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US Congress Passes $8 Billion Highway Trust Fund Bill

The US House of Representatives voted 376-29 to give final approval to a measure that would immediately appropriate US$8.017 billion of general revenue to the Highway Trust Fund, sending the bill to President Bush for his expected signature.

The House originally passed the bill, HR 6532, on July 23. Senators approved it by voice vote Wednesday evening, amending the legislation to make it effective upon the president's signature rather than on Sept. 30. The House today concurred with the Senate amendment and sent the bill to the White House.

Rep. James Oberstar, D-MN and chairman of the House Transportation & Infrastructure Committee, said approval of the bill restores to the Highway Trust Fund $8.017 billion that was siphoned off in a budget deal 10 years ago.

Following Bush’s expected approval of the bill, states will be able to restart hundreds of millions of dollars of construction projects that were put on hold this week as a result of the announcement last Friday by the Federal Highway Administration (FHWA) that it will not only reduce the distribution of payments to the states from twice daily to once a week, it will also proportionately reduce the amount of those payments, based upon available revenue.

US Department of Transportation (DOT) officials said states may receive only 70% reimbursement of their claims, or less.

According to DOT officials, the FHWA on an average day transfers $185 million to the states, increasing to $250 million a day in the busy summer construction season. Under the FHWA’s plan, transfers would decrease by $55 million daily, or $277.5 million per week.

Secretary of Transportation Mary Peters had urged Congress to appropriate more money to resolve the crisis by the end of this week. She said the trust fund faces a zero balance sooner than originally expected because Americans have sharply reduced driving and gas purchases this year because of high prices at the pump. That in turn has led to a drop in gas-tax collections because the fee is assessed per gallon purchased.

Comments

HarveyD

If fuel Fed Taxes are not enough to finance road works, why not raise them to the level required.

That may have trible barrel positive effects; reduce oil imports, reduce trade deficits and lower GHG.

Going deeper in debt will not do any of it. Taxing our children with more and more debts is not the best way to treat them.

GoodCheer

You said it HarveyD. Taxes on the use of cars should pay for the infrastructure cars need. If you don't like the taxes, drive less (and use the infrastructure less).

Of course it's the trucks that do the lion's share of the damage... they should really pay for most of highway maintenance.

Henry Gibson

The fuel taxes in the US must be adjusted to much higher values and at least keep pace with inflation. In fact fuel taxes in the US should be an increasing percentage of world crude oil prices. All imported crude oil should be taxed at 50% now and steeply rise to a hundred percent and greater as the speculative price goes to $130 and beyond. These taxes can support coal-to-liquid conversion plants and create a permanent price advantage for coal liquids. It is far better that the money goes into the hands of US workers and corporations than foreign hands. The worries about any additional CO2 released for Coal-to-liquids is over blown as it is not a substantial part of the CO2 already released. The US already ships CO2 over a hundred miles to a Canadian oil field to double its production, and many coal mines are near US oil fields.

CANDU power plants, bought from Canada, can use up the US used fuel rods in storage as well as reduce CO2 by replacing coal fired power plants and free up the coal to be used for gasoline and produce electricity for plug-in-hybrid cars. They can also provide heat and steam for ethanol and Coal-to-liquid conversion.

When, due to speculation and US government actions and inactions, the price of energy in crude oil is ten times that of coal it is long past time to start using coal for vehicles and even prohibit the use of oil in the US that arrives from other continents. Nafta should continue to allow the import of oil from Canada or Mexico if they wish to sell it. The US government's and populace's and politician's willingness, to allow the high oil prices, has caused the demise by nutritional deficiencies of many humans above and below the age of 8 both in the US and in many countries of the world.

All trucks should pay a mileage charge that more than covers the repair of additional wear that heavy vehicles cause. Both trailers and containers can be transported at less cost by rail. Walmart has distribution centers with many trucks far distant from any rail lines. Distribution centers should be relocated to rail lines.

HarveyD

HG & Good Cheer:

Agree with you that one large truck driving up to 300 000 Km/yr can do as much road wear and damage as 25 to 50 mid-size diesel or gas cars. It is not certain that trucks are paying their fair share.

However, locomotives using much the same fuel do not use or damage roads.

It would be difficult to use direct fuel taxes equitably. Truck Fed. yearly registration fees based on max. weight x distance travelled may be a fair way to do it.

sjc

Make the gasoline tax a percentage of price per gallon. If it is 10% then it would be 30 cents on a $3 gallon of gasoline at the retail level.

If the $150 billion that was borrowed and given out for the "stimulus" package had been allocated for bridges and roads, we would have seen a much longer expansion of the economy. Instead people took the $600 and bought imported big screen TV sets at Walmart. Now that is over and there is no more gain to the economy and no improvement to the aging infrastructure.

Derek

If people are driving less, then that should mean highways wouldn't need as much funding. The only crisis is that many jobs in the department of transportation have become obsolete but nobody's willing to hand out the pink slips.

steve

You guys miss the point. If money meant for the infrastructure actually went to the infrastructure this would not have happened. But money was "siphoned off" years ago, typical back room politics.

