Highway Trust Fund – How it works
Posted by nativelawpolicy
The Highway Trust Fund, which collects and allocates money to build and maintain surface transportation structures, receives almost 90 percent of its funding from a fuel tax on gasoline and diesel, while remaining revenue comes from miscellaneous taxes on tires, heavy vehicles, etc. Since 1993 the fuel tax has not adjusted. Advancements in technology has led to a decrease in the amount of fuel consumed and thus a decrease in revenue. Additionally, the almost 25 percent of the revenue from the fuel tax is diverted away from highway spending.
The Highway Trust Fund itself is divided into two accounts—the Highway Account and the Mass Transit Account—and each account expends roughly 85 percent and 15 percent of the total funds respectively. Highway Trust Fund spending has routinely outpaced fuel tax revenue. For the 2015 fiscal year, the Highway Account is estimated to spend upwards of $44 billion on roadway infrastructure and similar projects while only taking in $34 billion. Including the deficit accumulated by the Mass Transit Account, the Highway Trust Fund is expected to amass a deficit of $13 billion by the end of the 2015 FY.
Because the Highway Trust Fund cannot have a negative balance and must have a $5 billion minimum balance to meet obligations, Congress must shift money from the Treasury’s general fund. Over the last six years, Congress has diverted general fund dollars to the Highway Trust Fund more than thirty times. These “patches” are short-term fixes typically lasting from six months to a year and do not represent viable options in the long run.
Proposals for sustainable solutions include:
- Increasing fuel tax
- Decreases non-highway spending
- Taxing the overseas earnings of multinational corporations (repatriation)
- Downsizing Federal role in transportation
- Additional State actions such as tolls, bonds, sales taxes
Click here for more information on how the Highway Trust Fund works.
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Tags: department of transportation, federal budget, federal funding, federal highways, federal spending, fuel tax, highway trust fund, how things work, indian law, legal issues, Liz Walker, map-21, native american, native american attorneys, native law and policy, transportation, transportation reauthorization, United States Congress, Walker Law
Senate Environment and Public Works Committee Expected to Mark-up Highway Bill by Late June
Posted by nativelawpolicy
The Senate passed late in May a two month extension of the highway funding bill by voice vote, avoiding an abrupt halt in infrastructure spending and pushing off a debate over how to finance road construction in the long term. This vote came on top of a hectic week as politicians struggled to compromise on President Obama’s trade agenda and surveillance programs. The vote extending the decision on the highway bill and trust fund avoided a deal on how to finance a longer term highway policy. The Transportation Department said that with the extension, the trust fund had enough money to last until the middle of the summer.
So while the highway bill was the least contentious of the issues debated that week, leadership on both sides agree that finding the $15 billion at least needed a year for a 6 year highway bill will not be easy. But Republicans are expected to push for a short term funding extension till the end of the year, which would make for a count of some two dozen extensions over the past 12 years. However, Democrats are strongly opposed to another other short term fix.
Not surprisingly The Senate Environmental and Public Works Committee is expected to mark up a six year highway policy bill in late June, putting pressure on the finance committee to come up with the funding. Both parties have suggested tax reform as a solution. President Obama released a plan this year that would tax offshore income at 14 percent rate, and use the revenue to replenish the highway fund. But it is uncertain, if there is enough revenue from offshore profits to both fund highways, and still cut corporate tax rates as both Obama and Senate Republicans want to do. Many obstacles are facing tax reform, such as a small business lobby’s push to block any tax reform deal that doesn’t cut tax rates for individuals. Other lobbies have pushed for a corporate tax holiday to help fund roads, but it is anyone guess how much traction any of these proposals will gain.
Bottom-line, there will be a push for a short term extension till the end of the year of the Highway trust fund, but the Democrats are adamant that Republicans need to make highways a larger priority and will fight hard against anymore short term funding extensions. Meanwhile we can expect to see a mark-up on the re authorization or highway policy bill by the end June. At the least, this mark will reveal the level of spending that lawmakers will push for highways, and whether programs such as Tribal Transportation can expect increases in funding or changes in policy.
Posted in Articles, news articles, politics, upadates on transportation legislation, updates on transportation legislation, updates on washington
Tags: highway bill, highway funding, highway trust fund, map-21, moving ahead for progress, public works committee, senate enivornmental and public works committee, transportation reauthorization, United States Senate