The Importance of Funding Our Roads and Transportation Infrastructure

The Importance of Funding Our Roads and Transportation Infrastructure

Our roads are suffering.

Motor fuel taxes pay for the building, maintenance and administration of our transportation infrastructure, yet this method is proving ineffective. This article is the beginning of a series on the benefits of having a strong transportation infrastructure system, the problems paying for it and potential solutions.

Why is it Important to Have a Strong and Well-Maintained Transportation System?

A new report from the U.S. Public Interest Research Group Education Fund [U.S. PIRG Education Fund] and Frontier Group finds that drivers currently pay less than half the total cost of roads and argues that while increasing gas taxes could fill the shortfall, it would leave other problems unaddressed.


Two-hundred and seventeen billion dollars and 22,000 fatalities — this is the cost of our crumbling transportation infrastructure. That was eight years ago, and still our roads, highways and bridges are waiting for funds. Sixty-five percent of the most-used roads and highways are in poor condition, and 25 percent of bridges are unable to handle current traffic demands or are in need of repairs.

Short-Term Economic Impact

The state of transportation infrastructure is a vital component in creating new jobs. A 2012 report from the US Bureau of Economic Analysis (BEA) concluded that 65 percent of direct job creation from transportation investment occurred in the construction industry, 10 percent in each manufacturing and other related industries, and 6 percent in each Retail and Professional and Business Services. Per $1 billion spent on infrastructure, an estimated 42,100 jobs are directly or indirectly created or induced. Other studies have shown every dollar invested in these job sectors yields double the profit.

Long-Term Economic Impact

Five and a half billion hours stuck in traffic — that’s far more than we care to spend. A Texas Transportation Institute study estimated that motorists spend up to 5.5 billion hours stuck in traffic annually in city areas, wasting $120 billion in time and fuel. The upkeep of our roads can lead to astronomical returns. Over a 20-year period, a $1 investment in infrastructure returns more than triple this amount in economic activity and returns $0.35 of taxes back to the government.

Poorly maintained roads also lead to increased vehicle maintenance costs. It is estimated that the yearly cost increase for each vehicle owner due to poorly maintained roads is over $500. Below is a graphic from the Washington Post showing the average extra cost per year for vehicle maintenance due to bad roads.

Have you ever ordered something from Amazon or waited for your food to be delivered? Improved transportation infrastructure also stimulates the economy by increasing the dependability of on-time delivery systems. Many retail businesses are moving to a zero-inventory model. In order for these models to be successful, the delivery of materials and products must be timely. Improvements in the transportation system lead to improved reliability for this business model.

The matter of our roads, highways and bridges is less trivial than driving over a pothole. It affects our safety, job security and long-term economic state. Stay tuned for potential solutions on how to fix our crumbling transportation infrastructure. Until then, try not to get stuck in traffic.

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    Bob Donnellan

    Bob Donnellan

    Motor Fuel Tax Subject Matter Expert

    This analysis is intended for informational purposes only and is not tax advice.  For tax advice, consult your tax adviser. See the full disclaimer here.