In my state (MA) we have tolls for the Mass pike, but the road is in shambles because that money goes elsewhere. It's amazing this is legal.

Problem is that even though people drive less and wear down the roads less they also lose the tax money...then you have the big rigs which do not drive less taking up a larger percentage share of road use -> does their fuel economy induced tax rate (they get crap gas mileage and pay more in taxes as a result) make up for their increased wear on roads compared to passenger vehicles? Though we may be driving less, we have still spread out our housing areas more and the trucks are having to drive even greater numbers of miles to reach all of those locations...just can't telecommute goods into a store and increases in taxation will probably be passed onto the consumers which hits the poor people hardest.

[and to think...a few politicians were advocating suspending the federal gas tax - as small as it is].

Wes

In the US only on-road diesel is taxed for the road fund. There is a separate grade of diesel fuel used in generators, construction equipment, farm tractors, trains, etc., which is not taxed, and is dyed red to signify the difference. Truckers occasionally are checked to see that the diesel in their tanks isn't red.

Unfortunately this off-road only "red dye diesel" has much higher sulfur content limits. If you keep your eyes peeled in rural areas, you will occasionally see a gas station with a pump for off-road diesel, and it's always cheaper than regular diesel. Farmers put it into tanks on their trucks to carry back to the farm for their equipment.

Polly

"appropriate US$8.017 billion of general revenue to the Highway Trust Fund".
General revenue?

Gasoline tax covers about half the highway maintenance cost.
Taxing gasoline is highly regressive in the sense that it affects low income families more than prosperous citizens.
Wouldn't it be sensible to raise the additional $8B from a luxury showroom tax on new gas guzzlers?
For comparison, even China has raised sales tax on new cars with the largest engines from 20% to 40%.
Surely appropriating $8B of general revenue for highway maintenance is another hidden subsidy for America's gas guzzlers causing our gasoline addiction.

Tom Street

No politician has the cohones to raise taxes to pay for roads so instead they appropriate money which will only serve to increase the national debt. Nobody cares because no one will be impacted immediately by this irresponsible bill.

wintermane

The problem from the start has been that alot of non roads and bridges funding has been siphoning out money from this fund for a very long time and now that times are harder and funds alot less easy to get... the system has started to fail because of it.

Its like funding health care on smoking... ya sure makes sense at first.. until times get hard and alot of people cut back or quit... Then your trapped with a spiraling rev stream and no way to switch to new taxes any time soon as EVERYONE is hurting.. or at least everyone you can tax;/

They REALY should have been taxing large cities with bad transit systems to get the money to actualy fix the transit system problems... when those cities had money... too late now.

creativforce

Absolutely, the burden of cost for transportation and roads should be squarely on those using it the most. Double the gas tax! This is certainly not a burden on the urban poor, unlike the rich suburbs and ultra-rich exurbs, usable public transportation still exists in our cities. The cry for public transportation between towns would grow, if the cost of fuel was higher and the middle class would move closer to work. Maybe we could even build free electric trolleys like the good old days, before Big Oil and Big Auto bought them and destroyed them in the 1930s.

Even though semi trucks create 300x more damage to the road surface than cars, I don't think it makes sense to tax diesel fuel more heavily. After all, trucks carry goods and services for hundreds of people at a time, much more efficiently than everyone driving their SUV further to get the things they need.

tom deplume

There are many rural poor like me who live 6 miles to the nearest grocery store and 4 miles to the nearest gas station. Their low paying jobs are sometimes 30 to 50 miles away but they can't afford to live close to work.
There is plenty of money out there to be taxed to pay for infrastructure and many other needs but the folks with the money own one of the political parties.

Well, lets just get our congress-critters to mandate that trucks 3-axles and over must use non-dyed diesel fuel. Then start selling green dyed diesel at stations that cars and 2-axles trucks used. Eliminate any per-mile taxes beyond the fuel but keep the Heavy Vehicle sales taxes.

In the same bill require that the non-dyed diesel tax be increased at a rate of 5% annually. This would let the current politicians get out of office before the gains begin to hit.

There would be large savings in accounting that would offset the initial 5% increases. Cap the maximum trailer length to 53' or 57' where it exists but make it clear that 53' zones will not be expanded.

Require the investor owned freight railroads to agree to use the additional capital resulting from this move on the stock market to expand fast-freight capacity in intermodal and carload lanes.

Freight diesel use would then decline into perpetuity as most rail hauls are 3 to 4 times as efficient.

hansb

I'm with tom deplume.

Jobs in the country are more difficult to find, pay less and you have to drive longer distances. 40 miles to the closest Wal-Mart. Why should we spend more taxes to support 'mass transit riders' in big cities? They don't pay the actual cost for their transit ride. They pay one dollar when the actual cost is three dollars. Our gas taxes are used to subsidize their commute! That's how the 'highway trust fund' (is that something like the 'social security trust fund'?) is raided!

All things being equal, increase the 'mass transit' fares to reflect real costs and leave 'highway taxes' for 'highway construction and maintenance', as reflected in the name!

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