A transportation system that is efficient, safe and reliable is an important part of our competitive standing and funding challenges exist at both the federal and state levels.
Federal Highway Trust Fund Nearing Bankruptcy
The federal government has been a critical partner with the states since the creation of the Highway Trust Fund (HTF) in 1956. The HTF funded the construction of the interstate system and numerous other transportation projects.
A federal gas tax, currently 18.4 cents per gallon, is the largest source of revenue for the HTF. Congress has been authorizing short-term extensions of the Moving Ahead for Progress in the 21st Century Act (MAP-21) to meet existing commitments for the HTF. For the 10 year window 2015-2024, the cumulative shortfall in the highway and mass transit accounts of the HTF is projected to be $167 billion. Another short-term patch will not provide the long-term solution our nation needs to build and maintain modern and efficient transportation infrastructure.
Once again, the Highway Trust Fund is expected to become insolvent this May if Congress does not act.
Without Congressional action, Arizona’s FY 2015 losses will be:
- $825,732,143 statewide
- $115,459,367 Phoenix metro
- $28,994,739 Tucson metro
Arizona’s Highway User Revenue Fund Declining
The Highway User Revenue Fund (HURF) provides Arizona’s primary source of revenues for transportation projects. A variety of taxes and fees fund the HURF. Funds in the HURF are distributed to cities, towns, counties and the State Highway Fund according to a distribution formula.
Unfortunately, several unpredictable changes occurred over the past several years. When the economic recession hit, HURF revenues declined.Statewide HURF revenue is $9.6 billion below 2003 forecast according to the Maricopa Association of Governments. While revenues have begun to recover from the Great Recession, they are still only at the 2005 level. In addition to the hit that all of the revenue sources that fund the HURF took during the economic downturn, the state’s overall budget woes led to the HURF being raided for other non-transportation-related governmental expenditures. According to analysis by the Arizona General Contractors Association, a total of $1.7 billion has been swept from the HURF for other government activities.