Declining US$s for highways - where tolling fits in
June 24th | TollRoadNews

Kenneth Orski who follows transport funding issues in Washington DC says US Government grants to the states for highways will drop from the current level of $41b/year to about $32b next year based on the end of deficit financing under a newly budget conscious House of Representatives. That $32b will be the result of relying solely on federal gas/diesel tax revenues - as we used to before the massive deficit spending of 'stimulus' funds the past three years. (see Orski at www.innobriefs.com)

It's a return to highway users "paying their way" and "living within our means" Orski says citing the popular mantras that now set the tone for US Government budgeting for surface transportation. Handouts for highspeed rail will - hopefully - be zeroed out, and other rail folliescontained. Unsustainable 'sustainability' and 'livability' nonsense won't survive the result of last November's election, and the changed composition of the US Congress.

Too much attention is sometimes to Washington DC's role. States and local governments raise fully three times as much for highways as federal funding, Orski points out. They of course face their own budgetary constraints, and lack state 'Reserve' banks with the power to print US$s. And there is almost no stomach in any legislature to raise gas/diesel tax rates - politically directed highway programs are so distrusted.

Some states have been 'borrowing up' heavily themselves for highways loading up on TIFIA and GARVE (grant anticipation) bonds, so an increasing proportion of their gas tax funds and US money goes not to new roads but to paying for past loan-based spending.

IBTTA had a useful panel this week on the major opportunity for tolling in the US - funding the rebuild of the Interstate highway system. Ed Regan of Wilbur Smith Associates gave another of his masterful analyses of the issue and a collection of others gave variations on the theme.

Key point Regan makes is that the cost of essential rebuilding of the Interstate Highways is way bigger than the costs incurred in original construction. What we have now cost around $130b but the cost of rebuilding is in the range $1,300b to $2,500b in current prices - ten to twenty times higher. If spread over 50 years that's an annual expenditure in the range $26b to $50b.

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