Issue 2-09
Bill Seeks to Boost Highway Fund through Two Amendments to Tax Code
Rep. John Lewis (D-Ga.), a Ways and Means Committee member, introduced legislation (H.R. 2391) May 13 to increase revenue in the Highway Trust Fund through several changes to the Internal Revenue Code.
The Highway Trust Fund, which draws most of its money from a federal fuel tax and distributes funding to states for road, bridge and transit projects, faces long-term solvency problems as Congress debates a six-year rewrite of surface transportation policy and Highway Trust Fund revenue sources.
The measure seeks to ensure that interest accrued by the Highway Trust Fund stays within the trust fund instead of being routed to the general fund.
In 1998, during consideration of the Transportation Equity Act for the 21st Century, a deal between the authorization and appropriating committees set up budgetary firewalls around the trust fund, giving authorizers added power to dictate long-term funding levels.
But for that new authority, the authorizers agreed that interest from the HTF would be credited to the general fund. Also part of the deal was an $8 billion transfer from the then-prosperous HTF to the general fund.
But with HTF revenues shrinking and an imminent bankruptcy in September 2008, Congress shifted that $8 billion back to the HTF.
Greg Cohen, president and chief executive officer of the American Highway Users Alliance, told BNA the Highway Trust Fund has lost $5 billion to $8 billion in the last 11 years since the interest change was made.
The bill also targets fuel tax credits, seeking to have them paid from the general fund instead of the Highway Trust Fund.
Municipalities and public transportation operators, among others, pay the federal fuel tax rate of 18.4 cents per gallon but are then able to receive funds on the tax.
Under current law, those refunds are paid out of the Highway Trust Fund, and the Lewis bill seeks to shift that obligation to the general fund. That would increase Highway Trust Fund revenues by about $1 billion each year, according to stakeholders.
Source: BNA Construction Labor Report