said was soon to be facing a deficit of more than $4.3 billion.
Department of Transportation Secretary Mary E. Peters called out Congress last month for the HTF’s financial situation. She added that that the situation has been exacerbated due to oil and gas price spikes that have occurred this year and resulted in vehicle miles traveled dropping by more than 50 billion in the last eight months alone.
This is especially relevant, considering that the HTF is largely financed by the motor fuel federal tax, which is 18.4 cents per gallon for gasoline and 24.4 cents for diesel—and has not been raised since 1993.
And vehicle miles traveled in the U.S. have been down year-over-year in recent months, due to high gas prices, reducing funding for highways and transportation infrastructure initiatives.
National transportation officials are pleased with the decision to transfer money into the Highway Trust Fund. “The American public trusts us to keep the highways, bridges, and transit systems safe and usable,” said Pete Rahn, president of the American Association of State Highway and Transportation Officials (AASHTO). “Restoring the Highway Trust Fund is a short-term solution. It’s time to face up to the reality that America must rebuild and renew its aging system. We should use this to focus on how we will meet our future transportation needs.”
Larry Gross, President of Gross Transportation Consulting, said that while this situation was largely political, it is a positive that funds have been shifted for all transportation industry stakeholders. But in terms of fundamentally changing the Highway Trust Fund landscape, he said it does not really change anything, because the transferring of funds is more of a “stop gap” than anything else.
“The base problems remain in the form of a heavily motor fuels tax-based system that is struggling in an era when fuel consumption is being driven down by high prices,” said Gross. “The gas tax may not necessarily be the best mechanism for raising money, and that is the DOT’s position. There needs to be a strong federal role in highway spending, because there is so much interstate commerce dependent on it. A purely state-centric approach does not necessarily address that.”
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