Asset management can be an effective response to the fiscal challenges confronting the highway infrastructure in the United States. This paper explores asset management in light of recent developments in the funding, condition, documentation and management of the U.S. highway infrastructure. Capital biases associated with traditional U.S. federal highway funding programs are discussed, and the innovative financing approaches that have evolved in response to the inability of the Federal Highway Trust Fund to meet burgeoning highway renewal and replacement needs, caused in part by widespread deferred maintenance of the highway system, are discussed. The paper suggests that public sources of funding will not be adequate to renovate or replace the current highways and build new capacity. Closing the expected shortfall in public highway funding will require sustained infusions of private sector funding. However, the financing of highways through public-private partnerships will require state and local transportation agencies to radically change the ways in which the highway infrastructure is managed. Within the context of gradual changes in highway management and financing, the paper suggests a critical role for asset management in demonstrating prudent stewardship of highway infrastructure and facilitating private sector confidence in highway investments. Implications for innovative highway funding resulting from recent developments in asset management are examined, including: 1) further devolution of highway program and funding responsibilities to state and local levels of government; 2) developments in asset management processes and practices; and 3) the infrastructure reporting requirements recently developed by the Governmental Accounting Standards Board.
Abstract