The funding gaps in US infrastructure

Reuters is reporting that New York’s infrastructure funding gap amounts to almost $90 billion.  The state’s comptroller has reviewed spending and the aftermath of hurricane Sandy and found that New York’s cities and counties need to spend $250 billion on water, sewer and highway systems over the next 20 years to maintain transportation, water, waste and other infrastructural systems.  Currently some $161 billion in spending is planned.

This follows news that Texas and Colorado are trying to change their tax structures and limits in order to fund long term, multi-billion dollar funding for everything from education to highway and bridge repairs. News reports from the end of 2012 also seem to point to growing difficulties with planning and managing multi-year (and multi-budget year) projects.

Ironically, on the federal level, funding for major road and transportation projects is on a continuing downward slide due to something very different from what most people expect. It’s not the economy– it’s efficiency that is causing a funding problem.

The amount of money collected by the U.S. federal 18.4 cents-per-gallon gas tax is used to fund transportation projects across all 50 states. But gas tax revenues will continue to decline because cars are getting more efficient. As new technologies, designs, and congressionally mandated rules for auto manufacturing creates more gas efficient cars the total amount of gas taxes collected has stayed constant or declined. (The recession also played havoc with this funding when fewer people were driving to work, on vacations, and companies took steps to reduce their transportation costs.)

According to new poll conducted by Clarus Research Group on behalf of the Association of Equipment Manufacturers 77 percent of American citizens are in favor of “rebuilding” or “modernization” infrastructure in the U.S..

The money for funding those improvements will have to come from somewhere.