Transportation Infrastructure Funding Bill Under Construction

Federal investment in the nation’s surface transportation network has been accomplished with 32 short term measures over the last 6 years, and funding levels have long been inadequate to keep up with ongoing maintenance requirements, draw down the backlog of deferred maintenance, or position the nation for economic growth and the demands of an expanding and increasingly urban population.

The most recent short-term authorization expires this May, and states are already postponing or cancelling contracts they normally let to private construction industry for the spring construction season.  A robust solution is needed, and it is needed as quickly as possible. Several funding proposals are being actively discussed among policymakers, some more actively than others, and it seems that a package of solutions is needed to truly address the infrastructure investment required to sustainably grow the nation’s economy.

A number of proposals would raise the Federal fuels tax (or user fee if you please) – a 12 to 15 cent increase would result in providing the same value it did 22 years ago, when it was last raised. Modest measures can be taken to avoid increasing the tax burden on our most vulnerable citizens. Such an increase would provide enough funding to stop adding to the maintenance backlog that has grown from years of under-investment. Corporate tax reform proposals being discussed would result in one-time repatriation revenues which many have proposed be invested in infrastructure. This could be applied toward a one-time effort to eliminate the backlog of deferred maintenance and to begin building for the nation’s 21st century economic and population growth. Increasing royalties on domestic energy producers who have been reserving and using federal lands has also been discussed. These funds could help enable the transportation network to once again spur future economic growth.  

The trucking industry alone has estimated that interstate congestion is costing them (and as a result, the American public) $9.2 billion per year, with 89% of the cost resulting from just 12% of the miles, mostly in large and small urban areas. Expanding investment in transit systems would provide the reliable, convenient service needed to support the existing trend toward increased transit use thereby reducing auto traffic and enabling less expensive goods delivery.

In the upcoming long-term authorization bill, policymakers are also considering including incentives for states to pilot and expand use of alternative funding mechanisms to ultimately replace the federal fuels tax. Prominent among these alternatives is a vehicle miles travelled fee (Oregon is expanding its pilot already). Other alternatives that have been raised include a national sales tax on discretionary goods, which would reflect use of the transportation network to ship goods, or a carbon fee.

We need to move toward real solutions, with urgency – the nation’s confidence, economy, and well-being depend on it.