After a week of intense debate over how to replenish the quickly diminishing Highway Trust Fund, Congress ended the month of July with the passing of a bill that calls for $10.8 billion of highway and transit funding. Passed through Congress last Thursday, the bill has now been sent to President Obama who has expressed plans to approve it. Had Congress not acted, the Transportation Department would have begun delaying and cutting payments to states on Friday.
The bill calls for a 10 month extension to the life of the Highway Trust Fund, reauthorizing it until May. Though the bill provides a much needed plan for emergency funding, it essentially moves the debate over how to sustainably finance the Highway Trust Fund into next year. According to the Wall Street Journal, some Senators tried to only approve funding for up until Dec. 19 so that Congress would be forced to develop a long-term funding plan when the year ended. After passing through Senate, that plan was rejected by the Senate in 272-150 vote. The amended bill the will extend funding until May passed through the Senate by a vote of 81-13.
Congress still struggles to find a long term solution to the decreasing effectiveness of the fuel taxes which continue to bring in less and less revenue as consumers switch to more fuel efficient vehicles. The federal gas tax has remained at 18.4 cents a gallon since 1993 and is the primary source of funding the government uses to finance highway and transit improvements around the country.
If approved by the President, the House measure will create new sources of revenue through pension smoothing, which allows companies to contribute less to their pension plans. This budgeting tactic provides the federal government with more money to use for funding because companies lose out on the tax deduction associated with pension contributions. Though this is an effective way to bring immediate revenue back into the Highway Trust Fund, lawmakers from both parties are skeptical of pension smoothing.
What procedures are in place for reimbursement during a cash shortfall in the Highway Trust Fund?
When facing a cash shortfall in the Highway Trust Fund, specific reimbursement procedures are activated to manage the situation effectively. Here’s a concise breakdown:
Implementation Timeline
- Start Date: Procedures begin on August 1, 2014.
- Duration: These measures remain in place until further notice, ensuring the fund’s stability during financial constraints.
Key Procedures
- Cash Management Initiatives: A series of actions designed to optimize available funds and manage expenditures thoroughly.
- Prioritization of Payments: Reimbursements are prioritized based on urgency and necessity, ensuring critical projects receive funding first.
- Monitoring & Reporting: Continuous assessment of cash flow, along with detailed reporting, helps keep stakeholders informed and engaged.
These procedures are crafted to maintain the functionality of the fund while addressing temporary financial limitations, ensuring essential operations continue smoothly.
What are the cash management procedures proposed during the Highway Trust Fund shortfall?
Proposed Cash Management Procedures During Highway Trust Fund Shortfall
In response to a potential cash shortage in the Highway Trust Fund, specific procedures are proposed to ensure the continued operation of essential services. Here’s an outline of the steps to be taken:
- Implementation Timeline: The procedures are scheduled to commence on August 1, 2014, unless any additional directives are provided. They will remain in place until the funding situation stabilizes.
- Prioritization of Payments: Payments from the fund will be prioritized based on urgency and necessity. This approach ensures that critical infrastructure projects and emergency repairs receive funding first, aiding in the smooth functioning of crucial transportation routes.
- Periodic Review and Adjustments: The procedures will be regularly reviewed to assess their effectiveness, and adjustments will be made as necessary to optimize cash flow and minimize disruptions.
- Communication: All relevant personnel will be kept informed of any changes or updates to procedures, ensuring transparency and clarity for those involved in managing and allocating these resources.
These measures are designed to effectively manage limited resources, maintain critical infrastructure, and minimize the impact on ongoing and future projects during the shortfall.
What are the state-by-state shares of cash allocation for Highway Trust Fund apportionments?
State-by-State Cash Allocation for Highway Trust Fund Apportionments
Understanding how cash allocations from the Highway Trust Fund are distributed across states provides valuable insight into infrastructure funding. Below is a breakdown of some state’s share based on their 2014 apportionments:
- Alabama: Receives 1.93% of the total cash allocation, translating into approximately $732 million.
- Alaska: Secures 1.27% of the funds, amounting to roughly $484 million.
- Arizona: Is allocated 1.86%, which equals about $706 million.
- Arkansas: Benefits from 1.32% of the funds, totaling around $500 million.
- California: Claims the largest share with 9.33%, equating to approximately $3.54 billion.
- Colorado: Obtains 1.36% of the allocation, or about $516 million.
- Connecticut: Receives 1.28% of the cash, summing up to around $485 million.
- Delaware: Garners 0.43%, which is approximately $163 million.
These percentages highlight the distribution of funds intended to enhance and maintain state infrastructure, varying greatly by state and reflecting differing needs and priorities.
