Congressmen Offer Outlook for Highway Trust Fund
The Highway Trust Fund in its current state is not sustainable and is now predicted to be depleted by spring of 2021, according to Congressional legislators and other experts who spoke at the Coalition for America's Gateways & Trade Corridors (CAGTC) 2018 annual meeting in Washington D.C. on May 16.
As a result, they believe new highway funding mechanisms are needed – with some form of vehicle mileage tax the more promising of the options being discussed – as revenues from the traditional federal taxes on gasoline (18.4 cents per gallon) and diesel (24.4 cents per gallon) are in decline.
"We need to figure out how to fix the highway trust fund – that's a big task," said Rep. Sam Graves, R-Mo., [seen at right] during CAGTC's event. "The [federal] fuel tax is very regressive and more and more vehicles pay very little or no fuel tax at all. And this problem is only going to get worse over time. Electric vehicles are also a problem; we need to figure out how to capture a fee from them, maybe through a surcharge, because there are more and more of them on the road. They are a thorn in this process."
Graves noted that "a lot of states" are working on what he described as "interesting" alternative HTF revenue projects. Yet those efforts are "boiling down into two schools of thought," he explained: tolling ("which I am not a fan of but which is on the table as an option") and a vehicle mile tax.
"There is resistance to tracking vehicles for a VMT but the interesting thing is that the kids don't care about that – they are already tracking themselves with their [personal] technology today," he said. "We will hopefully start finding answers because the next highway bill is around the corner."
Sen. Tom Carper, D-Del., believes a VMT is going to be the option that wins out in terms of replacing HTF fuel tax revenue. "Ultimately, I think we're going to go to a VMT and, ultimately, we'll need a national VMT pilot program and soon," he said.
Meantime, the HTF needs money and needs it now, Carper stressed.
"Raising user fees has been successful; about 30 states have raised or added user fees over last few years and 90 percent of the Republicans and Democrats who voted to implement those fees got re-elected," he noted.
Jeff Davis, a senior fellow with Eno Transportation, pointed out in his remarks at the CAGTC meeting that the Congressional Budget Office's latest analysis indicates that the HTF "will be good through spring 2021."
With that date in mind, Rep. Jeff Denham, R-Calif., [seen at left] noted that more "serious discussions" about the HTF need to take place. "Do we index it [to inflation]? Raise it? Add new fees? Add more tolls [to its revenue stream]? Those are debates we need to have because whatever we do we need it to be bipartisan," he explained.
And few in Congress relish such funding debates, noted Graves. "I hate that we're going to have to spend political capital in the short term to stabilize it and then have to return to it and spend more political capital to change it or replace it," he said.