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January 17, 2011

Rule Change in US Congress will Drop Road and Bridge Spending
Filed under: Industry outlook — Tags: — nedpelger

The games have begun. On the first day of the 112th US Congress, the House of Representatives changed a procedural rule that will greatly affect highway projects. This opening move will likely be the first of many to cut federal spending.

Specifically, the 1998 Transportation Equity Act for the 21st Century had installed a firewall that forced legislators to keep highway funding at an indexed level. For the last 13 years, the amount to spend was set automatically and couldn’t be reduced. Then all the congressman just had to fight to get their own pieces of that ever increasing pie.

Now that firewall is gone by a procedural vote in the US House. At this point, everything is on the table.

I have mixed feelings. We certainly need to reduce US Government spending. We need to learn to live within our means. On the other hand, American transportation infrastructure needs maintenance and improvement.

The best solution likely will be found a plan that better measures use and benefits, then charges the users accordingly. We should be moving to some type of plan that charges for vehicle miles traveled. Technology certainly exists for this type of focused taxation, we just need the political smarts to move it forward.

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