NORMAN — In 1993, Bill Clinton was president, “Seinfeld” was on TV and a cellphone was the size of a brick. It was also the last time Congress raised the federal gasoline tax, which pays for roads, bridges and public transit. Over two decades, the cost of building and maintaining the nation’s transportation infrastructure has gone up significantly, while the tax designed to fund the work has stayed flat: Drivers still pay 18.4 cents per gallon at the pump for gasoline and 24.4 cents for diesel.
It should be no surprise, then, that the Highway Trust Fund is about to go broke. The U.S. Department of Transportation estimates that the fund could run out of money as soon as August, which means states will not receive the federal dollars they’ve been promised until the fund is replenished. If that happens, federally funded transportation projects may have to stop or slow construction, and new transportation projects could be delayed, putting thousands of construction jobs at risk.
This is not a new problem. The failure to raise the tax to keep up with inflation, coupled with the growing fuel efficiency of the nation’s vehicle fleet, has whittled away the buying power of the fund over many years. The gasoline tax currently generates about $35 billion a year, but the federal government spends $53 billion on highway and transit projects. Since 2008, Congress has transferred in general fund tax revenue to cover the shortfall. This year, gas tax revenue is coming in even lower than projected.
Congress and the Obama administration have proposed various ways to refill the trust fund. The administration wants to close corporate tax loopholes and use the revenue to expand highway and transit funding for four years. Senate Majority Leader Harry Reid, D-Nev., and Sen. Rand Paul, R-Ky., want to replenish the fund by encouraging U.S. companies to repatriate offshore profits in return for a one-time tax break, while House Speaker John A. Boehner, R-Ohio, would generate money for the fund by cutting Saturday postal service. These are short-term solutions at best.