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Supply Chain News: Report from the National Academy of Sciences Calls for Major Hike in Highway Spending


New Sources of Funding Such as VMT will be Needed, Report Says


Dec. 12, 2018
SCDigest Editorial Staff

America's interstate highway system is in bad shape and will require substantially more investment just to rebuild what we have, let alone add capacity.

Such is the conclusion of a new report on US logistics infrastructure needs from the National Academy of Sciences, a private, non-governmental institution created to advise the nation on issues related to science and technology. The new report was the result of a Congressional mandate to analyze the infrastructure issue.

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Congress should prepare for the need to employ new federal and state funding mechanisms, such as the imposition of tolls or per-mile charges on users of the highway system.

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It's not as if the report's conclusions or recommendations are new. Still, the report puts the issue and call to action in sharp relief, at a time when "The interstate highway system's future is threatened by a persistent and growing backlog of physical and operational deficiencies and by a number of large and looming challenges," the report states.

It later adds that "unless commitment is made soon to remedying the system's deficiencies and to preparing it for the challenges that lie ahead, there is a very real risk that the system will become increasingly congested; far more costly to operate, maintain and repair; less safe; incompatible with evolving technology; and vulnerable to the effects of a changing climate and extreme weather. The consequences from these deficiencies will spill over into all the passenger and freight modes that complement and connect to the system."

The issue, of course is not what should happen, it's a question of money. And it is going to take lots of it to change the status quo.

The chart below from the report shows the current level of annual spending on the US highway system (in 2016 dollars) and the amount needed per year over the next 20 years at various rates of growth of vehicle miles travelled.

As can be seen, current spending is about $21 billion – and virtually all of that on maintaining the current system, not adding capacity. Even at the low end of the VMT growth scenarios, the report says about $46 billion in annual spending is required, more than double current levels.


Huge Increases in Highway Spending Needed, NAS Report Says


At the top end of the scenarios, a whopping $69 billion will be needed, with a great increase in spending to add lane miles.

The report also makes the interesting observation that beyond maintaining what we have and adding capacity as traffic volumes grow, smart investment is needed to ensure that the system is robust and adaptable to changing vehicle technologies, such as autonomous cars and trucks, taking care to avoid premature investments in assets and the introduction of standards that would hinder or even foreclose useful development pathways.

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And in one more cheerful observation, the report notes that with much of the highway system at or near end of life, "only limited planning and budgetary preparations have been made to fix the deterioration that has already occurred and to prevent the physical and operational deficiencies that will ensue."

Not good.


So what to do? The report offers the following recommendations:

Congress should legislate something the report calls an Interstate Highway System Renewal and Modernization Program (RAMP). This program, pursued without sacrificing normal on-going system maintenance and repair, should focus on reconstructing deteriorated pavements, including their foundations, and bridge infrastructure; adding physical capacity and operations and demand management capabilities (e.g., tolling) where needed; and increasing the system's resilience.

Additionally, Congress should, as a near-term step, (1) increase the federal motor fuel tax to a level commensurate with the federal share of the required RAMP investment, and (2) adjust the tax as needed to account for inflation and changes in vehicle fuel economy.

SCDigest notes federal fuel taxes have not changed since the early 1990s, though many states have raised their taxes.

What's more, Congress should prepare for the need to employ new federal and state funding mechanisms, such as the imposition of tolls or per-mile charges on users of the highway system.

Many agree on the neeed for new funding sources, especially as alternative fuel vehicles gain a bigger percentage of vehicle traffic, but some groups, like the American Transportation Research Institute, are against a vehicle miles tax, saying it will be inefficient and require IRS levels of bureaucracy to manage.

The American Trucking Associations is strongly against tolls, but is solidly behind raising fuel taxes.

Another recommendation is that Congress should lift the ban on tolling of existing general-purpose interstate highways. As a condition for imposing those tolls, states should be required to assess their impact on current users and offer alternative mobility options for those users significantly and disproportionately harmed by new tolls.

Finally, Congress should direct the U.S. Department of Transportation and the Federal Highway Administration to develop criteria forsystem rightsizing using a consultative process that involves states, local jurisdictions, highway users, and the general public.

A forward-looking vision similar to that which drove the original construction of the US highway system is needed again now, the report says. Can such a vision take hold in today's environment – and will tax payers be willing to pony up?

Those are the trillion questions.

A full copy of the report can be found here: Renewing the National Commitment to the Interstate Highway System: A Foundation for the Future

Any reaction the US infrastructure issue of the report's recommendations? Let us know your houghts at the Feedback section below.


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