This story appears in the Nov. 25 print edition of Transport Topics.
WASHINGTON — Congress no longer can put off finding a long-term solution to U.S. infrastructure needs without risking that the nation will slip behind global competitors, several industry leaders said Nov. 21 during a transportation conference here.
At the session — labeled “Infrastructure for the Future” and sponsored by the American Highway Users Alliance and the Volvo Group — retailers, manufacturers and freight haulers joined in highlighting how a crumbling and congested infrastructure hurts the economy.
The federal government’s main source of surface transportation funding — the Highway Trust Fund — is headed for its own “fiscal cliff” in 2015, when it’s expected to run out of money from declining fuel tax revenue, said Bud Wright, executive director of the American Association of State Highway and Transportation Officials.
“What we need is a long-term, sustainable form of revenue,” he said. A fuel-tax increase that would cost users about $1 more per week would be sufficient to grow and sustain the trust fund, which pays for transportation projects and is supported mostly by a 24.4 cent-per-gallon diesel tax and 18.4 cent-per-gallon gasoline tax that haven’t been increased in 20 years, he said.
Infrastructure isn’t keeping pace with demand, and delays are growing. “For us, if you just take five extra minutes a day that we lose for every UPS driver, that’s $105 million” in extra costs, said David Abney, chief operating officer of UPS Inc., which moves 6% of the nation’s GDP.
To combat the delays, UPS has to put more drivers and trucks on the road, he said. “That means we burn more fuel. That means that we emit more emissions. There’s just a lot of the inefficiencies that we have to do to make up for the shortfall, and it’s not getting better, as you all know.”
Congress will have to decide whether to increase fuel taxes, index them to inflation or find new sources of funding, speakers said last week.
The challenge is convincing members of Congress who are “infrastructure deniers” and opposed to tax increases, American Trucking Associations President Bill Graves said. Americans will have to pay more in some form or fashion for the roads and bridges that are the “circulatory system” of the economy, Graves said.
Upgrading highways, airways, railroads and seaports, really only Congress and the administration can do that,” said UPS’ Abney. “Our job as users is to seek consensus on what is needed.”
Sen. Barbara Boxer (D-Calif.), chairwoman of the Environment and Public Works Committee, reiterated that she’s open to exploring a sales tax on fuel instead of the current per-gallon tax — similar to what Virginia lawmakers did this year to increase transportation funding. The current transportation bill, MAP-21, streamlined the environmental review process. Congress will have to focus on funding when the law comes up for reauthorization next year, she said.
“We can’t push the funding issue down the road,” she added.
She said a tax on vehicle miles traveled makes sense, but she has problems with the “intrusive” nature of it. A way to get around that might be to have drivers voluntarily report how many miles they travel when registering their vehicles, Boxer said.
Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, said he wanted to make funding secondary to jobs. “We have to make the case to the citizens first that there is a problem.”
About 160 people attended the conference, which featured keynote speakers Boxer, Shuster and U.S. Deputy Transportation Secretary John Porcari.
Olof Persson, CEO of Sweden-based Volvo Group, said the firm has about 4,500 employees in the United States and production facilities in five states, which is why it is important for Volvo to be involved in discussions about the future of infrastructure here.