[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
AMERICA BUILDS: THE NEED FOR A LONG-TERM
SOLUTION FOR THE HIGHWAY TRUST FUND
=======================================================================
(119-17)
HEARING
BEFORE THE
SUBCOMMITTEE ON
HIGHWAYS AND TRANSIT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
APRIL 29, 2025
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
__________
U.S. GOVERNMENT PUBLISHING OFFICE
60-847 PDF WASHINGTON : 2025
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Sam Graves, Missouri, Chairman
Rick Larsen, Washington, Ranking Member
Eleanor Holmes Norton, Eric A. ``Rick'' Crawford,
District of Columbia Arkansas,
Jerrold Nadler, New York Vice Chairman
Steve Cohen, Tennessee Daniel Webster, Florida
John Garamendi, California Thomas Massie, Kentucky
Henry C. ``Hank'' Johnson, Jr., Georgiaott Perry, Pennsylvania
Andre Carson, Indiana Brian Babin, Texas
Dina Titus, Nevada David Rouzer, North Carolina
Jared Huffman, California Mike Bost, Illinois
Julia Brownley, California Doug LaMalfa, California
Frederica S. Wilson, Florida Bruce Westerman, Arkansas
Mark DeSaulnier, California Brian J. Mast, Florida
Salud O. Carbajal, California Pete Stauber, Minnesota
Greg Stanton, Arizona Tim Burchett, Tennessee
Sharice Davids, Kansas Dusty Johnson, South Dakota
Jesus G. ``Chuy'' Garcia, Illinois Jefferson Van Drew, New Jersey
Chris Pappas, New Hampshire Troy E. Nehls, Texas
Seth Moulton, Massachusetts Tracey Mann, Kansas
Marilyn Strickland, Washington Burgess Owens, Utah
Patrick Ryan, New York Eric Burlison, Missouri
Val T. Hoyle, Oregon Mike Collins, Georgia
Emilia Strong Sykes, Ohio, Mike Ezell, Mississippi
Vice Ranking Member Kevin Kiley, California
Hillary J. Scholten, Michigan Vince Fong, California
Valerie P. Foushee, North Carolina Tony Wied, Wisconsin
Christopher R. Deluzio, Pennsylvania Tom Barrett, Michigan
Robert Garcia, California Nicholas J. Begich III, Alaska
Nellie Pou, New Jersey Robert P. Bresnahan, Jr.,
Kristen McDonald Rivet, Michigan Pennsylvania
Laura Friedman, California Jeff Hurd, Colorado
Laura Gillen, New York Jefferson Shreve, Indiana
Shomari Figures, Alabama Addison P. McDowell, North
Carolina
David J. Taylor, Ohio
Brad Knott, North Carolina
Kimberlyn King-Hinds,
Northern Mariana Islands
Mike Kennedy, Utah
Robert F. Onder, Jr., Missouri
Jimmy Patronis, Florida
Subcommittee on Highways and Transit
David Rouzer, North Carolina,
Chairman
Eleanor Holmes Norton, District of
Columbia, Ranking Member
John Garamendi, California Eric A. ``Rick'' Crawford,
Henry C. ``Hank'' Johnson, Jr., Georgiakansas
Jared Huffman, California Daniel Webster, Florida
Julia Brownley, California Thomas Massie, Kentucky
Mark DeSaulnier, California Brian Babin, Texas
Jesus G. ``Chuy'' Garcia, Illinois Mike Bost, Illinois
Chris Pappas, New Hampshire Doug LaMalfa, California
Marilyn Strickland, Washington Bruce Westerman, Arkansas
Patrick Ryan, New York Pete Stauber, Minnesota
Val T. Hoyle, Oregon Tim Burchett, Tennessee
Emilia Strong Sykes, Ohio Dusty Johnson, South Dakota
Jerrold Nadler, New York Jefferson Van Drew, New Jersey
Nellie Pou, New Jersey Troy E. Nehls, Texas
Kristen McDonald Rivet, Michigan Burgess Owens, Utah
Laura Friedman, California Eric Burlison, Missouri
Laura Gillen, New York Mike Collins, Georgia
Shomari Figures, Alabama, Kevin Kiley, California
Vice Ranking Member Vince Fong, California
Steve Cohen, Tennessee Tony Wied, Wisconsin
Dina Titus, Nevada Tom Barrett, Michigan
Salud O. Carbajal, California Robert P. Bresnahan, Jr.,
Greg Stanton, Arizona Pennsylvania, Vice Chairman
Sharice Davids, Kansas Jeff Hurd, Colorado
Seth Moulton, Massachusetts Jefferson Shreve, Indiana
Robert Garcia, California Addison P. McDowell, North
Rick Larsen, Washington (Ex Officio) Carolina
David J. Taylor, Ohio
Brad Knott, North Carolina
Kimberlyn King-Hinds,
Northern Mariana Islands
Mike Kennedy, Utah
Sam Graves, Missouri (Ex Officio)
CONTENTS
Page
Summary of Subject Matter........................................ vii
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. David Rouzer, a Representative in Congress from the State of
North Carolina, and Chairman, Subcommittee on Highways and
Transit, opening statement..................................... 1
Prepared statement........................................... 3
Hon. Eleanor Holmes Norton, a Delegate in Congress from the
District of Columbia, and Ranking Member, Subcommittee on
Highways and Transit, opening statement........................ 3
Prepared statement........................................... 5
Hon. Sam Graves, a Representative in Congress from the State of
Missouri, and Chairman, Committee on Transportation and
Infrastructure, opening statement.............................. 5
Prepared statement........................................... 6
Hon. Rick Larsen, a Representative in Congress from the State of
Washington, and Ranking Member, Committee on Transportation and
Infrastructure, prepared statement............................. 101
WITNESSES
Carlos M. Braceras, P.E., Executive Director, Utah Department of
Transportation, on behalf of the American Association of State
Highway and Transportation Officials (AASHTO), oral statement.. 8
Prepared statement........................................... 10
Ty Johnson, President, Fred Smith Company, on behalf of the
National Asphalt Pavement Association (NAPA), oral statement... 20
Prepared statement........................................... 22
Jeff Davis, Senior Fellow, Eno Center for Transportation, oral
statement...................................................... 28
Prepared statement........................................... 30
Brian Burkhard, P.E., Vice President and Global Principal for
Advanced Mobility Systems, Jacobs, oral statement.............. 40
Prepared statement........................................... 42
Adie Tomer, Senior Fellow, Brookings Institution, oral statement. 49
Prepared statement........................................... 51
SUBMISSIONS FOR THE RECORD
Letter to Hon. Sam Graves, Chairman, and Hon. Rick Larsen,
Ranking Member, Committee on Transportation and Infrastructure,
from the CHARGE Coalition, Submitted for the Record by Hon.
Jesus G. ``Chuy'' Garcia....................................... 68
Letter to Members of Congress from 26 National Transportation and
Construction Associations, Submitted for the Record by Hon.
Dusty Johnson.................................................. 83
Submissions for the Record by Hon. David Rouzer:
Letter of April 29, 2025, from John A. Costa, International
President, Amalgamated Transit Union....................... 102
Letter of April 29, 2025, to Hon. Sam Graves, Chairman,
Committee on Transportation and Infrastructure, from David
C. Bauer, President and Chief Executive Officer, American
Road & Transportation Builders Association................. 102
Statement of Ian Jefferies, President and Chief Executive
Officer, Association of American Railroads................. 103
Letter of May 13, 2025, to Hon. David Rouzer, Chairman, and
Hon. Eleanor Holmes Norton, Ranking Member, Subcommittee on
Highways and Transit, from David R. Hill, Executive Vice
President-Energy, Bipartisan Policy Center................. 105
Letter of April 30, 2025, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from the National
Asphalt Pavement Association; National Stone, Sand & Gravel
Association; Portland Cement Association; and National
Ready Mixed Concrete Association........................... 106
Letter of April 30, 2025, to Hon. Sam Graves, Chairman,
Committee on Transportation and Infrastructure, and Hon.
David Rouzer, Chairman, Subcommittee on Highways and
Transit, from NATSO, Representing America's Travel Plazas
and Truckstops; and SIGMA: America's Leading Fuel Marketers 107
Letter of April 28, 2025, to Hon. David Rouzer, Chairman, and
Hon. Eleanor Holmes Norton, Ranking Member, Subcommittee on
Highways and Transit, from Todd Spencer, President and
Chief Executive Officer, Owner-Operator Independent Drivers
Association, Inc........................................... 108
Letter of April 30, 2025, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Todd Spencer,
President and Chief Executive Officer, Owner-Operator
Independent Drivers Association, Inc....................... 110
Letter of April 29, 2025, to Hon. David Rouzer, Chairman, and
Hon. Eleanor Holmes Norton, Ranking Member, Subcommittee on
Highways and Transit, from Sean O'Neill, Senior Vice
President of Government Affairs, Portland Cement
Association................................................ 110
Letter of May 5, 2025, to Hon. Sam Graves, Chairman, and Hon.
Rick Larsen, Ranking Member, Committee on Transportation
and Infrastructure, from Dave Heller, Senior Vice President
of Safety and Government Affairs, Truckload Carriers
Association................................................ 111
Letter of April 29, 2025, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Rodney Davis,
Senior Vice President of Government Affairs, U.S. Chamber
of Commerce................................................ 112
Letter of April 25, 2025, to Members of Congress from 26
National Agriculture Associations.......................... 113
Letter of April 25, 2025, to Hon. Sam Graves, Chairman,
Committee on Transportation and Infrastructure, from 31
National Transportation and Construction Associations...... 113
Submissions for the Record by Hon. Eleanor Holmes Norton:
Statement of the Alliance for Automotive Innovation.......... 114
``The Truth Is Out There: The Cost of Roads Is Bankrupting
the Highway Trust Fund, Not Electric Vehicles,'' by Dave
Cooke, Senior Vehicles Analyst, The Equation Blog, Union of
Concerned Scientists, April 29, 2025....................... 116
Letter to Hon. David Rouzer, Chairman, and Hon. Eleanor
Holmes Norton, Ranking Member, Subcommittee on Highways and
Transit, from Albert Gore, Executive Director, Zero
Emission Transportation Association (ZETA)................. 122
APPENDIX
Questions from Hon. Dina Titus to Carlos M. Braceras, P.E.,
Executive Director, Utah Department of Transportation, on
behalf of the American Association of State Highway and
Transportation Officials (AASHTO).............................. 125
Questions from Hon. Dina Titus to Adie Tomer, Senior Fellow,
Brookings Institution.......................................... 126
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
April 25, 2025
SUMMARY OF SUBJECT MATTER
TO: LMembers, Subcommittee on Highways and Transit
FROM: LStaff, Subcommittee on Highways and Transit
RE: LSubcommittee Hearing on ``America Builds: The
Need for a Long-Term Solution for the Highway Trust Fund''
_______________________________________________________________________
I. PURPOSE
The Subcommittee on Highways and Transit of the Committee
on Transportation and Infrastructure will meet on Tuesday,
April 29, 2025, at 10:15 a.m. ET in 2167 of the Rayburn House
Office Building to receive testimony at a hearing entitled,
``America Builds: The Need for a Long-Term Solution for the
Highway Trust Fund.'' The purpose of the hearing is to discuss
the benefits to the Nation of a sustainable, long-term funding
solution for the Highway Trust Fund (HTF), the challenges with
the current funding mechanism, and consideration of other
funding options. At the hearing, Members will receive testimony
from the American Association of State Highway and
Transportation Officials (AASHTO), the National Asphalt
Pavement Association (NAPA), the Eno Center for Transportation
(Eno), Jacobs, and Brookings Metro.
II. BACKGROUND
The HTF was established by the Highway Revenue Act of 1956
(HRA) (P.L. 84-627) to provide a dedicated Federal revenue
source for the construction of the Interstate Highway
System.\1\ The HRA established a user-pay system where highway
users would pay a three cents per gallon excise tax on motor
fuels, the tax receipts would be deposited in the HTF, and HTF
balances would be dedicated to the construction of Federal-aid
highways.\2\ This structure allowed the program to operate with
contract authority, which allows agencies to enter into
obligations in advance of appropriations, thereby providing a
more dependable source of funding.\3\ This basic construct
remains in place today; however, subsequent acts of Congress
have increased the excise taxes on motor fuels, imposed taxes
on other users, and expanded the number of activities eligible
for funding under the HTF.\4\
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\1\ Highway Revenue Act of 1956, Pub. L. No. 84-627.
\2\ Id.
\3\ The Highway Trust Fund Explained, The Peter G. Peterson
Foundation, (Mar. 2, 2023), available at https://www.pgpf.org/budget-
basics/budget-explainer-highway-trust-fund#: :text=
The%20Highway%20Trust%20Fund%20(HTF,of%20the%20interstate%20highway%20sy
stem.
\4\ Dep't of Transp., FHWA, Funding Federal-Aid Highways, (Jan.
2017), available at https://www.fhwa.dot.gov/policy/olsp/
fundingfederalaid/07.cfm.
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For the first 50 years, the HTF funding mechanism generally
met the Congressional goal of self-sufficiency.\5\ Since 2001,
spending from the HTF has exceeded revenue deposits. Starting
in 2008, Congress has utilized transfers, mainly from the
General Fund (GF) of the Treasury, to keep the HTF solvent.\6\
The Congressional Budget Office's (CBO's) most recent
projections indicate a cumulative shortfall of nearly $142
billion over the five years following the Fiscal Year (FY) 2026
expiration of the current surface authorization act, the
Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58).\7\
The current HTF projections are based on the FY 2024 enacted
funding levels adjusted for inflation.\8\ Given the HTF's
solvency challenges, Congress must evaluate and consider ways
to fund surface transportation infrastructure in the future.
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\5\ Robert S. Kirk & William J. Mallett, Cong. Rsch. Serv.
(R47573), Funding and Financing Highway and Public Transportation Under
the Infrastructure Investment and Jobs Act, (May 24, 2023), available
at https://www.everycrsreport.com/files/2023-05-
24_R47573_2fdd993640445d646286ecfe0df6cc5570d409a6.pdf [hereinafter CRS
R47573].
\6\ Id.
\7\ CBO, Highway Trust Fund Accounts, (Jan. 2025), available at
https://www.cbo.gov/system/files/2025-01/51300-2025-01-
highwaytrustfund.pdf.
\8\ Id.
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THE IMPORTANCE OF TRANSPORTATION INFRASTRUCTURE
Transportation infrastructure provides a strong physical
platform that facilitates economic growth, ensures global
competitiveness, creates American jobs, and supports national
security. Our Nation's transportation infrastructure is the
backbone of the United States' economy. Transportation
accounted for nine percent of United States gross domestic
product in 2022, up from 8.4 percent in 2021.\9\ In 2023, all
modes of transportation moved an estimated 20.1 billion tons of
goods worth about $18.7 trillion on our Nation's transportation
network. In addition, nearly 16 million Americans,
approximately 10.3 percent of the United States workforce, are
directly employed by transportation-related industries.\10\
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\9\ Dep't of Transp., Bureau of Transp. Statistics, Transp.
Statistics Annual Report 2024 (Dec. 2024), available at https://
rosap.ntl.bts.gov/view/dot/79039 [hereinafter BTS].
\10\ Id.
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The surface transportation components of this broader
system play an integral part in the movement of people and
goods. In 2022, highways carried more than 3.2 trillion vehicle
miles, which includes cars, trucks, motorcycles, and buses.\11\
Public transportation continues to recover from pre-pandemic
ridership trends, reaching over 80 percent of 2019 levels.\12\
Of the total freight moved on our Nation's transportation
network, trucks moved 13 billion tons in 2023, valued at over
$13.6 trillion.\13\
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\11\ Id.
\12\ America Builds: A Review of the Nation's Transit Policies and
Programs. Hearing Before the H. Comm. on Transp. and Infrastructure,
119th Cong.--(2025) (statement of Nathanial P. Ford Jr., Chief
Executive Officer, Jacksonville Transp. Authority, on behalf of the
American Public Transp. Ass'n), available at https://
transportation.house.gov/uploadedfiles/04-09-2025_ht_hearing_-
_nathaniel_ford_-_testimony.pdf.
\13\ Id.
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Congestion is a growing challenge across the United States,
affecting both freight shippers and commuters. According to the
Texas A&M Transportation Institute's 2023 Urban Mobility
Report, the national cost of congestion was $224 billion in
2022.\14\ This amounts to approximately $614 million per day.
Nationally, congestion also wasted 3.3 billion gallons of
gasoline and resulted in an extra 8.5 billion hours of travel
time.\15\ Further, the average commuter spent an extra 54 hours
stuck in traffic.\16\
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\14\ Texas A&M Transportation Institute, 2023 Urban Mobility Report
(June 2024), available at https://static.tti.tamu.edu/tti.tamu.edu/
documents/mobility-report-2023.pdf.
\15\ Id.
\16\ Id.
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III. HIGHWAY TRUST FUND
SOURCES OF REVENUE
The HTF has three long-standing categories of income. These
are:
LFederal fuel taxes, which include gasoline and
diesel fuel taxes, as well as special fuel, gasohol, and
ethanol/methanol taxes;
LFederal truck-related taxes, which include taxes
on truck tires, truck and trailer sales, and heavy vehicle
users; and
LInterest and penalties, which include interest
derived from HTF balances that are invested in special Treasury
securities with interest from these securities credited to the
HTF, and penalties for violations of certain tax and vehicle
safety laws.\17\
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\17\ Supra note 4.
The HTF receives most of its revenue from the Federal
excise taxes on motor fuel. In FY 2024, the HTF was credited
with $42.5 billion in net tax receipts from highway users and
$7.5 billion in interest and other non-tax deposits, totaling
nearly $50 billion in net deposits.\18\ Of the net tax receipts
from highway users total from last year, approximately 81
percent of revenues derived from gas and diesel fuel taxes, 14
percent from truck and trailer sales, three percent from heavy
vehicle use, and two percent from truck tires.\19\
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\18\ Jeff Davis, Highway Trust Fund Ran $26.7 Billion User-Pay
Deficit in FY 2024, Eno Center for Transp., (Nov. 1, 2024), available
at https://enotrans.org/article/highway-trust-fund-ran-26-7-billion-
user-pay-deficit-in-fy-2024/.
\19\ Id. (numbers tabulated by Transp. and Infrastructure (T&I)
Comm. Staff).
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Congress has increased the Federal motor fuel tax rates
four times since the establishment of the HTF.\20\ They were
last adjusted 30 years ago as part of the Omnibus Budget
Reconciliation Act of 1993 (OBRA 1993) (P.L. 103-66).\21\
Currently, the tax on diesel fuel stands at 24.4 cents per
gallon and gasoline stands at 18.4 cents per gallon (see
Appendix 1).\22\ Of the gasoline tax, 0.1 cents goes to the
Leaking Underground Storage Trust Fund, and the remaining 18.3
cents per gallon goes to the Highway Trust Fund. The tax rates
on gas and diesel fuels are not indexed to inflation.
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\20\ CRS R47573, supra note 5.
\21\ Id.
\22\ Supra note 4.
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Several of the taxes deposited into the HTF will either
expire or be significantly reduced in the years following the
expiration of IIJA. For the HTF to continue to be credited with
revenues, Congress must either extend the existing HTF taxes at
their current rates, modify the existing taxes, identify
additional revenue streams, or pursue a combination of these
options. Historically, Congress has extended the existing HTF
taxes in surface transportation authorization bills, which
typically last two years past the authorization of
transportation programs. IIJA extended the taxes on truck and
trailer sales and on tires through the end of FY 2028, and the
taxes on heavy vehicle use through the end of FY 2029.\23\
Absent Congressional action, the current gasoline and diesel
tax levels would each be reduced to 4.3 center per gallon. IIJA
extended the current rates for the gasoline and diesel taxes
through the end of FY 2028.\24\ IIJA also extended the
requirement for the Treasury Department to deposit these tax
revenues in the HTF through the end of FY 2028.\25\
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\23\ Ali E. Lohman, Cong. Rsch. Serv. (R48472), The Highway Trust
Fund's Highway Account, (Mar. 27, 2025), available at https://crs.gov/
Reports/R48472?source=search#_
Toc194040932 [hereinafter CRS R48472].
\24\ Id.
\25\ Id.
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ACCOUNT STRUCTURE
For 26 years, the trust fund had a single account and a
single purpose--to fund the Federal highway programs. This
construct changed with a political agreement referred to as the
``Great Compromise'' or the ``80-20 highway-transit split.''
\26\ Implemented in the Surface Transportation Assistance Act
(STAA) of 1982 (P.L. 94-424), the result was a five-cent per
gallon increase in the gasoline tax (for a total gas tax of
nine cents) and the creation of a new mass transit account
(MTA).\27\ The compromise traded an increase in the gas tax for
an agreement to deposit one cent (20 percent of the new tax
increase) into the newly created MTA within the HTF. The
remaining four cents (80 percent of the new tax increase) would
be dedicated to the highway account (HA).\28\ The Great
Compromise agreement only pertained to the gas tax increase in
STAA, not total gas taxes collected. Further, it did not
dictate authorization amounts or spending from either the HA or
the MTA.\29\
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\26\ Robert S. Kirk & William J. Mallett, Cong. Rsch Serv.
(R45350), Funding and Financing Highways and Public Transportation,
(May 11, 2020), available at https://crs.gov/reports/pdf/R45350/
R45350.pdf; and Jeff Davis, Explainer: What the ``80-20 Highway-Transit
Split'' Really Is, and What it Isn't, Eno Center for Transp., (July 26,
2021), available at https://enotrans.org/article/explainer-what-the-80-
20-highway-transit-split-really-is-and-what-it-isnt/.
\27\ Jeff Davis, Highway Trust Fund 101, Eno Center for Transp.,
(updated Aug. 15, 2023), available at https://enotrans.org/article/
highway-trust-fund-101; Dep't of Transp., FHWA, Public Roads--Federal
Aid Highway Act of 1956: Creating the Interstate System (1996),
available at https://highways.dot.gov/public-roads/summer-1996/federal-
aid-highway-act-1956-creating-
interstate-system-sidebars-
0#: :text=The%20trust%20fund%20has%20two,cent%20of%20the
%20new%20revenue.
\28\ Jeff Davis, Highway Trust Fund 101, Eno Center for Transp.,
(updated Aug. 15, 2023), available at https://enotrans.org/article/
highway-trust-fund-101/ [hereinafter HTF 101].
\29\ Id.
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The HA continued to be largely devoted to construction and
maintenance of highways and bridges. The MTA was created to
fund public transportation such as buses, railways, subways,
and ferries, and also allows for the use of limited funds for
operating expenses in rural and small urbanized areas.\30\ This
new structure represented a move away from the user-pays
principle originally envisioned for the HTF.\31\ Road users
began to pay for transit programs, which constituted a
diversion of funds from highway program purposes.\32\ According
to a 2013 study by the University of California, Berkeley and
the National Bureau of Economic Research, ``the congestion
relief benefits alone may justify transit infrastructure
investments.'' \33\ However, the same study acknowledged that
``previous economic research does not support the hypothesis
that transit generates a large reduction in traffic
congestion.'' \34\
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\30\ CRS R47573, supra note 5.
\31\ Joshua Schank, et. al., Reagan Devolution: The Real Story of
the 1982 Gas Tax Increase, Eno Center for Transp., (Sept. 9, 2015),
available at https://enotrans.org/eno-resources/reagan-devolution-the-
real-story-of-the-1982-gas-tax-increase-2/.
\32\ Richard Weingroff, Busting the Trust, FHWA Public Roads (July/
Aug. 2013), available at https://highways.dot.gov/public-roads/
julyaugust-2013/busting-trust.
\33\ Michael L. Anderson, Subways, Strikes, and Slowdowns: The
Impacts of Public Transit on Traffic Congestion, University of Calif.,
Berkley & Nber, (Aug. 30, 2013), available at https://are.berkeley.edu/
mlanderson/pdf/Anderson_transit.pdf.
\34\ Id.
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TAX DEPOSITS INTO HTF ACCOUNTS
Fuel taxes enacted prior to 1982 and truck-related taxes
continue to be deposited into the HA of the HTF, but all fuel
tax increases enacted in 1982 or later are deposited into the
HA and MTA consistent with the 80-20 highway-transit split (see
Appendix 2).\35\ The percentage of gasoline and diesel fuel
taxes deposited into the MTA totals 15.6 percent.\36\ However,
when the Federal truck-related taxes are included, about 13
percent of total HTF tax receipts are deposited into the
MTA.\37\
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\35\ HTF 101, supra note 28.
\36\ Id.
\37\ Id.
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SOLVENCY
Beginning in FY 2001, and in each subsequent fiscal year to
date, HTF outlays have exceeded revenue deposits.\38\ For
example, in FY 2024, the HTF collected $49.9 billion in
revenues and interest and spent $70.6 billion.\39\ Some reasons
for the imbalance include:
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\38\ CRS R47573, supra note 5.
\39\ Supra note 7.
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LThe Federal fuel tax rates have not increased at
the Federal level since 1993 and are not indexed to inflation.
The gas and diesel taxes have each lost approximately 73
percent of their respective purchasing power between FY 1993
and FY 2023.\40\ If Congress had indexed the current rate of
18.3 cents per gallon for inflation in 1993, the Federal gas
tax would be approximately 40.6 cents per gallon in 2025.\41\
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\40\ CRS R48472, supra note 23.
\41\ Email from CBO to Majority Staff, H. Comm. on Transp. and
Infrastructure (Apr. 10, 2025, 11:33 a.m.) (on file with Comm.).
LGas tax revenue has and will continue to decline
as people purchase more fuel-efficient vehicles, including
electric vehicles.\42\
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\42\ HTF 101, supra note 28.
LThe pandemic and resulting lockdowns caused a
temporary but sharp decline in economic activity, driving, and
commuting.\43\
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\43\ John Gallagher, COVID-19 Draining the Highway Trust Fund,
Freight Waves (Apr. 15, 2020), available at https://
www.freightwaves.com/news/covid-19-draining-the-highway-trust-fund.
LLabor and construction materials costs have
increased, specifically increasing more sharply with COVID-
related supply shortages, safety-related requirements, and a
tight labor market. Highway construction costs increased 13.9
percent in 2023, less than in 2022 when costs increased 26.5
percent, the largest historical increase.\44\ The Bureau of
Transportation statistics estimates that higher construction
costs reduce what can be bought for transportation under IIJA
by 30 to 40 percent.\45\
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\44\ BTS, supra note 9.
\45\ Id.
LCongress has continued to pass surface
transportation legislation that increases both highway and mass
transit authorizations far beyond what the HTF can support with
current revenue sources.\46\
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\46\ Supra note 7.
CBO projects that annual HTF tax collections will decrease
from $44.1 billion in FY 2025 to $37.9 billion in FY 2035, a
more than 14 percent decrease.\47\ Within these respective
amounts, gas tax collections drop from $25.1 billion to $15.3
billion, or a 39 percent decrease, over the same period.\48\
Truck and trailer tax receipts are projected to increase by 48
percent from $6.2 billion in FY 2025 to $9.2 billion in FY
2035.\49\ Collections on diesel fuel and kerosene, truck tire,
and heavy vehicle use remain relatively flat over the next
decade.\50\
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\47\ CBO, Budget and Economic Outlook: 2025 to 2035 (Jan. 2025),
available at https://www.cbo.gov/system/files/2025-01/51138-2025-01-
Revenue-Projections.xlsx
\48\ Id.
\49\ Id.
\50\ Id.
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Because of the nature of ``reimbursable'' programs like
those funded by the HTF, there may be cash in the fund that is
not needed for immediate use. It is important to understand
that this is not a ``surplus,'' or excess cash. Rather, those
amounts will be needed over time to pay states as they submit
vouchers related to prior obligations.\51\ Absent Congressional
action, and if the HTF were to experience a shortfall, the
United States Department of Transportation (DOT) may implement
cash management procedures to slow reimbursements to state and
local governments and reduce apportionment funds to states.\52\
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\51\ Supra note 4.
\52\ CRS R48472, supra note 23.
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Both the HA and the MTA have separate self-sufficiency
calculations to test for solvency, the Byrd and Rostenkowski
tests, respectively.\53\ Each test compares financial
commitments to projected financial resources in the account for
the next four fiscal years and requires automatic reductions in
program apportionments associated with the account that cannot
cover its commitments.\54\ The contract authority
authorizations for transit have exceeded MTA revenue
projections for the next four years, and therefore, the
Rostenkowski Test was triggered beginning in FY 2020.\55\
Congress has continued to enact laws that cancel or suspend the
transit apportionment reductions required by the Rostenkowski
Test since FY 2020.\56\
---------------------------------------------------------------------------
\53\ HTF 101, supra note 28.
\54\ Id.
\55\ Id.
\56\ Id.
---------------------------------------------------------------------------
To ensure that the HTF could continue to pay its
obligations, Congress has transferred a total of $275 billion
from the GF and other sources into the HTF beginning in
2008.\57\ Most recently, IIJA transferred a total of $118
billion to maintain solvency through FY 2026.\58\
---------------------------------------------------------------------------
\57\ Id.
\58\ IIJA, Pub. L. No. 117-58, 135 Stat. 429.
---------------------------------------------------------------------------
IV. PROGRAMS FUNDED BY THE HIGHWAY TRUST FUND
The HTF provides funding for a number of highway, transit,
and highway safety programs (surface transportation programs)
administered by the Federal Highway Administration (FHWA), the
Federal Transit Administration (FTA), the Federal Motor Carrier
Safety Administration (FMCSA), the National Highway Traffic
Safety Administration (NHTSA), and the Office of the Secretary
of Transportation (OST). These agencies administer surface
transportation programs in partnership with states, public
transit agencies, and other local authorities. While Federal
agencies provide financial and technical assistance, state and
local partners select projects and carry out the programs on a
day-to-day basis.\59\
---------------------------------------------------------------------------
\59\ Supra note 4.
---------------------------------------------------------------------------
Congress most recently reauthorized surface transportation
programs with the enactment of IIJA. The law reauthorizes
Federal surface transportation programs through FY 2026. In
total, it authorizes approximately $530 billion over five years
for Federal-aid highways, Federal transit, and highway safety
programs to improve our Nation's infrastructure. Approximately
$382.9 billion is authorized from the HTF.\60\ Of this total,
approximately $303.5 billion is administered by FHWA, $69.9
billion by FTA, $4.5 billion by FMCSA, and $5.1 billion by
NHTSA.\61\ Of the remaining funds, IIJA authorized $89.1
billion in multiyear advance appropriations from the General
Fund, which is a change to the funding structure of highway and
transit programs; and the remaining amount is budget authority
subject to future appropriations acts.\62\
---------------------------------------------------------------------------
\60\ IIJA, Pub. L. No. 117-58, 135 Stat. 429 (numbers tabulated by
Transp. and Infrastructure (T&I) Comm. Staff).
\61\ Id.
\62\ Id.
---------------------------------------------------------------------------
IIJA's five-year average funding for HTF programs
administered by these modal agencies increased significantly
compared to the same average under the previous authorization,
the Fixing America's Surface Transportation Act (FAST Act)
(P.L. 114-94). Specifically, HTF-derived funding for FHWA
programs increased by 35 percent, FTA programs by 43 percent,
FMCSA programs by 38 percent, and NHTSA programs by 36
percent.\63\
---------------------------------------------------------------------------
\63\ Id.; FAST Act of 2015, Pub. L. No. 114-94, 129 Stat. 1312
(comparative numbers tabulated by T&I Comm. Staff).
---------------------------------------------------------------------------
V. FUNDING OPTIONS FOR THE HTF
Presuming that Congress continues to support the HTF as a
funding mechanism for the Federal-aid highways, Federal
transit, and highway safety programs, long-term changes to the
funding structure of the fund are required. In order to rely
solely on the HTF as a funding source, Congress must either
increase revenue dedicated to the fund or reduce spending, or
some combination of the two.\64\ However, Congress has not
agreed on a long-term strategy. Considerations in the
development of a long-term strategy include the Federal
Government's responsibility for transportation funding, the
proper distribution of expenditures on highways as opposed to
mass transit, and other specific policy proposals.\65\
---------------------------------------------------------------------------
\64\ CRS R47573, supra note 5.
