"Highway Trust Fund Going Broke…Again"
Just like last year, it seems that the federal Highway Trust Fund is going broke:
The federal Highway Trust Fund will run out of cash this summer, marking the second year in a row that gasoline tax revenues have failed to meet prior projections and federal spending commitments. Congress will need to add between $5 billion and $7 billion to keep the trust fund solvent for now, Sen. Barbara Boxer , D-Calif., announced Tuesday.
As Reuters noted, “rising gasoline prices, along with more Americans driving fuel-efficient cars, have pushed down gas purchases, and with them, gas tax collections.” And since the Highway Trust Fund is funded by gas tax collections, it’s now in a state of perpetual shortfalls.
This then, would seem like an opportune time to examine what purpose the fund is going to serve going forward and where its money is going to come from, particularly because its spending guidelines need to be reauthorized by this fall.
Currently, 81 percent of the fund’s money is dedicated to highways, while 19 goes toward mass transit. Sens. John Rockefeller (D-WV) and Frank Lautenberg (D-NJ) have submitted legislation stipulating that the next incarnation of the spending plan aim to “reduce per capita motor vehicle miles traveled on an annual basis, reduce national surface transportation-generated carbon dioxide levels by 40 percent by 2030, and increase the proportion of national freight provided by means other than trucks by 10 percent by 2020,” which would likely mean shuffling this ratio, with more emphasis on transit.
This has been met with stiff opposition from lobbyists (Congressional Quarterly calls them “highway groups“), who say that they won’t support any effort to raise the gas tax to cover the fund’s deficit unless the spending ratios stay as they are. But just like during the stimulus debate, if we’re trying to move toward a green economy, giving highways a much higher priority than mass transit seems misguided.
In any case, in light of new CAFE standards and a growing emphasis on fuel efficient vehicles, raising the gas tax is not a permanent fix for the fund’s woes. Two congressionally mandated commissions have recommended that “Congress find a new revenue source to pay for highway and transit programs,” and “their top recommendation was to tax motorists based on how many miles they drive.”