With highway programs squeezed by high construction costs, state departments of transportation say federal road funding must rise more than 80% by 2015 just to keep up with inflation. In a report released March 7, the American Association of State Highway and Transportation Officials says that hitting the $72.8-billion target in 2015 would require the equivalent of a 10¢-per-gallon, two-step hike in the federal fuels tax.
The report is the first of six that AASHTO plans to release as it lays the groundwork for the successor to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. SAFETEA-LU won't expire until fall 2009, but transportation interests already are marshalling arguments to convince Congress to provide more money. Many observers are awaiting a congressionally mandated commission's report on surface transportation finance and policy study, expected around the end of this year.
AASHTO's report estimates the total cost to improve highway conditions and performance at $189 billion in 2015. Of that, about $83 billion would be federal funds if Uncle Sam's share of overall highway capital spending remains at the 2005 level of 44%.
The U.S. Dept. of Transportation's most recent look at "conditions and performance," a summary of which was released March 2, estimates the average annual cost to maintain highways and bridges over the 2005-2024 period at $78.8 billion in federal and non-federal spending. That compares with $36.4 billion spent to rehabilitate the system in 2004, the DOT study's base year. It pegs the maximum economic benefit level for highway spending at an average annual $131.7 billion over that time period.
Increase would require equivalent of 10¢-per-gallon fuel-tax hike.
Using tolls on highways is one financial tool to help get some roads built, state officials say. "But it is not a silver bullet that's going to solve our problems in transportation in this country," says Missouri DOT Director Pete Rahn.
State DOTs are trying various tactics to deal with costs that jumped nearly 30% from 2004 to 2006. "It's a pretty significant bump that was never anticipated," Arizona DOT Director Victor Mendez says.
Coping mechanisms only go so far. It's been 14 years since the last gas-tax boost. What will prompt a new revenue hike? AASHTO Executive Director John Horsley says what will force the issue are projections that the Highway Trust Fund will begin running a deficit. "The trust fund is going to be in crisis one year from now," he says.