Highway Trust Fund Saved. For Now.

In the final moments leading up to the August summer recess Congress passed a piece of legislation to stop the insolvency of the Highway Trust Fund, which would have begun to affect road and transit projects across the nation as early as August 1st.

The $10.8 billion approved by Congress is just a temporary fix that will only last until May before the same funding crisis looms again. There is general agreement in Congress that a long-term funding solution must be reached, but there is disagreement on how to proceed.

The lingering air of uncertainty surrounding funding after May 2015 will affect state and—in particular—local road projects long before the actual deadline hits. As we wrote about in the last federal funding blog post, HTF funds are often allocated to certain projects at least a year in advance.

Kirk Steudle, director of MDOT said in a letter to U.S. Sen. Debbie Stabenow, that the absence of long term funding will create delays and raise costs for Michigan road projects: “The uncertainty that comes with the potential of another funding crisis in May 2015 creates tremendous difficulty for road agencies trying to budget, plan, and design projects for the next construction season. The consequence of this uncertainty is that unless something changes, much-needed projects will have to be delayed…[I]t is difficult to be as efficient as we would like in the face of the uncertainty that comes with a temporary funding solution.”

MDOT has already used about two-thirds of the federal funding available for this fiscal year. Steudle believes funding limits will be reached in mid-March of 2015. In order to keep costs low, MDOT should decide before mid-January what projects will need to be delayed. With so much left up in the air it will be hard to plan in advance. Costs will raise and many projects will likely go ignored.

Transportation Secretary Foxx shared his disappointment in Congress’ inability thus far to create a long term funding solution at an interactive town hall style meeting on Wednesday. He said the stopgap nature of the legislation will make state transportation planning increasingly difficult the longer a funding solution is put off.

Secretary Foxx encouraged everyone to get vocal about long term funding stating: “The country needs to get a little noisier on this.”

Secretary Foxx has already outlined his vision of a long term funding plan in the Grow America Act, a four-year, $302 billion proposal funded mainly through business tax reforms. Foxx’s bill would transform the HTF into a comprehensive fund for all types of public transportation, not just roads and highways, as well as creating a dedicated source of funding for rail. Doubts surround passage of the act given deep Republican opposition to the business tax reform that would be a main source of revenue.

The uncertainty of transportation funding past May 2015 has the potential to negatively affect projects in Michigan long before the actual deadline of HTF insolvency, and the same holds true in all states.  The time is now for discussion on a long-term funding solution that supports not just funding for roads and highways but also public transit. Congress needs to come up with real long term solutions to this pressing problem instead of sending back and forth bills for purely ceremonial or partisan reasons much as we have seen in recent weeks. Follow Secretary Foxx’s advice and get noisy about why transportation funding matters. Use #investnow to join the conversation already underway on Twitter and share why Congress needs to act sooner rather than later.

Feature image provided by Flickr account Joiseyshowa.

Written by Elle Getschman, Trans4M Intern 

 

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