In March, MTR reported that the Highway Trust Fund (HTF), which is supported by the federal gas tax and which pays for almost all transportation projects across the U.S., is anticipated to run dry by the end of the month.

Unfortunately, with less than a month to go, the situation has changed little since March. In a recent letter to heads of state DOTs, Transportation Secretary Anthony Foxx termed it “dire”, and many local electeds would agree that that is the case.

Though an agreement has not been reached on how to fund the HTF, it is not for lack of proposals from our leaders:

Corporate Tax Reform

President Obama’s GROW AMERICA Act– the Administration’s surface transportation reauthorization proposal—calls for “pro-growth business tax reform” to fund transportation infrastructure. According to the Administration, this will generate $150 billion. Streetsblog has called thisa “progressive and thoughtful” proposal “dead on arrival, even though it had support from the Republican chair of the Ways and Means Committee, Dave Camp.”

Corporate Tax Holiday

Senate Majority Leader Harry Reid (D-NV) proposed a corporate tax holiday to fund the HTF. As The New York Times describes the plan, “American multinationals would escape taxes on 85 percent of their profits currently held in tax-deferred foreign accounts, provided they bring the money to the United States in the next year.”

The Times notes that after creating $20-$30 billion in two years, a corporate tax holiday would “lose money — by one government estimate, a simple tax holiday would lose $96 billion over 10 years — because the low tax rate would be applied to profits that would have been brought home over time anyway.” Senator Reid’s proposal is a bit more complicated than “a simple corporate tax holiday” – his office claims that the proposal is structured to earn $3 billion over 10 years. However, as The Times points out, these kinds of policies encourage “the hoarding of profits in tax-deferred foreign accounts in anticipation of future tax holidays.” The Obama administration has made it clear that it does not support Senator Reid’s plan.

Corporate Inversions Ban

According to the Washington Post, Representative Chris Van Hollen (D-MD) is planning to push a ban of corporate inversions as a means to fund the HTF. The Post reports that this proposal would “raise $20 billion by restricting U.S. multinational corporations from lowering their taxes by moving headquarters abroad.”

Per-Barrel Oil Fee

Representative Peter DeFazio (D-OR) has introduced the Repeal and Rebuild Act, which would tax oil headed to refineries at $6.75 per barrel. This fee would increase over time, and the Act would also index diesel tax to rise with inflation. As T4 explains, “The barrel fee would rise over time, because it would be “double indexed” to match the growth of the U.S. DOT’s Highway Construction Cost Index and to replace revenue lost as CAFE standards require greater fuel efficiency.” In total, the proposal is expected to raise $314 billion over ten years for transportation projects. There is a short-term funding gap, however, which Representative DeFazio suggests could be filled by bonding $89 billion. Streetsblog points out that “Despite the fact that Sen. Barbara Boxer (D-CA) has endorsed a similar idea in the past, DeFazio’s plan doesn’t seem to be going anywhere [. . .].”

Federal Gas Tax

To provide revenue for the HTF, Senators Bob Corker (R-TN) and Chris Murphy (D-CT) propose to increase the federal gas tax (which has been set at 18.4 cents per gallon since 1993) by six cents each year for two years and then index future increases to inflation.

The plan has received considerable support in the press (Washington Post, Los Angeles Times and USA Today), though it has also been criticized in its proposal to continue tax breaks – effectively raising the gas tax, and then losing money by allowing these tax breaks to continue.

President Obama’s position on raising the federal gas tax has come under scrutiny lately, with conflicting reports on what the President’s position may or may not be.

Oil and Gas Drilling

Majority Whip Kevin McCarthy, who will assume Representative Cantor’s position as majority leader on July 31^st, recently noted that he favored funding transportation projects by increasing oil and gas drilling leases.

Or Maybe None of the Above

In the end, however, perhaps none of these proposals will move forward. In early June, House Speaker John Boehner (R-OH), Majority Leader Eric Cantor (R-VA) and Majority Whip Kevin McCarthy (R-CA) proposed an HTF patch by way of reducing Saturday mail delivery and moving funds from the Leaking Underground Storage Tank Trust Fund into the HTF. This proposal has been met with disapproval from Democratic leaders as well as the postal union. Since Majority Leader Cantor’s election loss, the proposal appears to have been put aside in favor of other patch proposals, rather than large-scale funding proposals. Speaker Boehner has since introduced fixes to cover the HTF for nine to 12 months, and Chairman of the Senate Finance Committee Senator Wyden (D-OR), has introduced a slightly more favorable three month patch plan. Senator Boxer (D-CA), whose Environment and Public Works Committee passed the six-year transportation reauthorization bill, the MAP-21 Reauthorization, recently came out in favor of the short-term measure Senator Wyden is pursuing.