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In its latest update of the Highway Trust Fund Ticker, the U.S. Department of Transportation predicts the HTF to run out of money by the end of August.
In the ticker update, the DOT notes that the Highway Account started fiscal year 2014 with about $1.6 billion, and $9.7 billion was transferred from the General Fund.
Since then, the account’s cash balance has dropped by nearly $3.5 billion to $8.4 billion.
In the agency’s last update in March, the ticker predicted a shortfall by late July.
The HTF provides funding to the majority of projects in the U.S., and the DOT could slow reimbursements to state and local agencies to prevent the shortfall.
Transportation Secretary Anthony Foxx recently said that if the HTF, along with other problems with the nation’s transportation system, isn’t properly funded, the ultimate cost to the nation could be 700,000 jobs.
“As soon as August to September of this year, the major funding source for our highway systems, our transit systems, the Highway Trust Fund is going to go belly-up,” Foxx said during the national convention of Al Sharpton’s National Action Network in New York City. “And the reason for that is because it’s gas tax dependent and people are riding more fuel-efficient cars and there’s not enough money.”
Despite the HTF’s looming insolvency, progress has been made in the past two months. In February, President Barack Obama proposed a $302 billion, four-year transportation reauthorization bill with the aim of avoiding such a shortfall. The proposed bill includes $63 billion to fund the gap in the Highway Trust Fund in the near term. According to the White House, the funding would address the insolvency of the fund for four years.
And just last week, key senators reached a bipartisan agreement on a plan they say will result in a long-term highway bill that would keep the current levels of funding with increase to account for inflation each year.
For more details, see the DOT’s Highway Trust Fund Ticker here.