July 24, 2014
While more fuel-efficient cars and trucks may be good for your wallet and the environment, they may not be so good for roads.
The federal Highway Trust Fund relies on an eighteen cent per gallon gas tax. If you drive diesel, the government hits you for twenty-four cents per gallon each time you fill up. Vehicles driving farther on less fuel mean the current formula which was developed in the nineteen nineties leaves the highway fund facing insolvency.
New York Democratic Congressman Bill Owens says that could hurt the economy in the busy summer construction season.
“I have both a good chunk of I-87 and I also have a good chunk of 81 in my district. Both of those have ongoing repair work that needs to be done,” says Owens.
Lawmakers seem to be coming around to short-term patches to keep the fund going until May. The House already passed a bill to boost the fund with customs fees and by forcing companies to defer some payments to their pension plans.
Owens says that’s not what local transportation officials or construction companies need.
“The bigger projects that have longer design and bid processes are really getting slowed down because people can’t count on the fact that there will be money and they don’t want to commit and then find out that there’s no money in the Highway Fund to pay for these repairs. So I see it has a short-term problem and a long-term problem.”
Binghamton-area Republican Congressman Richard Hanna supported the short-term patch in the House, but he doesn’t like it.
“There’s nothing, there’s no doubt about it that this House has failed to meet its obligation in terms of finding a way to fund this for the long-term,” says Hanna
Many Democrats say it makes sense to just raise the gas tax for the first time in more than a decade. Hanna disagrees, saying that would take money from the people who need it most.
“And energy in a place like Binghamton is a big part of people’s daily expense.”
Hanna says lawmakers should be rethinking the gas tax altogether. Big interstate projects now get the bulk of the federal funds and Hanna argues Albany officials send too much to New York City – leaving more rural communities to fend for themselves.
“The gas tax has become unfair and regressive towards more rural communities.”
An idea gaining bipartisan support is to give companies with holdings overseas a temporary tax “holiday.” The trillions of dollars held overseas could come back to the U-S at greatly reduced tax rates. That repatriated revenue could be used to set up an infrastructure bank.
New York Republican Congressman Tom Reed is supportive of the idea.
“That would all come through comprehensive tax reform,” says Reed.
Reforming the tax code is a touchy political issue that could take years, and lawmakers just have weeks to find a solution.
Reed supported the short-term fix in the House, but says he and other lawmakers on the Transportation Committee want to try and reach a deal on the infrastructure bank after this year’s elections.
But lawmakers have known the Highway Fund was nearing insolvency for years and haven’t touched it. What will change if lawmakers pass a patch to keep it afloat just until May?
Pennsylvania Republican Congressman Tom Marino says he and other new lawmakers are pressuring party leaders to tackle the long-term problem.
“We’re not waiting, okay, this is to a certain point that as soon as we get back folks we need to start working on this, and I’m tired of waiting for the last minute,” says Marino.
The federal Department of Transportation is warning there are just weeks until it will have to start slowing the flow of checks to New York, which receives one point six billion dollars annually from the trust fund.
That means there’s little time for this Congress to deal with the long-term proposals.