Key Topic

Highways and Roadways

By 2050, the total U.S. population is projected to reach 420 million, a 50 percent increase over 50 years. This growing society will demand higher levels of goods and services, and will rely on the transportation system to access them, according to the National Surface Transportation Policy and Revenue Study Commission.

Inefficiencies in our transportation system are costing billions and the statistics about the current condition of our highways and roads are alarming:

Americans waste 4.2 billion hours and 2.9 billion gallons of fuel a year sitting in traffic – equal to nearly one full work week and three weeks’ worth of gas for every traveler; the total cost of congestion in 2012 was $121 billion or $818 per motorist (Urban Mobility Report).   The national impact of crashes in 2012 was $230 billion (2.3% of GDP) according to TRIP. By way of comparison, Medicare annual costs in 2008 were just over 3% of GDP (The New York City Pedestrian Safety Study and Action Plan, August 2010).   Fourteen percent of America's major roads are in poor or mediocre condition, 44 percent of major urban highways are congested and 25 percent of bridges are either structurally deficient or functionally obsolete (TRIP, 2014).   Congestion and capacity constraints threaten to increase the cost of trade and impede America’s global competitiveness.  Delays in freight movement impose real costs on businesses that reduce productivity, impede our competitiveness and increase prices for consumers.  General Mills estimates that for every one mile per hour reduction in average speed of its trucking shipments below posted speed limits adds $2 million in higher annual costs (U.S. House Transportation & Infrastructure Committee’s Blueprint for Investment and Reform, 2009).  According to UPS, if congestion causes each UPS delivery driver to incur 5 minutes of delay, it would cost the company $100 (Testimony before U.S. Senate Environment and Public Works Committee, 2011). 

The primary source of funding for federal investments in our highways and mass transit system comes from the Highway Trust Fund.  The Highway Trust Fund was created in 1956 to construct the Interstate Highway System which has grown to 47,000 miles.   Funds deposited into the Highway Trust Fund include excise taxes on motor fuels and truck-related taxes, including taxes on gasoline, diesel fuel, gasohol, and other fuels; truck tires and truck sales; and heavy vehicle use.  In 1983, the Highway Trust Fund was divided into the Highway Account and the Mass Transit Account.  More than 80 percent of the total fund is the Highway Account, including a majority of the fuel taxes as well as all truck-related taxes.  The federal tax on gasoline is 18.4 cents per gallon and has not been raised since 1993. (source: http://www.gao.gov/new.items/d10780.pdf)  Because the gas tax is not indexed to inflation it has lost one-third of its purchasing power and is only worth 11.5 cents today (Federal Highway Administration).

To address growing needs, including repair and maintenance of existing assets, more resources will be needed and we must find smarter, more efficient ways to make these investments to ensure taxpayer dollars are spent wisely.