Montana won't likely have to hit the brakes on its summer road construction after a last-minute federal budget patch passed Tuesday in the U.S. House.
The vote signals a hard turn away from this summer’s fiscal cliff, in which the federal Highway Trust Fund ran out of money in the middle of highway construction season. Fueled by gas taxes, the trust fund has been running dangerously close to empty for a few years for several reasons.
The trust fund pays for all but 13 percent of Montana highway construction. Major projects slated for 2014 have been delayed for bid because of uncertainty over whether Congress would act. Labor unions and highway contractors say about 1,120 Montana jobs are at stake. The House and Senate still have to agree on a fix in the next two weeks to prevent construction from seizing up nationally.
The gas tax hasn’t increased since 1993, while the cost of highway construction over the past 21 years has been on a steep climb. Americans are also driving more fuel-efficient cars, which means they’re buying less gas. Raising the tax has been as politically attractive at roadside skunk
“I’m pleased that the House has passed a bipartisan solution to keep the Highway Trust Fund solvent and protect Montana jobs through the construction season,” said Rep. Steve Daines, R-Mont. “As a member of the House Committee on Transportation and Infrastructure, I will continue to work toward a long-term solution for the Trust Fund that does not raise the gas tax and ensures that Montana’s roads are safe and secure for years to come.”
The money for the House fix, approved 367-55, avoids increasing the gas tax by tapping other sources. It siphons money from a federal program to remove leaky underground fuel storage tanks. It raises customs fees and it allows companies to put off contributions to employee pension plans, which frees up revenue for the federal government.
An earlier proposal by Republican leaders to cut Saturday postal service and redirect the savings to road work isn’t part of the deal.
The solution, if agreed to by the Democrat-controlled Senate, could affect Montana’s program to remove leaky underground fuel tanks, which is almost entirely funded with federal dollars.
“Our 2015 grant, which we just applied for, is projected to be $719,750. We are required to match that with $79,972 in state funds,” said Mike Trombetta, of the state Department of Environmental Quality’s Remediation Division.
It was not immediately clear what the highway fix would mean to state fuel tank cleanup.
State highway construction should continue at least through the end of May 2015, provided a Senate fix expected in the next two weeks can be reconciled with the House fix passed Tuesday. However, if a House and Senate agreement backfires, starting in August the federal government will gradually end payments to states for highway projects.
“We’re hopeful they’ll take it up and pass it before the August recess,” said Lyn Zanto, Montana Department of Transportation planning administrator. “What it means for Montana is an extension of current funding for highway transit and safety through May 31. A short term solution is what it is.”
The problem with the funding patch is that it doesn’t give state highway planners enough financial certainty to the start projects that take several years to develop. The last time Congress passed a long-term highway funding bill was 2005, Zanto said.
That six-year funding proposal allowed Montana to launch the U.S. Interstate 90 East Belgrade Interchange, a $20 to $30 million project now under construction after years of development.
The Senate will have to take up highway funding soon. Congress leaves town for the month of August, which is also when the Highway Trust Fund is expected to turn insolvent. But there’s still likely to be a debate over the long-term funding crisis.
“Washington keeps kicking the can down the road, which puts construction planning and important Montana jobs in jeopardy,” said Sen. John Walsh, D-Mont.
Last month, Walsh proposed avoiding a gas tax increase and still funding highway construction adequately by closing corporate tax loopholes and spending the revenue on roads.
“I will continue to work with my colleagues across the aisle and in the House to pass my proposal to close corporate tax loopholes, reduce the deficit and fund a long-term highway bill for our jobs and economic growth,” Walsh said.
The Senate is likely to counter the House short-term fix with a similar version that raises revenue through tax compliance measures, which some Republicans say they oppose.