Federal highway and transit funding extended through early March by Congress

During the Lame Duck Session of the 111th Congress, U.S. lawmakers voted to extend federal highway and transit funding through a continuing resolution through March 4.

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During the Lame Duck Session of the 111th Congress, U.S. lawmakers voted to extend federal highway and transit funding through a continuing resolution through March 4.

This vote was part of H.R. 3082, which was sponsored by Texas Congressman Chet Edwards, and signed into law by President Barack Obama on December 22.

This continuing resolution is the latest in a series, which have been enacted to keep transportation spending afloat since SAFETEA-LU (Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users) expired on September 30, 2009.

As LM has reported, this funding, which goes toward surface transportation maintenance, development, and construction, has been kept afloat by multiple continuing resolutions typically ranging from four-to-seven weeks and keep funding at current levels.

While continuing resolutions have served as a stop gap to sustain funding at current levels, there is no clear indication if a new bill will come to fruition anytime soon.

With the federal gasoline tax, which has not seen an increase since 1994, serving as the primary funding mechanism for surface transportation funding, the prospect of raising it to generate additional revenue was raised in the final report issued by President Obama’s bipartisan commission charged with reducing the national deficit. The commission proposed to gradually increase the gasoline tax by $0.15 to fund transportation spending beginning in 2013.

And the commission’s draft report noted that raising the gasoline tax, which has been at 18.4 cents for gasoline and 23.4 cents for diesel and has not been increased since 1993, would “dedicate funds toward fully funding the transportation trust fund and therefore eliminating the need for further general fund bailouts.”

But raising the tax has long been labeled by lawmakers on both side of the aisle as a “non-starter,” especially now, given the focus on fiscal austerity in light of the recent mid-term elections.

This austerity has the potential to dismantle the traditional federal transportation funding program, according to Leslie Blakey, executive director of the Coalition for America’s Gateways and Trade Corridors.

“Once this continuing resolution expires, it is likely another one will be enacted, while the odds of another highway bill happening are less than zero,” said Blakey.

On top of this is a possible change in the rules—being voted on by House Republicans today—which will dictate that the minimum guaranteed annual spending level for federal transportation will no longer apply. Blakey said that the current annual spending levels allocated are more than the actual Highway Trust Fund can actually pay out. She added that this serves as a key linchpin between a user-paid trust fund guaranteed to only be used for transportation and is guaranteed to be spent, unlike the Harbor Maintenance Fund, which has a surplus approaching $5 billion, and is often used to help balance the federal budget and off-set deficit spending, rather than assist ports-related projects and efforts.

“It is an important philosophical change if they vote to strike this rule,” said Blakey. “Another extension of spending [highlights] that we don’t have a direction for transportation programs right now. Taking this rule out of the program is potentially the dismantling of what we have had in existence right now for nearly 20 years in the way in which we address and fund our transportation programs. If a new highway bill is not on track by May or June, then it may not happen until after the 2012 Presidential election.”

The need for a new surface transportation authorization was echoed by Senator Barbara Boxer (D-Calif.). In a Senate Committee on Environment and Public Works hearing on
“The Importance of Transportation Investments to the National Economy and Jobs,” last year. Boxer noted that infrastructure investments enhance business productivity by reducing disruptions that waste money, time, and fuel and undermine the country’s competitiveness.

“The next highway, transit and highway safety authorization provides an opportunity to take a fresh look at these programs and make the changes necessary to ensure our transportation system will meet America’s needs in the coming years,” said Boxer. “At the end of the day it’s a matter of setting the right priorities and crafting innovative and effective means to address them.”

About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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