President Obama reminded lawmakers that they must replenish the Highway Trust Fund soon when he recently sent a 6-year, $478 billion transportation proposal to Capitol Hill.
Both surface transportation programs and payments to the Highway Trust Fund from the general fund of the U.S. Treasury are set to expire May 31, as a new Concord Coalition issue brief explains.
The Transportation Department says the trust fund will still have enough money to operate normally until late July. If lawmakers reauthorize the programs while failing to address the trust fund’s growing shortfall, however, after July the federal government could not fully reimburse states for highway and transit projects. That could put thousands of those projects on hold.
Since 1993 motor fuels taxes — the trust fund’s primary funding source — have not been raised or indexed to inflation. To deal with the gaps between dedicated revenue and spending, Congress has unfortunately just transferred money from elsewhere in the federal budget, often through gimmicks.
The President has proposed using tax revenue from corporate profits earned overseas to help pay for transportation investments. But ideally a trust fund should rely on dedicated revenue sources that are related to the purpose of the fund.
Concord’s issue brief explains some options that elected officials should consider in searching for a responsible, long-term solution.
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