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10 Myths About the Highway Trust Fund
BY BECKY MOYLAN, American Society of Civil Engineers
1. The Highway Trust Fund Is Running Out of Money Because We Waste Money
Thanks to ISTEA, first passed in 1991, transportation projects are planned, developed, and executed efficiently while utilizing innovation.
Grades in the Report Card prove that when we invest in infrastructure, we see results. The 2013 Report Card saw improvement in six infrastructure sectors that benefited from private investment, targeted efforts from cities and states, or a one-time federal funding boost. Communities oftentimes know best where money will be best utilized, and the HTF allows many transportation project decisions to be made on the state and local levels.
2. The Federal Government Should Get Out of the Infrastructure Business and Let States Make Their Own Decisions
The HTF is designed to assist states in paying for transportation projects for many reasons, and it is a system that has served the country well. The cost of transportation projects is a huge expense and states do not have the funding to go this alone.
The U.S. Constitution’s Commerce Clause grants Congress the power to invest and maintain roads, bridges, and transit. From the Interstate Highway System to our ever-expanding electrical grid, infrastructure is a national issue that must be addressed through a national vision.
3. The Current Gas Tax Rate is Perfect and Does Not Need to Be Changed
According to the Congressional Budget Office, to prevent insolvency of the HTF in 2015, federal surface transportation investment would have to be cut by 92 percent that year.
The gas tax is not tied to inflation and hasn’t been raised in more than 20 years. We are trying to run a 2014 transportation system on 1993 dollars. This is obviously an untenable formula that must be addressed.
4. We Can Just Raise Enough Revenue Through Tolls and Public-Private Partnerships
Tolls and P3s can be successful sources of revenue, and are a part of the overall solution, but neither is a silver bullet in finding a sustainable long-term funding source. Historically, federal highway funding has accounted for approximately 45 percent of state DOTs spending on highway and bridge capital improvements. Quite simply, the federal government must lead on funding.
For 2015-2024, the cumulative shortfall in the HTF will be over $170 billion. While as House T&I Chairman Bill Shuster (R-PA) has said “the private sector continues to show significant growing interest in investing in infrastructure,” they cannot be a substitute for federal investment and leadership. P3s and tolls are pieces of the puzzle, and when partnered with a sustainable revenue stream, can help ensure reliable revenue for the HTF.
5. We Don’t Have Enough Revenue Because People Are Driving Less
Over the past two years, vehicle miles traveled (VMT) actually increased; in 2012 by 0.3 percent and in 2013 by 0.6 percent. While there was a downturn in vehicle miles traveled after 2007, this decrease coincided with the recession. As the economy continues to improve, more employees will return to work, increasing VMT. Furthermore, the U.S. population grows each year by just under three million people, and the number of licensed drivers also grows by two million people. It is estimated that this trend will lead to an increase of 25 billion VMT annually.
6. Raising the Gas Tax Would Hurt Economic Growth
In our Failure to Act economic studies, ASCE explored the consequences of continued underinvestment in infrastructure. Ultimately, the studies concluded that our deteriorating infrastructure will cost the American economy more than 867,000 jobs and suppress the growth of our GDP by $897 billion by 2020. Per household, the cost of deficient surface transportation will cost $1,060 per year.
7. The Gas Tax Isn’t Raising Enough Money Because Cars are More Fuel Efficient
Between 2012 and 2022, gas tax revenues will decrease by less than 1 percent, ($2.5 billion) the CBO estimates. The issue is not really fuel efficiency, but rather that the gas tax has not been increased since 1993. In the 20 years since, it has lost more than a third of its value because of inflation. Fuel efficiency will become more of a problem as fuel efficiency technology continues to advance, but in the near term it is less of a problem.
8. We Can Afford to Do a Short-Term Bill and Maintain the Status Quo
MAP-21’s funding will run out as the HTF becomes insolvent weeks, or more likely months, before the law intended the money to end. States, planners, and engineers cannot plan needed infrastructure projects without committed funding. As the impending insolvency demonstrates, there is currently not enough revenue to support the system.
Furthermore, the 2013 Report Card for America’s Infrastructure graded our nation’s infrastructure at a D+. Clearly that status quo is not enough in helping the U.S. build a 21st century infrastructure capable of competing on a global scale.
9. Congress Cannot Get Big Things Done Because Everything Turns into a Partisan Fight
In the words of Senate Minority Leader Mitch McConnell, “Infrastructure spending is popular on both sides.” In the past year transportation legislation and funding ideas have come from both Democrats and Republicans. Notably, Rep. John Delaney’s (D-MD) Infrastructure Bank bill was proposed with an equal number of Democratic and Republican co-sponsors. Sen. Vitter (R-LA) and Sen. Boxer (D-CA) have worked closely to craft a six-year highway bill, which passed out of committee with a unanimous bipartisan vote. And Rep. Dave Camp (R-MI) proposed a tax reform bill which included $126 billion for transportation projects. Efforts from both sides of the aisle . . . prove that there is support in both parties.
10. We Don’t Have the Money to Fix the Problem
The economic consequences of not being able to pay contractors and employees will send shockwaves throughout our economy.
The notion that we cannot find a long-term, sustainable revenue source is false. The costs of inaction and allowing the HTF to cease funding repairs and maintenance are immense.
Americans are already paying for our nation’s D+ infrastructure. Congested roads cost an estimated $101 billion per year in wasted time and fuel, and driving on roads in need of repair costs motorists an average of $324 per year in vehicle repair and operating costs. We can either invest now or pay a whole lot more in the years ahead. The lesson is clear: We can’t afford not to act.
ASCE is a professional society that represents more than 145,000 members of the civil engineering profession worldwide. It issues the Report Card for America’s Infrastructure once every four years. Click here for details.
©2014. All rights reserved. Excerpted for length with permission.
This “Commentary” section features different points of view from various sources to enhance readers’ broad awareness of themes and views that affect public transportation.