Highway Trust Fund’s Quick Fix Not the Optimal Answer

By August 15, 2014 June 16th, 2015 Government, Industry News, NationaLease

Bad roads are bad for business and bad for the country; that’s why Congress needs to find a long-term solution to keep the Highway Trust Fund solvent.

There are certain issues that have always had broad, bi-partisan support; the Highway Trust Fund has long been one of those issues since it was first established in 1956. But falling revenues from a national fuel tax, no alternative sources of funding, and congressional bickering have led to the dangerous state in which we find ourselves. A little less than one monh ago, it looked as though the Highway Trust Fund was likely to actually run out of money by the end of August. But Congress finally passed an emergency funding bill of $11 billion on July 31.

So we all breathe a sigh of relief, but this type of short-term emergency, seat-of-your-pants response is not the answer. The highways and bridges are the lifeblood of this country. We’ve posted in the past the appalling conditions of so many of them. The American Society of Civil Engineers, in their 2013 Report Card gave America a D+ for infrastructure and estimated that a total infrastructure investment would need to be $3.6 trillion by 2020! As their report indicated, “42% of America’s major urban highways remain congested, costing the economy an estimated $101 billion in wasted time and fuel annually…Currently, the Federal Highway Administration estimates that $170 billion in capital investment would be needed on an annual basis to significantly improve conditions and performance.”

Think of that…$170 billion is needed annually and the House just passed an $11 billion patch…and that is just through May of 2015. Then what…another patch?  Before the vote, a coalition of more than 60 groups, including the American Trucking Association (ATA), urged lawmakers to pass the bill.  ATA President and CEO Bill Graves said, “ATA continues to seek an immediate solution to the impending insolvency of the Highway Trust Fund. Moving from one funding crisis to another will force states to cancel or delay even more crucial highway projects, putting jobs and the economy at risk.”

Most Americans depend on the reliability, access, and safety of the nation’s highways and bridges; our industry depends on that even more. Bad roads, traffic congestion, dangerous situations… they all add up to potential losses in the billions for the trucking industry. From missed deadlines to wasted fuel to truck damage, the condition of our roads and bridges can make or break a fleet. So how do we fix this? We need to come up with innovative solutions and then push our representatives to develop the legislation and pass it. The ATA had created a task force to come up with funding possibilities and back in May, they released a list of options. The list includes:

  • Indexing of fuel tax based on price, CPI or the estimated impact of improved fuel efficiency
  • Proceed from repatriation of overseas capital
  • Issuance of Treasury bonds subsidized with revenue from indexing the fuel tax
  • A new annual “highway access fee” for all motorists
  • And more…

The success of our industry is tied to the success in finding long-term solutions for the Highway Trust Fund. There was a time when our infrastructure was the envy of the world; that’s certainly no longer the case. What is clear is that there is no silver bullet; we’ll all have to come together and find numerous options that will tie together to once again create the nation’s “super” highways.

We’d like to know what you think about the future funding of the Highway Trust Fund. What suggestions would you make?

David Beaudry

About David Beaudry

David Beaudry is Director of Logistics Engineering and Consulting for NationaLease. He brings 25 years experience in surface transportation, logistics engineering, and consulting. His earlier career includes management posts with Ryder System Inc. and National Freight. He holds a Bachelor of Science degree from Central Connecticut State.

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