One of the major crises facing the United States is its ageing highways, roads, bridges, and overall infrastructure. Unfortunately, sky-high gas prices are quickly claiming another victim: the Highway Trust Fund.
The Fund is expected to show a shortfall of $5 billion this year, the WSJ says, after having run a surplus since the Eisenhower Administration.
Infrastructure spending is getting hit by two factors: inflation in the cost of construction materials and a drop in revenue as less gas is consumed. On the latter, the Federal gas tax is 18.4 cents per gallon, and Americans are consuming fewer gallons. The Transportation Department is reporting today that Americans have reduced their driving by more than 40 billion miles so far this year. In April, American drove 1.8% fewer miles than last year, but in May that drop more than doubled to 3.7%. (see chart from WSJ).
That news is great for many reasons. Our reduced consumption will help bring oil prices down, as well as cut CO2 emissions. However, with less federal fuel taxes being paid, this reduction won’t fund the repairs of the US’s mass-transit systems.
The litany of problems:
- ~25% of bridges in the U.S. are “functionally obsolete” or “structurally deficient”
- 1/7 of the pavement on our roads is rated “not acceptable”
- $225 billion a year is estimated to be required to address the national emergency; current spending is 40% of that
- an estimated $14 billion and roughly 380,000 jobs will be lost by the states if Congress doesn’t act to shore up the funds soon
However, Washington has yet to offer real solutions. How about a fuel tax hike? Nope, instead we get silly gas tax holiday proposals.