In The News

Trust Fund short-term fix signed into law

State transportation planners around the country are breathing a little easier today after President Bush signed into law a measure that will put $8 billion into the nearly bankrupt Highway Trust Fund.

Without fanfare, the president signed the bill on Monday, Sept. 16, authorizing the $8 billion to be transferred from general Treasury funds into transportation coffers.

Just two months ago, Bush threatened to veto the legislation, which originated as House bill HR6532.

The House passed the bill in July, but it did not pass the Senate until Wednesday, Sept. 10, following an announcement by U.S. Transportation Secretary Mary Peters that the fund was on its way to insolvency.

The trust fund normally relies on fuel taxes for its income, but that revenue declined at the same time that transportation funding needs increased. The decline in tax revenue coupled with diversion of funds from the Trust Fund – estimated to be as much as 40 cents per tax dollar paid in – have been blamed for the fund going broke.

States rely on the fund for the federal portion of the cost of highway and bridge work, and many states had delayed projects, fearing that funding wouldn’t be available.

The Federal Highway Administration recently reported that without the short-term cash infusion, states stood to lose an average of 34 percent of their transportation budgets supplied by the federal government.

The new law ensures the Trust Fund is shored up through the next fiscal year. Congress will begin drafting long-term solutions for transportation funding in 2009.