House Eyes New Vehicle Fees to Boost Highway Trust Fund
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WASHINGTON — Ahead of the consideration of comprehensive surface transportation legislation, a subcommittee in the U.S. House of Representatives examined options for the future of the Highway Trust Fund.
The Eisenhower-era account designed to assist states with infrastructure projects is central to Congress’ upcoming votes on a multiyear highway policy measure.
At an April 29 hearing, Transportation and Infrastructure Committee Chairman Sam Graves (R-Mo.) said the panel intends to consider as early as the following day a new fee of $200 on electric vehicles, $100 on hybrid vehicles and a $20 fee on most other passenger vehicles in the coming years. “If successful,” Graves explained, “these new user fees would represent the first new funding streams into the Highway Trust Fund in more than 30 years.”
Rep. David Rouzer (R-N.C.), chairman of the Highways and Transit Subcommittee, championed the proposed fee. He has consistently urged the panel to identify a sustainable source of funding for national highway programs. The Highway Trust Fund, which is approaching insolvency, was most recently stabilized by the $1.2 trillion Infrastructure Investment and Jobs Act.
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“There are a number of different thoughts about how to address the fundamental structural challenges of the current funding mechanism to fund the Highway Trust Fund, and all have their pros and cons. Meanwhile, gasoline and diesel taxes, which have remained unchanged since 1993, have lost 73% of their purchasing power,” Rouzer said at the hearing.
Noting the upcoming consideration of a $200 annual registration fee on electric vehicles, the subcommittee chairman argued it “will raise tens of billions of dollars in additional revenue for the Highway Trust Fund over the next decade to better ensure that all users of our roads are paying to maintain roads.”
“While a step in the right direction and the first real attempt by Congress to address the trust fund’s solvency problems in more than 30 years,” Rouzer continued, “this fee alone will certainly not solve the estimated $142 billion shortfall.”
Meanwhile, Transportation and Infrastructure Committee ranking member Rep. Rick Larsen (D-Wash.) pointed to the highway account’s funding boost approved in 2021’s bipartisan infrastructure law. The Biden-era law is considered an economic success among most congressional Democrats.
As Larsen put it, “There are many options to fund transportation investments that Congress will have to debate ahead of the next reauthorization bill. However, what should not be up for debate is whether we continue to invest in our nation’s transportation infrastructure at the [bipartisan infrastructure law’s] robust levels.”
“What also should not be up for debate is that the entities who, thanks to the [bipartisan infrastructure law], now reap the benefits of federal support — cities, counties, Tribal governments and [metropolitan planning organizations] — must continue to have access to reliable funding,” the ranking member continued.
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At the subcommittee hearing, Jeff Davis, senior fellow at the , proposed that policymakers pursue funding options during this session of Congress. He reminded the subcommittee the political class has often demonstrated an unwillingness to raise tax rates to “keep pace with increasing trust fund spending or to restrain spending to stay in line with trust fund tax receipts.” The fund relies on insufficient revenue from the federal 18.4 cents-per-gallon tax on gas and 24.4 cents-per-gallon tax on diesel. Those tax rates were approved in 1993.
“Congress has to take a long, hard look and ask, do we want to continue the user-pay, user-benefit paradigm here? If so, it should be strengthened, with the trust fund made solvent by a combination of surface transportation user taxes and spending cuts,” Davis said.
Carlos Braceras, executive director of the Utah Department of Transportation, shared expertise with the subcommittee on behalf of the American Association of State Highway and Transportation Officials. “Just as the [highway trust fund] relies primarily on the fuels tax, states have long derived a large portion of their road funding from the gas tax,” he explained. “However, the gas tax at the state level also continues to be eroded due to inflation along with the growing use of fuel-efficient vehicles.”
The IIJA ensured the fund continues to meet its obligations through 2026. Afterward, analysts anticipate additional action will be required to guarantee its solvency. The fund is used for assisting states with construction and maintenance projects. The account is under the jurisdiction of the congressional tax-writing committees.
This year, congressional leaders have said the upcoming highway reauthorization bill will primarily prioritize transportation safety as well as provisions specific to efficient freight mobility and supply chain connectivity.
