... involves [the Office of Management and Budget], it involves our department, it involves people at the White House....This is a very serious matter,” he said.
LaHood declined to be pinned down about when a trust-fund proposal would be announced, saying only that he hoped it would be “sooner rather than later.” He said the highway account is “going to run out in mid-August. That’s our deadline” for producing a proposal.
The trust fund ran into problems last year, too. In early September, DOT officials warned spending was projected to outrun receipts and push the highway account into a deficit. Congress bailed out the account by transferring slightly more than $8 billion to the trust fund from the general fund. That move increased the deficit and wasn’t offset.
The hope was that last year’s $8 billion would carry the highway account through fiscal 2009, which ends Sept. 30. But in May, DOT and OMB briefed Democratic congressional staffers, outlining the grim 2009-2010 forecast for the trust fund. Senate Environment and Public Works Committee leaders brought the issue into the spotlight at a June 2 hearing.
LaHood says the problem is that motor-vehicle travel remains down, affecting fuel-tax receipts to the trust fund. The highway account’s balance for February, March and April was below the level for the comparable 2008 months. The summer construction season will be crunch time for the fund, as outlays to reimburse states for roadbuilding contracts start to peak.
FHWA and state DOTs now are busy rolling out billions of dollars in economic-stimulus funding for highways, but those projects don’t have an effect on the trust fund because the stimulus money comes from the general fund.
If Congress is to repair the trust fund before the threatened crunch hits in August, it will have to act by Aug. 7, when its month-long August recess begins. “That makes the deadline that much shorter,” says AGC’s Deery. Adds Cathy Connor, Parsons Brinckerhoff senior vice president for government affairs, “Something’s going to have to be done very, very quickly.”
David Bauer, American Road & Transportation Builders Association senior vice president for government affairs, says, “I think that, more importantly, this situation just underscores the need to seriously look at what the trust fund’s revenue situation is.” That question will be a central issue in devising a successor to the current surface transportation authorization bill, the 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU), which will expire on Sept. 30. Congress will be extremely hard-pressed to pass a new bill by then.
The roots of the current trust-fund problem go back to SAFETEA-LU, says Deery. When that measure was constructed, lawmakers “knew they were going to be pushing themselves against the wall, because they wanted to spend down the [trust-fund] balance.” Legislators realized there would be a problem in 2009, SAFETEA-LU’s last year, but figured they would cross that bridge when they came to it, Deery says. “Now we’re...at the bridge,” he says.