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Without question, the Infrastructure Investment and Jobs Act (IIJA) is finally moving critical infrastructure projects forward with new funding to states. Yet the gulf between Democratic and Republican lawmakers on the importance of funding transportation is omnipresent. 

This is despite a March NBC/NORC poll which concluded that, among categories where American adults would like to see more spending, 62 percent said there is too little spent on infrastructure. 

While the IIJA is spurring green energy spending and an economic boost, it could not be more clear that prioritizing funding for the United States’ infrastructure is no longer a bedrock bipartisan issue.

So far, there is no long-term fix for the beleaguered Highway Trust Fund (HTF). The gas tax remains at a 1993 rate, states have pursued their own ballot initiatives to shore up transportation funding, and the feasibility of a federal fee-based revenue source, that would draw on technology to track miles a vehicle is driven in an era of more fuel-efficient and electric cars, is consistently broached.  

No Time For Delays discusses some of this with Jeff Davis, Senior Fellow with the Eno Center for Transportation and Editor of the Eno Transportation Weekly, in our newest podcast. The Eno Center for Transportation recently completed a report on the national vehicle miles traveled (VMT)-fee pilot program, which is part of IIJA funding but not yet developed. Eno offers guidance and perspectives on the importance of costs, equity, privacy protection, interoperability, and implementation complexity. 

It’s Full Speed Ahead for IIJA, Yet Republicans Want to Cut DOT Grant Dollars

The IIJA basically gave the country a milestone opportunity to revisit and reinvest in a national highway network conceived around the 1950s and still being built out before the new millennium. 

“We were expecting infrastructure spending to hit in 2024 and 2025, but it’s making its way through the economy much faster than that,” said Diane Swonk, Chief Economist for KPMG, in a story in The Washington Post. “We’re getting renewed strength from infrastructure spending and other stimulus that is adding to the economy in a big way.”  

But if certain political players get their way, plans for major mass transit projects — such as the Hudson River Tunnel, the next phase of the Second Avenue Subway in New York City, and the BART (Bay Area Rapid Transit) system expansion in Silicon Valley and San Francisco — will likely be sidelined and significantly less federal discretionary dollars will go to Amtrak.

House Republicans have slashed the Biden Administration’s transportation budget asks and federal grants, such as RAISE (Rebuilding American Infrastructure with Sustainability and Equity). Additionally, Amtrak’s President Stephen Gardner said the House’s proposed budget for Fiscal Year 2024 would force Amtrak “to radically reduce or suspend service on various routes across the nation.” [Source: trains.com]

Looming now are competing federal budgets. For 2024, the House Committee on Transportation, Housing and Urban Development (THUD) provides a discretionary total of $21.6 billion to the Department of Transportation (DOT), which is $7 billion and 59% below the FY23 level. The Federal Aviation Administration (FAA) budget is above the FY23 enacted level but, for example, the amounts for the Federal Highway Administration (FHWA), Federal Railroad Administration (FRA), Federal Transit Administration (FTA) and the Maritime Administration (MARAD) are below last year’s levels. 

The Senate Appropriation Committee on THUD and related agencies provides $28.4 billion in funding for the DOT. And it emphasizes resources to ensure the safety of the rail network and capital investments to improve the state of good repair for transit. 

These are the result of policy differences between the House and the Senate, which means another battle will ensue that could result in a government shutdown. 

Looking Even Farther Down the Line 

“The bill is going to build out a lot. … We get quarterly updates on how many contracts and whatever are being signed for actual construction projects built by this and the money’s flowing out there and the tangible benefits will be seen,” says Davis. 

“But the latest forecast from the Congressional Budget Office (CBO) says we’ve got until 2028. The IIJA funding expires in September 2026 and, after that, the $36 billion a year of extra money that DOT is getting from that bill will expire,” adds Davis. “And then they’ll still be left with funding out of trust funds, but then the Highway Trust Fund (HTF) is going to go broke a year and a half after that at current spending rates. And when that happens, they’ve got to find another bailout from the general fund. The bill will keep getting bigger and the hole keeps getting deeper.” 

Davis says IIJA monies are preserved, for now, through the bill passed in 2021. But he also points out the IIJA is not a panacea. A more current and sustainable funding source for surface transportation has not been explored and eked out politically. But the nation is still going to have to find ways to pay for maintaining and updating roads, bridges, public transit, rail and a system that facilitates interstate commerce as well as benefits the nation’s safety and security. 

A public education and outreach campaign will be a pivotal part of the exploration and recommendation of fuel tax replacements, according to Eno. 

“A system where drivers are charged for each mile driven has long been acknowledged as a viable and sustainable long-term option for national transportation funding. Known alternatively as a VMT, mileage-based user fee (MBUF), or road usage charge (RUC), its application based on distance travelled … offers an enticing alternative. … Time is of the essence, and Eno recommends the federal government assemble the Federal Advisory Board as soon as possible,” it notes.

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