WASHINGTON — Railroads are pushing lawmakers to hike taxes on trucks to fix a crisis-level problem of federal road and bridge funding, putting pressure on their biggest competitor as each vies for freight market share.

Although the trucking industry says it’s open to equitable ideas, it holds that it already pays its fair share for highway infrastructure wear.

The issue stems from diminishing funds for the Highway Trust Fund, funded by gas taxes. As cars and trucks have become more fuel-efficient, federal revenue from gasoline and diesel sales declined. The rate set by Congress has been flat at 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel since 1993, figures that haven’t been indexed for inflation.

The Congressional Budget Office projected that, without a solution from Congress, the fund will become completely insolvent by 2028 and carry a roughly $135 billion deficit by 2031.

Lawmakers have taken to transferring cash from the Treasury general fund to the highway coffers. Congress last provided a $118 billion patch from the general fund in the 2021 infrastructure law to make up for the declining gas tax revenues.

The railroad industry holds that those federal transfers are helping to subsidize the trucking industry, creating an uneven playing field.

“Our competitors have gotten and are on pace to get over $300 billion in public subsidy for the infrastructure they operate over,” Ian Jefferies, president and CEO of Association of American Railroads, said during a House Transportation and Infrastructure Committee hearing last month. “It is a competitive imbalance.”

Jefferies said that Class I railroads, which the organization represents, pay for “almost 100%” rail infrastructure, which he estimated amounts to $1.1 trillion since 1980 when adjusted for inflation.

“We’re just looking for a level playing field here,” he said. “When you’re subsidizing infrastructure to the tune of hundreds of billions of dollars, that just flips the scale on its side and pushes freight where it’s going to go to the cheapest level, which is going to be the highways.”

Jefferies also argued that Congress and the administration should not increase federal truck weight limits since it would cause more wear and tear to federal highways.

Tax uneasiness

There haven’t been any clear solutions for the Highway Trust Fund. Lawmakers have shied away from increasing the tax rate on gas and diesel for any number of reasons, not the least of which is consumer reaction.

The Trump administration, for one, has promised to unleash energy dominance in part to lower costs at the pump.

An alternative idea is that all highway users, including those driving electric and hybrid vehicles, should pay based on miles traveled. Such a model would tax vehicles based on how many miles they travel and would weigh other factors like vehicle weight or type of vehicle.

But lawmakers haven’t hashed out what that would look like on the federal level.

The rail industry is urging Congress to adopt a weight- or axle-based “Vehicle Miles Traveled” tax, which would require heavier vehicles like trucks to pay a higher tax for using federal highways.

The trucking industry agrees that there needs to be a solution, whether it’s a gas tax increase or new user pay model. But truckers argue their tax revenues already make up a disproportionate share of the fund.

Darrin Roth, vice president of highway policy at American Trucking Associations, said in an interview that truckers pay roughly 45% of the Highway Trust Fund. According to the Bureau of Transportation Statistics, commercial trucks made up roughly 10% of highway vehicle-miles traveled in 2020. Light-duty vehicles, like passenger vehicles, made up nearly 89%.

Roth added that much of the infrastructure costs drawing cash from the fund are related to new construction of roads rather than maintenance, and that a good portion of the wear on the roads is due to weather.

“The real issue is that nobody’s paying what they should be paying,” he said. “Ninety-five percent of the traffic on an urban road in rush hour are passenger vehicles, not trucks. So really the cost of highway expansion should be attributed to passenger vehicles.”

The Owner-Operator Independent Drivers Association, which represents small trucking companies, said it also supports an overhaul of the system — as long as it’s done in a “fair and equitable way among users.”

“We are particularly concerned about proposals that would single out the trucking industry for a truck-only VMT,” a spokesperson said. The group, a participant on a Transportation Department advisory board on the issue, is fighting mileage-based proposals.

On truck weight limits, Roth said ATA is advocating a 10% increase in weight for auto haulers because these days they’re transporting more electric vehicles, which are heavier than gas-powered equivalents. He added that an increase in axle weights impacts pavement conditions, but an overall freight weight increase that doesn’t increase axle weight doesn’t cause any increase in road wear.

Legislation

Lawmakers have renewed interest in fixing Highway Trust Fund deficits following the Biden administration’s push to boost adoption of electric vehicles. In the current gas tax model, EVs don’t pay for wear to federal roadways despite being heavier than gas-powered cars and trucks.

In a preliminary list of spending cuts circulated last month by House GOP leaders, they floated a proposal to charge a fee for electric vehicle sales that would be deposited into the fund.

Transportation leaders have also identified trust fund insolvency as a high priority for the upcoming surface transportation reauthorization bill. The current authorization expires in 2026, but lawmakers said they’ll begin discussions long before expiration.

“We must also have a frank discussion about the solvency of the Highway Trust Fund. … It is wholly unfair that an entire segment of users doesn’t contribute to the roads and bridges they use,” House Transportation and Infrastructure Highways Subcommittee Chairman David Rouzer, R-N.C., said at a hearing last month. “We must rectify this so all users are treated fairly and contributing to the systems on which they rely.”

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