SOLVING THE FUNDING CRISIS
Finance to improve and build roads across the USA is dwindling but the need is only
increasing. There are a number of options that could help solve the problem
American motorists drove 3,225
trillion miles in 2018, an increase
of 12.2 billion miles over the previous
year, refl ecting a robust economy.
Roads and bridges are the life blood
of the American economy, but crumbling
infrastructure presents a debilitating
roadblock to future productivity. Nearly
20% of major highways are in a poor or
mediocre state and 7% of US bridges are
classed as structurally defi cient. Congestion
costs drivers US$160 billion per year. For the
average motorist, traffi c adds 42 hours to
their drive time and results in 19 gallons
of wasted gas a year. Meanwhile, growing
backlogs for rehabilitation pose a signifi cant
risk to public safety.
Chronic underfunding and deferred
maintenance means the US requires an
estimated US$836 billion in improvements.
Industry and government may disagree on
best practices, but it is clear the US must
embrace sustainable transportation funding
sources. Solutions range from traditional
tolling practices to highly optimised
systems capable of regulating traffi c
in and out of the most congested cities.
POLITICAL WILL
The good news is that investment in the
nation’s infrastructure is among a handful
of priorities leaders in Congress agree on. In
July, Senators John Barrasso (R-WY) and
Tom Carper (D-DE) reaffi rmed bipartisan
commitment to remedying American roads
and bridges. America’s Transportation
Infrastructure Act (ATIA) is the largest
funding bill proposed for highway
reauthorization and authorizes US$287
billion over fi ve years for state-led
transportation initiatives.
But this Act is still a long way from
solving the funding crisis. Though the size
of America’s fl eet and total Vehicle Miles
Travelled (VMT) are expected to increase
over time, the sale of gasoline will continue
to decrease as demand for cheaper, more
fuel-effi cient cars and electric vehicles
increases. A fuel tax increase may
TOLLTRANS 2020
60 www.TrafficTechnologyToday.com
moderately boost transportation funds,
but is unsustainable over time.
HOW US FUNDING WORKS
Investments in transportation in the US
are funded from three primary sources:
(a) State revenues – state gas excise tax,
licensing and registration, motor vehicle
sales tax; (b) Federal revenues – highway
trust fund, federal gas tax, appropriations;
(c) State/Federal general funds – some states
will enact special legislation to allocate
other revenue sources or portions of them
to support transportation needs, or a small
fraction of funds may be allocated from
a state’s general revenue fund. In Indiana,
for example, 1% of the state’s sales tax is
applied to the state Highway Trust fund.
States have historically relied on local
gas taxes to sustain their transportation
funds. Fuel taxes set by state legislatures
refl ect fi xed prices per gallon. Each gallon
of fuel carries an additional 18.4 cents
levied on behalf of the federal government
and deposited into the Highway Trust
Fund. The federal gas tax, nevertheless,
has not increased since 1993 and is worth
40% less than it was 25 years ago. Without
additional revenue, the trust fund will
become insolvent by 2021, according to
the Congressional Budget Offi ce.
According to the White House Council
of Economic Advisors, a higher gas tax is
merely a stopgap. In 2016, federal outlays
eclipsed total transportation funds by
US$10 billion. Some states are already
embracing private sector innovation to
fi nance transportation and, despite claims
from the US Chamber of Commerce,
technology is changing how the
transportation system is used, and the
way we pay for it must evolve en suite.
FEDERAL APPROPRIATIONS
Current US law on transportation fi nance
authorizes US$300 billion through the
Fixing America’s Surface Transportation
(FAST) Act for federal highways, highway
safety, transit, and passenger rail
programme until the end of 2020. Congress
faces mounting political and economic
pressure to pass a new federal spending bill
that, not only addresses existing concerns,
but sets the country on a path towards a
sustainable transportation future.
Estimates from the Government
Accountability Offi ce indicate The Highway
Trust fund may already be underfunded to
the tune of some US$100 million. Congress
has, in the past, allocated fund transfers
from the General Budget into the Highway
Trust fund to cover such defi cits. Congress
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by Jason Wall, A-to-Be, Portugal
/www.TrafficTechnologyToday.com