Higway trust fund almost broke…again
| June 08, 2009 |
Declining gas tax receipts have left the federal highway trust fund some $8-billion to $12-billion short of the money it needs to meet its commitments to projects authorized through 2010. Last September Congress had to divert $8-billion from the general tax revenues to the highway fund just to keep it afloat.
The shortfalls will make for interesting discussions this fall when Congress has to create a new six-year funding bill to replace SAFETA-LU, which expires in September. The House Transportation and Infrastructure Chairman James Oberstar says he will not allow Congress to drag out the authorization with a series of stopgap spending resolutions as happened six years ago. So Congress will likely have to do one of three things: raise the gas tax, create an alternative deficit financed system (in an era of unprecedented deficits) or let our highway and transit systems fall into further disrepair and lay off tens of thousands of construction workers.
And as dire as this is, I’ve yet to see anybody in Washington D.C. account for what the new CAFE standards will do to gas tax receipts. If the current fuel economy average of 25 mpg has to rise to 35 mpg by 2016 as proposed, that means that gas tax receipts will fall by roughly 30 percent–yet with no reduction in the number of miles driven. Something’s got to give.