Could new tax collection procedures be the key to improved bridge maintenance? (with related video)

No question about it, U.S. bridges need upgrades and repairs. The Associated Press analyzed data from the most recent federal National Bridge Inventory, and found that 7,795 bridges in the U.S. are both “structurally deficient” and “fracture critical.” According to the Federal Highway Administration, a bridge is deemed fracture critical when it doesn’t have redundant protections and is at risk of collapse if a single, vital component fails. A bridge is structurally deficient when it is in need of rehabilitation or replacement because at least one major component of the span has advanced deterioration or other problems that lead inspectors to deem its condition poor or worse.

Houston-based FuelQuest is a technology company that provides software to suppliers and purchasers of fuel. The firm currently manages 20 billion gallons of fuel per year for companies like UPS, FedEx and 7-Eleven. The company tracks the correlation between fuel supply and tax regulations.

State governments use FuelQuest software to collect motor fuels excise taxes. According to David Zahn, FuelQuest’s vice president of marketing, the easier, mandated electronic filing process made possible by his firm’s software encourages greater vendor participation with more people actually filing their taxes. “What you find is that states’ revenue base increases. States often are reticent to talk about these things, but we estimate that states see a 7 to 10 percent increase in revenue by using our software.” With the FuelQuest offering, says Zahn, states see an increase in their revenue base, “and when you do that, now you have more dollars to get more bridge maintenance and repair projects off the ground.”

Here are the views of David Zahn.

GPN: Would indexing motor fuel excise taxes to inflation help the deteriorating bridge situation in the U.S.?
David Zahn: Motor fuels excise taxes in a lot of states are not indexed to inflation, so for most states, every year that they collect another dollar of revenue for motor fuels excise taxes, the buying power of that dollar is less and less. And for some states, it hasn’t changed in 15 to 20 years. The federal excise tax hasn’t changed for a long time, also. If our bridges are declining, and you are getting less money to maintain and improve, there’s a gap there that is widening over time. So just simply indexing those taxes to inflation will at least stem the bleeding and that’s what a medical doctor would do when a patient has an injury—just stop the bleeding. If you stop the bleeding, now you can worry about fixing the problem. We think that indexing the fuels tax to inflation makes sense. And that will provide more money in highway department coffers for needed bridge maintenance.

GPN: Do governments need a stable, steady, predictable revenue source for needed bridge repairs?
DZ: A lot of states have turned towards bonding initiatives, basically debt, to pay for these infrastructure projects. That’s one route, but at some point, and some states have seen that, Texas has had that problem, where your debt service starts to become quite high, and if your funds start going more towards debt service than they do towards actual projects, then what you did is you put a Band-Aid on the wound and you didn’t actually fix the problem long-term. That’s a trap that if you have a short-term view, maybe even a political view, which you might fall into. I’m all for small government, but I’m not for no government, and you’ve got to fund certain things that we all benefit from, and roads and bridges are certainly in that category.

GPN: Do you see bridge conditions in the U.S. improving in the future?
DZ: The truth is that they have. Just look at the number of structurally deficient bridges in the U.S. “Structurally deficient” means that the bridges are in need of repair. It doesn’t mean that they are unsafe. The number of those bridges in the U.S. that are structurally deficient is decreasing each year, according to the latest statistics from the federal Bureau of Transportation Statistics. We’ve gotten to such a state of disrepair that Yes, it’s getting better, and it’s trending the right way, but it’s trending really slowly in the right way. So, the speed at which we are attacking the problem has to accelerate.

Thank you, David Zahn, for your views.

Go here to view reports on FuelQuest tax revenue successes. This case study outlines how the New Hampshire Dept. of Safety gained additional motor fuels tax compliance with the FuelQuest Zytax Government software.

Go here for GPN’s first installment on deteriorating bridge conditions in the U.S. Al Maloof outlines how public-private partnerships could help fund needed bridge repairs in the U.S.

In this video, Pennsylvania Department of Transportation Secretary Barry J. Schoch tells why he authorized the department to add or increase weight restrictions to about 1,000 structurally deficient bridges statewide to ensure bridge safety and preserve the Keystone State’s aging bridge system.