U.S. surface transportation funding

Three years into the five-year Fixing America’s Surface Transportation Act, elected officials are grappling with how the nation will fund its aging infrastructure in the future.

The FAST Act allocates $305 billion to infrastructure, but it doesn’t fix the insolvent Highway Trust Fund. The HTF is powered by a federal fuels tax, 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel.

Gasoline tax collections have failed to keep up with infrastructure expenditures, in part, because there has been no increase in the gas tax in nearly 25 years. (Try paying today’s bills and expenses with your paycheck from 1993. Chances are, even covering your basic expenses would be a challenge.) Several states however, have raised, or are considering raising their state gasoline tax to help make up funding deficits.

While these initiatives help, we need a significant commitment to a long-term funding plan at the federal level. The FAST Act served to buy us time, essentially through 2020, to formulate a sustainable highway funding strategy for the country. It’s critical that our leaders unite to pass a bill that has the right blend of straight-ahead funding, smart leveraging, private investment and other tactics to provide a financial platform for creating our 21st century transportation system. Once federal funding is in place, it can bolster recent initiatives across the U.S. that direct hundreds of billions in funding — from bonds, sales taxes, fuel taxes and fees — to restore or expand local or statewide transportation assets.

Further thoughts on federal infrastructure funding and the HTF can be found in this 2018 HNTB Viewpoint, and HNTB's perspective on the importance of efficient investement can be found in this additional 2018 Viewpoint. Both are authored by John Barton, PE, HNTB National DOT market sector leader and senior vice president.

Reversing the effects of decades of underinvestment requires transformative action and states aren’t waiting for the federal government as challenges continue to mount on roadways, rails and bridges.

Are P3s the answer?
Perhaps. The Administration's proposed $200 billion, 10-year infrastructure program may include investments through public-private partnerships. But, most suitable P3 projects must have a price tag of $1 billion or more to appeal to the profit-driven private sector, so P3s alone cannot shoulder the burden of filling the funding gap. Private sector participation is an answer, but it is not the only answer.

So, what is the answer?
America should diversify its transportation infrastructure funding portfolio. The answer lies in identifying and dedicating public funding sources on the local, state and federal levels, raising the gas tax to ensure a healthier HTF, implementing tolling and P3s in places where appropriate, and approving sales tax increases or transportation tax measures in others.

It's also important to note that most states prefer flexibility in the use of funding allocations, rather than grant programs. If grant programs are enacted, it’s better to establish a timeline for preparing and submitting proposals that should not be extended or lengthened, to give states a fair chance at funding.

And, we must invest those dollars strategically if we are to achieve the gains in jobs, economic growth, global competitiveness and quality of life that Americans deserve:
 
  • Prioritize projects transparently: Projects with greatest potential benefit should go first.
  • Deliver projects more efficiently: Use alternative delivery methods, such as design-build.
  • Innovate before we construct: Seek affordable alternatives that may achieve the same result as new construction.
  • Advance user-centered mobility: Use transportation technology to erase the gaps between modes.

Sufficient investment not only will promote safety and security, but it can advance our transportation network to match the fast pace of technological development and increasing global competitiveness.

Selected HNTB thought leadership
 
Selected media
 
Photo: Capital Beltway/I-495 HOT lanes in Virginia