July 22, 2014 -There have been several proposals over the past few weeks in both the Congress and the Michigan Legislature to fund needed transportation improvements. Nationally, we are dealing with two separate, but related issues. The more immediate is that the federal trust fund is going to be bankrupt any day now. Why is this? The simple answer is that we are spending dollars at a faster rate than money is coming in from the federal gas tax. The fix to this problem seems rather easy – either increase revenue or slow down spending. Well, the federal gas tax has not been increased since 1993 – over 20 years ago! And, this is an election year, so full speed ahead on construction!
What solutions do we get? First, we get the idea of stopping the U.S. postal service on Saturday, take the dollars we would save over the next 10 years, and use this to put into the trust fund to fund transportation. We also had a proposal to go back and sell bonds in order to raise dollars to fund needed transportation improvements.
I thought these were creative options, but now Congress is working on an even more unique idea. They found dollars by “smoothing” payments going to fund the retirement programs of federal employees, counting on some revenues that should be here by 2024, and taking money from the LUST – Leaking Underground Storage Tank – Fund! All of these gimmicks are to avoid the inevitable – we need more real money put into the system!
In order to improve our transportation systems, road and transit agencies need reliable, predictable, stable, or growing sources of revenue. They are never going to be able to improve our infrastructure based on these band-aid approaches!
The second issue is that MAP-21, the current federal funding program, expires at the end of September this year. If Congress can’t fix the trust fund issue, they have no chance of reauthorizing a 3-5 year bill any time soon. Costs keep going up and revenue keeps going down. Pension smoothing? Really?
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