\65\ Id.
---------------------------------------------------------------------------
Several options that would increase revenues into the HTF
that have been discussed include:
LRaising motor fuel taxes and/or indexing the
motor fuel tax to inflation.\66\ This option would require a
significant increase and may not be viable in the long-term as
motor vehicles become more fuel efficient.\67\ For example, CBO
recently estimated that increasing the Federal taxes on
gasoline and diesel fuel by 15 cents per gallon in January 2025
would reduce the deficit by $211.6 billion over the next ten
years.\68\ This estimate assumes the tax would be indexed for
inflation each year using the chained consumer price index for
all urban consumers, and incorporates an offsetting reduction
in income and payroll tax revenue.\69\
---------------------------------------------------------------------------
\66\ Id.
\67\ Brianna Fernandez, Raising the Gas Tax is Not a Long-Term Fix
to the Highway Trust Fund, American Action Forum (Apr. 24, 2018),
available at https://www.americanactionforum.org/insight/raising-gas-
tax-not-long-term-fix-highway-trust-fund/
#: :text=April%2024%2C%202018-
,Raising%20the%20Gas%20Tax%20is%20Not%20a%20Long
%2DTerm,for%20the%20Highway%20Trust%20Fund&text=As%20of%202021%2C%20the
%20Highway,transit%20projects%20%E2%80%93%20will%20be%20insolvent.;
Addressing the Long-Term Solvency of the Highway Trust Fund: Hearing
Before the S. Comm. on Environment and Public Works, 117th Cong., (Apr.
14, 2021), available at https://www.cbo.gov/publication/
57138#: :text=Lawmakers%20have%20several%20options%20for,movement%2C%20o
r%20on
%20electric%20vehicles.
\68\ CBO, Budget Options: Increase Excise Taxes on Motor Fuels and
Index Them for Inflation, (Dec. 12, 2024), available at https://
www.cbo.gov/budget-options/60963.
\69\ Id.
LImposing a Federal tax or fee on electric
vehicles (EVs) and depositing the revenues into the HTF.
Although this would address a fairness argument by requiring EV
motorists that do not pay for their use of roads to pay into
the HTF, such a tax would not, by itself, result in a
---------------------------------------------------------------------------
sustainable HTF.
LImposing an annual tax or fee on vehicles at the
time of a vehicle's annual registration.\70\ Congress may
choose to either replace or supplement the existing Federal
motor fuel taxes with a Federal annual registration fee.
---------------------------------------------------------------------------
\70\ CRS R48472, supra note 23.
LReplacing or supplementing motor fuel taxes with
a vehicle miles traveled (VMT) charge.\71\ VMT pilot programs
were first funded under the FAST Act. IIJA continued to provide
funds for these pilot programs and required DOT to establish a
Federal System Funding Alternative Advisory Board as well as a
national VMT pilot program.\72\ The Biden Administration
notified Congress of the selection of members to the Federal
System Funding Alternative Advisory Board on January 15,
2025.\73\ In 2022, FHWA estimated that total VMT by all vehicle
types is projected to increase by 22 percent from 2019 to
2049.\74\
---------------------------------------------------------------------------
\71\ CRS R47573, supra note 5.
\72\ FAST Act of 2015, Pub. L. No. 114-94; IIJA, Pub. L. No. 117-
58, 135 Stat. 429.
\73\ Email from FHWA to Staff, H. Comm. on Transp. and
Infrastructure (Jan. 15, 2025, 12:38 p.m.) (on file with Comm.).
\74\ Dep't of Transp., FHWA, 2022 FHWA Forecasts of Vehicle Miles
Travelled (VMT), (July 2022), available at https://www.fhwa.dot.gov/
policyinformation/tables/vmt/2022_vmt_forecast_
sum.pdf.
LTransfer general revenues from the GF into the
HTF. Transferring funding into the HTFhas been the de facto
funding policy to sustain the HTF for the 18 years prior to
FY2026.\75\
---------------------------------------------------------------------------
\75\ CRS R47573, supra note 5.
---------------------------------------------------------------------------
VI. WITNESSES
LMr. Carlos M. Braceras, P.E., Executive Director,
Utah Department of Transportation, on behalf of the American
Association of State Highway and Transportation Officials
(AASHTO)
LMr. Ty Johnson, President, Fred Smith Company, on
behalf of the National Asphalt Pavement Association (NAPA)
LMr. Jeff Davis, Senior Fellow, Eno Center for
Transportation
LMr. Brian Burkhard, P.E., Vice President and
Global Principal for Advanced Mobility Systems, Jacobs
LMr. Adie Tomer, Senior Fellow, Brookings Metro
Appendix 1: Current Highway Trust Fund User Fees \76\
---------------------------------------------------------------------------
\76\ Supra note 4.
------------------------------------------------------------------------
Tax Type Tax Rate
------------------------------------------------------------------------
Federal Motor Fuel Taxes................................................
------------------------------------------------------------------------
Gasoline and gasohol...................... 18.4 cents per
gallon\\
Diesel.................................... 24.4 cents per
gallon\\
Special Fuels:
General rate............................ 18.4 cents per gallon
Liquefied petroleum gas................. 18.3 cents per gasoline-
equivalent gallon
Liquefied natural gas................... 24.3 cents per gallon diesel-
equivalent gallon
M85 from natural gas.................... 9.25 cents per gallon
Compressed natural gas.................. 18.3 cents per gasoline-
equivalent gallon
------------------------------------------------------------------------
Other Federal Taxes on Truck Users......................................
------------------------------------------------------------------------
Tires (maximum rated load capacity):
0-3,500 pounds.......................... No Tax
Over 3,500 pounds....................... 9.45 cents per each 10
pounds in excess of 3,500
Truck and Trailer Sales................... 12 percent of retailer's
sales price for tractors
and trucks over 33,000
pounds gross vehicle weight
(GVW) and trailers over
26,000 pounds GVW
Heavy Vehicle Use......................... Annual tax: Trucks 55,000
pounds and over GVW, $100
plus $22 for each 1,000
pounds (or fraction
thereof) in excess of
55,000 pounds (maximum tax
of $550)
------------------------------------------------------------------------
\\ $0.1 cent is deposited in the Leaking Underground Storage
Tank Trust Fund
Appendix 2: Federal Highway User Fees \77\
---------------------------------------------------------------------------
\77\ Dep't of Transp., FHWA, Highway Statistics Series, (2020),
available at https://www.fhwa.dot.gov/policyinformation/statistics/
2020/fe21b.cfm.
---------------------------------------------------------------------------
February 2020
Table FE-21B
----------------------------------------------------------------------------------------------------------------
Distribution of Tax
--------------------------------------------------
Highway Trust Fund
Tax Effective -----------------------------------------
User Tax Rate Date Leaking General
Highway Mass Underground Fund
Account Transit Storage Tank Trust
Account Fund
----------------------------------------------------------------------------------------------------------------
Fuel Taxes (Cents per Gallon)
----------------------------------------------------------------------------------------------------------------
Gasoline and Gasohol fuels............... 18.4 10/1/1997 15.44 2.86 0.1 -
Diesel and Kerosene fuels................ 24.4 10/1/1997 21.44 2.86 0.1 -
Alternative fuels \2\....................
Liquefied Petroleum Gas.................. 18.3 \ 1/1/2016 16.17 2.13 - -
3\
Liquefied Natural Gas.................... 24.3 \ 10/1/2006 22.44 1.86 - -
4\
Compressed natural gas................... 18.3 \ 10/1/2006 17.07 1.23 - -
3\
Other Special Fuels...................... 18.4 10/1/1997 15.44 2.86 0.1 -
----------------------------------------------------------------------------------------------------------------
Other Taxes--All Proceeds to Highway Account
----------------------------------------------------------------------------------------------------------------
Tires.................................... Tax is imposed on tires sold by manufacturers, producers, or
importers at the rate of $.0945 ($.04725 in the case of a bias ply or
super single tire) for each 10 pounds of the maximum rated load
capacity over 3,500 pounds.
Truck and trailer sales.................. 12 percent of retailer's sales price for tractors and trucks over
33,000 pounds gross vehicle weight (GVW) and trailers over 26,000
pounds GVW. The tax applies to parts and accessories sold in
connection with the vehicle sale.
Heavy vehicle use........................ Annual tax:
Trucks 55,000-75,000 pounds GVW, $100 plus $22 for each 1,000 pounds
(or fraction thereof) in excess of 55,000 pounds
Trucks over 75,000 pounds GVW, $550
----------------------------------------------------------------------------------------------------------------
Source: Office of Highway Policy Information, Federal Highway Administration.
\2\ Alternative fuels is any liquid other than gas oil, fuel oil or any product taxable under Section 4081 of
the Internal Revenue Code (gasoline, diesel, kerosene, and diesel-water emulsion.)
\3\ Changes to tax rate included in the Surface Transportation and Veterans Health Care Choice Improvement Act
of 2015. Amounts for these products are defined as having a rate ``per energy equivalent of a gallon of
gasoline.'' Computation details can be found in 26 USC 4041.
\4\ Changes to tax rate included in the Surface Transportation and Veterans Health Care Choice Improvement Act
of 2015. Amounts for these products are defined as having a rate ``per energy equivalent of a gallon of
diesel.'' Computation details can be found in 26 USC 4041.
AMERICA BUILDS: THE NEED FOR A LONG-TERM SOLUTION FOR THE HIGHWAY TRUST
FUND
----------
TUESDAY, APRIL 29, 2025
House of Representatives,
Subcommittee on Highways and Transit,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:12 a.m., in
Room 2167, Rayburn House Office Building, Hon. David Rouzer
(Chairman of the subcommittee) presiding.
Mr. Rouzer. The Subcommittee on Highways and Transit will
come to order.
I ask unanimous consent that the chairman be authorized to
declare a recess at any time during today's hearing.
Without objection, so ordered.
I also ask unanimous consent that Members not on the
subcommittee be permitted to sit with the subcommittee at
today's hearing and ask questions.
Without objection, so ordered.
As a reminder, if Members wish to insert a document into
the record, please also email it to [email protected].
I now recognize myself for the purposes of an opening
statement for 5 minutes.
OPENING STATEMENT OF HON. DAVID ROUZER OF NORTH CAROLINA,
CHAIRMAN, SUBCOMMITTEE ON HIGHWAYS AND TRANSIT
Mr. Rouzer. Today's hearing focuses on the importance of
long-term certainty and stability for the Highway Trust Fund.
This timely discussion is part of a series of subcommittee
hearings as we work to develop and enact an on-time, multiyear
surface bill.
Congress created the Highway Trust Fund in 1956 to provide
a dedicated Federal revenue source, based on a user-pays model,
for the construction of the Interstate Highway System. Congress
began with a 3-cents-per-gallon excise tax on gasoline
allocated to the trust fund. Currently, the Highway Trust Fund
is funded by excise taxes on gas and diesel fuels, as well as
taxes on truck tires, truck and trailer sales, and heavy
vehicle users, with the most recent adjustment to the tax on
gas and diesel fuels in 1993.
Since 2001, spending from the Highway Trust Fund has
exceeded its revenues. During the most recent fiscal year, the
Highway Trust Fund collected nearly $50 billion in revenues and
interest but spent $70.6 billion, a deficit of more than $20
billion, which is a pretty significant gap. To ensure the trust
fund's continued solvency, Congress has transferred a total of
$275 billion from the Treasury's General Fund to the Highway
Trust Fund since 2008.
Without a serious solution, our State, local, and private-
sector partners risk losing a reliable funding source critical
to project delivery and our national economy. While General
Fund bailouts have offered short-term relief at the expense of
the individual American taxpayer, they do not address the long-
term challenges that plague the Highway Trust Fund.
The last several surface transportation authorization bills
have continued to authorize highway and mass transit
authorizations beyond what the Highway Trust Fund can
reasonably support. The current surface transportation law, the
Infrastructure Investment and Jobs Act, increased Highway Trust
Fund spending by more than 36 percent, but made no reforms to
revenue streams, resulting in a $118 billion General Fund
transfer to cover that gap.
Now, 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 percent
of their purchasing power. If Congress had chosen to index the
gas and diesel taxes to inflation back in 1993, an additional
$480 billion in Federal revenues would have been raised, most
of which would have been deposited into the Highway Trust Fund.
Obviously, gas tax revenue will continue to decline as cars
become more fuel efficient. Electric vehicles require no fuel,
and therefore, obviously, are not paying into the Highway Trust
Fund. CBO estimates gas tax revenues, the majority of the trust
fund receipts, will decline by nearly 40 percent--40 percent--
over the next decade.
Fortunately, this committee is intent on addressing the
shortfall in a fair and equitable manner. Through
reconciliation, this committee will propose a $200 annual
registration fee on electric vehicles at the Federal level,
which 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 those roads.
While a step in the right direction, and the first real
attempt by Congress to address the trust fund solvency problems
in more than 30 years, this fee alone, of course, will
certainly not solve the estimated $142 billion shortfall.
Given that backdrop, we look forward to hearing from our
witnesses on potential solutions and new, innovative methods we
might employ to fund our surface transportation programs. And
so, therefore, I thank each of you for being here today.
[Mr. Rouzer's prepared statement follows:]
Prepared Statement of Hon. David Rouzer, a Representative in Congress
from the State of North Carolina, and Chairman, Subcommittee on
Highways and Transit
Today's hearing focuses on the importance of long-term certainty
and stability for the Highway Trust Fund. This timely discussion is
part of a series of Subcommittee hearings as we work to develop and
enact an on-time, multi-year surface bill.
Congress created the Highway Trust Fund in 1956 to provide a
dedicated federal revenue source, based on a user-pays model, for the
construction of the Interstate Highway System. Congress began with a
three-cents per gallon excise tax on gasoline allocated to the Trust
Fund. Currently, the Highway Trust Fund is funded by excise taxes on
gas and diesel fuels, as well as taxes on truck tires, truck and
trailer sales, and heavy vehicle users, with the most recent adjustment
to the tax on gas and diesel fuels in 1993.
Since 2001, spending from the Highway Trust Fund has exceeded its
revenues. During the most recent fiscal year, the Highway Trust Fund
collected nearly $50 billion in revenues and interest but spent $70.6
billion, a deficit of more than $20 billion, a significant gap. To
ensure the Trust Fund's continued solvency, Congress has transferred a
total of $275 billion from Treasury's General Fund to the Highway Trust
Fund since 2008.
Without a serious solution, our state, local, and private sector
partners risk losing a reliable funding source critical to project
delivery and our national economy. While General Fund bailouts have
offered short-term relief at the expense of the individual American
taxpayer, they do not address the long-term challenges that plague the
Highway Trust Fund.
The last several surface transportation authorization bills have
continued to authorize highway and mass transit authorizations beyond
what the Highway Trust Fund can reasonably support. The current surface
transportation law, the Infrastructure Investment and Jobs Act,
increased Highway Trust Fund spending by more than 36 percent, but made
no reforms to revenue streams, resulting in a $118 billion General Fund
transfer to cover the gap.
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 percent of their purchasing power. If Congress
had chosen to index the gas and diesel taxes to inflation back in 1993,
an additional $480 billion in federal revenues would have been raised,
most of which would have been deposited into the Highway Trust Fund.
Obviously, gas tax revenue will continue to decline as cars become
more fuel efficient. Electric vehicles obviously require no fuel and
therefore are not paying into the Highway Trust Fund. CBO estimates gas
tax revenues, the majority of Trust Fund receipts, will decline by
nearly 40 percent over the next decade.
Fortunately, this committee is intent on addressing this shortfall
in a fair and equitable manner. Through reconciliation, this committee
will propose a $200 annual registration fee on electric vehicles at the
federal level, which 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, this fee alone will certainly not solve the estimated $142
billion shortfall.
Given that backdrop, I look forward to hearing from our witnesses
on potential solutions and new innovative methods we might employ to
fund our surface transportation programs. Thank you all for testifying
here today.
Mr. Rouzer. I now recognize our ranking member for 5
minutes for an opening statement.
Ms. Norton.
OPENING STATEMENT OF HON. ELEANOR HOLMES NORTON OF THE DISTRICT
OF COLUMBIA, RANKING MEMBER, SUBCOMMITTEE ON HIGHWAYS AND
TRANSIT
Ms. Norton. Thank you.
I want to thank subcommittee Chairman Rouzer for holding
this hearing.
The Highway Trust Fund guarantees predictable funding to
State and local partners, empowering communities to build the
infrastructure they need. However, since 2008, trust fund
spending has outpaced revenue, a trend that is projected to
exhaust the trust fund by 2028. Therefore, Congress must find a
sustainable solution to ensure the solvency of the trust fund.
To date, Congress has transferred $275 billion from the
General Fund to the Highway Trust Fund, including $118 billion
in the Infrastructure Investment and Jobs Act. This infusion of
funds enabled critical investments in roadway, bridge and
freight infrastructure, roadway safety upgrades, and transit
network expansions. Without the General Fund transfers, these
and many other priorities would have been sidelined.
Supplementing the Highway Trust Fund revenue with General
Fund transfers has been necessary because Congress has not
raised the gas tax in over 30 years, which has eroded its
purchasing power.
The Infrastructure Investment and Jobs Act supported
several pilot projects to study other funding options, such as
a road user charge that would levy a fee on miles driven rather
than gallons of fuel consumed. Congress should consider the
full menu of options to ensure the solvency of the Highway
Trust Fund, including a national road user charge.
Whatever Congress decides, the solution must meet several
criteria.
First, we need to provide a sustainable revenue source for
the Highway Trust Fund that allows this committee to continue
to enact multiyear surface transportation bills.
Second, we must retain and strengthen the Mass Transit
Account of the Highway Trust Fund. Transit, which is an
essential part of our transportation system, improves mobility,
reduces pollution, reduces congestion for drivers, and supports
millions of private-sector jobs.
Eliminating the Mass Transit Account, a proposal Congress
hears periodically, would not make up for the Highway Trust
Fund's shortfall. According to Jeff Davis, one of our
witnesses, the Highway Trust Fund will face an annual $40
billion gap between revenue and spending by 2027. Transit
spending will account for only $17 billion, or less than half
of the shortfall. Congress must reject any attempts to
eliminate the Mass Transit Account, which would hurt people,
our economy, and our environment without solving the problem.
Third, we need to direct more Highway Trust Fund resources
to places that need them the most: local roads are what I mean.
According to research by the Brookings Institution, local roads
are entitled to a much larger share of Federal resources than
they receive, and they tend to be in much worse condition than
State roads.
There are several paths that Congress may choose to take
that would guarantee reliable funding, maintain the Mass
Transit Account, and direct more resources to local partners.
I look forward to today's discussion.
Thank you.
[Ms. Norton's prepared statement follows:]
Prepared Statement of Hon. Eleanor Holmes Norton, a Delegate in
Congress from the District of Columbia, and Ranking Member,
Subcommittee on Highways and Transit
I would like to thank Subcommittee Chair Rouzer for holding this
hearing. The Highway Trust Fund guarantees predictable funding to state
and local partners, empowering communities to build the infrastructure
they need. However, since 2008, Trust Fund spending has outpaced
revenue, a trend that is projected to exhaust the Trust Fund by 2028.
Therefore, Congress must find a sustainable solution to ensure the
solvency of the Trust Fund.
To date, Congress has transferred $275 billion from the General
Fund to the Highway Trust Fund, including $118 billion in the
Infrastructure Investment and Jobs Act. This infusion of funds enabled
critical investments in roadway, bridge and freight infrastructure,
roadway safety upgrades and transit network expansions. Without the
General Fund transfers, these and many other priorities would have been
sidelined.
Supplementing the Highway Trust Fund's revenue with General Fund
transfers has been necessary because Congress has not raised the gas
tax in over 30 years, which has eroded its purchasing power.
The Infrastructure Investment and Jobs Act supported several pilot
projects to study other funding options, such as a road user charge
that would levy a fee on miles driven rather than gallons of fuel
consumed. Congress should consider the full menu of options to ensure
the solvency of the Highway Trust Fund, including a national road user
charge.
Whatever Congress decides, the solution must meet several criteria.
First, we need to provide a sustainable revenue source for the Highway
Trust Fund that allows this Committee to continue to enact multiyear
surface transportation bills.
Second, we need to retain and strengthen the Mass Transit Account
of the Highway Trust Fund. Transit, which is an essential part of our
transportation system, improves mobility, reduces pollution, reduces
congestion for drivers and supports millions of private sector jobs.
Eliminating the Mass Transit Account--a proposal Congress hears
periodically--would not make up for the Highway Trust Fund's shortfall.
According to Jeff Davis, one of our witnesses, the Highway Trust Fund
will face an annual $40 billion gap between revenue and spending by
2027. Transit spending will account for only $17 billion, or less than
half of the shortfall. Congress must reject any attempts to eliminate
the Mass Transit Account, which would hurt people, our economy and our
environment without solving the problem.
Third, we need to direct more Highway Trust Fund resources to the
places that need them most: local roads. According to research by the
Brookings Institution, local roads are entitled to a much larger share
of federal resources than they receive, and they tend to be in much
worse condition than state roads.
There are several paths that Congress may choose to take that would
guarantee reliable funding, maintain the Mass Transit Account and
direct more resources to local partners. I look forward to today's
discussion. Thank you.
Mr. Rouzer. I now recognize the chairman of the full
committee, Mr. Graves, for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. SAM GRAVES OF MISSOURI, CHAIRMAN,
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Mr. Graves. Thank you, Chairman Rouzer, and I want to thank
all of our witnesses for being here today as we discuss the
importance of long-term certainty and stability in the Highway
Trust Fund.
The trust fund is facing an insolvency crisis dating back
to at least 2008. Its current user fees are no longer
sufficient to sustain necessary investment in our surface
transportation needs.
The Infrastructure Investment and Jobs Act, or IIJA, failed
to address the issue, and it only made matters worse by
increasing spending from the Highway Trust Fund by $102 billion
and relying on a bailout of the trust fund with $118 billion
from a General Fund transfer.
Let me be clear: 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 is going to have severe consequences for our
Nation's transportation system and the American people.
That is why tomorrow, as part of the reconciliation package
that we are going to be working on, the committee will take the
first steps towards Highway Trust Fund solvency and stability.
We will vote on a proposal to leverage existing State vehicle
registration systems and assess a new fee of $200, as was
pointed out, on electric vehicles; $100 on hybrid vehicles; and
a $20 fee on most other passenger vehicles. If successful,
these new user fees would represent the first new funding
stream into the Highway Trust Fund in more than 30 years.
Nearly 40 States already have a special registration fee
for EVs. It is time for the Federal Government to assess a fee
on EVs that, for years, have not paid any gasoline or diesel
taxes, which is, obviously, the primary source of the Highway
Trust Fund revenues at this point.
Most importantly, this proposal continues the user fee
principle and ensures EVs no longer get a free ride on our
highways. While EVs and hybrids will start paying these fees
into the system in the near term, the $20 fee would not go into
effect until 2031. This delay gives the committee the
opportunity to consider restructuring the broken trust fund tax
structure with a fairer system to ensure solvency for many
years to come.
And let me close by once again underscoring the
significance of this proposal. The trust fund is broken. Our
reconciliation bill will take the first steps towards fixing
it, unlocking the path towards permanently addressing the trust
fund issue. This gives our committee a significant head start
in our reauthorization process and sets us up for success.
We have to act now to save the trust fund before it is too
late.
And with that, Chairman Rouzer, I appreciate the
opportunity, and I yield back.
[Mr. Graves' prepared statement follows:]
Prepared Statement of Hon. Sam Graves, a Representative in Congress
from the State of Missouri, and Chairman, Committee on Transportation
and Infrastructure
Thank you, Chairman Rouzer, and thank you to our witnesses for
being here today, as we discuss the importance of long-term certainty
and stability for the Highway Trust Fund. The Trust Fund 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 from the
Highway Trust Fund by $102 billion and relying on a bailout of the
Trust Fund with a $118 billion General Fund transfer.
Let me be clear. 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.
That is why tomorrow, as part of reconciliation, the Committee will
take the first step towards HTF solvency and stability. We 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
successful, these new user fees would represent the first new funding
streams into the Highway Trust Fund in more than 30 years.
Nearly 40 states already have a special registration fee for EVs.
It is time for the federal government to assess a fee on EVs that, for
years, have not paid gasoline or diesel taxes, the primary source of
Highway Trust Fund revenues.
Most importantly, this proposal continues the user-pays principle
and ensures EVs no longer get a free ride on our highways. While EVs
and hybrids will start paying these fees into the system in the near
term, the $20 fee would not go into effect until 2031. This delay gives
this committee the opportunity to consider restructuring the broken
trust fund tax structure with a fairer system to ensure solvency for
years to come.
Let me close by once again underscoring the significance of this
proposal. The Trust Fund is broken. Our reconciliation bill will take
the first step towards fixing it, unlocking the path towards
permanently fixing the Trust Fund. This gives our committee a
significant head start in our reauthorization process and sets us up
for success.
We must act now to save the Trust Fund before it's too late.
Mr. Rouzer. Ranking Member Larsen has yielded back. So we
will now go to introduction of the witnesses.
Mr. Kennedy, I understand that you have a witness that you
would like to introduce.
Dr. Kennedy of Utah. That is correct, Mr. Chairman.
Mr. Rouzer. You are recognized.
Dr. Kennedy of Utah. Thank you very much, Chairmen Rouzer
and Graves, and to the ranking member, Madam Norton.
I am great grateful to introduce Mr. Carlos Braceras,
somebody who I have known for 10 years. As a State legislator,
he is an outstanding resource, and on the Federal level, we are
going to have a great experience being able to have him here.
He brings a wealth of leadership and expertise to today's
discussion. He has dedicated 38 years of his service--even
though he looks like he is 20 years old--he has been actually
working for the Utah Department of Transportation for 38 years
where he has served as executive director since 2013.
He has been a national leader in transportation innovation
and currently chairs the AASHTO Agency Administration Managing
Committee, and has also been recently appointed to be the Chair
of the Federal System Funding Alternative Advisory Board.
I had the privilege of working with Mr. Braceras in the
State legislature in order to pass legislation that launched
Utah's statewide road usage charge program. Thanks to his
leadership, Utah now has one of the first and largest RUC
programs in the country for alternative fuel vehicles.
Mr. Braceras has consistently demonstrated innovative
leadership, helping Utah become a national model for
transportation planning and project delivery.
I look forward to engaging with him and our other
distinguished witnesses during today's hearing.
Thank you, Mr. Chair.
With that, I yield back.
Mr. Rouzer. We also have with us Ty Johnson, who is
testifying on behalf of the National Asphalt Pavement
Association and also a great North Carolinian.
Great to have you here.
Jeff Davis, representing the Eno Center for Transportation;
Brian Burkhard, representing Jacobs; and Adie Tomer,
representing Brookings Metro.
I particularly thank each of you for being here and look
forward to your great insights.
Briefly, I would like to take a moment and explain our
lighting system. It is pretty self-explanatory. There are three
lights in front of you. Green means go. Yellow means red is
soon to come. And red means close it up just as quickly as you
can if you haven't already.
I ask unanimous consent that the witnesses' full statements
be included in the record.
Without objection, so ordered.
I also ask unanimous consent that the record of today's
hearing remain open until such time as our witnesses have
provided answers to any questions that may be submitted to them
in writing.
Without objection, so ordered.
I also ask unanimous consent that the record remain open
for 15 days for any additional comments and information
submitted by Members or witnesses to be included in the record
of today's hearing.
Without objection, so ordered.
So as your written testimony has been made part of the
record, the subcommittee asks that you limit your oral remarks
to 5 minutes.
With that, Mr. Braceras, you are recognized for 5 minutes.
TESTIMONY OF CARLOS M. BRACERAS, P.E., EXECUTIVE DIRECTOR, UTAH
DEPARTMENT OF TRANSPORTATION, ON BEHALF OF THE AMERICAN
ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS
(AASHTO); TY JOHNSON, PRESIDENT, FRED SMITH COMPANY, ON BEHALF
OF THE NATIONAL ASPHALT PAVEMENT ASSOCIATION (NAPA); JEFF
DAVIS, SENIOR FELLOW, ENO CENTER FOR TRANSPORTATION; BRIAN
BURKHARD, P.E., VICE PRESIDENT AND GLOBAL PRINCIPAL FOR
ADVANCED MOBILITY SYSTEMS, JACOBS; AND ADIE TOMER, SENIOR
FELLOW, BROOKINGS INSTITUTION
TESTIMONY OF CARLOS M. BRACERAS, P.E., EXECUTIVE DIRECTOR, UTAH
DEPARTMENT OF TRANSPORTATION, ON BEHALF OF THE AMERICAN
ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS
(AASHTO)
Mr. Braceras. Chair Rouzer, Ranking Member Norton, members
of the subcommittee, good morning and thank you for the
opportunity to testify.
My name is Carlos Braceras. I am the executive director of
the Utah Department of Transportation, and I am a past
president of the American Association of State Highway and
Transportation Officials.
I am honored to share the perspective of State departments
of transportation nationwide, along with some insights from
Utah.
Transportation is the backbone of America's quality of life
and its economy. Every schoolbus route, every emergency
response, and every product on our store shelves begins with a
safe, reliable trip on our roads and bridges.
When transportation works, people barely notice it. When it
fails, communities and commerce grind to a halt.
We must recognize that the system is truly a nationwide
network. When transportation is successful in Utah, we
contribute to the success of North Carolina. Likewise,
transportation challenges in Utah negatively impact States on
the other side of the country.
The Highway Trust Fund is vital to building and maintaining
a strong, effective transportation network. Let me give you one
specific example.
Using the Bridge Formula funds from the IIJA, Utah
identified 90 bridges that were in need of work. Seventy-six of
them were owned by rural communities off the State system. By
the end of the current program, every one of those bridges that
had been in poor condition will have been repaired or replaced.
This results in better safety and mobility for users of the
system and lifts the burden from local governments whose
budgets are overstressed.
This Bridge Formula Program is an example of how formula
funding allows States to plan strategically and to effectively
deliver the priorities that are most important to our State and
local communities.
The important benefits of an effective transportation
system now face a critical risk. The Highway Trust Fund is
deteriorating. Since 2008, the Highway Trust Fund has spent
more than it collects, because the primary revenue source, a
per-gallon fuel tax that is not indexed for inflation, shrinks
as vehicles become more efficient, consuming less fuel or no
fuel at all, and inflation continues to erode the purchasing
power.
Absent congressional action, we will face a shortfall of
roughly $20 billion next year. States will be forced to delay
projects, contractors will pull back, and costs will rise,
undermining the very efficiency that taxpayers expect.
To avoid that outcome, we need a long-term reauthorization
that does two things.
First, it must extend the current IIJA investment levels
and at least keep pace with inflation so State DOTs can plan
and deliver projects with confidence.
Second, it must modernize how we pay for the system,
because a 21st-century network cannot run on a 20th-century
revenue model.
The principles that have served this country for nearly 100
years is a user-pay approach. Simply put, those who use the
transportation system help pay for it.
In Utah, we put that philosophy into practice with the
Nation's first statewide operational road usage charge program.
We have learned valuable lessons for how to address concerns
about fairness, privacy, freedom of choice, and cost to
administer.
Our experience in Utah demonstrates that it is possible to
effectively address challenges and concerns associated with the
road use charge model, and we believe solutions can be
implemented nationwide.
We recognize that a mileage-based user fee is not a silver
bullet, but Utah's experience shows that it can be part of a
diversified toolbox that also includes an inflation-indexed
fuel tax while the fleet continues to rely on gasoline and
diesel, targeted fees, and, yes, General Fund contributions.
Members of the subcommittee, transportation is essential
for our extraordinary economy and quality of life in America.
States need the certainty and the resources to build a safer,
more resilient, and more innovative transportation future. A
timely, long-term, fully funded reauthorization will let every
State--urban, suburban, and rural--deliver the projects our
citizens expect and deserve.
