All 50 states will begin to see cuts in federal transportation funding if Congress doesn’t act soon to reach agreement on how to pay for federal highway and transit programs.
The cuts will vary from state to state but will average about 28 percent beginning Aug. 1 because the balance in the federal Highway Trust Fund is diminishing and will soon go below $4 billion, the level federal officials say is needed for incoming fuel tax revenue to cover outgoing payments to states.
Revenue from federal gas and diesel taxes is expected to be about $8 billion short of the transportation funding the government has allocated to states this year. The reason for the shortfall is that the federal 18.4-cent-a-gallon gasoline and 24.4-cent-a-gallon diesel tax haven’t been increased since 1993, while construction and other costs have continued to go up.
In a rare show of bipartisan common sense, U.S. Sens. Bob Corker, R-Tenn., and Chris Murphy, D-Conn., last month proposed a 12-cent increase in the federal gas tax to be phased in over two years after which the tax will be indexed to inflation. But the plan has gone nowhere so far. Members of Congress from both parties and the Obama administration have shown no appetite for raising taxes – especially in an election year – even if work on the nation’s roads, bridges and rails comes to a halt this fall.
But raising fuel taxes to fund critical infrastructure construction projects is hardly a left-wing proposal, enjoying the support of business groups such as the U.S. Chamber of Commerce and the American Trucking Association. Businesses that rely on the nation’s highways, bridges and rail lines to get their goods to market understand all too well the repair, replacement and maintenance needs of the nation’s transportation infrastructure.