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The nightmare that is the Highway Trust Fund. It’s over-bloated and instead of offering solutions congress along with the President and his Transportation department are desperate to find another bailout to stop the bleeding. If you could even believe this, Congress at one point in time was considering money from USPS (Post office) reforms as an offset to the bailout of the Highway Trust Fund. The House shifted to considering “pension smoothing” or encouraging companies to repatriate money as possible offsets. These are more bad ideas that don’t fix the problem but give it a temporary Band-Aid. More bailouts. The Highway Trust Fund (HTF) has been bailed out $55 billion since 2008.
“With each bailout, the link between highway spending and gas taxes is degraded, making it increasingly difficult to enact structural reforms that turn over the federal highway and transit programs to the states, so they can manage their transportation needs without Washington bureaucrats.” – Russ Vought Heritage Action
If I may digress for a moment to give you an idea of how transportation issues have been affected where I live in Southeast Georgia. Our area of the state voted for the TSPLOST tax while the vast majority of Georgia voted it down. We have the worst unemployment rate for the entire state. Southeast Georgia is at 10% unemployment while the rest of the state is doing much better. The Athens area has the lowest at 5% unemployment.
So with record unemployment you are really going to see below average returns on those taxes. The taxes raised to finish necessary transportation projects are miniscule and are not enough to finish the necessary transportation projects in my region. These projects had zero input from traffic engineers and the list of projects were given to the Georgia Department of Transportation (GDOT) by county commissioners, mayors and city managers (Frikin politicians!) While the taxes are hardly enough to cover the costs; they are offset from promises from GDOT.
Yeah, they (GDOT) are pretty much bankrupt and upside down themselves and get a good bit of their money from the Highway Trust Fund. One of the projects on the TSPLOST list is a long old bridge on US1 by the nuclear power plant, Plant Hatch which will cost 20 million dollars. They haven’t even started on the bridge and it’s supposed to be completed by 2015. I seriously doubt we’ll see that bridge completed or even started on. It’s interesting how this past fall we had lots of roads flooded and damaged from all the rain we have been experiencing which closed the county schools for at least a week. It kind of makes you wonder if those TSPLOST dollars are really being used or not.
We have a national transportation “funding crisis”, as the Highway Trust Fund will run short of cash in late July, early August. HTF is the main source of federal cash to build and maintain roads and transit systems. The states count on money from the federal government to pay for their projects.
Under current law, drivers pay a tax of 18.4 cents per gallon on gasoline and 24.4 cents on diesel fuel, which gets deposited into the HTF
On Sept. 30 the current highway spending bill MAP-21 expires (So, MAP-21 is what authorizes the spending, the HTF is where the $$ comes from) While many blame more fuel efficient cars as the reason HTF is running out of money, a more relevant reason is transportation bills in recent years have been excessive and have diverted spending to non-road, non-bridge activities well beyond the scope of the federal highway authority (bike paths, bicycle facilities, landscaping, streetcars, scenic overlook construction, community preservation, and environmental mitigation).
While the House, Senate, and Obama have released transportation plans, Tom Graves and Mike Lee are leading the way for real meaningful long term reform. Representative Tom Graves H.R. 3486 Transportation Empowerment Act phases out the Highway Trust Fund over five years, and restores Fed gas tax funds and authority to the states. Senator Mike Lee is carrying this bill, S. 1702, in the Senate.
Representatives from GA not yet co-sponsoring are Collins, Price, Kingston and Scott. I would really love to see Jack Kingston sign onto this. It will give him a lot of support from conservatives in Georgia who are frustrated with transportation lies and false promises coming from Washington DC as he faces his runoff for the GOP nomination for US Senate against David Perdue.
The Transportation Empowerment (TEA) Act would completely reform the current highway funding program. It aims to open up America’s transportation system to greater local control, better targeted projects, and a more efficient way to maintain and improve the nation’s infrastructure. The bill allows states to respond to the needs of their communities and develop systems that result in less traffic, shorter commutes, access to more affordable homes, and will help families better manage the work-life balance.
How it Works
Transfers almost all authority over federal highway and transit programs to the states over a five-year period.
Lowers the federal gas tax to 3.7 cents from 18.4 cents over the same time period.
During the five-year phase out, states will receive block grants that come with vastly fewer federal strings attached.
What It Does
Immediately reduces the bureaucratic burden involved in the construction of critical transportation projects.
Results in a faster administrative response to the transportation problems Americans face, such as traffic, commuting, and access.
Gives states greater flexibility in their tax structure.
Connects where people want to work with where they want to live.
Opens opportunities to develop new mass-transit solutions, innovate environmental protections, and improve the financing of projects.
Creates jobs and grows the economy.
Why The Current System Hurts The Commute
When the costs of federal red tape and Highway Trust Fund redistribution are taken into account, 37 states, including Georgia, have a rate of return below 100%. For example, Georgia’s estimated buying power in Fiscal Year 2014 is anticipated to be approximately 84% based on the most recent Highway Trust Fund payment information available, costing Georgia taxpayers $185 million.
For Fiscal Year 2014, $820 million was authorized nationwide for so-called “transportation alternatives” defined in part as landscaping, scenic beautification, and transportation museums, among other items.
The good news is that many states including Blue states have had enough of waiting on going through the federal government for their transportation needs. According to Heartland.org:
“There is a quiet revolution in transportation funding underway these days. Faced with a depleted Highway Trust Fund and uncertain prospects for more money from a deficit-conscious Congress, many states are taking matters into their own hands and aggressively pursuing more fiscal independence.
A survey we recently conducted documents significant funding initiatives in 18 states. Some states have raised their gasoline taxes (MD, WY, MA, VT). Others have shifted to a tax on fuel at the wholesale level (e.g., PA). Still others have enacted dedicated sales taxes for transportation (e.g., AK, VA) or floated toll revenue bonds (e.g., OH).
Further evidence of such local initiatives came on Election Day last November when voters approved more than 70 percent of the ballot measures to increase or extend funding for local transportation.”
It’s time for real leadership on this and an amazing opportunity to be problem solvers for the GOP.