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Highway Trust Fund is on fumes and time is running out

"That’s why the American Trucking Associations is calling on Congress to endorse the Build America Fund — our solution to fund the modernization of our deteriorating network of roads and bridges. The BAF would be supported with a federal fuel usage fee built into the price of wholesale transportation fuels collected at the terminal rack, phased in at a nickel per year over four years. The fee would be indexed to both inflation and improvements in fuel efficiency, with a five percent annual cap."

It’s Infrastructure Week, and if potholes, watermain breaks and failing bridges from coast to coast aren’t enough to motivate Congress into action, then maybe another piece of dire news will: America is once again hurtling toward a highway funding cliff that should sound alarms for lawmakers, particularly budget hawks. 

For decades, we have relied on the Highway Trust Fund (HTF) — which is financed primarily by the federal fuel tax that we all pay at the pump — to help repair and maintain our nation’s roads and bridges.  And for decades, this funding mechanism has received broad bipartisan support as the most efficient and effective way to fund and maintain our nation’s roads and bridges. 

But the federal fuel tax has remained flat since 1993, and the HTF, unable to keep pace with demands, is now running on fumes. Estimates show the U.S. will need about $20 billion annually — in addition to current projected user fee revenue — to avoid reductions in highway, transit and safety investments.  If no action is taken by 2020, the Highway Trust Fund will be flat broke.

At that point, lawmakers face some very difficult choices.  They can raid the general treasury — Americans’ hard-earned tax dollars — to keep the Highway Trust Fund afloat, as has been done several times since 2008. That option relies on us borrowing more money from overseas, driving up our national debt at the expense of future generations.  Alternatively, they could allow the HTF to fail, causing the cancellation or delay of critical transportation projects and throwing hundreds of thousands of people out of work.  This would force states to do Congress’ job, starting with the cancelation of projects even earlier than 2020 given all the uncertainty.

Read on…

Chris Spear is president and CEO of American Trucking Associations.

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