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1 1 (August 11, 2015)

handle is hein.crs/govcazs0001 and id is 1 raw text is: FF.ri E.$~ & Updated August 11, 2015 Surface Transportation Funding and Infrastructure Challenges Surface transportation reauthorization acts fund federal highway and public transportation programs. The Moving Ahead for Progress in the 21St Century Act (MAP-21; P.L. 112-141), which originally expired September 31, 2014, has been extended through October 29, 2015, by the Surface Transportation and Veterans Health Care Choice Improvement Act (P.L. 114-41). The most salient issue remains funding and the solvency of the Highway Trust Fund (HTF). The extension bill transferred $8.07 billion into the HTF to prevent a funding shortfall. More money will be needed if Congress wishes to continue the highway and public transportation programs at their current levels. Thm ,-:eder~atAid Hghay gr'a, MAP-21 and two subsequent extensions provided $41 billion annually for highways. Of these funds, 92.5% are provided to the states via formula. The states have nearly complete control over the decisionmaking in regard to these funds, within the limits of federal planning, eligibility, and oversight rules. Money is not provided up front. A state is reimbursed after work is started, costs are incurred, and the state submits a voucher to the Federal Highway Administration. The highway programs are focused on highway construction and planning, and do not support operations or routine maintenance. Federal share of project costs is generally 80%, but 90% for Interstate System projects. In general, projects are limited to a designated system of roads that make up roughly 25% of all U.S. public roads. MAP-21 and the extension bills authorized $10.6 billion for the federal public transportation program in FY2013, $10.7 billion in FY2014, and $10.7 billion in FY2015. Most of this funding is distributed by formula to local transit agencies. The largest discretionary program is the New Starts Program, which supports construction of new local rail, bus rapid transit, and ferry systems, and the expansion of existing systems. Intercity rail programs are not part of the federal public transportation program, and historically have not been authorized through surface transportation legislation. However, a surface transportation bill passed by the Senate in July 2015, H.R. 22, includes many intercity rail provisions. Highway Trust Fund. Historically, all of the federal highway program and 80% of the public transportation program have been funded with revenues from the HTF. Revenues supporting the HTF come from a combination of fuel, truck, and tire taxes, but the fuel taxes provide about 90% of the money. The excise taxes on gasoline and diesel are fixed in terms of cents per gallon (18.3 cents for gasoline and 24.3 cents for diesel), and do not adjust for inflation or change with fuel prices. The rates were last raised in 1993. Increases in gasoline and diesel consumption kept revenues growing until the recession of 2007. Since that time, improving fuel efficiency and slow growth in vehicle mileage have led to a leveling of revenue growth. Spending from the HTF consistently outruns highway user revenues. Unable to agree on revenue increases or program reductions, Congress began providing a series of transfers to the HTF to prevent its insolvency. Since September 2008, Congress has provided over $73 billion to the HTF, mainly from the Treasury general fund. Short-term issues. Unless Congress authorizes additional funds before then, the balance in the HTF is expected to fall so low by late 2015 that the Department of Transportation may have to delay reimbursement to states and transit agencies for completed projects. Long-term issues. The Congressional Budget Office projects an annual gap of almost $15 billion between the anticipated flow of revenue into the HTF and the cost of maintaining current highway and public transportation programs (see Figure 1). Figure I. HTF Revenues and Outlays: FY2008-FY202I Billions $30 $,40 ...........____ $ 30 . . . . . . . . . . . . HISTORY PROJECTED 5 2 0 ...... ................................. I ....... ......... 2Q10 2012 2014 2016 2Q18 202D Fiscal Years Source: Congressional Budget Office. W& ak Are QA~ )§ Continue transferring general funds. Congress could choose to appropriate sufficient general fund transfers annually to the HTF to address the shortfall. In recent years Congress has required offsets so the transfers do not increase the budget deficit, meaning that spending on other programs must be reduced or tax receipts increased in amounts equal to the amounts of the transfers. 'O 'T mppm qq\ a ' p\w -- ' gnon g-o I 'S 11LIANJILiN,

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