The House Subcommittee on highways and transit held a hearing on April 29 to address long-term solution for the Highway Trust Fund revenue shortfall. The HTF has faced an insolvency crisis dating back to at least 2008, as current user fees are no longer sufficient to sustain necessary investment in our surface infrastructure needs. The Infrastructure Investment and Jobs Act (IIJA) failed to address this issue and only made matters worse by increasing spending $102 billion and relying on a general fund transfer of $118 billion in support. The subcommittee chairman said Republicans support investing in infrastructure, but our highway funding system is founded upon the principle that roadway users must pay for their use of the system. Failing to restructure our surface transportation funding sources will have severe consequences for our nation’s transportation system and the American people. He said, as part of reconciliation, the Committee will vote on a proposal to leverage existing state vehicle registration systems and assess a new fee of $200 on electric vehicles (EVs), $100 on hybrid vehicles, and a $20 fee on most other passenger vehicles. If approved, these new user fees would represent the first new funding streams into the Highway Trust Fund in more than 30 years.
A variety of witnesses addressed the subcommittee with thoughts on fixing the funding shortfall. AASHTO, the state DOT organization, pointed out that three broad categories of revenue for the HTF exist: Raising or indexing the rates of existing HTF revenue streams such as the excise tax on gasoline and diesel, user fees on heavy vehicles, and sales taxes on trucks, trailers, and truck tires; Identifying and creating new federal revenue sources for the HTF, including, for example, imposing an annual fee on electric and hybrid vehicles or a tax on alternative fuels such as electricity; and Redirecting revenue generated by existing federal sources into the HTF, including, for example, customs duties, income taxes, and other revenues from the General Fund.
Neither AASHTO nor any of the other witnesses offered a strong recommendation for any one of these solutions. All agreed that attempting to maintain a user fee concept is the most promising approach but that increasing the motor fuels tax was the most problematic of the revenue sources being proposed.