By now we’re sure that you and virtually everyone else within the construction industry are in wait and see mode when it comes to the Highway Trust Fund (HTF).
Let’s face it: Without this funding source the construction industry will be dealt a blow that hasn’t been seen in a while. And the scary thing about it is that the HTF is on pace to run out of money in three months or less.
So what does this mean for you?
It means that projects across the nation will not be able to start and more than 700,000 workers, not could, but WOULD lose their jobs.
There’s no denying that the HTF is very, very important to the construction industry, but perhaps what’s more important is for you to know and really understand how it works.
Let us break it down for you:
The Congressional Budget Office (CBO) recently explained that the HTF spending has exceeded revenues by more than $52 billion for the past 10 years and is expected to continue outpacing revenues.
In addition, spending is estimated to exceed revenue by $167 billion by 2024 if both obligations (adjusted for inflation) and revenues continue at their current rate.
The HTF, however, is treated differently than other items in the federal budget.
You see……the HTF has a split budgetary classification.
Here’s what we mean: The programs funded by the HTF are considered discretionary and are not subject to the reductions required of mandatory programs. However, the budget authority for those programs is classified as mandatory, so the HTF doesn’t have the statutory cap on spending that most discretionary programs have.
The HTF gets its revenue from the federal fuel tax, which has remained at the same rate — 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel — since 1993 without any index for inflation.
Due to the current issue, the Obama administration has proposed a 4-year highway bill that aims to address the HTF shortfall, and the Senate is considering a 6-year bill that would provide greater transparency of HTF use.
We’ll see how this plays out. It should be interesting.