Transportation infrastructure will be a high priority throughout the country in 2021. Many large projects have already been announced, and others are anticipated. However, there are significant indications that a major change is emerging in how transportation-related projects will be funded in the future.
Transportation leaders have hoped for years that Congress would pass an infrastructure bill, and there was optimism that possibly billions of dollars for infrastructure projects might be allocated. While some progress has been made, chances for billion-dollar infusions of cash for transportation projects seem less likely. As a result, numerous pilot programs and studies related to revenue generation are occurring, and there is evidence of a major trend that is developing.
Gasoline taxes have been the primary funding source for transportation infrastructure, but that revenue is no longer adequate. Automobiles consume less gas than they did in the past. Tolling has not been popular, and it is likely that new regulations designed to generate transportation revenue also will not be viewed positively. But, road repairs and expansion and bridge and tunnel maintenance are long overdue in every state.
Bold leaders are stepping up to find alternative funding sources. The following provides a quick overview of how many states are planning to pay for the new and much-needed transportation infrastructure projects.
House Bill 37 proposes a system of road user charges. The bill, introduced in the 2021 legislative session, outlines a tiered system of user charges for vehicles based on per-mile rates. The revenue would be used by the Wyoming Department of Transportation to erase an annual funding shortfall of $135 million.
The Oregon Department of Transportation also has launched a Local Road Usage Charge Pilot Program. The objective of this program is to gather data for three potential funding models: area-boundary pricing, layer-area pricing, and corridor pricing. Oregon is not alone in testing driver charges. The states of Utah and California are conducting pilot programs as state leaders seek new funding for departments of transportation.
State leaders are considering a $26.7 billion, 16-year plan that calls for increasing the gas tax by 18 cents to 85.8 cents a gallon. Legislators are considering a carbon tax and clean fuels program to generate transportation infrastructure funds. The plan would allocate $8.2 billion for carbon-reduction initiatives, such as electric ferries and buses, mass transit, and bike lanes, and it would provide $3.5 billion to replace culverts.
The governor of Massachusetts signed a new $16 billion transportation bond bill on January 15 that authorizes the state to borrow money to finance ongoing transportation projects. The revenue will be used for bridge repairs, road improvements, and public transit initiatives. Projects to be funded include the Green Line extension for $595 million and South Coast Rail for $825 million.
The contract for a $298 million northern section of the Hampstead Bypass will be awarded by the North Carolina Department of Transportation (NCDOT) in January 2022. This project is one part of the work that is planned to connect N.C. 210 to U.S. 17 North. Work on the southern part of the NC 210 project will begin in future years.These are interesting and challenging times, and Congress is being asked to fund COVID recovery, provide programs to generate job creation, find revenue to send to cash-strapped cities, counties and school districts, and provide financing to reverse the nation’s crumbling infrastructure. It is obvious that our country must change its methods for funding transportation projects.