On behalf of Utah and my colleagues in all 50 States, thank
you for your leadership and for the chance to testify. I look
forward to your questions.
[Mr. Braceras' prepared statement follows:]
Prepared Statement of Carlos M. Braceras, P.E., Executive Director,
Utah Department of Transportation, on behalf of the American
Association of State Highway and Transportation Officials (AASHTO)
Introduction
Chair Rouzer, Ranking Member Norton, and Members of the
Subcommittee, thank you for the opportunity to appear today at this
important hearing on America Builds: The Need for a Long-Term Solution
for the Highway Trust Fund.
My name is Carlos Braceras, and I serve as Executive Director of
the Utah Department of Transportation (UDOT) and on the Board of
Directors of the American Association of State Highway and
Transportation Officials (AASHTO). I also served as AASHTO President
from 2018 to 2019. AASHTO represents the state departments of
transportation (state DOTs) of all 50 states, the District of Columbia,
and Puerto Rico. In addition to serving as a past AASHTO President, I
am also Chair of the AASHTO Agency Administration Managing Committee
and Chair of the Technical Working Group of the AASHTO Center for
Environmental Excellence. I am also the past Chair for the AASHTO
Committee on Design. I also serve on the National Academies of
Science's Transportation Research Board Executive Committee and am a
past Chair.
I first joined UDOT with degrees in engineering and geology in
1986. Before my appointment as the Executive Director in May 2013, I
served as the Deputy Director for twelve years with previous experience
as a Region Director, Major Project Manager, Chief Geotechnical
Engineer, and Chief Value Engineer.
I would like to extend AASHTO's utmost gratitude to you and your
colleagues on the House Transportation and Infrastructure Subcommittee
on Highways and Transit (the Subcommittee) for your dedicated
leadership on surface transportation policy and your oversight of
Infrastructure Investment and Jobs Act (IIJA) implementation. As AASHTO
members look forward to the reauthorization of surface transportation
programs prior to the IIJA's expiration in September 2026, state DOTs
appreciate the sound policy and stable funding provided through this
multiyear bill. The federally-assisted state-administered program and
the formula-based funding that underpins the surface transportation
bill remains foundational to the work of every single state DOT in
meeting the goals of our country and improving safety, mobility, and
access for everyone as articulated in AASHTO's 2021-2026 Strategic
Plan.
The IIJA's highway formula funds are vital to the federal surface
transportation system, enabling us to strategically improve outcomes.
These federal funds, combined with Utah's robust state-funded program,
are significantly benefiting all of our state's citizens. I would like
to share an example of how the IIJA is supporting UDOT's mission to
enhance quality of life through transportation. As an engineer, the
example I am most appreciative of is the Bridge Formula Program, which
has been one of the most valuable elements of IIJA for Utah. We have
identified 90 bridges for improvements, which we prioritized with a
goal to address as many bridges owned by local governments as
possible--of the 90 bridges prioritized, 76 are locally-owned. Without
the Bridge Formula Program, many of these bridges would not be improved
for quite some time. However, after implementation of the five-year
IIJA Bridge program, all bridges that were in poor condition at the
time of prioritization will be addressed. This will result in increased
safety and accessibility in locations where needs are high and
resources are short.
In determining how to sustain foundational federal investment
throughout the country upon the IIJA's expiration next year, today's
hearing is an important example of Congress's oversight
responsibilities. As the owners and operators of transportation
infrastructure in every corner of the country, UDOT and the other state
DOTs appreciate the opportunity to offer our perspective on this vital
issue.
AASHTO's Vision and Core Policy Principles for Reauthorization
To inform your crucial work on surface transportation
reauthorization, I want to point out that earlier this month, AASHTO's
Board of Directors unanimously adopted the state DOTs' collective
vision and core policy principles for the upcoming bill. Our vision
calls for a world-class transportation system that supports and
strengthens the nation's transportation infrastructure for a strong
economy with improved safety and mobility. We believe achieving this
vision requires the following:
Federal funding stability: Stable federal funding is
necessary to keep the pipeline of planned investments in transportation
improvements, maintenance, and operations moving forward; a disruption
to this stability will translate into project delays that increase
costs resulting in fewer projects per dollar.
Formula-based federal funding paired with state
contributions: This approach to federal funding reflects the proven
federal-state commitment that ensures the flexibility necessary for
each state to best meet its unique investment needs.
Current funding levels plus inflation must be the
baseline: The baseline for the next bill must grow from current levels
and keep up with inflation to advance safety and mobility in a
meaningful way.
User pay principles for all vehicles: Congress should
ensure all vehicle types pay their fair share to fund transportation
and to sustain the Highway Trust Fund.
AASHTO's Core Policy Principles are as follows:
1. Prioritize formula-based federal funding to states.
Congress should prioritize formula funding for core
federal highway and transit programs that optimally balance national
goals with state and local decision making, including the National
Highway Performance Program, Surface Transportation Block Grant
Program, Highway Safety Improvement Program, National Highway Freight
Program, Congestion Mitigation and Air Quality Improvement, and Bridge
Formula Program.
Congress should strengthen the federally-assisted state
administered program by allowing maximum transferability among formula
program categories, without federal approval, to ensure the right
project can be funded at the right time.
Congress should increase the formula-based program's
share of the Federal-aid Highway Program to 95% to support faster and
more effective delivery of projects that go through the state and local
planning process.
Congress should consolidate programs that have similar
policy objectives and allow states and local governments flexibility to
optimize delivery. Such programs include Carbon Reduction,
Transportation Alternatives Set-aside, PROTECT, and National Electric
Vehicle Infrastructure formula programs.
In addition to prioritizing formula funding, Congress
should reserve discretionary grants only for projects of utmost federal
interest.
2. Improve project delivery and program administration by
increasing flexibility, simplifying environmental regulations, and
reducing program burdens.
Congress should eliminate or reduce all federal
regulatory and programmatic burdens that are not explicitly required in
law including performance measures.
Congress should support interested states who want to
assume more federal responsibilities and the associated accountability.
Congress should direct executive branch agencies to
fully implement One Federal Decision to speed up the review timeline
for projects and improve accountability for all parties involved in a
project.
Congress should modernize the NEPA process, rules, and
definitions such as ``major projects'' and ``federal actions'' to
better align federal resource agencies' review and permitting actions
that improve transportation and environmental outcomes while reducing
delays.
Congress should support grandfathering environmental
documents under development from new environmental regulations or
listings that occur during the existing review process, such as
consideration of updated listing of new endangered species after all
consultations were previously completed.
3. Create a more safe, resilient, and efficient future by
supporting state DOTs' ability to harness innovation and technology.
Congress should expand eligibility to fund technology
and institute procurement flexibility across all modes with an emphasis
on the safe and efficient movement of people and goods.
Congress should sustain support for research,
development, and technology transfer activities that drive innovation
for state DOT programs across the country.
Congress should call for collaborative industry
consideration of governance frameworks and standards for seamless
infrastructure and vehicle connectivity.
I am very supportive of AASHTO's vision and core policy principles
concerning the upcoming surface transportation reauthorization bill. I
would like to highlight the importance of prioritizing formula funding
over discretionary funding.
While the IIJA has introduced many competitive discretionary
funding programs, these have, at times, caused administrative
inefficiencies at the federal, state, and local levels.
Formula funding offers administrative efficiency and the
predictability essential for effective infrastructure planning.
Furthermore, these funds enable Utah to allocate resources according to
our local needs and priorities. I believe the next reauthorization bill
should prioritize formula-based funding while limiting discretionary
funding.
I view discretionary funding as a windfall--beneficial but
unreliable. Discretionary grant programs are most effective in targeted
circumstances and should be used for projects that align with
established goals, which have been identified through collaborative
long-range planning with local governments. Utah's FrontRunner 2X
Project, which aims to expand our commuter rail capacity by adding
tracks in strategic locations, is a prime example. This project aligns
with Utah's long-range transportation plan, is necessary to address the
mobility needs for our fast-growing urban population and would meet a
critical need for the 2034 Winter Olympics. To ensure its timely
completion, UDOT has applied for a discretionary grant through the
Capitol Investment Grant Program. Targeting discretionary grants toward
projects that align with established goals would allow an increased
focus of funds on formula-based funding, offering states the greatest
opportunity for sustainable infrastructure development.
Importance of the Highway Trust Fund
In 1956, Congress created the Highway Trust Fund (HTF) as part of
the Highway Revenue Act of that year. It serves today as the primary
mechanism by which the federal government provides resources to states,
local governments, and transit agencies for highway and transit
investments. The sources of revenue into the HTF fall into two
categories: (1) motor vehicle fuel taxes on gasoline (18.4 cents per
gallon) and diesel (24.4 cents per gallon); and (2) various fees
related to heavy truck use. Motor fuel taxes account for the vast
majority of revenue into the HTF, at approximately 90% of HTF receipts.
Other revenues (not based on motor fuel consumption) account for only
about 10% of HTF receipts.
The HTF has several key policy features from its inception almost
70 years ago. It is based upon the important ``user pays'' principle,
which ensures federal highway users pay for the roads. It also ensures
these user fees are used specifically for transportation purposes--as
regularly defined and updated by Congress--through the application of
``budgetary firewalls'' that prevent the diversion of revenues to non-
transportation activities. The historical predictability and
reliability of HTF revenues supporting multiyear capital investments
has enabled the federal surface transportation funding program to serve
as an ideal means for supporting state DOTs, local governments, and
transit agencies throughout the country.
Resources from the HTF are provided in the form of contract
authority, a unique federal budgeting mechanism that allows for the
obligation of funds without the need for an annual appropriation.
Instead, the appropriations process provides the authority to liquidate
(i.e., pay) these obligations. Federal surface transportation
authorization legislation provides contract authority on a multiyear
basis, with the IIJA providing it for five years from fiscal year 2022
through fiscal year 2026. Providing annual contract authority levels at
the beginning of the five-year authorization timeline allows state DOTs
to plan and manage their programs of transportation projects, giving
them the much-needed certainty and stability to effectively and
efficiently fund transportation investments. This certainty and
stability allow states to be strategic in their investments. Utilizing
a sophisticated asset management business approach to program the right
project at the right time allows for better outcomes: increased safety,
better asset conditions, and lower cost of asset ownership.
While the HTF provided stable, reliable, and substantial highway
and transit funding for decades, this is no longer the case. Since
2008, the HTF has been sustained through a series of General Fund
transfers. With the transfer of $118 billion into the HTF to pay for
the IIJA, the total amount transferred now stands at over $275 billion.
While state DOTs are grateful for past efforts to supplement the HTF
with General Fund transfers, this is not a viable long-term solution.
Upon expiration of the IIJA, states will be left uncertain about how to
plan for projects in the future.
According to the January 2025 Congressional Budget Office (CBO)
baseline, this year's HTF spending is estimated to exceed receipts by
$29.4 billion, with this annual gap growing to $50 billion by 2035. If
Congress were to reauthorize federal transportation programs for five
years after the expiration of the IIJA, just to maintain current
investment levels from HTF adjusted for inflation, CBO estimates the
gap between necessary revenue into the HTF and five-year expenditures
from it would be roughly $142 billion. The IIJA was unique because it
also provided a substantial amount of crucial transportation funding
through advance appropriations from the General Fund. Sustaining this
funding will require about $195 billion in additional resources in the
next five-year bill.
As we near the end of the IIJA, every state is in the position of
making assumptions regarding anticipated federal funding after fiscal
year 2026. Every state has a multiyear State Transportation Improvement
Program (STIP) that includes all of the projects we anticipate
delivering over the programmed period of time. Each state will be
making their own unique assumptions. In Utah, our currency is trust. We
look at the STIP as a promise made to our citizens, and we are very
proud that we deliver our projects on time and within budget. Having
them in the fiscally constrained STIP is what allows us to do that.
During our current programming cycle, we are making the assumption that
the federal program will be flat after FY 2026 because we do not know
what reauthorization will look like. We do not want to make commitments
that we may not be able to deliver. That is why a timely long-term
authorization is so important.
The funding provided from the IIJA continues to play a critical
role in allowing every state and community across the country to
address their immediate and longstanding transportation needs. State
DOTs and their partners in the transportation industry do everything in
their power to deliver needed priority projects as quickly as possible,
but due to the nature of large capital programs, many of the projects
take several years to complete. We cannot emphasize enough the need for
stable and predictable funding from the HTF that makes it possible for
state DOTs to strategically plan their transportation programs,
especially when they include large projects that need a reliable flow
of funding over multiple years. These projects are what connect people,
enhance quality of life, and stimulate economic growth in each
community where they are built.
Utah was the fastest growing state in the country over the past 10
years, placing rapidly increasing demands on our transportation system.
Our ability to provide the necessary additional roadway capacity is
being outpaced by population growth, so the pressure to deliver capital
projects is urgent and acute. We are in the enviable position of having
State leaders that understand the value of transportation
infrastructure investment, so we have a healthy state-funded budget for
capacity projects. However, an effective transportation system also
requires a proactive approach to maintenance and operations. In Utah,
we depend on a reliable funding program for road and bridge maintenance
and repairs and safety projects as a critical piece of our overall
funding approach. I believe that Utah is an ideal model as a partner
with the federal government because we bring substantial state funding
to the critical federal-state partnership.
Figure 1: Utah Transportation Funding Snapshot
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Impact of Inflation
A major challenge for state DOTs since the IIJA's enactment in
November 2021 has been inflation--both in terms of how much each dollar
can buy in transportation expenditures, and in the decades-long loss of
purchasing power of the federal gas tax.
At its outset, the level of funding authorized in the IIJA was
often described as ``historic, or generational'' including its $673.8
billion in transportation funding for roads, bridges, transit,
airports, ports, and rail. Of that $673.8 billion, the largest share--
or $379.3 billion--was for highway infrastructure, with roughly 20% of
the total highway allocation to be distributed in each of the five
fiscal years from 2022 through 2026.
State DOTs are grateful for this funding. However, since the first
year of the IIJA, the nation as a whole--and the transportation sector
in particular--have experienced a significant loss of purchasing power
due to inflation. According to USDOT's Bureau of Transportation
Statistics (BTS), their ``modest inflation'' scenario for the IIJA
estimates a 31% loss in purchasing power for the total of its five
fiscal years from fiscal 2022 to 2026, reducing the $379.3 billion in
nominal dollars for highways to $260.5 billion in real dollars. The
BTS's ``high inflation'' scenario estimates a 40% loss in purchasing
power of IIJA funding, reducing $379.3 billion in nominal dollars to
$224.2 billion in real dollars. It should be noted that the nominal
increase in formula funding to states from the last year of the FAST
Act to the first year of the IIJA was 31%--which translates to
essentially standing still in terms of purchasing power under the BTS's
``modest inflation'' scenario or experiencing a 9% loss under the
``high inflation'' scenario.
Figure 2: IIJA Funds Authorized for Highways by Fiscal Year and Amount
Reduced by Construction Cost Inflation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Another sobering data point comes from the FHWA's National Highway
Construction Cost Index, which shows a 70% increase between October
2020 and June 2024. According to the Eno Center for Transportation,
since the end of 2020, the federal government has lost $61.5 billion of
the value of its spending increases on roads and bridges due solely to
increased construction costs.
Figure 3: National Highway Construction Cost Index: Seasonally Adjusted
from 2016 Q3 to 2024 Q2
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
This substantial construction cost inflation has occurred while the
purchasing power of HTF revenues continues to decline substantially.
Federal fuel taxes are flat, per-gallon excise taxes that have not been
adjusted since 1993 and thus have lost more than half of their value
over the last 35 years. This loss of purchasing power is especially
stark when compared to the costs of other basic goods and services
during the same period.
Figure 4: Sample of Nominal Price Changes Relative to Federal Gas Tax
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Utah has not been immune to these significant construction cost
increases. We typically program for project costs to increase between
4% and 5% annually. However, the recent rate of inflation has far
exceeded the norm. In 2021, we saw construction costs increase by 16%,
followed by a 12% increase in 2022 and an 8% increase in 2023. In 2024,
costs returned to the 5% to 6% range. Our current six-year program
includes over $9.5 billion in projects, and inflation has impacted the
costs for all of them. To manage these cost increases, we have had to
delay projects unless new funding became available. Delaying projects
decreases the benefits to the public, as timely project delivery is
essential for realizing the safety and mobility benefits of these
projects.
Figure 5: National Fuel Tax Purchasing Power Erosion
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Options for Addressing the Future Highway Trust Fund Funding Gap
Should Congress wish to address the HTF revenue gap, which AASHTO
strongly urges this body to do, there is no shortage of technically
feasible tax and user fee options that Congress could consider to
generate additional HTF revenue. 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.
The following is a matrix that demonstrates the breadth of
potential HTF revenue mechanisms, including a column that shows an
illustrative rate or percentage increase and the associated revenue
yield estimated.
Figure 6: Matrix of Illustrative Surface Transportation Revenue Options
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
State Innovations To Address Transportation Funding Shortages
Just as the HTF relies primarily on the fuels tax, states have long
derived a large portion of their road funding from the gas tax.
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.
Since 2016, over two-thirds of all states and the District of
Columbia have enacted legislation to increase their transportation
revenues. These actions have included raising the rates of existing
transportation taxes or fees; indexing revenues so they automatically
track with inflation or rising construction costs; and establishing a
wide variety of new revenue sources. AASHTO's Transportation Governance
and Finance report (3rd edition), published in 2022, found over 100
sources of revenue in place at the state level just to support roads
and bridges.
In 2003, the Utah Legislature recognized that fuel tax revenues
were increasingly insufficient to support necessary investments in our
transportation system, so they established a Transportation Planning
Task Force. Among other funding mechanisms, the Task Force explored the
possibility of a road usage charge program as a potential strategy to
address the critical issue that fuel taxes are failing to meet the
growing demand for additional transportation capacity and preserving
the system assets. The decline in the effectiveness of the fuel tax
stems from multiple factors, including: (a) continuous improvements to
the fuel economy of motor vehicles in general; (b) increased adoption
of electric, hybrid, and alternative fuel vehicles, which generate
little to no fuel tax revenue; and (c) inflation continuing to outpace
the growth in fuel tax revenue year after year.
To address the inability of the fuel tax to raise sufficient
revenue for our state transportation system, Utah has implemented the
following policies:
State Sales Tax Earmarks: A portion of state sales tax
revenue is allocated to Utah's capacity program, starting at 8.3% in
2006 with incremental increases to an earmark of 27.68% in 2025.
Fuel Tax Increases: The state raised fuel taxes from 19
cents per gallon in 1998 to 24 cents, and again in 2016 to 29 cents per
gallon.
Fuel Tax Indexing: Fuel taxes have been indexed to the
Consumer Price Index since 2019. In 2025, fuel taxes increased to 38.5
cents per gallon.
Motor Vehicle Registration Fee Increases and Indexing:
Registration fees were increased multiple times between 1997 and 2009,
with indexing beginning in 2009.
Annual Fee for Alternative Fuel and Hybrid Vehicles:
These fees were introduced in 2016. In 2025, electric vehicles paid
$139, plug-in hybrids paid $60, and hybrids paid $23.
Local Option Sales Taxes for Transportation: Utah's first
local option sales tax, dedicated to public transit, was adopted in
1975. Currently, local governments can implement up to five local
option sales taxes, totaling 1.25%, for various uses, including public
transportation, highways, active transportation, and airports.
In Utah, we have come to the realization that there is not a silver
bullet for funding transportation. We believe it takes a strong federal
partnership, a variety of user fees, and sales tax or other general
revenue sources. Each of these components play an important role that
enables us to take care of what we have and to address the needs of our
growing population.
The federal government is a critical partner in addressing
transportation, and it should be noted that federal transportation
funding does not displace or discourage state and local investment. In
fact, as evidenced by significant transportation infrastructure
investment needs, further strengthening and reaffirmation of the
federally assisted, state-implemented foundation of the national
program is even more critical now than in the past.
User Based Funding Approach
As the revenue yield from fuel taxes has decreased, interest
continues to grow in potential user-pays approaches that charge people
based on how many miles they drive rather than how much fuel they buy.
The gas tax was originally intended to serve as a user fee, but over
time has become increasingly decoupled from usage as vehicles become
less dependent on--or entirely independent from--petroleum fuel. A
user-pays funding model would realign the link between what you use and
what you pay. Many terms are used for this type of user-pays system,
including a vehicle miles traveled (VMT) fee, a mileage-based user fee
(MBUF), and a road usage charge (RUC) as we call it in Utah. For the
purposes of this discussion, I will use ``road usage charge'' as a term
referring to the user-pay funding approach generally.
Recognizing the need for further demonstration, research, and
testing of road usage charging models, in 2015 Congress established the
Surface Transportation Systems Funding Alternatives (STSFA) program in
the Fixing America's Surface Transportation (FAST) Act. At this
juncture, 51 RUC-related pilots and studies in a number of states have
been funded through the STSFA program. In addition, multistate and
regional pilots on the East and West Coasts were completed with STSFA
support. These pilots have garnered findings and lessons learned on
topics such as reporting methods, account management, public
acceptance, interoperability, and impacts on commercial vehicles, which
will help inform the future of any mileage-based system.
The IIJA continued the exploration of road usage charges through
two RUC programs: (1) the Strategic Innovation for Revenue Collection,
a five-year, $75 million grant program for states, local governments,
and metropolitan planning organizations to further study user-based
funding models; and (2) the National Motor Vehicle Per-Mile User Fee
Pilot, providing $50 million to conduct a national RUC pilot for up to
1,000 participants in each of the 50 states, the District of Columbia,
and Puerto Rico. In addition, I am honored to serve as Chair of the
Federal System Funding Alternative Advisory Board created as part of
the IIJA to provide practical state DOT perspectives to inform the
pilot program. The Board members have been named, and I hope that the
Board will be activated soon.
The RUC holds many potential benefits, such as looking at the
``market rate'' to access crowded segments of the road network and
helping to reduce excessive road wear. In addition, mileage fees for
trucks could vary based on axle weight (for example, higher for trucks
with fewer axles) and type of route (higher for travel on lightly
engineered routes). This would encourage truckers to adopt trailer
configurations designed to reduce axle loads and to travel, where
possible, on heavily engineered highways or main arterials.
With that said, concerns have also been raised about the equity of
the RUC compared to fuel taxes. A common perception has been that RUC
is unfair to rural residents. States that have examined this issue have
found that while rural residents tend to drive longer distances, they
use less fuel-efficient vehicles to do so and thus pay more in gas
tax--both in total and per mile--than urban residents. Rural residents
likely wouldn't pay more than they do under a gas tax model, while
urban residents--who tend to drive more efficient vehicles--would
likely pay a little more. When it comes to ensuring privacy, a RUC can
rely on metering options that provide no information about the location
of travel, rely on a trusted third party to protect and secure private
data, use technology with built-in privacy safeguards, and be supported
by privacy legislation that clearly distinguishes between permissible
and impermissible uses of personal travel data--or a combination of the
above.
In Utah, we implemented the nation's first operational statewide
road usage charge (RUC) program in January 2020, applying and testing
the principles and practices described earlier. Through this
experience, we have gathered numerous lessons that we believe will
benefit the national pilot, as we learned from states with prior RUC
programs. Several key features of our program are designed to
specifically address common concerns about potential road usage charge
programs.
Our program currently applies only to electric vehicles, as they
benefit from the highway system but do not contribute fuel tax revenue,
ensuring fairness. Furthermore, participation in our program is opt-in.
Electric vehicle owners can choose to pay a flat fee at vehicle
registration, ensuring their contribution to the transportation system
without mandatory RUC participation. While the program's parameters may
evolve, we believe providing choice is crucial, especially in the
initial implementation years. We also recognize that individuals have
varying levels of comfort with data privacy, particularly concerning
location information. Therefore, we offer multiple options for
collecting and submitting mileage data, including the option to report
only odometer readings. A national pilot, and any potential future
nationwide program, should be developed with careful consideration. Our
experience in Utah demonstrates that it is possible to effectively
address challenges and concerns associated with the RUC model.
A RUC is a fair way to ensure that owners of all vehicles--
including those that use little or no gas and thus pay little or no gas
tax--pay for their use of the roads.
Conclusion
I believe it is clear to all policy makers that an effective
transportation system is critical to our economy, mobility, health, and
communities. It offers a huge lever to affect success, today and in the
future. We can coalesce around a shared vision of providing people
freedom to go where they want, when they want, how they want--and to do
so safely. We connect people with what matters most: jobs, recreation,
communities, healthcare, educational opportunities, and--most
importantly--the people we care about. We connect people to these
things through a travel experience that is frictionless: People don't
even notice it because it just works.
Achieving a future world-class transportation system--essential for
our nation's security and economic vitality--requires predictable
revenue sources that keep up with inflation.
The current funding trajectory of the HTF--the backbone of the
federal transportation surface transportation program--is declining and
remains unsustainable. Given its foundational role in funding highway
and transit investments in every corner of the country, AASHTO looks
forward to assisting you and the rest of your House colleagues in
finding and implementing a viable set of revenue options for the HTF to
ensure continued investment in our future through transportation.
Mr. Rouzer. Mr. Johnson.
TESTIMONY OF TY JOHNSON, PRESIDENT, FRED SMITH COMPANY, ON
BEHALF OF THE NATIONAL ASPHALT PAVEMENT ASSOCIATION (NAPA)
Mr. Johnson. Good morning, full Transportation and
Infrastructure Committee Chairman Graves, Ranking Member
Larsen, and Highways and Transit Subcommittee Chairman Rouzer,
Ranking Member Norton, and members of the committee.
Thank you for the opportunity to speak today about the
Highway Trust Fund and the vital role it plays in securing the
future of our national surface transportation system.
My name is Ty Johnson. I am proud to serve as president of
Fred Smith Company, a Raleigh-based heavy highway construction
company employing over 1,200 dedicated men and women throughout
North Carolina. Our company builds roads and bridges,
manufactures asphalt, and has proudly contributed to the
infrastructure that keeps our communities connected for nearly
100 years.
I am a lifelong North Carolinian, born in Durham and
educated at NC State University where I earned a degree in
civil engineering. I have spent my entire 30-year career in the
heavy highway industry serving in many positions at our
company.
Today, I am honored to speak not only for Fred Smith
Company, but also on behalf of the 1,100 member companies of
the National Asphalt Pavement Association, the only national
trade association exclusively representing the asphalt paving
industry for the past 70 years.
Our members are in every State and operate in every
congressional district. The asphalt pavements we provide cover
over 94 percent of the entire national roadway market, and our
industry is ubiquitous with any policies focused on highway
funding, expansion, and maintenance.
However, we cannot talk about America's infrastructure
future without first talking about the solvency of the Highway
Trust Fund. My hope is to provide this committee on the HTF's
real world impacts on contractors and material providers, like
Fred Smith Company and others in the asphalt industry, who work
with State DOTs and HTF-backed projects every day throughout
the country.
I believe four clear user fee pathways must be considered
for HTF solvency, and while NAPA is agnostic on any one option
we must pursue, these four would certainly make major financial
strides.
One option is to immediately index and raise the gas tax,
which hasn't occurred since 1993. Another is to capture all
users of the national roadway system within the HTF, explicitly
EV and any hybrid drivetrains that pay little to no funds into
the HTF currently.
Additionally, you could implement a national vehicle-miles
traveled program that will provide an equitable capture of the
roads we use and frequency, which can be deployed without
privacy concerns and could implement various collection
mechanisms.
Lastly, a national fee on gross vehicle weight restrictions
would capture any vehicle on our roadways and tier a vehicle's
fee based off its weight and, thus, its literal impact on our
national roadway network.
Each of these options has merit, and together, implemented
in some capacity or in tandem, offer a pathway to sustainable
long-term funding.
In North Carolina, we understand the stakes. Our State
maintains more roads than nearly any other, over 80,000 miles
of highway and 13,500 bridges. In 2023 alone, North Carolina
received $1.6 billion in Federal funds from the HTF to support
critical projects like the widening of I-95 and improvements to
I-85 and I-77 in Charlotte.
Every $1 billion in infrastructure investment supports
approximately 13,000 America jobs. At Fred Smith Company and
across the entire asphalt industry, we provide good-paying
careers that support families and communities. But without
reliable HTF funding, that workforce we proudly employ and the
projects they deliver are at risk.
While we are doing what we can to help, the asphalt
industry is stretching every Federal dollar, given asphalt is
America's most recycled material. Every year, over 90 million
tons of reclaimed asphalt pavement are reused, saving State
DOTs more than $3 billion annually. With the right policies and
incentives, we can further expand this cost-saving practice and
deliver greater value for every taxpayer dollar without
sacrificing pavement performance.
But it is not just how we support the HTF with user fees,
it's what HTF resources mean for the safety of our employees.
As you know, last week was National Work Zone Awareness Week, a
sobering reminder that more than 100 road workers lose their
lives annually in work zones. HTF programs, like the Work Zone
Safety Contingency Fund, support technologies and strategies
that keep our workers and the traveling public safe.
Members of the committee, the Highway Trust Fund is not
just a financial mechanism. It is the backbone of our Nation's
surface transportation network. The current user-fee system is
unsustainable, but the solutions are within reach and the
choices are real.
On behalf of Fred Smith Company and the members of NAPA, we
are eager to partner with you in shaping a bold, bipartisan
reauthorization package that financially secures the HTF and
positions our country for decades of economic growth and
mobility.
Thank you for the opportunity to speak today. I look
forward to your questions and to supporting your work in
ensuring the financial future of our national surface
transportation network.
[Mr. Johnson's prepared statement follows:]
Prepared Statement of Ty Johnson, President, Fred Smith Company, on
behalf of the National Asphalt Pavement Association (NAPA)
Introduction
Transportation and Infrastructure Committee Chairman Sam Graves,
Ranking Member Rick Larsen, Highways Subcommittee Chairman David
Rouzer, Ranking Member Eleanor Holmes Norton, and other members of the
committee, thank you for inviting me today to discuss the Highway Trust
Fund (HTF) and its financial security ahead of the upcoming surface
transportation reauthorization package.
My name is Ty Johnson, President of Fred Smith Company, a Raleigh-
based construction company employing more than 1,200 hard-working men
and women throughout North Carolina. Fred Smith Company manufactures
materials and builds roads and bridges as a major asphalt paving and
heavy highway contractor. I'm proud to share that we are at the cusp of
our centennial year, as we'll celebrate 100 years as a company in 2027.
I was born in Durham and am a lifelong resident of North Carolina.
I attended NC State University where I earned a Civil Engineering
degree in 1995. After graduating, I began working as a grading foreman
for a family-owned heavy-highway construction company in Raleigh. This
will be my 30th year working for this same company, which became Fred
Smith Company in 2009. I have served in many positions with most of
those years spent leading our estimating pursuits. In 2024, I was named
President of the company and have enjoyed my leadership position this
past year. The heavy-highway industry has provided me with many
fulfilling opportunities. My story is similar to my colleagues and
industry peers, who take pride in building the roadways that connect
Americans to their families, communities, and commerce. My hope is that
I will continue to see many others advance their careers and improve
their lives through hard work and perseverance in the heavy-highway and
paving industries.
Fred Smith Company operates within a larger family of construction
companies, spanning services in asphalt mix production, aggregate
facilities, and liquid asphalt terminals across eight states. Together,
we comprise Construction Partners, Inc. (CPI). Within CPI, publicly
funded projects make up the majority of our business and include local
and state roadways, interstate highways, airport runways, and bridges.
We also perform private sector projects that include paving and
sitework for office and industrial parks, shopping centers, local
businesses, and residential developments.
I am proud to join you on behalf of the 1,100 U.S. member companies
of the National Asphalt Pavement Association (NAPA) the only trade
association representing the asphalt pavement industry in the United
States for 70 years. NAPA member companies are located in every state
and have operations in every single congressional district providing
roadbuilding services for families, businesses, communities, and states
to thrive. NAPA is eager to partner and collaborate with the T&I
Committee as we collectively work toward the next highway
reauthorization. As I share my testimony, I look forward to sharing the
funding challenges facing the HTF, the user fee solutions we should be
considering, an insight on how the HTF supports programs like work zone
safety, and how the asphalt industry is helping leverage precious
federal funding.
