If you’ve been following the news, you’re probably aware the House of Representatives recently passed a bill that would raise nearly $11 billion and extend current highway and mass transit funding levels through May 2015. The House’s measure is financed by higher customs fees, changes to pension plans, and money from a fund to repair leaking underground fuel storage tanks. The Senate is considering a similar bill.
I recently wrote a letter to the chairs of the House and Senate Transportation and Infrastructure Committees, as well as California’s Congressional delegation, calling on them to approve at least a short-term fix before Congress’ August break begins. If the House and Senate cannot reach an agreement on at least a short-term fix to keep the federal Highway Trust Fund solvent by August 1, the U.S. Department of Transportation will begin limiting reimbursements for states. Should the reduced federal reimbursements continue into the new federal fiscal year, which begins October 1, Caltrans will recommend to the California Transportation Commission that no new projects be allocated until challenges at the federal level are overcome. While we maintain a sufficient cash balance to weather a short-term disruption of federal reimbursements, we can only do so with the assurance that the federal government will continue to honor commitments made to projects already underway.
The long-term issue is that our funding isn’t guaranteed. The state receives more than $3 billion in federal funding annually for transportation projects. Most of it comes from fuel taxes, and for the last 21 years, motorists have paid the same tax on each gallon of gas, while they are purchasing more fuel-efficient vehicles that go further with less fuel. This means less funding for transportation. The California State Transportation Agency, together with Caltrans, the California Transportation Commission and our regional transportation partners, is leading the effort to develop recommendations for alternate transportation funding sources, such as road usage charges and a statewide tolling and pricing policy. We must continue to explore new ways to fund transportation, so we can sustain our world-class system now and into the future.