LAREDO NEAR THE WORLD TRADE BRIDGE - Local, state and federal representatives celebrate the redesignation of Loop 20 in Laredo which will allow sections to be added to the Interstate Highway System as they are upgraded. The partially complete interchange with I-35 in the background carries up to 15,000 trucks daily. Significant increases in Federal and State funding for highways is needed to continue building important freight corridors such as I-69 in Texas.

 

US DOT Says More Highway Funding Needed; Chamber, Others Back Increase in Fuels Taxes

 

March 5, 2014

 

Local, state and federal spending on highways is at least $50 billion a year short of meeting minimum needs according to the U.S. Department of Transportation's biannual report to Congress.

 

Transportation Secretary Anthony Foxx has been talking recently about the need for transportation investment focused on America's infrastructure deficit and identifing ways to use innovation and improved planning to stretch transportation dollars as effectively and efficiently as possible.

 

Foxx said the assessment report predicts a dire future for U.S. transportation with crumbling infrastructure and overcrowded highways unless spending is increased.


"We have an infrastructure deficit in this country, and we need to create more jobs," Foxx said. "Improving our roads, bridges, and transit systems will provide help on both fronts."

 

The report on the state of America's transportation infrastructure is the 2013 Status of the Nation's Highways, Bridges and Transit: Conditions and Performance. It confirms what all transportation have known for the past decade -- that more investment is needed to maintain and improve the nation's highway and transit systems.

 

The Department of Transportation's Conditions and Performance report, based on 2010 data, estimates all levels of government would need to spend between $123.7 billion and $145.9 billion per year to both maintain and improve the condition of roads and bridges alone. In 2010, federal, State and local governments combined spent $100.2 billion on this infrastructure, including $11.9 billion in American Recovery and Reinvestment Act dollars.

 

The report also indicates that as much as $24.5 billion is needed per year to improve the condition of transit rail and bus systems. In 2010, total spending to maintain and expand transit systems was $16.5 billion – a spending level also boosted temporarily by Recovery Act dollars.

 

According to the report, travel on pavements with good ride quality rose from 46.4 percent in 2008 to 50.6 percent in 2010. A major factor in this increase was the one-time funding provided under the Recovery Act, much of which was directed toward pavement resurfacing in part because of short spending deadlines. This 4.2 percent increase represents the highest two-year jump ever since the metric was first used in 1995. While the report shows overall pavement and bridge conditions have improved in many areas, the improvements have not been uniform across the national system.

 

The investment estimates for roads and bridges are based on ranges, which is new to the 2013 report. The higher ends are based on state-provided forecasts, which were used in past reports – they average out to annual growth of 1.85 percent per year. The lower ends presume vehicle miles traveled (VMT) will grow at an average annual rate of 1.36 percent per year, which is consistent with the average annual growth in the past 15 years.

 

Casey Dingles of the American Society of Civil Engineers said the DOT report is similar to estimates by the ASCE that an additional $93 billion a year is needed for infrastructure spending.

 

HIGHWAY TRUST FUND CRISIS

Congress is facing a major milestone this year with the Highway Trust Fund set to run dry. The looming insolvency of the Highway Trust Fund could soon force states to shut down or defer highway projects beginning in fiscal 2015. Congress is working on legislation to reauthorize federal transportation funding.


States may see a delay or reduction in reimbursements from the Federal Highway Administration by late summer and total cutoff in fiscal 2015. DOT estimates the Trust Fund will run out of money in August at current expenditure levels.

 

That would mean that TxDOT and other state highway departments might not be reimbursed for projects they have already paid for. An empty Trust Fund will prevent states from being able to obligate any new federal highway funds in fiscal 2015.

 

The current funding bill, Moving Ahead For Progress in the 21st Century or MAP-21, expires on Sept. 30. Congress has prevented the Trust Fund from going broke by transferring a total of $53 billion from the general fund to the Trust Fund since 2008.

 

About 90% of the federal Highway Trust Fund funding comes from federal gasoline and diesel fuel taxes. These funds account for about 40% of the money spent by TxDOT each year on roads and bridges.

 

In testimony before the Texas Legislature last year former TxDOT Executive Director Phil Wilson said, "The federal-aid highway program is becoming more and more unreliable as a means of funding our growing transportation and mobility needs. As Congress considers legislation to reauthorize federal transportation programs beyond 2014, Texas must be clear about its goals. We need clear definitions on the roles of the federal, state and local governments. We need flexibility in transportation finance, procurement and operation of facilities. In addition, we need to be able to develop and implement seamless multimodal solutions that can best achieve our transportation goals."

 

U.S. Chamber of Commerce and groups such as the American Trucking Association and AAA are advocating a federal fuel tax hike to address the shortfall. The Chamber has called for a tax increase of 18.4 cents-per-gallon to replenish the Highway Trust Fund.

 

“The simplest, most straightforward and most effective way to generate enough revenue is by increasing federal gasoline and diesel taxes,” Chamber CEO Thomas Donohue said at a recent Senate hearing, noting the gas tax hasn’t been increased since 1993. “A moderate increase in the gas tax, phased in over time, would provide the necessary funding, preserve the ‘user pays’ principle and provide needed stability.” He added that a federal gasoline tax is the best, most effective temporary solution to the highway funding cliff.

 

Many state and federal lawmakers continue to distance themselves from an increase in gasoline and diesel taxes at the pump. The Congressional Budget Office has said a 10-cent gas tax hike would keep the Trust Fund minimally solvent for the next decade

 

“Let’s start by having some courage and showing some leadership. For once, let’s do what’s right, not what’s politically expedient,” Donohue said.