By Dave Bauer, senior vice president of government relations, ARTBA
The Congressional Budget Office (CBO) projects the Highway Trust Fund (HTF) will be unable to support any new federal highway or transit spending once FY 2016 begins October 1 without congressional action to generate new trust fund revenues before that date.
Much like the summer of 2014 when CBO issued a similar warning regarding the coming fiscal year, all new trust fund revenues in FY 2016 are expected to be used to pay for federal-aid projects currently under way, leaving no remaining resources to support new highway/transit investment.
The HTF operates under a cash method of accounting where bills are paid as they come due, as opposed to holding each year’s disbursements in reserve until the costs are incurred. Current federal highway investment of $40.7 billion and the $8.6 billion in HTF-supported transit program funding would be reduced to zero under this scenario.
The U.S. Department of Transportation projects the HTF can continue to maintain current levels of investment through July, but that it would be forced to begin slowing down reimbursements to state departments of transportation in August to preserve a positive trust fund balance if no new resources are provided.
The current situation is the mirror image of the trust fund’s fiscal dilemma from July of 2014 when Congress infused the HTF with $10.8 billion in resources from elsewhere in the federal budget. Since that action was a short-term patch, Congress knew it would be facing the same crisis if it did not act. Unfortunately, members of Congress did not develop a long-term HTF plan during the intervening nine months and much of the dialogue on Capitol Hill has now shifted toward the duration of the next extension of the programs.
ARTBA is continuing to urge members of the House and Senate to act this year on a permanent HTF fix and end the current eight year cycle of trust fund patches and constant uncertainty about future federal highway and transit investment.