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Senators Max Baucus (D-MT) and Charles Grassley (R-IA) are drafting a new proposal to remedy the Highway Trust Fund (HTF) revenue shortfall which, if not addressed, threatens to reduce federal highway funds to states in FY 2009 by 34 percent or more. The new proposal would recapture $8 billion in revenue that was lost to the HTF in a trade off for funding guarantees when the TEA-21 reauthorization legislation was enacted in 1998. The new HTF fix proposal will be added to a bill to extend aviation related taxes that will expire on June 30 if Congress does not take action.
AGC will be contacting all senators and representatives seeking their support for this legislative fix. AGC's Legislative Action Center is being updated with new letters for your use in contacting your Congressional delegations. All are urged to make these contacts as we are at a critical juncture in the process. Failure to solve the HTF shortfall now could impact state highway lettings over the next several months and throughout next year.
The original Baucus/Grassley proposal would have provided about $5.1 billion in revenue to the HTF. Projections from the US Treasury in February showed that HTF revenue would be $3.7 billion short of the amount necessary to fully fund SAFTEA-LU authorized levels. Since that time, however, the continual rising cost of gasoline has resulted in a significant downturn in driving which further reduces HTF revenue. The new Baucus/Grassley proposal is intended to provide enough revenue to address this additional shortfall.
 
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