WASHINGTON, April 24 The U.S. government may
have to slash road and highway spending almost entirely or raise
the gasoline tax by more than 50 percent in the face of a
perpetual funding shortfall, the Congressional Budget Office
said on Wednesday.
The nonpartisan agency, which analyzes policy for Congress,
said that to bring the trust fund for highway and transit
projects into balance in 2015 lawmakers could reduce spending
obligations to $4 billion from $51 billion.
Another possible solution would be to raise the gas tax by
10 cents per gallon, Sarah Puro, analyst for surface
transportation programs at CBO told the House Budget Committee.
She added that Congress could also combine smaller spending cuts
with a slimmer tax hike.
The federal government charges motorists an 18.4
cents-per-gallon gas tax when they fill up at the pump, and then
uses these revenues for highways and public transit. Suggestions
in recent years to raise the tax even a few pennies have met
heavy political resistance.
With cars becoming more fuel efficient and commuters turning
more to alternatives, the fund perpetually does not have enough
revenue to cover spending demands. The federal government
frequently steps in with emergency transfers, and Puro told the
committee that since 2008 Congress has poured $41 billion into
Another transfer of $12.6 billion has been authorized for
2014, after lawmakers approved deposits of $6 billion this year.
If Congress were to continue making the emergency transfers
instead of cutting spending or raising the gas tax it would have
to provide $14 billion in 2015, Puro said.
The trust fund was spared from the automatic spending cuts,
known as sequestration, which began last month.
CBO forecasts that the highway part of the trust fund will
end this fiscal year in September with a balance of $5 billion
and the public transportation segment will have a balance of $3
But in five years the entire fund covering both highways and
transit will end fiscal 2018 with a gap of $47 billion. At the
end of 2023, the fund will be short $126 billion, according to
CBO projections that consider the pace of inflation and the slow
growth in the tax revenues.
Most of the highway money flows to states for road repair
and construction, and projected shortfalls make it hard for them
to plan capital works projects often spanning several years.
That, in turn, can slow down construction companies and others
which provide tools and materials for major infrastructure
Many states that charge their own gas taxes have also faced
shortfalls in recent years. Some are looking for more stable
sources of revenue, with Virginia recently moving its
transportation program away from a gas tax.
Puro noted the federal gas tax was last increased in 1993
and if it had been adjusted for inflation the rate would be
about 29 cents per gallon. Because the tax did not rise with
prices, the fund's purchasing power is only about 62 percent of
what it was 20 years ago, she said.