The Challenge: Stagnant Highway Trust Fund User Fees
The investment and certainty that the HTF brought from its
inception in 1956 and over the past seven decades facilitated the
planning, development, and maintenance of the U.S. roadway
infrastructure network--the consistency and reliability of which
underpins our national economic competitiveness. Despite its
importance, the Highway Trust Fund has been running on empty. Since
2008, Congress has transferred more than $150 billion from the general
fund to cover shortfalls. The HTF's primary revenue source--the federal
gas tax--has not been increased since 1993, and it is not indexed to
inflation. Adjusted for inflation, its purchasing power has fallen by
nearly 50%. Without HTF solutions, economic progress quickly evaporates
with more road closures, increased delays for road repairs, and traffic
increasing exponentially in our major cities, ports of entry and border
crossings, and national highways.
This consistent decline in user-fee revenues is exacerbated by
increasing fuel efficiency across all classes of automobiles and the
prevalence of electric vehicles (EVs)--a growing market share that does
not contribute into the federal HTF system in spite of the additional
wear and tear EVs have on our roadways due to their heavier gross-
vehicle weight from batteries. The result to the HTF is a growing
mismatch between revenue and need, and that gap will get exponentially
larger without the implementation of new user fee approaches. I
understand that perhaps as early as tomorrow, this Committee will have
a markup via the Budget Reconciliation instructions, and EV fees are
under consideration--we greatly appreciate seeing those funds generated
from highway users going into the HTF. It sounds self-explanatory, but
we must have all highway users paying into the HTF and we
wholeheartedly support capturing all users, including EV drivetrains,
within HTF revenues.
The biggest issue and opportunity facing this Committee is to
provide a solution for consistent, robust investment in our nation's
highways and fix the HTF. With the current highway reauthorization
legislation, Infrastructure Investment and Jobs Act (IIJA), expiring on
September 30, 2026, we know many members of the Committee will be
focused on the policies, project priorities, and scope of a future
multi-year surface transportation reauthorization; but none of that is
possible unless we implement solutions to support the financial
solvency of the HTF. While the current state of the HTF seems
challenging, we have tremendous opportunity to usher in a new era of
HTF expansion and improvements for many future decades of road
expansion and maintenance.
Speaking on behalf of a 100-year-old company and the 1,100 members
of NAPA, we want to help you and be part of the solution for ensuring
American's highway infrastructure continues to serve our nation and
people well.
Seeking Durable Revenue Solutions: Reevaluating the HTF User-Fee Model
Let's not ignore the financial red flags; the current system has
long been broken. A more equitable and sustainable user-fee model is
required. Because the asphalt industry, and virtually every corner of
the construction and transportation sectors, understand action must be
taken, we support HTF solvency via user fee generation. Given the
dependence every citizen has on our national surface transportation
network, our elected officials need to take bold steps toward HTF
solutions. Some options this Committee should consider include:
Modernizing the federal gas tax by indexing it to
inflation.
Ensuring EVs contribute their fair share into the HTF,
through registration fees or similar mechanisms.
Exploring road usage charges or vehicle miles traveled
(VMT) fees that better reflect wear and tear on infrastructure.
Gross vehicle weight registration fees, which would
capture all road users equitably.
The opportunity for private investment through expanded
public-private partnerships (P3) and infrastructure banks that focus
exclusively on surface transportation projects.
Understanding various revenues options exist, the asphalt industry
would like to highlight those with the most data, durability and
financial promise. Let's explore four of the most viable options.
1. Federal Gas Tax Increase and Index:
The federal gas tax has not increased since 1993, which stands at
18.4-cent per gallon gasoline tax and 24.4-cent per gallon diesel tax,
and the gas tax is not indexed for inflation. Despite no changes to
this revenue source in more than 30 years, the gas tax remains the main
revenue source for the HTF. According to the National Council of State
Legislatures \1\ (NCSL), since 2013, 35 states and the District of
Columbia have all raised their local gas taxes to help pay for
infrastructure. While some were accomplished via ballot measures, a
majority of these increases were drafted, debated, and passed through
state legislatures. It should be noted that over two-thirds of the
electorate have supported state and local measures to enact modest
increases to gas tax receipts in order to grow and maintain their
roadway network. Taking the same initiative at the federal level would
dramatically help the HTF. Previous failed legislation that would have
indexed and increased the gas tax 25 cents over 5 years would have
raised HTF receipts almost $375 billion over a ten-year window,
according to ENO Trans.\2\
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\1\ https://www.ncsl.org/transportation/recent-legislative-actions-
likely-to-change-gas-taxes#: :
text=Since%202013%2C%2035%20states%20and,their%20state%20gas%20tax%20rat
e.
\2\ https://enotrans.org/article/how-much-money-would-a-gas-tax-
increase-raise/
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2. Registration Fees for EVs:
As new technologies lead the vehicle market toward hybrid and
electric vehicle (EV) options, we must determine how all users of our
roads pay for the maintenance and expansion of using them. EVs do not
pay into the HTF at the federal level, yet inflict more wear and tear
compared to traditional vehicles due to the weight and size of their
battery components. It is imperative that Congress provide a solution
to capture this market of growing highway users that are currently not
paying any Federal tax to use our national highway system. Despite no
federal fees, at least 39 states have some variation of an EV fee to
help offset roadway maintenance cost. According to NCSL \3\, 32 of
those states also assess a registration fee for both plug-in and non-
plug-in hybrid electric vehicles with combustible engines, ensuring all
potential drivetrains are captured. EV registration fees range from a
low of $50 in Colorado to a high of $290 in New Jersey starting in
2028. At least 10 states structure the additional registration fees to
grow over time by tying the fees to the consumer price index or another
inflation-related metric.
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\3\ https://www.ncsl.org/transportation/special-registration-fees-
for-electric-and-hybrid-vehicles
#: :text=For%20example%2C%20at%20least%2039,vehicles%20or%20alternative%
20fuel
%20vehicles.
---------------------------------------------------------------------------
3. National VMT Fee:
A viable option to consider would be a national vehicle miles
traveled (VMT) fee, which has been discussed before this Committee. In
fact, NAPA led a coalition letter during a previous hearing on this
topic, underscoring the need to examine this revenue option further and
press DOT to convene their VMT advisory group--as mandated under IIJA--
in earnest. VMT fees have long been studied and show real promise, with
states like Utah and Oregon compiling years of data on local VMT
measures, with other states like Virginia soon to implement their own
programs. This approach aligns revenue generation directly with road
usage, offering a sustainable alternative to fuel taxes. Thus, VMT fees
provide a consistent and predictable funding stream that reflects
actual road usage, rather than fuel consumption patterns that are
subject to change. And a VMT fee would capture all users, regardless of
drivetrain, ensuring all users are paying their share into the HTF.
Lastly a VMT would not be discriminatory on rural America or cause an
invasion of privacy; there are various collection mechanisms that could
be considered that don't include any record of one's driving patterns.
4. National Gross Vehicle Weight Fees:
A novel approach that eliminates any dependence on new user-capture
technologies or dramatic administrative burdens is a national gross
vehicle weight (GVW) fee. This option would categorize all roadway
users--motorcycles, passenger cars, delivery vans, and long-haul
commercial trucks--into specific GVW classes with a corresponding fee.
Many states already have a variation of this fee at the local level. A
national fee would be collected by the states during their current
processes for collecting state registration fees. Adding the federal
fee would not require a significant cost to operate nor would it
require a significant amount of time to transition, given every state
has registration fee collection agencies and processes. Furthermore,
this revenue has options to grow, since the number of vehicles in the
national fleet continues to increase year over year, and the schedule
below could generate $70 billion. A rough schedule \4\ of GVW fees
could look like this:
---------------------------------------------------------------------------
\4\ American Highway Users Alliance (AHUA) GVW one-pager
---------------------------------------------------------------------------
$135 for most passenger cars
$165 for large SUVs and pickup trucks
Up to $4,600 for the largest commercial trucks (18-
wheelers)
User-Fee Summary:
While no one solution will resolve HTF solvency on its own, we must
be willing to consider an array of options in tandem. This Committee
has a unique opportunity to draft a highway reauthorization package
that bolsters the HTF not just for a few years, but establishes a
durable financial foundation for decades to come and for generations of
Americans reliant on a world-class surface transportation system. The
asphalt industry is eager to work with you as these options develop and
work with other elected officials to support these proposals in a
future highway reauthorization package.
Economic Growth Relies on a Strong Transportation Network
The economic argument for fully and properly funding the Highway
Trust Fund is overwhelming. According to the White House's Council of
Economic Advisors, every $1 billion invested in transportation
infrastructure supports an estimated 13,000 American jobs \5\. These
are good-paying jobs that support families and build communities--many
of which can be found in the asphalt industry and at companies like
mine. In 2018, the national roadway network facilitated the transport
of over $18 trillion in annual economic activity via 5.25 trillion ton-
miles of freight \6\. Many goods--whether manufactured in Detroit or
imported through Long Beach or Baltimore--move on highways and roads
paved with asphalt, maintained in part by the Highway Trust Fund.
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\5\ https://www.whitehouse.gov/blog/2011/09/09/american-jobs-act-
state-state.
\6\ https://www.fhwa.dot.gov/policy/otps/TPS_2020_Trends_Report.pdf
---------------------------------------------------------------------------
Fred Smith Company has had the privilege to positively impact the
people of NC through its construction projects by easing congestion,
opening new areas for development, and providing better ride quality on
major highways and thoroughfares. Smoother roads mean the pavements
last longer compared to rough surfaces, and for commuters this
translates to less wear and tear on their vehicles, mitigating their
own out-of-pocket maintenance costs. We have previously, and are
currently, participating in multiple projects to add capacity, improve
ride quality, and improve road safety on interstates I-40, I-85, and I-
95 and major arteries such as US-1, US-264, and US-401. All of these
projects are dependent on funding through the Highway Trust Fund, and
as I'll share, the local impacts cannot be overstated.
North Carolina Impacts from HTF-Backed Projects
In my home state of North Carolina--a state of 10.7 million people,
with a rapidly growing economy and one of the largest state-maintained
highway networks in the country--the impact of the HTF cannot be
overstated. From reducing congestion in urban corridors to connecting
rural communities to job centers, the HTF is critical to road
construction, economic development, and motoring safety in the Tar Heel
State.
North Carolina ranks second in the nation for the number of state-
maintained roads, with more than 80,000 miles of highway and over
13,500 bridges. The North Carolina Department of Transportation (NCDOT)
is responsible for maintaining a road system that supports major urban
hubs like Charlotte, Raleigh, and Greensboro as well as rural counties
stretching from the rugged Appalachian Mountains to the beaches of the
Atlantic coast. This diverse and expansive transportation network
requires consistent and flexible funding--something only the Highway
Trust Fund has reliably provided over the years.
In 2023, North Carolina received approximately $1.6 billion in
federal highway and transit funds through the HTF. These funds were
instrumental in advancing dozens of major road construction projects
across the state, including:
Widening I-95 near Fayetteville and Rocky Mount, one of
the most important commercial corridors in the eastern United States.
Improving I-85 and I-77 interchanges in Charlotte,
addressing major congestion bottlenecks in one of the country's
fastest-growing cities.
Reconstructing bridges in rural counties like Yancey,
Graham, and Northampton that are essential for school buses, emergency
responders, and freight vehicles.
Because North Carolina maintains more roads than most states,
federal support fills a critical gap. State funding--drawn from gas
taxes, vehicle fees, sales taxes, and toll revenues--cannot alone cover
the scale of infrastructure need; the same is true for almost any other
State DOT. The HTF ensures that state and local governments have the
predictable, multi-year funding needed to plan, build, and complete
major projects on time.
In North Carolina, HTF support translates to tens of thousands of
construction, engineering, and manufacturing jobs annually. And these
funds supported thousands of jobs on projects such as the I-26 widening
in western NC, I-95 modernization, and numerous bridge replacement
projects across the state.
Furthermore, better roads reduce shipping delays, lower
transportation costs for goods and services, and attract commercial
investment and manufacturing growth. Areas like the Research Triangle
and Charlotte metro have seen booming tech, financial, and logistics
industries--sectors that rely heavily on an efficient road network.
Road construction funded by the HTF also strengthens the state's
agriculture sector, which remains one of the largest in the nation.
Understanding the local impacts are critical, and as in any other
state, North Carolina cannot continue to grow without HTF support.
Why We Need a Fully Funded Highway Trust Fund for the Future
Despite recent federal investments through IIJA, America still
faces a $1.2 trillion infrastructure funding gap through 2039,
according to the American Society of Civil Engineers. More than 40% of
the nation's roads are in poor or mediocre condition, and one in three
bridges needs repair or replacement. Congestion on major urban highways
is worsening, costing drivers billions of dollars in lost productivity
and fuel annually. Meanwhile, rural and tribal communities continue to
lack sufficient connectivity altogether--roads constructed 80 years ago
are still the same singular connector despite dramatic increases to
population and traffic. The HTF is the only mechanism capable of
delivering stable, equitable, and long-term funding to address this
national crisis, with local impacts in North Carolina communities and
across the country. While IIJA supplied historic investments into
highway construction and maintenance, the purpose of the HTF is to
ensure continuity and certainty of funding over the longer term.
Fred Smith Company understands this pressing need, as North
Carolina's population is projected to grow by nearly 3 million people
in the next 25 years, and the state's highway system must be ready to
meet this demand. Major HTF-funded initiatives like the I-540 Southeast
Extension in Wake County, the US-70 improvements in eastern North
Carolina, and the future I-87 corridor are all examples of how long-
term, federally supported planning is helping prepare for the state's
future needs. Moreover, road construction today increasingly
incorporates resilience to changing weather events--designing roads to
withstand heavier rainfall, flooding, heat, and major natural disasters
that weren't anticipated in decades past. The HTF enables North
Carolina to invest in modern engineering practices that protect
communities and ensure the longevity of infrastructure investments.
As North Carolina is trying to satisfy the future needs of our
growing state, we are also dealing with the effects of Hurricane
Helene, which devastated the western part of our state last fall.
Helene has significantly impacted the financial position of our NCDOT,
which is projecting the total cost of repairs caused by the hurricane
to our transportation network to approach $5 billion. In most cases,
the state will pay for these repairs as they are performed and then
must wait for partial reimbursement from the Federal government. The
non-reimbursed costs as well as the cash outlay will deplete state
funds slated for maintenance of roads and bridges and will cause delays
to these programs. The funding impact is expected to last four years,
directly affecting and delaying other infrastructure projects in the
state. We need the Federal dollars now more than ever, and that
translates to real impacts on not just our p
HTF Solvency Helps Improve Work Zone Safety
While we've outlined impacts and user fee options, I want to share
what HTF solvency means for a core focus within the asphalt industry--
safety. I'd love to build these HTF-backed projects, but doing so along
major roadway corridors comes with risks, and the asphalt contractor
plays a critical role in the project delivery of a new or reconstructed
roadway. Last week was National Work Zone Awareness Week, meant to
encourage safe driving through work zones. According to FHWA, each year
about 100 road workers lose their lives in work zones and roughly half
of those fatalities involve being struck by a vehicle \7\. We need to
make sure funding is available to provide the most effective traffic
control measures available to ensure the safety of these men and women.
HTF ensures that FHWA and State DOTs have resources to support work
zone safety improvements, including bipartisan programs like the Work
Zone Safety Contingency Funds (WZSCF) to allow for funding
flexibilities to deploy proven technologies that protect workers and
drivers alike.
---------------------------------------------------------------------------
\7\ https://workzonesafety.org/work-zone-data/
---------------------------------------------------------------------------
The hard-working members of the heavy highway construction industry
are indispensable. We have a very skilled workforce that constructs
very complex projects, often in very challenging conditions and dynamic
work sites. In North Carolina, our workforce has many options for
employment, and we constantly are competing for top talent with other
industries. If our industry were to lose some of its talent due to a
slowdown in work, we may not get them back. If the highway workforce
shrinks, it will lead to slower project delivery and higher costs. All
outcomes directly attributable to the financial health of the HTF and
the asphalt industry can help us see those dollars are executed
responsibly.
How the Asphalt Industry Helps Saves HTF Dollars
I also want to highlight how the asphalt industry is doing
everything in its power to stretch federal resources as far as
possible. Some of you may not know, but asphalt is the most recycled
product in the country. Our pavements are fully recyclable into new
pavements, meaning we can exponentially increase the life natural
resources, delivering quality roads at lower costs. Annually, more than
90 million tons of reclaimed asphalt pavement (RAP) are deployed
throughout the national roadway network, saving State DOTs more than $3
billion \8\. Using RAP saves dramatically on virgin material costs--
aggregates and asphalt binder--while exceeding performance specs for
normal road usage. We encourage the Committee to consider working with
FHWA and State DOT partners to expand the use of RAP to leverage
federal resources responsibly. While the national average use of RAP
stands at around 21% \9\, we have the capacity and willingness to do
more--saving precious taxpayer dollars in the process.
---------------------------------------------------------------------------
\8\ https://www.asphaltpavement.org/uploads/documents/
Sustainability/NAPA_RAP_
Benefits_for_Pavement_Owners_1121.pdf
\9\ https://www.asphaltpavement.org/uploads/documents/IS138-
2021_RAP-RAS-WMA_
Survey_508_-_WITH_APPENDICES.pdf
---------------------------------------------------------------------------
Conclusion
I am encouraged by the discussion and perspectives shared by my
colleagues on the witness panel, and I thank you for taking HTF
solvency seriously in the next highway reauthorization package. As you
have heard from my testimony, we can't discuss the critical road and
highway projects, policies, and programs facing our national roadway
network unless we first adequately address the financial solvency of
the HTF. It is essential to the work the Fred Smith Company proudly
delivers to North Carolina's citizens throughout the state. It allows
our NCDOT to implement the big projects needed to maintain our local
economies and ultimately advance our national economic competitiveness.
We need the HTF, and we need it to work properly. I look forward to
sharing the asphalt industry's positive impact in connection with the
great people our industry employs and the critical road projects we
pave. Thank you for the invitation this morning and I look forward to
answering your questions.
__________
Attachment
October 18, 2023.
The Honorable Sam Graves,
Chairman of the House Transportation and Infrastructure Committee,
1135 Longworth House Office Building, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member of the House Transportation and Infrastructure
Committee,
2163 Rayburn House Office Building, Washington, DC 20515.
Dear Chairman Graves and Ranking Member Larsen:
Thank you for today's hearing examining the financial solvency of
the Highway Trust Fund (HTF) and potential solutions, including the
creation and implementation of a national vehicle miles traveled (VMT)
program, titled ``Running on Empty: The Highway Trust Fund''. The
undersigned organizations represent a diverse set of transportation
stakeholders, all of whom support augmenting the current HTF user-fee
system to ensure financial solvency ahead of the next multi-year
surface transportation reauthorization law.
HTF revenues have long struggled to meet increasing infrastructure
investment needs. Federal motor fuels taxes have remained stagnant
since 1993, with the prospects of an increase dim. Instead, Congress
has chosen to provide General Fund and other transfers to keep the HTF
solvent, totaling $275 billion since 2008. The Congressional Budget
Office estimates that the HTF will require another $150 billion in
revenues to pay for continued spending at baseline levels from 2027-
2031, not including additional resources that will be necessary to
maintain advance appropriations investments included in the
Infrastructure Investment and Jobs Act (IIJA). Congress must consider a
long-term solution to ensure HTF viability and the future health of our
surface transportation system, while maintaining the user fee principle
upon which the HTF is founded. A VMT or mileage-based user fee to
replace all current motor fuel taxes and fees can certainly be a
potential solution, and work has been underway to explore feasibility.
Congress has created programs to explore alternatives to the gas
tax, like 2016's Surface Transportation System Funding Alternatives
(STSFA) Program, which has provided $73.7 million to 37 projects in
states across the nation to assist with the design, implementation, and
acceptance of user-based systems, such as a vehicle mileage-based user
fee.
While these programs have been invaluable to better understand this
user system and areas of improvement, there is more immediate work that
needs to occur in order to realize VMT potential and broader
implementation. Under IIJA, Congress required the Department of
Transportation (DOT) to establish a national pilot to ``test the
design, acceptance, implementation, and financial sustainability'' of a
VMT system.\1\ It requires the creation of a Federal System Funding
Alternative Advisory Board that will provide an annual report to
Congress and ultimately create recommendations for a possible permanent
VMT program. We urge DOT to convene this panel as quickly as possible
and utilize the $50 million over 5 years authorized under IIJA.
---------------------------------------------------------------------------
\1\ ENO Report--https://enotrans.org/eno-resources/driving-change-
advice-for-the-national-vmt-
fee-pilot/
---------------------------------------------------------------------------
A national VMT pilot program will provide valuable lessons and
identify several important factors for the successful implementation of
a permanent, truly user-based VMT program. Getting this information now
and leveraging Congress's oversight function to ensure a national VMT
program is successful will help in answering the toughest question
facing the next surface transportation authorization: how do we fix the
HTF?
Thank you again for this important hearing and we look forward to
working with you and your staff to ensure we secure the information
needed to support a comprehensive national VMT program ahead of the
next surface transportation reauthorization package.
Sincerely,
American Association of State Highway and Transportation
Officials.
American Concrete Pavement Association.
American Concrete Pipe Association.
American Council of Engineering Companies.
American Institute of Steel Construction.
American Iron and Steel Institute.
American Road & Transportation Builders Association.
American Society of Civil Engineers.
American Traffic Safety Services Association.
Associated General Contractors of America.
Associated Equipment Distributors.
Association of American Railroads.
Association of Equipment Manufacturers.
Concrete Reinforcing Steel Institute.
CRH.
FP\2\, Formerly the Foundation for Pavement Preservation.
Granite Construction.
Maryland Asphalt Association.
National Asphalt Pavement Association.
National Ready Mixed Concrete Association.
National Stone, Sand & Gravel Association.
National Steel Bridge Alliance.
Ohio Contractors Association.
Portland Cement Association.
CC: House Ways and Means Committee Chairman Smith and Ranking Member
Neal
Senate Environment and Public Works Committee Chairman Carper and
Ranking Member Capito
Senate Finance Committee Chairman Wyden and Ranking Member Crapo
Mr. Rouzer. Mr. Davis, you are recognized.
TESTIMONY OF JEFF DAVIS, SENIOR FELLOW, ENO CENTER FOR
TRANSPORTATION
Mr. Davis. Chairman Rouzer, Ranking Members Norton and
Larsen, and members of the subcommittee, my name is Jeff Davis.
I am a senior fellow at the Eno Center for Transportation, a
nonpartisan think tank founded by traffic pioneer William
Phelps Eno in 1921 to carry on his work increasing the safety
and flow rate of vehicular traffic.
We are a 501(c)(3) nonprofit that now studies all modes of
transportation up and down the Federalist chain of Government.
Established in 1956, the Highway Trust Fund is part of the
``user-pay, user-benefit'' tax principle. Simply put, the
Federal budget is kept in two separate books. All spending
accounts are kept in one book. All receipt accounts are kept in
a separate book. The sum totals of the two books get compared
to determine the Federal deficit or surplus.
A Federal trust fund account is a bridge between the two
books, a way of linking receipt accounts with specific taxes on
certain groups with spending accounts that benefit those groups
over a long period of years. It is a visibility exercise, not a
fiduciary relationship.
Simply put, the first 50 years of the Highway Trust Fund
worked well. It raised the $676 billion in taxes on highway
users and spent the same amount, plus $7 billion in interest,
building the interstate system and meeting other road, bridge,
and transit needs.
Since 2007, however, things have been out of balance.
Spending was 28 percent higher than tax receipts, necessitating
$275 billion in bailout transfers, almost all from the General
Fund.
This happened for three reasons: a slowdown in the rate at
which total driving increased year to year, a slow increase in
automotive fuel efficiency, and a political system that keeps
increasing trust fund spending each year without regard to
revenue levels.
The problem on the spending side has been more acute lately
since the enactment of the Bipartisan Infrastructure Law. Trust
fund tax receipts in 2024 were almost $1 billion less than 3
years prior, while trust fund spending increased by $17 billion
over that same period.
In the future, things get worse, as chart 1 from my
testimony will show. This shows--the columns, the vertical
columns, are tax revenues for the trust fund, and then the
green ones on top are the General Fund bailouts and the year
they get spent, and then the red line is spending.
You can see that CBO projections at the current rates of
spending levels, the trust fund will run out of money again in
mid-2028. And after that, the immediate revenue gap will be
around $40 billion a year, rising to $50 billion a year by
2035, or $340 billion over that period cumulative.
Put another way, only 60 cents out of every dollar paid out
of the trust fund last year came from highway user taxes. The
rest came from some other kind of General Fund subsidy or
transfer. In about 2030 or 2031, we fall below the 50-percent
mark, 50 cents on the dollar. And by 2035, CBO says trust fund
taxes will only support 43 cents out of every dollar of
outlays.
Now, make no mistake, the trust fund didn't go broke
because of electric vehicles, but the rate of EV adoption
controls the rate at which motor fuel tax receipts will
continue to decline in the future.
If Congress decides they want to continue the user-pay
system--and they should consider that question--revenues and
spending need to be aligned.
At present, three of the five Highway Trust Fund excise
taxes tax the extent of highway system use. Gasoline, diesel,
and heavy truck tires are all proxies for road mileage.
The other two taxes on trucks don't measure the extent of
road use, the 12-percent sales tax and the Heavy Vehicle Use
Tax annually. They are more system access charges.
So in terms of taxes that measure road usage, so far, there
doesn't appear to be the willingness in the political system to
increase motor fuel taxes. And while Congress has encouraged
research into a national mileage fee, the implementation cost
and complexity of such a fee probably mean that it wouldn't be
practical to get it done in time for the next reauthorization
bill. That leaves taxing road access, the potential for road
use, instead of the extent of actual road use.
The committee apparently released this morning a national
vehicle registration fee proposal it will consider tomorrow
focused on, first, electric vehicles and hybrids and eventually
expanding to all motor vehicles.
Although such fees do not fully measure system use, they
are as consistent with the user-pay system as either of the two
current truck taxes are. But, again, remember how big the
problem is. We are only 60 percent self-sufficient right now,
dropping below 50 percent in 2030 or 2031.
In terms of dollars, just remember one figure: $42 to $43
billion a year of revenue at most forever versus 80-some
billion dollars in receipts by the time the IIJA--in spending--
by the time the IIJA is done. You have either got to bring the
$41 or $42 billion line up or the $80 billion line down, or
some combination, and that means that you either double
revenues or else cut spending by the end of this bill.
My back of the envelope calculations say that the EV fee,
while it is significant, wouldn't come close to actually
closing the amount of revenue that you need to get another 5-
year bill.
This concludes my testimony. I would be happy to answer any
questions.
[Mr. Davis' prepared statement follows:]
Prepared Statement of Jeff Davis, Senior Fellow, Eno Center for
Transportation
Chairman Rouzer, Ranking Member Norton, and members of the
Subcommittee, my name is Jeff Davis and I am a Senior Fellow at the Eno
Center for Transportation, a nonpartisan think tank founded by traffic
pioneer William Phelps Eno in 1921 to carry on his work increasing the
safety and flow rate of vehicular traffic. We are a 501(c)(3) nonprofit
organization that now studies all modes of transportation up and down
the federalist chain of government. I have been studying the Highway
Trust Fund since 1996, and I wrote my first article predicting a future
Trust Fund insolvency crisis back in February 2006.
What Is the Highway Trust Fund?
Established in 1956, the Highway Trust Fund is part of the ``user-
pay, user-benefit'' tax principle which has dominated state
transportation funding since the early 20th century and which was first
adopted by the federal government after World War II. Federal aviation
(1970), inland waterway (1978), and harbor maintenance (1986) programs
have since been put on the user-pay system with their own trust
funds.\1\
---------------------------------------------------------------------------
\1\ See my testimony [https://docs.house.gov/meetings/PW/PW12/
20231018/116425/HHRG-118-PW12-Wstate-DavisJ-20231018.pdf] before this
subcommittee on October 18, 2023, for a full history of the user-pay
paradigm.
---------------------------------------------------------------------------
Simply put, the federal budget is kept in two separate books. All
spending accounts are kept in one book, and all receipt accounts are
kept in a separate book. The sum totals of the two books are compared
on a daily, monthly, and annual basis to determine the federal deficit
or surplus.
A federal trust fund account is a bridge between the two books--a
way of linking receipt accounts from specific taxes on certain groups
with spending accounts that benefit those groups, over a long period of
years. It is a visibility exercise, not a fiduciary relationship.
How Has the Highway Trust Fund Performed?
For the first 50 years of its existence, the Highway Trust Fund
worked according to plan. During that period, total user tax receipts
on gasoline, diesel fuel, and the trucking industry were $676 billion,
only $7 billion less than highway (and later, mass transit) outlays,
which was more than made up for by interest earned on balances.\2\ But
since then, Trust Fund spending has exceeded user tax receipts by $208
billion, far more than interest can compensate for, which has
necessitated over $275 billion in special bailout transfers from the
General Fund, the last of which was in the 2021 infrastructure law and
will keep the Trust Fund solvent into 2028. (A complete list of those
transfers is in Appendix A of this testimony.)
---------------------------------------------------------------------------
\2\ The payment of interest from the General Fund to a trust fund
account is another kind of subsidy, but it is widely accepted and dates
back at least to the establishment of the Unemployment and Social
Security Trust Funds in the 1930s, so this committee is probably not
the place to reargue the concept.
---------------------------------------------------------------------------
Table 1
------------------------------------------------------------------------
HTF: The First 50 Years (1957-2006) The HTF Since Then (2007-2024)
------------------------------------------------------------------------
Net user tax receipts: $676.0 Net user tax receipts: $724.5
billion billion
------------------------------------------------------------------------
Outlays: $682.6 billion (101% of Outlays: $932.2 billion (128% of
net user tax receipts) net user tax receipts)
------------------------------------------------------------------------
Interest/Fines: $30.1 billion Interest/Fines: $17.8 billion
------------------------------------------------------------------------
Special Bailout Transfers: net zero Special Bailout Transfers: $275.5
(on two occasions, short-term billion
loans by GF to HTF were made and
then repaid with interest)
------------------------------------------------------------------------
Why has this happened? Three reasons.
1. That total amount that people drive doesn't increase as fast as
it used to. For the first 50 years of the Trust Fund, the total amount
of driving in the U.S., measured in vehicle miles-traveled (VMT),
increased by an average of 3.2 percent per year, enough to keep pace
with inflation in many years. Since 2007 the increase has only averaged
a half-percent per year.
2. Starting in the mid-1970s, vehicles got more fuel-efficient,
rendering a cents-per-gallon tax an ever-worsening proxy for a tax on
driving. The number of gallons of motor fuel taxed each year increased
by an average 2.6 percent for the first 50 years, but now only
increases by an average 0.3 percent per year.
3. The political system has been unwilling to increase tax rates
to keep pace with increasing Trust Fund spending or to restrain
spending to stay in line with Trust Fund tax receipts. Over the first
50 years, Congress acted four times to increase the gasoline tax rate,
from 3 cents per gallon to 18.3 cents per gallon, which helped
counteract lost buying power due to inflation. But that last increase
was in 1993.
Table 2
------------------------------------------------------------------------
HTF: The First 50 Years (1957-2006) The HTF Since Then (2007-now)
------------------------------------------------------------------------
VMT increases an average 3.2%/year VMT increases an average of 0.5%/
year
------------------------------------------------------------------------
Taxed gallons of motor fuel Taxed gallons of motor fuel
increased by an average of 2.6%/ increased by an average of 0.3%/
year year
------------------------------------------------------------------------
Tax rates were increased so that the The present 18.3 cents/gal.
gasoline tax rate in 2006 (18.3 gasoline tax rate is the same as
cents/gal.) was 6.1 times the rate it was in 2007, having not been
in 1957 (3.0 cents/gal.) increased since 1993
------------------------------------------------------------------------
The gasoline tax is the largest, but not the only, excise tax on
highway users that supports the Trust Fund. There are currently five
such excise taxes, which collectively raised $42.5 billion in fiscal
year 2024. The gasoline tax raised 58 percent of that total.
