A safe, modern and efficient transportation system is critical to the economic success of our nation. Yet, policymakers in Washington have had their heads in the sand for years while our infrastructure continues to deteriorate. Our roads are clogged with traffic, our trains and buses are filled to capacity and our skies are approaching gridlock.
This has been happening all over the country, including in Utah. But then again, you probably already knew that. Forty-four percent of Utah’s urban interstates are congested during peak travel times, and 30 percent of the state’s major roads are in poor or mediocre condition. But were you aware that driving on mediocre roads in Utah costs the average driver $287 in repairs and operating costs each year? It’s no wonder that the American Society of Civil Engineers graded Utah’s infrastructure a C+.
In some respects, Utah is ahead of the game, as America’s infrastructure fared much worse at a D+. Your state has started to take action by investing more in your infrastructure. But at the national level, our policymakers have not been serious about a long-term infrastructure strategy. As a result, America has been falling apart and falling behind our global economic competitors. In 2005, the World Economic Forum rated the competitiveness of America’s infrastructure No. 1. Today, we have fallen to No. 9 behind France and the Netherlands.
Since the 1950s, our roads, bridges and transit have been funded by the users of the system through an 18.4 cent federal fuel tax. But this once reliable source of funding is no longer sufficient to meet the needs of a 21st-century transportation system. While there are more cars on the road than ever before, they are also more fuel-efficient, using less or no gas and generating smaller revenues for the Highway Trust Fund. Coupled with the fact that the fuel tax has not kept up with inflation and has not increased since 1993, the Highway Trust Fund is in danger of running out of money in 2020.
Think about that. The cost of everything has gone up since 1993. Imagine trying to get by today on the same salary you earned in 1993. That is the woeful state of the Highway Trust Fund. The years of kicking the can down the road must end.
Congress can address this issue sooner than later by tying infrastructure to the tax reform proposal that will be making its way through Congress in the weeks ahead. We are suggesting two ways to provide a long-term and sustainable solution to the Highway Trust Fund. The first is through an immediate cash infusion. An estimated $2 trillion in corporate earnings from American companies are currently stashed overseas and sheltered from U.S. taxes. Let’s bring that cash back home by incentivizing companies to repatriate these funds at a much lower tax rate than the current 35 percent corporate tax rate and directing a substantial portion of those funds to the Highway Trust Fund or an Infrastructure Bank.
While this immediate cash infusion is directed to rebuilding the nation’s infrastructure, let’s also modernize the federal fuel tax by a modest 10 cents and tie it to inflation. Ultimately, the fuel tax is likely to be phased out in several years as technology will make it possible to transition to a system based on the number of miles driven by users. This would ensure that all users of the system pay their part, including the growing number of hybrid and electric vehicles that use little or no gas. This concept is already being studied and tested in several states, including Oregon and California.
Over the past 30 years, all revenue increases for the Highway Trust Fund have been included in tax or deficit reduction legislation. As former elected officials, we fully understand the difficult politics of raising revenue. But by tying infrastructure to tax reform, any increase in the fuel tax would be more than offset by the amount of a middle-class tax cut. Over 250 bipartisan members of Congress agree, which is why they recently sent a letter to the House Ways and Means Committee asking that a long-term fix for the Highway Trust Fund be included in a tax package.
It’s past time for serious action to revitalize America’s infrastructure. Congress must link tax reform and infrastructure, and provide a permanent fix to the Highway Trust Fund.
Ray LaHood is a former U.S. Transportation Secretary and Ed Rendell is a former Pennsylvania Governor. Both are co-chairs of Building America’s Future.