Who's going to pay for new highways?

• Author: Poole, Robert W., Jr.

Our Interstates are wearing out. Here's what we need to do to fix them.

Most of us take Interstate highways for granted. If you're under 30, they have always simply been there: the long dull stretches of open road on family road trips, the clogged arteries of your daily commute. But prior to the 1960s, highways as we know them today didn't exist. There were hardly any long-distance freeways without cross traffic or with safe separation between opposing lanes. Most commuting was done on boulevards with stoplights every half mile or so. The Interstates brought faster, safer travel by car and truck to all of America. Today, these 47,000 miles of highway handle an amazing volume of traffic. A quarter of all vehicle-miles traveled take place on Interstates, even though they account for just 2.5 percent of all U.S. highway lane-miles.

Unfortunately, we can't assume the Interstates will always be there. Even well-designed and well-maintained highways eventually wear out and need to be rebuilt. The Interstates were conceived for a 50-year service life if properly maintained (and not all of them have been). Because nearly all were built between i960 and 1990, much of the system will need rebuilding over the next few decades. What's more, many Interstate corridors, both rural and urban, are congested today and will be more congested in the future. Road pricing could help, but as the economy and population keep growing, our transportation infrastructure must grow along with it: We're going to need more lanes.

The huge problem that our politicians have not yet taken seriously is how to pay for what amounts to a second-generation Interstate system. Last year, on behalf of Reason Foundation--the nonprofit that publishes reason--I carried out a detailed study to estimate the cost of rebuilding and selectively widening the Interstate system. For each of the 50 states and the District of Columbia, I used the best available estimates of the cost per lane-mile to reconstruct existing Interstate lanes. These calculations took into account the different types of terrain in each state (flat, hilly, or mountainous) as well as construction cost differences among the states. Then I used conservative state-specific projections of the growth rates of car and truck travel to figure out which Interstates would need additional lanes, in which decade they would need them, and how many lanes they would need. This included adding truck-only lanes on selected Interstates with very high truck volumes over the next 40 years.

A project this massive turned out to cost $983 billion. That figure is the net present value of all the construction projects that would need to occur between 2020 and 2040, in 2010 dollars. In round numbers, we're talking about a trillion dollars. How on Earth are we going to pay for that?

Those with long memories assume the feds will pay. After all, they paid the first time around, didn't they? But that's a pipe dream. The current debate in Washington, D.C., is over how to bail out the federal Highway Trust Fund, which is nearly out of money, not the best way to spend an additional trillion dollars. The Trust Fund until recently was supported solely by highway user taxes--primarily, federal taxes on each gallon of gasoline and diesel fuel sold. But even if Congress had the political will to enact a large increase in those fuel taxes, powerful interest groups would insist that any revenues be divided up among scores of existing federal highway and transit programs (which include bike paths, sidewalks, and recreational trails), leaving only a fraction for a trillion-dollar Interstate makeover. If we're ever going to rebuild and modernize the Interstates, we need to come up with a new way to pay for it.

How We Got Into This Mess

From the earliest years of the United States, the role of the federal government in building highways (and making other "internal improvements") was a subject of controversy. The Constitution called for a postal system and "post roads," but such early presidents as Thomas Jefferson, James Madison, and Andrew Jackson did not interpret this as giving Congress the power to build roads or canals and vetoed bills to do such things. The one exception was Jefferson's approval of a bill to fund a "national road" (as a post road) to open up the Northwest Territories. Aside from that exception, 19th-century highways were largely developed by private businesses and paid for with toll revenues.

By the 1890s, bicyclists and farmers had started working together to call for paved roads linking the countryside to cities. The resulting Good Roads Movement found an ally in the Department of Agriculture, which got money from Congress in 1893 to create...