The chairwoman of the Senate committee that oversees transportation projects said Wednesday that lawmakers need to act quickly to “save” the Highway Trust Fund from insolvency.
Speaking at a meeting of the American Association of State Highway and Transportation Officials (AASHTO), Sen. Barbara BoxerBarbara BoxerAnother day, another dollar for retirement advice rip-offs Carly Fiorina 'certainly looking at' Virginia Senate run Top Obama adviser signs with Hollywood talent agency: report MORE (D-Calif.) said the fund that is used to pay for federal road and transit projects is on the verge of extinction without congressional action this year.
“We need to save the Highway Trust Fund,” Boxer said to the group. “A fund that’s been in place since 1956, but it is threatened with extinction, so to me, failure is not an option. We’re going to have to fight hard to make sure that trust fund is solid for the next five, six years at least.”
The Highway Trust Fund’s coffers are traditionally filled by the 18.4 cents per gallon federal gas tax, but the gas tax only brings in approximately $34 billion per year.
The current federal transportation bill, which is scheduled to expire in September, contains more than $50 billion in annual road and transit projects.
Boxer said she was glad drivers are getting better gas mileage for their cars, but she said the combination of increased fuel efficiency and reduced consumption was doing a number on infrastructure funding.
“The gas tax is not keeping up with inflation, and it’s not keeping up with the wonderful innovations that we have to save gas, and that’s so important,” Boxer said. “This isn’t temporary. This is something we have to deal with. We see where the trend is going with the gas tax.”
Boxer said the only solution was to once again provide additional funding to supplement the gas tax revenue to adequately fund transportation. Lawmakers used approximately $20 billion per year from other areas of the federal budget to close the shortfall in the 2012 bill that is scheduled to expire in September.
“Let me be clear: The pending highway trust fund shortfall must be addressed by an infusion of funds,” Boxer said. “Otherwise CBO estimates that obligations for new projects in 2015 would need to be reduced to zero. This would result in federal highway, highway safety, transit funding being cut by $50.8 billion in fiscal year 2015 with 1.8 million jobs lost.”
Boxer added there would be “serious consequences if we don’t act.
“We’re running out of time,” she said. “States may be required to cut pending projects from current funding plans, or they may be unable to allocate funds for any new projects in fiscal year in 2015.”
Boxer’s comments came as President Obama is scheduled to unveil a proposal for a four-year, $302 billion transportation bill that White House officials say can be paid for with the help of $150 billion in savings from closing corporate tax loopholes.
Boxer said Wednesday that Obama’s proposal was a viable solution to the transportation funding crisis.
“You’re going to be hearing from [the Obama administration] today,” Boxer said. “I think you’ll be excited at what they have done in this whole area of transportation. It’s very, very good. They’re looking at tax reform, which is certainly one way to make sure we have the funding for six years.”
Transportation advocates have pushed Congress to generate more infrastructure revenue by increasing the gas tax for the first time since 1983, but Boxer said that was unlikely to happen in this election year.
“I’m going to be very honest with you … I don’t see support for raising the gas tax, and there is absolutely no way we’re going to cut spending, so it’s going to have to be a creative way to fund this in reality,” she said.
Boxer has said previously she supported switching to a tax on gas on the wholesale level that would be paid for by oil refineries instead of drivers, like Virginia and Maryland have done.
But Boxer said the wholesale gas tax idea has failed to gain momentum.
“I think I may be the only one who likes that idea,” she said. “I haven’t seen a groundswell of support for that idea.”
Boxer said she was not wedded to the wholesale gas tax proposal as the only transportation funding solution, however.
“I’m a pragmatist, and I want to just get this done,” she said. “I think we have to work with the realities, which is, we’re not going to get a gas tax … so let’s be pragmatic. Let’s not engage in ideological squabbles about a pay-for. Let’s just find one.”
Boxer said the Senate would likely unveil its version of the transportation bill reauthorization package this spring.
"We intend to mark up a highway bill in April," she said. "It will be hopefully a five- to six-year bill. It will probably be current levels, plus inflation."
Boxer said the most likely option for a funding increase beyond the president's tax reform proposal would come through the DOT's Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program.
"The TIFIA program has an amazing leverage on our jobs and our work," she said. "I view the TIFIA program as a way to really increase, through leverage, the amount of money that's being spent out there."
House Transportation Committee Chairman Bill Shuster (R-Pa.) and Transportation Secretary Anthony Foxx are scheduled to address the state transportation officials’ summit on Thursday.