States seeking alternatives as federal road fund wanes
The government trust fund that pays to build and repair highways and bridges across the country might soon be running on fumes.
The federal tax on a gallon of gas, the Federal Highway Trust Fund's chief source of revenue, has not gone up in 14 years, and Congress is loath to raise it. Americans are demanding more fuel-efficient vehicles, which means less gasoline used and fewer dollars for the fund.
As a result, states are having to look in other places for road-building money. Many fear that the fund's looming shortage could hurt their efforts to address traffic congestion and other transportation problems.
WASHINGTON » A cash crunch is fast approaching for the government trust fund that pays to build and repair highways and bridges.
The federal tax on a gallon of gas has not risen in 14 years, and Congress is reluctant to increase it. People are demanding more fuel-efficient vehicles -- less gasoline used, fewer dollars for the fund.
States are already looking to other places for road-building money -- toll road and consumption-based sales taxes, for example. They worry that the fund's looming shortage could hurt their efforts to address traffic congestion as well as environmental and safety problems caused by inadequate roads.
The situation can only get worse in 2009, when revenues for the Federal Highway Trust Fund begin falling short of planned federal spending.
The fund provides the overwhelming bulk of federal dollars spent on highways. It gets its money mainly from the 18.4 cents-a-gallon excise tax that drivers pay at the pump.
Self-service regular now tops $3 a gallon. There is concern that gas will reach a price at which people will get serious about cutting back on driving -- sending less money into the fund. Fuel-tax receipts did dip last summer when there was a spike in pump prices.
About 45 percent of all highway spending comes from the trust fund. With less money available from the fund, states must turn elsewhere for money to expand their highways and fill their potholes. That prospect is making lots of people unhappy.
» Indiana, facing a $1.8 billion gap in money needed for road improvements, negotiated a $3.85 billion deal with an Australian-Spanish consortium to lease and operate the Indiana Turnpike for 75 years. Voters expressed their displeasure, electing Democrats to replace a Republican-run House that signed off on the deal.
» In Florida, with federal aid declining, more than 90 percent of new roads since the early 1990s have been toll roads, state Transportation Department spokesman Dick Kane said.
» Voters in Washington state approved a 14.5-cent increase in state gasoline taxes over a five-year period.
» In California, voters decided to borrow the money, approving bond issues totaling $19.9 billion to be used for highway and transit projects during the next 10 years.
» Georgia increased its construction program to $2 billion from $911 million, largely through a sales tax on gasoline that rises with fuel prices, unlike the frozen federal levy.
» Oregon is experimenting with a voluntary system where drivers pay a user fee based on miles driven rather than gas consumed. Some environmentalists say this approach negates the benefits of buying fuel-efficient cars.
» Texas, Virginia and Minnesota are among states that have built or are building high-occupancy toll lanes where drivers can pay to have a congestion-free path before them.
At the end of 2000, the highway trust fund had a balance of almost $23 billion. By the end of 2006, that balance had fallen to $9 billion.
The Congressional Budget Office predicts the fund will run a deficit of $1.7 billion at the end of 2009 and $8.1 billion by the end of 2010, when the current highway program expires and Congress will write a new one.
"This crisis will be thrown in their lap right as they are rewriting the program," said Jeff Shoaf, senior executive director of Associated General Contractors of America.