US: highway money so little that states mull tax hikes image

Some of the states – even the ones led by Republican politicians – have started debating whether to increase taxes, as infrastructure funds crumble amid lower fuel prices, battered roads and the usual gridlock in Congress.

For the US states, among them Iowa, Michigan and New Jersey the options to bring more money for infrastructure projects include hiking the levies at the gas pump, seeking new financial aid from borrowers or any other money-generating strategy that help them. And, just as prices at the pump have been dropping like crazy in recent weeks – by more than $1 per gallon since April – might alleviate opposition if the politicians choose to increase taxes.

Because the US Congress has not modified (upwards, of course) the gasoline tax since 1993, the ongoing conundrum has led to the Highway Trust Fund reaching the brink of bankruptcy this year. The botched up solution was to bring some money from other directions, but the maneuvers would only support the infrastructure projects through May. Additionally, federal and state taxes generate less money each month because the automakers introduce more fuel-efficient vehicles. And, according to the American Society of Civil Engineers, the country needs just through the decade’s end no less than $3.6 trillion in infrastructure investment.

Via Bloomberg