Surface transportation: the case for growth

This paper reviews the history and background of the development of our surface transportation system, and the salient issues surrounding investment in the system. Surface transportation investments have demonstrable economic and social benefits that go well beyond the sums invested. These benefits include net increases in economic output and productivity, improved national security and disaster response, and equitable access to economic and social opportunities for our citizens. There is widespread consensus that public investments in surface transportation have been lagging needs for several decades, to the point where our crumbling and congested infrastructure threatens our economic and social well being and our competitiveness in world markets. While some gains can be made through better use of existing revenue, rehabilitating the existing system and investing in our future will require spending that is tens of $billions per year above recent levels. How to raise the required revenue is a more complex and controversial issue. Federal and state revenues are primarily derived from liquid fuel taxes, and the combined effects of greater vehicle fuel efficiency and the tax structure have severely eroded purchasing power in real dollar terms. Over the long term we must face up to the inevitable conclusion that the fuel taxes, by themselves, are not sustainable as our primary revenue source. The pending shortfall in the federal Highway Trust Fund has forced the issue. It is urgent that we get on with the process of identifying and analyzing acceptable alternative or supplemental funding methods.