My commentary, posted nearly a year ago, spoke to the critical need to fund the repair and upgrade of the system that moves goods through California and the nation, given that international trade is one of the most important drivers of the state’s economy and that competitors, both in the U.S. and abroad, are flexing their muscles. If shippers cannot get their goods to the marketplace quickly and efficiently, they’ll pursue other options at California’s expense. Today’s column looks at some pending remedies to the challenge.
It’s not a pretty sight. The American Society of Civil Engineers have given America’s national bridges and rail system a grade of C+, our ports – a C, our roads – a D. Overall grade for the entire infrastructure system – a miserable D+.
So what to do?
This week Congressman Alan Lowenthal unveiled bipartisan legislation which will provide an on-going, dedicated source of revenue to invest in rebuilding crumbling freight infrastructure — removing bottlenecks and improving the efficiency, reliability, cost and safety of the system, while reducing adverse impacts on the environment and adjacent communities. A proposed 1 % fee on the movement of goods on our roadways would provide about $8 billion annually for these purposes. The fee is being proposed, given that the primary source of federal transportation dollars, the Highway Trust Fund, is nearly broke. Fed by federal gas tax revenue, the Fund has been squeezed as consumers switch to fuel-efficient and alternative-fueled vehicles. The Fund is also encumbered by a stagnant tax rate that has remained the same for 20 years.
Another proposal, similar in intent, is the Grow America Act 2.0, released by the Obama administration, which would make robust investments across the entire transportation spectrum, including funding for needed freight infrastructure improvements. This $478 billion 6-year transportation reauthorization plan provides stable funding for the nation’s highways, bridges, transit and rail systems. Funding would come from current revenues in the Highway Trust fund, which is almost depleted, supplemented by a 14% tax on the $2 trillion of untaxed foreign earnings that U. S. companies have accumulated overseas. And, there are other proposals under consideration.
We’ve got to get this right. The importance of a vital freight system to California cannot be overstated. Freight valued at more than $704 billion each year moves from and through California to the rest of the nation, fueling our state’s economic growth and providing the goods and services to sustain regional and national industries and consumers on a daily basis. And millions of jobs are a stake. Upward of 1.6 million jobs throughout the Southern California region, and 3 million logistics jobs throughout the U.S. originate from our movement of container freight.
Challenging California’s position as the international trade leader of the U.S., our competitors are on the hunt. Improving our freight system and ensuring there are sufficient dollars available to do just that will go a long way in helping California “deliver the goods” and maintain its competitive edge.
Billie Greer is president of the Southern California Leadership Council, a nonprofit, nonpartisan organizations formed to provide leadership on major public policies critical to economic vitality, job growth and quality of life of the region. Three former California governors and several dozen business and community leaders are members of the council.