Inside Transportation

From Capital Partnerships LLC

Highway Fund in Red by 2009

The National Surface Transportation Infrastructure Financing Commission, met last week to look at the long-term viability of the Highway Trust Fund.  The panel, which is separate from the National Surface Transportation Policy and Revenue Study Commission, selected Rob Atkinson, President of the Information Technology and Innovation Foundation as its Chair.  The commission is charged with developing recommendations for future transportation financing proposals while determining if the current gas-tax-based tools are able to meet future needs

Jack Basso of AASHTO, told the commission that annual revenues to the Highway Trust Fund "are not declining." Joined by Cambridge Systematics, he noted that the problem facing the highway account of the Highway Trust Fund stems from Congressional authorizations and appropriations that exceed anticipated revenues. By 2015, Basso said, inflation, as measured by the Consumer Price Index, will have reduced the purchasing power of Highway Trust Fund dollars by 70% from 1995.

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Pressure to Increase Transportation User Fees

If Congress does not take correction action, the highway account will fall short by as much as $630 million in cash in Fiscal Year 2009 and as much as $5.8 billion in FY 2010. In the immediate future, today’s 18.4 cent federal gas tax would have to be raised the equivalent of 3 cents. And to finance a $73 billion highway program by 2015, the federal gasoline tax would have to be raised by the equivalent of an additional 7 cents in 2010. Also, the federal tax on diesel fuel would have to be raised by the equivalent of 13 cents to 37.4 cents for uniform excise distribution.

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