You know it well. It’s that anxiety that overcomes you when all you can see is an ocean of red brake lights in front of you on the interstate.
The average rush-hour commuter in America spends 42 hours per year sitting in gridlock during peak hours, according to the 2016 INRIX Global Traffic Scorecard. The most congested cities, to nobody’s surprise, are Los Angeles (104 hours), New York City (89) and San Francisco (83). The worst congestion in Texas was found in Dallas, where 59 hours per year are sapped sitting in traffic. Nationwide, more than $295 billion was spent on wasted fuel and lost time in 2016—about $1,400 annually for the average driver—because of congestion.
Get the picture? Our transportation network has a difficult time keeping up with population growth and business expansion now, let alone trying to get ahead of it. It raises a massive infrastructure concern for the decades ahead—not just creating new roads or expanding existing ones, but financing them.
In Texas, for instance, population growth continues to skyrocket. U.S. Census Bureau data shows that Texas gained roughly 400,000 new residents in 2017. Texas is now home to 28.3 million residents, and the Office of the State Demographer projects that more than 50 million people could live in the Lone Star State by 2050. The impact of this amazing growth on our transportation system is challenging, especially when major infrastructure projects can take 10 to 20 years to complete.
The Impact of Fuel Taxes
One obstacle to the process is that federal and state gas taxes are becoming less impactful when it comes to paying for our highways—they are not long-term solutions. The Federal Gas Tax is 18.4 cents per gallon and hasn’t been raised by Congress since 1993. The Texas Motor Fuels Tax is 20 cents per gallon—established back in 1991. Add 25 years of inflation, increasing construction costs, and cars that are much more fuel efficient, and it’s easy to see how gas taxes today don’t provide the roadway financial boost they did decades ago.
Texas voters in 2014 and 2015 approved Propositions 1 and 7, which are constitutional amendments that pull additional tax money and deposit it into the State Highway Fund. Proposition 1 pulls a portion of oil and gas severance tax revenues, while Proposition 7 draws from general sales tax and motor vehicle sales tax revenues. Those funds have helped with construction, maintenance and rehabilitation over the last few years—addressing some of the congestion issues that exist now. Additional funds come from sources such as vehicle registration fees and other miscellaneous taxes. However, all new money within the system does not meet the projected needs.
The key is thinking about the ultimate doubling of a population and being able to accommodate it efficiently. How will funding, which is only one aspect of equation, evolve to maintain highways and help build new ones? How will we use technology to make the most of our existing infrastructure? What alternative modes of transportation will we use to move around?
A new series over the next several months will examine the following transportation topics:
Funding. Funding highway projects comes in many different shapes and sizes. One potential method for adding future revenue is the vehicle miles traveled (VMT) tax. Think of it as a user-fee scenario. The tax would apply everywhere based on the number of miles driven. For example, someone burning up our highways every day commuting to work would incur a higher tax than a soccer mom using local roads to get her kids to practice. The VMT tax has been implemented in pilot programs and other studies to this point. Political will ultimately will determine whether or not the tax is put into play for everyone. Consider your phone or electric bills. Those are user fees; transportation could take the same route. We’ll also look at partnering and alternative delivery solutions.
Connected and autonomous vehicles. We all know that major auto manufacturers, and other companies such as Google and Uber, are spending billions of dollars on connected and driverless car technology and testing. That technology, once harnessed, will provide many benefits and ease stress on the roadways. As we think about the future of mobility, a truly self-driving car’s behavior would always be known. As we know, a human’s behavior and reaction time are unpredictable. The more cars are moving in sync and “talking” with one another, the more traffic congestion could be alleviated. That is one way of gaining more capacity out of our existing facilities. Ride-sharing programs are another part of the solution.
Alternative modes. Consider where cities such as New York, Chicago, Boston, or Washington, D.C., would be today if money hadn’t been invested in mass transit. It would be nearly impossible to travel anywhere. Mass-transit solutions and other modes of transportation such as high-speed rail, hyperloop technology and active transportation networks will continue to evolve. If you don’t think you would ever give up your car, consider what you pay to keep a vehicle in operation for a year. What is the price tag for your combined car payments, gasoline charges, maintenance costs, insurance coverage, toll bills, and parking fees? Those costs will climb.
For more than 50 years, America and its highways benefited from a tried and true system of collecting taxes at the pump. That system’s impact for the infrastructure and traveling needs of today continues to fade. Technology will play a huge role in solving our transportation issues for the next 50 years, but the public’s mindset—how it uses transportation—has to change, too. And we must continue to think innovatively about solutions.
Our blood pressure depends on it.
For more information about Halff’s Transportation team, write to Info-Transportation@Halff.com.
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