When the nation last faced deteriorating infrastructure, President Ronald Reagan, long considered the champion of fiscal conservatism, proposed a modest increase to the federal gas tax. He reassured his fellow conservatives, “This program will not increase the federal deficit or add to the taxes that you and I pay on April 15th. It’ll be paid for by those of us who use the system, and it will cost the average car owner only about $30 a year. That’s less than the cost of a couple of shock absorbers — but the benefit to our transportation system will be immense.”
Once again, we face the challenge of deteriorating roads and failing bridges as our nation’s infrastructure is literally crumbling beneath us. The average motorist loses $523 annually due to higher maintenance and vehicle operational costs from rough roads. Additionally, traffic congestion and gridlock represent a $960 yearly penalty. Our deficient roadway system costs the typical American nearly $1,500 a year.
To make matters worse, we are hurtling toward a highway funding cliff. The Highway Trust Fund (HTF), which has historically been the primary source of federal revenue for highway projects, safety programs and transit investments, will become insolvent by the end of 2020. At least $20 billion per year will be needed in addition to the current revenue from highway user fees — mostly gas and diesel taxes — to prevent a reduction in funds. The $60 billion annual federal investment from the HTF still falls well short of the resources necessary to provide the federal share of the investment needed.
We’re pleased that President Trump recognizes this crisis and has placed the rehabilitation of our interstates and roadways as a high priority on his policy agenda. But to rebuild our infrastructure for the long term we need a plan that is big and bold, like President Reagan’s. Any proposal that relies on fake funding schemes like highway tolls and privatizing rest areas will not generate the revenue necessary to make significant infrastructure improvements.
America’s truckers, comprising 7.4 million employees and one in 16 U.S. jobs, are ready to step up. We already pay 45 percent of total Highway Trust Fund user fee revenue — even though trucks account for only 14 percent of vehicle miles traveled on our roads. To bridge the funding gap, we are proposing the Build America Fund — a 20-cent-per-gallon user fee on all transportation fuels, including diesel, gasoline and natural gas. The fee will be applied at the wholesale terminal rack, before fuel reaches the retail gas pump, and indexed to inflation and improvements in fuel efficiency.
The Build America Fund will generate $340 billion over the course of a decade, which will not only cover the highway funding gap but also create an account to invest in the nation’s most urgent infrastructure needs, including projects at the state and local level.
A 20-cent fee is fair and equitable and would cost the average passenger vehicle driver just $2.00 per week, or a little over $100 per year. That’s still less than the cost of a pair of shock absorbers. In exchange for that small investment, motorists will see that $1,500 annual expense for vehicle damage, wasted gas and lost time drop exponentially, offering real and measurable savings in return.
Most important, the Build America Fund is fiscally conservative. A full 99 cents of every dollar collected from a user fee is spent directly on the intended purpose of maintaining roads and bridges. Compare that to other methods of infrastructure funding, like tolling — where as much as 35 cents of every dollar is wasted on administrative and overhead costs rather than on road maintenance.
Furthermore, tolls cause motorists to use alternative routes that are generally less safe and not as well constructed. Congress can look in its own backyard where the toll for driving 10 miles on I-66 express lanes in Northern Virginia hit a ridiculous peak of $47.
A well-maintained, reliable and efficient network of highways is vital to our country’s economic and national security. The Build America Fund would generate sufficient revenue to both ensure the long-term future of the HTF and begin to address major transportation capacity challenges, including the major highway bottlenecks that are responsible for a disproportionate share of congestion that plague commuters and truckers alike.
President Reagan twice proposed a user fee that was supported by Democrats and Republicans, organized labor and the business community. As he wisely said, “Perhaps most important, we will be preserving for future generations of Americans a highway system that has long been the envy of the world and that has truly made the average American driver king of the road.”