By Brent Dezember | Chairman, National Precast Concrete Association
If you’ve been following the construction industry news, you are no doubt aware that the Highway Trust Fund is going broke. If you supply products to DOTs, this issue could potentially hit you right in the pocketbook. Originally created to fund the construction of the interstate highway system, the Highway Trust Fund remains the backbone of the nation’s surface transportation system. The fund gets its money from a federal fuel tax of 18.3 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel and related excise taxes.
Those tax rates have been in place since 1993. If you think back 20 years, the vehicles we drove then were gas guzzlers compared to what we’re driving now, and that’s why the fund is in trouble. At the risk of oversimplifying the issue, less gas consumed means less funding, and on a national scale that means big problems for the Highway Trust Fund.
Congress is now being called upon to provide the fix so that basic highway maintenance, upgrades and expansion can continue. Our economy already suffers immensely from lost time, increased accidents and other inconveniences related to aging transportation infrastructure. Without a fix, the trust fund is projected to run out of money in August, and projects all over the country will grind to a halt. If nothing happens soon, you will likely hear a great deal more about the dire economic consequences as the summer wears on.
The impact is being felt already. In March, the Arkansas Highway and Transportation Department put 10 projects on the shelf due to the uncertainty in funding. Those projects represent $60 million in bid letting, according to the American Association of State Highway and Transportation Officials. The work includes highway rehabilitation and widening, bridge replacements, traffic signal upgrades and highway connections, AASHTO says. Other states will no doubt follow suit.
There are three ways Congress can fix this problem: increase the gas tax, raid the treasury to deposit money into the trust fund account, or pass a long-term transportation bill that addresses the issue. Increasing the tax in an election year is pretty much a non-starter, so that’s not likely to happen. Simply transferring money into the trust fund is a Band-Aid approach that has been used before, but it only delays the inevitable insolvency discussion for a short-term period. We need a long-term approach.
So let’s fix it. There are hopeful signs that maybe this time we can get it done. Bill Shuster, the new chairman of the House Transportation and Infrastructure Committee, has floated the idea of a vehicle miles tax to pay for the highway bill. Other funding methods are also being discussed. On the Senate side, California’s Barbara Boxer, the Democrat chair of the Environment and Public Works Committee, appeared with Louisiana Sen. David Vitter, the top-ranking Republican, to announce a bipartisan agreement “in principle” to work for a long-term renewal of the transportation funding act now known as MAP-21. The Moving Ahead for Progress in the 21st Century Act is a two-year funding piece set to expire Sept. 30. The Senate is talking about a six-year replacement, which would provide enough assurance for long-term projects to continue.
Nothing has been settled, but at least both sides are talking. As an industry directly impacted by roads, bridges and mass transit projects, we will make our voice heard. NPCA will be advocating for decisive action and joining with our partners in the cement and concrete industry to keep the pressure on Congress and the White House. As individual businesses, we need to put the pressure on our own congressional representatives as well. A modern transportation system is critical to the ongoing health of our economy and the safety of our citizens. We’re running on fumes now, and it’s time for all sides to put partisan differences to rest to figure out a way to fill up the tank.