By JIM ABRAMS, Associated Press Writer
Sun May 20, 12:53 PM ET
WASHINGTON - A cash crunch is fast approaching for the government
trust fund that pays to build and repair highways and bridges.
The federal tax on a gallon of gas has not risen in 14 years
and Congress is reluctant to increase it. People are demanding
more fuel-efficient vehicles less gasoline used, fewer dollars
for the fund.
States already are looking for other places for road-building
money toll road and consumption-based sales taxes, for example.
They worry that the fund's looming shortage could hurt their
efforts to address traffic congestion as well as environmental
and safety problems caused by inadequate roads.
The situation can only get worse in 2009, when revenues for
the Federal Highway Trust Fund begin falling short of planned
federal spending.
The fund provides the overwhelming bulk of federal dollars
spent on highways. It gets its money mainly from the 18.4 cents-a-gallon
excise tax that drivers pay at the pump.
Self-service regular now tops $3 a gallon. There is concern
the price will reach a price at which people will get serious
about cutting back on driving sending less money into the fund.
Fuel tax receipts did dip last summer when there was a spike
in pump prices.
About 45 percent of all highway spending comes from the trust
fund. With less money available from the fund, states must
turn elsewhere for money to expand their highways and fill
their potholes. That prospect is making lots of people unhappy.
--Indiana, facing a $1.8 billion gap in money needed for road
improvements, negotiated a $3.85 billion deal with an Australian-Spanish
consortium to lease and operate the Indiana Turnpike for 75
years. Voters expressed their displeasure, electing Democrats
to replace a Republican-run House that signed off on the deal.
--In Florida, with federal aid declining, more than 90 percent
of new roads since the early 1990s have been toll roads, state
Transportation Department spokesman Dick Kane said.
--Voters in Washington state approved a 14.5-cent increase
in state gasoline taxes over a five-year period.
--In California, voters decided to borrow the money, approving
bond issues totaling $19.9 billion to be used for highway and
transit projects over the next 10 years.
--Georgia increased its construction program from $911 million
to $2 billion, largely through a sales tax on gasoline that
rises with fuel prices, unlike the frozen federal levy.
The American Association of State Highway and Transportation
Officials says at least six states have adopted variable fuel
taxes that are pegged to inflation.
--Oregon is experimenting with a voluntary system where drivers
pay a user fee based on miles driven rather than gas consumed.
Some environmentalists say this approach negates the benefits
of buying fuel-efficient cars.
--Texas, Virginia and Minnesota are among states that have
built or are building high-occupancy toll lanes where drivers
can pay to have a congestion-free path before them.
With the population of Texas increasing by 1,000 people a
day, "we as a state don't really feel like we have an
option to shelve projects or sit on our hands as the problems
with the highway trust fund loom larger and come closer on
the horizon," said Christopher Lippincott, a Texas Transportation
Department spokesman.
Revenues from tolls, bonds, federal loans and local contributions
allowed most of a new turnpike around Austin to be completed
more than 20 years sooner than if the state had relied solely
on state and federal taxes.
The Texas Legislature is trying to satisfy concerns of Gov.
Rick Perry over a bill that includes a two-year freeze on most
new privately financed toll roads. The freeze reflects opposition
to the Trans Texas Corridor, a combined toll road and rail
system from Mexico to the Oklahoma line.
Of the 18.4 cents a gallon in federal excise taxes, about
15.44 cents goes to the highway trust fund, 2.86 cents to mass
transit programs and one-tenth of a center to a leaking underground
storage tank fund. The tax on diesel fuel is slightly higher.
Close to two-thirds of the trust fund's $40 billion in receipts
last year came from the gasoline tax.
Gasoline was only 30 cents a gallon and the excise tax on
it was just 3 cents in 1956 when Congress created the highway
trust fund. As gasoline prices rose, so did the tax. But a
tax-adverse Congress has kept it at 18.4 cents a gallon since
1993, when gasoline prices were about $1.10 a gallon.
Two years ago, lawmakers proposed a 4-cent-per gallon boost
in the fuel tax to finance a $375 billion highway bill. They
backed off when President Bush pledged to veto any road legislation
with a tax increase. In the end, the spending plan came to
$286 billion.
At the end of 2000, the highway trust fund had a balance of
almost $23 billion. By the end of 2006, that balance had fallen
to $9 billion.
The Congressional Budget Office predicts the fund will run
a deficit of $1.7 billion at the end of 2009 and $8.1 billion
by the end of 2010, when the current highway program expires
and Congress will write a new one.
"This crisis will be thrown in their lap right as they
are rewriting the program," said Jeff Shoaf, senior executive
director of Associated General Contractors of America.
Because investment in new projects is spread over a number
of years, every dollar of shortfall translates into a $4 drop
in highway spending, he said.
Thus in 2010, the government will have only $20 billion to
invest on highways, half the current spending level and less
than one-third of the $70 billion that Shoaf said is needed
for real road improvements.
"A drastic cut in federal highway and transit funding
will result unless Congress steps in," John Horsley, executive
director of the American Association of State Highway and Transportation
Officials, said in a report.
Horsley's group said the fuel tax would have to be increased
by 10 cents per gallon through 2015 to restore the purchasing
power of the program.
The Senate Finance Committee is looking into temporary ways
to refinance the trust fund, including redirecting some transportation-related
taxes that now go into the government's general account and
clamping down on gas tax fraud. A Transportation Department
commission also plans to issue recommendations by the end of
this year.
By the middle of the next decade, the highway trust fund will
be providing $100 billion to $150 billion below real needs
for building highways and bridges, predicted Rep. Peter DeFazio,
chairman of the House Transportation and Infrastructure subcommittee
on highways and transit.
"In the long run we've either got to admit we are going
to underinvest and accept more gridlock and congestion" or
find new revenue sources, said DeFazio, D-Ore.
What is clear to him is that raising taxes of any kind for
the highway trust fund is possible only if people are convinced
that more spending will mean less congestion, safer roads and
a cleaner environment.
The public will not support new taxes "just to throw
money in the maw of the federal government," DeFazio said.
___
On the Net:
Federal Highway Administration: http://www.fhwa.dot.gov/
American Association of State Highway and Transportation Officials:
http://www.transportation.org/
American Road and Transportation Builders Association: http://www.artba.org/
Associated General Contractors of America: http://www.agc.org/
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