American roads are crumbling. You know this. You might even know crappy infrastructure cost an American family of four more than $3,000 a year. Or that, even after a 2015 transportation bill injected a lifesaving $70 billion into the federal highway fund, the Congressional Budget Office a projects an $8 billion funding gap when the legislation runs out in 2021.
Help is on the way, you say! President Donald Trump will soon reveal his hotly anticipated $1 trillion plan to fix everything, the one even Democrats could support. Well, sorry. First off, $1 trillion will barely cover what the Department of Transportation estimates is a $836 billion backlog in highway investment needs. It won't come close, because the bill will likely address airports, water pipes, railroads, and more, along with the stuff you drive on. Second, a one-time cash injection doesn't guarantee money in the long run.
More to the point, a real fix has to go after the real problem: The way the US has funded road construction and repairs for decades just doesn't work anymore. It hasn't worked in years. Someone needs to figure out how to move beyond writing occasional checks and get serious about long-term funding solutions. Fortunately, smart people have been thinking about this stuff years. Here are a few options.
Since its birth in the mid-50s, the money for construction and maintenance on the federal highway system has come from the Highway Trust Fund, which is funded by the gas and diesel taxes you pay at the pump. Trouble is, Congress hasn't raised the gas tax since 1993, even as inflation has done its thing, the American population has ballooned 25 percent, average fuel efficiency in new passengers cars has jumped from 28 miles per gallon to 36, and a sluggish recession economy pushed drivers out of cars and away from gas. So the Highway Trust has faced big spending gaps---it's taking in way less in taxes than it's spending.
After years of OK-ing emergency America's cash transfusions from the Treasury, Congress passed a 2015 bill to stabilize funding over the next five years. It dedicated $95 million to studying alternative sources. And it kicked the can just a bit farther down the road.
So, here's a thought: raise the gas tax to close funding gaps in the short term, fill the coffers for now, and make everyone a little bit happier. Maybe even tie it to inflation, so the money keeps pouring in. Just a couple of problems. First: This may not solve the big picture issue, which is long-term funding. If vehicles continue to get more fuel efficient and electric cars slowly, slowly catch on with the American public, the country isn’t going to be using as much gas, which means less money to fix stuff.
The second issue is that---perhaps you’ve heard?---Congress has a very hard time passing tax increases. It’s why the federal gas tax has been stuck in the 90s: No one’s willing to stake their political future on something that gets voters angry.
Now, there appears to be some local support for gas tax hikes, with even a few red states (Nebraska, Georgia, and North Carolina among them) voting to pay more per gallon. The California legislature voted to raise its tax by 12 cents per gallon just last week---bringing it to 50 cents, the second highest in the nation.
“You can make the case to local voters that the money is going to stay here in your community,” says Jim Tymon, the director of policy and management with the American Association of State Highway and Transportation Officials. Sending money to Washington, however, for the roads those politicians have to take care of? Harder sell.
After years of wheel spinning, the 2015 transportation bill finally funded a close look at a road usage tax, where people pay per mile they drive instead of per gallon they burn. Just looking at alternatives is a big, heartening breakthrough, says Liisa Ecola, a senior policy analyst with the RAND Corporation who focuses on transportation issues. “I don’t feel as frustrated as I did a couple years ago,” she says. This option seems the most likely replacement for a gas tax, but boy, does it face some hurdles.
The pay-per-mile strategy could raise as much as $246 billion by 2020, according to the American Association of State Highway and Transportation Officials. And states are interested. California just wrapped up the largest ever American pilot study of a road usage charge last month, a nine-month, 5,000-vehicle research project. Full results will come out in July, but participant feedback was pretty positive, albeit among self-selecting volunteers: 90 percent said they would get involved with another road charge program, three-quarters thought the road charge was more fair than a gas tax. Nearly two-thirds were “very satisfied” with road charging as a concept.
But to charge you for how much road you’re using, the feds will have to sort of follow you around---a good way to make plenty of Americans uncomfortable. For the California pilot, 60 percent of participants opted for a plug-in device that reported miles directly to the state government; another 18 percent tallied up mileage based on users’ smartphone GPS. How will the government protect, not to mention store, all this travel data? It’s a big question mark.
If you, private American citizen, don’t want to actually pay to fund infrastructure, there’s good news and bad news. The good is that there is money in roads, so private companies have hopped to invest in them. Private owners of tolling facilities brought in $2.4 million per toll road mile in 2014. There are also plenty of roads left to capitalize, about 99.4 percent of the more than 1 million miles of public road that receive federal highway dollars. “A major expansion of tolling might reduce the need for federal expenditures on roads,” writes the non-partisan Congressional Research Service.
Except, many roads that get so little traffic that they’re no good for making moolah. “It may work in Florida and may not work in Alaska,” says Tymon. And those roads still need fixing. Even on heavily trafficked roads, tolls need to be positioned so they’re almost impossible for savvy drivers to evade. That takes careful planning.
Finding transportation revenue sources for road funding is a pain, so maybe the best solution is to lift money from elsewhere in the federal government. If tax reform is really on the table this summer, lawmakers might have a chance to shovel some dollars over from corporate taxes, like an offshore repatriation scheme.
Downside: Many in the transportation world would really like to see funding money linked to the people who are actually using it the most. "We do like that direct connection between the folks who are actually using the facility and those who are actually paying for its use," says Tymon.
Or, maybe everybody just agrees to go all-in on hyperloop and flying cars.
