After several indications in the press that President Obama would tackle the infrastructure problem in his State of the Union address, many were disappointed when the 6,718-word speech contained only 63 words on the topic. However, the 2016 budget proposal, released on Feb. 2, did contain an extension of the plan proposed a year ago. It recommended to Congress a six-year, $478 billion surface transportation authorization—up from $300 billion in the original plan—as well as an $18 billion fund for regional freight projects.
The big unanswered question, however, continues to be how all this will be funded. Though it might seem like the obvious solution, most politicians are quick to distance themselves from the subject of fuel tax increases, even when they're called "user fees," as the U.S. Chamber of Commerce has dubbed them. About half the funding for the president's proposal would come from a one-time 14-percent tax on earnings held overseas by U.S. corporations. In addition, a new 19-percent tax on foreign earnings would be established. Clearly, this will not be popular with the powerful multinational corporations that would be affected. More importantly, it does not place the burden where it belongs—with the users of the highways and bridges through reasonable fuel taxes (or "user fees," if you prefer). I believe that expecting this to be resolved by the time the current funding expires is extremely optimistic.
To add to the confusion, on the same day the budget was released, Secretary of Transportation Anthony Foxx unveiled a 316-page report titled "Beyond Traffic." This is a report on a study by the Department of Transportation to determine a 30-year blueprint for the overhaul of the country's transportation systems. The goal of the study was to develop a comprehensive national transportation system, instead of a collection of individual systems based primarily on the various states' wants and needs. The study drew on work already done by the University of Virginia and the American Society of Civil Engineers (ASCE). In a 2012 report, the ASCE projected that an infusion of $3.6 trillion by 2020 would be necessary to meet infrastructure needs. The chances of that funding's coming through are slim to none, but the country desperately needs a well-conceived and well-researched plan. Unfortunately, Secretary Foxx said the "report is not an action plan and is not intended to be." He calls it a "conversation about the future, rather than a conclusive definition of a path forward."
To most of us, a description of the nation's infrastructure problems is a blinding glimpse of the obvious. Hundreds of articles have been written about the state of our roads and bridges, and the continuing, clumsy efforts of Congress to develop a sound, practical funding system. What we have read very little about is a national blueprint for the projects. Without this, there will be no guarantee that the funds, when and if available, from whatever source, will be spent in the best interests of the country as a whole.
Because of Congress's failure to provide funding, a number of states have raised their own fuel taxes and are using the funds for highway and bridge construction and repair. Although this, no doubt, will help the states, these projects may or may not facilitate a national system. For instance, the state of Tennessee has discontinued work on its 156-mile segment of Interstate 69, the so-called NAFTA highway that would provide a direct connection with Canada and Mexico. However, the state just spent a whopping $753 million on a Nashville bypass. So far, its highest and best use seems to be easing traffic flow between Memphis and Knoxville on University of Tennessee football game days.
While it is encouraging to see some increased activity, I am not sure I see a good solution on the horizon.