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Washington: Health of highway system at risk

By: Herman Wang
(Contact)

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Bob Corker

WASHINGTON — Driving less ironically could lead to the downfall of the country’s highway system.

With Americans traveling significantly fewer miles due to higher gas prices, the federal Highway Trust Fund, which is financed through gas-tax collections, faces a massive shortfall and could be bankrupt next year.

The looming deficit, just three years after the fund had a $10 billion surplus, is prompting lawmakers to reassess the funding formula, when reauthorization of the federal highway program occurs next year.

“At some point, we really have to recalculate how we do these revenues,” said U.S. Rep. Zach Wamp, R-Tenn., a member of the House Appropriations Committee. “The question is how we raise the revenue without hurting the economy.”

The trust fund provides one-third of the money states use for building and maintaining highways and bridges. A flat tax of 18.4 cents per gallon from gasoline sales and 24.4 cents per gallon for diesel generates money for the fund.

But with gas hovering slightly under $4 a gallon nationwide, Americans are cutting back on their car usage. The Department of Transportation reported that Americans drove 9.6 billion fewer miles this past May, a decline of 3.7 percent compared to a year ago.

Since last November, 40.5 billion fewer miles have been driven compared to the same seven-month period a year ago, the department reports.

As a result, transportation officials now project the trust fund, which was expected to pay for about $40 billion in infrastructure projects next year, will have a $3.1 billion shortfall.

As a short-term patch, the House in late July passed a bill, 387-37, to transfer $8 billion from the U.S. Treasury into the trust fund, despite a veto threat from the White House.

U.S. Rep. John Duncan, R-Tenn., who sits on the House Transportation Committee, said the bill simply returned money to the trust fund that was taken out in 1998 and spent on other priorities during a year of surplus.

“We are not robbing the general fund. We are returning money that was never supposed to be there,” he said.

In the Senate, however, a tax extender bill that included the $8 billion infusion into the highway trust fund failed to get the 60 votes necessary to head off a filibuster led by Republicans, who wanted to keep the Senate’s focus on energy legislation instead.

U.S. Sen. Bob Corker, R-Tenn., said he sees the need to address the Highway Trust Fund shortfall but is not inclined to support any temporary patches like the $8 billion transfer.

“One of the things about (Congress) that can be very disconcerting is the way we do things on a short-term-fix basis,” he said. “I hope that what we’ll do is look at a longer-term fix, not just a Band-Aid. I know we’ve got to solve it.”

BAD ROADS, WORSE ECONOMY

Allowing the country’s highway system to deteriorate will lead to an economic disaster, said Pat Quinn, president of Chattanooga-based trucking firm U.S. Xpress.

Mr. Quinn was part of federally convened panel that recommended to Congress an increase in the gas tax up to 40 cents per gallon over five years — even though he said his company buys 13 million gallons of fuel each month, spending $57 million in May. The increase would help firm up the trust fund’s finances until a user-based fee system of public/private partnerships on toll roads can be implemented, he said.

“I don’t think anybody wants a high gas tax, but in the interim, there is a need,” said Mr. Quinn, who testified before Congress earlier this year. “It hasn’t been raised since before Bill Clinton took office in 1992. It wasn’t indexed to inflation, nor has it been increased in 16 years.”

Gridlock on highways, he said, costs the country $78 billion to $200 billion annually in lost productivity.

And as regoins such as the South continue to grow in population, the area’s highways will become increasingly congested, leading to further transportation delays and lost productivity, he warned.

“Some tough decisions are going to have to be made in the next highway bill,” Mr. Quinn said. “Someone’s got to be a statesman and lead it. It’s a national problem. It’s not just about what each congressman can bring back to his district. That’s been the problem with the last two highway bills.”

Rep. Wamp, who voted for the $8 billion infusion into the Highway Trust Fund, said he would support indexing the gas tax to inflation or to the cost of a gallon of fuel, but he cautioned against adding to the already high prices.

“Raising taxes when the economy is soft is always a real problem,” he said. “I know the truckers and other people who use the infrastructure need to have relief, but if you just raise taxes when gas prices are this high, you’ll have even more businesses going out of business.”

U.S. Rep. Lincoln Davis, D-Tenn., who also voted for the House trust fund bill, said he hopes a second economic stimulus package that Congress is likely to take up in September will include significant funding for infrastructure improvements. He cited economic estimates that every $1 billion invested by the federal government in road construction translates to 35,000 family-wage jobs.

“I see a need for infrastructure improvement,” he said. “It would create a lot of jobs, and they’d be good-paying jobs. It would also build infrastructure that our children and grandchildren would be able to use. It’s an investment in America.”

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