Wednesday, June 3, 2009

Spend, baby, spend -- even if you don't have it

The federal Highway Trust Fund is near empty again.

From the Wall Street Journal:

WASHINGTON -- The Obama administration said as much as $17 billion in additional federal money is needed to maintain roads and bridges over the next two years, underscoring the challenges policy makers face as driving habits change.

The recession and gas-price increases over the past two years have caused many consumers to drive less and switch to more fuel-efficient cars. The result has been a fall in revenue from taxes on gasoline and vehicle purchases, which are used to fund state and local transportation projects.
The highway trust fund will need an injection of as much as $7 billion by September or states would not receive all the money they are counting on to finance construction projects later this year, the administration said.

In addition, the fund will need as much as $10 billion more, or roughly 25% of what it distributes to states each year for road work, in the 12 months after September, the administration said.

"The administration is working closely with Congress to solve this difficult problem and ensure that states have the resources they need to maintain our roads and highways," a White House spokesman said on Tuesday. He declined to offer any specific solution.

The State Department of Transportation is looking for help from the fund with the $1.9 billion North-South I-94 reconstruction and expansion project and will eventually have its hand out for the $2.3 billion Zoo Interchange reconstruction and expansion project.

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