As October 1 approaches, all supply chain eyes will be turned toward Washington to see what Congress does about the transportation funding bill scheduled to expire on that date. Most are aware of our deteriorating infrastructure and the billions of dollars it would take to bring highways and bridges up to acceptable standards. But no one seems to have the foggiest notion about where the necessary funds will come from. The Highway Trust Fund is expected to be depleted by August.
A number of industry experts feel that the federal gas tax of $.184 per gallon should be increased. This has not been done since 1993, primarily due to the fact that whenever it was considered, it fueled a political firestorm.
President Obama has spoken several times lately of "public - private" partnerships which can be translated into "tolling our interstates". Congress banned tolls on all interstates when the 46,000 mile system was created in 1956, although they have made some exceptions in the past several years. Generally speaking however, only those highways that had tolls at the time could keep them.
Many influential firms and organizations, such as the memberbership of the Alliance for Toll-Free Interstates that includes FedEx, ATA, UPS, and McDonald's, are opposed to tolling and this is surely to generate a contentious debate within Congressional walls when it comes up for consideration.
One of the most logical objections is that toll roads will result in "double taxation" as we would pay federal and state gasoline taxes, as well as tolls. Another argument is that tolling will simply create another major bureaucracy that must be financed. The Illinois Tollway Commission, for example, operates 286 miles of toll roads in 12 northern Illinois counties. Their annual operating budget is slightly over $583 million, and they have 1700 employees. In fairness, a major part of this goes toward maintaining the highways, but a whopping $93.6 million is spent on toll services. The system has 473 toll collectors.
Many industry watchers, including this writer, believe some reasonable increase in the fuel tax woule be a much more fair and equitable solution. Certainly, the resulting revenue would not be enough to completely solve the problem, but it would be a good start.