The U.S. Highway Trust Fund is running low on cash
The federal Highway Trust Fund runs out of money at the end of the month. It’s been paid for by gas taxes since 1993, but raising taxes is a tough political sell, and right now Congress can’t agree on what to do about it.
Meanwhile, Jersey City, NJ is in the middle of a construction boom.
Those two things may seem unrelated, but Jersey City Mayor Steven Fulop says if the fund runs out of money, it could put the kibosh on the growth.
And to understand, it’s important to take a look back at the recent history of Jersey City.
“If you go back two decades, this was an example of urban decay,” Fulop says. “Most of downtown was rail yards. And if you go back twenty some odd years, they were giving these brownstones away. This was actually the most financially and economically challenged portion of the city that we’re standing in right now.”
Now, construction cranes tower above the city in almost every direction.
“We’re going to overtake Newark as the largest city in New Jersey, and I can comfortably say that the 20 largest buildings in the state will be in Jersey City in the next four years,” Fulop says. “We’re building 54 stories, 60 stories, 70 stories, another 55 story, I mean I could go on and on. And if you walk down here you’ll see the cranes, and activity, and people working … those are generally concentrated around mass transportation.”
Building around mass transit has been a cornerstone for Jersey City. And a good portion of the money that goes towards mass transit in the state comes from the Highway Trust Fund. In New Jersey, the average person pays about $600 per year in those taxes.
Fulop says if that money were to dry up, then contractors, developers and others in the building industry would lose faith in future funding and slow down – or stop – ongoing projects.
“And once they stop, they’re hard to get back started,” Fulop says.
The Highway Trust Fund was created in 1956. It’s been funded by gas taxes, but the tax isn’t tied to inflation, so it’s gotten less bang for its buck since the 90s. And like many things in Congress, the trust fund is a fight. Conservatives say the program is bloated, and needs to be reformed. But Mayor Fulop, a Democrat, doesn’t see it that way.
“At the end of the day, it’s a partnership between federal, state and local,” Fulop says. “And anybody who says that government doesn’t have a role in building infrastructure is an absolute moron. I don’t know how else to say it.”
Right now, there are a couple plans to pay into the fund lasting until next Spring, but no long term solutions have been agreed upon.
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