Detroit Bureau on Twitter

Posts Tagged ‘highway funds’

Green Cars – Red Ink?

A shift to electric power could be a financial nightmare for federal and state coffers.

by on Jan.20, 2011

Great for the environment but bad for the Treasury?

Buy a car, get a check.  It worked for Chrysler, three decades ago, when the maker introduced the idea of rebates in an effort to boost lagging sales.  Now, the federal government – and more than a dozen states – are using the same tactic hoping to convince American motorists to switch from conventional powertrain technology to advanced battery vehicles.

The $7,500 federal tax credit is a significant chunk of cash, with a vehicle like the Nissan Leaf reducing its list price by nearly a quarter.  Lawmakers wisely placed limits on the number of battery car buyers can claim the subsidy – and how long the program will operate – to avoid bankrupting an already deficit-plagued Treasury.

Your Alternate News Source!

But even when such government-funded sales incentives vanish, battery cars could place a serious strain on both federal, state and, in some cases, local government tax coffers by cutting off a steady and lucrative source of tax revenues, gasoline excise taxes.  That means, in years ahead, lawmakers may be forced to enact new taxes specifically aimed at battery car owners.


Fix the Roads, But Don’t Ask Us to Pay for It

The Highway Trust Fund is about to go broke, again.

by on Sep.03, 2009

 61,000 miles of our National Highway System are now in poor to fair condition, 25% of bridges "structurally deficient."

About 61,000 miles of our National Highway System are in poor to fair condition.

Everyone knows what happens to a car when it runs out of fuel. Nevertheless, the same cannot be said about the Highway Trust Fund, which at current funding levels will be $17 billion short of money for the 2010 fiscal year that starts next month.

Minnesota Democrat James Oberstar’s sweeping bill to reform Transportation policy and fix the bankrupt Highway Trust Fund has been blocked by the Obama Administration, so the U.S. Chamber of Commerce, among others, is pushing to renew the existing bill for six more years.

Virtually everyone agrees that our roads, highways and bridges need more maintenance and rebuilding, but a depressed economy and soaring budget deficits make politicians reluctant to address the problem.

In addition, the gang that lives in state along the banks of the Potomac is much better at passing out money for earmarks and pet programs, than they are at finding ways to pay for them. That’s why the Trust Fund is under funded in the first place.

The problem with renewing the existing bill is that it doesn’t contain adequate taxes to support the work required to keep roads repaired. The gasoline tax of 18.4 cents a gallon that goes toward roads has not been raised in 15 years. And, if you’ve been driving through those years, you know what has happened to our highways. About 61,000 miles of our National Highway System are now in poor to fair condition, and 152,000 bridges – 25% — are “structurally deficient.”

Well, things could get worse. The easy political position given circumstances right now is to renew the existing law, without increasing fuel taxes.

However, the numbers do not work. An estimated $235.7 billion (FY 2010-FY 2015) will be raised, but existing transportation programs cost $326.1 billion during the same period. And this doesn’t catch up with decades of neglect.

No Potholes!

No Potholes!

The Obama Administration kicked the problem down the road as Congress recessed this summer by moving $7 billion more in funding into the Trust Fund so that it can get by for the time being.