National Highway Funding Needs

Several major government officials and organizations have recently commented on the status of the nation’s transportation system, and on the need for additional funding to support investment. These officials and organizations include the Secretary of Transportation, the U.S. Chamber of Commerce, the National Association of Manufacturers and the American Trucking Associations, among others.

Former Secretary of Transportation Norm Mineta, and his successor, Secretary Mary Peters, have both spoken extensively about a growing national transportation crisis that must be addressed. The Department of Transportation has also produced several reports that point out the issues. The Department’s Federal Highway Administration (FHWA) estimates that nationally, another $5.7 billion in funding over and above 2002 levels is needed annually simply to maintain the system, and that another $50.7 billion per year is needed to make improvements.[50]

The U.S. Chamber of Commerce has been very vocal about the need for increased transportation investment.[51] Nationally, they indicate that $222 billion is needed annually to preserve the system, but that 2005 revenues were just $180 billion – a $42 billion per year shortfall. To actually improve the system with new capacity they say we are $91 billion per year short of funds. Since this report was written, federal funding authorizations increased by about $14 billion per year, but not by anywhere near enough to close the gap in funding. The Chamber Foundation, which prepared the report, suggests one key option for increasing funding is to begin indexing fuel tax rates to inflation. If indexing was applied retroactively to the time of the last fuel tax increase in 1993, it would raise approximately $19 billion per year.

Other organizations and companies have reached similar conclusions about the need for increased transportation investment. For instance, the National Association of Manufacturers’ president, former Gov. John Engler, say Congress must address transportation infrastructure needs this year.[52] Even the American Trucking Association has made increasingly strong comments about the need for additional funding, and has indicated it would prefer higher fuel taxes rather than more toll roads.[53] While it has not yet outright endorsed a tax increase, it seems to be open to the possibility. However, one of the biggest truckers in the country, FedEx Freight, has called flat out for fuel tax increases.[54] FedEx Freight President Doug Duncan says his company supports increasing the federal fuel tax if the money is used solely for highways. They indicate an additional $35 billion per year is needed to reduce congestion along the nation’s highways.