With insolvency looming for the Highway Trust Fund, the US Secretary of Transportation Anthony Foxx has sent out a proposed plan to address the issue and called on Congress to take swift action, according to a statement from the Department of Transportation.
In both of his letters to state transportation departments and transit agencies, Secretary Foxx has outlined steps his department will have to take to manage the situation, the statement said.
“There is still time for Congress to act on a long term solution,” said Secretary Foxx. “Our transportation infrastructure is too essential to suffer continued neglect, and I hope Congress will avert this crisis before it is too late.”
The Department’s most recent projections show the shortfall will reach a critical point in the Trust fund’s Highway Account in just a few weeks, requiring a similar cash management plan to follow for the Trust Fund’s Mass Transit Account when it is expected to reach a similar point this fall, the statement said.
Each year, the US Department of Transportation apportions funding to the states for their highway programmes based on formula established in federal law.
Starting in August, the DOT will use those same percentages to determine how much each state will receive of whatever amount is left in the trust fund.
Reimbursements to states will be limited to the available cash in the trust fund, and new revenues will be added every two weeks as money from the gas tax flows into the fund, according to the statement.
A similar process will be implemented for Federal Transit Administration funds in the fall, when the transit account for the Highway Trust Fund is expected to become insolvent, it said.
This approach by the DOT is intended to allow state departments of transportation to direct available cash to what they determine to be the highest transportation priorities and choose which projects receive reimbursement.
On the same day, President Barack Obama also urged Congress to take quick actions to pass legislation that would would replenish the Highway Trust Fund, adding that he would issue executive orders to let his policy initiatives happen. Obama made the comments during a speech in Washington DC.
The Highway Trust Fund was established in 1956 to finance the US Interstate Highway System, roads and bridges. It was expanded in 1982 to include mass transit projects. It has three accounts – the Highway Account which funds road constructions, a smaller Mass Transit Account that supports mass transit, and a Leaking Underground Storage Tank Trust Fund.