The Highway Trust Fund — the primary federal account dedicated to funding highways, bridges and transit — is going broke.

The HTF is funded largely by federal taxes on gasoline and diesel fuel — revenue sources designed decades ago for a very different transportation system. That revenue isn’t keeping up with surface transportation needs.

The problem?

Congress has not increased the federal gas tax since 1993, but it has consistently increased funding for roads and bridges to account for rising construction costs and a growing backlog of infrastructure needs. Nobody is suggesting that Congress should cut investments in roads and bridges, but it must figure out how to pay for them.

Attempting to close this gap solely by raising the gas tax would require a dramatic increase that is unlikely to be politically viable. More importantly, tying our long-term ability to fund roads exclusively to fuel consumption no longer reflects how Americans travel. The rapid growth of vehicles that use little or no gasoline further undermines this model. In a world of increasing fuel efficiency and evolving powertrain technologies, it makes little sense to tax Americans based on the type of vehicle they drive or the fuel it uses.

Since 2007, Congress has relied on a variety of general fund offsets to cover an increasingly larger share of the HTF. These offsets have allowed Congress to pass larger highway bills even though the HTF has covered a smaller part of the Surface Transportation Program annually.

While these general fund infusions have prevented immediate insolvency, they were never intended to serve as a permanent solution. Continuing down this path only increases uncertainty, undermines long-term infrastructure planning and grows the national debt.

The solution: To build and maintain modern essential infrastructure, America needs a long-term revenue source that applies to all vehicles that use the road system, is fair to the driving public, and does not require repeated general fund bailouts.

Our approach would replace the outdated fuel-tax model with an annual fee based on vehicle weight, collected by states at the point of registration. This system would fully fund the HTF, eliminate its structural deficit and ensure every vehicle category contributes fairly to access federal roadways.

Under this approach, all federal fuel taxes and truck taxes that currently support the HTF would be eliminated and replaced with a transparent annual weight-based fee collected by state DMVs.

This approach offers several major benefits.

It eliminates the federal gas and diesel taxes, lowering gas prices and reducing the pain at the pump. This is especially important now as gas prices are rising due to geopolitical events.

Second, it would fully stabilize the HTF for the long term. The Congressional Budget Office estimates a nearly $300 billion shortfall in the HTF over the next 10 years, with the fund becoming insolvent starting in 2028. The annual fee proposal would eliminate the need for general fund support for the HTF, saving taxpayers billions while also giving Congress, the Department of Transportation and states the necessary resources to make essential investments to maintain and modernize our infrastructure.

Finally, eliminating the truck taxes will help to reduce the upfront burden of investing in a new heavy-duty truck. Since World War I, new trucks have been subject to a 12 percent federal excise tax. As truck prices have risen, that tax has become a significant barrier to investing in newer, safer and cleaner vehicles.

This is a simple and fair solution that drivers can understand and support. Every state already has an established vehicle registration system, meaning the infrastructure to collect those fees is already in place. This reduces the cost to collect and avoids creating a new federal tax bureaucracy.

Taxpayers can reduce the upfront burden of these fees by breaking their payments up into multiple installments. For most passenger vehicle owners, the monthly payment could be less than a Netflix subscription.

The Surface Transportation Reauthorization is moving through Congress right now. It’s the perfect moment to reform and stabilize the trust fund and finally fix our national transportation infrastructure emergency.

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ABOUT THE WRITER

Andrew Stasiowski is the president and CEO of the American Highway Users Alliance. He wrote this for InsideSources.com.

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