Modern transportation infrastructure is a critical building block to ensure that the US economy is in a position for long term growth and prosperity. It creates jobs, draws investment and supports overall global competitiveness. With the deadline for the Highway Trust Fund reauthorization looming, we are faced with the reality that our crumbling transportation systems simply are not up to the job.
Our aging infrastructure impacts everyone. Every day, Americans leave their homes to commute to work or school only to be faced with more than just snarled traffic, but roads in dire need of repair: more than one-fifth of U.S. roads are in poor condition, with nearly half a trillion dollars in needed repairs across the country over the next decade.
U.S. ports, a critical economic doorway, are struggling under the weight of increased cargo traffic, leading to congestion and slowing exports. They now require nearly $30 billion in landside investment alone to keep up with the general demands they are under. Our national infrastructure is in a clear state of decline, demanding $3.6 trillion in total infrastructure investment by 2020 to repair our facilities according to the American Society of Civil Engineers.
For one of the largest economies in the world known for its strength and leadership, we are falling behind other countries. Infrastructure spending has continued to decline since 1960, now at less than 2% of GDP annually behind China at 9% and Europe at 5%. Meanwhile our population continues to grow and with it come new demands on our aging transportation system.
How do we get back on track and safeguard the health of our transportation infrastructure? The first step is for Congress to ensure the solvency of the trust funds for highways, transit, airports, ports, and waterways. Critical infrastructure projects demand long term planning and certainty, not a continual cycle of start-stop efforts. We must aim for a long-term, bipartisan solution so that every year states don't have to put projects on hold for fear of running out of funds.
Second, its time Congress looked beyond Washington and bring the private sector to the table to spur new financing partnerships that support our infrastructure needs.
There is an untapped opportunity here: Standard and Poor's estimates that private investors could provide more than $100 billion in infrastructure investment each year. Public-private partnerships (P3s) are unique in that they offer upfront capital financing, along with the transfer of risk to the private partner, allowing for more efficient project design, construction and maintenance.
Recognizing this pressing need and opportunity, we have introduced the Move America Act. Move America is designed to strengthen our transportation system by making it easier for the states to put together P3s and draw private investment. This unique, bipartisan driven proposal complements federal funding efforts, by creating cheaper and more effective financing tools to expand investment in roads, bridges, transit, ports, rail, and airports.
Move America expands tax exempt private activity bonds and creates a new infrastructure tax credit, giving stakeholders significant flexibility to pursue infrastructure projects that are badly needed in states and localities. And these tools are available for use regardless of who owns the project - government or private groups -- making financing, management, and leasing arrangements much simpler and even more cost effective. The bonds also exempt the interest income from the alternative minimum tax, making it an attractive proposal to investors.
For states that are hesitant to issue more debt, or that are looking to leverage more private equity, Move America tax credits would be available for the state to attract equity investors. The credits are available to the extent there is at least twice as much private investment in the project. This two-to-one match leverages additional equity investment at a lower cost to states and cities, lowering their capital costs or allowing them to reduce tolls or other revenues required for the project.
Critical transportation projects come to life in less time and at less cost to taxpayers. Americans can travel on safer footing. The private sector finds a new investment opportunity.
Strengthening our country's transportation infrastructure shouldn't be a political issue. It's time we come together and create a path to move America forward and build the 21st century infrastructure that our country deserves.
