“There’s good news and slightly less good news.” – Joanne Harris, The Gospel of Loki
After years of angst and relying on patch-work, short term extensions instead of coming up with the long range funding desperately needed for infrastructure improvements to our highways and transportation systems, Congress recently passed and President Obama just signed the Fixing America’s Surface Transportation Act – a five year, $305 billion funding effort. Good news indeed, as now transportation agencies on the state and local level can move important projects forward, given there is some level of certainty that funding will be there until 2020.
More good news for California. The FAST Act recognizes the importance of projects that specifically improve the movement of freight by relieving bottlenecks and moving cargo more efficiently and safely, and has designated nearly $11 billion for that purpose. This attention placed on freight marks a milestone, and the importance to California cannot be overstated. Our state has the most extensive, complex, interconnected freight system in the nation. In 2014, tens of millions of tons of freight, valued at $704 billion, moved from and through the nation, providing the goods and services needed to sustain regional and national industries and consumers on a daily basis. This activity is expected to triple in the next twenty years, and the infrastructure must be in place to accommodate the increase in the movement of goods that today creates upward of 1.6 million jobs throughout the Southern California region.
And, the Act recognizes that goods don’t move on highways alone but rather the system is multi-modal, including highways, seaports, airports, railroads, border points of entry, pipelines, warehousing and distribution centers and local connector roads. Good news indeed.
Now for the slightly less good news. The FAST Act increases funding by only 11 % over five years, short of the $400 billion Secretary Anthony Foxx says is needed nationally to reduce congestion on our roads and to meet the demands of our transportation systems. In California alone, nearly $60 billion is need to pay for overdue repairs to the state’s transportation system, requiring new and expanded financing strategies.
More slightly less good news. There is a continuing need for Congress to confront once and for all the insolvency of the Highway Trust Fund, the major source of federal funds for transportation. Supported by federal fuel taxes, the Fund has been depleted as vehicles become more fuel efficient, resulting in substantial annual shortfalls. Proposals to increase those taxes, whose rates have not changed in 20 years, have landed in a political quagmire. Instead, Congress has siphoned off other sources of revenue to prop up the Fund. The FAST Act does so by tapping into custom fees, Federal Reserve Bank dividends, and reserves, among other sources.
In order to move slightly less good news into the good news category, the Highway Trust Fund deficit must be addressed. The Congressional Budget Office predicts Congress will need to find over $100 billion in additional Trust Fund revenues to fund the next authorization bill five years down the road. Those who use our highways and transportation systems – you and me – are the necessary payees. It’s time to take a serious look at alternative user fees – perhaps fees on all vehicles, including those that do not use gasoline, charging fees for miles traveled, or indexing the federal gas tax rate to the CPI, among other proposals.
Meanwhile good news and slightly less good news are far better than bad or slightly less bad news. So pause and take heart that it looks like a good news step has been taken in the right direction.
Billie Greer is a public policy advisor.