Issue link: http://read.dmtmag.com/i/280096
26 | www.cedmag.com | Construction Equipment Distribution | March 2014 A Closer Look Editor's Note: AED recently commissioned researchers at the College of William & Mary's Thomas Jefferson Program in Public Policy to conduct a comprehensive census of state transportation infrastructure financing and funding mechanisms. One goal of the study, which was released in January 2014, was to help lawmakers on Capitol Hill understand available options to restore the solvency of the Highway Trust Fund. The second purpose was to give equipment distributors around the country a tool to help them advocate more effectively for infrastructure in their own states. The study includes a description of all the major mechanisms states can use to support road and bridge investment, as well as a snapshot of each state's program. We encourage AED members to share the findings with their local, state, and federal lawmakers and encourage them to use the findings to help solve America's infrastructure crisis. The full report is at http://bit.ly/aedwm2014. A summary brochure with a state-by-state chart is at http://bit.ly/wm2014brochure. Roadway infrastructure offers countless public benefits: improved safety, economic growth, and increased job opportunities. Despite these benefits and voters' recognition of the importance of transportation infrastructure, the purchasing power of federal transportation funding has been steadily declining. In an era of tight federal budgets, state legislatures find themselves increasingly burdened with the responsibility of maintaining and building roadways. States must improve the sustain- ability of their funding sources and increase their financing opportunities to facilitate roadway projects. Although there is no single mechanism suited to support every state's roadway needs, legislators should understand the inher- ent benefits and risks of each available option to make informed decisions. States should diversify funding and financing sources to stabilize revenue streams, focus on user-fee-based mechanisms, and accompany imple- mentation efforts with educational initiatives. Following these general recommendations, states can further serve their constituencies by imple- menting mechanism-specific strategies. Funding Options Offer Investment Opportunities Dozens of mechanisms fund roadway infrastructure across the country, but only six are widely used: fuel taxes; tolls; general fund revenues; vehicle registration, licensing, titling, and permitting fees; vehicle miles traveled fees; and freight-related fees. Fuel taxes, including excise and sales taxes, are the most common funding mechanism. Although universally implemented, reluctance to increase the tax at the state level has led to a rapid loss of purchasing power. States can rejuve- nate fuel taxes by increasing and index- ing rates to preserve purchasing power. Indexing the fuel tax to construction costs may better account for changes in the purchasing power of states' trans- portation funds. Alternatively, states can index fuel taxes to the consumer price index to ensure the tax keeps pace with market inflation. Fuel taxes alone, however, cannot sustain states' baseline revenue require- ments for roadway infrastructure. One funding mechanism gaining momen- tum is the vehicle miles traveled (VMT) fee, which charges drivers a fee for every mile driven. States have several options for tracking mileage, rang- ing from the collection of odometer readings on tax forms to the automatic collection of fees at gas pumps via GPS systems. This type of direct user fee may eventually become the most sustainable mechanism because of its flexible pricing options, but the admin- istrative, political, and technological difficulties of tracking users' mileage makes this mechanism viable only as a future funding option. Forward-looking states like Oregon are already preparing for the VMT fee by conducting state- wide trials of various tracking devices. In the short-term, states need to rely Solving America's Infrastructure Crisis (continued on page 30) States must step up to the plate and increase both their transportation revenues and use of all available financing mechanisms. BY SARAH BEASON, IRINA CALOS, AND MEGHAN STUBBLEBINE Photo courtesy of Broce Broom. The MK-1 Transfer Sweeper utilizes a large brush that continually sweeps debris to a conveyor, keeping pace with the milling process and cleaning more thoroughly so tack sticks better to the road surface.