Senate Finance Committee Discussing Highway Patch
The Senate Finance Committee is beginning a markup of a short-term patch to the Highway Trust Fund, providing funding through the end of the year. Without additional funds, the Highway Trust Fund will run low this summer, disrupting funding for highway projects, and eventually run out of money entirely. If that happens, all revenue coming into the trust fund for 2015 will be used to pay for current projects, meaning no new projects would receive funding next year.
We described the Senate proposal earlier this week, though today's version is modified to remove the one provision – the increase in the heavy vehicle use tax – that would have helped the long-term solvency of the Trust Fund but done little for the short term. It also adds a transfer from the Leaking Underground Storage Tank fund and several measures saving less than $0.1 billion.
|Options To Reduce Highway Spending|
|Policy||New Revenue||Available for Highway Fund|
|Increased mortgage reporting||$2.2 billion||$2.2 billion|
|Clarification of statute of limitations on overstatement of basis||$1.3 billion||$1.3 billion|
|Revoke passports for seriously delinquent taxpayers||$0.4 billion||$0.4 billion|
|Require inherited IRAs to be paid within 5 years||$3.7 billion||$3.7 billion|
|Transfer from the Leaking Underground Storage Tank Fund||$0 billion||$0.8 billion|
|Total Revenue Raised||$7.6 billion||$8.4 billion|
We’ve written about the long-term need to restore sustainability of the Trust Fund in our paper Trust or Bust: Fixing the Highway Trust Fund, and we've discussed long-term options to raise revenue from current sources or cut spending to bring highway revenues and spending closer to balance. The Senate Finance bill is clearly just a short-term solution, but hopefully it can be a bridge to legislation that addresses the structural imbalance in the HTF.