Project Objective

The goal of this study is to fully explore the fragility of the current means for funding the Highway Trust Fund. It will explore why this fragility exists, gather the various proposals and recommendations to bolster the fund, and where possible provide an assessment of each one as well as the potential impact on New York.

Project Abstract

In 2000, the U.S. Department of Transportation estimated that an average annual investment of $56.6 billion would be necessary over the next 20 years to maintain the nation's existing highways and bridges. It also estimated that an average annual investment of $10.8 billion would be needed over the same period to maintain the nation's transit systems. At the same time, according to current baseline projections from the Congressional Budget Office, the highway account of the Highway Trust Fund (HTF) will be depleted by 2006 and the mass transit account balance will fall to $0 three years later.

These projections in the midst of discussions regarding the reauthorization of federal funds for surface transportation have led to a number of recommendations aimed at bolstering the financial base of the HTF. Such recommendations include, for example:

* Redirecting the portion of the gasohol tax (2.5$/gallon) currently being diverted to the General Fund; * Eliminating the current excise tax exemption for gasohol (currently at 5.3$/gallon) or refunding the HTF highway account from the General Fund, the equivalent of the receipts lost from this exemption; * Resuming the accrual of interest on the HTF's balances (this was ended in 1998); and/or, * Raising taxes on gasoline and heavy truck use.

These suggestions will all help the current status of the HTF, according to the Congressional Budget Office, but they still may leave the HTF in a fragile position. Other longer-term solutions have been put forth to reduce the Fund's reliance on gasoline taxes (in FY2001, 58% of the funding for the HTF was derived from gasoline taxes).

Task Descriptions

The approach that will be used to accomplish this work includes the following tasks:

• Literature Review
  The first step in the study will be to undertake a literature review utilizing a variety of sources, including but not limited to federal and state government documents as well as transportation organization and association statements and analyses. Care will be taken to explore innovative proposals from around the country, and where appropriate from locations beyond the United States.
• Interviews
  Running concurrently with the literature review, interviews will be conducted with persons who have testified before the U.S. Congress or state legislatures on this issue as well as with individuals who have identified and/or written about potential solutions.
• Preparation of the Final Report
  When all the data and discussion are collected and assessed, a final report will be drafted summarizing the results

Budget

$26,388

Student Involvement

This project will involve several undergraduate and graduate students in data collection, presentations, literature documentations and report preparation.

Relationship with Other Research Activities

None

Technology Transfer Activities

None

Benefits of the Project

Given the timeliness of the study and the constantly changing political environment, two monthly updates will be prepared for review and discussion. The final report will be one of several background pieces that may be utilized at a workshop on reauthorization being planned for May 2003.

Key Words

Transportation Funding, Transportation policy, Gasoline Taxation