There is no doubt that our country’s infrastructure is in dire need of improvement. Driving a rig for a living, this comes as no surprise because you probably experience crumbling highways and bridges on an almost daily basis. Now we are left with the question facing the trucking industry; who is going to pay for the repairs and improvements that are needed?
White House Proposal for Funding
According to the president’s infrastructure plan, the federal government would allocate $200 billion in federal funds over the next decade, but the bulk of the money needed for funding infrastructure projects to the tune of at least $1.5 trillion will need to come from other sources. These sources include: localities, states and the private sector, including the trucking industry. The intent of the federal contribution is to start the ball rolling and get infrastructure projects started. The breakdown of this $200 billion would include:
- $100 billion for incentive programs for municipalities and states
- $50 billion for block grants to governors for rural projects
- $20 billion for transformative projects
- $20 billion for enhancing federal credit programs and increase the use of private activity bonds
- $10 billion for creating a Capital Financial Fund
Possible Funding Mechanisms at Stake
During the kickoff for May’s Infrastructure Week, Secretary Elaine Chao delivered keynote remarks including 16 funding mechanisms that she and other administration leaders suggest for bolstering funding for infrastructure. It should come as no surprise that none of the mechanisms suggested are totally supported by all. In fact, among the concerns raised by lawmakers is that these mechanisms could act as a barrier to programs because of the added uncertainty they are causing.
With a volatile economy, funding mechanisms that cost the private sector are concerning for owner/operators and trucking firms. Included among the suggested funding mechanisms are:
- Increased fuel taxes, which is unpopular with fuel prices continuing to climb for the past few months
- Expanded public-private partnerships
- Tolling, which is viewed negatively by most in the trucking industry
- Vehicle miles traveled fees, which some states have already begun running pilot tests
- Fuel usage fee included in wholesale fuel prices that would be collected at the terminal rack
The consensus is that there is no perfect solution for funding infrastructure to get highways and bridges back up to par in the United States. It is likely that several funding mechanisms will be needed to help generate the funding that will need to be supplied by municipalities, states, and the trucking industries.
While the infrastructure plan was released earlier this year, it is possible that it will not be passed into law this year.
