I am sure it won’t come as any great surprise to anyone that we will not be seeing infrastructure legislation coming out of Washington this year. With the mid-term elections coming up in November, members of Congress are far more interested in campaigning and working on legislation that will make them more popular with their constituents. Infrastructure improvement, or more accurately, infrastructure funding is not one of those favored activities.
Such things are not uncommon in election years, but our problem seems to be that with some major election every two years, Congress seems to find it difficult to get much accomplished between them. This year could be even more problematic. If the November elections result in a major shuffle of Democrats and Republicans, we could see infrastructure pushed back to Square One.
The infrastructure plan presented by President Trump in February, was disappointing to many in that it proposed using Federal dollars as incentives to encourage the states and private interests to pay the rest of the bill. During the campaign, we had been promised a $1 trillion plan, and most believed that a much larger portion of it would come from the Federal government. It is clear now that is not going to happen. Nor does Congress have an appetite for increasing the fuel taxes that go into the Highway Trust Fund. This fund is the major source of money for improvements to roads and bridges; but according to the Congressional Budget Office, between 2021 and 2026, the fund will face a deficit of $204 billion annually.
The fuel tax has not been increased since 1993; and despite pleas from truckers, the United States Chamber of Commerce, and others, Congress has consistently refused to raise the tax. Even if they did, we will continue to see deficits due to better gas mileage and electric cars and trucks. We desperately need some new thinking and some new funding ideas; but this does not appear to be the year we will get them. In the meantime, according to the American Trucking Associations, the trucking industry experiences $50 billion annually in congestion expenses. And, this is in a country that can fly to other planets, produce autonomous vehicles, and sail self-propelled boats. If it were not for safety considerations, our newer aircraft would operate without the luxury of a pilot. At the same time, we seem to be gridlocked when dealing with things like potholes. In any event, it will be at least another year before we see any Federal program.
The saving grace for some states has been the fact that they have pushed ahead and increased their own fuel taxes as a means of funding necessary improvements. Now, we have a new possible source of income for the states that choose to use it. The United States Supreme Court has made it possible for states to legalize sports betting. (Sports gambling in Nevada, where it is already legal, totals $4.9 billion annually; and across the U.S. the illegal sports betting market is about $150 billion per year.) For the states, tax income can increase significantly if they choose to legalize sports gambling. Four states already have – betting on this decision. Experience in states earnings taxes from casinos, has shown that gambling can be a significant source of funds.
Despite this possibility, the Federal government needs to act. The maintenance of a highway system sufficient to meet the country’s needs is a Federal responsibility, and our government should step forward and meet this obligation.