Table 3
The Five Highway Trust Fund Excise Taxes on Highway Users
------------------------------------------------------------------------
IRC FY 2024 Net
Tax on Section Tax Rate Receipts
------------------------------------------------------------------------
Gasoline and gasohol......... 4081 18.3 cents/ $24.771 billion
gallon.
Diesel and special fuels..... 4041 24.3 cents/ $9.456 billion
gallon.
Sale of new trucks/trailers.. 4051 12% of MSRP.... $6.055 billion
Use of very heavy trucks..... 4481 Weight-based; $1.460 billion
up to $550/
year.
Tires for heavy trucks/buses. 4071 Weight-based; $748 million
up to $75 per
tire.
------------------------------------------------------------------------
FY24 TOTAL
$42.489 BILLION
------------------------------------------------------------------------
Revenue stagnation is only half of the problem. The bigger problem
of late is on the spending side, which keeps increasing to cover system
costs and construction inflation. Fiscal year 2024 was the year when
the big spending increases from the IIJA finally showed up in terms of
Trust Fund cash flow. Outlays went from $60 billion in 2023 to $70
billion in 2024, and the baseline predicts that outlays will cross the
$80 billion per year mark in 2027 or 2028. Meanwhile, at current tax
rates, receipts will either remain flat at around $43 billion per year
or else decrease steadily, depending on the adoption rate of electric
vehicles into fleets and other fuel economy developments.
Table 4
The Last Ten Years of Highway Trust Fund Cash Flow (Billion $)
----------------------------------------------------------------------------------------------------------------
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
----------------------------------------------------------------------------------------------------------------
Net Tax Receipts................ 40.8 41.2 41.0 42.6 43.6 42.4 43.4 46.6 42.1 42.5
Outlays......................... 51.8 54.3 54.4 55.2 56.1 58.2 53.7 53.6 60.1 70.6
----------------------------------------------------------------------------------------------------------------
What Do Future Highway Trust Fund Projections Look Like?
Looking forward, the Congressional Budget Office's January 2025
baseline projections say that, under current law tax rates and spending
levels (with discretionary inflation), the Trust Fund will go from a
$28 billion user-pay deficit last year to a $50 billion user-pay
deficit a decade from now, in 2035.
Put another way, last year, only 60 cents of every dollar paid out
of the Trust Fund came from highway user taxes--the rest came from some
kind of General Fund subsidy or transfer. In 2030 or 2031, CBO projects
we will drop below the 50 cents-on-the-dollar threshold, and by 2035,
highway user taxes at current rates will only support 43 cents of every
dollar of Trust Fund outlays.
Chart 1
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
See Appendix B of this written testimony for all of the numerical
detail on the latest CBO baseline.
(A note on baselines: the next CBO baseline update, this spring or
summer, will look somewhat different. The spending line will be at
least $1 billion per year higher because the January baseline was
constructed while USDOT was operating under the half-year continuing
resolution, so FY 2025 spending was held at the FY 2024 total and all
subsequent years reflected that. The subsequent enactment of a full-
year funding bill increases Trust Fund spending obligations by $1.3
billion in 2025 and that number will be inflated for subsequent years
in the next baseline. But on the revenue side, things should improve,
because the Trump Administration has taken formal steps to pull back
EPA and USDOT greenhouse gas emission and fuel economy regulations that
CBO had previously assumed would significantly increase market
penetration of electric and plug-in hybrid vehicles.)
Sometime in 2028, probably spring or early summer, the Trust Fund
is scheduled to run out of money again. At current law spending levels
and tax receipt projections, this means that Congress will have to
start bridging a Trust Fund revenue gap of around $40 billion per year,
either through increased revenues, decreased spending, or additional
bailouts from the General Fund. That annual gap would rise to $50
billion by 2035 (a cumulative $340 billion).
How Do Electric Vehicles Affect Trust Fund Finances?
Electric cars, pickup trucks, and vans are not subject to any
current Highway Trust Fund excise taxes. But make no mistake--the
Highway Trust Fund's current dire financial situation was not caused by
electric vehicles. The current insolvency crisis began in the fall of
2008--just as the first few dozen handmade Tesla Roadsters were being
delivered. And only 1 million hybrid-electric vehicles had been sold by
the end of 2007, out of 136 million registered automobiles that year.
EVs and hybrids did not cause the Highway Trust Fund to go broke.
However, unless tax rates are changed, the rate of EV adoption
controls the rate of change of the revenue half of the Trust Fund's
future fiscal imbalance.
At present, EV adoption is accelerating, and the latest official
projections have that rate increasing in the future. The Energy
Department's latest official outlook assumes that the tax credits and
strong regulatory incentives for EV adoption enacted in the last
Administration will remain in place:
Table 5
Energy Department Projections for EV/Hybrid Composition of US Light-Duty Vehicle Fleet
Million light-duty vehicles. Assumes all Biden-era tax credits and regulations remain in place.
--------------------------------------------------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric................................................ 4.8 6.9 10.0 13.8 18.2 23.0 28.7 34.9 41.6 48.4 55.1 61.6
Plug-In Hybrid.......................................... 1.4 1.9 2.5 3.2 3.8 4.6 5.4 6.3 7.4 8.3 9.3 10.2
Regular Hybrid.......................................... 7.7 8.8 9.9 10.8 11.5 12.3 13.0 13.7 14.3 15.1 15.8 16.6
ICE..................................................... 251.5 249.0 246.0 242.4 237.8 232.1 225.5 217.9 209.4 200.8 192.4 184.2
-----------------------------------------------------------------------------------------------
Total................................................. 265.4 266.6 268.4 270.1 271.2 272.0 272.6 272.7 272.7 272.6 272.5 272.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Energy Information Administration, Annual Energy Outlook 2025, Table 39, Reference Case
CBO used similar assumptions for EV and hybrid adoption in its
January baseline, which showed relatively flat VMT growth combined with
the above EV/hybrid adoption rates to drag gasoline tax receipts from
$25 billion per year to $15 billion per year over a decade:
Table 6
CBO January 2025 Baseline Forecast for Net Gasoline Tax Receipts to HTF (Billion $$)
----------------------------------------------------------------------------------------------------------------
FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35
----------------------------------------------------------------------------------------------------------------
24.8 25.1 24.7 24.1 23.2 22.2 20.9 19.4 18.1 17.0 16.1 15.3
----------------------------------------------------------------------------------------------------------------
But even if consumers were to abruptly stop buying electric
vehicles entirely, Congress would still face a gigantic Highway Trust
Fund revenue hole. Remember: VMT doesn't increase like it used to, and
is projected to only increase by 0.4 percent per year from now on
(light duty vehicles only), meaning that gasoline tax receipts can't
grow faster than that unless the tax rate is increased or people start
buying more gas guzzlers.
The chart below shows two Trust Fund revenue scenarios and two
Trust Fund spending scenarios. The solid lines are the January 2025 CBO
baseline, with spending adjusted for the full-year FY25 totals. The
revenue baseline assumes all current law tax credits and policies to
promote EV adoption will continue. The alternative revenue scenario
assumes that EVs stop selling, causing gasoline tax receipts to
increase at 0.5 percent per year. The alternative spending scenario
extends all IIJA Division J appropriations for surface transportation
modes at baseline levels, but with that new spending supported by the
Trust Fund, instead of the General Fund.
Chart 2
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
With heavy (baseline) EV market penetration, the Trust Fund's
revenue hole with baseline spending is around $50 billion a decade from
now. If you stop selling EVs entirely, the revenue hole would still be
around $40 billion in 2035.
What Can Be Done to Remedy this Situation?
First, 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. If not, then any
combination of real general revenues can be used to plug the hold in
the Trust Fund, or you could get rid of the Trust Fund entirely and go
to a blend of annual appropriations and multi-year advance
appropriations out of the General Fund.
However, the title of this hearing is ``The Need for a Long-Term
Solution for the Highway Trust Fund,'' so we will take Trust Fund
abolition off the table for now.
The Revenue Side
At present, three of the five Highway Trust Fund excise taxes
attempt to tax the extent of highway system use. The gasoline, diesel
fuel, and heavy truck tire tax are all proxies for taxing road
mileage--the more miles driven by an internal combustion engine (ICE)
vehicle, the more gallons of gasoline or diesel fuel the operator
purchases, and the more the tires on a tractor-trailer have to be
replaced. None of these is a perfect proxy for VMT, but the degree of
highway use contributes greatly to the amount of taxes paid.
The other two taxes do not measure the extent of road use. The 12
percent federal excise tax on new trucks, tractors, and trailers is
only levied once, at the manufacturer, and the annual usage tax on the
heaviest trucks is only levied once per year. For these ``highway
access'' taxes, the degree of highway use is irrelevant to the amount
of tax paid.
In terms of taxes that measure road usage, there does not appear to
be the willingness in the current political system to increase motor
fuel taxes. While Congress, in the 2015 and 2021 reauthorization laws,
has encouraged research into a mileage fee or road user charge that
would eventually replace motor fuel taxes, the 50-state pilot program
funded mandated by the 2021 authorization law, which was supposed to be
complete by now, has still not moved forward. The implementation costs
and complexity of a national VMT fee/RUC are such that it probably
would not be practical to implement in time for the next
reauthorization bill, even if the political willpower were there.
That leaves taxing road access--the potential for road use--instead
of the extent of actual road use. In order to access the road network,
you need a vehicle and a license. Levying a tax or fee on either one of
those would be a tax on road system access similar to the existing
truck Federal Excise Tax (FET) or Heavy Vehicle Use Tax (HVUT).
There has been much discussion of some kind of federal tax or fee
on electric vehicles simply because they currently pay nothing into the
federal Highway Trust Fund. Several states have taken steps to levy EV
fees for deposit into their road funds.
In terms of what the average ICE vehicle pays in fuel taxes, here
is the latest data from the Federal Highway Administration.
Table 7
Latest FHWA Vehicle Operation Statistics for Light-Duty Vehicles (2023)
------------------------------------------------------------------------
Light-Duty
-----------------------------------------
Short WB Long WB Total
------------------------------------------------------------------------
Number of Reg. Vehicles....... 197,134,299 62,103,995 259,238,294
Avg. VMT per Vehicle.......... 11,026 11,360 11,106
Fuel Consumed per Vehicle 447 633 492
(Gal.).......................
Times 18.3 Cents per Gallon... $81.80 $115.84 $90.04
------------------------------------------------------------------------
Source: FHWA, Highway Statistics 2023, Table VM-1. ``Short WB'' =
wheelbase of 121 inches or less. ``Long WB'' = wheelbase over 121
inches.
Per the latest Federal Highway Administration data (Table VM-1 in
Highway Statistics 2023), the average fuel consumption per registered
light-duty vehicle in 2023 was 492 gallons. Multiply that by the
current gasoline tax rate of 18.3 cents per gallon and you get a
ballpark number of $90 per year that an EV driven the average amount
should pay into the Trust Fund, were EVs to be taxed in the same amount
as an internal combustion vehicle.
However, that is the mean (average) amount--total registered
vehicles divided by total estimated VMT and gallons. There are more
registered cars than registered drivers, so the miles on a driver's
``main'' vehicle will be higher.
If one assumed a $90 per EV federal registration fee, then using
the Energy Department's EV adoption assumptions from Table 5, above,
the $90 EV fee would bring in $900 million in 2026, rising to $5.5
billion in 2035. Higher fees would bring in more money, as would any
fees charged on hybrid vehicles. (The assumed EV adoption rates in
Table 5 will probably shrink in next year's Outlook as the Trump
Administration rolls back GHG regulations and if Congress enacts
policies less friendly to EVs.)
The Spending Side
In recent years, spending out of the Trust Fund has been increasing
at a faster rate than tax revenues have been decreasing. Inexorable
spending growth, along with static revenues, got us to where we are
today, with highway user taxes only supporting 60 cents out of every
dollar spent by the Trust Fund. As I mentioned earlier, at the current
rates we will drop below the 50 cents on the dollar mark in 2030 or
2031. ($41 or $42 billion in user tax receipts versus $82 to $83
billion in outlays.)
This means that unless you cut spending, you have to double
revenues from somewhere or else have more general fund bailouts.
There used to be a widespread belief among many legislators that if
you could just cut back the ``non-essential'' or ``non-traditional''
elements of Trust Fund spending, that the Trust Fund could once again
live within its means without tax increases. These legislators tended
to be from districts who got minimal value out of the Mass Transit
Account.
This attitude may have been mathematically valid once, but no
longer. The following table shows the contract authority provided by
the IIJA for the Federal Highway Administration in 2026, by program.
Assume that Congress throws the Federal Transit Administration, the
National Highway Traffic Safety Administration, and the Federal Motor
Carrier Safety Administration completely out of the Highway Trust Fund,
immediately. And then Congress goes down the FHWA budget and throws out
all of the ``non-traditional'' items--no more transportation
alternatives, carbon reduction, CMAQ, EV charging, metropolitan
planning, emission reduction grants, climate change resilience, pilot
programs, none of it--just ``traditional'' concrete, asphalt, and
steel. That still leaves new FHWA contract authority around $9.5
billion above all of the projected highway user tax receipts for that
year:
Table 8
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
This is not meant as a criticism of mass transit or of non-
traditional Trust Fund spending, only that this once-commonly held idea
is no longer valid because of the recent rate of overall spending
growth. I am merely pointing out that fixing the spending side of the
Highway Trust Fund imbalance is just as important as fixing the revenue
side imbalance, but tends to get less attention.
This concludes my testimony, and I would be happy to answer any
questions.
Appendix A
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Appendix B
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Appendix C
Comparison of Federal Highway Trust Fund Highway Account Receipts
Attributable to the States and Federal-Aid Apportionments and
Allocations from the Highway Account
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Mr. Rouzer. Mr. Burkhard.
TESTIMONY OF BRIAN BURKHARD, P.E., VICE PRESIDENT AND GLOBAL
PRINCIPAL FOR ADVANCED MOBILITY SYSTEMS, JACOBS
Mr. Burkhard. Good morning, Chairmen Graves and Rouzer,
Ranking Members Larsen, Holmes Norton, and members of the
Subcommittee on Highways and Transit.
My name is Brian Burkhard. I am vice president and global
principal for advanced mobility systems at Jacobs. I appreciate
this opportunity to testify today as you examine the need for a
long-term solution for the Highway Trust Fund.
We like to say at Jacobs that we are challenging today to
reinvent tomorrow by solving the world's most critical
problems, and helping communities solve their infrastructure
challenges has never been more complex.
As one of America's leading consulting and advisory firms,
Jacobs delivers infrastructure projects that enhance mobility
and efficiency across all modes of transportation, and much of
this work is supported by the Highway Trust Fund.
Nearly every project I have worked on in my career has been
made possible by the Highway Trust Fund. These are projects
that keep our transportation systems reliable, safe, and
resilient. Moreover, because of the improvements and
efficiencies they realize for goods movement and mobility, they
drive the American economy forward.
The Highway Trust Fund represents a founding principle that
has formed the basis of the Federal transportation policy for
over half a century, the ``user-pays, user-benefits''
principle. But the Highway Trust Fund continues to be in
trouble, and our current path is uncertain unless we address
the fund's long-term structural issues.
Fortunately, there are several alternatives to relying on a
fuel tax to fund our transportation infrastructure needs. These
include an EV fee and a mileage-based user fee or road user
charge.
First, an EV fee could be a short-term stopgap measure to
reduce the fuel tax deficit caused by EVs. Nearly 40 States
have adopted EV fees, usually in the form of the annual fee
paid during vehicle registration. Some States have implemented
additional fees based on vehicle weight or have instituted fees
on public EV charging stations.
However, EV fees should not be viewed as a panacea to the
fund's problem. Rather, they should be considered in parallel
with a longer term fix to the gas tax.
Additionally, these one-time or annual payments are not
precise assessments on transportation usage, and they do not
align with the continued impact that a vehicle imposes on the
system.
As stated in the National Surface Transportation
Infrastructure Financing Commission's report in 2009, required
by SAFETEA-LU, the most viable approach to efficiently fund
investment in surface transportation in the medium and long run
will be a user charge system based more directly on miles
driven rather than indirectly on fuel consumed.
Congress has helped States and interstate organizations
test the feasibility of mileage-based user fees, but now
national leadership is critical and the USDOT should move
forward on the national pilot as defined and required by the
IIJA.
Full Federal implementation of a mileage-based user fee
pilot program must be accompanied by a robust education
campaign to ensure drivers understand how the program works,
the positive impact on rural communities, and the opportunities
for privacy protections. Moving to a true transportation usage-
based system is imperative in the long run.
Lastly, the role of private financing and P3s has grown in
interest in helping to close the gap between limited public
funding and our growing needs. P3s have been used for centuries
across the world and are becoming more prominent in the U.S.
thanks to Federal financing programs, such as the tax-exempt
private activity bonds and low-interest rate TIFIA loans. P3s
can accelerate project delivery and encourage cost-saving
innovation, but they are not suitable for all project types,
particularly those without sustainable funding sources.
Encouraging private-sector participation, ideation, and
efficiency is good for infrastructure, and we urge this
committee to make these financing programs more accessible so
States and localities can accelerate project delivery.
This committee knows all too well that our infrastructure
funding gap has continued to grow, and we encourage continued
collaboration to ensure that the Federal Government remains a
committed partner in funding our transportation infrastructure.
Ensuring the solvency of the Highway Trust Fund while
adhering to the user-pays principle is essential for continued
economic growth and is needed to improve the safety of our
Nation's transportation systems.
Thank you for the opportunity to testify, and I look
forward to your questions.
[Mr. Burkhard's prepared statement follows:]
Prepared Statement of Brian Burkhard, P.E., Vice President and Global
Principal for Advanced Mobility Systems, Jacobs
Why the Highway Trust Fund is Important
Good morning, Chairmen Graves and Rouzer, Ranking Members Larsen
and Holmes Norton, and Members of the Subcommittee on Highways and
Transit.
My name is Brian Burkhard, and I am Vice President and Global
Principal for Advanced Mobility Systems at Jacobs.
I want to thank you for this opportunity to testify today as you
examine the need for a long-term solution for the Highway Trust Fund.
I have over 37 years of experience in transportation systems and
infrastructure development. Throughout my career, I have led innovative
initiatives across connected and automated vehicle technology, wireless
electric vehicle (EV) charging systems, and major capital improvement
projects. I have been grateful for the opportunity to help states and
local governments plan, design, build, operate and maintain complex
transportation system solutions that have resulted in improved
mobility, increased goods movement, positive economic impacts, and
lasting safety. To say that the Highway Trust Fund is responsible for
my personal career would be an understatement. Nearly every project
that I have worked on has been made possible by funding that comes from
the Highway Trust Fund.
We like to say at Jacobs that we're ``challenging today to reinvent
tomorrow by solving the world's most critical problems,'' and helping
communities solve their infrastructure challenges has never been more
complex. As one of America's leading consulting and advisory firms,
Jacobs delivers crucial infrastructure projects that enhance mobility
and efficiency across all transportation modes, including aviation,
rail and transit, highways and bridges, and ports and maritime. Much of
this work is supported by the Highway Trust Fund, and we understand
that the advent of electric vehicles, improved vehicle fuel efficiency,
and the limitations of the current federal fuel tax, all pose great
challenges to assuring that there is enough money to repair and build
America's transportation infrastructure. Jacobs is proud to have
studied and piloted alternatives to the fuel tax, through our work on
Mileage-Based User Fees (MBUFs), and to have also engaged in
alternative funding and financing methods on projects across the United
States.
Jacobs works to create equitable, sustainable, and smart
infrastructure that connects people and drives economic development.
Like other larger engineering and consulting firms working in
transportation, we understand that the Highway Trust Fund is an
integral funding source for nearly all the work we do for our state and
local transportation clients. Averaging out the local match dollars,
the Highway Trust Fund provides about 25 percent of the funding for
these projects.
Transportation professionals like me are attracted to designing,
building, and maintaining infrastructure because of how broad
stretching the impacts are to American's lives. Transportation
infrastructure is the backbone of daily life in America and can
influence job accessibility, commute times, and even housing choices. A
well-maintained system boosts efficiency, reduces costs, and enhances
safety, while outdated infrastructure can lead to congestion, higher
accident rates, and increased transportation expenses. For businesses,
strong infrastructure facilitates commerce, lowers logistics costs, and
fosters competitiveness.
Projects that are funded by the Highway Trust Fund keep our
transportation systems reliable, safe, and resilient. Moreover, they
drive the American economy forward--these infrastructure projects
impact how communities can economically thrive because of improvements
and efficiencies in goods movement and enhancements in mobility. And on
the global stage, the improvements to our transportation infrastructure
are essential to America's competitiveness. This is why Congress must
prioritize ensuring that we have a robust Highway Trust Fund to power
our infrastructure and our economy.
Why the Highway Trust Fund is in Jeopardy
As we all know, the Highway Trust Fund continues to be in trouble.
Highway Trust Fund expenditures are growing quicker than its sources,
as our nation's transportation infrastructure needs grow. According to
the Congressional Budget Office, the deficit between outlays and
inflows was approximately $20 billion in 2024 and is expected to
increase to over $45 billion by 2034 \1\. The federal fuel tax, which
accounts for about 80% of the Highway Trust Fund's receipts, has not
been adjusted for inflation since 1993 and, when adjusted for
inflation, is half the revenue of what it was in 1994. According to the
Environmental Protection Agency's 50 Years of EPA's Automotive Trends
Report, fuel efficiency has doubled since 1975 and an increasing share
of vehicles using our transportation system today do not pay any fuel
tax at all \2\. The net effect of all these issues results in a
downward trend in federal revenue per vehicle-mile-traveled and a
growing insolvency issue with the Highway Trust Fund.
---------------------------------------------------------------------------
\1\ Details About Baseline Projections for Selected Programs--
Highway Trust Fund Accounts: January 2025. (2025, January).
Congressional Budget Office. https://www.cbo.gov/system/files/2025-01/
51300-2025-01-highwaytrustfund.pdf.
\2\ 50 Years of EPA's Automotive Trends Report. (2025, January 15).
Environmental Protection Agency. https://www.epa.gov/greenvehicles/50-
years-epas-automotive-trends-report.
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Our current path is unsustainable. Simply raising the gas tax would
be a short-term solution to address the solvency of the Highway Trust
Fund, but does not address the long-term structural issues to maintain
a user-pays, user-benefits model of federal transportation investment.
Instead, we at Jacobs urge this committee to consider alternatives to
the federal fuel tax to fund transportation infrastructure projects.
Alternatives to the Fuel Tax
Fortunately, there are several alternatives to relying on a fuel
tax to fund our transportation infrastructure needs. The following are
some prevailing funding alternatives in practice across the country
today:
Electric Vehicle (EV) Fees
Many states have introduced annual fees on electric vehicles (EVs)
to compensate for lost fuel tax revenue. Currently, 39 states have
adopted EV fees, with amounts ranging from $50 to $250 per year,
depending on the state \3\. Some states, like Maryland and Wisconsin,
also impose additional taxes on electricity used at public charging
stations to further offset revenue losses.
---------------------------------------------------------------------------
\3\ Special Registration Fees for Electric and Hybrid Vehicles.
(2025, February 25). National Conference of State Legislatures. https:/
/www.ncsl.org/transportation/special-registration-fees-for-electric-
and-hybrid-vehicles.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 1_Annual EV Registration Fees by State (Source: National
---------------------------------------------------------------------------
Governors Association, 2020)
Common approaches to EV fee assessment include a flat annual fee
that EV owners pay during vehicle registration. Tiered fees have been
applied in some states for heavier EVs or may even adjust these
according to vehicle type. Some states even structure these EV fees to
grow over time by tying the fees to an inflation-related metric. A few
states tax electricity used at public EV chargers to mimic fuel taxes.
At the federal level, an annual registration fee on EVs could be a
short-term stop gap measure to reduce the fuel tax deficit in the
Highway Trust Fund caused by EVs. However, this should not be viewed as
addressing the entire shortfall and should be considered in parallel
with a longer-term fix to the gas tax.
There are some important considerations to keep in mind with an EV
fee. First, policymakers must be transparent with the public that these
EV fees are transportation user fees intended to replace the gas tax
and will be used for transportation investments. Additionally, an
annual fee should be priced to mirror the lost gas tax for each class
of vehicle so that the fee is as closely tied to transportation usage
as possible to maintain the trusted ``user pays'' principle that has
guided federal transportation funding for decades. Second, a one-time
or annual fee is still not a precise fee assessment on transportation
usage as it does not adjust to all miles driven by each vehicle.
Whereas usage fees, like the fuel tax, increase with miles driven, a
single fee assessment does not align with the continued impact that a
vehicle imposes on the transportation system over the life of the
vehicle. With a single fee, a person who only drives 5000 miles in a
year would be paying the same as someone driving 20,000 miles in a
year.
Third, it is appropriate to consider the multitude of taxes and
fees EVs may be subject to compared to gasoline-powered vehicles. Many
states include a variety of annual battery electric fees, kilowatt hour
fees, and sales or electricity taxes on public EV charging. While
making sure EVs pay their fair share is necessary for infrastructure
sustainability, these fee methodologies could disincentivize EV
adoption and may be more punitive than gasoline-powered vehicle
ownership. A related problem is that annual, upfront registration fees
disproportionately affect lower-income vehicle purchasers in contrast
with usage fees or motor fuel taxes, which can be paid incrementally.
Overall, it is imperative that Congress maintain a transparent ``user
pays'' principle when guiding any new transportation usage fees.
Mileage-Based User Fees (MBUFs)
Motor fuel taxes link highway use with the associated costs of
building and maintaining roads as well as other indirect costs
associated with usage of the transportation system, such as pollution
and congestion. But motor fuel taxes are an imperfect user fee because
they do not differentiate among vehicles that cause greater or lesser
road wear for the same amount of fuel consumed or between travel on
crowded and uncrowded roads. As concluded by the National Surface
Transportation Infrastructure Financing Commission in 2009 and stated
in their Final Report: ``The most viable approach to efficiently fund
investment in surface transportation in the medium to long run will be
a user charge system based more directly on miles driven rather than
indirectly on fuel consumed.'' \4\
---------------------------------------------------------------------------
\4\ Paving Our Way: A New Framework for Transportation Finance.
(2009, February). National Surface Transportation Infrastructure
Financing Commission.
---------------------------------------------------------------------------
To address this imperfection, a concept has emerged called Mileage-
Based User Fees (MBUFs), also known as Vehicle Miles Traveled (VMT)
taxes or a Road User Charging (RUC) fee. Under an MBUF system, drivers
would be charged for the number of miles they drive instead of the
amount of fuel they purchase, creating a direct connection between the
amount you pay and your use of the transportation network (see Figure
2). Recent legislation has directed studies on MBUF, including a
national pilot program to assess its design, acceptance, and
sustainability.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Figure 2_Comparison of Fuel Taxes Paid and MBUF Paid by Vehicle Fuel
Efficiency (Assuming a Single per mile MBUF Rate Applied to all
Vehicles)
Figure 3 simplifies how an MBUF system could work. Data collection
and reporting are necessary to identify the number of miles traveled.
Miles driven can be measured through periodic odometer readings,
vehicle GPS systems, devices that can plug into a vehicle's on-board
diagnostic port, cellular on-board units, or even a driver's
smartphone. If location data is included, it can be used to
differentiate by state where a vehicle has driven. Alternatively,
odometer readings or automated data without location can be used to
simply measure the number of miles driven. Regardless of how miles are
measured, these would be sent to an account manager. Once an account
manager collects mileage data, invoices the driver, and collects the
MBUF, it transfers it to the beneficiary, in this case, the State.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Figure 3_How MBUF Works
Some MBUF concepts have considered the use of a multi-state
clearinghouse that could track cross-state travel and re-distribute
MBUF funds collected based on out-of-state mileage.
MBUF, or RUC, program pilots have been funded and studied
extensively across the United States. The Surface Transportation System
Funding Alternatives (STSFA) grant program, established by the FAST
Act, contributed funding but required a local match, to explore MBUF
revenue mechanisms through study, demonstrations, and piloting. This
program aimed to conduct outreach and increase public awareness of the
need for new alternatives to the fuel tax and to identify ways to
minimize the administrative costs associated with MBUF systems.
Through STSFA or independent initiatives, Jacobs has had the
opportunity to assist several states and coalitions in exploring MBUF
programs. The current state of those and other programs are as follows:
Oregon, Utah and Virginia: These states have operational
MBUF programs (participation in these programs are currently
voluntary).
+ Oregon conducted America's first MBUF pilot in 2013, which led
to the establishment of OReGO--Oregon's statewide RUC program. It
allows enrolled users to have their miles tracked with a GPS device or
a non-GPS odometer tracker and gives enrollees a credit against taxes
they pay at the pump. Since 2015, high MPG and EV vehicles can be
enrolled in a voluntary program where drivers pay 1.9 cents per mile.
Oregon is considering mandatory registration.
+ In 2018, Utah was the second operational MBUF system in the
U.S. EVs are allowed to enroll at a rate of 1 cent per mile in lieu of
an annual flat EV fee.
+ Virginia became the third operational MBUF system in the U.S.
in 2022 by establishing a ``Highway Use Fee.'' Drivers can elect to pay
0.94 cents per mile capped out at $109 per year.
Hawai'i: Passed the first mandatory RUC legislation in
2023. Starting on July 1, 2025, most EV drivers can choose to pay a 0.8
cent per-mile RUC charge or flat annual RUC that is capped at $50 per
year. By the end of this year, Hawai'i will present a RUC transition
plan to the legislature with steps on how to implement a RUC charge to
all vehicles in Hawai'i by 2033.
Washington, California, Wyoming, Colorado, Minnesota,
Kansas, Missouri, Texas, Ohio, New Hampshire, Pennsylvania, Delaware,
North Carolina, and others: These states have launched or are
developing pilot programs to study the feasibility and implementation
of RUCs with trucks or light-duty vehicles.
+ Caltrans is testing RUC through the establishment of real
monies collection and issuance of fuel tax credits. This pilot is
evaluating opportunities and challenges in the establishment of this
system and to consider how such a system might scale statewide.
+ Colorado implemented their first road charge pilot program
with 100 vehicles over a 4-month period. The participants of this pilot
supported the RUC concept and appreciated its fairness to charge on
miles-traveled rather than fuel consumption. The pilot demonstrated
that mileage-reporting mechanisms could be effective in collection of
data without major issues. The pilot also exposed policy challenges
like privacy in mileage-reporting and how to integrate with existing
transportation funding mechanisms.
The Eastern Transportation Coalition (TETC)--Since 2017,
TETC is a leading consortium of 19 states and Washington DC, of which 9
have explored RUC and its potential impacts. TETC has piloted several
aspects of RUC, including community outreach and communication through
participant surveys, focus groups, and messaging. This program has
conducted 12 passenger vehicle pilots engaging nearly 3000 passenger
vehicles.
+ An urban-rural analysis was conducted in Georgia and Maryland.
When moving from a gas tax to an MBUF, Georgia's rural residents would
pay 9% less per year and Maryland's rural residents would pay 7% less
per year.
+ In North Carolina, TETC helped create AdvaNCe Transportation
Together, a collaboration between NCDOT, the business community, and
other private-public partners exploring transportation funding. The
result is an online public education forum that provides information on
how transportation is funded today, the problem with the current
funding model, and potential solutions. Public engagement and education
on the need for more sustainable funding options is key to any future
MBUF's success.
RUC America--RUC America is a consortium of states that
pools resources to study the viability of MBUF. RUC America has funded
over 24 research projects studying the feasibility of road usage
charging across the interests of 19 state DOTs. Oregon and Utah are
member states that are actively operating RUC programs. The second tier
consists of states that are conducting, or have conducted, RUC research
pilot projects and includes California, Colorado, Hawaii, Pennsylvania
and Washington. The remaining states are monitoring transportation
trends and evaluating the road usage charge environment.
