Congress patches federal Highway Trust Fund

With no time left to spare, Congress passed legislation to patch the federal Highway Trust Fund and avert implementation of a cash management plan that would have withheld federal highway reimbursement payments to states.

The president signed the bill into law on Aug. 8, as the Highway Trust Fund reached depletion.

The compromise legislation provides $10.9 billion to fund transportation infrastructure projects through May 2015. The Senate had been advocating for an extension only through December in order to force the development of a longer-term solution immediately following the mid-term elections.

Funding for the legislation comes from “pension smoothing,” which allows companies to delay funding employee pensions and consequently lowers their corporate tax deductions, as well as increases in U.S. Customs user fees.

In Massachusetts, several large projects were jeopardized by the threat of Highway Trust Fund depletion. According to the Boston Globe, these included the reconstruction of Interstate 91 in Springfield, the resurfacing of Route 1 in Peabody, and bridge replacements on Route 16 in Medford and Everett. Transit projects such as the extension of the MBTA Green Line and expansion of Boston’s South Station were also jeopardized.

Federal gas tax revenue goes to the Highway Trust Fund, but this revenue source has declined in recent years due to decreased fuel consumption. The federal gas tax was last raised in 1993.

Along with the $10.9 billion in highway funding, the legislation temporarily extends MAP-21, the comprehensive federal surface transportation program. MAP-21 was set to expire on Sept. 1.

This is the first extension of MAP-21. Its predecessor, SAFETEA-LU, saw nine short-term extensions before the adoption of MAP-21 in 2012.