Reports Outline Highway Funding Needs, How Investments Could Boost Economy

This story appears in the Dec. 15 print edition of Transport Topics.

Highway funding advocacy groups issued reports last week on the need for greater investment, laying the groundwork for an effort to persuade Congress to pass a long-term bill next year.

Federal funding for highways and public transit is only authorized through May 31 under a temporary spending bill approved last summer.

However, federal, state and local governments must spend $120 billion on highways and bridges and $43 billion on public transit infrastructure annually over the next six years to meet current demand, said a report from the American Association of State Highway and Transportation Officials and the American Public Transportation Association.

“Despite those dramatic investment needs, currently only $83 billion is invested [annually] in roads and bridges, while just $17.1 billion is invested in public transit,” the report said.

“There is little disagreement about the value of transportation,” AASHTO Executive Director Bud Wright said in a statement. “The key is reaching consensus on Capitol Hill.”

Several hearings have been held in Congress on the need to improve the highway network and other freight facilities.

Congress, however, has not agreed on a long-term funding mechanism for transportation. This past summer, the Highway Trust Fund, supported by fuel taxes that have not been raised in more than 20 years, tottered on insolvency before lawmakers agreed to the temporary funding bill.

AASHTO said in its report that the cost of inaction is being borne by the trucking industry and other business sectors.

The report cites studies by the American Transportation Research Institute that say traffic congestion costs trucking $9.2 billion a year in increased operational costs due to hours of lost productivity.

Also last week, a coalition of road builders and labor unions released a study that shows how federal spending on transportation infrastructure boosts the economy by creating jobs beyond the construction sector.

“Two-thirds of the economic benefits and jobs created by federal highway and transit investment occur in nonconstruction sectors,” said the study done by IHS Global Insight for the Transportation Construction Coalition.

The coalition includes the American Road and Transportation Builders Association, Associated General Contractors of America and several labor unions.

“For every three construction jobs created, five jobs are created in other sectors of the economy,” the IHS study said.

After the construction industry, the sector that benefits most from federal transportation spending in terms of job creation is the professional and business service sector, the study said. The trade, transportation and utilities sectors are in third place, the study found.

“We think they get it,” ARTBA President Pete Ruane said about whether lawmakers agree that transportation spending is good for the economy.

“And this study is just more ammunition to make the case for them to do their bloody job,” he said during a phone press conference about the report.

Stephen Sandherr, CEO of AGC, acknowledged that so far Congress has ignored the sustainable funding issue.

“But there seems to be a growing consensus that a reliable funding source needs to be identified, so, we’re about halfway home,” Sandherr said.