That is the question—at least where the nation's highway infrastructure is concerned.
Last month, I wrote about the continuing infrastructure drama taking place in the nation's capital. As Sept. 30 approaches, all supply chain eyes will be turned toward Washington to see what Congress will do about replacing the current transportation funding bill (MAP-21), which expires on that date. By now, most of us are aware that the nation's roads and bridges have reached a critical state of disrepair and that it will take billions of dollars to bring them up to acceptable standards. But no one seems to have the foggiest notion of where the money will come from.
Right now, the chief source of revenue for road construction projects is the federal fuel tax, which currently stands at 18.4 cents per gallon on gas and 24.4 cents on diesel. But revenues from the tax, which has not been raised since 1993, no longer come close to meeting needs. Several organizations, including the U.S. Chamber of Commerce and American Trucking Associations (ATA), have called for raising the federal fuel tax. But that won't happen without a fight. Whenever the subject has been raised, it has sparked a political firestorm that Congress has been reluctant to walk into.
That brings us to the question of tolls. Both President Obama and Secretary of Transportation Anthony Foxx have recently made reference to "public/private" partnerships, which most consider to be code for "tolling our interstates." That would be an abrupt reversal of course for this country. Congress banned tolls on all interstates when the 46,000-mile system was created in 1956, although a few exceptions have been made in recent years.
The "fors" and "againsts" are already lining up. Opponents of tolling include a number of influential companies and organizations, such as the Alliance for Toll-Free Interstates (ATFI), which counts FedEx, the ATA, and UPS among its members. Among other objections, ATFI cites the failure of several attempts at tolling interstates as well as a number of perceived inefficiencies. It notes that a study by the Transportation Research Board of the National Academies found that a typical toll facility spends 33.5 percent of its revenue on administration, collection, and enforcement, while the administrative cost of collecting a fuel tax is about 1 percent of revenue. Another, I believe legitimate, concern raised by the group is that drivers would be subject to double taxation in that they would pay tolls along with state and federal fuel taxes.
On the other side of the debate, we have the International Bridge, Tunnel and Turnpike Association (IBTTA), an organization representing toll facility owners and operators.
IBTTA calls tolls "one of the most effective and proven ways to finance the construction, operation, and maintenance of heavily traveled road, bridge, and tunnel infrastructure" and notes that the country's 5,000 miles of tolled highways, tunnels, and bridges generate over $12 billion in annual revenues. In testimony before Congress, the organization made a pitch for expanding the program, stating, "While MAP-21 allows for tolling of new interstate capacity, IBTTA strongly encourages the committee to consider allowing the expansion of this funding tool to include existing mileage on the interstate system."
Personally, I cast my lot with the ATA, the U.S. Chamber, and the other proponents of raising the fuel tax. I believe that some reasonable increase would be a much more fair and equitable solution than tolls. Admittedly, the resulting revenue wouldn't solve the problem entirely, but it would be a good start. Whatever the end result, the issue is sure to generate a contentious debate when it comes up for discussion in Congress.