After Congress and the President were unable to agree on a deal to continue funding for federal agencies and programs through the annual appropriations process, the federal government was shut down and non-essential employees were sent home. The shutdown is now in its second week, and there is no sign of progress towards a resolution. The disagreement has now extended to include the federal debt limit, which Congress must raise by mid-October or risk the federal government defaulting on its obligations. The shutdown has short-term and long-term consequences for transportation.
First, in the short run, due to its unique funding, the federal shutdown has a more limited effect on transportation than on many other agencies. As you may know, revenue from the federal gas tax (18.4 cents/gallon) is dedicated to federal transportation spending and is put in a “highway trust fund” that is not subject to the annual federal appropriations process. Any USDOT employees paid from the trust fund are exempt from the shutdown, so the entire Federal Highway Administration and parts of the National Highway Transportation Safety Administration are still operating at normal capacity, as are the funds that flow to state departments of transportation.
While the short-term effects are limited, the long-term effects could be problematic. The current transportation bill, MAP-21, expires in one year. The major challenge in reauthorizing MAP-21 is funding: the federal gas tax no longer generates enough revenue to keep transportation funding level. Starting in 2015, there will be a $15 billion per year funding shortfall. Filling that gap will take tough decisions on where to cut and how to raise additional revenue. The disagreements and lack of ability to reach consensus that has led to the government shutdown does not bode well for Congress’ ability to make the tough choices that will be necessary to fill the transportation funding hole.
There is one possible long-shot solution. There are rumblings about the possibility of a deal for ending the shutdown and raising the debt limit that would be a “grand bargain” on taxes and spending which could include a long-term solution for the highway trust fund.
If a grand bargain is not reached and Congress continues down its current path, a year from now we could well see a stand-off over the extension of MAP-21 and its funding. In that case, come October 2014 – we could have a shutdown of transportation spending which would cascade to state departments of transportation and lead to construction projects stopping and employees being laid off. In that funding climate, our work to advocate for funding for Safe Routes to School, bicycling and walking will be made even more difficult than it was during the creation of MAP-21.
Let’s hope that Congress is able to resolve the government shutdown soon, and in a way that helps us avert a potentially dark future for transportation funding.