Two comment letters sent by the American Association of State Highway and Transportation Officials to Senate leaders on February 21 re-emphasized the need to reauthorize surface transportation legislation ahead of the expiration of the Fixing America’s Surface Transportation or FAST Act in September.
The letters – the first sent to Sen. Charles Grassley, R-Iowa, and Sen. Ron Wyden, D-Ore., respectively chairman and ranking member of the Committee on Finance, and the second to Sen. Mitch McConnell, R-Ky., and Sen. Chuck Schumer, D-N.Y., respectively the Senate’s majority and minatory leaders – stressed that “now is the time” to bring together the work of the all key Senate committees to finalize funding and financing proposals for the next multiyear highway, highway safety, transit, and passenger rail reauthorization so it can be passed on time.
Those letters came on the heels of a new report issued by Fitch Ratings on February 14 that called for a “new paradigm” to adequately address the growing U.S. infrastructure funding deficit.
“While a source of adequate and sustainable funding is a critical component, a results-oriented, objective and strategic approach to investment, along with responsible stewardship of the public purse, are paramount,” Fitch said in its report. “Increased spending without a strategic, comprehensive approach to infrastructure investment based on national priorities will not go far in addressing the continued deterioration of critical economic assets.”
The firm noted that addressing U.S. infrastructure needs will require a “significant uptick” in annual new investment as the existing “multi-trillion-dollar” infrastructure deficit will require a “glide-path to trillion-dollar annual investments” at 5 percent of U.S. gross domestic product and more than double recent historical levels to have a “meaningful” impact.
“States and local governments have made efforts to fill the funding gap, including raising gas taxes, using toll revenues for other unrelated projects, or entering into public-private partnerships,” Fitch noted. “State and local spending on infrastructure was about 1.5 percent of U.S. GDP in 2018 but infrastructure needs are too great to address on their own. States and municipalities need funding visibility and assistance to begin work on necessary projects.”