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House lawmakers approve $13.6B lifeline for Highway Trust Fund

Funding to support highway and intermodal projects included in one-year extension of FAST Act

States rely on HTF for highway projects. (Photo: Jim Allen/FreightWaves)

The U.S. House passed legislation that injects $13.6 billion into the Highway Trust Fund (HTF) while extending the FAST Act by one year at current funding levels.

The legislation was part of a continuing resolution to keep much of the federal government running through Dec. 11 and avoid a government shutdown on Sept. 30, the end of the fiscal year.

The resolution, which passed with bipartisan support Tuesday, is expected to be taken up and passed by the U.S. Senate before the end of the month.

“The House did its work, but Senate Republicans failed to begin the appropriations process, sadly making a continuing resolution necessary to avoid a devastating government shutdown,” commented House Appropriations Committee Chairwoman Nita Lowey, D-N.Y.

The FAST — Fixing America’s Surface Transportation — Act, which was scheduled to expire Oct. 1, will now run through Oct. 1, 2021. The legislation appropriates $10.4 billion from the U.S. Treasury into the highway account and $3.2 billion into the mass transit account, the two accounts that make up the HTF.

“That should be enough to keep the trust fund solvent over the next year,” a Capitol Hill source told FreightWaves.

A coalition of 88 business and government groups have been pushing for a one-year extension of the FAST Act along with an increase in funding levels. However, lawmakers chose not to raise funding levels beyond what was already in place in 2020.

The HTF, which states rely on to fund highway and intermodal infrastructure projects, has struggled to remain stable due to declining gas and diesel tax revenues, and lower fuel consumption during the coronavirus pandemic has put more pressure on the fund.

If current funding for the highway program increases annually at the rate of inflation, revenues and accumulated balances of the HTF will be insufficient to cover spending from the highway account beginning in 2022, according to the latest projections (March 2020) from the Congressional Budget Office.

“HTF funding uncertainty discourages investment in substantial, multiyear infrastructure projects as these require long-term planning and funding commitments,” credit rating agency Fitch Ratings noted in a report Wednesday.

“Other taxing options that could support the HTF, such as a tax on vehicle miles traveled or a highway freight tax, may be difficult to implement because of the costs of implementing and enforcing a new tax system. An additional tax burden would also be unpopular during the nascent economic recovery.”

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John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.