WASHINGTON – Bowing to pressure from House Republicans, Democrats on the Senate Finance Committee on Thursday said they could agree to a deal that would extend federal funds for highways into next spring.
In exchange, Republicans on the Senate Finance panel agreed to provide $10.9 billion in new money for the Highway Trust Fund, expected to go bankrupt in August. The agreement was announced yesterday at the start of a committee meeting to mark up legislation that would have extended road funding only through December. Lawmakers then began marking up the new bill.
Earlier on Thursday, the House Ways and Means Committee approved a similar bill that would extend highway funding through May 31. Finance panel leaders hailed the deal, saying both sides got something they wanted, according to a report in The Hill.
The House Ways and Means bill includes transferring $1 billion from the Leaking Underground Storage Tank (LUST) Trust Fund to the Highway Trust Fund. The LUST Trust Fund is financed through the collection of 1/10th penny per gallon of gasoline and diesel fuel sold.
In 2012, lawmakers transferred $2.4 billion from the LUST Trust Fund to help fund road maintenance and construction. NACS had been successful in defeating a 30% diversion of all future LUST tax revenues to the highway trust fund in 2012, and will continue to oppose similar efforts as Congress looks to long-term revenue streams to fund our highways and continue to support dedicating 100% of LUST tax revenues to funding the tanks program.
The trust fund used to make repairs to the nation's roads and bridges is funded by the 18.4 cents per gallon federal gas tax. The tax hasn’t been raised in 21 years, and is not bringing in enough money to pay for necessary fixes around the country. The shortfall has become worse in recent years as cars have become more fuel-efficient.
The result has been a shortfall in federal transportation spending that budget analysts estimate runs to about $16 billion per year. The gas tax typically brings in about $34 billion per year compared to $50 billion in annual road and transit spending.
Transportation advocates have said the current funding level is the bare minimum Congress can spend on infrastructure projects to maintain the nation’s road and transit systems, and they have pushed for the first gas tax increase in two decades to close the funding gap. Both the House and Senate proposals rely mostly on revenue from pension changes and customs fees to raise the $10.9 billion for road fixes.
Without action by Congress, the Transportation Department warned it would have to begin cutting payments to state and local governments for road repairs on Aug. 1.