Introduction to PPPH
Professor Orin Puniello
May 5, 2014
Transportation Policy and the Transportation Funding Issue
The roads, railroads, bridges, and public transportation systems are all integral parts of the United States; without them there would be numerous predicaments in terms of mobility and the ability to facilitate commerce and shipping. Transportation policy pertains to the development of constructs that are set to achieve certain objectives in social, economic, and environmental development, whilst also simultaneously working with the proper functioning and performance of the transportation system. State governments have realized how imperative it is for the nation to implement new transportation funding ideas and capitalize on these very same ideas. In recent years, the transportation funding dilemma has been increasing due to the capacity of the system not being able to add up to the actual use of the transportation system. Due to this, states have decided that a solution must be found to this issue by increasing funding and financing, especially in congested areas that demand more. The federal government has kept the transportation funding at stagnant levels. Due to this, in 2013, many states including Maryland, Massachusetts, Pennsylvania, and Virginia decided to put policies to use that would essentially create new funding for transportation infrastructure. Officials have been discussing their options since 2013 but many states such as Alaska, Iowa, Wisconsin, New Mexico, and Rhode Island will most probably take action this year after examining the issue at hand. States such as Texas are voting this November in order to decide if funds from the state emergency rainy day fund should be used for transportation projects while other states such as Missouri are petitioning in order to hold a vote on a one-cent tax increase for projects such as transportation infrastructure. The transportation funding issue will become an even more prominent issue in 2014 because not only are states wondering how infrastructure will be funded, but Washington is as well. The deadline is quickly approaching because this fall, the federal legislation outlining the United States’ finances regarding transportation is set to expire. This deadline alone poses a threat to transportation projects across the country as the federal gas tax has remained the same for 20 years and counting, but without proper transportation policy action, federal budget specialists predict that the gas taxes will soon decrease and will not be able to fuel transportation projects. States, in particular, play a key role in funding, operating, and maintaining the transportation assets in the United States and due to the demand and growth of transportation increasing, states are also searching for many solutions to finance and fund the issue at hand. Funding the United States’ transportation program is extremely crucial to the economy while also being critical to the daily lives of citizens. The funding needed to repair, upgrade, and improve the transportation system so that it may sufficiently meet current and imminent demands is estimated to be several billions of dollars. Granted, the funding required to fuel the renovation is in the billions, but the concrete solution to this ongoing and growing problem has not yet been found. Funding, in particular, poses many high risks for many reasons including motor fuel and highway taxes, and additional revenues needed to maintain current expenditure. Motor fuel and high way use taxes, both used to help sustain the Highway Trust Fund, heavily fund the transportation system, but are quickly diminishing. For example, motor fuel tax rates have no increased since 1993; today, the 18.3 cent per gallon tax on gasoline that was sanctioned in 1993, would be worth a mere 11.4 cents. The reason for this is that in the past 20 years, there has been an influx of...
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