What's Coming Down the Road in 2013?

Doug Ford, president, International Slurry Surfacing Association (ISSA): Getting pavement preservation into MAP-21 was a very positive movement for both the states and industry. The mere inclusion in the bill will stimulate education on pavement preservation processes and thus education on money saving systems. The right preservation treatment at the right time saves dollars and stretches budgets.

ET: What are the disadvantages of MAP-21?

NAPA: The obvious negatives of MAP-21 are the bill’s length (just two years), the funding level (essentially flat) and the fact that it does not meet the challenge of how we will find long-term funding. A two-year bill is simply not long enough for state transportation departments to plan and budget for larger, multi-year highway and bridge projects. It’s also too short to encourage contractors to make long-term capital investment decisions.

ARRA: This bill is not put together for contractors — that is not its purpose. It is about taking $105 billion out of an otherwise poorly managed budget to try and duct tape and glue a failing infrastructure in this country. [This bill] is underwhelming to say the least and certainly not a ray of sunshine for the road building community, but again this bill is not for contractors.

The funding that is needed for our country’s infrastructure is not in the billions anymore. The cost of holding this together escalates every year at a staggering pace.

The Future of Highway Funding

ET: What does the future hold for the Highway Trust Fund (HTF)?

NAPA: Estimates show the HTF will be in the red in 2015. MAP-21 provides an $18.8 billion transfer from the general fund to the highway trust fund. Future bailouts are highly uncertain and raising the gas tax user fee is politically difficult. The federal-aid highway program needs a long-term funding source, and that is an area which MAP-21 did not address.

ARTBA: The HTF is still facing structural issues. The amount of revenue collected into the fund is not keeping pace with obligations. MAP-21 provided some short-term relief from the series of extensions since SAFTEA-LU expired, but Congress is going to have to deal with the same situation when MAP-21 expires.

ET: The question of raising gas taxes and increasing funding for our roads seems to be off the table for now. Where do we get the financing for constructing and preserving our highways? What options are available?

NAPA: There are plenty of options. Raising the gas tax is the easiest, most obvious solution, but there is little political will to support it. Next would be a tax on vehicle miles traveled. The technology is available, but the privacy issues will be a high hurdle to overcome in trying to enact the legislation. Another option would be to use royalties from oil and natural gas production to pay for highway investments.

We have options, but any option put on the table will have its detractors. That is why political leadership will be needed in the next Congress to solve this issue.

ARTBA: The National Surface Transportation Infrastructure Financing Commission outlined 30 potential revenue options for supporting federal investment in highway, bridge and transit construction in its 2009 report. Although the U.S. could adopt any number of different revenue sources, the implementation of a new system would take time. In the short run, the gas tax is still the best option for funding the federal aid program.

ARRA: Financing for the existing bill doesn’t appear to be an immediate problem. The HTF and some change between the cushions on some Washington sofas will get this through. The Afghanistan conflict coming to an end may free up some funds, as well.

Longer term, the idea of increasing the gas tax makes perfect sense. What do the oil companies do when they need money? I’m not joking — that is exactly what happens, and it seems the most likely and timely solution.

ET: With fewer funds available for new highway construction, how do you see the role of preserving our roads changing?

NAPA: The lower the funding level, the more dollars will be directed toward maintaining the existing highway and road system, and the less likely it is that we will build additional capacity.

Congress was clear in MAP-21: the goal of the legislation is to bring the existing national highway system up to a state of good repair. Unfortunately, MAP-21 doesn’t even provide enough funding for that. At best, the rate of decline in the condition of our nation’s roads, highways and bridges will slow.