Highway Trust Fund Fix Being Debated as Part of Aviation Bill

May 01, 2008

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An aviation funding bill being debated in the Senate contains a measure to shore up the federal Highway Trust Fund.

The provision, backed by Senators Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa), would prevent the Highway Trust Fund from going into the red by restoring $5 billion in revenue for Fiscal Year 2009. Baucus is the Senate Finance Committee Chairman, while Grassley is Finance
Ranking Member.

The bill would add close to $5 billion to the trust fund by the end of 2009, in order to cover funding shortfalls for projects that Congress has already approved. Most of that money would come from general tax revenue; $800 million of it would come from taxing gasoline when it leaves the refinery, instead of when it is removed from the terminal, as under current law.

According to DowJones, Sen. Kay Bailey Hutchison, R-Texas, argued for separating the aviation-related provisions into a separate bill from the highway and tax provisions, the latter of which are opposed by the White House.

"With our nation's economy limping along, this is precisely the time that we need to be investing in our transportation infrastructure - both aviation and highways," said American Association of State Highway and Transportation Officials Executive Director John Horsley. "Unless we can fill the $3.3 billion hole in the Highway Trust Fund, the federal-aid highway funds going to the States will be dramatically reduced by $13.5 billion by the end of September, 2009. This would be a severe economic blow to the states, at least half of which are facing their own budget shortfalls and would be unable to make up the difference.

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