+ One project through RUC America was to evaluate how automated
vehicle (AV) systems could be utilized to enable an MBUF. The pilot
utilized data from an AV delivery company to identify the opportunities
and challenges associated with AV-based systems and assess their
potential integration into a RUC framework.
As a member of the advisory panel that convened for the Eno
Center's 2023 report entitled Driving Change: Advice for the National
VMT Fee Pilot, I was encouraged by the report's findings on the need
for and importance of a national pilot to explore the framework,
policies, and implementation of a federal MBUF.
U.S. DOT should move forward on a national pilot to test the
design, acceptance, implementation, and financial sustainability of an
MBUF system in keeping with the ``user pays, user benefits'' principle
of federal transportation funding. Since time is of the essence and a
Federal Advisory Board has already been established for this
initiative, USDOT must not stall on this important and needed
evaluation.
Full federal implementation must be accompanied by a robust
education campaign to ensure that drivers understand how the program
works, to describe the positive impact on rural communities and
opportunities for privacy protections. Incorporating ``choice'' into
these programs is essential for their success. Building upon the
individual state pilots and findings, a national pilot will be
essential in the evaluation of a potentially lasting and fair solution
to our Highway Trust Fund problem. In the meantime, EV fees could
potentially offer a stop-gap solution but by no means should be
considered a panacea to address tax parity with traditional vehicles.
The Role of Private Financing in Transportation Investment
In 2023, federal, state and local governments spent nearly $350
billion on highways and mass transit infrastructure with the federal
government responsible for roughly 25% of this spending, largely
through the Highway Trust Fund \5\. While the federal government
supports transportation investments in a variety of ways, outside
direct grants from the Highway Trust Fund (i.e. TIFIA and Private
Activity Bonds), the role of private financing and public-private
partnerships (P3s) has grown in interest to help close the gap between
limited public infrastructure spending and need. The federal government
and states have enabled P3 projects in a variety of ways over the past
few decades, however the U.S. still lags many other developed countries
in utilizing P3s. While progress is being made, the federal government
can do more to be a willing partner to embrace the private sector's
drive for innovation and efficiency in transportation project delivery.
---------------------------------------------------------------------------
\5\ Public Spending on Transportation and Water Infrastructure,
1956 to 2023. (2025, February 26). Congressional Budget Office. https:/
/www.cbo.gov/publication/60874.
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Public-Private Partnerships (P3s)
Public-Private Partnerships (P3s) have been used for centuries, but
their modern application in infrastructure financing gained momentum in
the late 20th century. Historically, P3s were employed in colonial
charters, toll roads, and early railroads in the U.S. The 1990s and
2000s saw a global surge in P3 adoption, particularly in Canada, the
U.K., and Australia, where governments encouraged private investment in
public infrastructure. In the U.S., P3s became more prominent as
infrastructure needs have outpaced the public sector's ability to
maintain and improve assets, and with federal financing programs, such
as the Transportation Infrastructure Finance and Innovation Act (TIFIA)
and private activity bonds (PABs), supporting their expansion.
P3s involve a long-term agreement between a government agency and a
private entity to finance, build, operate, and maintain infrastructure
projects. The private sector typically provides upfront capital, while
the public sector ensures regulatory oversight. Common P3 models
include:
Design-Build-Finance-Operate (DBFO)--The private partner
handles all aspects, with revenue generated through tolls or fees.
Build-Operate-Transfer (BOT)--The private entity operates
the project for a set period before transferring ownership to the
government.
Lease-Develop-Operate (LDO)--The government leases an
asset to a private firm for upgrades and operation.
P3s have been used in various sectors, including transportation,
water systems, and public buildings, and offer owners an opportunity to
maximize and extend their limited public funding. Many states fund
their transportation investments with a pay-as-you-go model where costs
are covered by current revenues, rather than by borrowing or
accumulating debt. While this can reduce the burden of debt on
taxpayers, it also limits the ability for states and localities to fund
large or complex projects that may dwarf their current revenues.
In 2023, Tennessee passed the Transportation Modernization Act
(TMA) which gave TDOT authority to enter into P3s to address urban
congestion, while freeing up funding to invest in rural communities
\6\. The state allocated $3 billion in state funding into identified
critical corridors to add ``choice lanes'' in each direction which will
be financed and operated by a concessionaire. It is estimated that
Tennessee's initial investment into the concession will result in a 3-
to-5-fold return in the form of transportation infrastructure
improvements.
---------------------------------------------------------------------------
\6\ Transportation Modernization Act. (2025, April 25). Tennessee
Department of Transportation. http://tn.gov/tdot/build-with-us/
transportation-modernization-act.html
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Since Congress established tax-exempt PABs and low-interest-rate
TIFIA loans, the large majority of U.S. P3 projects have used one or
both financing methods to leverage private investment on more
advantageous terms than in the commercial market. These long-term and
flexible financing options are invaluable tools for making P3s and
transportation projects a reality. We strongly urge this Committee to
make both financing programs more accessible so states and localities
can accelerate project delivery of critical transportation projects.
P3s can accelerate project delivery by removing delays typically
associated with traditional government funding and can create
sustainable funding sources through tolls or other fees. P3s leverage
private sector investment reducing taxpayer burden and transfer of risk
to the private sector while encouraging cost saving innovation and
efficiencies through value engineering.
However, P3 contracts can be complex with lengthy and legally
intricate negotiations and may not be suitable for all types of
projects. Private financing can result in more expensive projects due
to risk coverage and some P3s have lacked transparency on pricing and
service quality. All told, P3s are investment partnerships that require
good faith negotiation between the private and public sectors to
maximize benefit for the traveling public.
Conclusion
Congress should continue to provide--and reauthorize as needed--the
current array of formula funding, federal grants, loans, loan
guarantees, and bonding options to help state DOTs and local project
sponsors.
Above all else, Congress should seek to adhere to the ``user pays''
principle and do its best to provide our nation with a robust Highway
Trust Fund.
Recent surface transportation laws have not solved the enduring
Highway Trust Fund dilemma, but the Infrastructure Investment and Jobs
Act (IIJA) did find a bipartisan solution through the use of advanced
appropriations to help communities fund critical infrastructure. The
U.S. infrastructure funding gap is well known, with the American
Society of Civil Engineers 2024 Bridging the Gap study finding an over
$3.5 trillion investment gap just to reach of state of good repair
across all infrastructure modes \7\. However, inflationary pressures
and rising materials and project costs are forcing communities to cut
back on their programs. We urge this Committee to continue to work
together and seek out funding sources outside of the federal fuel tax,
including the use of advanced appropriations, to ensure the solvency of
the Highway Trust Fund and to drive economic growth and improve the
safety of our nation's transportation system.
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\7\ 2025 Report Card for America's Infrastructure. (2025). American
Society of Civil Engineers. https://infrastructurereportcard.org/
economics/.
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Thank you again Chairmen Graves and Rouzer, Ranking Members Larsen
and Holmes Norton, and Members of the Subcommittee for the opportunity
to testify.
I look forward to your questions.
Mr. Rouzer. Mr. Tomer.
TESTIMONY OF ADIE TOMER, SENIOR FELLOW, BROOKINGS INSTITUTION
Mr. Tomer. Chairman Rouzer, Ranking Member Norton, and
members of the Subcommittee on Highways and Transit, thank you
for the opportunity to testify before you today.
My name is Adie Tomer. I am a senior fellow at the
Brookings Institution here in Washington, DC.
I want to start by noting that my remarks today, plus my
written testimony, strictly represent my personal views and do
not in any way reflect the views of the Brookings Institution,
its other scholars, employees, officers, or trustees.
This hearing comes at an opportune time. The Highway Trust
Fund is one of the most powerful fiscal instruments in your
investment toolbox. Its unique design allows lawmakers to
approach investment through multiyear cycles, the same approach
used by the State and local owners of our surface
transportation network.
The trust fund delivers not just funds but certainty, and
the net effect has been a transformation in how people and
goods move across America. Said plainly, the trust fund itself
is a national asset.
Still, the trust fund is just a tool. It doesn't
differentiate between where gasoline and diesel were consumed.
The trust fund isn't codified to advance any specific economic
competitiveness goals you may have. It is only there to support
the execution on your congressional program priorities.
This next reauthorization presents another opportunity to
adopt investment policies that will promote economic
competitiveness for generations to come.
The Highway Trust Fund will continue to be a powerful tool
to achieve that overarching objective, especially if it is
coupled with targeted improvements to what it funds and how it
distributes that funding. I have three high-level
recommendations to that end.
First, it is vital to keep investing more in the network.
We spend generations building out all our roads and rails, and
the roadways alone are now worth over $5 trillion, according to
the BEA. All those facilities interweave to move over 1 billion
person-trips and over 55 million tons of freight every day. It
is in our best interest to keep maintaining and modernizing
that network.
Yet, Congress is actually falling short of its past
commitments. Even with the IIJA money now coursing through the
system, the share of GDP that Congress spends on highways and
transit is below the average from 1991 to 2023, and it would
look even worse if we went back to 1956.
Not only is spending falling behind, but significant
inflation within the construction industry means we have lost
purchasing power, too.
This is a missed opportunity. Per CBO's own research, when
Federal grants increase, State and local governments actually
spend more on surface transportation infrastructure, too.
Second, it is critical to rethink where and in what the
Federal Government invests. Multiple sections in chapters 23
and 49 of the U.S. Code have enshrined national goals for the
country's surface transportation network, including: promoting
system reliability, improving safety, supporting regional
economic development, and reducing project delays.
Multiple of those areas deserve extra attention, including
our persistently bad safety record and how Federal compliance
impacts project delivery timelines.
But I want to call particular focus today to our local
roadway network. Per our recent research at Brookings, 49
percent of locally owned principal arterials--again, these are
main roadways--are in poor condition, compared to 7 percent of
mileage on similar State-owned roads.
One of the likely causes is fiscal extraction. Even though
locally owned roads carry 34 percent of all VMT in the country,
a relative proxy for many of the trust fund's revenues, current
rules apportion all of their gas tax receipts to States. This
annual subsidy is hurting system reliability and limiting
economic development, but more direct regional funding could
address it.
Finally, the Congress should use spending targets and
programmatic reforms to inform your consideration of new
revenues.
The United States is incredibly fortunate to have the
fiscal capacity to invest at the scale we need and to have
access to a range of instruments to reach our spending targets.
Just as importantly, the menu of policy responses is well-
established and thoroughly researched. Vehicle registration
fees, road user charges, and private financing instruments are
all viable options alongside established alternatives, such as
increasing gas taxes or transferring General Fund revenues. The
challenge is building consensus and selecting fiscal
instruments that match your goals.
I recommend Congress set up a bipartisan working group to
pool your published knowledge and then use that working group
to address thorny questions, like tax incidence, compliance
cost, and spending timelines.
To conclude, the trust fund is well suited to channel
investment dollars. Yet, it would be a wasted opportunity if
Congress did not couple considerations of new revenue with
efforts to rethink how the country measures need, who controls
the funding, and the process by which funding recipients comply
with Federal rules.
Thank you again for the opportunity.
[Mr. Tomer's prepared statement follows:]
Prepared Statement of Adie Tomer, Senior Fellow, Brookings Institution
Chairman Rouzer, Ranking Member Norton, and members of the
Subcommittee on Highways and Transit of the Committee on Transportation
and Infrastructure, thank you for the opportunity to testify before
you. My name is Adie Tomer and I'm a senior fellow at the Brookings
Institution. I want to emphasize that my written remarks--plus what
we'll discuss during the hearing--are strictly my personal views and do
not in any way reflect the views of the Brookings Institution, its
other scholars, employees, officers, or trustees.
This hearing comes at an opportune time. The Highway Trust Fund is
one of the most powerful fiscal instruments in the federal government's
investment toolbox. The Trust Fund's unique design allows federal
lawmakers to approach investment through multiyear cycles, which is
exactly what state, regional, and local owners of physical
infrastructure assets need to plan and invest with confidence. Decades
of steady use of the Trust Fund's design have helped catalyze
significant improvements in the country's surface transportation
network, making a profound impact on how people and goods move across
America. Said plainly, the Trust Fund is a national asset.
At the same time, Congress and the extensive stakeholder community
know that the Trust Fund needs mechanical improvements. Revenues have
failed to keep up with outlays for over two decades. Fortunately, the
menu of policy responses is well established and thoroughly researched.
Vehicle registration fees, road user charges, and private financing
instruments are all viable options alongside established alternatives
such as increasing gas taxes or transferring general fund revenues. The
federal government has the capacity to shore up the Trust Fund and a
proven record of doing so.
However, deciding on mechanical solutions would be short-sighted if
not married to candid debate around what kinds of investments the Trust
Fund should support and the aggregate level of investment the country
needs. The federal government is already falling behind historic
investment levels, which has the knock-on effect of reducing total
state and local investment too. Meanwhile, emerging challenges such as
a poor roadway safety record should force a fresh look at what national
goals we're failing to achieve and what kinds of spending would better
address the performance gaps.
As this Committee and your peers take the lead on surface
transportation reauthorization, you have a profound opportunity to
adopt investment policies that will create more economically dynamic
and secure communities for generations to come. The Highway Trust Fund
is a powerful tool to help achieve that overarching goal, especially if
coupled with targeted improvements to what it funds and how it
distributes that funding.
Why America needs to continue investing in surface transportation
It's important to start with exactly why surface transportation
matters so much to our economy and society. Every day, all of our
streets, highways, rail lines, and intermodal facilities accommodate
over 1 billion trips and move over 55 million tons of freight.\1\ Even
the country's $526 billion in international goods traded by maritime
and air freight in 2023 wouldn't be possible without surface
transportation network links to their local producers and consumers.\2\
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\1\ Adie Tomer and Ben Swedberg, ``Connecting the DOTs: A survey of
state transportation planning, investment, and accountability
practices'', Brookings Institution, 2024. Available online at: https://
www.brookings.edu/articles/connecting-the-dots-a-survey-of-state-
transportation-planning-investment-and-accountability-practices/
[accessed April 2025].
\2\ Bureau of Transportation Statistics; see: https://data.bts.gov/
stories/s/Moving-Goods-in-the-United-States/bcyt-rqmu/
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Most of that surface infrastructure is publicly owned and a
testament to the collaborative nature of America's federalist system.
States predominantly own major roadways such as the federal interstate
highways, but many also own transit systems, intercity rail, and other
surface assets. Localities own even more assets, including almost half
(44%) of the country's federal-aid highway system and the vast majority
of transit systems.\3\ The Bureau of Economic Analysis values the
country's government-owned highway and streets structures at $4.94
trillion, and that doesn't even include all the various transportation
equipment owned by public agencies or other private and public
transportation structures.\4\
---------------------------------------------------------------------------
\3\ Adie Tomer and Ben Swedberg, ``Highway shakedown: How local
road users are subsidizing state highway investments'', Brookings
Institution, 2025. Available online at: https://www.brookings.edu/
articles/highway-shakedown-how-local-road-users-are-subsidizing-state-
highway-investments/ [accessed April 2025].
\4\ Table 7.1, Fixed Asset Account Tables, 2023, Bureau of Economic
Analysis
---------------------------------------------------------------------------
While the federal government owns very little of the physical
network, federal lawmakers have long understood the national imperative
to invest in other's assets. Multiple sections in Chapters 23 and 49 of
the United States Code have enshrined national goals for the country's
surface transportation network, including promoting system reliability,
improving safety, supporting regional economic development, and
reducing project delays. National law is clear: The federal government
should use its fiscal resources to make direct investment in the
network and induce more investment by state and local peers.
That grand investment effort is never complete, though, because the
network itself will perpetually need improvement and the demands placed
on the entire system will always change with time. Recent indicators
underscore just how pressing today's investment needs are, both on the
network itself and for the households and businesses that depend on it:
States successfully built out the interstate highway
network during the second half of the 20th century, with the Trust Fund
largely underwriting the effort. Now local roads are suffering; per
recent Brookings research, 49% of locally owned principal arterial
mileage--America's major roadways--is in poor condition, compared to 7%
of mileage on similar state-owned roads.\5\
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\5\ Tomer and Swedberg, 2025.
Certain transit system components need upgrades to reach
a state of good repair, including 14% of vehicles and 17% of
systems.\6\ In total, the U.S. Department of Transportation (USDOT)
estimates the replacement cost (otherwise known as the ``reinvestment
backlog'') for transit assets falling below the state of good repair at
over $100 billion.
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\6\ U.S. Department of Transportation, see: https://
www.fhwa.dot.gov/policy/25cpr/pdf/CP25_Full_Report.pdf#page=53
Even after constant focus among government officials at
all levels, roadway injuries and fatalities are still stubbornly high.
Fatalities alone increased by nearly 10,000 per year in the decade
leading up to 2022.\7\
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\7\ This is as reported by the Federal Highway Administration's
2022 Highway Statistics, and includes data since 1967.
The growing quantity of extreme weather events--which
keep costing the country more each decade--have begun to impact surface
transportation assets. The washing away of vital arteries in North
Carolina, regularly submerged roads in Miami, and melted transit cables
---------------------------------------------------------------------------
in Portland, Ore. all demonstrate the need to harden essential assets.
Addressing the country's maintenance needs and contemporary
challenges requires significant fiscal commitment. The Infrastructure
Investment and Jobs Act (IIJA) did increase nominal spending, but even
those funds are failing to keep up with historic averages. When
comparing nominal federal spending on highways and transit to gross
domestic product (GDP)--a way to control for economic era--the most
recent year was below average spending from 1991 to 2023, and even
worse if looking at averages back to 1956.
Federal spending is especially important because it induces further
spending by state and local governments, particularly on highways. The
Congressional Budget Office's research found that ``state and local
governments reduce their own per capita spending on highway capital by
26 cents for an additional dollar of annual federal formula grants;
that finding is toward the lower end of a broad range of estimates in
the existing literature. The rate of substitution decreases as state
and local governments run larger deficits, such that, all else being
equal, those governments spend more of their own funds on highways when
federal grants increase [emphasis added].'' \8\
---------------------------------------------------------------------------
\8\ Sheila Campbell and Chad Shirley, ``Fiscal Substitution in
Spending for Highway Infrastructure'', Congressional Research Service,
2021. Available online at https://www.cbo.gov/system/files/2021-10/
57430-Fiscal-Substitution.pdf [accessed April 2025].
---------------------------------------------------------------------------
The Highway Trust Fund is a national asset--and a range of revenue
sources can support long-term solvency
Federal legislators gave future lawmakers a great gift in 1956.
Establishing the Highway Trust Fund separated many federal
transportation programs from the annual appropriations negotiations
that most domestic discretionary spending programs must navigate. For
the seven decades since then, Congress has continued to use multiyear
authorizations to deliver the kinds of guaranteed funding that
complement the capital budgeting approach and lengthy construction
cycles used by their state and local partners. Passing those multiyear
authorizations depends on a solvent Highway Trust Fund, meaning there
are enough available funds with the highway and mass transit accounts
to cover multiple years of committed federal expenditures.
Maintaining a solvent Trust Fund has always required lawmakers to
closely follow changes in the marketplace and adopt revenue-related
reforms when necessary. Over the Trust Fund's first five decades, the
addition of millions of new drivers, the stretching of average trip
distances, and the dramatic rise in trucking volumes all boosted
gasoline tax and other revenues that effectively get deposited directly
into the Trust Fund. Yet even with those market developments, lawmakers
still needed to increase the gas tax multiple times between 1956 and
1993 to keep up with proposed spending.\9\
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\9\ ``The Federal Excise Tax on Motor Fuels and the Highway Trust
Fund: Current Law and Legislative History'', Congressional Research
Service, 2016. Available online at https://crsreports.congress.gov/
product/pdf/RL/RL30304 [accessed April 2025].
---------------------------------------------------------------------------
The market patterns and revenue responses shifted in the 21st
century, but maintaining the investment power of the Highway Trust Fund
has not wavered. Average trip distances stopped growing at the same
rate, the rate of new drivers slowed, and greater fuel efficiency all
led to missing expected revenue targets. The emergence of electric
vehicles only accelerated the reduction in relative gas tax
returns.\10\ And while legislators continued to increase nominal
spending in reauthorizations, they chose not to increase the gas tax or
adopt new direct revenue sources to make up the revenue-spending gap.
Instead, Congress chose general fund transfers as their preferred
method to keep the Trust Fund solvent.\11\
---------------------------------------------------------------------------
\10\ Julie Hotchkiss and Kalee Burns, ``Electric Vehicles,
Potholes, and Taxes: Who Pays the Price?'', Federal Reserve Bank of
Atlanta, 2023. Available online at https://www.atlantafed.org/-/media/
documents/research/publications/policy-hub/2023/07/11/04--electric-
vehicles-potholes-and-taxes--who-pays-price.pdf [accessed April 2025].
\11\ ``Funding and Financing Highways and Public Transportation
Under the Infrastructure Investment and Jobs Act (IIJA)'',
Congressional Research Service, 2023. Available online at https://
www.congress.gov/crs-product/R47573 [accessed April 2025].
---------------------------------------------------------------------------
Relying on general fund transfers has caused consternation among
many stakeholders, but it's worth recognizing that every decision made
by past bill authors adhered to the same general principle: The federal
government is a more helpful investor in surface transportation
networks when it can tap the multiyear spending authority the Highway
Trust Fund unlocks. Whether it's general fund transfers, increasing the
gas tax, or using any number of other fiscal instruments, maintaining
Trust Fund solvency will always require some level of debate and
eventual agreement among federal lawmakers.
That's exactly where this current Congress now sits as it starts
the next reauthorization process. Per a January update from the
Congressional Budget Office, the Trust Fund could easily face a $180
billion total shortfall over the next five-year authorization.\12\
Continuing to deliver the scale of investment the country needs--and
doing so through the Trust Fund model--will require this Congress to
understand revenue alternatives and consider how those work in
different combinations.
---------------------------------------------------------------------------
\12\ Highway Trust Fund Accounts, Congressional Budget Office,
2025. Available online at https://www.cbo.gov/system/files/2025-01/
51300-2025-01-highwaytrustfund.pdf [accessed April 2025].
---------------------------------------------------------------------------
We certainly are not short on fiscal instruments to choose from.
There are multiple proposals circulating to add national vehicle
registration fees, some of which apply to all vehicles and some of
which would only apply to electric vehicles. A road user charge, or
vehicle miles traveled (VMT) fee, is continuing to be tested
domestically and abroad. The gas tax could easily be raised either as a
flat amount or through a new indexed system. Lawmakers could adopt a
targeted sales tax to tap the steady growth in e-commerce. Even with
inconsistent performance, there are still some individuals asking to
use even more private financing models to extend the reach of public
funds. Finally, the general fund will continue to be available. All of
these alternatives have their merits, and various combinations could
address long-term revenue needs.
Fortunately, there is also no shortage of available research on how
each of these alternatives work in practice. Industry experts and
independent researchers can all help you answer critical but thorny
questions under each. For example:
How would each instrument spread tax incidence among
different households, businesses, and geographies?
What are the compliance costs to ensure any new vehicle
registrations system can minimize fraud and avoid double-charging
owners vis-a-vis state laws?
Road user charges are the ideal instrument for many, but
what are the realistic timelines to establish a national system and
what kinds of complementary policies (such as a national ID) are
necessary to make it work?
I recommend Congress set up a serious, bipartisan working group to
pool published knowledge, address those thorny questions, and share the
results with the public. The group's mandate should be narrow: to
provide unbiased information on how well each revenue instrument could
support multiyear federal funding for surface transportation. One model
for this approach would be a more streamlined version of SAFETEA-LU's
fiscal study commissions. If executed well, the group can help build
trust among lawmakers--and trust has always been an invaluable
ingredient in Congress' ability to pass bipartisan surface
transportation authorizations.
Spending policies will continue to determine the Highway Trust Fund's
real-world impact
The Highway Trust Fund is an invaluable tool for federal lawmakers,
their state and local counterparts, and the broader transportation
industry. But it's still just a tool. The Trust Fund itself doesn't
differentiate between where gasoline and diesel were consumed. The
Trust Fund isn't codified to advance any specific economic
competitiveness goals. It's simply there to facilitate execution on
congressional priorities through formula funding programs.
That's why any debate around the Trust Fund's solvency isn't just
about fiscal mechanics. The first-order questions revolve around
measuring our progress against established national goals, considering
what kinds of projects will help address deficiencies, and determining
where those investments should take place. Answering those difficult
questions will help to estimate total investment needs and how much
revenue is needed to fill that gap.
I applaud this Congress for initiating conversations to answer
those first-order questions, including through public hearings such as
this one. Since this specific hearing is focused on Trust Fund solvency
and capabilities, there are three specific areas that I recommend
Congress address:
1) Eliminate the local to state subsidy.\13\ From 1956 through the
end of the century, Congress and the states perfected a system to
capture revenue from the growing pool of drivers to build highways
mostly from scratch. The resulting 160,000-mile network is still
instrumental in promoting goods trade and shortening trip times across
the country, making that network's maintenance an ongoing national
priority. Yet while that original build-out was essentially complete in
the early 1990s, the federal government is still generating tax revenue
from use of local roads but apportioning almost all spending to the
states.
---------------------------------------------------------------------------
\13\ Tomer and Swedberg, 2024.
With 34% of national VMT occurring on locally owned roads, the
current tax-and-spend system is fundamentally unfair to local
government officials and directly contributes to poor conditions on the
local roadways that every vehicle uses. Returning some Trust Fund
resources to localities and their shared regions is both a fairer
approach and a prudent response to the country's greatest maintenance
---------------------------------------------------------------------------
needs.
2) Improve asset management systems.\14\ Congress and state
departments of transportation (DOTs) deserve enormous credit for the
success of Transportation Asset Management Plans (TAMPs). Each plan
must include the state's asset management objectives, measures, and
targets for asset condition, with a particular focus on the national
highway system. State DOTs must also include investment strategies--
based on their analysis and asset management--that would support
improving asset conditions and achieving performance targets and
national goals. Since adopted in MAP-21, states are meeting those
requirements and bringing more accountability to the overall investment
process.
---------------------------------------------------------------------------
\14\ Ibid.
Congress will be able to stretch the reach of Trust Fund
dollars if they expand what TAMPs cover. Expanding monitoring to all
principal arterials will ensure state and federal officials have data
on all major roadways--enhancing the likelihood they'll prioritize
investment in roads irrespective of their owner. Federal law could also
consider setting a ceiling on recommended roadway quality, which could
help spread spending to more roadway segments each year. Congress can
reference innovations such as those in Maryland and Minnesota as
---------------------------------------------------------------------------
lawmakers consider specific reforms.
3) Manage the tensions between efficiency and compliance. It's
natural for people of every governing philosophy to apply their own
distinct views to how the federal surface transportation program should
operate. Those who are passionate about protecting against waste,
fraud, and abuse will want to ensure programs have the appropriate
safeguards and paperwork to match. Those concerned with long-term
actuarial costs will want project selection to account for
environmental risk exposure. Those who believe public spending should
support domestic industries will want to add related elements to
spending decisions. All these ancillary priorities can easily be
defended, mostly because there is a moral position underpinning each.
However, lawmakers must be clear-eyed: Every additional
compliance step creates a greater degree of friction on how quickly
federal capital can be mobilized to support construction, procurement,
and other essential activities. The issue is more pressing because the
transportation industry has faced steep inflation over the past few
years, which is already limiting the purchasing power of each public
investment dollar. Federal lawmakers should closely monitor how much
specific spending rules align with their ambitions for each formula
spending program.
Conclusion
The United States has the capacity to keep investing enough in our
surface transportation network to promote national economic
competitiveness and security--and the Highway Trust Fund is a well-
suited tool to channel investment dollars to where they will advance
such national goals. Yet it would be a wasted opportunity if Congress
did not couple considerations of new revenue with efforts to reform how
the country measures need, who controls the funding, and the processes
by which funding recipients comply with federal rules.
Mr. Rouzer. Well, thank each of you very much.
We will now turn to questions from the panel. I will
recognize myself for 5 minutes for questions.
I will start with Mr. Johnson.
It was great to be with you back home in North Carolina
when we went and toured the project you are working on there on
I-95. And, by the way, I think we have been working on I-95
since I was born.
But in any event, talk to us a little bit about the
importance of trust fund solvency in terms of timelines and
sustainability, just the importance of keeping projects on
task.
Mr. Johnson. Thank you, Congressman Rouzer, for that
question, and also for your time in coming to visit with us and
to our plant and see our paving operations on I-95. It was a
privilege to be able to do that.
So my two biggest concerns as president of Fred Smith
Company are the safety of our employees and to make sure that
we have enough work for all of our employees.
The Highway Trust Fund in North Carolina provides about 25
percent of the funds needed to fund the DOT road program. So
that 25 percent is very critical to our company and to our
employees.
The highway industry in North Carolina is sized--the number
of employees we have and the equipment and resources we have is
sized to maintain a certain dollar amount spent for the highway
program. And if the funds were to be reduced and the amount of
money coming in and available were to be reduced, that would
severely impact our industry.
That would mean that we would potentially have layoffs and
reduction in workforce, which would be devastating to our
company and our communities.
Also, knowing that that money is there and it is consistent
and it is sufficient and we know it is coming, allows us to
invest in our company and invest in our communities, whether
that be buying and installing, putting up new asphalt plants,
or buying more equipment, or expanding our offices, hiring more
employees, be willing to train our employees. Knowing that the
money is available and it's coming and it's dedicated is
critical for us to make those decisions.
The work we do is extremely expensive. The equipment and
the materials that we buy cost a lot of money. And with any
uncertainty if that work will be there to put that equipment
and those people to work, it makes us question whether we want
to grow and expand in our communities.
So in addition to those, the long-term effects, if we do
have a slowdown and the workforce shrinks, then when the work
does come around, if there is more work that comes later, it is
going to cost more. It is going to take longer, because the
workforce is going to be smaller. Just supply and demand. If
there is more work and we have fewer people, then it is going
to cost more, and the project is going to be delayed.
And that is just talking about our company. When you are
looking at what it means to our communities and the traveling
public, without having that funding to be able to keep up with
the demands in our State, whether it be people who live in our
State or people who just transit through our State, it really
impacts the mobility, the ride quality. We can't maintain
roads.
So just having the Highway Trust Fund solvent, knowing that
it is there and that our DOT can plan out the work and know
that the money, the funds will be available when the time comes
to build it, that we can count on those jobs being there and
the opportunities are there, this means so much for our
planning of our resources and our labor force that when there
is doubt with our State or with our company, it just makes it
challenging to grow and to invest.
So the renewal of the Highway Trust Fund, it's critical to
our employees and our communities.
Mr. Rouzer. Thank you very much. You covered it well.
Mr. Braceras, let me ask you. Utah is a growing State.
North Carolina is a growing State. How have you traversed the
pitfalls, all the pros and cons of addressing your issues
there?
Mr. Braceras. Thank you, Mr. Chair.
Growth is so exciting, but it is also one of the biggest
concerns our citizens have, the rate of growth.
And Utah is a little--we like to say we are unique, and
some people might roll your eyes at that. But we are a very
urban State, believe it or not. We are the seventh most
urbanized State in the country, because 65 percent of the land
in Utah is owned by the Federal Government.
So we have amazingly beautiful places to go recreate in.
But our growth is all concentrated on basically what we call
the Wasatch Front. And what we are seeing with that explosive
growth is a concern both from the quality of life that
everybody is experiencing, and congestion has been one of the
rising concerns.
So the ability to plan and get projects ready to go is
really critical, and that is I think what Mr. Johnson was
talking about. We all, States, have a 5-year plan of projects
because it takes a long time to deliver those projects. We know
for every section of road, we have a plan for every section of
pavement in our State, every bridge in the State.
And if we can deliver those projects when it is needed
most, we follow the deterioration curve of a pavement, and we
say, you know what, we could make an investment, a lower cost
investment at the right time, and we could stretch out the life
of that roadway.
So if we----
Mr. Rouzer [interrupting]. I will need to shut you down
there. I don't want to go too far over time since I am chairman
and have to keep everybody else in line.
