Frequently Asked Questions

//Frequently Asked Questions

Frequently Asked Questions

Frequently Asked Questions

Scope & Conditions
Building Transportation Infrastructure
Funding, Financing & Costs
Environment

A safe and efficient transportation system is one of the fundamental requirements of a modern economy. Businesses depend on the transportation system for access to materials and labor and to get goods and services to customers. Households depends on the transportation system for access to work, school, shopping, medical care, social activities and entertainment.

Some of the economic benefits of a robust transportation system include:

  • Jobs: The Federal Highway Administration (FHWA) estimates that every $1 billion in highway spending supports 13,000 jobs throughout the economy. At current levels, transportation investment supports 4 million U.S. jobs across all sectors of the U.S. economy.
  • Economic Growth: Construction work performed on transportation projects, including highways, bridges, subways, light rail systems, freight rail, airports and water ports, generates over $508 billion in total annual U.S. economic activity and contributes approximately $254 billion to the U.S. Gross Domestic Product.
  • Freight Shipments: More than $18.1 trillion in freight was shipped in the United States in 2016, according to FHWA. Trucks were involved in 82 percent of all freight shipped. Rail, air, water, and pipelines accounted for the remaining 18 percent of freight shipments. FHWA estimates that the value of freight shipments will increase by 84 percent between 2016 and 2040.
  • Other Benefits: An efficient and safe transportation system is crucial for the mobility of businesses and individuals. Transportation improvements have been a major source of productivity increases and reduced costs for manufacturers, retailers and other businesses that use just-in-time delivery systems. Americans traveled a total of 5.3 trillion miles by all transportation modes in 2016, an average of 16,400 miles per person. Most of that travel, 80 percent, was by automobile, truck, or motorcycle.
  • Defense and security: The U.S. transportation infrastructure is critical to our national defense and homeland security. Nearly 63,000 miles of roads have been designated part of the Strategic Highway Network, including the entire Interstate Highway System, because of their important role in transporting military equipment and personnel. Roads also comprise the primary evacuation routes in the event of an attack or a natural disaster.

In 2017, there were 4.18 million miles of road in the United States, including Alaska and Hawaii, according to the Federal Highway Administration.

The United States has an extensive transportation network:

  • 5,104 public-use airports, 14,263 private facilities for recreational and business air travel, and 288 facilities owned by the military or U.S. government.
  • 138,565 miles of railroad track carry much of the nation’s heavy freight and agricultural output.
  • Over 271,000 route-miles of scheduled bus service, plus 12,413 miles of fixed-rail transit including trolley buses, commuter rail, subways, and light rail systems. The fixed-rail transit systems serve 3,216 stations where passengers can board or exit trains.
  • 15,322 marine facilities on 29,620 miles of navigable waterways. (Source: National Transit Database, ARTBA 2015 Economic Profile)
Across the country, 199,147 miles of major highways, or 19.4 percent, are in poor or mediocre condition and need repaving or even more substantive repairs.

At the same time, 47,052, or 7.6 percent, of the nation’s 616,086 bridges are structurally deficient. This means these bridges are safe to use but need significant maintenance or repair to remain in service. View road and bridge conditions by state here.

Congestion and delay cost American drivers $160 billion per year. In 2014, drivers spent an extra 6.9 billion hours in their cars and trucks due to congestion and had to purchase an extra 3.1 billion gallons of fuel. For the average U.S. motorist, congestion during peak periods adds 42 hours to their driving time and results in 19 gallons of wasted gasoline per year, for an annual cost of $960 per motorist.

Of that total congestion cost, $28 billion represented the impact of congestion on the U.S. trucking industry, which raised the price paid by American households for many goods and services.

The following table includes information for road and bridge conditions by state. According to the latest available data, Rhode Island has the worst roads and bridges in the country, with 52.8 percent of all federal-aid highway miles in poor or mediocre condition, and 23.1 percent of bridges designated as structurally deficient

Less than 1 percent of the land area of the U.S. is covered by roads, according to the Federal Highway Administration.

Road and bridge improvements are designed by civil engineers, who prepare the drawings, specify the types and quantities of materials to be used, and determine how to assure the safety of construction workers and motorists while the project is underway.

