In a great article in the Wall Street Journal on May 23, 2011, R. Richard Geddes comments as to why the US infrastructure (at least the transportation system) is teetering on collapse.  The article reminded me that a few months ago, a friend travelled to Greece during the height of the Greek Debt meltdown and was struck by how modern Greece’s transportation system is even though the country is broke!  The contrast was especially striking because he had taken Mass transit in Boston to the airport and could not get over how dingy, inefficient, and decrepit that system appeared and we are supposedly the greatest economic power in 2011, and Greece one of the worst.  Yet he could travel around Greece easier and faster than in Massachusetts and most of America.  This morning I came across an article that explains why we have such a dichotomy.  Please remember that infrastructure is one of the few improvements that creates jobs (with high unemployment we need some), and strengthens the economy for decades after installation (another thing this fragile recovery could use).  Some of the statistics from the 2009 Report of the National Surface Transportation Infrastructure Financing Commission referenced in the article were eye opening:

Currently the annual need to maintain the US transit system is $42 billion and the highway system is $131 billion.  The current revenues to maintain the system (both highway and mass transit) are $76 billion per year.  So each year our roads, bridges and rails fall further behind because we underfund the payment of what we already own by $96 billion a year.  To fund the difference we need to increase gasoline taxes by 53 cents a gallon.  That is a huge difference.  The current gas tax is 18.4 cents per gallon so we are looking at quadrupling the gas tax just to pay for what we have.  Obviously the politicians were asleep at the switch here.  Gasoline taxes were last raised in 1993.

Improving the system so that we can compete (to quote a theme from President Barack Obama) would require raising the gas tax by 76 cents a gallon or pushing gas prices to about $4.60 per gallon using today’s prices.  That may seem radical, but we have a major problem here because we need to spend more money on maintaining infrastructure and we have to fund it with some sort of revenue source.  Part of the problem with our debt is that we funded what little transportation infrastructure work we accomplished with debt when the gas tax and other revenues fell short!   In addition to providing revenue, a gasoline consumption tax would be environmentally sound because it would encourage more use of public transport and low-emission cars.

Another option would be a tax on mileage, so everyone pays for the miles they drive or commute whether it is air, car, rail, boat or subway.  Some of it we can easily asses such as rail, air, boat and subway by adding a surcharge to tickets.  As for automobiles, with the hybrids and electric cars using little gas for the miles they cover, we probably need to assess a fee based upon miles driven.  The cost estimated by the same commission is about 3.2 cents to maintain the system or 4.6 cents to improve the system.  That sounds good until you try to figure out how to calculate the mileage.  We already have a system in place as people are required to track mileage for repairs, income taxes and other purposes.  In this case we could use a similar system.  Per the Federal Highway Administration April 4, 2011 estimate, average mileage per year is about 13,500.  That fee would then equal $432 to maintain our system and $621 to improve it.

Although in general I am against taxes, I think a combination of a gasoline tax and a mileage tax is the fairest method to fund costs on improvements that we need to make anyway.  Each method has its benefits and drawbacks, so the combination would average out the drawbacks while helping to solve two problems at one time:  repairing and maintaining our transportation infrastructure and limiting carbon emissions.  The prospect of being on the road with a bridge collapsing underneath you or on a train when it is delayed for hours is enough to give anyone pause.  I believe that the above proposal is the best method to fix the current problem.