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North Bay Business Journal

Monday, June 2, 2014, 5:30 am

Federal highway funds in jeopardy again

By Cynthia Murray

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    Commentary by Cynthia MurrayThe North Bay transportation system is woefully inadequate. Highway 101 is gridlocked every day because of the gap in widening the freeway because of lack of funding. Highway 37 is wall-to-wall traffic at commute hours with no solution in sight.

    In “Why America’s about to run out of money for roads (again),” by Brad Plumer (Vox, May 6, 2014) alerts us to the latest transportation crisis. The Federal government, which currently provides about 27 percent of the U.S. transportation funding through the Highway Trust Fund, is about to run out of money. If this happens, it would put a halt to about “$47 billion worth of road, highway and mass-transit projects starting in August.” Allowing the Highway Trust Fund to be depleted has become the norm for Congress of late. What makes it even worse, is that state and local governments match that Federal money and have already contracted on projects with the full expectation that the Federal match would be forthcoming.
    Mr. Plumer says that the funding crisis started in 2008 resulting from Americans driving less, and using more gas-efficient vehicles, thereby generating less federal gas tax. Lawmakers have cobbled together funding to augment the loss gas tax, but Plumer says, “Since lawmakers are reluctant to either slash federal transportation spending or raise the federal gas tax, they have to come up with increasingly convoluted gimmicks to keep the fund intact.”
    Most of the Federal money is spent on highways. The Highway Trust Fund was envisioned to provide roads and highways that “would be paid for by the people actually using them. But it is no longer true that highways pay for themselves.
    Mr. Plumer says that once the trust fund is depleted, the U.S. government is limited to spend on the amount it receives from the gas tax, which hasn’t been raised since 1993. Without an infusion of other funds, projects throughout the U.S. will need to be scaled back or cancelled. Congress is kicking around ways to shore up the funding other than increasing the tax rate.

    President Obama has proposed spending $302 billion in federal transportation spending over the next four years, paid for by closing unspecified tax breaks for corporations.

    Given Congress’ track record of taking positive action to solve national problems, it is likely that the U.S. transportation infrastructure is about to get even worse. The state of our infrastructure directly impacts the U.S. economic competitiveness, from moving goods and services to easing commutes to providing much needed well-paying jobs.

    Cynthia Murray is the CEO of the North Bay Leadership Council, cmurray@northbayleadership.org.

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