Senate Finance Committee Chairman Ron Wyden (D-Ore.) today released details of a temporary solution to stabilize the Highway Trust Fund (HTF) and preserve federal highway and public transportation investment through the end of 2014. This “patch” of the HTF is scheduled to be taken up in the Finance Committee June 26. According to the Federal Highway Administration, the cash balance of the HTF is expected to be run down to zero by the end of August.
Without action, the U.S. Department of Transportation will begin slowing reimbursements to state transportation departments in July for already underway federal-aid highway projects. The Congressional Budget Office says the trust fund would not be able to support any new highway or transit investment when FY 2015 beings October 1.
Wyden’s plan would transfer $9 billion from the General Fund to the HTF. This transfer would be paid for with four changes to non-transportation portions of the tax code and an increase in the annual Heavy Vehicle Use Tax (HVUT) for large trucks. The HVUT is one of the current contributing revenue sources for the HTF and has not been adjusted since 1984. The tax code changes in the Wyden plan include: additional required information on mortgage interest tax returns; a six-year statute of limitations on overstated taxes; revocation or denial of passports for delinquent taxes; and a requirement that inherited IRA savings be distributed within five years. These provisions would generate offsetting revenue over the next 10 years, similar to the tax policy reforms that helped pay for the 2012 surface transportation law, MAP-21.
While the proposal is expected to garner the support of Democratic senators on the Finance Committee, it is unclear at this time if the package will be passed out of the committee with bipartisan support. Finance Committee Ranking Republican Orin Hatch (R-Utah) has said he will not support the plan because it failed to include spending cuts. It should be noted that spending cuts are not in the jurisdiction of the Finance Committee, which is responsible for U.S. tax laws, and that Hatch has not specified which areas of spending he wants to see cut. Additionally, senators routinely offer amendments to multi-year authorization bills or annual appropriations bills to cut spending.
ARTBA is urging all Finance Committee members to support legislation to keep federal highway and transit funds flowing to the states while they develop a long-term trust fund plan this year.