This week is Infrastructure Week so I suppose it’s fitting that the Senate Committee on Environment and Public Works introduced the MAP-21 Reauthorization Bill on Monday. The bill would fund the federal-aid highway program for the next six years at the current funding levels with an annual increase each year of about 2% to account for inflation.
MAP-21 took effect on October 1, 2012 and is set to expire on September 30, 2014. Even more pressing is the Highway Trust Fund which is running dry and could hit a shortfall before the end of July according to the U.S. DOT. A report from the White House claims that if the Highway Trust Fund runs out of money it could suspend over 112,000 infrastructure projects and put 700,000 jobs at risk.
So what’s the solution? The Highway Trust Fund is primarily funded by national gas and diesel taxes which haven’t been increased in over 20 years. Improved fuel efficiency in vehicles means less revenue in fuel taxes is being generated. Raising the federal gas tax would be the easy solution but since it’s an election year don’t expect anyone in Congress to float that idea. Another option would be to decrease the amount of funding for surface transportation projects with the next funding bill that would fall in line closer to what is being generated by the current federal gas tax each year. This probably won’t happen either since the MAP-21 Reauthorization Bill plans to keep funding at current levels. This is also a bad idea because our nation’s deteriorating infrastructure needs more funding, not less, and the recovering construction industry needs the jobs generated by these projects. The most likely scenario is that money from the General Fund will be transferred to the Highway Trust Fund to keep it solvent through the end of the fiscal year.
The good thing about the MAP-21 Reauthorization Bill is that it is a long term funding bill that continues the programs and reforms established in MAP-21 while putting an emphasis on improving transparency on how projects are selected and funded. The Senate Committee on Environment and Public Works are scheduled to markup the bill on May 15th. The current text of the bill doesn’t include any info on how it will be funded apart from the Highway Trust Fund which means the Senate Finance Committee will have to figure out how to fill those funding holes.
The MAP-21 Reauthorization Bill comes about two weeks after the U.S. DOT submitted the Generating Renewal, Opportunity, and Work with Accelerated Mobility, Efficiency, and Rebuilding of Infrastructure and Communities throughout America Act, or GROW AMERICA Act, which was a $302 billion, four year transportation funding bill. The GROW AMERICA Act would have allowed tolling on existing interstates, something that isn’t currently allowed, and could have been funded through corporate tax reform that President Obama suggested a couple of months ago. With the release of the MAP-21 Reauthorization Bill, it seems unlikely that the GROW AMERICA Act will be considered.