Michelle Blackston, writing at The Thicket at State Legislatures, has an entry entitled Highway Trust Fund runs out of gas. Apparently the National Highway Trust Fund is funded by the federal gas tax which hasn’t been increased since 1993. In the meantime, inflation and international competition for the materials used in transportation infrastructure have severely eroded the purchasing power of this fund which is now approaching zero.
In her press release, Secretary [of Transportation] Mary Peters blames Congress for ignoring the dwindling fund. Peters went as far as to say: “Time and again, the President has warned Congress of the pending shortfall and submitted fiscally prudent budgets to close the gap. Americans cannot afford to have Congress play ‘kick the can’ with highway funding for another year, another month, or frankly, another week.”
Up until last week, however, the Administration opposed and threatened to veto the very legislation this Department is “recommending.” The immediate action Secretary Peters is calling for includes: 1- Legislation that will transfer $8 billion from the general fund to the highway account; 2- Pay states a proportional reimbursement until the $8 billion transfer is approved.
The Highway Trust Fund pays for a portion of the nation’s roads, bridges and interstate system. In fact, the money for road repairs has already been spent and the federal government reimburses states for this work. Now, it looks as though states will only receive 75% of their reimbursements, if any at all.
It all flows downhill. You can bet that when the States get shorted, local government will get shorted in return. Then, presumably, Governor Daniels will blame locals for their excessive spending.
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