In August 2014, President Obama signed a $10.8 billion package to fund federal highway and transit programs through May 31, 2015. This year, Congress must enact a new authorization, extend the existing one again or allow the nation's surface transportation programs to expire.
In order to meet increased demand for transportation infrastructure, the 114th Congress is likely to examine a number of possible transportation funding solutions, including: an increase in existing motor fuels taxes; private financing through public-private partnerships (P3s); Transportation Infrastructure Finance and Innovation Act (TIFIA) financing; and toll financing. Long-term, Congress is expected to consider new transportation funding mechanisms involving distance-based or mileage-based user fees (MBUFs). In addition, Congress will need to review and renew existing transportation funding mechanisms such as tax-exempt bonds, tolling and TIFIA credit assistance program.
This primer summarizes the surface transportation funding options available to Congress and examines some of their pros and cons.