Tuesday, September 9, 2008

The Highway Trust Fund is Going Broke

According to U.S. Transportation Secretary Mary Peters, the federal Highway Trust Fund will be out of funds by the end of this month. NCSL's blog, The Thicket, alerts us with this post.

Peters issued a press release on Friday, Sept. 5th, outlining the situation. She immediately blamed Congress for ignoring "three years worth of warnings." NCSL points out, however, that the administration opposes and has threatened to veto the Department of Transportation's legislation which calls for 1)$8 billion transfer from the general fund to the highway fund, and 2)pay states a proportional reimbursement until the transfer is completed.

The policy is that states pay for their road repairs and then receive reimbursements from the highway fund. Now it appears that states would receive 75% of reimbursements, if any.

Now, for the bitter pill. NCSL's Surface Transportation Reauthorization Working Group has been concerned about the situation for awhile. When the group met in July at the national conference, they sent letters to Congress raising red flags and requesting the adoption of new policies and strategies. Up to now, states have led the way in developing innovative ways to fund road improvements, but they still require funding from the Highway Trust Fund which is depleting rapidly due to the high cost of gasoline.

Oregon state Senator Bruce Starr, who leads the working group, stated that the only way to maintain the Highway Trust Fund is to increase the federal gas tax. Ouch.

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