Author: [Guest] Mark Solomon, Senior Editor
In July 2012, President Obama signed into law the “Moving Ahead for Progress in the 21st Century” Act, better known as “MAP-21.” The law funded the nation’s highway and mass transit projects for 27 months at a cost of $105 billion. It placed unprecedented emphasis on freight movement and recognized freight’s importance to the economy. The law established a national freight policy requiring the Department of Transportation to develop a “primary freight network” out of 27,000 miles of highways designated as most critical to the movement of goods. And it raised to $75,000 from $10,000 the insurance bond that freight brokers must maintain to ensure that motor carriers are paid for transporting shippers’ cargoes tendered to them by brokers.
The law was also notable for what it didn’t do. It didn’t increase the taxes paid at the pump on gasoline and diesel fuel, keeping them at the same levels since 1993. It also maintained the same limits on the size and weight of heavy-duty trucks that have been in place since 1982.
Since 2009, the nation’s highway funding had been sustained by a series of short-term extensions approved by Congress. The 2012 law was the first time since 2005 that multiyear funding was provided for surface transportation and logistics management projects.
The law was set to expire in September 2014 when Congress did what it vowed it wouldn’t do any more: Pass another short term extension and finance the projects during that time with money borrowed from the general treasury. In late August, lawmakers agreed to extend the current program until May 2015 and re-direct $10.8 billion in general funds to the Highway Trust Fund, the mechanism under which transport projects are funded, so the trust fund wouldn’t run out of money and work on projects could continue.
During the many short-term extensions between 2009 and 2012, Congress appropriated approximately $35 billion from the general fund to the trust fund. However, the 2012 law called for an $18.8 billion upfront payment into the trust fund, a move that was designed to avoid any more funds transfers during the 27-month life of the statute.
The extension until May buys Congress some time. But lawmakers haven’t addressed the core issue of paying to modernize an infrastructure already under tremendous stress from increased vehicular traffic. For decades, fuel taxes have been the primary source of revenue for the highway trust fund revenue. However, as vehicles of all types become more fuel-efficient, motorists and truckers are driving longer between fill-ups. In addition, many trucking companies set their rigs’ maximum speed at 62 miles per-hour, a fuel conservation measure that has the effect of reducing consumption that, in turn, curtails trust fund revenues.
Raising fuel taxes during an uneven economic recovery has been a political non-starter at the White House and on Capitol Hill. Groups representing shippers, truckers and millions of businesses have lobbied for a fuel tax increase indexed at the rate of inflation and whose proceeds would be dedicated to surface transportation and logistics management projects.