Now that President Obama has signed new federal transportation funding legislation – the Fixing America’s Surface Transportation (FAST) Act – we will soon know how much federal funding we will have to spend through 2020. While the dollar amounts are not going to be enough to significantly improve our transportation systems, they should go a long way towards stabilizing the existing conditions. When you also consider the recent action of the state legislature to increase state funding for transportation, the funding discussion is now over for several years.
The biggest benefit of these bills will be the ability of state and local transportation agencies to at least plan their projects for the next five years and be reasonably secure knowing how much funding they will be receiving. If you are looking for a significant improvement in our road and transit systems, though, you are going to be disappointed.
Congress and the state legislature have managed to dodge the big bullet once again – the main source of transportation funding comes from the gas tax and vehicle registration fees. The state legislature increased both, while Congress chose not to increase either. A sobering reality is getting closer and closer.
In 2012, the federal government increased the fuel economy to the equivalent of 54.5 mpg for cars and light-duty trucks by Model Year 2025. This represents more than a doubling of the current average. There is no doubt of the potential benefits this decision has on the environment, importing less oil, and pushing battery technology. It also has the impact of cutting transportation funding from the gas tax in half – 50 percent by 2025!
As car companies ramp up to meet the requirement, we will see fewer and fewer dollars being raised for transportation improvements. Cheap gas and an improving economy might have people driving more than they currently do and can potentially delay the inevitable, but the decrease in the number of gallons of gas sold is a reality that is fast approaching. What are solutions? Well, you could always double the gas tax, but that is never going to happen. You could charge a fee based on the number of miles you drive – not on the gallons of gas you use. Some states are testing this concept, but most of the country is very lukewarm on this idea.
2025 is coming, and we do not have a solution. We haven’t even had any public discussion about the problem, let alone the solution. With the current state and federal funding legislations ending in 2021 and 2020 respectively, future elected leaders are not going to be able disregard this issue again. Can’t wait to see the end of this story!
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