Future Surface Transportation System Needs
The future needs of the U.S. surface transportation system are great and the costs to provide them are increasing. The discussion below describes why the needs are as great as they are, gives examples of what four states are doing to meet those needs, and then outlines the costs the United States will have to address in order to provide the future system needed.
Preservation Is Job One!
The system of highways, bridges, public transportation, and railroads on which the nation depends have largely been built over the past 60 years. Much of the system is getting older and needs to be rebuilt or replaced. For example, the 47,000-mile Interstate Highway System, which represents about 1 percent of total U.S. road miles, has almost 15,000 interchanges, many of which are wearing out or do not meet current operational standards.
A good example of this is the Marquette Interchange in Milwaukee, Wisconsin. Built in 1968, for $33 million, it was designed to carry 150,000 vehicles per day, but is currently forced to carry 300,000 vehicles per day. The overworked structure has aged quickly and needs to be replaced. A new interchange with the capacity and modern design needed for the future is under construction and will replace the old Marquette Interchange next year at the cost of $810 million.
Similar anecdotes prevail for the 210,000 Interstate lane-miles whose pavement foundations may have to be rebuilt, the 55,000 bridges on the Interstate in need of reconstruction or replacement, or the 540,000 bridges elsewhere in the system. The point is, the numbers are huge.
Capacity Increases Are Needed in All Modes
Travel on the U.S. highway system has increased five-fold over the past 50 years, from 600 billion vehicle miles traveled (VMT) in 1956 to 3 trillion VMT in 2006. The amount of highway mileage built during that period was substantial, but the increase in travel has been so great that most of the capacity and redundancy planned when the system was built have been used up. A good example of this is the Woodrow Wilson Bridge on Interstate 95 just south of Washington, DC. By the year 2000, the 45-year-old bridge had become a notorious bottleneck, carrying more than 200,000 vehicles a day, when it was only built to accommodate 75,000 vehicles a day. By 2008, an investment of $2.4 billion will expand the bridge from 6 to 12 lanes, two of which will be reserved for use by transit. Its new capacity of 300,000 vehicles a day will hopefully be adequate for many years to come.
Over the next 50 years in Phase II of the Interstate System, nearly as much capacity will need to be added to the Interstate System as the lane-miles built over the past 50 years in Phase I. To reduce congestion and meet the demand of those dependent on public transportation, the United States will have to build enough transit capacity to double ridership by 2030. Substantial freight rail capacity will be needed to handle the 63 percent increase in demand expected by 2035. Additional capacity will be needed as well to make expansion of intercity passenger rail service possible.
Traffic moves freely on the new Woodrow Wilson Bridge.
Increased Costs of Construction Erode Purchasing Power
In the period from 1993 to 2004, highway construction costs increased at approximately the rate of the consumer price index—around 2.5 percent annually. But from 2004 through 2006, there was a spike in the prices of petroleum, steel, concrete, asphalt, and construction equipment which increased construction costs, overall, by close to 30 percent. At the Commission hearing in Memphis, on November 16, 2006, Scott Bennett of the Arkansas DOT gave an example of what this has meant to the highway program in his state. “In 1977, with a $100 million widening program, the Department could have funded 143 miles of major widening improvements. In 2006, for the same $100 million, the Department could construct only 17 miles.”
There are two ways to describe what needs to be done to restore the purchasing power of Federal transportation programs to adjust for increasing construction costs. One is to describe how much the program needs to be increased to restore the program’s purchasing power to a level equivalent to what it could have purchased previously. The other is to calculate how much Federal fuel taxes would have to be adjusted to produce the revenues needed to fund the program at the restored levels.
Figure 2. Percentage Increases in Construction Costs 1993–2015
Restoring the Purchasing Power of Federal Assistance
AASHTO estimates that between 1993, the year in which Federal fuel taxes were last adjusted, and the end of 2015, construction costs will have increased nearly 70 percent. (Figure 2.) To restore the purchasing power of the program, annual Federal funding will have to be increased from $43 billion in 2009 to $73 billion by 2015. (Figure 3.) Over the past 15 years, the Federal share of highway capital spending has been 45 percent, and the state and local share 55 percent. To sustain their share at 55 percent of the total in 2015, state and local governments would have to increase their investment to $89 billion.
