The Senate and House tax bills proved to be missed opportunities for fixing the federal Highway Trust Fund, but states are doing their part and investing in infrastructure.
The federal Highway Trust Fund, an account used to pay for the federal share of roads, bridges, and transit, has not been raised in 24 years. Over time, the 18.4-cent user fee has lost 40% of its purchasing power, while the cost of materials and labor has continued to increase. Increasing the gas tax would solve this problem, but congress has been reticent to do so. In contrast, many states have taken action to address transportation funding needs through a gas tax increase.
Many states have chosen to do their part by implementing motor fuel taxes, with California as the most recent addition to this list. The state added a 12-cents-per-gallon tax at the pump in November., The tax is expected to raise $5.2 billion each year over the next decade for highway, bridge, and road repairs to improve the quality of life for drivers. Unfortunately, now voters are asking to reopen the issue through a ballot measure proposal, which would appear in the November 2018 ballot if enough signatures are collected. ASCE believes this would negate the progress made to address California’s surface transportation needs.
This week, Iowa, Nebraska, and Indiana’s investments made headlines. Iowa approved a 10-cents-per-gallon increase in February 2015, rounding out the total gas tax to 30.5 cents. Nebraska added a 6-cents, phased-in increase beginning in May of that year, which will fully take effect in 2019, for a total of 31.6 cents. Just under three years after both states raised their gas taxes, residents are seeing the much-needed results. From bridge replacements in Nebraska, where 15.4% of bridges are structurally deficient, to highway lane expansions in Iowa, where traffic has increased 123% over the last 30 years, long overdue changes are being made in both states. Indiana’s 10-cents-per-gallon increase took effect just a few months ago and is already funding small projects, including improvements on local city streets.
The gas tax is not the only way to raise revenue. Infrastructure champions are proposing additional solutions to fund America’s failing infrastructure. Connecticut Congressman, John Larson is suggesting a carbon tax. Through the recently-introduced America Wins Act, Larson hopes a pollution tax will raise $1.8 trillion over 10 years, and says this money should be invested in infrastructure improvements. He hopes that taxing pollution is a solution that everyone can get behind and it looks like some already have. Shell, BP, and ExxonMobil have already shown support for this idea.
Americans have shown that they are willing to pay more to improve our infrastructure, and states are finding creative solutions to close the infrastructure investment gap. Find out if legislation is moving in your state to address infrastructure needs.