The study, Future Highway and Public Transportation Finance Study, will take a two-phased approach. The first phase, released recently at a press conference in the U.S. Capitol, provides a short-term look at future funding.
The study determined that the Highway Trust Fund could be in deficit as early as 2010 with current funding arrangements. The study also determined that “current transportation revenues at all levels of government – federal, state and local – are not sufficient to maintain or improve the nation’s highways and transit systems.” It found the average annual gap to maintain the system to be $38 billion and to improve the system $92 billion.
Also in the near term, the study found “existing revenue streams into the federal Highway Trust Fund leave significant annual shortfalls in meeting the federal share of capital investments necessary to maintain and improve the nation’s highway and transit systems.” The average annual federal gap to maintain the system under present conditions would be $20 billion and to improve would be $43 billion.
“Current federal funding levels are not enough to maintain our existing roads, bridges and other transit infrastructure,” said David Hirschmann, Chamber senior vice president and executive vice president of National Chamber Foundation.
Short-term solutions presented by Cambridge Systematics’ Gary Maring included indexing the federal motor fuel taxes back in 1993 to account for inflation. 1993 was the last time the federal fuel tax was raised. Other options remains revenue and financing tools such as the Transportation Innovation Financing Infrastructure Act and private-activity bonds; tax credit bonding such as “Build America Bonds;” dedicating a portion of the current customs duties for investment in port and intermodal freight projects; eliminating exemptions; and granting investment tax credits for freight projects.
The study is intended to be a comprehensive investigation into alternatives to supplement the federal fuel tax for financing the Highway Trust Fund over the next 30 years. The second phase of the study, to be released in October 2005, will suggest long-term comprehensive funding alternatives to provide for the safe and efficient movement of goods and people.
“We have reached a critical point in the transportation funding debate,” said Edward Mortimer, Chamber transportation policy director. “With lawmakers already 19 months late in reauthorizing highway and transit legislation, we need to keep the pressure on Congress and the administration to ensure that this bill has maximum funding.” Cambridge is undertaking the study in association with Alan Pisarski and Mercator Advisors.
