Issue link: http://read.dmtmag.com/i/114548
Infrastructure ("U.S. Keeps Building New Highways While Letting Old Ones Crumble" continued from page 34) country still has a bridge repair backlog of $65 billion, according to the Federal Highway Administration. At a time when Congress is proposing significant budget cuts and tax increases have little support, states are canceling or scaling back highway projects. They're looking for private partners to help finance construction, and still coming up short. Motorists are discovering that the roads they thought were free are anything but. Over the past four months, McClatchy traced the extent and causes of yet another financial crisis that's developed below the radar of most Americans. A review of government reports, an analysis of thousands of state and federal campaign donations, and interviews with dozens of current and former elected officials, watchdogs and transportation officials showed that there were a lot of hands on the wheel as the system veered off course. Excerpts from the AED-commissioned report, "The Impact of Fuel Use Trends on the Highway Trust Fund's Present and Future," authored by researchers at the College of William and Mary, http://bit.ly/htf2013. Gas Tax Pushback Vehicle Miles Trials Understanding the objections to raising fuel taxes to fund the HTF Understanding the objections to implementing a vehicle mileage-based user fee (VMBUF) to fund the HTF. ...A generic opposition to increased tax revenue complicates [the] entire [HTF insolvency] discussion. When one considers, though, that motorists are paying less federally per mile of highway use than at any point since the Federal-Aid Interstate Highway Act despite a massively more complicated highway infrastructure, perhaps the opposition would become less fervent. It's also the case that fuel taxes are among the few taxes that are not registered as percentages but rather as cent/unit (gallon) taxes, which leads to a loss in purchasing power if rates are not adjusted regularly. Given that gas prices have risen dramatically since the last gas tax rate revision, the federal gas tax is a dramatically lower percentage of gasoline sales than it was in 1993. Opposition to increases in fuel tax rates might also subside when such a policy is presented as lifting future debt burdens off the General Fund and as making the HTF more self-sustaining. Opposition to a VMBUF system may be more potent. The basic infrastructure of a VMBUF usually involves some kind of in-car monitoring technology, which may provoke genuine concerns about governmental intrusion of privacy. We have outlined potential ways for policy officials to alleviate these concerns within the VMBUF framework that have been tested at the state level. Other concerns include the fear of a VMBUF being socio-economically regressive, how a VMBUF might be implemented at the state and local level, and whether a VMBUF removes a powerful incentive to purchase more fuel-efficient automobiles...These are all concerns that must be addressed but importantly can be addressed within the eight- to 10-year phase-in period that we allow for in our projections modeling. The critical point is that, for a VMBUF to be most effective, the planning and conversations need to start now. Because of the phase-in period and the more general mathematical logic, we recommend that inflation-indexed fuel tax rates be implemented as soon as possible – either as part of contemporary tax reform or for the next federal highway reauthorization in 2014. Furthermore, the starting point for these rates should be the rates that would have occurred if fuel taxes had been indexed to inflation in 1993. Gains from such a policy would be immediate and would allow for the discussion and potential implementation of a VMBUF to be planned. In eight to 10 years, the country may feel less angst with a VMBUF system, but if not, at least the HTF would be on the way toward greater fiscal solvency than is currently projected. While many transportation policy experts are understandably focused on the year-to-year actions of Congress, our report hopes to begin a conversation about longer-term financial viability. The Highway Trust Fund was designed to be a fiscally self-sustaining way to fund federal aid for highway projects, and with some key institutional reforms, it can remain so into the future. 36 | www.cedmag.com | Construction Equipment Distribution | March 2013 34_Highway_Feature_KP.indd 36 2/27/13 4:03 PM