july 25, 2014. highway trust fund (htf) cashflow problems highway trust fund long term solvency ...
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July 25, 2014
Highway Trust Fund (HTF) Cashflow problems
Highway Trust Fund Long Term Solvency
FY 2015 Appropriations
MAP-21 Reauthorization
FY2014 State Legislative Session Highlights
Highway Account cannot fall below $4 billion cash reserves
This cashflow issue is estimated to occur in mid-August
FHWA cash management process announced to begin on August 1
U. S. Congress goes on recess for the entire month of August, a legislative solution needs to be passed by the end of July
◦ The House passed a bill that provides a $10.8 billion HTF “patch”, and a MAP-21 extension until May 2015 (8 months)
◦ The Senate has to decide what to do next – do they put the House bill to a vote on the Senate Floor? Do they make amendments to the House bill and send an amended bill to the Senate floor? At the moment, they have not decided.
◦ While the HTF “patch” amount is the same in both the House bill and Senate amendments, one particular Senate amendment has the MAP-21 extension until the end of December 2014.
◦ The difference in the length of the extension is connected to the November elections. Democrats want to work on the MAP-21 reauthorization bill during the lame duck period.
Currently, HTF outlays are $16 billion/year more than revenues
Since 2008, over $50 billion in general funds have been transferred to keep the HTF solvent
Current gas tax revenues cannot support MAP-21 funding levels ($629 million FHWA funding for FY 2014 )
Steady loss of the purchasing power of the gas tax due to decreased fuel consumption and inflation
No Congressional appetite to increase revenues
MAP-21 formula funding levels used in both Senate and House bills
Senate bill contains funds for TIGER, Amtrak and New Starts, that the House bill does not contain
HTF cashflow crisis must be resolved for Appropriations to proceed
Not on schedule. FY 2015 begins on October 1, 2014, and we still do not have an appropriations bill
Four key interrelated deadlines requiring legislation:
Problem Expiration DateHighway Trust Fund runs out of Money
Mid-August, 2014MAP-21 Programs and Contract Authority Expire
September 30, 2014Trust Fund Permission to Pay Claims
Expires September 30, 2014
Current Law HTF Taxes Expire September 30, 2016
MAP-21 ends on September 30, 2014
Obama Administration and Senate Environment and Public Works Committee released proposals in 2014
Additional funding or revenue ($16 billion/year) needed merely to meet current funding levels.
MAP-21 Implementation (Rulemaking) is incomplete
$31.5 million for Corridors of Commerce $30 million for winter maintenance costs $23 million to support operations and maintenance
(including LED lighting, innovations in pavement repair, accelerated replacement cycle for snow plow fleet
$54 million for local road upgrades $33 million for local bridges $4 million for at-grade rail crossings, and two additional
statewide rail track inspectors based on concerns with the hauling of Bakken Crude Oil by freight rail through the state
Serge Phillips, Federal Relations Man651-366-3075Email: [email protected]
Serge Phillips, Federal Relations ManagerMnDOT Office of Government Affairs
Ph: 651-366-3075Email: [email protected]