What would be impact of insolvent Highway Trust Fund?

Foxx sent letters to the heads of state transportation departments on Tuesday detailing what steps the DOT will take should the funding crisis not be averted. According to the letter, which you can read in its entirety here, states will receive funding based on each state’s “federal formula apportionment in this fiscal year.”“There is still time for Congress to act on a long-term solution,” said Foxx. “Our transportation infrastructure is too essential to suffer continued neglect, and I hope Congress will avert this crisis before it is too late.”

“There is still time for Congress to act on a long-term solution,” said Foxx. “Our transportation infrastructure is too essential to suffer continued neglect, and I hope Congress will avert this crisis before it is too late.”

“These cash management procedures will begin on Aug. 1, 2014, for programs funded out of the highway account, with states receiving notification of their first proportional share on Aug. 11, 2014,” Foxx wrote. “This process will be repeated twice a month as additional tax receipts are deposited into the trust fund. At the beginning of each semi-monthly cycle, you will receive a new cash allocation. We will continue to administer this process until the Congress can reach a solution that provides adequate resources to the fund.”

“As Transportation Secretary Foxx’s letter to state DOTs shows, the risk to the nation’s surface transportation programs is real and imminent. We are encouraged that Congress is taking the short-term solvency of the Highway Trust Fund very seriously. We remain encouraged and supportive of ongoing discussions by Congress that would address the short-term solvency issue, which is critical to states,” Bud Wright, executive director of the American Assn. of State Highway and Transportation Officials.

“Across the nation, local governments own 78% of the nation’s road miles, 50% of the nation’s bridges, and operate the majority of the nation’s transit systems,” the National League of Cities said. “At the same time, local governments are involved in less than a quarter of the $41 billion in federal funds spent on highways each year and have little say in how federal transportation dollars are invested in our communities.”

The Highway Trust Fund was established in 1956 to finance construction and maintenance of the U.S. Interstate System and other roads and bridges. It was expanded in 1982 to include mass transit projects, but is funding primarily through fuel taxes, which have not kept pace with inflation.

The current highway bill, MAP-21, expires in September and there are conflicting signs as to whether Congress will address it with anything more than a short-term stopgap bill.