On February 12, President Trump sent to Congress his long awaited plan for repairing the nation’s infrastructure. The plan was first mentioned during his campaign when he promised that $1.0 trillion would be spent on the repair and/or construction of bridges and roadways. Even before the plan was formally presented however, it became clear that the federal government would provide only $200 billion of the total. The bulk of the funds ($800 billion) would have to come from the states or private enterprise. The final proposal was pretty much as predicted, and was disappointing to almost everyone.

Even the $200 billion is problematic. The Highway Trust Fund has always been the source of most of the funding for highway and bridge repair and construction. Currently however, the federal government is spending about $15 billion more annually than the fund takes in. The fund is supported by the federal fuel tax of $.184 per gallon on gasoline and $.244 per gallon on diesel fuel. These taxes have not been increased since 1993. The reason for this is purely political. No member of Congress wants to be associated with such a visible tax, particularly this year, when a number of them are up for re=election. Most industry organizations such as the American Trucking Associations and the U.S. Chamber of Commerce, have advocated an increase, but Congressional leaders apparently would rather have a root canal than to try to push such legislation through Congress.

To compound the problem further, because of Congress’ failure to act, twenty-six states have raised their fuel taxes since 2013. If by some miracle, the federal tax was increased, drivers in those states would be penalized for their states’ proactivity. Right now, it appears that the $200 billion Federal share is going to increase the Federal deficit even further or be siphoned off from other programs, neither of which is a satisfactory solution.

That still leaves the bulk of the funding up to the states or private interests. It is reasonable to expect that this can only result in increased state taxes or the privatization of public services. Some states already have privatized rest areas along interstate highways. Both the White House and the Department of Transportation see tolling of interstate highways as one of the cornerstones of the plan. When the interstate highway system was authorized in 1956, Congress banned tolling on any of these roads.   Although some exceptions have been approved, most of the interstate system is toll free. It is difficult to visualize private investors getting excited about owning highways unless there is a reasonable return on their investment. The same is true for any state or federally funded public facility. We could find ourselves paying fees for using highways, bridges, airports, and rivers. The sparsely populated, rural areas could see no improvements since there would not be enough utilization of roads and bridges to justify private investment.

Finally, the states if left to their own devices, will invest in the projects they feel are important, not necessarily what is best for the country or the national highway system. We could end up with a state of the art highway in one state that quickly deteriorates at the state line. I am afraid that by the time this all sorts out, we would be much better off if Congress just increased the federal fuel taxes.

In a 2017 speech, President Trump said, “I will be asking Congress to approve legislation that produces a $1 trillion investment in the infrastructure of the United States – financed through public and private capital – creating millions of new jobs. Crumbling infrastructure will be replaced with new roads, bridges, tunnels, airports and railways gleaming across our beautiful land.” This is a great goal, but so far the execution appears to be a little weak.

Written By: Clifford F. Lynch