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US infrastructure funding remains inadequate

Infrastructure funding is a serious issue for U.S. roadways.
/ Industry News & Trends /

By: Phil Sneed

The U.S. is heavily reliant on roads, and almost 70 percent of the nation's freight is transported in trucks that rumble down the nation's highways, according to the American Trucking Associations. Despite the importance of high-quality roadways to the U.S. economy, the country's infrastructure is woefully underfunded and falling into disrepair. This problem affects everyone, but it's particularly worrisome for truck drivers, who spend their days on the road. 

While the nation's infrastructure issues can't be solved overnight, the government must take steps to stop the current decay of the nation's roads, both to protect the drivers who rely on the highway system for their living and to encourage the economic growth that makes the country a global powerhouse. 

The scope of the problem
According to The Economist, the U.S. spends over $90 billion on its roadways each year. Unfortunately, that's nowhere near enough. The Federal Highway Administration said a $170 billion annual investment would be necessary to keep the country's roads in good condition. While it's easy to ignore the issues caused by inadequate road upkeep, the lack of funding contributes to serious problems that can have severe safety implications. 

"A $170 billion annual investment is necessary."

The issues with American roads extend far beyond a few potholes, and many are invisible to the naked eye. Currently the U.S. has over 70,000 bridges that are considered "structurally deficient." When asked about these bridges by CBS, Congressman Ray LaHood​, R-Ill., said, "I don't want to say they're unsafe. But they're dangerous."

Despite a growing awareness of the risks introduced by a weakened infrastructure system, government officials have been slow to add funding to address the problem. This is shortfall due to the way highway projects are funded. 

Where the money comes from
The Economist explained the job of funding the nation's highways is split between cities, states and the Highway Trust Fund, a federal organization that gets money from taxes levied on every gallon of gas sold in the U.S. That tax hasn't increased since the early '90s, but the price of maintaining the nation's roadways has grown. Improved automotive fuel efficiency and a decline in driving overall mean less gas is purchased each year, which substantially limits the amount of money the fund takes in annually. 

"Improved fuel efficiency lessens the income from gas taxes."

That decline in funding is exacerbating the nation's existing infrastructure problems, and the government has not acted to restore the HTF's income to workable levels. One common proposal is an indexed gas tax that would shift in accordance with inflation. The Congressional Budget Office noted that this strategy could increase revenue, but would be unworkable in the long term. The greater prevalence of electric and hybrid vehicles alongside rising fuel economy for internal-combustion engines would likely wipe out funding gains an indexed tax might provide. Still, an adjustment to the gas tax offers one of the most feasible solutions to highway funding in the short term. 

Trucking's role and other options
The trucking industry is reliant on U.S. roadways, but actually accounts for a relatively small percentage of overall use. According to the American Trucking Associations, trucks account for just 14.2 percent of the total miles traveled on roads, but steep user fees levied on truck traffic means the industry is a major contributor to the HTF. User fees from truckers made up 43 percent of the money collected by the HTF in 2014.

At this point, a range of options for highway funding are on the table, but do not provide a surefire solution. Some have proposed a simple doubling of the gas tax, according to U.S. News & World Report, which would increase the cost of business for truck drivers and be subject to the issues cited above. Meanwhile, President Barack Obama has incorporated an infrastructure proposal into his 2016 budget that uses a one-time tax on corporate profits held overseas to fund the HTF. A version of this proposal died in Congress last year, and it's not clear that this new version will find support. 

The Economist pointed out that increased tolling could offer a respite from rising infrastructure costs for some areas, but tolls often meet with opposition from drivers, and federal law currently prohibits the addition of tolls on existing interstates.

The ATA estimates freight tonnage on U.S. roads will increase by 3.2 billion tons to 17.3 billion tons overall in the next 10 years. This increase will necessitate more capacity, which translates to increased road construction. The current funding system is unable to maintain the roads America currently has, let alone additional highways that may be built in the future. A comprehensive plan for highway funding could ensure the safety of professional truck drivers and other motorists and prepare the country's roads for an influx of additional traffic. Sadly, it remains unclear what that plan will be and where money for improvements will come from.