Burnley: Virtually no shot at federal transportation funding bill before election

Short-term funding extensions are nothing new in the Trust Fund’s history. The Fund has come close several times to running out of money, and has needed transfer payments from the U.S. Treasury Department to remain solvent and to meet its commitments.

The FAST Act, signed into law in 2015, funded highway programs largely through deficit spending. The problem with that approach, according to Burnley, is that motor fuels tax receipts have been dropping as vehicles become ever more fuel-efficient. At the same time, the tab for the deficit spending continues to rise. Over the next five years, the Highway Trust Fund faces a shortfall of between $78 billion and $120 billion, a gap almost impossible to close with a funding mechanism that is bringing in less revenue than ever, Burnley said.

The Obama Administration had ordered significant increases in corporate fuel efficiency standards, known as “CAFE.” This made vehicles more efficient but deprived the Trust Fund of fuel tax receipts. The Trump White House rolled back some of those efforts, but with a Democratic majority in the House, there is reason to expect a push not only to return to the Obama plan, but to make the CAFE standards even more rigorous, Burnley said.

Early in his administration, President Trump said he favored the idea of an increase in the federal fuels tax, and went so far as to tell a meeting with lawmakers on both sides of the aisle that he would provide political cover to get it done. However, any hope of bipartisanship effectively ended in January when Democrats officially took control of the House, Burnley said.

While President Trump may see the value in raising the motor fuels tax, he’s “not going to jump off the cliff by himself,” especially when so many Republicans are opposed to the tax hike, Burnley said.

The most widely endorsed proposal has been a 25 cents per gallon increase in diesel and gasoline taxes, spread out in 5 cent per gallon increments over five years. The federal Highway Trust Fund is paid for almost exclusively out of a 24.4 cents per gallon tax on diesel bought at the pump, and an 18.4 cents per gallon tax on gasoline.

The 2015 law was largely the handiwork of Senator Barbara Boxer (D-California) and Senator James Inhofe (R-Oklahoma), who crossed party lines to get a bill passed. Infrastructure has traditionally been one of the few issues the two parties could agree upon. Boxer has since retired, while Inhofe continues to serve in the Senate.