August 1, 2014
Column | fastlane

Time is running out (and so is the money)

The Highway Trust Fund is running on fumes. But that's no guarantee Congress will address the infrastructure problem in a meaningful way anytime soon.

By Clifford F. Lynch

By the time you read this, Congress probably will have at least developed a preliminary short-term solution for replenishing the Highway Trust Fund, which was predicted to be depleted by the end of this month. The looming funding crisis is not news for those in the industry. This publication and others have run dozens of articles on the condition of our roads and bridges and the fact that Congress has done very little to address this issue in a meaningful way.

Lately, however, the problem has been brought closer to home by mainstream media at both the national and local level. Last month, Time magazine estimated that 252 million vehicles travel across structurally deficient bridges every day and that it would take $106 billion just to repair the bridges—not to mention the additional tens of millions it would take to repair and/or replace highways. The major television networks have all addressed the crisis, and local newspapers, through editorials and articles, have warned that many local projects may be curtailed if something isn't done. On July 7, Secretary of Transportation Anthony Foxx said the states would face a 28-percent cut in infrastructure funding unless Congress acts. President Obama has warned that unless some action is taken soon, 700,000 jobs will be at risk. The trust fund has been worked down to $4 billion, and it is estimated that the fund will need $9 billion through the end of the year and $12 billion to carry it into spring. This fund is very important to the states. Last year, they received $50 billion for roads and mass transit, and state leaders have become increasingly concerned and vocal. Congress had no choice but to act.

The larger question is what to do about the current transportation legislation, Moving Ahead for Progress in the 21st Century (MAP-21), when it expires on Sept. 30. It does not appear that Congress has even a vague idea of what action to take. Several proposals have been floated, but most of these have included an increase in the fuel tax, the primary source of revenue for the trust fund. This has not been done since 1993, which in itself is somewhat ridiculous. But as might be expected, every time an increase has been suggested, it has created a political firestorm from which most members of Congress have quickly distanced themselves.

Last month, however, in a rare show of bipartisan cooperation, Senators Bob Corker (R-Tenn.) and Chris Murphy (D-Conn.) introduced a bill that would raise fuel taxes by $0.12 per gallon over the next two years. The U.S. Chamber of Commerce has long been on record as favoring a hike in the fuel tax, and the American Trucking Associations and such highway users as FedEx and UPS have indicated their support of the new legislation. The latter is particularly significant in that combined, these two companies log about 3 billion miles annually.

But will Congress support it? The prospects are pretty slim. The November election is just around the corner and in some areas, will be hotly contested. I don't believe a new, controversial transportation funding bill will make it through Congress before the election. If it hasn't done so already, I think Congress will try to take the easy way out and extend the current MAP-21 legislation until after the election and supplement the Highway Trust Fund from some other source, as it has done at least five times in the past. Blocking such a move will be the more conservative legislators, who are insisting that the money come from cutting other programs rather than raising taxes. So the infighting is likely to continue. In the meantime, we will continue to deal with a problem that has been ignored for far too many years. Our biggest hope at this point is that all the grassroots publicity will generate enough pressure to force some action.

About the Author

Clifford F. Lynch
Columnist
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services, and author of Logistics Outsourcing – A Management Guide and co-author of The Role of Transportation in the Supply Chain. He can be reached at cliff@cflynch.com.

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