No free ride

What a wonderful world it would be if public services and facilities could somehow be provided without anyone paying for them - or that if there is a cost, it could be assigned to someone else.

Alas, that's not the world we live in. The fact is that inadequacies in U.S. transportation infrastructure have become a burden on the supply-chain industry, and fixing the problem will require money. The question is how to raise it.

When the interstate highway program was authorized a half century ago, the federal government was able to fund most of it with gasoline taxes. States also imposed fuel taxes for highway improvements. Today's gasoline prices, coupled with no-new-taxes sloganeering, make this an unpopular option today.

Transportation Secretary Mary Peters has been promoting privatization of transport infrastructure, with the revenue stream boosted by higher tolls. She correctly points out that gas taxes aren't keeping pace with transportation needs and that a new approach is needed. Opponents, however, are uneasy about a wholesale transfer of public assets to private control.

An infrastructure funding option that's starting to win grudging acceptance in the supply-chain industry is user fees. As Bill Mongelluzzo points out in this week's cover story, some in the industry are showing a willingness to consider a national fee as a way to provide needed infrastructure and possibly avoid being nickeled and dimed by state and local fees.

At a recent public hearing in Southern California, several members of Congress spoke favorably about a bill to establish a national import-export container fee, based on cargo value. Exporters favor this approach because it would be less costly for their generally lower-value shipments and would reduce the burden on exporters to finance infrastructure that is sized to meet import needs.

Another interesting approach, suggested by Douglas Rubin of Moffatt & Nichol, would be a port or intermodal fee patterned after the passenger services fee that you see as an add-on to your airfare. Such a fee would be authorized nationally, but would permit states or ports to opt out.

The key to solving the funding problem for transportation infrastructure will be to find a source that will be sufficient to meet the need, that can be easily collected, and that is assessed equitably enough to minimize economic distortions and avoid undue harm to any specific industry segment.

How that is done is something the industry may be debating for years to come. What's encouraging is that the debate finally appears to be getting serious.

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