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Cover Story 2016-07-27T11:56:58+00:00
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Highway Trust Fund: Groundhog Day?

by Dave Bauer, ARTBA senior vice president of government relations

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In the early 1990s movie “Groundhog Day,” Bill Murray plays a character who keeps reliving the same day. No matter what Murray’s character does during that day, the next morning he wakes to the same song from his alarm clock and the day proceeds just as the others.

This bit of pop culture has become a too frequent metaphor for the past eight years of Highway Trust Fund (HTF)
dysfunction where each cycle begins with a projection of when the fund will be unable to fulfill its obligations and ends with Congress approving last minute legislation to temporarily preserve highway and public transportation investment. Then the clock starts ticking on the next crisis.

As we count down to the sixth HTF revenue shortfall in eight years, a number of developments have already ensured that we are not reliving the same trust fund cycle.

Certainly, the U.S. Department of Transportation’s projection that—without additional revenues—it will need to start slowing down reimbursements to the states in July due to trust fund liquidity constraints and insolvency looming in September very much bring to mind the premise of Groundhog Day. The difference between this situation and the previous five trust fund shortfalls, however, is the vast recognition by members of Congress of the need for action and the priority the congressional leadership has placed on passing a surface transportation bill. The day after the 2014 elections, both House Speaker John Boehner (R-Ohio) and incoming Senate Majority Leader Mitch McConnell (R-Ky.) cited infrastructure as one of the few areas where the new Republican Congress could find common ground with President Obama. Since the 114th session of Congress convened in January, passing a surface transportation reauthorization bill  has been consistently listed as one of the “must do” items by members of both chambers and parties.

Perhaps one of the brightest spots in terms of distinguishing the 2015  HTF crisis from those in 2008, 2009, 2010, 2012, and 2014, is that this time around all parties are actively seeking a solution. Most members of Congress now clearly understand they cannot deliver a long-term surface transportation bill until they find a long-term HTF solution. Senate Finance Committee Chairman Orrin Hatch (R-Utah), Environment & Public Works Committee Chairman Jim Inhofe (R-Okla.), Commerce Committee Chairman John Thune (R-S.D.), and Foreign Relations Committee Chairman Bob Corker (R-Tenn.) have all publicly said they are evaluating all options—including a federal motor fuels tax increase—to generate additional HTF revenues.

In the House, Representatives Reid Ribble (R-Wis.), Dan Lipinski (D-Ill.), Tom Reed (R-N.Y.), and Bill Pascrell (D-N.J.) generated a letter from 285 House members—including a majority from both parties—urging the House GOP and
Democratic leadership to make developing a long-term HTF plan a priority.

While the Obama Administration has long advocated for increased federal surface transportation investment, the President’s FY 2016 budget for the first time includes a specific plan to generate the resources necessary to pay for his highway, transit, and passenger rail spending proposal. The Administration’s plan to allocate $238 billion generated over six years by requiring U.S.-based multinational companies to “repatriate”—or declare as U.S. revenue—profits earned overseas has generated mixed responses on Capitol Hill, but no one disputes that this mechanism would generate real revenue.

The challenge with this proposal is primarily based on the need for a broad re-write of the U.S. tax code—a major lift in any environment—to make the repatriation construct work.  Furthermore, many on the congressional tax committees and in the business community want revenue generated from corporate tax reform to be used to lower corporate tax rates.  Regardless of the prospects of using repatriation revenues to support transportation investment, the fact that the President and his team have forwarded a HTF solution is further evidence of the different environment in 2015 than in years past.

It should also be noted that forces outside of Capitol Hill have highlighted the nation’s infrastructure challenges and the need for congressional action. The CBS news program “60 Minutes” ran a lengthy segment in late November about the
deterioration in the nation’s highways, bridges and other infrastructure facilities. Since January, editorials in The
“Washington Post,” “USA Today,” “The New York Times” and other major publications have endorsed a gas tax increase to generate the resources needed to begin improving the country’s roads, bridges and public transportation facilities.

According to Sir Isaac Newton’s Third Law of Motion, for every action there is an equal and opposite reaction. While Newton focused on physics, his insight also applies to politics. The long-time opponents of federal highway and transit
investment have definitely noticed the momentum towards a solution for the HTF over the last two months and have
accelerated their activities to derail this progress.

Professional conservative groups, such as Heritage Action and The Club for Growth, were part of a letter signed by 50 self-titled taxpayer advocates and free market organizations that wrote to Congress in February opposing a gas tax increase and brandishing unsupported claims of wasteful federal highway spending.  The “Wall Street Journal” also recently wrote a lengthy editorial calling for abolishing the federal gas tax and forcing states to handle highway and bridge needs on their own. The Journal is also allowing other conservative pundits to run  op-eds decrying a gas tax increase and further criticizing the value of federal highway investment.

While these attacks on the irrefutable public and economic benefits that come from improved transportation
infrastructure are disappointing, these individuals and entities would not be stepping up their efforts to kill a  HTF fix if they too did not see progress occurring.

The first step toward ending the eight-year cycle of dysfunction that has plagued federal surface transportation investment and disrupted the activities of the states that rely on these funds for, on average, 52 percent of their highway and bridge capital improvements, was always going to be the launch of a national debate. It has been clear over the last two months that this overdue discussion has begun.

It is now up to Congress and President Obama to find a way to fill the HTF’s $15 billion per year shortfall between available resources and current levels of highway and transit investment.  The positive developments over the last two months have certainly laid the foundation for such a solution, but we still have a long way to go. It is the responsibility of the transportation construction industry and all transportation stakeholders to build on these steps and continue pushing Congress to act in a meaningful way to permanently fix the HTF. As already noted, there are vocal and committed groups working aggressively to defeat us in this effort and you can bet Congress is hearing from them.   

With the authorization of the highway and transit programs expiring May 31, and the trust fund needing additional
resources by July, one way or another Congress will act in the next few months. This means we have the attention of
lawmakers and they are facing a deadline, two things that always create an opportunity on Capitol Hill.

For those of you who have not seen or do not remember the movie, Bill Murray’s character in “Groundhog Day” broke out of his time trap by beating the odds to achieve something meaningful. In a similar spirit, it’s time to break out of the time trap and for Congress and the President to achieve something meaningful and permanent with the HTF.

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2015 January/February Articles


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Past Issues



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