But anyhow, thank you. You can weave your answer into some
other questions when you have a little more time later.
Ms. Norton.
Ms. Norton. Thank you, Mr. Chairman.
Mr. Braceras, under your leadership, the Utah Department of
Transportation is working to increase ridership on the
FrontRunner commuter rail line. This transit project will help
meet the demands of rapid population growth in Utah by
providing an alternative to driving along a crucial corridor.
To do so, the FrontRunner project will need more than $1
billion in Federal capital investment grant funding. Should
Congress consider bringing the CIG program into the Highway
Trust Fund to further the program's reliability across surface
transportation bills?
Mr. Braceras. Thank you, Ranking Member Norton, for that
question.
Like we mentioned earlier, the State of Utah is growing
really fast, and we feel like we have a three-legged stool to
address our mobility needs. One is, we are still continuing to
add capacity to the roadways. We need to increase our transit
usage.
And I appreciate you mentioning the FrontRunner project. It
is one of the most important projects we are working on with
our partners at Utah Transit Authority, as well as our partners
at the MPOs.
We are trying to take the service--right now, peak-hour
service is every 30 minutes, and we are trying to get to 15-
minute peak-hour service. And so that is why we feel very
positive about our ability to compete in the Capital
Improvement Grant program to be able to fully fund the
FrontRunner project, which we think is a critical project for
the 2034 Olympics that we have coming up.
In direct response to your question, ma'am, I think you are
going to have to look at--if you move it into the Highway Trust
Fund, something is going to have to give. And right now I think
we can demonstrate across this country there is more demand,
there are more needs in the Highway Trust Fund than we can even
fund right now.
So we are comfortable competing with where the CIG program
is currently today, and we think we are going to be able to
deliver--well, we know we are going to deliver that project
prior to 2030.
Ms. Norton. Mr. Davis, public transit benefits everyone by
reducing air pollution, easing congestion for drivers,
connecting people to essential services, and providing good-
paying jobs. However, Congress routinely hears calls to save
money by eliminating the Mass Transit Account from the Highway
Trust Fund.
Why would this fail to solve the Highway Trust Fund's
solvency problem? And how would it harm transit?
Mr. Davis. Thank you, ma'am.
Traditionally, there was a traditional rural bias in the
highway program from day one back in 1916. Urban highways used
to be illegal under Federal law till about 1944. They couldn't
use Federal money. And the rural bias of the program still
exists to some extent because you got to have roads through a
long stretch of nowhere that connect big city A to big city B.
The highway guys resented, I believe, mass transit, letting
them into the system originally, because the program as it was
in the 1970s and 1980s was much more about the 10 or so big
legacy cities that had existing rail systems.
Since then, under Senator Shelby in particular, the transit
system has branched out a lot, a lot more emphasis on transit
in midsize and smaller cities, rural bus service, things like
that, trying to deliver more specific usability to rural areas.
But the fact that political parties have gotten polarized,
and population density is now as good a metric as you can find
for political polarization, hasn't really helped things. But
regardless of why people may have been opposed to mass transit
out of the trust fund in the first place, the fact is that
outlays have grown so great now that it wouldn't fix things.
On page 9 of my testimony, I did a hypothetical where if
you threw mass transit and motor carrier safety and highway
safety out of the trust fund and then went through just
highways and got rid of all the congestion relief, Green New
Deal stuff, alternatives, bike paths, anything, you are still
$9\1/2\ billion short in 2026 of having the Federal Highway
Administration by itself sufficient on the entire existing
system of taxes.
So the days of when throwing the nontraditional, noncore
highway programs out would have balanced things have long since
passed us by.
Ms. Norton. My time has expired.
Mr. Rouzer. Mr. Crawford.
Mr. Crawford. Thank you, Mr. Chairman. I appreciate you
conducting this hearing today.
Thank you to the witnesses here, as well.
As we all know, electric vehicles are notoriously heavy by
comparison to the combustion engine vehicle counterparts. As we
have seen over the last several years, the production of EVs is
continually rising, resulting in more on the road. So more on
the road means more wear and tear on our infrastructure.
And I am all for vehicle choice, and I wouldn't tell
someone what car they can or can't purchase. But I have some
concerns about the fact that currently there is no model for EV
owners to pay into the trust fund that actually pays for the
wear and tear imparted on those roads. And I think we just
can't sustain that level of fatigue. It is unfair to the rest
of the drivers who continue to pay into that system.
So I wondered if you could speak on how having EV owners
pay their share into the Highway Trust Fund can address that
discrepancy.
Mr. Braceras, we can start with you if you want to weigh
in.
Mr. Braceras. Yes.
So going back to 2003, 2004, the Utah Legislature was
asking this same question, and that is when the legislature
made a decision that we wanted to proceed forward with finding
a way to implement a road usage charge, and it was about the
principle of fairness.
And so we have been doing pilots over the years. In 2020,
we did launch our road usage charge program. And the way this
was done was the legislature imposed a $140 a year fee--
registration fee, we will call it--on electric vehicles. And if
they chose to participate in the road usage charge program--so,
choice--then they could waive that fee, and they would be
charged on the actual miles that they drove.
The marketing slogan we used at the time, because we were
worried if people would participate, was: if you drive less,
you pay less. And we capped it at the $140, that maximum fee.
Mr. Crawford. I have got to tell you, that is a real
bargain, $140 on the front end versus what they would pay, what
gas burners are paying, diesel burners are paying. That seems
like everybody would be jumping out there and saying, ``Yes,
sign me up.''
Mr. Braceras. Yes. If I may, Mr. Chairman.
It is, we figure, about $100 less than what a gasoline
operator would pay for that same usage.
Mr. Crawford. Wow. I don't know how you arrived at that
number necessarily, but it seems like a heck of a bargain for
EV users to be able to pay at that low rate on the front end.
But that is something that we can discuss.
I guess another concern that I have is, Mr. Braceras, you
stated in your testimony the privacy component to implementing
the user-pay system and how important it is for ensuring
privacy safeguards. We all talk about that, privacy, but guess
what? We are all carrying these around [indicating cell phone].
These are the transponders that mark everybody in the room at
any given time.
And so, we are having the conversation about, ``Well, I
want to safeguard my privacy,'' and yet, we are walking around
having that conversation while we have got one of these
[indicating cell phone]--or two--in our pockets at any given
time.
So how do we balance that? I fully get it. I serve on the
Intel Committee. I get the risk associated with that, sharing
data with various entities. How do we bridge that gap, number
one?
Number two, if we are talking about vehicle-miles traveled,
how do we do it in a way that is conscious of the fact that it
could create a cash flow problem? Because right now, we pay as
we go. User pays, yes, the current model, we pay as we go. So
we don't really feel it.
But if we are paying that, vehicle-miles traveled after the
fact as we go in to register our vehicles, now we are talking
about for working folks you are going from maybe $65 in some
States to register your vehicle to maybe $1,600, because now
you are paying for the miles in arrears.
How are we going to address that?
Mr. Braceras. Well, one of the things that we are doing if
you opt into our road usage charge program, we can do it by
monthly payments.
And to touch on privacy real quick, there is a different
standard between the way the public looks at privacy with a
private company, my phone company, versus the way people think
of Government. You would think we would trust our Government
more, but that is not the case.
So, we think it is really important to always lead with
privacy, talk about your principles, and talk about how you are
going to protect it, how important that is.
Mr. Crawford. Thank you. I appreciate that.
I have got a lot of other topics I would like to address,
but I have only got 30 seconds. So, I am going to give you that
30 seconds back, Chairman.
Mr. Rouzer. I thank the gentleman.
Mr. Johnson, you are recognized.
Mr. Johnson of Georgia. Thank you, Mr. Chairman, and also
Ranking Member Norton, for convening this hearing, and thank
you to the witnesses for your testimony.
Every day, Americans are stuck in traffic, stranded by
failing transit, and forced to risk their safety on crumbling
roads and bridges. When local roads are ignored, it's not the
powerful who feel it first; it's the working class, the people
who can't afford a second car or a detour, who feel it first.
We were promised an administration that would put people
first, and instead, the American people received cuts to
funding, chaos, and complete disregard for the rule of law.
That neglect continues to leave bridges collapsing, buses
breaking down, and opportunities out of reach.
But it didn't just start 100 days ago. The Grover Norquist
``no new tax'' pledge, called the Taxpayer Protection Pledge,
has been in force since 1986. And since 1990, the majority, the
overwhelming majority of Republicans in Congress, most of whom
have signed on to that Taxpayer Protection Pledge, have refused
to vote for a tax increase.
So, in 1993, when the Highway Trust Fund increased to 18
cents a gallon for the gas tax, most Republicans voted against
it. And they have continued to vote against it each and every
time there has been an opportunity to increase it. And so that
18 cents per gallon was not indexed to inflation, so the money
is being eaten up. And that is what is causing our roads and
bridges to crumble.
And so now we have a proposal to produce some revenue into
the Highway Trust Fund by charging EV owners a $200-a-month
assessment, which--I am not disagreeing with that. I think the
EV owners should pay into the system.
But I wonder whether or not Grover Norquist is going to say
that that is a tax increase, and if he does--the same way he
has said that increasing the Highway Trust Fund is a tax
increase and he is opposed to it--my friends on the other side
of the aisle will be opposed to it also. And then we will
continue--while cutting taxes for the top 1 percent in this
country, we will continue to see our roads and bridges
crumbling because we are failing to invest.
We know what smart investment looks like. It means giving
communities the certainty to plan not just for the next
election, but for the next generation. It means ensuring local
governments aren't left to fight for scraps and that cleaner,
smarter transportation is part of the solution, not an
afterthought.
The future of our transportation system and the strength of
our economy depend on it.
Mr. Tomer, the Department of Transportation recently sent a
letter to grant recipients warning that it could pull Federal
funding from cities and States that don't align with its
interpretation of immigration enforcement or antidiscrimination
laws.
In practice, that means that if a community limits
cooperation with ICE or if DOT deems a local policy--DEI:
diversity, equity, and inclusion--discriminatory, it could lose
access to critical infrastructure funding for roads, bridges,
and transit systems. This raises serious concerns.
Mr. Tomer, how effective is it to tie transportation
funding to these kinds of legal and political debates?
Mr. Tomer. I appreciate the question, Representative.
I can't speak to the politicization of some of this, and I
am certainly not an immigration lawyer. What I can speak to in
an apolitical way is that delivering on projects and, as I
mentioned in my opening statement, the certainty that the
Highway Trust Fund promotes is good for economic development
for communities of all kinds----
Mr. Johnson of Georgia [interrupting]. Yes, but my question
has to do with these extraneous requirements having nothing to
do with transportation impinging and preventing transportation
projects from being funded. It's wrong, isn't it?
Mr. Tomer. I can't speak to what the----
Mr. Johnson of Georgia [interrupting]. Well, let me ask Mr.
Burkhard.
What do you have to say about it, sir?
Excuse me for interrupting, Mr. Tomer. I am running out of
time.
Real quick, Mr. Burkhard.
Mr. Burkhard. Yes. I would say that transportation programs
are funded by the Highway Trust Fund and are bipartisan
programs, and Congress' continued support for them showcases
how invaluable they are in improving our transportation.
Mr. Johnson of Georgia. Okay. So everybody is afraid to
cross Donald Trump. I get it.
But thank you all for your appearance today, and I yield
back.
Mr. Rouzer. Mr. Webster.
Mr. Webster of Florida. Thank you, Mr. Chairman, for having
this meeting. And it is certainly a timely subject, probably
the most important one we are addressing.
So, Mr. Johnson, you talked about some of the proposals
that are out there. How would you approach the various funding
proposals we have had before us regarding Highway Trust Fund
solvency?
Mr. Johnson. Could you repeat the question again?
Mr. Webster of Florida. Well, I will try to. I might have
forgotten what it was.
So, we have a lot of proposals out there regarding the
funding of transportation and the future of it. So how would
you approach the solvency of the transportation fund? How would
you do that?
Mr. Johnson. Well, thank you for that question.
The asphalt industry supports anything that allows the HTF
to retain its financial stability. We are agnostic to what
particular method it is.
The four that I laid out earlier that we have mentioned
are: raising the gas tax, fees for EV fees, vehicle-miles
traveled, or the tiered weight fees. Any four of those we would
be acceptable with.
Mr. Webster of Florida. So, you are not wed to any
particular proposal then, right?
Mr. Johnson. No, sir. Anything that adds funds so that we
can perform more of the work that we do for our communities, we
are for it.
Mr. Webster of Florida. Great.
So, Mr. Burkhard, how would you, kind of, approach a--if we
had an infrastructure bank--which we don't have, but if we did,
a Federal infrastructure bank--it leverages only private money;
no tax dollars in it--could you see that enhancing the funding
of the infrastructure of this country?
Mr. Burkhard. Yes. I believe an infrastructure bank could
be used to supplement a lot of the current funding tools. As
Mr. Johnson alluded to, there are many methods that,
collectively, can help fund our transportation improvements,
and we see that infrastructure bank is a good option.
And it also could signal the Federal Government's openness
and commitment to working with the private sector and would
also provide a clearinghouse that could attract eligible other
private financing.
So we see the infrastructure bank as one of many potential
solutions to address the funding challenges.
Mr. Webster of Florida. Thank you so much.
I yield back.
Mr. Rouzer. Ms. Brownley.
Ms. Brownley. Thank you, Mr. Chairman.
Mr. Chairman, I have been a member of the House
Transportation and Infrastructure Committee since 2015, and in
the over 10 years that I have served on this committee, we have
had several hearings about the need for long-term funding
solutions for the Highway Trust Fund.
In those 10 years, we have passed two prior surface
transportation authorization bills, the 2015 FAST Act and the
2021 IIJA, and in both of these bills, we were forced to rely
on general revenue transfers to shore up the Highway Trust
Fund.
But it is not just the last two surface transportation
reauthorizations that relied on this mechanism. As we have
heard in testimony today and many times before, Congress has
not raised the gas tax since 1993, which is the primary source
of revenue for the Highway Trust Fund, and the revenues coming
into the trust fund have not kept pace with outlays since 2001.
But here we are again, having the same conversation about
the problem, while the House Ways and Means Committee, which
has jurisdiction over the revenues, has been unable to come up
with a solution. So, I really wish we were having a joint
hearing with Ways and Means. It might be more productive.
Another alternative that I think we should consider is a
change to the House rules to give the House Transportation and
Infrastructure Committee jurisdiction over the revenue piece of
the Highway Trust Fund. Maybe then we could really make some
headway on a long-term solution.
Until we find one, it seems we may be doomed to repeat the
same hearing every couple of years like the movie ``Groundhog
Day'' where nothing ever changes until we flip the script and
make radical, positive changes.
Yesterday, I went on the House Ways and Means website and
searched for the words ``Highway Trust Fund'' to find the date
of their last hearing on this subject. Would you be surprised
to know that the search returned not a single result?
Does anyone know when the last time was that the House Ways
and Means Committee had a hearing focused specifically on
Highway Trust Fund? I am asking any of you who are testifying
here today.
Mr. Davis. There was one around 2004, I think.
Ms. Brownley. And what did they conclude?
Mr. Davis. They wound up not recommending a significant
rate increase, although there was some weird stuff with the way
the ethanol was taxed. They found things around the edges and
found some extra dollars for the trust fund, much of which
wound back up in Bill Thomas' district as earmarks.
Ms. Brownley. Well, thank you. I don't think that--I think
my opinion, my argument here, still stands pretty firm, but I
will move on.
So, Mr. Braceras, I appreciate your testimony noting the
importance of the Olympics, and understanding both your State
and my State--I am from California--are both anticipating a
great, great Olympics.
But my question to you is, have you had any discussions
with the city of Los Angeles, the State of California, with
regards to awareness that the Federal Government needs to pitch
in here, understanding that I think both in Salt Lake City
ahead of the 2002 Olympic Games and in Atlanta ahead of the
1996 Games the Federal Government certainly provided resources
to ensure that we had success with the Olympic Games?
So have you had any further conversations with Los Angeles
with regards to upping the awareness around this issue?
Mr. Braceras. Yes, ma'am, we have. We all talk together, us
transportation geeks, and so we talk and leverage what we
learned in 2002. We have shared that with Los Angeles and with
the transit districts there as well. And we are going to
certainly have some folks on the ground there during the Games
to learn as well.
So we go back and forth. It is a good conversation.
Ms. Brownley. So are you getting any positive feedback from
the Federal Government with regards to additional funding to
support the Games?
Mr. Braceras. I know my delegation, the Utah delegation, is
very interested in helping Utah prepare for the 2034 Games. And
when we think about preparing it, we don't want to build
projects just for the Games. We look at the Games as an
operational event.
So we are going to look to the Federal Government for
support on things like security. We are going to have to bring
in a lot more transit vehicles, buses mostly. And so we look
for that support from the Federal Government. We received it
prior to 2002, and we expect to be successful going forward.
Ms. Brownley. Thank you.
I yield back, Mr. Chairman.
Mr. Rouzer. Mr. Babin.
Dr. Babin. Thank you, Mr. Chairman. Appreciate the hearing
today. And I am honored to be seated here on this esteemed
committee for another important round of surface transportation
reauthorization.
I am also glad that we are discussing the Highway Trust
Fund, the continued solvency of which is absolutely critical to
the longstanding health of our Nation's roads and highways and
bridges going into the future.
But--and my friends on the committee who have been here a
while know this--I am very concerned that my home State of
Texas is continuing to pay more than their fair share, more
than they get out of it. Texans receive a paltry 84-percent
rate of return on Highway Trust Fund programs, meaning that for
every dollar the State puts in, they only get 84 cents back.
Mr. Chairman, I look forward to working with you and my
other colleagues on this committee on the dais to try to
correct this issue.
With that said, I will move into my questions.
Mr. Burkhard, you note in your testimony that rural
residents in States like Georgia and Maryland would end up
paying less under a mileage-based user fee as compared to the
current gas tax.
Could you explain why a mileage-based fee works better for
rural communities?
Mr. Burkhard. Yes. Thank you for your question,
Congressman.
Many folks in the rural communities have vehicles that have
lower gas mileage--lower than, in some cases, 20 miles per
gallon. And so they pay quite a bit more in comparison to more
efficient vehicles, which tend to be people that are living in
suburban or urban communities. And so that is where the cost
differential happens.
And, interestingly, this is part of what we are finding in
working with States on their mileage-based-user-fee pilots, is
that education is essential to these programs to ensure that
people understand the result of the mileage-based user fee.
Dr. Babin. Thank you.
And just a followup: How can Congress act to make sure that
a mileage-based fee does not overburden our trucking industry,
who collectively log thousands of miles driven?
Mr. Burkhard.
Mr. Burkhard. Can you repeat the question, please?
Dr. Babin. How can Congress act to make sure that a
mileage-based fee does not overburden our trucking industry,
who drives thousands of miles?
Mr. Burkhard. Absolutely. Absolutely. Yes, a tiered program
that would address the weight of vehicles is what the mileage-
based-user-fee pilots are looking at, and so making sure that
that fair share is attributed as the vehicles put wear on the
transportation system. That is how we would feel that should be
approached.
Dr. Babin. Okay. Thank you.
And, Mr. Braceras, I am also concerned with the redtape
surrounding the deployment of projects in our rural areas. Do
you see any opportunities to streamline Federal requirements
tied to Highway Trust Fund dollars that would help rural State
departments of transportation to deliver projects more
efficiently and cost-effectively?
Mr. Braceras. Thank you for the question.
Dr. Babin. Yes, sir.
Mr. Braceras. Absolutely, there are always opportunities to
improve and streamline the way we deliver our projects.
We work closely with our local governments, and we actually
provide the technical expertise to help our governments deliver
those projects.
Now, other examples that we utilize is, where a local
government may want to do the project on their own, we do an
exchange for Federal dollars. So we will exchange 85 cents on
the dollar, and the local communities then can have the
flexibility to execute their projects the way they want. They
feel it is much more effective, and they can deliver those
projects faster.
So that is one tool that we utilize in Utah on an ongoing
basis.
Dr. Babin. I gotcha. Thank you.
Mr. Chairman, I yield back.
Mr. Rouzer. Mr. Garcia.
Mr. Garcia of Illinois. Thank you, Mr. Chairman and Ranking
Member, and, of course, all the witnesses here today.
It is clear that the Highway Trust Fund status quo is no
longer viable. The billions of dollars that Congress has
transferred from the General Fund to the Highway Trust Fund
since 2008 tells us as much.
All Americans are subsidizing driving, whether they
actually drive or not. And what have we received in return?
Lots of bad stuff. Traffic and congestion. According to INRIX,
a transportation analytics company, the typical U.S. driver
lost 43 hours in traffic in 2024.
Our communities also suffer from heavy pollution. The
American Lung Association estimates that 46 percent of all
Americans are living in places that get failing grades for
unhealthy levels of ozone or particulate matter.
People of color and people with lower incomes
disproportionately live in areas affected by higher levels of
air pollution, leaving them vulnerable to respiratory diseases,
heart disease, and adverse birth outcomes.
But despite all these facts--worsening traffic, public
health risks, and environmental injustice--Congress continues
to prioritize highway spending over public transit via the 80-
20 split--that is, 80 percent for highways and 20 percent for
public transit. It is a funding paradigm that is outdated and
unresponsive to the needs of local communities.
I am a big supporter of increasing funding for public
transit and getting on par with highway spending.
Mr. Tomer, as you point out in your testimony, the USDOT
estimates that the reinvestment backlog of transit assets
falling below the state of good repair is over $100 billion.
The backlog ranges from transit vehicles like buses and
railcars to system components like train signals.
How would shifting the funding split in the Highway Trust
Fund towards public transit help transit systems address the
reinvestment backlog and improve their service?
Mr. Tomer. Yes, Representative Garcia, thank you for the
question.
The Congress has been really clear over the past few
decades that, as we have finished the grand project that was
building out the national interstate system--and bundled under
the formal ``National Highway System'' moniker, right, which my
colleague Mr. Davis spoke about--and this original fiscal
system we set up was, in fact, capturing user fees from all
users, because that National Highway System--it didn't exist
yet, right? We had to pool this money. The States were the
right entity to give it to to build out that network.
Now that that network has been built, the Congress,
particularly since 1991 with Senator Moynihan and other
leadership, have been looking for different ways to offer
flexibilities, both to States, to other potential recipients,
those who work directly with the States to think about
different flexibilities, and that is inclusive of transit.
What I think you are raising, and both with the FTA's own
conditions assessments, frankly, sister data, if you will, from
the Federal Highway Administration, is that we need to think
differently about investments particularly in regions and
localities, giving them flexibilities to make the investments
that work right for them.
We know even in the State of California, right, there is
only so much real estate left to build, and, in fact, we need
to build, kind of, better in the locations where people already
live and think differently about how people move around.
So it is not just that there is this backlog of investment.
I think the Congress has been clear about giving those
flexibilities, and investing more in transit is clearly one of
those areas where the need exists.
Mr. Garcia of Illinois. Thank you for that.
Next, I would like to briefly discuss a proposal to have
EVs pay into the Highway Trust Fund. My Republican colleagues
are pursuing a punitive fee of $200 on EVs as part of
reconciliation. That is despite the fact that the average
passenger vehicle paid $82 into the Highway Trust Fund last
year.
Mr. Davis, what amount would you recommend setting an EV
fee that does not tax drivers unfairly based on the kind of
vehicle that they choose?
Mr. Davis. Based on the statistics the Federal Highway
Administration published a couple of months ago, the 2023
averages, the average short-wheelbase vehicle, under 112
inches, paid about $80 in gasoline taxes, and the average long
wheelbase, sort of the bigger truck or an SUV, van, paid about
$112, so about a $90-a-year average.
As Mr. Crawford mentioned, there is a weight differential
for EVs, particularly on the heavier end. You could maybe juice
that up to have EVs pay a bit more. But $200 a year seems a
little more than the average ICE vehicle, plus that weight
differential Mr. Crawford was talking about. So it is not
ridiculously out of proportion, but maybe a little bit more.
Mr. Garcia of Illinois. Thank you.
Mr. Chairman, before I yield back, I seek through unanimous
consent to submit a letter for the record from the CHARGE
Coalition detailing how a $200 EV fee is harmful on consumers
and fails to address the solvency issues with the Highway Trust
Fund.
Mr. Rouzer. Without objection.
[The information follows:]
Letter to Hon. Sam Graves, Chairman, and Hon. Rick Larsen, Ranking
Member, Committee on Transportation and Infrastructure, from the CHARGE
Coalition, Submitted for the Record by Hon. Jesus G. ``Chuy'' Garcia
Dear Chairman Graves, Ranking Member Larsen and Members of the
House Committee on Transportation and Infrastructure:
As a unique coalition of advocates focused on industry, health,
energy, transit, consumer, environmental, accessibility, and clean
technology advocacy, we are writing to urge Congress to oppose any
proposal to include new fees on Americans with electric vehicles (EVs)
in the federal budget reconciliation process. Using the budget
reconciliation process to impose new fees on drivers circumvents the
important role of bipartisan discussion in the Surface Transportation
Reauthorization process and undermines stated priorities to support the
``user pays'' principle.
The Highway Trust Fund has been unsustainable for far longer than
electric vehicles have been on the road in any meaningful numbers. The
federal gas tax has not been increased since the 1990s. Inflation,
increases in construction costs and improved efficiency of the internal
combustion fleet have caused the Highway Trust Fund to be reliant on
general fund infusions since 2008. To reach sustainability, Congress
should examine how all drivers, including EV drivers, contribute to it.
That conversation must occur during a bipartisan Surface Transportation
Reauthorization process, not within a partisan reconciliation.
EV drivers should contribute to the transportation system's upkeep
and efficiency, but current proposals, including an annual $200
registration fee, are neither fair nor appropriate. While individuals'
use of the transportation system varies, the average fuel consumption
per light duty vehicle in 2023 was 447 gallons.\1\ At the current
federal gas tax rate of 18.4 cents per gallon, the average light duty
vehicle would have paid only $82.25 in federal taxes to federal trust
funds that year. Combined with state EV registration fees, which are
similarly high compared to state gas tax revenues per user,\2\ EV
drivers would be paying disproportionate and discouragingly high taxes
under such a proposal. This annual fee structure for electric vehicles
would not solve the revenue gap in the Highway Trust Fund. Adding
additional barriers to EV adoption places an undue burden on American
consumers and companies who are already facing rising prices on
vehicles across the board.
---------------------------------------------------------------------------
\1\ FHWA Highway Statistics Series 2023, Table VM-1
\2\ Atlas Public Policy, EV drivers in 36 states pay a surplus of
fees each year
---------------------------------------------------------------------------
The undersigned respectfully urge Congress to reject the inclusion
of EV fees in any reconciliation package, and instead advocate for a
fair and transparent approach to policy development through Surface
Transportation Reauthorization.
Sincerely,
Alliance of Nurses for Healthy Environments.
Ample.
CALSTART.
Center for Biological Diversity.
Clean Fuels Michigan.
Coltura.
Drive Electric Dayton.
Earthjustice Action.
East Metro Strong.
Ecology Center.
Environmental Defense Action Fund.
Environmental Law & Policy Center.
EVHybridNoire.
Fresh Energy.
Forth.
GreenLatinos.
Health Care Without Harm.
It's Electric, Inc.
League of Conservation Voters (LCV).
Michigan Energy Innovation Business Council.
Mobilify Southwestern Pennsylvania.
Native Sun Community Power Development.
Natural Resources Defense Council.
Plug In America.
Project Green Home.
Public Citizen.
Respiratory Health Association.
Sierra Club.
Southern Environmental Law Center.
Southwest Energy Efficiency Project.
Texas EV Alliance.
Transportation for America.
Union of Concerned Scientists.
ZETA.
Mr. Garcia of Illinois. Thank you.
I yield back.
Mr. Rouzer. Mr. LaMalfa.
Mr. LaMalfa. Thank you, Mr. Chairman. Appreciate it.
Mr. Davis, I have a couple questions for you.
On your history with the Highway Trust Fund and research,
what do you see are the turning points that have led us to this
current structural deficit we have? And--well, let's go from
there, please.
Mr. Davis. The first turning point was so slow that I
didn't notice it really until a couple years ago, that back in
the glory days, the 1950s and 1960s, VMT, the amount driven,
was increasing by 4\1/2\ percent per year on average. That is
higher than inflation. Then that started to change in the 1980s
and then again in the early 2000s, so now it is only increasing
by less than one-half of 1 percent a year.
So, even if you stopped selling EVs tomorrow----
Mr. LaMalfa [interrupting]. One-half of 1 percent a year of
increased miles?
Mr. Davis. VMT. And so, even if you stopped selling EVs and
gasoline mileage stayed right where it is, that is the most
that gas-tax receipts could go up without a rate increase, is
about one-half of 1 percent per year.
And then, starting after the OPEC embargo and then Iran,
the mileage kept getting better and better, so fewer gallons
per mile. And then, finally, the last few bills, starting in
2005, have intentionally increased spending greater than
anticipated revenue. So we are--three separate things.
Mr. LaMalfa. The whole full-court press that we have heard
from Government and from different entities is that we want
people to drive more efficient vehicles.
And so what is the reward in that? Are you using less gas?
But then now Government looks at it like, well, you are not
using enough gas, you are not generating enough tax. So, what
is the catch?
Mr. Davis. It made sense as a matter of energy policy after
OPEC and then environmental policy to encourage that. But
people didn't realize until it was too late that you had
Federal energy and environmental policy at loggerheads with
Federal highway finance policy, which was based on the number
of gallons sold. And no one put it together until it was too
late, apparently.
Mr. LaMalfa. Yes. Okay.
And we were talking about rural areas a little bit and
people who might have lower mileage vehicles because they need
four-wheel drive or they are doing the types of jobs and such
in agriculture or mining or timber or things like that.
So, aren't they still paying at the pump a proportionate
amount to what they drive? I mean, the worse the mileage is,
the more you are going to pay, right?
Mr. Davis. Yes, sir. That is correct.
Mr. LaMalfa. Okay.
So, expand on how the electric vehicles are playing a role
these days in lack of revenue.
Mr. Davis. Well, currently, EVs don't pay any taxes to the
Highway Trust Fund, and----
Mr. LaMalfa [interrupting]. Yet, a minute ago, we heard it
called it is a punitive tax to put any kind of tax on it. What
do you think about that?
Mr. Davis. You can argue the level, but EVs should be
paying something if you are going to continue the user-pay/
user-benefit system. That philosophical decision needs to be
made, whether to continue user-pay/user-benefit or move on to
something else. Because if you continue user-pay, that limits
the universe of new revenue sources you can find to highway and
transit users.
But if you are going to continue user-pay, EVs should
definitely pay something. It just becomes a question of what
level and how to collect it.
Mr. LaMalfa. It would seem so, yes.
So, how much heavier is an EV vehicle compared to, let's
say, the same size of car that is not EV?
Mr. Davis. It depends on--it is really bad on the truck and
SUV side. The Ford F-150 Lightnings and those Hummers are
several thousand pounds heavier than their equivalents. But on
the smaller car end, it is not so much.
I remember at one point the Chevy Volt, or Bolt, whichever
it was----
Mr. LaMalfa [interposing]. Yes.
Mr. Davis [continuing]. Had the exact--had, within 50
pounds, the same weight and wheelbase as the Corvette. And if
you drive a Corvette the way God meant you to drive a Corvette,
you are using a lot of gallons of gas, but the Bolt could
follow that behind there at the same speed and pay nothing.
So, that was my old example of why EVs should pay
something.
Mr. LaMalfa. God bless America on that, right?
What do you see--well, I want--there has been a lot of talk
about this vehicle mileage tax, and I am greatly concerned
about the methods that it will be collected.
What do you see, Mr. Davis, is going to be the actual
collection and tracking method that is most likely to be used?
Mr. Davis. I continue to worry about the administrative
costs, because, right now, the gas tax is so easy to collect
because it is collected at the refinery or tank farm.
Mr. LaMalfa. Yes.
