Infrastructure Funding Looks Dead Until at Least 2020

July 08, 2019 by Alan Adler, @AlanAdler

Congress is unlikely to approve an infrastructure plan to repair the nation’s highways and bridges this year. So, the trucking industry is focusing on federal highway legislation in 2020.

Discord between House Democrats and President Trump chilled prospects for a $2 trillion spending program the two sides announced after meeting in late April.

“We still have hope. But the only thing we feel comfortable predicting is continued unpredictability,” said Sean McNally, an American Trucking Associations spokesman.

TRUST FUND TROUBLES

The ATA is pushing for higher federal fuel taxes. It proposes a 20-cent per gallon increase, or five cents a year over four years. That would raise $340 billion for the Highway Trust Fund. The trust doles out money to states for maintenance and repairs.

The most cost-effective way to shore up the trust fund is raising fuel taxes, said Chris Spear, ATA president. Federal gasoline and diesel taxes per gallon have not changed since 1993.

The trust fund dates to 1956. The Eisenhower Administration created it to maintain and repair the interstate highway system.

The trust fund is running out of money because the federal tax on gasoline has remained constant at 18.4 cents per gallon – 24.4 cents per gallon for diesel fuel – since 1993. Inflation has climbed more than 65 percent in the last 25 years, Spear said.

INFRASTRUCTURE CRUMBLING

Overall, 47,052 of the nation’s 616,087 bridges are structurally deficient, according to the American Road and Transportation Builders Association.

It would take $45 billion to $70 billion a year for the next 20 years to modernize only  highway surfaces. That estimate is from the Transportation Research Board.

The poor condition of many interstates delays truckers. Congestion from slowdowns and traffic bottlenecks costs the industry $74.5 billion in lost efficiency annually, the American Transportation Research Institute says.

Trump proposed a $1.5 trillion infrastructure plan during his 2016 campaign. He mentioned it briefly in his State of the Union address earlier this year. Nothing happened until the White House and Democratic congressional leaders announced the $2 trillion plan after an April 30 meeting. Another meeting three weeks later broke up over unrelated issues.

“We believe there is still ample opportunity for the President to step up and demonstrate real leadership on this issue,” McNally said.

FUNDING ALTERNATIVES

Others doubt that will happen.

“We have been skeptical since the beginning,” Marc Scribner, senior fellow at the Competitive Enterprise Institute, told Trucks.com.

The non-profit think tank favors user fees and allowing states to collect tolls to pay for infrastructure improvements. It is focusing on surface transportation legislation to replace the current program from 2015.

“It’s the only vehicle that has something approaching a deadline for action,” Scribner said. If nothing happens this year, getting anything done in the 2020 election year is unlikely, he said.

Many states are raising their own money for road projects. Thirty states raised fuel taxes between 2013 and 2019, according to the Institute on Taxation and Economic Policy.

FINDING WORKERS

A massive federal infrastructure program requires workers, said Robert Poole, transportation policy director at the Searle Freedom Trust. Unemployment is at a 50-year low, making finding construction workers a challenge.

“Pumping hundreds of billions of dollars into a full-employment economy is unlikely to expand employment. But it likely would increase wages significantly,” Poole said. That would raise project costs and create a shortage of workers in other industries.

Trucks.com April 23, 2019
An increase in the fuel-user fee would equitably – and economically – fund needed infrastructure repairs.

Leave a Comment

Your email address will not be published.

×

Subscribe to our mailing lists

Choose one or more topics:
x