Construction companies use these plans to build the project.

State and local highway agencies can either: design a highway construction project “in-house,” with engineers who are employees of the agency; or contract with a private engineering firm to design and prepare the plans. Some state highway agencies do all design work in-house. Most, however, use both methods.

Projects also go through comprehensive environmental impact reviews.

For most highway and bridge projects, whether new construction or improvements to existing infrastructure, once the plans are complete, the state or local highway agency then asks for bids from qualified construction firms to build the project. The construction company that submits the lowest bid is selected to do the construction work. In recent years, some state highway agencies have been using a “design-build” approach for major highway or bridge construction projects. Under design-build, the state highway agency contracts with a company to do both the design and construction work on a project, based on the state’s project specifications. This can often speed project delivery and lower costs, since some of the preliminary construction work can get underway while the project details are being designed.

Almost all roads, bridges, airports and transit systems in the U.S. are owned by state and local governments or government-created agencies, which are responsible for constructing and maintaining them.

Every state has a department of transportation (DOT) as do most counties and cities. You can access a state’s DOT website. The federal government helps state and local governments pay for construction and upkeep of airports, transit systems and major roads, but actually own very little of the nation’s transportation infrastructure-mainly roads in national parks and forests, Indian reservations, and military bases. The federal government, however, does own and operate the nation’s passenger rail system, Amtrak. Learn more at the U.S. DOT website.

There are hundreds of industries that provide materials and services for the construction of the nation’s highways, bridges, airports, ports and transit infrastructure systems.

The principal materials used in highway and bridge construction include asphalt, aggregates, concrete, cement and steel. Highway and bridge construction is an important market for many of these suppliers.

The U.S. Bureau of Economic Analysis provides information on the purchases and inputs used by industries in the United States. The U.S. Geological Survey also provides information on the amount and usage of many of the key material inputs to highway and bridge construction, including crushed stone, construction sand and gravel and natural aggregates.

The review and approval process for all transportation projects includes multiple opportunities for the public to submit comments to a variety of federal and state transportation and environmental agencies. These public agencies must then respond to these comments before proceeding with the project. ARTBA’s government affairs team keeps a close eye on legislative and regulatory developments, and notifies members about relevant opportunities for comments.

Most U.S. transportation infrastructure construction and maintenance is paid for through dedicated user-related taxes and fees.

The major source of funding for federal highway and transit investment is the Highway Trust Fund (HTF). It was created by Congress in 1956 to provide money for construction of the Interstate Highway System and other federal investment in highway improvements.

In 1982, Congress added a Mass Transit Account to finance federal investment in subway and public transportation systems. Taxes paid by highway users are credited to the HTF and are used solely to pay for highway and mass transit improvements.

Current revenue sources include an 18.3-cents-per-gallon federal excise tax on gasoline and gasohol, a 24.3-cents-per-gallon tax on diesel fuel, equivalent taxes on other motor fuels such as compressed natural gas, and three taxes levied on heavy trucks and truck tires.

Revenues from the taxes on motor fuels are divided between the Highway Account and the Mass Transit Account by formula, while all revenues from the taxes on heavy trucks are credited to the Highway Account.

In recent years, revenues have totaled in the range of $36 billion to $41 billion per year, with about $5 billion credited to the Mass Transit Account and the balance to the Highway Account. The Congressional Budget Office expects HTF revenues to remain relatively stagnant for the foreseeable future.

The Federal Highway Administration and the Federal Transit Administration use HTF revenues to pay the federal share of improvements made to highways and public transportation systems. Highway Account revenues can be used to design, construct, improve and preserve Interstate Highways and most other major highways, purchase right of way, conduct environmental mitigation, and make other capital improvements, but they cannot be used for routine maintenance such as filling potholes or removing snow. Mass Transit Account revenues can be used to construct and improve subway, light rail and other mass transit systems, purchase buses and make other capital improvements, but generally not for operating expenses.

There is also a federal Airport and Airways Trust Fund, which finances airport improvements and the air traffic control system. This trust fund is financed by fees on air travelers and taxes on aviation fuels.

