During Transportation Secretary Pete Buttigieg’s confirmation hearing, Senator John Thune (R-SD) observed that bipartisan support for the need to fund infrastructure is only exceeded by bipartisan support for not finding a way to fund infrastructure. As an industry, we have observed this for a generation. The last increase in the federal gas tax occurred in 1993.
President Biden’s “American Jobs Plan” announced yesterday at the Carpenter’s Training Center in Pittsburgh faces questions; specifically, as the Wall Street Journal observes, “1) how to pay for infrastructure; and 2) exactly what is infrastructure?” Biden’s infrastructure plan mixes a myriad of social justice and climate-based policy into a massive package and includes corporate and personal tax increases to pay for it. Gone is the user fee concept that has funded highways for more than 70 years.
The American Road & Transportation Builders Association plans to link the highway and transit portion of the Biden “American Jobs Plan” to reauthorization of the FAST Act that governs spending from the national Highway Trust Fund. The FAST Act expires September 30, 2021. So, this is the start of a several months and possibly longer debate in congress on what, how much, and how to fund infrastructure.
For you number crunchers we offer this. The highway portion of this eight-year plan is stated to be $115 billion. That’s about 5% which is exactly the portion of highway spending in then-President Obama’s 2009 “infrastructure” stimulus plan. Pennsylvania’s share of the Highway Trust Fund historically has been about 4%. So, spread over eight years, PA would receive about $575 million per year. ARTBA views this as an increase above current FAST Act funding levels.
Meanwhile at the state level, APC recently called for using the most recent American Rescue Plan COVID relief funds to cover the state’s General Fund, thus freeing nearly $700 million in Motor License Fund dollars for building and maintaining PennDOT’s 40,000-mile highway system. This short-term move can get PennDOT through a tough financial bind while the final outcome of the federal plan is determined.