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New Approaches to Ease America's Transportation Funding Gap

By Jim Avitabile

January 11, 2017


The need for increased investment in the nation’s infrastructure has been well documented. A 2016 infrastructure report prepared by the American Society of Civil Engineers assigned failing grades to virtually every category of public infrastructure in the US.

Surface transportation facilities represent the largest of the infrastructure categories studies by ASCE, it also represents the category with the largest funding deficiency. Over the next ten years, the total surface transportation needs are projected to be $2 trillion but available funding is estimated at $941 billion, roughly 46% of demand. This represents a $1.1 trillion gap in funding, the widest on each of the infrastructure categories evaluated by ASCE.

As a nation, we rely upon our roads, bridges, ports, rails and transit systems to commute to work, get goods to market and provide the mobility necessary to support our economy. ASCE has correlated this lack of investment to a reduced GNP, loss in business and reduced jobs -- an annual loss of $3,400 per household.

President Donald Trump has promised a new infrastructure program with plans to support investment in each of the infrastructure categories. Increased funding levels will be welcome, but how these funds get allocated has yet to be determined. What is certain is that if the US is going to stay economically competitive, the country must implement increased infrastructure improvements efficiently and economically.

So where can this funding come from? Many states and agencies are using alternative project delivery, tolls, managed lanes, and public-private partnerships to leverage their budgets and get the highest return on their capital improvement programs.

In all, 34 states have or operate toll roads, but not all state agencies have legislation in place to toll new facilities or introduce managed lanes. There are currently 2,900 miles of tolled interstate roadways operated in 21 states throughout the US. Since the Intermodal Surface Transportation Efficiency Act (ISTEA) was enacted in 1991, 168 new toll projects have been advanced from development, to design, finance, and construction.

These projects represent 9,500 lane miles of new capacity implemented primarily through the leveraging of toll revenues in combination with alternative project delivery methods, such as DB and public-private partnerships (P3s). Of these projects:

  • 104 involved new centerline miles of highway
  • 23 involved widening existing tolled facilities
  • 35 projects involved HOT lanes or express lane widenings.
  • 22 projects involved variable priced HOT lane facilities on interstate.
  • Several were procured as P3s, such as I-4 and I-595 in Florida, SH-183 in Texas, I-77 in North Carolina, and I-95 and I-66 in Virginia.

There is no singular solution to address our surface transportation needs. But, there are accepted proven industry solutions available, such as tolling, managed lanes, and P3s.

These proven industry solutions are only tools to help public administrators arrive at the most cost effective and acceptable procurement and funding method. To make these tools available to all state agencies, broader legislation is required to address local restrictions on tolls and P3. The easiest and best way for the US DOT to achieve this is through funding incentives.

If the industry works together, we can solve this problem with the right levels of funding. Criteria can be established that will help define the best method of project delivery, and to determine when and if tolling is of benefit.

There is no one-size-fits-all solution, and legislative challenges exist. But, through education programs, mentoring and networking of agency representatives and establishing a federal funding program that incentivizes the use of proven industry tools including design-build, P3s, tolls and managed lanes, we can make strides in providing for our future transportation needs.

The American Highway User’s Alliance once labeled our interstate system as “the best investment a nation ever made.” Our industry has taken the time to identify the challenges and develop and perfect the tools that can address these challenges. The time has come for us to protect the investment that we so badly depend upon every day.

Topics: Insights, Transportation, Tolls & Managed Lanes, Transportation Industry News, Florida, Public-Private Partnerships, Project Delivery & Procurement, Texas, Virginia

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About the Author

Jim has 40 years of experience in the transportation market and is a recognized leader in alternative delivery.

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