June 11, 2019
Column | outbound

Free ride

Under current law, drivers of gas- and diesel-powered vehicles shoulder the burden of highway maintenance and repair costs, while drivers of electric vehicles get a free ride. This will have to change.

By Mitch Mac Donald

The time has come to fundamentally change our approach to funding the nation's infrastructure. That's one of the key conclusions of a report issued six months ago by the Transportation Research Board's (TRB) Committee on the Future Interstate Highway System. The question, as always, is how.

The report, Renewing the National Commitment to the Interstate Highway System: A Foundation for the Future, is based on a wide-ranging study of the actions needed to upgrade the nation's interstate highways. In addition to outlining an ambitious modernization plan, the report's authors offer recommendations for financing what amounts to a wholesale overhaul of the system's deteriorating pavements and bridges.

"The interstates have long been the backbone of our country's transportation system, but most of them have exceeded their design lives and in many places are worn and overused," said Norman Augustine, former chairman and CEO of Lockheed Martin Corp. and chair of the committee that wrote the report, in a statement. "These aging interstates are highly congested oftentimes and in need of reconstruction. Furthermore, technological advances are offering new opportunities, but they may also undermine a principal source of income for the interstates, namely the tax on fuel."

That last point is a crucial one. An epic overhaul will require an epic investment. And that means rethinking the way we fund highway improvements. Right now, most of the money for federal road projects comes from the excise tax on gasoline and diesel fuel. But that's not a sustainable financing path for the future.

For one thing, revenues from the fuel tax, which hasn't been raised since 1993, constantly come up short, forcing Congress to dip into the general treasury to pay for roadwork. If the current system isn't meeting today's needs, it certainly won't meet tomorrow's.

For another, thanks to the "technological advances" Augustine cites, more people are driving hybrid-electric or electric vehicles and thus, pay minimal or no fuel taxes. They are getting a truly free ride on our nation's interstates. This will have to change. We need all road-users to pitch in if we hope to create a highway system for the 21st century.

Fixing the problem won't be cheap. The TRB report projects that to adequately update and expand the interstate highways will require roughly $45 billion to $70 billion per year for the next two decades. By way of comparison, state and federal spending on interstates has averaged about $25 billion annually in recent years.

To finance the work, the TRB committee proposes an increase in the fuel tax in the near term as well as allowing tolls and per-mile charges on more interstate roads. Because of decades-old restrictions barring the use of federal money for toll roads, only about 7 percent, or roughly 3,000 miles, of the 47,000-mile interstate highway system is currently subject to tolls.

Were it not for the aforementioned "technological advances" that have spurred the rise of electric vehicles, the TRB's recommendation would get a ringing endorsement here. The growth in the use of electric cars and trucks, though, is a reality. Ignoring reality is risky at best and perilous at worst.

An increase in the federal (and likely state) fuel taxes would serve only to amplify an existing inequity. There can be no "free rides" built into the funding scheme. And that is exactly what an increase in the motor fuels tax would provide.

The answer then must be tolls. The ban on interstate tolling must be lifted and user charges assessed in an equitable way. Drivers of all vehicles must pay their fair share of infrastructure costs based on how much they use the system, meaning how many miles they drive.

It is not only time to reverse the pattern of neglect and underfunding of our interstate highways, but also time to put an end to free rides.

About the Author

Mitch Mac Donald
Group Editorial Director
Mitch Mac Donald has more than 30 years of experience in both the newspaper and magazine businesses. He has covered the logistics and supply chain fields since 1988. Twice named one of the Top 10 Business Journalists in the U.S., he has served in a multitude of editorial and publishing roles. The leading force behind the launch of Supply Chain Management Review, he was that brand's founding publisher and editorial director from 1997 to 2000. Additionally, he has served as news editor, chief editor, publisher and editorial director of Logistics Management, as well as publisher of Modern Materials Handling. Mitch is also the president and CEO of Agile Business Media, LLC, the parent company of DC VELOCITY and CSCMP's Supply Chain Quarterly.

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