During his State of the Union address earlier this year, President Trump called on Congress to produce a plan to introduce $1.5 trillion dollars in investment in infrastructure spending. He indicated that this would include investments by the federal, state and local governments and should include private sector investment as well.

This is certainly welcome news to those of us in the construction industry. Unfortunately, we’ve all heard about this sort of investment before. One of the primary sources the federal government utilizes to raise funds for infrastructure investment is the Highway Trust Fund. This fund was created in 1956 and imposes a tax on gas and diesel fuel purchases in the US. Those funds are supposed to be earmarked for spending on infrastructure projects. Despite the fact that infrastructure needs have increased, the amount of tax collected on each gallon of gas has not changed since 1993.

Only a relatively small portion of infrastructure investment comes directly from the federal government. The Congressional Budget Office states that in 2014 the federal government spent approximately $100 billion on infrastructure while the state and local governments contributed approximately $316 billion. This represented approximately 2.4% of the US GDP. That percentage has been relatively consistent for about the last 30 years. The American Society of Civil Engineers states the infrastructure needs in the US require a two trillion dollar investment above the spending level that has traditionally been put towards infrastructure projects over the next 10 years. While this sounds like an onerous increase, it only represents about a 1% increase in GDP spending over that time period. The good news is that infrastructure spending has typically been a good investment. The US Federal Reserve and the International Monetary Fund estimate that the return on a dollar invested in infrastructure returns $1.50 to $3.00 in benefit back to society. Additionally, the political climate for this movement seems to be right as roughly half of all Americans cited improving the country’s infrastructure as one of their top priorities according to polling performed by the Pew Research Center in January of this year.

Let’s hope that President Trump and Congress come through on their promise to significantly increase investments in infrastructure. It’s time to get this done.

Categories: Infrastructure
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Author Biography

Darrell Sanders, P.E., is chief engineer for Contech Engineered Solutions. He holds a BS degree in Civil Engineering from the University of Cincinnati and an MBA from the University of Dayton. He holds a Professional Engineering license in several states. Sanders is a member of several industry committees, including NCSPA, AASTHO, ASTM, and CSA. Darrell can be contacted at dsanders@conteches.com.

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