State governments finance highway construction and maintenance through a broad set of taxes and fees, most of which are also user-related. Every state imposes taxes on gasoline and diesel fuel, from a low of 8 cents per gallon in Alaska to over 35 cents per gallon in some states. Other revenue sources include vehicle registration fees, driver license fees, sales taxes on motor vehicles, heavy truck use taxes, traffic violation fines, and similar taxes and fees.

State governments have expanded their user fees and use of general revenues to finance highway improvements. Many state governments also borrow money for highway construction by issuing bonds. A few states permit local governments to levy taxes and fees on highway users, but in most states, local highway expenditures are financed out of property tax revenues.

Public-private partnerships (P3) are another funding strategy. Private investors such as pension funds or investment banks finance some or all of the costs of building a highway, then earn a return by charging tolls.

Construction costs per mile of road vary depending on location, terrain, type of construction, number of lanes, lane width, durability, number of bridges, etc. It costs more to build a new road than to rehabilitate a road or add lanes. Roads cost more to build in urban areas than in rural areas. Roads in mountainous terrain are more expensive to build than roads on flat land.

Nonetheless, some states have developed cost models to guide planning for their highway construction programs. These models estimate the cost of various kinds of highway improvements. The following are some examples:

  • Construct a new 2-lane undivided road – about $2 million to $3 million per mile in rural areas, about $3 million to $5 million in urban areas.
  • Construct a new 4-lane highway — $4 million to $6 million per mile in rural and suburban areas, $8 million to $10 million per mile in urban areas.
  • Construct a new 6-lane Interstate highway – about $7 million per mile in rural areas, $11 million or more per mile in urban areas.
  • Mill and resurface a 4-lane road – about $1.25 million per mile.
  • Expand an Interstate Highway from four lanes to six lanes – about $4 million per mile.

The Florida Department of Transportation has published detailed cost-per-mile estimates for new construction, resurfacing and other work on rural, urban and suburban roads. The Arkansas Department of Transportation’s latest estimated costs per mile are available here. The Pennsylvania Department of Transportation has published cost-per-mile estimates for work on interstates as well as lower-volume roads.

The federal gas tax rate is 18.3 cents per gallon.

The average motor vehicle in the United States, including cars, SUVs, minivans and pickup trucks, was driven 11,507 miles in 2016, the latest year for which data are available. The national average fuel economy for cars and light trucks was 22.0 miles per gallon, which means the average vehicle used 522 gallons of motor fuel. This means that consumers pay an average of $96.07 in federal gasoline taxes annually for each vehicle they own.

The average American household owns 1.9 vehicles, which means the average household pays $182.54 in federal motor fuel taxes per year, or about $3.50 per week.

The federal gasoline tax costs the average driver 8.3 tenths of a cent per mile. This is calculated by dividing the federal excise tax rate on gasoline of 18.4 cents per gallon by the average U.S. personal motor vehicle gas mileage of 22.0 miles per gallon.

To calculate how much federal gasoline tax you pay per mile, first determine your vehicle’s fuel economy — that is, how many miles your vehicle gets per gallon of gasoline. Then divide that number into 18.4 cents per gallon to calculate your tax cost per mile. For example, if your vehicle averages 15 miles per gallon, the federal gasoline tax costs you one-and-a-quarter penny for every mile you drive. If your vehicle gets 25 miles per gallon, the tax costs you only three-quarters of a penny per mile.

The average cost of driving a motor vehicle is 54.5 cents per mile, when gasoline, insurance, depreciation, maintenance and repair costs are considered. The federal gasoline tax thus represents 1.5 percent of the cost per mile of driving a motor vehicle in the U.S. In other words, for every dollar you spend driving your car, one and one-half cents represents the federal gas tax.

The average state gasoline tax rate was 26.94 cents per gallon as of January 2019. State gas tax rates range from under 9 cents per gallon (in Alaska) to more than 57 cents per gallon, so the amount of tax paid varies by state.

With the average vehicle using 522 gallons of gasoline, this means the average cost of state gasoline taxes was $140.67 per vehicle. The average household with 1.9 vehicles thus pays $267.28 in state gasoline taxes annually, or $5.13 per week.

