The Highway Trust Fund is likely to run into the red by September, according to the latest update from the Department of Transportation.
In its most recent monthly status report, DOT shows the fund’s cash balance dipping below zero in late August or the first week of September.
The pending shortfall creates a sense of crisis as Congress drafts legislation to replace the current highway law, MAP-21, with a long-term program.
MAP-21, a two-year program, expires in October. All agree that the next bill needs to cover a longer period, five to six years, but there’s no agreement on how to pay for it.
State transportation departments are caught in the middle. Unless they get a clear signal that Congress will find the money needed to keep their programs going, they will start shelving plans for future projects.
Sen. Barbara Boxer, D-Calif., chair of the Senate Environment and Public Works Committee, has said the deadline for sending that signal is June.
Transportation and business interests strongly support raising the fuel tax and indexing it to inflation but a tax hike of any description is too heavy a political lift for Congress or the White House.
There are alternatives on the table. President Obama and Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, have proposed one-time funding infusions derived from corporate tax reforms. Rep. John Delaney, D-Md., has proposed a financing innovation based on tax-free repatriation of overseas earnings.
Boxer, whose committee is drafting a bill this month, has said Congress might be able to come to terms on funding derived from corporate tax reform, but not before the November mid-term election.
That means Congress may have to tap the general treasury for money to keep the fund whole this fall.