'Perfect Storm' Facing Highway Trust Fund, Says The Transportation Construction Coalition

Staff | September 28, 2010

(Washington, D.C.) – Federal funding for transportation projects faces a "perfect storm" that must be addressed to avoid a $13.7-billion cut in federal highway investment in FY 2009, Pennsylvania transportation construction engineer John McCaskie today told members of a Senate Appropriations Subcommittee. He testified April 3 on behalf of the Transportation Construction Coalition (TCC) before the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development on the issue of Highway Trust Fund Highway Account solvency. TCC is a coalition of 28 national associations and labor unions founded in 1996 to present a unified construction industry voice on federal transportation investment and policy issues.

When Congress enacted the Safe Accountable Flexible Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) in 2005 it relied on revenue assumptions that have not held constant, and as a result projected Highway Account revenues are $3.7 billion below the amount necessary to support the $41.2 billion in highway investment SAFETEA-LU calls for in FY 2009. As a result of this shortfall, anticipated revenues could only finance an FY 2009 highway investment level of $29.5 billion, which is 32-percent less than the amount provided in FY 2008 and guaranteed by SAFETEA-LU for FY 2009.

McCaskie noted that unemployment in the highway construction industry has increased 2.4 percent over the past 14 months because increased construction material costs have lead states to reduce the number of construction contracts going out for bids. "Not addressing the Highway Trust Fund revenue shortage and the potential resulting cut of as much as 32 percent in highway funding would result in further cutbacks in transportation projects and lead to further job loss. This would heighten the perfect storm scenario and have a drastic effect on not only the transportation construction industry but the U.S. economy as well," McCaskie said.

McCaskie also outlined a solution to address the trust fund crisis supported by a broad transportation construction industry coalition. "While this situation may seem bleak, there is a light at the end of the tunnel. Senate Finance Committee Chairman Max Baucus and Committee Ranking Republican Charles Grassley have followed through on the commitment they made to you last year and developed legislation that would ensure the highway investment commitment made by SAFETEA-LU can be delivered," he said.

A complete copy of McCaskie’s remarks and prepared testimony are available online at www.artba.org and www.agc.org.