Since 2008, revenues to the Highway Trust Fund (HTF) have been insufficient to fully support the level of federal highway and transit investment authorized by Congress. Prior to enactment of the FAST Act, the annual investment gap was nearly $15 billion. Congress has not increased the federal motor fuels tax since 1993, but federal highway and public transportation spending has grown substantially over the last 26 years. It should surprise no one that holding the trust fund’s inflow of revenues constant while attempting to address the nation’s growing transportation needs would lead to an unsustainable situation.

Due to inflation, prices have increased by 74 percent between 1993 and 2018, while the gas tax has remained static at 18.4 cents per gallon. This means that gas tax revenues are making up a smaller and smaller portion of the price of gasoline, while the price of construction materials has continued to increase. These inflationary increases have eroded the ability of the HTF to keep up with the cost of building and repairing roads, bridges, and other transportation infrastructure.

The FAST Act relies on a variety of one-time cost savings and non-transportation resources to supplement incoming HTF revenue to support its investment levels over the next five years. These include: tapping a surplus from the Federal Reserve; cutting a 6 percent annual dividend the Federal Reserve pays big banks; selling oil from the Strategic Petroleum Reserve; and other budget “gimmicks.”

While the FAST Act temporarily stabilizes federal highway and transit investment, it fails to address the HTF’s structural revenue deficit. As a result, the Congressional Budget Office projects a return to annual HTF revenue shortfalls beginning in FY 2022 that will average $18 billion annually. If the run up to FAST Act approval, including numerous short-term extensions, is any guide, we will see states beginning to scale back planned projects well before the authorization expires.

Roughly $42 billion per year flows into the HTF from the motor fuels taxes and heavy truck-related revenue sources. These existing user fees do not generate enough revenue to maintain existing investment levels, let alone the amount needed to repair and build our nation’s critical transportation infrastructure.

The federal excise tax on gasoline and diesel fuel generates about $1.98 billion of revenues per penny of tax. Of this total, $1.4 billion per penny of tax is deposited into the Highway Account and used to finance the federal highway program. The remaining $558 million per penny of tax is deposited into the Mass Transit Account and is used to finance the federal public transportation program.

The U.S. spends far more each year repairing and maintaining existing roads and bridges than on construction, according to the Federal Highway Administration.

In 2014, the latest year the Federal Highway Administration released data, the federal highway program committed $27.2 billion to new projects, improving 53,238 miles of highway and 5,173 bridges. Only $1.3 billion, or 4.7 percent of this total, was committed to new highway or bridge construction. An additional 8.8 percent was committed to projects that added capacity to the highway system. Nearly six times as much, $13.4 billion, was committed to improvements designed to maintain or preserve existing roads and bridges, such as road reconstruction and resurfacing, bridge replacements, and bridge repairs. $2.4 billion, or 8.8 percent, was committed to traffic safety improvements, traffic management, or environmental improvements. The remaining $7.7 billion was committed to other improvements, including right of way acquisition, engineering, research and planning.

State and local governments also emphasize preservation over new construction. In 2014, the latest year that full data is available, state transportation departments spent $119.1 billion total on highway capital improvements, including federal funds. Only $11.7 billion, or 9.9 percent, involved constructing new highways or bridges. Another $9.3 billion, or 7.9 percent, financed reconstruction projects that also added capacity to the system and widening projects. Another $29.4 billion, or 24.7 percent, was spent on preservation construction, such as roadway resurfacing and bridge repairs. In addition, state DOTs spent $17.9 billion on right of way acquisition, project engineering, safety improvements to highways, traffic management improvements, or environmental enhancement projects. States also spent nearly $33 billion on routine maintenance of highways and bridges and on highway law enforcement and highway safety.

Highways: The FAST Act provides $45.3 billion for highway and bridge improvements in FY 2019 (the fiscal year from Oct. 1, 2018 through Sept. 30, 2019) and grows this amount to $46.4 billion by FY 2020. Most federal highway investment is used to upgrade and maintain the nation’s core highways, including the Interstate Highway System, and to repair and replace deficient bridges.

An additional $3.4 billion was provided for highway and bridge investments as part of the final FY 2019 spending bills signed into law Feb. 15, 2019.

Mass Transit: For public transportation, the FAST Act provides $12.4 billion in FY 2019. The amount grows to $12.6 billion in FY 2020. Federal public transportation program funds are used to build and upgrade rail mass transit systems in major cities and to purchase and upgrade buses and facilities of local transit agencies.

