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article imageGas taxes and crumbling roads — How do we pay for our highways?

By Karen Graham     Feb 23, 2017 in Politics
A conundrum is facing state legislatures across the country - How to pay for critical transportation infrastructure with a declining gas tax revenue? And how can states make up for the decline without penalizing those of us who are leading greener lives?
As was discussed in Digital Journal earlier this month, Transportation infrastructure encompasses everything from roads, railways, airways, waterways, canals and pipelines. It includes terminals such as airports, railway stations, bus stations, warehouses, trucking terminals, refueling depots and seaports.
However, today we want to focus on our roads and highways. Many people might not realize this, but well-maintained roads and highways are necessary to supporting vibrant communities and are critical for long-term economic growth, increasing employment, household income, and our Gross Domestic Product (GDP).
Poor road and highway conditions not only are a threat to economic security but to consumers. Regardless of the vehicle people use, gas-fueled, hybrid or electric car, there is a calculated amount called "vehicle operating costs," that is figured into what a motorist pays annually in maintenance costs riding on bad roads.
Increased vehicle maintenance costs are blamed on deteriorating road conditions.
Increased vehicle maintenance costs are blamed on deteriorating road conditions.
Interiot
According to Trip.net, "The average motorist in the U.S. is losing $523 annually - $112 billion nationally - in additional vehicle operating costs as a result of driving on roads in need of repair. Driving on roads in disrepair increases consumer costs by accelerating vehicle deterioration and depreciation, increasing the frequency of needed maintenance and requiring additional fuel consumption."
The nation's transportation infrastructure report card
According to Trip.net, a National Transportation Research Group, close to one-third of our major urban roads – Interstates, freeways and other arterial routes are in substandard condition and unacceptable due to the "rough" ride motorists endure, while 39 percent of our major urban roads and highways have pavements that are in mediocre or fair condition. Only 28 percent of our roads are considered to be in good condition.
The Trip.net report, issued in November 2016, is not a very good report, especially in a nation that takes great pride in its economic health on the world stage.
Poyholes increase vehicle maintenance costs.
Poyholes increase vehicle maintenance costs.
Infrastructure Report Card
Another group, the American Society of Civil Engineers (ASCE) also assesses American infrastructure, releasing a "report card" every four years. The ASCE is due to release the 2017 report card on March 9, and hopefully, it will be better than 2013's. The 2013 report card gave the U.S. an overall grade point average (GPA) of D+ on all its infrastructure and in particular, a D on roads.
The conundrum between state and federal funding for surface transportation
The other day, Digital Journal reported on the number of states that have already or are planning to assess user fees on hybrids and EVs. The anti-EV movement was discussed at length, however, the need for an increased gasoline tax was also mentioned.
And this is the big problem, in a nutshell - How can states with crummy surface transportation infrastructure, and folks, this includes roads and highways across the nation, pay for maintenance and repairs? In this country, we rely on both the federal government and state governments.
As we have already discussed, states use gasoline taxes, tax-exempt municipal bonds and the like to pay for infrastructure projects. The federal government is a critical source of funding for road and highway repairs. Signed into law in December 2015, the current five-year program, Fixing America’s Surface Transportation Act (FAST Act), provides a modest increase in funds for states but falls far short of the monies needed for any serious improvements.
But let's get real. Saying that consumers are paying for road maintenance and repairs is a joke. It's a myth, says the U.S. Public Interest Research Group Education Fund. Gasoline taxes and EV-user fees don't begin to cover the funds needed evry year to cover road maintenance and repair costs.
According to the report, "Gas taxes and other fees paid by drivers now cover less than half of road construction and maintenance costs nationally – down from more than 70 percent in the 1960s – with the balance coming chiefly from income, sales and property taxes and other levies on general taxpayers."
Traffic conditions in KL
Traffic conditions in KL
Flickr user Michael Loke
On February 8, 2017, the Senate’s Environment and Public Works committee held its first oversight meeting of the 115th Congress. The new Chairman John Barrasso (R-WY) made it very clear where he stood on Trump's campaign proposal to fund the nation's transportation infrastructure using "private investment."
Barrasso said that while public-private funding solutions may be innovative, "public-private partnerships and other approaches to infrastructure investment that depend on a positive revenue stream from a project are not a surface transportation infrastructure solution for rural states.”
The problem with the Fast Act is that while it does provide $305 billion over a five-year period, and that includes an 18 percent increase in funding, it does not adequately provide a solution for the nation’s need for highway and transit improvements and does not include a long-term and sustainable funding source. So Congress will have to thoroughly investigate the problem.
More about Transportation, gas taxes, hybrids and EVs, States, Federal Government
 
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