Congress mulls future Highway Trust Fund funding

| Thursday, July 18, 2002

The U.S. House Highways and Transit Subcommittee July 16 examined funding options for the Highway Trust Fund in preparation for the reauthorization of the Transportation Equity Act for the 21st Century (TEA 21) next year.

"We see clear signs that the federal Highway Trust Fund - the basic financial cornerstone of our infrastructure network - is at risk," said Ohio Gov. Bob Taft. Fifty percent of Ohio's interstate highways need to be re-engineered and rebuilt, he said.

Tom Petri (R-WI), subcommittee chairman: "Taxes collected from gasoline, diesel, and truck-related sales are the major sources of revenue - 88 percent - for the federal share of transportation infrastructure projects. The collection of fuel taxes will continue to finance highways and transit for some years to come.

"However, the combination of factors such as special tax breaks for alternative fuels, technological advancements in the efficiency of car and truck engines, and future fleet introduction of fuel cells and electric or hybrid cars, all make it imperative that we begin now to explore new ideas on how to continue the financing of highways and transit systems."

Witnesses outlined various ways to strengthen the fund: The American Road & Transportation Builders Association recommended a 2 cents per-gallon annual fuel tax increase through the life of the TEA 21 reauthorization legislation to catch up with rising costs since the last user fee increase.

AASHTO advocated the creation of a Transportation Finance Corporation - independent of the federal government - tasked with getting greater value from the investment of highway improvement dollars.

Tom Walker, director of the Wisconsin Transportation Builders Association, wants to index the motor fuel tax to the Consumer Price Index. According to Walker, this will allow the federal aid highway program to keep pace with inflation and provide a more reliable source of funding to states.

John Kuhl of the University of Iowa discussed research into a new user fee collection system designed to more accurately account for all relevant factors regarding a user's actual impact on the highway system. Kuhl suggested such a system would more equitably charge motorists for their use of highways, regardless of the type of vehicle propulsion used.

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