While a new $500 billion transportation bill has been proposed, the bill doesn’t identify a sustainable funding mechanism to support it. According to the AGC analysis, if a bill with proper financing is not passed, many highway construction projects will be stopped, no new projects will be started, and many contractors will be put out of business. Declining state budgets compound the problem. 

 

As we highlighted in an earlier blog, the U.S. has an old, failing infrastructure, and the need for a well-funded transportation bill is crystal clear. What’s unclear is exactly where the money will come from. Almost all of the Highway Trust Fund comes from the gas tax which hasn’t been increased since 1993. But the gas tax revenue isn’t increasing with more road use, because of inflation, the decline of travel caused by the recession, and fuel-efficient vehicles. The AGC is primarily focused on getting a higher gas tax set aside to fund only highway and bridge projects. They want to see a new transportation bill that is at least $450 billion, and to get that kind of funding there needs to be an increase in revenue. However, in today’s political climate with the incoming tax increase adverse Republicans, a tax increase seems unlikely.