Finding Solutions to the Diminished Highway Trust Fund

Posted by on May 12, 2015 in Economy, Transportation | No Comments

This week is Infrastructure Week, and it could not come at a better time because at the end of May MAP-21, the current transportation funding bill, is set to expire.

There’s no question that this is a huge issue because all Americans rely on having a safe and efficient transportation system. At the end of April, our project development and site engineering manager, Darren Hamrick, and I traveled to Washington, D.C., for the American Council of Engineering Companies (ACEC) annual convention and legislative summit to meet with U.S. Senate and House of Representative offices.

We are asking for a sustainable, long-term solution to the revenue challenges facing the Highway Trust Fund to ensure that our highways, bridges and transit systems can support the U.S. economy. Every dollar invested in highway and transit development generates between $4 and 8 billion in economic output. A modern and efficient transportation system is crucial for many reasons, including protecting public safety, promoting the economy and providing mobility. Those in the manufacturing, construction, agricultural, energy and distribution sectors rely heavily on our highways and transit systems.

But in the last decade, there have been nine short-term extensions of highway and transit programs, and there’s been no long-term funding plan since 2009. I like the analogy of preparing your budget at home without knowing what your next paycheck will be. This is essentially what state departments of transportation are dealing with, because they don’t know the extent of funding they may have even in the near future. This makes long-term planning impossible.

I blogged about the significance of this two years ago in the hopes of starting a conversation about transportation funding. In that post, I talked about the heart of the problem, which goes back to the fact that while U.S. infrastructure has deteriorated, spending has declined as cars have become more fuel efficient. As gas prices went up, people tended to travel less, and therefore purchased less gas. This means that collections from state and federal gasoline taxes also declined. The federal gas tax, which is the major source of revenue for the Highway Trust Fund, has not been increased since 1993. I still believe that reforming this gas tax system is a great solution to the broken system of the Highway Trust Fund.

In response to these issues, many states are having to take more financial responsibility for roads and bridges. At least six states have delayed about $2 billion in construction projects. Tennessee, where Sain Associates has our Pulaski office, is one of the states that has delayed projects, and we are already feeling the impact of that. There are many projects not happening that need to be done. Maintenance projects are now the priority as more and more deteriorating bridges and roadways continue needing to be paved and widened.

But what else can be done? ACEC has several ideas that I think are worth considering to find solutions to this problem. Predictable and growing revenue sources like user fees will support infrastructure investments that foster economic growth. They will also lower project costs by fixing roads and bridges before they deteriorate. Here are the possible solutions as suggested by the ACEC:

• Increasing and indexing current user fees
• Sales tax on fuel, freight charges
• Tolling
• Revenues from expanding energy exploration
• Additional bonding and other financing tools
• Repatriation of overseas corporate profits to generate tax dollars that supplement the
Highway Trust Fund

While some or all of these ideas may be good solutions, things aren’t moving fast enough to provide resolution by the soon approaching deadline of May 31, 2015. There are House and Senate committees drafting long-term reauthorization bills, but the most likely scenario is that we will see yet another short-term extension.

During Infrastructure Week, there will be many high-profile events, media coverage, focused advocacy and other efforts around the country to build momentum for rebuilding American infrastructure. We hope that these issues will be addressed head-on this week to find innovative solutions, technologies, policies and investments for our aging infrastructure.

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