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The Senate Finance Committee approved legislation intended to ensure the solvency of the Highway Trust Fund (HTF) through 2009. Both the Office of Management and Budget and Congressional Budget Office have estimated that the HTF could have a shortfall of as much as $4.3 billion in FY 2009 unless new HTF revenue is generated. Failure to provide additional revenue could result in a 36 percent cut in highway funding in FY 2009.
Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking member Charles Grassley (R-Iowa) developed a financing initiative to avoid this problem and included it in the bill approved late last week. The Baucus/Grassley initiative would generate the needed revenue by:
• Crediting the Highway Trust Fund for emergency expenditures paid out of the fund since 1998.
• Suspending current fuel tax exemptions/refunds provided for gasoline used on farms and gasoline used for non-highway purposes by local transit systems.
• Implementing additional mechanisms to further crack down on fuel tax evasion, including changing the location where gasoline taxes are collected and imposing an excise tax on removing certain fuels from foreign trade zones.
 
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