Is an Infrastructure Apocalypse on the Horizon?

The US’s aging Infrastructure seems to be falling apart but what is worse is no one knows how to fund infrastructure.

How much more can motorists pay before they can no longer pay any more?

Motorists already pay a state and federal gas tax. Motorists already pay special wheel taxes or additional vehicle registration fees. In some places, motorists, along with everyone else, pay an extra sales tax to improve and maintain local streets and roads. Driving cross country or on their daily commute, motorists pay tolls to use roads. Various urban cores want to evoke congestion pricing at rush hour or just to drive downtown. Some states are now even conducting or preparing to conduct vehicle miles traveled tax experiments that eventually may replace the gas tax or be added to all rest that motorists already pay.

Policy makers and editorials continue to pump the idea that a VMT Tax is the inevitable future but not yet.

Traffic congestion is worse than ever. Even though, motorists are paying all these taxes and fees, there seems to be less money to maintain current streets, roads and highways. Mississippi, the poorest state in the country, has over 500 bridges that are structurally unsound and the legislature still can’t decide how to fund infrastructure.

54,259 bridges nationwide are considered structurally deficient. Many of our bridges have exhausted their time of usage. Without bridges, folks cannot go to work, kids cannot go to school, goods cannot be hauled to market and raw materials cannot go to manufacturing plants.

The everyday-just-trying-to-get-by-sort-of driver is having more and more difficulty doing just that. Most drivers cannot afford to have one third or sometimes one half of their monthly pay taken up by transportation costs. Pay certainly has not gone up as much as transportation costs. Transportation costs plus the increase in housing costs will soon bring the country to a halt because no one will be able to pay for anything.

Eighty-eight percent of all adults drive in America.  Motorists are the biggest constituency but at the same time, the most complacent. We all know the situation is grave and it seems as if it will not get better any time soon.

In a recent Chicago Tribune editorial, the Chicago Metropolitan Agency for Planning Executive Director Joseph Szabo said:

There is no free ride, and you don’t just invent money. The soundest policy if for the users of the system, those reaping the benefits of the system, to be the ones to pay for the cost of maintaining and modernizing the system.”

Even though he was referring to possible congestion pricing for the windy city, it got me to thinking if all users of infrastructure paid for their actual use of public infrastructure, would that mean each of us would need to wear a Fitbit type of device with a transponder that would track how many steps we take on public or private sidewalks so that we can be tolled for steps taken too? Every step we take someone could be making a penny.

The state of Illinois has been kicking the can on paying for infrastructure for so many years, lawmakers are now faced with a $40 billion price tag. According to the state DOT, the backlog of work has increased by 85 percent since 2000. In 2017, lawmakers passed its budget with a $5 billion income tax hike but guess what—the budget did not include basic funds for infrastructure. That comes in a capital bill passed separately—the last one was passed in 2009.

New York state recently passed a budget which includes an additional tax for each rideshare in New York City that will go to help pay for fixing the very broken NYC subway system. Will this be enough money? Next year, will they impose congestion pricing in Manhattan for the same purpose? Folks in Manhattan may not even drive but they will pay for this in the higher amount for goods and services they will need to fork out.

Where does this taxing for use begin and end?

It seems there is a concentrated effort to push motorists out of their personal cars which is a weird construct if you think about it. If motorists stop driving who will then pay for public transit? Everyone claims that getting folks out of their personal car will be cheaper for them but if cities and states imprint a rather hefty transit fee to every rideshare and to every transit ride, it will cost even more for the average Joe and Jane.

Washington can’t really help it seems. Experts say The Highway Trust fund will perhaps be spent by 2020. The cornerstone of the Trump Administration Infrastructure plan will be to reverse the funding equation. Before Trump, the infrastructure spending equation was 80 percent federal money and 20 percent state or local money. Now, the idea is to make state and locals pay for 80 percent while the feds chip in 20 percent. Just like most of the country, the federal government is deep in debt. By 2020, the projected annual deficit might very well be at $1 trillion.

The Trump Administration as well as the Obama Administration, have been pushing public private partnerships or PPPs to build infrastructure—allow private companies to build the infrastructure with some government money (really—it is our money since we are paying taxes) and the company will then have a huge financial interest in the cash made by tolling. PPPs though are notoriously unreliable and the government (which is us) is left holding the bag if the private company goes belly up.

Do we have our heads stuck in the sand?

Without good working infrastructure, our society falls apart. Goods and services still have to move and so do workers. We need vehicles on roads to make our economy work.

Infrastructure needs to work long term and so do the funding mechanisms that pay for our nation’s bridges, highways, roads and streets.

 

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One Response to “Is an Infrastructure Apocalypse on the Horizon?”

  1. Peter Rives says:

    Yes, but we shall have driverless cars….