Next transportation crisis is looming
 The financial underpinnings of Iowa’s highway program are likely to suffer another major blow in light of an announcement by the U.S. Department of Transportation that states may receive substantially less money from the federal Highway Trust Fund in fiscal year 2009 and beyond than had been projected.
Iowa DOT Director Nancy Richardson responded to the news by saying, “It’s another dark cloud in the looming highway funding storm, which is already aggravated by rising construction costs, flat state highway revenues, increased traffic demands, and an aging infrastructure.”
New estimates by the U.S. Office of Management and
Budget (OMB) predict a $4.3 billion shortfall in the federal Highway Trust Fund in fiscal year 2009. The shortfall is attributed to the lower than expected fuel tax receipts and continued financial outlays at levels based on the original revenue estimates.
Between 1980 and 2005, federal receipts from gasoline taxes increased at an average rate of 2.7 percent per year. According to the U.S. DOT, in the early part of 2007, Americans drove fewer miles than the same period the year before -- for the first time ever. When Americans drive less, they buy less gasoline and pay less in gasoline taxes.
The Highway Trust Fund is the principal mechanism for funding federal highway and transit programs through receipts from excise taxes charged to highway users, such as taxes on motor fuels. For fiscal year 2009, Iowa has projected it will receive approximately $386.6 million in federal-aid formula funds for its highway programs. This represents 26 percent of Iowa’s total highway program funding.
“The impact of the projected shortfall would be dramatic for Iowa,” said Richardson. “According to the American Association of State Highway and Transportation Officials, it could mean a 38 percent cut in the national federal-aid highway program. Iowa could simply not meet its transportation demands in the face of such a cut. And, the trickle-down effect on jobs and the economy would be felt by all Iowans. Therefore, Iowa is joining other states in an immediate call to Congress to identify ways to fill this funding gap,” said Richardson.
|