To put into perspective whether such an increase is possible, consider the history of the past two decades. In 1981, highway capital investment was $19.7 billion, $11.5 billion Federal and $8.2 billion state and local. By 2005, it had increased to $75 billion, up 280 percent; $33 billion Federal, up 187 percent; and $42 billion state and local, up 412 percent. If state and local investment increases at the same annual rate for the 10 years between 2005 and 2015 as it did for the 24 years between 1981 and 2005, it will increase to $89 billion. To restore the system’s purchasing power overall, the Federal government will also have to fund its share of the increase needed.
Figure 3. Federal Highway Program Funding Needed to Restore Program Purchasing Power
To restore the purchasing power of the transit program, Federal funding will have to be increased from $10.3 billion in 2009 to $17.3 billion in 2015. To sustain their share at 55 percent of total spending in 2015, state and local governments would have to increase their investment to $21.1 billion.
Adjusting Federal Fuel Tax Rates to Restore Program Purchasing Power
The Federal gas tax rates have remained static since 1993 when the rate was increased to 18.3 cents with 4.3 cents dedicated to the General Fund. The Highway Trust Fund did not receive any investment benefit until 1998. Our estimate of what it would take to restore the program’s purchasing power is calculated to coincide with the recapture of the 4.3 cents revenue in 1998 under TEA-21. Inflation has and will continue to dramatically decrease the purchasing power of current revenues due to a lack of rate adjustments.
Figure 4. Federal Fuel Tax Rate Adjustments to Restore Purchasing Power
Because of the rising costs of construction, the value of the 18.3 cents Federal gas tax rate will decline 55 percent or to 8.3 cents between 1998 and the end of 2015, unless corrective action is taken to preserve Federal capital investment. The rate will have to increase by 3 cents or its equivalent in 2009 to sustain the program at the level guaranteed in SAFETEA-LU. Between 2010 and 2015, it would have to increase by another 7 cents to restore the programs’ purchasing power. (Figure 4.)
Global Trade Will Multiply Truck Freight Traffic
When construction of the Interstate Highway System began in the 1950s the economy of the United States was largely self-contained. That is changing. The percentage of U.S. GDP represented by foreign trade increased from 13 percent in 1990, to 26 percent in 2000, and is expected to hit 35 percent by 2020. The number of containers moving through U.S. ports increased from 8 million units in 1980 to over 40 million in 2006, and is expected to hit 110 million by 2020. To carry those containers as well as growing domestic traffic, truck freight on our highways is expected to increase over 100 percent by 2035.
Just saying that the number of combination freight trucks will increase 100 percent or double over the next 20 years does not convey the challenge. Alternatively, on today’s Interstates the most heavily used portions are seeing upwards of 50,000 combination trucks per day, per mile. Today, only 30 miles on the entire Interstate System carry more than 50,000 trucks per day. Forecasts show that by 2035 that number will reach 2,500 miles. Loads of this magnitude will almost certainly force State DOTs to handle this traffic through dedicated truck lanes.
The hours of peak congestion on the Interstate System in metropolitan areas are expected to increase from 29 percent in 2000 to 46 percent by 2020. And this comes at a time when U.S. retailers and manufacturers are almost totally dependent on “just-in-time” truck delivery. Store shelves and manufacturing assembly lines have to be resupplied, sometimes within a 15-minute window. Reliability is a must. So the entire freight system of shippers, carriers, highways, railroads, ports, retailers, manufacturers, and customers face major challenges.
The railroads face the challenge of restoring capacity fast enough to keep pace with the increase in intermodal freight which has been growing at over four percent annually. Over the past several decades, to improve productivity the railroads reduced track mileage from 380,000 miles to around 175,000 miles. If they are unable to raise the capital required to add the capacity needed, long-haul traffic, which many believe could be more efficiently carried by rail, may, by default, have to be carried by truck, further complicating highway congestion.
Future Surface Transportation System Needs (continued) >>
