As previously reported by Conduit Street, the recent collapse of a bridge in Washington State has raised infrastructure funding concerns at both the state and the federal level. A May 28 Baltimore Sun editorial highlights the slow decay of the nation’s roads and bridges and reiterates the need for a strong federal transportation funding program.
The problem is that U.S. funding for transportation and other types of infrastructure has not kept pace with inflation or the country’s needs. …But [state funding efforts] surely won’t be enough if the federal government abdicates its historic role in financing transportation and other public works projects. The federal Highway Trust Fund remains in danger of going broke this year, chiefly because Congress has not seen fit to raise the federal gas tax in two decades.
Recognizing that an increase in the federal gasoline tax is unlikely, the editorial instead supports a proposal that would allow private companies to guarantee transportation funding bonds in exchange for lowering the costs of repatriating overseas holdings.
Make no mistake, the federal government’s 18.4-cents-per-gallon motor fuel tax isn’t likely to be increased any time soon. …
But there are some alternatives worth exploring. One particularly promising idea came to light last week from an unlikely source — Maryland’s newest congressman, freshman Rep. John K. Delaney. A Democrat with a background in finance who represents the 6th District, which runs from Montgomery County through Western Maryland, Mr. Delaney is lead sponsor of a bill to create a $750 billion infrastructure fund financed through bond sales.
But here’s the rub. Those 50-year bonds with a 1 percent interest rate wouldn’t be guaranteed by the federal government but by private companies looking to repatriate overseas holdings. …
Mr. Delaney’s Partnership to Build America Act would set up an auction in which U.S. corporations would bid down the price to repatriate their funds. If, for instance, the winning bid was a 4-to-1 ratio, a company like Apple would have to purchase $1 in bonds for every $4 repatriated — the equivalent of an 8 percent tax rate.
The editorial argues that such innovative ideas are needed to generate funding for transportation and other necessary infrastructure.