The federal fund that’s supposed to maintain the nation’s roads and bridges may soon be empty, yet lawmakers on Capitol Hill can’t agree on how to restore it. It’s not clear they’ll be able to reach an agreement.
While more fuel efficient cars and trucks may be good for your wallet and the environment, they may not be so good for the roads you drive on. The federal Highway Trust Fund relies on an eighteen cent per gallon gas tax. If you drive diesel the government hits you for twenty four cents per gallon each time you fill up.
Vehicles driving farther on less fuel mean the current formula, which was developed in the 1990s, leaves the highway fund facing insolvency.
Fairfield Democratic Congressman John Garamendi says local officials have told him they’re bracing for the fund could run out of cash in the next few weeks.
“It’s a major problem for California," says Garamendi. "We have more highways, more traffic than anywhere else in the nation. It’s a major, major problem. We’re going to lose thousands – tens of thousands of jobs if this problem isn’t solved.”
The pending crisis is sparking a debate in Washington over the future of U.S. transportation funding. Granite Bay Republican Congressman Tom McClintock says part of the current problem is that lawmakers in both parties have raided the fund to pay for things that are not road related.
“The Highway Trust Fund wouldn’t be in any trouble if the taxes people paid at the pump for their highways actually went to their highways," says McClintock.
McClintock says the current gas tax is a user fee, but users aren’t getting what they pay for.
“But over the years those funds have bled – been bled off for purposes unrelated to the highways," says McClintock. "Fifteen percent goes to mass transit. An untold amount goes to environmental mitigation. The money that people pay as taxes at the pump are no longer getting to their highways. That’s the problem. Fix that, and the trust fund is solvent.”
House Republican leaders are scrambling to find a solution so they can avoid the blame if the fund goes broke. One proposal they offered is ending most Saturday postal service and putting the savings in the highway fund. The idea is seen as a temporary fix by lawmakers in both parties -- applying future savings to today’s trust fund shortfall.
Richvale Republican Congressman Doug LaMalfa doesn’t like the option, he says it’s better than a tax increase.
“Well, it’s not a perfect solution, but if it’s a stopgap that we can live with, you know, until we have a longer discussion about how to properly fund, then maybe it’s the one that we’re going to have to use to get through the year, you know," says LaMalfa.
Elk Grove Democrat Ami Bera says the proposal is a non starter.
“You know, that’s not a reasonable way to pay for the Highway Trust Fund," says Bera. "I mean, the reality is, is as a doctor, I know a lot of my senior patients rely on Saturday mail delivery to get their medications. And a lot of folks – you know, with commerce increasingly happening online – require mail and postal service.”
Another idea that’s gaining bipartisan support is to give companies with holdings overseas a temporary tax “holiday.” The trillions of dollars held by companies overseas could come back to the U.S. at greatly reduced tax rates. That repatriated revenue could be used to replenish the highway fund. Garamendi says it makes sense.
“I could support corporate tax reform. Indeed I could," says Garamendi. "There’s no doubt that there are many American corporations that are skipping out on their responsibilities to this country. And corporate tax reform would be an important way of bringing back a responsibility that every American and every American corporation should have. In other words, pay your fair share.”
But reforming the tax code is a touchy political issue that could take years, and lawmakers just have weeks to find a solution. California Democratic Senator Barbara Boxer is on the transportation committee. She says if lawmakers are unwilling to raise the gas tax, then they ought to just scrap it and pass the fee from drivers to the oil companies.
“I’d like to do away with the gas tax and replace with it a user fee at the refinery level. Then we would never have a gas tax," says Boxer. "That’s my favorite proposal.”
Boxer says she doesn’t trust this divided Congress to deal with a complex issue. She says that will have negative ripple effects this fall.
“Yeah, I think that – I think that what they’re going to do is patch it till December and then in the lame-duck do a long-term solution," says Boxer. "I think it’s not the way to go. It’s going to disrupt things but it’s better than letting the program lapse."
The federal Department of Transportation is warning there are just over three weeks until it will have to start slowing the flow of checks to states. That means there’s little time for this Congress to deal with the long term proposals being offered by California lawmakers.
Transportation officials are hoping lawmakers can find a short term solution so they don’t have to stop construction – even if they say the nation desperately needs a long term strategy.