Why the Highway Trust Fund Keeps Running Out — and the Future of U.S. Transportation Policy

HTF Balance by President

It’s January in our nation’s capital. The weather is miserable but with a new Congress and new majorities, the town is buzzing with anticipation. For the first time in a decade a sitting president is facing consolidated opposition. From one end of Pennsylvania Avenue to the other, to K Street, the talk is about veto or break-through. Six months from now, it’ll be summer and the collective attention will have shifted to the 2016 elections.

Over the next 6 months our super intelligent and highly effective government has the opportunity to tackle issues through legislation or (earmuffs!) executive action that can set the stage for renewed American exceptionalism, or set us back a few decades. Pick your issue – immigration, health care, education, the environment, tax reform – everything is on the table. With Obama and Congress circling each other, the media giddily gauding one side or the other, the American public is left waiting to see if we bet on the right horses last November.

Our transportation infrastructure, responsible for everything from

  • providing access to employment, education, and health care to
  • facilitating the flow of energy, goods, and products across the country and to foreign markets

is on life support!

Bridges are collapsing, roads and highways are falling apart, and it takes longer and longer to get anywhere whether flying, driving, or even on public transit.

It is with this backdrop that this morning, Transportation Secretary Anthony Foxx will be testifying, along with a number of state governors, at the Senate Environment and Public Works Committee’s first hearing addressing the Highway Trust Fund this session.

Transportation Leaders to Testify

It’s important to understand the history of how and why we got here… so we put together some data visualizations! Check them out!

TL-website-blog-HTF-highway-trust-fund-data-visualized-2

HERE’S THE STORY:

Since 1957 America has paid for its transportation infrastructure (Highways, Bridges, Airports, Trains and Buses) largely through a gas tax. Proceeds from the tax are used to fund our Highway Trust Fund (HTF). Failures of recent administrations to adequately fund infrastructure projects coupled with an ever-increasing demand for transportation has left the HTF on the brink of insolvency. Without legislative action, the HTF runs out in May.

The lack of a long-term transportation funding solution is collapsing our bridges and bottlenecking economic growth, while the rest of the world from the UAE to Singapore to Hong Kong, is driving full steam ahead, literally.

Historically, up until President George W. Bush, Congress increased the gas tax whenever infrastructure spending exceeded gas tax revenues. Since 1993, we haven’t increased the tax or found a long-term solution — instead using budget gimmicks to pay for complex infrastructure projects, 3 bills and over 10 short-term extensions in the last 15 years. This creates an environment where governors, mayors, and transportation leaders (including everyone testifying today) are constantly fighting to keep our infrastructure going, in lieu of modernizing and planning ahead for growth and sustainability.

Net Change in HTF Balance
SOURCES: US Department of Energy (USDoE), US Energy Information Administration (US EIA), Tax Foundation

The story gets worse. Since the mid-2000s, we haven’t been driving as far as we used to, and now cars are getting more mileage than ever before. That’s a double whammy for the “per gallon” gas tax.

SOURCE: Federal Highway Administration (FHWA)

This has meant real consequences for our nation’s infrastructure.

1 in 9 bridges are structurally deficient — 250 million crossings a day are made on bridges that require speed or weight restrictions to ensure safety.

1 in 3 of our roads are in poor or mediocre condition — costing the average car owner $324 a year for vehicle maintenance and increased fuel costs, not including the cost of sitting in traffic and higher prices for consumer goods as the cost of doing business increases.

If you think roadways and bridges are bad, take a look at our public transit network. Many of the largest cities in this country still lack reliable, safe, and cost-effective public transportation options. While we celebrate the recent rise of the Ubers and Lyfts of the world, public transit as an industry — largely due to persistent underfunding at the local, state and federal levels — has literally been stuck in the last century.

With a very modern, truly multi-modal network that reaches all parts of the city, the Berlin Transit system is only 9th on the list of best systems in the world. In large part due to the sheer volume of people that rely on it day-in day-out, our beloved NY MTA does make the list at a respectable No. 10.

Berlin Transit

But wait. In spite of all the issues mentioned above, federal investment in infrastructure has grown consistently with overwhelming support for the last 50 years. How then, do we find ourselves with a crumbling infrastructure?

Infrastructure Investment Growth
SOURCE: Congressional Budget Office (CBO)

The answer, ironically enough, is the gas tax. The revenue source that pays for our infrastructure investments has also been its greatest constraint. Our infrastructure investment is capped, by what we are willing to tax ourselves at the pump.

In fact, relying on the gas tax — we would need to raise it by at least 15 cents to shore up the $112B funding shortfall to achieve a state of good repair within the next twenty years — fixing our structurally deficient roads and bridges and preventing another collapse like the one in Minnesota.

Minneapolis Bridge Collapse

Relying solely on the gas tax, we’ve been falling behind as a nation and are paying the cost — sitting in more traffic, driving on roads and bridges that we know are not safe, and paying more for all the goods and services flowing through our transportation networks.

Emerging economic superpowers are making huge investments in their infrastructure; earlier this month China announced $1.1 trillion dollars to be spent on 300 infrastructure projects in 2015. Last year between October and November alone, China approved 21 new projects worth $112B, twice our annual transportation budget.

None of this means a gas tax increase is a bad idea. But relying solely on the tax to fund our investments is. It’s why the trust fund keeps running out. And why other countries have gotten ahead by pouring hundreds of billions into their nation’s transportation networks.

We must find a sustainable long-term solution to our transportation infrastructure that scales with our country’s growth to foster thriving communities and a vibrant economy.

Good luck and godspeed to you, Mr. Secretary!

 

Farhan Daredia, James Mietus, and Molly King contributed to this report.

Graphics courtesy of Anna Tulchinskaya and Paul Miller.

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