$20 billion annually needed in next federal surface transportation bill

$20 billion annually in new trust fund revenue necessary in next federal highway bill just to maintain "status quo" travel and safety conditions on nation's roads, U.S. DOT report shows

News ARTBA April 26, 2007
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Simply maintaining current physical conditions and levels of safety and traffic flow on the nation's highway network will require $20 billion annually in new revenue flowing into the Highway Trust Fund over the life of the next federal surface transportation investment bill, a new analysis of U.S. Department of Transportation (U.S. DOT) data shows. The current highway and transit law--the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)--expires Sept. 30, 2009.

This troubling find comes from an analysis of the U.S. DOT's 2006 biennial report to Congress on U.S. highway conditions, performance and congestion levels on the nation's highways that was conducted by ARTBA Vice President of Economics and Research Dr. Bill Buechner, a Harvard-trained economist who spent two decades with the congressional Joint Economic Committee before joining ARTBA in 1996.

Beginning in fiscal year (FY) 2010, Buechner said the federal government would have to invest $54.5 billion and grow to $61.5 billion by 2015 just to maintain highway conditions and ensure traffic congestion does not get any worse. By comparison, current Highway Account revenues are projected to range from $34.7 billion to $40.5 billion between FY 2010 and FY 2015--a shortfall of approximately $20 billion annually.

An increase in the federal motor fuels excise is the most effective way to fill this void in the short-term, Buechner said. A fuel tax increase of 10 cents per gal in FY 2010 is necessary to meet the federal government's share of the documented highway investment needs in the U.S. DOT report. The federal motor fuels excise has not been increased since 1993, and inflation has eroded 30% of its purchasing power during this time.

The challenges of meeting the nation's highway needs looms even larger, Buechner said, with continued projected growth in the U.S. economy and population, and future increases in truck and passenger vehicle traffic.

To maintain current conditions and system performance on the nation's public transit system, in the next surface transportation bill the federal government would need to invest $9.3 billion in FY 2010, rising to $10.5 billion in FY 2015. The U.S. DOT report did not consider the costs of constructing new transit systems, which would substantially boost transit investment needs, Buechner said.

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