NAFA Urges Long-Term Fix to Highway Trust Fund Issue

NAFA Members’ fleets are major users of the American highway system. They face congestion, poor road conditions, closed bridges, and other obstacles that have a direct impact on their efficiency and their employers’ bottom lines.

Congress finally passed a Highway Bill, just before the summer recess and just in time to keep the Highway Trust Fund from going bankrupt. However, the squabbling  House and Senate agreed only to kick the can down the road by means of budgetary trickery. In the end, the Senate accepted a short-term fix from the House that will keep the Highway Trust Fund solvent only until next spring.

A more sensible way would have been to continue the fuel taxes that have been a mainstay of federal highway support since the days of President Eisenhower. To that end, Sen Chris Murphy (D-Conn) and Sen. Bob Corker (R-Tenn), suggested a 12-cent gas tax increase spread over two years. The current 18.4-cent per gallon tax has not been raised since 1993. Thanks to better fuel economy, and an increase in hybrids and battery powered vehicles, gas-tax receipts to both states and the federal government, which apportions its collections among the states, have dropped with the likelihood that they will continue to drop, even if miles driven increases.

Thus, in addition to increased taxes, other sources of highway funds must be sought. These will include more toll roads, and perhaps increased use taxes. That particular tax may not sit well with many fleets, but a strong interstate highway system and a sound transportation system are fundamental to our nation’s competitiveness. NAFA members’ fleets are major users of the American highway system. They face congestion, poor road conditions, closed bridges, and other obstacles that have a direct impact on their efficiency and their employers’ bottom lines.

As NAFA chief executive officer Phil Russo said, “Congress must develop a long-term solution to this significant issue that has been plaguing the United States for more than a decade. We applaud Congress for taking action to provide a short-term patch, but they have once again kicked the can down the road and have not resolved the root issue.”

That root issue, he noted, is that the Highway Trust Fund has no sustainable means of generating sufficient revenue to pay for the hundreds of projects for which it is responsible, which total billions of dollars. Those projects include highway improvements, bridges, and other infrastructure projects. With a short-term fix in place, efforts must now turn to developing a long-term strategy for funding the HTF.

NAFA is by no means alone in this position. Associations representing state and local government officials, the National League of Cities, the U.S. Conference of Mayors, the National Governors Association, the American Trucking Association, the American Road and Transportation Builders Association, and even AAA, all called upon Congress for a long-term solution. A longer-term bill will provide certainty for states and localities to plan their projects without the fear that funds may dry up before completion.

NAFA has voiced support for legislation that would increase the gasoline and diesel excise tax, provided that it is indexed to inflation, and with the condition that such an increase be balanced by the inclusion of incentives to offset the tax increase. An increase in the excise tax is the simplest, most straight-forward, and most effective way to generate enough revenue to fund the country’s highway system into the future.

Several legislative proposals have been introduced to increase the tax on fuels. NAFA has voiced support, in principle, for the proposal by Senators Corker and Murphy that would increase the federal gasoline and diesel taxes by six cents in each of the next two years for a total of 12 cents; index the gas tax to inflation, using the Consumer Price Index (CPI); and offset the revenue raised from increasing the gas tax by providing net tax relief for families and businesses.

Russo promises that NAFA will monitor the situation, and continue to make the position of fleet professionals known to legislators until a satisfactory conclusion has been reached.

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