Wednesday, June 11, 2014

As U.S. highway fund runs low, and Sat. mail deal looks doubtful, states look for ways to pay for roads

The Highway Trust Fund is running out of money, and no immediate solution is in sight; the Senate seems unlikely to accept House Republican leaders' idea to end Saturday mail (except for packages) and use the savings to replenish the fund. So states are delaying construction projects or finding innovative ways to raise money for basic road maintenance and for repairing damaged or dangerous roads, Jon Kamp and Kristina Peterson report for The Wall Street Journal. Payments to states could end "as soon as August unless Congress agrees on a solution. Fuel taxes feed the fund, but they haven't budged in two decades, making revenue from them susceptible to inflation and more efficient cars even as U.S. infrastructure worsens."

Some states are preparing for an end to funds by asking residents to make up the difference by passing fuel-tax increases, the Journal reports. In Missouri "the state's Republican-led Legislature recently passed a resolution to ask voters for a sales-tax increase to raise at least $5.4 billion over 10 years for projects such as widening Interstate 70, which links St. Louis and Kansas City. A rise in the sales tax is considered more politically viable than a gas-tax boost." (WSJ graphic)

But some rural residents don't welcome that solution, especially because they doubt that higher taxes will benefit roads in their areas, the Journal reports. "Blake Hurst, a Missouri farmer who heads an agriculture trade group, is looking to see how many rural projects are proposed before he decides whether to support a tax increase. Ever-larger equipment like his combines leave little space for passing traffic." He told the Journal, "We're interested in maintaining that ability to get our stuff to market."

"In the absence of congressional action, the balance in the fund's highway account will fall to $2 billion by Sept. 30 and its mass-transit account to $1 billion, according to the Congressional Budget Office. That would force the Transportation Department to start delaying payments to states as soon as August to keep the balances above zero, as required by law," the Journal reports. "Meanwhile, Transportation Secretary Anthony Foxx sounded another alarm Tuesday," saying, "We find ourselves this summer with a highway trust fund that will become insolvent by August—700,000 jobs around our country potentially at risk." (Read more)

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