Planning a Fourth of July Road Trip? Not so fast: Our Highway Trust Fund is Going Broke

Photo by Matthew Fern

As the flags wave, the fireworks fly, and AAA forecasts that 41 million Americans will travel 50 miles from home this Independence Day weekend, a transportation crisis is in the works. The Highway Trust Fund – the federal fund that’s used to repair our highways and bridges – will run out of money by the end of the summer, unless our government takes action.

Depending on what state you live in, the highway fund might provide more than 40 percent of highway and transit funds.  And President Obama this week said that if additional funds aren’t identified to keep the highway fund running, it could cost as many as 700,000 jobs, equivalent to the population of cities like Denver or Boston.

So why is the highway fund about to run out of money, and how bad is it?

The trust fund gets its money from the gas tax, which at 18.4 cents a gallon hasn’t been raised since 1993. More than twenty years on, a combination of regular inflation and more fuel efficient cars has meant steadily decreasing revenue for the fund, without a corresponding decrease in costs.  This year the fund will run about $8 billion short. Without a real solution, running out of highway funds – and crumbling roads and bridges to match – could become an annual summer travel tradition.

Proposals to raise more money to shore up the highway fund include closing business tax loopholes, raising the gas tax, instituting new road tolls, and cutting funding elsewhere.   Not surprisingly, there is little agreement among our elected officials about which of these to actually enact.

The Highway Trust Fund’s problems remind us that the federal budget paves the way – literally – for our day to day lives, and raise a big question: does our country still have what it takes to come together to fund our most basic needs, or will we continue to let political wrangling hold us back?