We finally have a new highway bill and infrastructure act! Pt. 1

By Scopelitis Transportation Consulting, Consultants to Axele

We’ve been hearing a lot about the Highway Trust Fund and the Infrastructure Investment and Jobs Act; what does it all mean for trucking?

Once every 5 years or so our Congressional leaders go through a process called “reauthorization” of the country’s surface transportation programs. What this boils down to is Congress conducting a series of hearings and deliberations to set the legislative framework for programs and funding to build, operate and maintain the federal transportation system. These are major commitments, and the multi-year legislation helps to provide a level of certainty that the necessary funding will be allocated to federal and state agencies to support these projects and programs in the long term.

The Highway Trust Fund: Building and repairing roads and bridges

One of the most significant challenges in transportation continues to be building and repairing our roads and bridges. The Highway Trust Fund (HTF), which provides much of the funding to support these programs, is historically underfunded and does not generate enough revenue to foot the bill. The federal fuel tax, which we all pay at the pump, has been the primary revenue source for the trust fund since it was enacted in 1956, and this user fee has not seen any increase since 1993. Since 2008, the HTF has been sustained through revenue transfers from the general fund to the tune of more than $140 Billion. In part due to the lack of federal support to keep pace with the country’s needs, a number of states have raised state fuel taxes to compensate.

The Fixing America’s Surface Transportation (FAST) Act was the most recent authorization and was enacted in December 2015. It expired in September 2020, but had been operating on an “extension,” which essentially extended the existing programs and funding levels until Congress could pass a new Bill.

The current Congress has worked hard on the FAST Act reauthorization. It has been a top priority for the Biden Administration. The House of Representatives passed its version of the highway bill in May, and the Senate passed its own in August. Typically, there is a conference committee that is formed from both chambers of Congress to review and iron out the differences between the 2 bills and recommend a compromise approach for all to agree on. This year was different. The Senate passed version, the Infrastructure Investment and Jobs Act (IIJA), was the bill voted on and passed  in the House, and was just signed into law by President Biden on November 15. The bill is a $1.2 Trillion package, which provides significant and long sought increases in funding.

The Infrastructure Investment and Jobs Act: What trucking issues will it address?

The IIJA addresses a number of trucking issues. First, from a funding standpoint, there are significant increases in the bill, as it authorizes $550 billion in new spending, $110 billion of which would go to roads and bridges. The bill also would direct $66 billion to rail and $40 billion to transit programs. It also provides approximately $65 billion for improving the electrical grid and for energy production, $50 billion for improving the resiliency of the infrastructure and protect it from cyberattacks and natural disasters, and $7.5 billion towards charging stations for electric vehicles. The revenue model Congress has devised to pay for these increases are a mix of options, none of which address the Highway Trust Fund solvency issue on a long-term basis.

Read the second part of this blog, covering the provisions of interest to the trucking industry, here.

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