Libby Taylor, an accountant at Sain, recently celebrated [...]
Alabama’s highway system includes 11,000 centerline miles of which 905 miles are interstate and 5,745 bridges. In order to expand and keep these thousands of miles safe and operational, transportation funding is crucial.
But our system for funding transportation infrastructure in the U.S. and in Alabama is broken. I think a lot of the problem has to do with inaccurate public perception and the lack of leadership from our politicians.
Much of the public seems to think that as the price of gas goes up, we get more tax money for road improvements and infrastructure. In fact, it is the complete opposite.
Gas taxes aren’t a percentage but involve a predetermined amount of cents per gallon. When the price of gas goes up, people tend to drive less and thus consume less gasoline, which means less money coming in through the gas tax. If the tax was a percentage, it would be a somewhat better situation.
This funding system has not changed for many years. In fact, the last state gas tax increase in Alabama was 5 cents in 1992. We get a flat amount or less from gas taxes, but the cost of transportation infrastructure improvements continues to rise. Construction costs are at least two times more than they were 20 years ago.
The funding is not adequate for meeting the infrastructure needs of our transportation system. Raising the state’s gas tax is one way to start correcting this problem, and I think there are a lot of advantages to this approach. It would help fund improvements to infrastructure and it would create a lot of jobs.
According to this article, a new report by the American Road & Transportation Builders Association’s (ARTBA) shows the money invested in transportation construction generates $354 billion in annual U.S. economic activity — the equivalent of 2.25 percent of the Gross Domestic Product (GDP).
A recent report released by the U.S. Department of Commerce and presented by the Alabama Department of Transportation (ALDOT) says that for every billion dollars invested in transportation infrastructure, 30,000 jobs are created.
But the necessary investments aren’t being made. In the 2013 ASCE Report Card for American’s Infrastructure, the nation scored a D+. This below average score demonstrates that there is a lot of improvement that needs to be done on the current condition of our nation’s infrastructure. When investments are made and projects move forward, the grades rise – it’s as simple as that.
ALDOT recently reviewed their 5 year plan and really tried to make it more fiscally balanced. Alabama and many other DOTs are putting much of the funding they do have toward system preservation/maintenance rather than building new roads.
To combat these issues, some states are raising their gas tax to boost transportation revenues. Alabama hasn’t done that yet, and there don’t seem to be a lot of people on the federal or state level who want to raise taxes for infrastructure.
Another problem is that in Alabama, ALDOT doesn’t even get all of the gas tax we currently collect. It’s debatable and people have different opinions on this, but some of the funding raised from gas taxes is actually going to the department of public safety, the court system, state park maintenance and other programs.
And yet another issue is that as there continues to be more and more emphasis in the auto industry on fuel efficiency, people are buying less gas. We’re all for that, but with the way our gas tax system is set up, it will mean less funding for transportation infrastructure.
A lot of people have no clue about how this works. They see gas go up to $4 gallon and think there will be more money for transportation infrastructure. But that’s not the case.
These days, when any kind of tax increase is mentioned it is scrutinized very carefully because of the economy. When it comes to getting changes made, it’s important to educate the public and help people understand these issues.
We hope to help foster a discussion about transportation funding and explore options about how the system can be improved. We would love for you to comment and let us know what your thoughts are.
Jim Meads, P.E., President/CEO of Sain Associates, has worked as a civil engineer in the transportation industry for almost 30 years. He has participated in projects throughout the Eastern U.S. and is the Transportation Committee Chair of ACEC Alabama.
Sain Associates, Inc., is headquartered in Birmingham, Alabama, with offices in Cullman, Alabama, Pulaski, Tennessee and Mandeville, Louisiana. Sain is a site engineering, traffic/transportation engineering and planning and land surveying firm with experience in more than thirty states.