The U.S. Department of Transportation is running out of money fast. On Tuesday, DOT announced that the trust fund used for road and transit projects will run dry by August, not September as previously predicted.
If Congress does not take action, DOT warned, the crisis could force state and local governments to set back or even cancel transit projects scheduled for the summer, because federal aid will not be available to help fund state construction costs.
The trust fund had $8.4 billion in coffers as of March 28. But according to DOT, that amount is lower than the cost of infrastructure outlays scheduled for the rest of the year.
These concerns harken back to President Obama’s warnings in February. "If Congress doesn't finish a transportation bill by the end of the summer," he said, "we could see construction projects stop in their tracks."
Transportation Secretary Anthony Foxx launched an eight-state bus tour to urge Congress to quickly pass legislation to pay for highway and transit programs. Foxx is promoting Obama’s proposal for a four-year, $302 billion plan to replenish the Highway Trust Fund. As much as $150 billion of that fund would come from proposed reform in corporate tax laws.
Congress could end up doing what it has done several times over the last five years: extract enough money from the general treasury to keep programs going a few more weeks or months, at which point Congress will need to make another decision.
In 2012, Congress passed a two-year, $105 billion highway bill the day before a previous transportation bill was set to expire. It was the first time since 2005 that Congress had passed a long-term transportation plan. Now the 2012 Moving Ahead for Progress in the 21st Century Act is reaching its own expiration date—and money is running out.
The Highway Trust Fund is usually funded by revenue collected by the federal gas tax. The gas tax, 18.4 cents per gallon, has not be raised in over two decades. Infrastructure expenses have meanwhile outgrown receipts by about $20 billion in recent years as Americans have driven less and cars have become more fuel efficient.
The Congressional Budget Office has estimated that legislators must authorize $100 billion in new spending in addition to the $34 billion expected annually for the gas tax in order to approve a six-year transportation bill. This amount would allow funding to continue at current levels.
Senate Budget Committee Chairwoman Patty Murray (D-Wash.) is calling for congressional action by July, when the fund’s coffers could hang below $4 billion and when state and local governments could start shutting down projects.
Photo used via Creative Commons license with Flickr user Lauri Kolehmainen.