June 23, 2022
The Federal government spent $191 billion on infrastructure in 2019. In 2021, about 41% of infrastructure spending was on highways and 32% on air travel. 19% was spent on rail and mass transit.
Congress recently passed the Infrastructure Investment and Jobs Act (IIJA), aimed at rebuilding the country’s roads, bridges, and rails as well as expanding access to clean drinking water, tackling the climate crisis and advance environmental justice and more.
According to the White House, 1 in 5 miles of highway and 45,000 bridges in the US are in poor condition. The legislation will allot $110 billion in funding to repair roads and bridges.
Currently, infrastrastructure in the United States is funded by taxes on fuel and motor vehicles. Despite this, neither the federal government or local governments collect enough taxes to adequately fund the needs of the country’s infrastructure. Revenue from taxes on fuel has also become less reliable thanks to the growing adoption of hybrid and electric vehicles. As a result, many states use revenue from other sources to make up the difference.
Montana, Tennessee, Indiana, and California are the only states that get enough revenue from taxes, tolls and other fees to cover their highway infrastructure needs.
According to the 2021 Report Card for America’s Infrastructure, the country’s infrastructure rating is a C-. The nation’s roadways are dealing with increased wear and tear, and 43% of them are in poor or mediocre condition. The current infrastructure deficit is $256 billion.
This article will look at the current state of our bridges, roads, and transit and how road usage charging (RUC) can help.
Bridges have a 2021 Report Card for America’s Infrastructure grade of C. 42% of bridges in the US (around 615,000) are more than 50 years old, and 12% of those are over 80 years old. Bridges are not designed to exceed 50 years of use. Not only that, according to the 2021 Report Card for America’s Infrastructure, 178 million trips across structurally deficient bridges are taken every day. To make these necessary repairs, the country needs to increase spending on bridge repairs from $14 billion to $22 billion.
Over 40% of America’s roads are in poor or mediocre condition, and as rehabilitation needs increase, motorists pay around $1,000 per year in wasted time and fuel. Because of this, roads received a 2021 Report Card for America’s Infrastructure grade of D. Congestion on America’s roads caused us to travel an extra 8 billion hours in 2017.
Many people rely on public transit daily, and while access to public transit would make things easier for many Americans, 45% of us don’t have access to it. Furthermore, much of the existing transit system is aging, and many agencies don’t have the funds to make necessary repairs. All of this results in the transit system having a grade of D-.
To maintain and improve our nation’s bridges, we need to increase our investment by 58%. At that current rate of investment, it would take until 2071 to make the necessary repairs and upkeep. There are 231,000 bridges in the country that are in need of repair. Of those, 21,000 of these bridges are susceptible to washout or collapse due to foundation issues.
To meet the funding needs to keep bridges safe, 37 states have raised or reformed their gas tax, but it’s not enough. Spending to improve and maintain bridge safety remains inadequate.
When it comes to repairing and keeping bridges in safe, working order, the government must provide additional funding. To do this, the 2021 Report Card for America’s Infrastructure suggests raising the federal fuel tax by five cents per year. The report also suggests taking advantage of technologies, techniques, and innovations to extend the life of bridges.
States are urged to prioritize investments into those bridges that experience the highest daily traffic volumes, evacuation routes, or freight corridors.
The country’s roadways move 72% of our goods, and 43% of those are in poor or mediocre condition. The United States has been underfunding its roadways for years, resulting in a backlog of $786 billion. Furthermore, increasing temperatures over the years are expected to increase pavement costs by $19 billion. The Highway Trust Fund, which has been used to fund the upkeep of roads and bridges, is near insolvency because of the limitations of the fuel tax.
To combat this, many states are exploring additional revenue sources.
While a little less than half of Americans don’t have access to public transit, the existing public transit system lacks sufficient funds to keep it in good, safe working order. The backlog for funding public transit infrastructure needs will be around $270 billion in 2029. To accommodate the increasing needs of the nation’s public transit system, the 2021 Report Card for America’s Infrastructure recommends again increasing the amount of the gas tax.
As you’ve read, there are limitations to the nation’s fuel tax solution for funding infrastructure because the gas tax does not change along with the price of gas, and as more and more motorists begin to use electric or hybrid vehicles, the gas tax won’t remain sustainable. Road usage charges (RUC) arean alternative to this funding method. With RUC, a motorist pays for the use of the roadway based on the distance they’ve traveled.
RUC works by charging motorists for miles traveled instead of the amount of fuel consumed. This allows road funding and maintenance to be focused on the most heavily traveled routes. The fuel tax credit lets some businesses reduce their taxable income based on types of fuel costs. This tax credit encourages the use of renewable energy sources. It offsets the gas tax from the US government.
In most countries, including the US, revenue generation for infrastructure is usually created via toll roads and bridges, etc. In 2001, RUC was first implemented when the Port Authority of New Jersey and New York implemented a discount using EZ Pass during off-peak hours.
Currently, Oregon, Connecticut, and Utah have implemented RUC programs. Oregon and Utah’s programs are voluntary for drivers of electric or fuel-efficient vehicles. Connecticut’s program does not begin until 2023 and only applies to trucks weighing more than 26,000 pounds.
Other states that have piloted RUC programs include:
Washington: The state does not want to raise gas tax. The program focused on increasing alternative fuel sources and fuel economy.
California: 90% of people would be willing to participate in a RUC program, the state’s pilot program found. Seventy-three percent of those people surveyed said an RUC program would be fairer than a gas tax.
Colorado: Around 91% of people would be willing to participate in an RUC program and people see it as a fair alternative to the gas tax.
Of people surveyed in these pilot programs, some mentioned they were concerned with data security of the program. Hawaii, North Carolina.
Road usage charging benefits states and drives by:
Improves roads: Because the gas tax is becoming less effective, RUC is a great alternative to funding infrastructure.
Allows motorists to pay for what they use: This allows the roads with the highest usage to receive the highest funding.
Combats climate change: By reducing congestion during peak travel times. Having higher prices at peak travel times could also lead some drivers to carpool. It may also lead to people more carefully planning their trips to spend less or shorter periods on the roadways.
Attributes fairness: The RUC helps attribute fairness for drivers by charging based on road usage, not on the amount of fuel consumed.
While RUC has many benefits, there are some concerns about the program:
Privacy: The largest criticism of the RUC program is the perceived lack of privacy among users. This is because the RUC system “tracks” drivers. However, RUC programs are actually more private than EZ Pass toll transponders, for example. An RUC program would only transmit the payment and vehicle ID. No trip information would be shared.
A disadvantage to rural drivers: Most rural drivers drive longer distances than their urban counterparts. However, it should also be noted that rural drivers tend to own older, fuel inefficient vehicles, which makes RUC cost to individual drivers about the same across rural and urban communities.
Cost: The cost of collecting a fuel tax is very low. An RUC would have higher collection costs. Costs would include hardware and system development as well as technology installation. Though, once an RUC program is adopted at mass scale, costs reduce significantly.
As the consideration of RUC continues, it needs to be established whether an RUC system would be a national or state entity. But it is clear that the future will be RUC as the fuel tax system is becoming more obsolete.
When considering an RUC program, it’s important to find a partner that has:
Your RUC partner should also be able to create streamlined systems that are customized to your community’s needs.
Road usage charges are the future of infrastructure funding that is more sustainable. It’s time to make the shift to a mileage-based user fee.