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Congress Provides Highway Funds Just in Time, but It’s a Short-Term Fix

By Kent Hoover for Phoenix Business Journal

Congress avoided an interruption in federal funding for road projects by temporarily replenishing the Highway Trust Fund. Photo credit: Jake Dean/bizjuornals.com

Congress avoided an interruption in federal funding for road projects by temporarily replenishing the Highway Trust Fund. Photo credit: Jake Dean/bizjuornals.com

Federal funding for highway projects will continue to flow after the Senate accepted the House’s version of an $11B bill to replenish the Highway Trust Fund through May 2015 (AZBEX, May 30).

Without action, the Federal Highway Administration said it would have to start rationing federal funds for highway, bridge and transit projects on Friday.

State transportation officials and construction companies were relieved by this last-minute fix to the shortfall in the Highway Trust Fund, but they note this bill is only a short-term solution (AZBEX, Jun. 13).

Congress wasn’t willing to raise federal gasoline taxes this time around — the $11B short-term fix was paid for by so-called “pension smoothing” — allowing employers to delay pension plan contributions, thereby raising their taxable income. It also increased customs fees and transferred money from a trust fund for leaking underground storage tanks into the Highway Trust Fund (AZBEX, Jun. 6).

In the long run, higher gas taxes and adding tolls to existing interstate highways will be necessary to fund the nation’s transportation needs, contends the International Bridge, Tunnel and Turnpike Association, which represents owners and operators of toll facilities.

Read more at Phoenix Business Journal