President Obama signed a three-month extension of federal highway funding on July 31, less than 24 hours before the funds were set to run out. The short-term extension of the Highway Trust Fund (HTF), which funds safety, highway, transit and other transportation-related programs, is the 34th short-term, stopgap bill in the past six years.
Despite collaboration between congressional transportation, tax and public works committees, the U.S. Senate and U.S. House of Representatives were unable to come to an agreement on how to fund a multi-year highway bill. In a first-step toward a potential long-term agreement, the Senate passed a three-year bill to pay for infrastructure spending; however, the House did not consider the bill before leaving town for August recess. The Senate is hopeful their passed legislation will lay the ground work for an agreement on a long-term proposal between both chambers.
About 50% of funding on infrastructure projects, including roads, bridges and other non-highway projects, comes from the federal government’s HTF, which is paid for by the 18.4 cents-per-gallon federal gas tax. The federal government then allocates money from the HTF to states based on size, highway usage and necessity while states fund the additional 50%.