First Word: The debate draws near

|  July 17, 2007 |

It’s been nice, but it may be ending soon unless we can offer better solutions.

After 14 years without an increase in the federal fuel tax, such action will be likely when Congress reauthorizes the highway program in 2009. Too many things depend upon it, including the continued profitability of American companies and the United States’ position in the global marketplace.

Our government spent $170 per capita on transportation in 1970; today it spends only $30. As a result, lane miles increased 1 percent during the past 30 years, while population and travel grew 18 percent and 21 percent, respectively. The U.S. Chamber of Commerce estimates a shortfall of $500 billion over the next decade between actual spending on surface transportation and what is needed just to maintain current conditions.

These numbers have been around for years. They didn’t convince Congress to raise the fuel tax when it reauthorized highway funding in 2005, and they’re not likely to do so when legislators begin crafting the next long-term highway spending bill in 2008.
Figures and statements like these, however, might:

  • Traffic congestion costs the U.S. economy $168 billion per year. Increased travel times caused by recurring congestion are costing carriers and shippers an additional $25 to $200 per hour.
    - The Federal Highway Administration

  • “I’m afraid if things don’t turn around soon, we’ll begin turning the clock back on many of the improvements that these supply chains have made and begin to restrain commerce…”
    - Doug Duncan, chief executive, Fed Ex Freight

  • “Transportation in this country is breaking down.”
    - Gerry Shaheen, chairman, U.S. Chamber of Commerce, and group president, Caterpillar

  • “China, India and the European Union … are making huge, strategic transportation investments designed to help them challenge – and beat – America in the global marketplace.”
    - Charlie Potts, first vice chairman, American Road & Transportation Builders Association

These statements were made as part of testimony before the National Surface Transportation Policy and Revenue Study Commission, created under SAFETEA-LU to address future funding needs, and they reflect growing concern among business leaders in diverse sectors of the economy. Some of those leaders are already calling for a fuel tax hike, even though they – like you – would suffer an increase in their companies’ operating costs.

So why is raising fuel taxes one of the few solutions we’re hearing about? The Highway Trust Fund’s highway account will be bankrupt by the end of this decade. That will leave Congress with two choices, according to the Associated Equipment Distributors: strengthen the highway program by increasing the federal fuel tax or do nothing and fashion a future in which inadequate highway capacity cripples U.S. productivity and competitiveness.

The Associated General Contractors of America and ARTBA promote raising the fuel tax. While the U.S. Chamber of Commerce, which represents more than 3 million businesses and organizations, has stopped short of officially supporting a fuel tax increase, it maintains “fuel taxes are currently the simplest, fairest and most effective way to fund surface transportation infrastructure investment.”

Getting business groups to voice their opinions and offer solutions will be key to letting Congress know how important this issue is for your business and our future.

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