|SOURCE: Office of Management and Budget, Table 22-4, CD-ROM supplementary material with analytical perspectives, fiscal year 2007 budget of the U.S. Government|
New estimates say the Highway Trust Fund is healthier than some thought several months ago, but it's still projected to tumble into the red in four years. Federal, state and industry officials are starting to talk about bolstering the fund and other ways to pay for building roads.
Treasury Dept. estimates released Feb. 6 with President Bush's 2007 budget proposal show trust fund revenue will exceed outlays until the end of 2010, when the fund will post a $2.6-billion deficit. A U.S. Chamber of Commerce report issued last November said the balance in the fund's highway account—its major component—is projected to hit zero in 2008. That got highway interests worried. Treasury's new numbers are "very good news," says John Horsley, American Association of State Highway and Transportation Officials executive director. "If [the fund] had gone bust in 2008, all 2007 we would have been focused on how do we save the program, how do we sustain the guaranteed funding levels."
If Treasury's figures hold true—they're updated in August and February—they buy time to figure how to add to the fund or find alternatives before the Safe, Accountable, Flexible, Efficient Transportation Equity Act—a Legacy for Users lapses Sept. 30, 2009. The trust fund issue is critical. Alabama Dept. of Transportation Chief Engineer Don Vaughn says, "When we get a project on line today, we need to have some reasonable expectation of funding when we get ready to go to construction." Says Arizona DOT Director Victor Mendez: "We might get through SAFETEA-LU, the full six years. The concern I think most states would have is beyond that, we need to begin addressing the challenges now. We can't wait until ‘08 to begin that process."
Bush's 2007 budget proposes $100 million in grants for up to five states to evaluate alternative road finance methods. One idea is a mileage-based user fee. But Alabama's Vaughn says, "That's going to be a hard sell to get the general public to accept something like that."
With no trust fund catastrophe imminent, Congress may not tackle the issue now. But David Bauer, American Road & Transportation Builders Association senior vice president, says, "It's not as if this problem can be put off until 2009 and still hope to have a viable solution."