Highway Trust Fund needs an honest fix
By The Denver Post Editorial Board
The Veterans Affairs hospital in Aurora wasn't the only federal project that would have shut down over Memorial Day weekend without last-minute action by Congress to keep construction going on a short-term basis.
Transportation projects around the country also got a reprieve when the U.S. Senate passed a two-month extension of highway funding on the day before the holiday recess.
But two months is not a long time, and as the next deadline approaches Congress will face the same challenges on which it just punted.
Over the past 12 years, The Hill reports, Congress has passed no fewer than two dozen short-term extensions.
Truly, this bad habit needs to end. It actually isn't that hard to fix the Highway Trust Fund. Compared to tackling entitlements, in fact, it looks like a snap.
The core of the problem, as with so much in the federal budget, is that the highway program spends more than it takes in with an 18.4 cent gas tax and 24.4 cent diesel tax. And the problem has been particularly acute since 2008.
This year, for example, the fuel tax will cover about $34 billion of roughly $50 billion in spending. And that gap is likely to grow since more fuel-efficient cars have resulted in stagnating tax revenues.
What to do? First, index the gas tax to inflation. The present tax was set in 1993, when its spending power was far greater than it is today. A bipartisan bill floated in the House in April would index the gas tax to inflation for 2016-17 and, if Congress failed to find an alternative funding plan, boost the tax again to cover inflation for the next three years.
But even that wouldn't be enough to cover present transportation commitments. Congress will need either to transfer some general revenue to transportation — while finding an offsetting reduction elsewhere — or increase the gas tax.
The Highway Trust Fund should be self-sustaining, based on user fees. It shouldn't have to depend on uncertain and fluctuating transfers from other sources.
To that end, the bipartisan Committee for a Responsible Federal Budget recommends "extending the current highway bill for two years, scheduling a 9-cent gas tax increase at the end of the first year, and limiting future highway spending to trust fund income."
The 9-cent hike would just about make up for the effect of inflation since 1993.
One way or another, the committee understandably argues, "it is important for lawmakers to come up with a real solution rather than continue to paper over the shortfall with budget gimmicks and deficit spending."
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