What we need to do to fix infrastructure in the US
WRITTEN BY CARLO A. SCISSURA
PUBLISHED ON MARCH 25, 2019
America’s infrastructure is more than just a network of roads, bridges, tunnels, ports, railroads and airports connecting our towns, cities and states. It serves as a backbone of economic growth and preserves our safety, quality of life and prosperity. The United States has long been a global leader in innovation, transportation and smart fiscal policies, yet the infrastructure that keeps our country open for business is now far out of date.
According to the American Society of Civil Engineers, the current condition of our infrastructure earns a grade point average of D+, and there is an estimated $2 trillion funding gap to bring it to a state of good repair by 2025. While we have benefited from past centuries of building, neglect has befallen our once greatest achievements – in the 1930s, 4.2 percent of the country’s GDP was spent on infrastructure investment, but by 2016, that number fell to 1.5 percent. In other words, our nation’s infrastructure is crumbling, and we need real, sustainable investment – and we need it now.
For many of these challenges, Americans must be willing to pay, rates and fees that reflect the true cost of using, maintaining and improving all infrastructure, including our water, waste, transportation and energy services. Most Americans support this approach. In last November’s elections, 79 percent of all state and local ballot measures supporting transportation infrastructure investments passed. Voters across 31 states raised their own taxes and fees in exchange for better roads, bridges and transit.
There is no single funding solution that will solve all our infrastructure investment challenges. It is important that we have a large toolkit of funding and financing options available that can be utilized to provide the infrastructure we need. Our funding plan brings together a collection of 10 bold ideas to significantly invest in our nation’s infrastructure.
The first – and most logical – step in raising money for infrastructure should be to raise the federal tax on gasoline and diesel. Eventually, this would give way to a system that would impose a tax on vehicle miles traveled, as we adapt to increasing fuel economies and the proliferation of hybrid or all-electric vehicles. The fuel tax has not been raised since 1993, and since that time, the money generated from those taxes has lost over 40 percent of their purchasing power. Rep. Peter DeFazio (D-Ore.), chairman of the House Transportation and Infrastructure Committee, continues to point out that we’re borrowing $16 billion a year to backfill the Highway Trust Fund, while the majority of states around the country have raised their gas tax. It’s time we put the Highway Trust Fund on a long-term path to solvency, and raising the existing user fees is the only way to achieve this.
Other user fees include updates to the Harbor Maintenance Fee, raises to the Airline Passenger Facility charge, and the introduction of a new Rail Passenger Charge – each helping to fund direct capital investments for their respective users.
These long-term funding streams will need to be leveraged in the short term to provide the capital needed to get large infrastructure projects underway. By issuing bonds backed by the projected revenue of long-term solutions, the federal government will deliver the vital capital needed to jump start infrastructure revitalization across the country.
Beyond fees and bonding, we’re proposing the expansion of programs like the Transportation Infrastructure Finance and Innovation Act, Water Infrastructure Finance and Innovation Act and Railroad Rehabilitation & Improvement Financing, as well as making new money available through federal loans for infrastructure improvement. There are also a set of easily achievable suggestions that could help move along current and future projects, such as streamlining the regulatory process, removing statutory and regulatory barriers to promote private-public partnerships and supporting municipalities implementing their own funding mechanisms like congestion pricing in New York City.
The Building Congress believes that a robust, long-term federal infrastructure modernization program, combined with greater investment by state, local and private stakeholders, can engender the partnership necessary to ensure America has a 21st century infrastructure network. However, without a serious commitment from federal lawmakers, we will not make the kind of progress demanded by the challenges we’re facing.
Infrastructure investment has a history of creating jobs and strengthening the economy in this country. Direct funding from the federal government has resulted in some of the most transformative infrastructure projects that have had the greatest lasting effects. From the Hoover Dam, to rural electrification and the interstate highway system, significant investments in infrastructure have paved the way for our country’s current economic success.
We have an incredible opportunity to use the momentum and support from the American people for infrastructure investment to provide long-term, sustainable revenue as part of an infrastructure package. The Building Congress calls on Congress and the Trump administration to put forth and approve a robust and comprehensive bipartisan package that includes sustainable funding to get America’s infrastructure not just back to a state of good repair, but to make us a global leader. If we do not invest now and fail to rise and meet this crisis, then we cannot guarantee America’s long-term economic development, productivity and international competitiveness.
The United States must be at the forefront of the world, and the foundation of our position is our infrastructure.
Carlo A. Scissura is president and CEO of the New York Building Congress
Click here to read the article in The Hill.
