The House Budget Committee, chaired by Rep. Paul Ryan (R-WI), held a hearing Wednesday to discuss the state of the Highway Trust Fund and possible solutions to make the fund solvent not just for the next few years, but as part of a long-term vision. The Congressional Budget Office released a Statement for the Record regarding the status of the HTF in response to the hearing.
Ryan opened the hearing with a discussion of the financial issues the HTF has encountered for years.
"Though it included some needed reforms, the most recent surface transportation reauthorization bill, MAP-21, included $19 billion in general fund transfers," Ryan said. "Now, to its credit, for the first time, the cost of the general fund transfers was offset in MAP-21. Despite these large infusions, however, CBO estimates the trust fund will go bankrupt sometime in fiscal year 2015 under current law."
The CBO report did call the HTF "unsustainable," providing three scenarios it suggests could fix the problem: greatly reduce highway trust fund spending; find a way to bump up revenues; or do a little of each.
Hearing attendees heard from multiple witnesses with experience in transportation finance: Janet Kavinoky, U.S. Chamber of Commerce Executive Director for Transportation and Infrastructure and Americans for Transportation Mobility Coalition Vice President; R. Richard Geddes, Cornell University Policy and Associate Professor and Director of the Cornell Program in Infrastructure; and Robert Poole, Searle Freedom Trust Transportation Fellow and Director of Transportation Policy at Reason Foundation.
While all witnesses agreed that something had to be done to create some long-term stability, Kavinoky highlighted the need for reform (in order to get "the most bang for the buck out of federal investments"), additional participation from private investors and public-private partnerships, and finding federal revenue for systemic investment.
In order to find that additional revenue, Geddes suggested instituting a mileage-based user fee, "which is consistent with the way providers of most goods and services, including utilities, charge their customers." Although it may be unpopular at first with some motorists, Geddes said, it would be important to stress "citizen-ownership of infrastructure assets and to utilize a permanent fund—one type of public trust fund—to preserve economic value released by pricing." Geddes, like Kavinoky, recognized PPPs as a vital tool in transportation infrastructure projects.
To finish her opening statement, Kavinoky discussed the costs of not acting, including the costs of congestion, lives lost due to deteriorating safety features on the nation's transportation network, and the inability to compete globally due to an aging transportation system, among others.
"These things might not 'score' for the Congressional Budget Office or the Office of Management and Budget, but the costs are real," Kavinoky said. "And so are the benefits. Our national transportation system is critical for ensuring long-term economic prosperity and supporting Americans' high standards of living, which have driven economic expansion, and is the backbone of our business supply chain. Lasting jobs grow where infrastructure works."
Additional information on the hearing, including written testimony from all witnesses, is available here.
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