Infrastructure. It isn't sexy, but it’s important. And it's crumbling. The American Society of Civil Engineers’ 2013 report card on American infrastructure gives the country an overall grade of D+, saying that our infrastructure systems are failing to keep pace with the current and expanding needs.
Crumbling infrastructure costs money
Thirty-two percent of major roads are in poor or mediocre condition. Rough roads aren’t just inconvenient — they cause damage to vehicles, requiring drivers to pay for additional reparis.
The vast majority of federal money devoted to road, bridge and rail maintenance comes from a tax on each gallon of gasoline sold. The gas tax has been unpopular since its inception in 1932. The tax has been raised by both Republican and Democratic administrations, most recently in 1993. Since that increase, the miles vehicles travel per gallon has increased and inflation has eroded the purchasing power of the tax revenue.
Next year, the tax is projected to raise just $39 billion. That's short of the $53 billion in planned spending and a long way from the $170 billion that the Federal Highway Administration says it would take to significantly improve the condition of federal highways and bridges.
So what can we do?
There’s no agreement on how to raise the money to pay for all these improvements, but a number of possibilities have been floated:
- Congress could increase the taxes on gas and diesel fuel. Each additional penny per gallon would raise $1.5 billion a year. According to the Congressional Budget Office, it would take a 10-cent increase to cover all of our projected obligations using the gas tax.
- In his 2015 budget, President Barack Obama proposed spending $302 billion over four years on surface-transportation improvements. The additional money would come from changing the corporate tax code by closing loopholes and slashing rates.
- Rep. Steve Israel wants to raise money for infrastructure investment by allowing corporations to bring back money they are holding in overseas accounts. His proposal involves a greatly reduced corporate income tax rate, conditioned on using some of the repatriated money to buy bonds to fund infrastructure projects.
- We could lift the ban on new tolls on interstate highways, but that’s unlikely to happen.
Congress has to find the money to rehabilitate roads and bridges. It can't keep dithering while the country's underpinnings crumble.