For over 25 years, the Highway Trust Fund, the source of money for Federal infrastructure projects, has been losing its purchasing power. That’s because the federal fuel tax, which is not indexed to inflation, has not been raised since 1993. Yet, while federal funding remains stagnant, construction costs have increased 125% since 2003.
Rep. Earl Blumenauer (D-OR), a longtime member of the House Ways and Means Committee, says it is “unacceptable” that “we are paying for our 2019 infrastructure needs with 1993 dollars.”
Instead of waiting for Washington, states have taken it upon themselves to fund their own infrastructure projects. In the U.S., state governments do bear much of the responsibility for the transportation systems within their borders; states own and maintain transportation assets, plan and build new infrastructure, manage billions of Federal and state dollars each year, and collaborate with and support local governments. In recent years however, states have faced greater challenges in meeting these obligations than ever before.
Today, states use over 54 different funding mechanisms in an attempt to pay for their crumbling infrastructure, including: vehicle registration fee increases; alternative fuel vehicle registration fees; road use charges; congestion pricing; mass transit taxes; and rental car sales taxes.
Even with these innovative alternative-funding mechanisms, motor fuel taxes – such as California’s landmark SB 1 legislation – still remain the most reliable transportation investment method. Since 2013, 31 states have enacted legislation to increase state gas taxes to help pay for infrastructure needs.
California’s SB 1, the Road Repair and Accountability Act of 2017, invests $5.4 billion annually over the next decade to rebuild California’s transportation system by fixing streets, freeways and bridges, and targeting funds toward transit and congested trade and commute corridor improvements.
However, passing a gas tax increase is not an easy task, and even states that have done it successfully, such as California, need more resources from the Federal Government to pay for the projects that will keep our infrastructure moving forward, says Rep. Blumenauer.
In May 2019, Rep. Blumenauer introduced the Rebuild America Act of 2019, which would incrementally increase the federal tax on gasoline and diesel fuel by five cents a year over five years, index those taxes to inflation, and “establish Congressional intention” to replace those taxes with “a more equitable, stable source of funding” within 10 years.
Rep. Blumenauer added that the United States “faces the largest infrastructure funding gap in the world,” with surface transportation having the greatest need, which the American Society of Civil Engineers estimates needs more than $1.1 trillion of investment by 2025. Meanwhile, a 25-cent increase in the federal fuel – which would cost the average driver less than $3 a week – would contribute nearly $400 billion toward upgrading roads, bridges, and transit systems, he explained.
Source: Various
