When it Comes to Infrastructure, We Can’t Keep the Status Quo
If the U.S. government were to focus on core infrastructure—roads, bridges, rail lines, airports, pipelines, and electrical grid as well as reduced bottlenecks and congestion—it could reduce the amount of fuel we burn and increase vehicle efficiency.
The infrastructure bill recently passed by the Senate is a step in the right direction, and we do need to invest in our core transport and power generation systems. That being said, the current bill and subsequent $3.5 trillion “add-on” is a huge cash grab for so many pet projects and unnecessary expenditures. It’s doubtful we will realize a big difference in the quality of our roads, bridges, rail lines, airports, pipelines, and electrical grid any time soon.
What we need is money being spent on actual maintenance and repair of existing infrastructure and the building of new infrastructure to accommodate the migration of our population due to the pandemic. We have seen many people leave our densely populated cities and move to more rural areas. With the population shift, we will need to make sure there are roads and bridges to accommodate the increased traffic those areas will see, or we run the risk of even more bottlenecks. And let’s not forget about the changes that will be needed for the future of electric vehicles.
The funding of highway projects, in particular, is typically split between the state and federal budgets 75% and 25% respectfully. So, we can assume that if the federal government is allocating funds to projects, the states must do the same. But that might not be a valid assumption as some states do not have funds for infrastructure projects.
The fuel tax has been used to fund highway improvements and yet Congress has refused to increase the gas tax since 1993. With inflation, the value of a dollar collected today is far less than that same dollar collected in 1993. This means the funds collected via the federal gas tax are worth exponentially less today and will continue to devalue over time. It is as if the Highway Trust Fund has not had a cost-of-living increase in the past 28 years. This is not acceptable; imagine if you were still making the same wages you did in 1993.
One of the proposed solutions given the advancements in electric vehicles and the fact that they very likely are the vehicles of the future is to move to a Vehicle Mile Tax (VMT). Each person would pay for the miles they drive versus a tax at the pump. Given that the average age of personal autos in the U.S. is 12 years old there would need to be a massive investment in how to collect the VMT data.
As you can see for every lever you push forward another lever pushes back.
If we were to focus on our core infrastructure—roads, bridges, rail lines, airports, pipelines, and electrical grid as well as reduced bottlenecks and congestion—we would reduce the amount of fuel we burn and increase vehicle efficiency.
I don’t have the answers for this, but I do know that we can’t keep doing what we have always done or our roads, bridges, rail lines, airports, pipelines, and electrical grid are going to end up in even worse shape than they are today. And that is completely unacceptable.
At Corcentric, we stand ready to help any fleet bridge that gap. Now, more than ever, it’s crucial to make the right lease-versus-buy choice – those who do are more likely to emerge from the COVID crisis as industry champions positioned for growth. To learn how we can help, contact Corcentric today.