It is now peak construction season, and without congressional action the federal highway trust fund will go bankrupt (expenditures will exceed receipts) in August — next month. As the senators for Maryland, we are fighting for a multi-year transportation bill to provide planning and funding certainty to our state.
Federal gas and diesel taxes paid at the pump are the primary revenue streams for the highway trust fund, which provides formula funding to states for both highway and transit projects.
We fought for a formula that provides Gov. Martin O'Malley and Maryland Transportation Secretary Jim Smith approximately $780 million annually to spend across the state: $580 million in highway formula funding and $200 million in transit formula funding.
The cause of the Highway Trust Fund's insolvency is threefold: big improvements in vehicle fuel efficiency, reduced driving and inflation. The last time Congress increased the gas tax was in 1993 from 14.1 cents per gallon to 18.4 cents per gallon. These three factors have resulted in lower gas tax revenues, reduced purchasing power and trust fund receipts not keeping up with demand.
A bankrupt Highway Trust Fund means the Maryland Department of Transportation (MDOT) would stop receiving $80 million a month in reimbursements from the U.S. Department of Transportation. As a result, MDOT would have to use state money obligated for other project to cover its federal expenditures. In other words, MDOT will be forced to rob Peter to pay Paul. New projects will not be initiated and existing projects will slow down or stop. The Department also will be forced to focus solely on system preservation instead of new construction needed to improve safety and modernize our transportation network.
Maryland needs a multi-year bill that ensures the solvency of the federal highway trust fund. A multi-year transportation bill is estimated to create two million jobs nationwide, and transportation loans and grants create another million. Doing nothing is utterly unacceptable, and short-term extensions do not provide the planning and funding certainty states need to put those three million workers on the jobs necessary to maintain and improve our nation's essential transportation assets. In an uncertain economic climate, investments in transportation infrastructure create jobs in construction, engineering and manufacturing right here in the United States.
A multi-year transportation bill will help businesses succeed by making sure goods and products get to where they need to go. U.S. trade is expected to double in the next 13 years, and our national transportation assets must serve the growing economic demands for U.S. goods and services. We must modernize and maintain our infrastructure or we risk diminished profits and falling behind our international competitors in the global marketplace.
It also creates certainty for commuters and families. Traffic congestion wastes over 2.9 billion gallons of fuel each year. Maryland commuters have the longest commutes in America.
Unfortunately, the gridlock in Congress only leads to more gridlock on our nation's roads. When it comes to funding our nation's infrastructure, we've suffered from roadblocks and standstills. Despite our calls for more funding our roads, highways, bridges and railways are in dire need of repair.
That's why we work hard as Maryland's one-two punch for transportation funding. Sen. Cardin serving on the Environment and Public Works, and Finance Committee creates the policy and authorizes the programs that guide infrastructure investments for Maryland and the nation. Sen. Mikulski as chairwoman of the Appropriations Committee puts the funds in the federal checkbook to keep Marylanders moving.
We know strong transportation infrastructure is a key ingredient to economic growth. It protects the safety and reliability of travel and transportation. It also supports our economy with investments in the highways, public transit, airports, passenger rail and ports. This money creates engineering and construction jobs today and prepares us for jobs tomorrow bringing growth to our economy. The $13.1 billion Maryland spent in transportation over the last five years has generated $29.3 billion in business output, including $12.9 billion in wages and nearly 35,000 jobs per year.
We also know that infrastructure projects don't just happen but they require smart planning. It's why we are united with the U.S. Chamber of Commerce, the American Society of Civil Engineers, and the American Association of State Highway and Transportation Officials in fighting for a multi-year transportation bill this year.
Barbara A. Mikulski, a Democrat, is Maryland's senior U.S. senator; she can be reached at email@example.com. Maryland U.S. Sen. Ben Cardin is also a Democrat; he can be reached on Twitter: @SenatorCardin.
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