DOT chief: Highway funding shortfall is 'a serious problem'

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Transportation Secretary Anthony Foxx said Thursday that the projected funding shortfall for road and transit projects this year is a "serious problem" that needs a long-term solution.

Speaking at the U.S. Conference of Mayors' annual meeting, Foxx warned that the Highway Trust Fund running out of money would have ripple effects for cities and other levels of local government. 

"The Highway Trust Fund, which is perennially teetering on the edges, is still teetering on the edges," Foxx said. "We're currently on track today to go upside down before the fiscal year that we're in concludes. It's a serious problem. It's a serious problem no only because of the math, but also, what it does at the local and the state levels."

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The Highway Trust Fund is traditionally filled with money that is collected via the 18.4 cents per gallon federal gas tax. The tax brings in approximately $35 billion per year, but the current bill that provides funding for road and transit projects includes about $54 billion in annual spending, which transportation advocates say is barely enough to cover maintenance needs.

The current surface transportation funding bill is scheduled to expire in September, which is around the time the Transportation Department has forecasted the highway trust fund will run out of money.

Advocates have pushed for lawmakers to establish a new funding source for transportation projects.

Foxx said Thursday that President Obama prefers to use revenue from corporate tax reform to buttress the Highway Trust Fund, although he did not give out a specific funding amount.

"The president, for the last six months, has been talking about an idea that's a pretty good idea. It's linking corporate tax reform to infrastructure investments that will help improve our picture," Foxx said. "Stabilize the Highway Trust Fund for a period of years and allow us to plow investments into infrastructure."

Foxx said Obama was receptive to other funding ideas that have been discussed in Congress, such as a proposal from Rep. Earl Blumenauer (D-Ore.) to nearly double the federal gas tax and an idea from Sen. Barbara Boxer (D-Calif.) to switch from taxes on drivers' individual gas purchases to a wholesale fee on oil sellers.

"We see signs of progress there when the chairman of the House Ways and Means Committee, [Rep.] Dave Camp [R-Mich.], who's been working on this issue for a year or more, the outgoing chair of the Senate Finance Committee, [Sen.] Max Baucus [D-Mont.], has also put his shoulder to the wheel on this," Foxx said. "And that's one path that — that can help us get there.

"But then you've got other legislation. You've got Earl Blumenauer, a former mayor from Portland, Ore., who's got a bill he's pushing, and Sen. Boxer and Chairman [Bill] Shuster [R-Pa.] of the House [Transportation and Infrastructure] Committee, are also working on idea," he said.

Foxx said without need funding for transportation,  municipal governments would be unable to plan for constructions projects.

"Projects get slowed, they get delayed, and some of them don't get on the books at all," he said. "Meanwhile, we're stacking up a list of needs in this country: maintenance needs and new capacity needs. And so, this challenge is going to be a massive one, but one that can be undertaken if the context is shaped, and you are a critical part of setting that context."

He added that it was also important for Congress to start planning for transportation more.

"You come to Washington, there's a rail bill, there's a highway bill, there's a aviation bill," Foxx said. "But when you go home, there's an airport, there's a highway, there's a rail, there's transit. It all has to work together."

Foxx said the DOT would prepare a long-range transportation plan that is similar to documents that are often put together by cities.

"Part of what I hope we can do at DOT is to help our country, help everyone, all of our stakeholders, think past our noses as we think about how this transportation system has to be built," he said.

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