Senate Committee Looks at Highway Trust Fund Solvency

In its continuing effort to lay the groundwork for next year’s need to reauthorize the highway and transit programs, the Senate Environment and Public Works (EPW) Committee held a hearing Wednesday to address the status of the Highway Trust Fund and examine options for providing the revenue needed to keep the trust fund operating. EPW chairwoman Sen. Barbara Boxer (D-Calif.) opened the hearing by reading from a statement submitted by AGC, which highlights the dire situation facing the HTF at the end of FY 2014 – when there will be an insufficient balance to allow for new federal funding obligations, again calling for continued support for increasing the traditional motor fuels tax, including allowing for inflation adjustments and identifying new revenue sources. Sen. Boxer suggested that she is looking at the idea of replacing the 18.4 cents per gallon tax on gasoline purchases with a sales tax fee paid by oil wholesalers, she believes the option would help close an approximately $20 billion annual shortfall in transportation funding. There was not unanimous support for this idea among Committee members present and Senator Boxer pointed out that this decision is in the hands of the Senate Finance Committee, but is a concept she will encourage the committee to look at. The hearing included an industry panel that uniformly pointed out not only the need to raise the needed revenue, but to do it quickly to avoid program disruptions next year. A second panel included testimony from members of two commissions established to look at the future of the federal transportation programs and how to fund them. Panelists Jack Schenendorf and Kathy Ruffalo both called for the need for Congress to continue the user pay system that has been so successful in the past. Schenendorf said a 25- to 40-cent per gallon gas tax increase is necessary to start meeting future needs. Also on this panel was Virginia’s Secretary of Transportation Sean Connaughton, who talked about the state’s success last year to increase transportation funding, which included a change in the collection of user-fees similar to the idea suggested by Sen. Boxer. Senator Max Baucus (D-Mont.), a member of the EPW Committee, but also chair of the Finance Committee, said he hoped to address increasing the federal gas tax or finding other ways to raise revenue for highway and transit programs as part of the tax reform effort his committee will be taking up. He said that including this as part of a larger bill might increase its chances of success. Sen. Baucus said his goal is to move a comprehensive tax reform bill later this year.