An additional $660 million was provided for mass transit grants as part of the final FY 2019 spending bills signed into law Feb. 15, 2019.

Airports: The Federal Aviation Administration awarded over $3.5 billion in FY 2019 for the Airport Improvement Program (AIP), which is the federal program that provides funds to build and upgrade airport runways, taxiways, and other ground facilities. An additional $500 million was provided for the AIP program as part of the final FY 2019 spending bills.

Railroads: Most of the approximately $10 billion annual construction work on railroads is privately financed by the nation’s railroad companies. The federal government, however, provides an annual appropriation, of over $1.9 billion in FY 2019, for capital improvements to Amtrak and an additional $222 million to help cover operating expenses.

Water: The Army Corps of Engineers is responsible for capital improvements and maintenance of the nation’s inland waterways. The regular appropriation for the Corps of Engineers in FY 2019 included $2.18 billion for construction activities.

According to the latest analysis of the conditions and performance of the country’s highway, bridge and transit networks, all levels of government should be investing $89.9 billion annually in highway and bridge improvements just to maintain current physical and performance conditions on the nation’s highways and bridges. The cost to improve our nation’s highways by making all investments with a positive benefit-cost ratio would be $142.5 billion annually. At this funding level, the U.S. would eliminate an $836 billion backlog in unmet highway and bridge capital investment needs.

The current level of annual investment by all levels of government in transit programs, $17 billion, is closer to the $22.9 billion needed annually to bring current transit systems and equipment to a state of good repair assuming low ridership growth. (If there is high ridership growth, needs are expected to average $26.4 billion per year.) If spending continues at current levels over the next 20 years, it will result in an estimated $122 billion in deferred system preservation projects.

There are multiple federal environmental statutes governing how transportation projects are built. These include, but are not limited to, the National Environmental Policy ActClean Air ActClean Water Act and Endangered Species Act. There are also federal regulations that must be adhered to relating to storm water runoff, historic sites and wildlife refuges. Individual state governments also have their own sets of environmental laws and regulations, which must be followed.

As many as 200 major steps are involved in developing a transportation improvement project from the identification of the project need to the start of construction. The U.S. Government Accountability Office (GAO) estimates it typically takes between nine and 19 years to plan, gain approval of, and construct a new major federally-funded highway project.

The Federal-Aid Highway Program has created over 52,000 new acres of wetlands since 1996. This means that for every one acre of wetlands impacted by a transportation improvement project, nearly three new acres have been created. Or looked at another way, transportation projects have not only mitigated all of the wetlands they have impacted, they have exceeded that amount and added more than 33,000 acres of new wetlands.

The transportation construction industry has a long and impressive history of recycling. Each year, approximately 200 million tons of old highway/street pavements are recycled, with 80 percent of that material reused in highway construction projects. To put the 200 million tons in perspective, the total weight of municipal solid waste recycled yearly (cans, bottles and newspapers) is only 82 million tons.

No! Just as building new schools does not “cause” more students or studying, building roads does not “cause” more drivers or traffic. Both schools and roads, like other public infrastructure and housing, are built to accommodate an ever-growing U.S. population and economy. New roads do provide more access for citizens to reach jobs, health care, shopping, recreation, and family. Business can reach markets and serve customers. Whether or not they use a particular road, however, depends on whether they think it provides them with a more efficient (less time spent), less expensive (less money spent), or safer route than their other transportation alternatives. And according to the Federal Highway Administration and the U.S. Environmental Protection Agency, despite gains in gross domestic product, population and vehicle miles traveled, the nation’s air quality has improved. Specifically, between 1990 and 2013, the transportation sector has helped reduce volatile organic compounds (VOCs) by 87 percent, nitrous oxides (NOx) by 64 percent, particulate matter (PM 2.5) by 48 percent, and carbon monoxide (CO) by 86 percent. NOx and VOCs are precursors to ozone and associated with greenhouse gasses and climate change. As levels of VOCs and NOx continue to decrease, so will ozone and greenhouse gases.

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By |2019-04-29T11:41:16+00:00April 26th, 2019|Comments Off on Frequently Asked Questions

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