Update on The State Infrastructure

Infrastructure in the U.S. has become an issue that has not gotten the attention it should be getting, and as a result some infrastructure in the U.S. is becoming ineffective. The Highway Trust Fund is in danger of running out of money, as there is major concern about the gap between revenue and spending. Some major issues ineffective infrastructure pose include failure of levees, which becomes an issue of public safety, as well as increased congestion causing traffic delays, which in turn affects the economy.  

The Federal Motor Fuels Tax, the source of revenue for the Highway Trust Fund, has not been increased since 1993. Issues in infrastructure are likely to be prevalent when the U.S. government is using 1993 dollars to solve modern day problems. The average family already pays an extra 9 dollars a day because of ineffective infrastructure issues. This includes things like car repairs, congestion, and the extra cost for the movement of goods as a result of things costing more to be shipped. Given the fact Americans already are paying for the tax, it would make sense to pay a little more so they can actually get something out of it, and avoid the unnecessary money they are spending because of ineffective infrastructure. There also should not be the concern that the tax money will be misappropriated because the money goes straight into the trust, and is only used to address infrastructure issues. In addition, some commerce associations including trucking associations say they would not mind paying more in motor fuels tax to address the issues.

However, one of the issues of the gas tax is that there are many motorists with hybrids and electric vehicles that do not go to the pump. As a result, Congress is looking at some pilot programs that have been used in states, to assess new kinds of taxes that would be fair to those that drive different kinds of vehicles. One proposal includes assessing a yearly fee to electric vehicle owners so they also have to pay a tax even though they do not go to the pump.

Advocacy groups have used several strategies to try and raise attention to the issues. They have been doing things like organizing local town halls and seeing what the local people want, using media to raise awareness, and talking directly with lawmakers. Advocacy groups want people to speak with their members of Congress about what good some of the infrastructure projects are doing, as well as talking about the needs, and how ineffective infrastructure affects their lives. The Dominos Pizza pothole campaign is a great example of how media is talking about infrastructure issues, and showing that these issues are a reality.

It is important to look at other nations in what they are doing, and how much they are spending on infrastructure as a percentage of GDP. The U.S. is behind many countries in terms of spending as a percentage of GDP. And generally speaking a dollar spent on infrastructure multiplies in its affect on the economy, so there are several benefits for a country when spending money on infrastructure.

The major roadblock for infrastructure improvements right now is the divide in Congress, and the major gridlock it is causing. Lawmakers constantly worry about the next election and many believe that the possibility of raising a tax will upset voters and hurt their chances at re-election. However, lawmakers get voted in to do something, and bring change and improvements when they are needed. So it is not necessarily the case that increasing a tax will upset taxpayers, and if enough members of Congress see this, infrastructure improvements could happen.  

31 states have already raised their motor fuels tax, and it is possible that states are doing this to show that it is time the federal government steps in and partners with state governments to raise the federal tax. $20 billion a year for infrastructure is not a big ask, given the issues and needs for improvements. Next year the current surface transportation bill will expire, and that would result in a massive shortfall in funding. It is probably in lawmakers’ best interest to avoid nothing getting funded, resulting in thousands of people losing their jobs, right before an election. This means there is a good chance some type of bill will get passed, the question is how large in scope will it be. Regardless of how things play out, the infrastructure issue should be something that is a focal point of debate during the upcoming 2020 campaign season.

By: John Guzman