Where will the money come from?

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There’s no question the U.S. transportation systems needs money to continue performing its necessary role within the U.S. economy – though how much money of course remains a hotly debated topic.

When it comes to the highway trust fund (HTF), much of Capitol Hill is worried not only that fuel tax revenues are declining and have been for some time but that the fund itself may be literally run out of money altogether by September.

Sen. Barbara Boxer (D-CA), chairman of the Environmental & Public Works committee, talked about this in a speech during the annual “Washington Update” meeting hosted by the American Association of State Highway and Transportation Officials (AASHTO) this week.

“We need to save the HTF – a fund that has been in place since 1956 but is now threatened with extinction. So to me failure is not an option,” she said. “We’re going to have to fight hard to make sure that fund is solid going forward for the next five to six years at least.”

Boxer noted that the job of “solidifying” the HTF would be “really easy” if it were not for the funding shortfall.

“And you know why we’re facing a shortfall: the gas tax is not keeping up with inflation or the wonderful innovations we’ve developed for saving gas,” she explained. “This isn’t temporary; this is something we have to deal with.”

Boxer stressed that the monetary needs of the HTF must be addressed by a near-term cash infusion: something proposed by both President Obama in a speech yesterday as well as by a broader tax reform plan unveiled by Rep. Dave Camp (R-MI), chairman of the House of Representatives Ways and Means Committee, yesterday – a plan that would dedicate $126.5 billion to the HTF for eight years.

Boxer noted that her committee is already deep in the weeds on a new highway bill with that should be ready for legislative mark up by April. “I am comfortable we can deliver a five to six year bill with funding at current levels plus inflation,” she said. “Tax reform certainly one way to gain funding but I don’t see support for raising the gas tax and absolutely there is no way to cut spending. So has to be a creative way to fund this.”

This hearkens back to something Noel Perry, senior consultant with research firm FTR and president of economic consulting firm Transport Fundamentals, touched on during FTR Transportation 2013: Insights for Uncertain Times in September last year.

“The reason why Washington D.C. is the way it is right now is we are arguing about who gets less in the future, not who gets more,” he said. ““The key thing to understand here is that someone gets hurt no matter what the fiscal answer is.”

Boxer is in favor of replacing traditional fuel taxes with fees collected at the refinery, as well as a vehicle miles traveled or VMT fee structure.

“We need to work with realities; you’re not going to get a gas tax increase and we’re not going cut education or repeal the Affordable Care Act. That’s not happening,” she stressed. “So let’s not engage in ideological squabbles; let’s get it paid for. It’s better if we had a long term way to fill up the HTF like a gas tax [so we] have to work together to find sweet spot for dependable funding.”

Well, the clock is ticking – we know the HTF runs dry in September. Can not only a deal be reached but the necessary monies be found? That will be the real truck.

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