The Department of Transportation (DOT) on Tuesday moved up its projected bankruptcy date for the trust fund that is used to pay for road and transit projects, saying it will now run dry by the end of August.
The department had previously projected that the Highway Trust Fund would run out of money in September without congressional action.
The DOT has warned that the transportation funding shortfall could force state and local governments to cancel infrastructure projects scheduled to begin this summer because federal money will not be able to assist with construction costs.
{mosads}The department said Tuesday that the Highway Trust Fund had $8.4 billion in its coffers on March 28, but the agency said the amount is lower than the infrastructure outlays that are scheduled for the rest of the year.
Senate Budget Committee Chairwoman Patty Murray (D-Wash.) said the update from the DOT should send a message to lawmakers that they need to act fast to save the federal transportation funding system.
“Today’s update from the Department of Transportation should be a wake-up call to Congress,” Murray said. “The Highway Trust Fund is heading toward an avoidable crisis as early as July, and if we don’t act, could lead to a construction shutdown on our nation’s roads and bridges. Every day that Congress waits to address this looming crisis, states will be forced to make difficult planning decisions, as many already have, to delay projects that improve roads and bridges in their communities.”
Murray is calling for action by July because that’s when the Highway Trust Fund’s coffers will dip below $4 billion, which is the point when transportation experts have said state and local governments will have to begin canceling infrastructure projects.
The Highway Trust Fund is normally filled by revenue collected by the 18.4 cents-per-gallon federal gas tax. The gas tax has not be increased since 1993 and infrastructure expenses have outpaced receipts by about $20 billion in recent years as Americans drive less frequently and cars become more fuel efficient.
The Congressional Budget Office has projected that lawmakers will have to authorize $100 billion in new spending in addition to the $34 billion that is expected to brought in annually by the gas tax to approve a new six-year transportation bill, which is the length being sought by infrastructure advocates.
Supporters of a multi-year transportation bill, which include Sen. Murray, have argued that state and local governments need more certainty in federal transportation funding than the current two-year measure that is scheduled to expire in September. Lawmakers said when they passed the 2012 Moving Ahead for Progress in the 21st Century Act that they could only cobble together enough money for transportation projects to last until this year.
Murray said Tuesday that she was in favor of proposals from President Obama and House Ways and Means Committee Chairman Dave Camp (R-Mich.) to use money from corporate tax reform to replenish the highway trust fund for another round of infrastructure projects.
“I’m hopeful that Democrats and Republicans can act on bipartisan proposals that would use corporate revenue to shore up the trust fund to keep those construction projects up and running, and our economy moving,” Murray said. “Unfortunately, the House Republican budget would take us in the opposite direction. Instead of solving this crisis fairly and responsibly, it would shut down new construction financed out of the Highway Trust Fund for all of fiscal year 2015, which would hurt workers, our economy, and states across the country.”
Rep. Paul Ryan’s (R-Wis.) budget proposal calls for requiring transfers to the Highway Trust Fund to be offset by cuts to other areas of the federal budget. Otherwise, transportation projects would be limited to the money that is brought in by the federal gas tax, which advocates say would cause further deterioration to the U.S. infrastructure network.
Ryan said in his budget proposal that requiring Congress to offset future transfers would make lawmakers more likely to address the underlying problems with the current funding source.
“Instead of continuing to rely on general fund transfers for solvency going forward, the Congress needs to address the systemic factors that have been driving the trust fund’s bankruptcy,” Ryan said in his budget proposal.
Murray said lawmakers will not have enough time to adhere to Ryan’s proposal before the Highway Trust Fund goes bankrupt.
“We cannot stand by, as the Highway Trust Fund nears critically low levels, and lose new investments in our roads and bridges, especially when these are the very projects that ensure businesses can move their goods quickly and efficiently and help ease congestion for commuters across the country,” she said. “We should give states the certainty they need to avoid a construction shutdown this summer by making sure the Highway Trust Fund can continue to support projects that create jobs and spur economic growth.”