Mr. Davis. 1,300 points of collection versus 285 million
registered auto vehicles.
The IRS still hasn't considered how much they are going to
have to invest in manpower and technology to implement such a
tax, and it would not be quick to implement.
Mr. LaMalfa. Exactly. That is my concern, is that you are
going to create a whole new bureaucracy to chase people around
on their mileage they put on each one of their vehicles,
versus, when you pay at the gas pump, the system is already
there to do it. So, why do we want to do that?
And then I wonder how intrusive it is to be tracking
people's mileage. Are we going to end up with those little
bing-bong things that you drive through the tollgates? Are we
going to have GPS on there tracking people, where they go and
what they do?
What do you see on that?
Mr. Davis. The time is up, but you can do it that way, or
you can just do an odometer measure once a year, which is not
intrusive at all. So, there are a variety of ways to implement
a fee.
Mr. LaMalfa. Yes, all right. And certainly not invading
people's privacy on that.
So, thank you, Mr. Chairman. I yield back.
Mr. Rouzer. Mrs. Sykes.
Mrs. Sykes. Thank you, Mr. Chairman and Ranking Member, for
holding this meeting. Obviously, this is a lively topic, and I
am glad to be a part of it.
So, I am just going to kind of jump right into it, because
we have been talking about the solvency, or lack thereof, of
the Highway Trust Fund, and we have seen that the expenditures
have exceeded the revenue, which obviously is a problem, and
this trend has continued over several decades. And for
communities without State resources to make up for these lost
funds, like many of the communities I serve, this would be
devastating.
Ohio has certainly received billions of dollars from the
Highway Trust Fund, and we host millions of travelers that come
through our State using our very robust highway system. And our
ability and our--the fact that we are centrally located allows
for us to welcome all of these visitors, but not without
additional costs.
So, I have heard a couple of solutions here over the months
that we have been preparing for this conversation, including
increasing the gas tax, for short; adding a new tax to EVs and
hybrids; and creating a mileage-based user fee.
And I think I want to focus our conversation back on the
people who are going to be impacted by all of those decisions
the most, the American public. Because between the tariffs on
vehicles that change in the blink of an eye--that might even be
changing today--the cost of living that has not been addressed
as promised, my constituents just don't have the money to pay
more in gas taxes. And the cost of owning a car seems like it
is going to not be a reality for many individuals, between the
tariffs, the uncertainty, and increasing whatever costs might
come about by these discussions.
So I just want to ask the panel, and I will start to my
left: How do you justify increasing this? What would you say to
me as I go back to my community and say, these are the options
on the table, after you are currently struggling to pay your
bills, in order to pay for this Highway Trust Fund?
In 30 words or less. I believe in you. You can all do this.
Mr. Braceras. First of all, I believe that transportation
is one of those foundational issues that all of our citizens
need to have functioning well and that our responsibility in
Government is to be able to provide that at the lowest cost for
our citizens.
And, really, by--I got a call from the Wall Street
Journal--I am not doing 30 words; sorry--from the Wall Street
Journal in 2015 when we passed a gas-tax increase, and they
said, ``I thought Utah was a conservative State.'' And I said,
``We are. Conservative people take care of what they have. That
is a lower cost of ownership.''
So I would recommend that being able to connect the
benefits that they receive from transportation to the costs
that they pay is an important component.
Mrs. Sykes. Thank you. Mr. Johnson.
Mr. Johnson. Thank you.
So I just want to say that the heavy highway paving
industry is a very competitive industry. The money that is
spent by the Federal Government and the State government goes
very far because it is a very competitive industry. We work
hard every day to try to get our costs as low as possible, and
that cost is passed along to the users.
And we believe, in order to maintain those communities and
be able to service those communities, the Highway Trust Fund
needs to be funded by the users so that we can continue to
provide that service and that connectivity that the communities
need.
Mrs. Sykes. Thank you. Mr. Davis.
Mr. Davis. Beyond just the general sentiment that there is
no such thing as a free lunch and we haven't been paying for
what we use and it is time that we did that, it is important to
emphasize the extent to which the Highway Trust Fund supports
both mass transit and roads in wherever your district is and
that it is the cooperative nature of the State and local
program to get your constituents where they need to go. And if
we let the Federal side of it atrophy too far, local commuting
and local connectivity to the national system will suffer.
Mrs. Sykes. We only have 30 seconds left. Mr. Burkhard.
Mr. Burkhard. Yes. I would say that, ultimately, goods
movement--improved goods movement and mobility will make the
local economy thrive. So telling your local business owners
that investments in transportation will actually help them and
will make their lives better.
Mrs. Sykes. Mr. Tomer.
Mr. Tomer. This money gets you to work. It gets your kids
to daycare or to school.
But what I would make sure that they are asking back of you
is, how do we make sure we see these returns back in our
community in the way we want to see them?
Mrs. Sykes. Thank you so much.
And I just hope, as we continue this conversation, we don't
forget about the fact that the cost of living is entirely too
high in this country and we are considering who is going to
have to shoulder this burden as we make decisions moving
forward.
Thank you, Mr. Chair. I yield back.
Mr. Rouzer. Mr. Barrett, you are recognized.
Mr. Barrett. Thank you, Mr. Chairman, and thank you all for
being here and for your participation in today's hearing.
Mr. Johnson, I had a question for you. How can we be sure
that additional dollars--because a lot of the focus of this
hearing today is around the injection of more money into the
Highway Trust Fund that will ultimately make its way into State
governments, local governments, or into the system that will
result in the paving of roads that is the part that your
organization does. But how can we be sure that investment of
more dollars will actually yield more miles of road or more
infrastructure, more bridges built, things like that?
It has been one of my frustrations, coming from State
government before serving in this role, was that we injected
more money into our transportation budget, but it always felt
like the rate of inflation around funding of highway projects,
road building, and everything else far exceeded the rate of
inflation in the overall economy and we weren't always yielding
more miles of paved road, for example.
Can you help me understand how we can expect a correlating
benefit for more money being spent?
Mr. Johnson. Yes. Thank you for that question.
As I stated just in my previous answer there, our industry
is very competitive. Almost every project that we perform for
the Government is a low-bid situation. So we are constantly
trying to try new methods, new innovative techniques, work
harder to get our costs lower so that we can provide the
roadway at the lowest possible price.
And we are continuing to innovate through recycled asphalt
pavement or new, innovative designs in order to try to keep
that as low as possible so those dollars go as far as possible.
Mr. Barrett. Sure. And I know that there is a bid process
and everything else, but we are dealing with sourcing of
aggregate and some of the other scarcity of materials and
workforce issues. We have, I think, 7 million men in America
that are on the sidelines, not working and not seeking work
right now. I think we have a whole bunch of issues combined
that are contributing to this that could be addressed.
And I am not suggesting that we don't need more money into
the system, but I also want to make sure that any additional
investment we do would be met with a commensurate increase in
output that would actually be to the benefit of drivers. I
think one of their biggest frustrations is they feel like taxes
or fees or other things go up and they don't actually see the
outcome in result and benefit of infrastructure.
I did have another question. I am not sure who on the panel
would be best for this--maybe, Mr. Davis, this would be more in
your bucket--but the VMT issue of total miles traveled.
Where do you see the relationship between total miles
traveled and, I guess, the obligation for the user to pay for
that use of the roads versus the person who might drive
relatively little, but still needs those roads available for
the time that they do drive?
So somebody who may not travel very often still needs that
road to connect them--it needs to be available all the time for
them to drive and visit relatives, go to the doctor, and pursue
the obligations that they have.
So, I guess, placing the entire cost expectation on the
number of miles driven versus the, I guess, comparative ratio
of having the available infrastructure, where do you see that
falling, and would we be placing all of our eggs in one basket?
And would it affect rural drivers like those in my district who
may travel further but still need--other folks need the benefit
of the highway system, whether they drive every day or not?
Mr. Davis. That is an excellent point.
Right now, as I mentioned, three of the five existing
taxes--the gasoline, diesel, and heavy truck tire--tax
basically the extent of your driving. If you drive more----
Mr. Barrett [interposing]. Right.
Mr. Davis [continuing]. 2 more gallons, the truck burns
more tires. And the other two are just once a purchase or once
a year for system access.
And I think a blend of those concepts in the future is
probably accurate. Because a good amount of it is based on VMT
wear and tear--not just wear and tear, but also congestion, but
system access is an area that we haven't taxed enough on the
individual side that perhaps there is room for.
Mr. Barrett. Sure.
And you alluded--and I have only got a few seconds left, so
I apologize. But you alluded to, if we don't do a VMT or a
user-based fee, like, some other application of building the
Highway Trust Fund would be necessary. Do you have any
alternative methods?
We seem to be at a stalemate between VMT, gas tax,
degrading value of that with fuel economy and electric
vehicles. What would be an alternative method of doing this
that you would feel would be fair?
Mr. Davis. User fee is better, but if you are going to keep
a trust fund, if it is not user fee, at least it has to be
reliable. That is the most important thing, is a reliable,
year-to-year sense of revenue, as little volatility as
possible.
At one point, there was a suggestion for a crude oil barrel
tax. I believe Mr. DeFazio chased that for a while. And
something like that would be not directly highway user, because
you are taxing the plastics industry and whoever else uses oil,
but it would be better than nothing, and it would be less
volatile.
Mr. Barrett. Okay. Thank you.
Thank you, Mr. Chair.
Mr. Rouzer. Mr. Nadler, you are recognized.
Mr. Nadler. Thank you, Mr. Chairman.
Mr. Braceras, your testimony calls for the committee to
reauthorize the funding baseline in the BIL plus inflation.
Do you view that baseline as solely covering the Highway
Trust Fund programs? Or do you mean that baseline to include
the programs covered by advance appropriations as well?
Mr. Braceras. I mean both, sir. I think we need to take the
baseline that you have used for advance appropriation for the
surface transportation system and take that combined with the
Highway Trust Fund and we need to grow that for inflation in
order to just meet the basic needs that we have in front of us
today.
Mr. Nadler. Thank you.
For decades, the Highway Trust Fund was funded primarily
through gas taxes paid by drivers. But that hasn't been the
full story for a long time. Today, gas-tax revenues cover
barely half of the trust fund's spending--I think this was
mentioned earlier--and Congress has repeatedly used general
taxpayer dollars, including more than $275 billion since 2008,
to keep it solvent.
That means every taxpayer, including millions of Americans
who don't own a car and rely on public transit, are already
helping to fund the system. Transit riders are paying into the
trust fund too, and they deserve a fair share of the
investment.
Mr. Davis, you have written extensively about the Highway
Trust Fund's history and the political compromises that shaped
its evolution, including the creation of the Mass Transit
Account in 1982. As you have noted, transit investments often
relieve congestion, expand access to jobs, and protect road
infrastructure by reducing wear and tear.
Given these benefits, can you discuss the importance of
maintaining and strengthening dedicated transit funding within
the Highway Trust Fund?
Mr. Davis. If you go back and look at the debates in the
1970s and early 1980s, the urban lobby was arguing about facts
on the ground. They said, ``Okay, our big cities don't need
more urban cross-freeways, we need more transit,'' and they
really didn't care where the money came from. The trust fund
lobby, on the other hand, was saying, ``The Highway Trust Fund
was user-pay/user-benefit, and that is the way it is set up,
and this is a violation of that.'' And both sides were correct,
because they were having different arguments at the same time,
talking past each other.
And it took--in 1972, it took until the urban vote got big
enough that they were able to defeat a highway bill for the
first time. And eventually in 1973, they wound up getting a
compromise to open the trust fund up to transit projects when
the locals would select.
And then again in 1982, they realized early on that they
were going to need the urban vote, and so they went ahead with
the penny-for-transit 80-20 split of the new revenue for a Mass
Transit Account then.
So what it took in the past was the plain fact that the
bill couldn't pass without the votes that demanded mass-transit
funding. It was pure and simple.
And since then, you have had--the Mass Transit Account
still only gets about 13 percent of trust fund revenues,
because the trucking revenues and the pre-1982 gas and diesel
revenues are still entirely devoted to the Highway Account. So
they are getting about 20 percent of trust fund spending but
only about 13 percent of trust fund revenues, so the Mass
Transit Account----
Mr. Nadler [interrupting]. Wait a minute. Thirteen percent
of----
Mr. Davis [continuing]. Is much more extended----
Mr. Nadler [interrupting]. Thirteen percent of trust fund
revenues comes from where?
Mr. Davis. Well, it goes to the Mass Transit Account. They
get about 13 percent of the revenues, depending on how volatile
trucking is. And they are getting 20 percent of the--roughly 20
percent of the spending.
So the Mass Transit Account is much more overleveraged than
the Highway Account at present, and something has to be done to
ameliorate that as well.
Mr. Nadler. Yes, especially since gas-tax revenues cover
barely half of the trust fund's spending and the other half is
coming from the taxpayer.
Mr. Davis. Yes.
Mr. Nadler. Mr. Tomer, your testimony highlights the urgent
need for investments in transit assets and the growing backlog
of repairs.
Given shifting demographics, climate challenges, and the
need to connect all Americans to economic opportunity, how
critical is it that Congress preserve and expand Federal
investments in public transit? And what risks do we face if we
fail to do so?
Mr. Tomer. Yes, I appreciate the question, Representative
Nadler.
Study after study, kind of, all across the intellectual
spectrum shows that transit produces net benefits to society,
what economists will also often wonkily call, like,
``agglomeration economy spillovers.'' The point is, this helps
grow places. It helps get people to work, particularly in a
more affordable manner. It provides net economic benefit to not
just the communities it is in, but the country as a whole.
The question, I think, for the Congress, as my colleague
was just speaking to, is: How do you set up the revenue system
in a sustainable way to make sure that you can, kind of, invest
in all-of-the-above solutions that make sense for each of these
communities?
Mr. Nadler. Thank you.
I yield back.
Mr. Rouzer. Mr. Collins, you are recognized.
Mr. Collins. Thank you, Mr. Chairman.
I was making some notes there on something that was just
said. Sorry about that.
Listen, I just want to take a few minutes and I want to
speak from the perspective of a trucker, because I am in the
trucking business. It is all I have done all my life.
And I guess the first thing I want to start out with is
just a list of taxes that we pay from the trucking industry.
I mean, first of all, we pay for IRP tags, which is
supposed to be the International Registration Plan, for every
truck, every tag, every year.
Then we have got FET tax on new purchases, which is based
on the purchase price, which, when I bought my first truck back
in the early 1990s, fully loaded, decked out, was $81,000.
Today, it is pushing over $200,000 per truck. Trailers are the
same way. We pay FET tax on every tire we buy. And, by the way,
there are 18 tires on an 18-wheeler. And we use a lot of them.
We pay fuel tax based on fuel mileage in every State across
this country, no matter whether you buy fuel in that State. And
the tax is based on the tax rates for that State.
We also pay the Federal highway use tax, which has gone up
over years. We used to pay it in arrears based on how many
trucks you did have for the past year. Now we pay it upfront on
how many trucks you have today in one lump sum, and there is no
refund if you wreck or if you sell the truck, period.
So that is just a conglomeration of what we pay to stay out
there on the road.
And when you look at things like what we have had to watch
over the past administration with the IIJA, with $1.24
trillion, whatever it is, that was spent, when less than half
of it went to fix our roads and bridges out there. The majority
of it, we had to watch as they built bike paths and put--I
don't even know if they ever built an EV charger. But we had to
watch as our taxpayer dollars were spent on something that was
unnecessary, when we are out there sitting in congested roads,
can't move, roads that need potholes fixed, bridges that need
to be replaced.
On average, road construction, from the time it starts to
the time it is finished: 7\1/2\ years before they get started
on the road, 10 years to finish it. What does that tell you?
They spend most of the time on permits and all of these
lawsuits from all of these environmentalists out there that are
suing us.
Then you take the contractor that is building the road. Do
you realize that they pad their bills by 30 percent just to pay
for all these crazy permits, for all of these frivolous
lawsuits that are going on?
I guess--one other thing--I wanted to--I have to ask a
couple questions.
Mr. Johnson, asphalt, if I remember right, right?
Mr. Johnson. [Nonverbal response.]
Mr. Collins. Asphalt price is based on what, petroleum
price? Does it go up when petroleum goes up?
Mr. Johnson. [Nonverbal response.]
Mr. Collins. Goes down when petroleum goes down?
Mr. Johnson. [Nonverbal response.]
Mr. Collins. Okay.
Mr. Davis, this is a question--I didn't understand you.
Now, it is really a question I have been looking for. Does mass
transit pay more into the Federal highway use trust fund than
what they get back? Or do they get more out of it than what
they pay in?
Mr. Davis. There are no specific taxes on the use of mass
transit that go to the trust fund. Now, a lot of people who----
Mr. Collins [interrupting]. But they get mass--they get
mass--they get Federal highway use tax trust fund----
Mr. Davis [interrupting]. Well, I take the subway
occasionally, but I also own a car. So, there are people who--
--
Mr. Collins [interrupting]. But mass transit gets Highway
Trust Fund----
Mr. Davis [interposing]. Yes.
Mr. Collins [continuing]. Money? Okay.
Mr. Davis. Yes. Taxes on highway users are deposited to
mass transit.
Mr. Collins. I think it is somewhere around $6 billion to
$8 billion a year, something like that? I think that is it?
Mr. Davis. It is about $5 billion a year in----
Mr. Collins [interrupting]. Okay. That was the answer I was
looking for. Thank you.
Listen. Truckers--and I know we are looking at how we are
going to set this up. Ninety-eight percent of the trucking
companies out there are 10 trucks or less. These are
generational. We work off of pennies per mile, 2\1/2\-percent
return. Truckers have paid enough into the tax system.
If you want to do something, get your priorities right.
Congress needs to get their priorities right and quit spending
money on all this junk out there like bike trails. Put it into
the roads and the bridges that we need fixed and replaced out
there. Get these frivolous lawsuits off of everybody. Get some
loser payout--give me some good tort reform; you will reduce
the cost of what it is costing to build these roads and bridges
out there.
And you know what? Mr. Johnson, make us energy-independent.
You start producing oil here in our country, then you will see
the price of gas, you will see the price of petroleum come
down.
And, oh, by the way, the EPA, who has hounded on the
truckers forever--we have gotten less fuel mileage every time
the EPA makes a decision out there. Our fuel mileage goes down,
so we pay more just by buying a gallon of fuel.
The other thing I would like to say--I know I am out of
time. I think we just need to block-grant money to these States
and let them handle how to best use it and fix their own roads
and expand their own roads and bridges.
Thank you, Mr. Chairman, and I yield back.
Mr. Rouzer. Ms. Friedman, you are recognized.
Ms. Friedman. Thank you, Mr. Chair.
And thanks to the witnesses for coming here today.
As we discuss all these challenges facing the Highway Trust
Fund, I want to just take a minute to talk about how we use the
money that is in there.
Something that L.A. knows a lot about is traffic
congestion. The national statistics on highway congestion in
2022 shows that the cost of congestion was $244 billion
nationwide. That is about $614 million a day that we spend
because of congestion.
It also wastes billions of gasoline nationally, with about
21 wasted gallons of gasoline per driver per year. It releases
about 24 million tons of excess greenhouse gases into the
atmosphere.
And congestion resulted in an extra 8.5 billion hours of
traffic delays across the country. In L.A. alone, each commuter
spent an extra 122 hours per year sitting in traffic. Nobody
likes doing that, least of all me.
Between 1993 and 2017, we have added 30,500 new freeway
lane miles of roads in the largest 100 urbanized areas. That is
a 42-percent increase in freeway lane miles. States alone spent
more than $500 billion on highway capital investments in
urbanized areas, with a significant portion spent on highway
expansions.
Now, in that same timeframe that we were expanding all
these highways and putting billions and billions of dollars
into those projects, traffic congestion in those 100 urbanized
areas has grown by 144 percent.
The evidence is clear--and study after study shows this--
that highway expansions--now, they do a lot of things.
Sometimes they add roads to places that didn't have them
before. Sometimes they make our roads a lot safer. And there
are certainly places where we need to expand our highways. But
when it comes to congestion, there is not really evidence that
expanding highways to deal with the congestion is doing
anything except making congestion worse because of induced
demand.
Now, in my community, where we have widened the I-5 freeway
and many other roads, we have seen no measurable decrease in
congestion, and it has come at a lot of cost to the residents
who live around those highways, many of whom saw a marked
decrease in their quality of life.
And, at the same time, that money that went into those
expansions didn't go into things that we know reduces
congestion, namely, more investments in mass transit, in urban
mass transit.
Transit is estimated to reduce CO2 emissions by 37 million
metric tons annually. Individuals who ride on public
transportation instead of driving can save more than $13,000 a
year. That is over $1,000 per month.
And, certainly, for many people in our urban areas, they
can't afford to own and operate a car, and so they are transit-
dependent. And because of our lack of investment in transit, we
have given them, many times, really just terrible qualities of
life because transit doesn't work well enough for them. It is
too slow, and it doesn't come fast enough.
And, also, robust public transportation systems take users
off the road, which does reduce congestion and makes the roads
not wear as quickly.
Every $1 billion we invest in public transportation
sustains $5 billion in long-term economic impact and 50,000
jobs, which sounds like a great value for taxpayers' money.
So I am going to ask Mr. Tomer: To your knowledge, is it
standard practice across the country that, when we are looking
at investing our transportation dollars and our highway funds,
that communities are doing a cost-benefit analysis of the same
investment going into mass transit or going into a highway
widening? I know that some communities have done this, but is
this common practice? And should it be?
Mr. Tomer. Thank you for the question, Representative.
The--look, every State and community is different, and I
think we know that. That is actually one of the, kind of, great
features of this country.
Our cost-benefit analyses have come under attack for
decades now from academics--and this is really civil attack, I
want to be clear, like, a civil discourse. The question is,
what are you trying to achieve? I mean, we have to be blunt
with all of ourselves here. What are we trying to solve?
We know--and I really appreciate you bringing this up--that
induced demand is effectively an economic truth. You can't
endlessly expand highways once you have built out a community.
It is a fallacy to tell our households that suddenly this is
going to solve congestion, because we know it is not.
What bothers me the most, frankly--and I think it is in the
tenor of today's conversation--it slows down freight, slows
down trucking. I hate when deliveries are late to my house, and
I am sure businesses feel far worse when it is their bottom
line.
So I think what is key here is, how do we think about
sensible cost-benefit analysis that makes sense for each one of
these communities. Oftentimes, transit, like in Greater Los
Angeles, right--voters, over two-thirds, approved this
expansion because it is what made sense to them after, for
generations, frankly, trying a different solution.
It is going to look different in different places, but,
again, as we keep adding people to this country, which is a
truly bipartisan goal, we are going to have to think about how
we can realistically fit all of them and our businesses and
their freight in these growing communities.
Ms. Friedman. Well, thank you, because doing things the
same way over and over again with bad results is not a good way
for us to move forward.
I yield back. Thank you.
Mr. Rouzer. Mr. Stauber.
Mr. Stauber. Thank you very much.
Thanks to all of you for being here and your testimony.
The previous Biden administration pushed an unsustainable
mandate on the American people: electric vehicles. They tried
to take the choice away from the American taxpayer.
Former Secretary Buttigieg and I frequently sparred on this
topic. I often had to remind him that the cars, electric
vehicles, were unaffordable, inoperable in cold-weather
climates, and the infrastructure simply didn't exist to make it
work.
And when they siphoned billions of taxpayer dollars to pay
for their Green New Deal agenda, they eliminated the Buy
America provisions and used child slave labor to expedite the
process. Obviously, I disagreed.
Some people have bought into the EV way of life, and that
is fine. What I have always wanted above anything else is
consumer choice, flexibility for the American people to do what
is best for them.
But it is important to note that the current state of play
is not fair. EVs currently benefit from the highway system but
do not contribute to it. What is worse is that they are heavy
vehicles and far harder on our roads.
Mr. Braceras, could you talk a little more about the annual
fee the State of Utah has utilized in an effort to address EV
usage?
Mr. Braceras. Thank you. Yes.
So the State of Utah approached the idea here with one of
fairness and choice. And so we recognized that EVs were not
paying their fair share for their use of the roadway, but we
wanted to give people a choice on how they would do this.
So we approached it by doing the $140 annual fee on EVs,
and then we have a road usage charge program, kind of a
parallel program. And so folks can opt in to the road usage
charge program, they don't pay the $140 fee, and they will only
pay for the miles that they drive.
And so it is trying to be fair to the EV users but also
fair to the rest of the highway users. And we have found this
to be a fairly--it is well-accepted from our users. Obviously,
if you have a choice, you have decided you like that approach.
But we think that was--we feel very comfortable with that
approach.
I anticipate--now, this is Carlos, not my State
legislature. We anticipate that our next steps going forward
will be to require EV users to go into the road usage charge
program. But that is still a--that is a policy debate still to
take place.
Mr. Stauber. I think EV and hybrid fees are an important
step to addressing parity on the roads and ensuring
transportation infrastructure remains a shared responsibility.
When the Biden administration mandated EV use, can you
imagine being in northern Minnesota when it is 35 below trying
to get to work when the battery has 50 percent less usage or
even less than that?
And it was disappointing that we had to push, continuously
push the former administration to allow us to have choice, just
like you did for your citizens in Utah. You gave them a choice
and an opportunity for them to choose.
That is what the American people wanted. They didn't want
the EV mandate forced down their throat.
Mr. Chair, I yield back.
Mr. Rouzer. Mr. Stanton.
Mr. Stanton. Thank you very much, Mr. Chairman.
And thank you to the witnesses for being here for this
very, very important hearing.
Highway Trust Fund is essential. It helps States build out
and maintain their infrastructure. But it is in need of real
reform to make sure States like Arizona, my home State, get a
fair deal. We need to be pragmatic about how this investment
upkeeps highway and transit, keeping families and businesses
connected.
So I want to thank all of the witnesses for your
recommendations as we work to develop a strong bipartisan
surface transportation reauthorization bill.
In Arizona, like most States, we make the most of the
formula funding that is allotted. ADOT uses Highway Trust Fund
dollars to maintain its more than 28,000 lane miles.
Federal formula funds are also used to modernize and
improve safety along existing roadways, like U.S. 93,
connecting parts of rural western Arizona, which recently
received Federal funds to turn a two-lane highway into a four-
lane divided highway, making it much, much safer.
Projects like this improve safety for Arizonans, lessen
congestion, and allow for more freight transportation to move
across the State, an important part of our commerce.
But even with investments like these, Arizona is doing more
with less. Arizona has added more than 2 million people since
just 2000. Our economy has grown exponentially. But current
funding formulas are decades old and rely woefully on outdated
census information and traffic data.
Arizona is one of the fastest growing States in the
country, but this year, we received one of the lowest
percentage of funds relative to our State's contribution.
Continuing to rely on this antiquated formula to determine
future investments isn't just inefficient policy. It puts fast
growing States at a significant disadvantage and undermines our
ability to tackle our significant and growing infrastructure
needs.
Just yesterday, I introduced a bipartisan bill with my
colleague, Congressman Tony Gonzales of Texas, to modernize
this formula. Texas is another fast growing State that has not
seen the level of investment to keep up with its population.
Our Highway Formula Fairness Act will allow for the
Decennial Census to be considered when calculating
apportionment for many States that have increased population
since the previous census to receive funding that reflects that
growth. It is just common sense.
The bill would also require the Secretary of Transportation
to conduct a highway formula modernization study to assess the
methods and data that are currently used to apportion Federal-
aid highway funds so we can keep up building and improving.
Mr. Braceras, thank you for your perspective both as a
representative of AASHTO and as executive director for Utah. In
your testimony, you reflected on that, like Arizona, Utah has
seen increased growth. In fact, Utah was also one of the
fastest growing States in the country.
How would having a 10-year census number as part of the
apportionment calculation for the Highway Trust Fund impact
your State of Utah?
Mr. Braceras. Thank you. Thank you, Congressman, for the
question.
And, yes, like Arizona, Utah is growing tremendously right
now, and it is really one of the biggest concerns that our
citizens have.
I would say, let's use the best data we can have to make a
more informed decision. So, I am always a fan of getting the
best data, the more recent data we can have, to be able to make
those decisions. So, very supportive of the idea of that.
Mr. Stanton. All right.
And like Utah, Arizona has needs to improve our existing
older infrastructure while keeping up with the growth needs. We
need to do both.
Mr. Johnson, in your testimony, you focused on Federal
investments for project delivery, workforce development, and
economic activity as it relates to North Carolina. You brought
up the importance of maintaining a user-based trust fund to
ensure that critical road and bridge funding is not
reprioritized.
In your opinion, what would be the biggest mistake we could
make regarding the Highway Trust Fund in this upcoming highway
bill? What would cause the most harm on future highway
construction funding?
Mr. Johnson. Thank you for your question, Congressman.
The biggest mistake we could do is to do nothing. It is a
broken system. We know it has been a broken system. And there
are numerous different alternatives out there that could help
fix the system. So it is just asking Congress to make a choice
and hopefully fix the system for the long term.
Mr. Stanton. I really appreciate that.
By the way, the irony of it is that infrastructure
investment is probably the most popular investment we can make
at the Federal level. People do not mind if they need to pay
more. They know they are getting an infrastructure investment,
which improves their lives and they know improves their local
economy.
Finally, I just have a statement.
Mr. Davis, I don't have a question, but just to say thank
you to the team at Eno. The work that you do in providing
support in a bipartisan way for this committee is important and
will make us have a better surface transportation bill, and it
is very much appreciated.
Thank you. I yield back.
Mr. Rouzer. Mr. Johnson.
Mr. Johnson of South Dakota. Thank you, Mr. Chairman.
Math is a stubborn thing, of course, and the math tells us
that if Congress does not act, the Highway Trust Fund will be
insolvent in just 3 years. And because math is such a stubborn
thing, we know that if Congress does not act, that we will be
in a $50 billion hole by the year 2035.
In fact, since 2008, we have put $275 billion from the
General Fund into the Highway Trust Fund, and at the same time,
of course, we don't have everybody paying into the system.
Now, a user-pays system works pretty well when everybody
pays in. It really falls apart when you have free riders.
That is why I was so grateful to hear Mr. Stauber and Mr.
Braceras have a back-and-forth about my bill with Deb Fischer
that would make sure that everybody is paying their fair share.
And I was grateful for so many of the witnesses for addressing
this issue in their testimony.
And to make it clear, our bill, my bill with Senator
Fischer, would just say, hey, for those EVs, they are going to
pay their fair share. We have calculated what would be a fair
amount if they were an internal combustion engine. Of course,
we have an accounting for the heavier weight because of the
battery.
It seems like it is an idea that is gaining some steam. And
so, Mr. Chairman, I would ask for unanimous consent to enter
this letter of support for my bill signed by 26 national
associations.
Mr. Rouzer. Without objection, so ordered.
[The information follows:]
Letter to Members of Congress from 26 National Transportation and
Construction Associations, Submitted for the Record by Hon. Dusty
Johnson
Dear Members of Congress:
Investing in the nation's infrastructure provides far-reaching
economic benefits. Recent congressional support for roads, bridges and
public transportation systems has helped deliver much-needed projects
to every congressional district across the country. These improvements
have enhanced safety, mobility and efficiency nationwide.
These outcomes are made possible by the continuity and
predictability of funding supported by a healthy Highway Trust Fund
(HTF). At present, HTF revenues are generated primarily through user
fees on the sale of gas and diesel fuels, along with transfers from the
General Fund to make up for insufficient revenues.
However, improvements to vehicle efficiency and the influx of
hybrid and electric vehicles have resulted in a system where all users
of the system are not treated fairly. Instead, some users pay for the
maintenance of the system, while other users pay less or nothing at
all. At the same time, user fee revenue has not met system needs.
The undersigned organizations call on Congress to pass a fee on
electric vehicles comparable to what gas and diesel vehicles pay and
dedicate the revenues solely to the HTF. While this solution would only
partly enhance HTF revenues, it would help ensure all users of the
system are paying for its upkeep.
Further, we ask Congress to oppose any measures that would strip
existing revenue from the HTF. Proposals to reduce or eliminate revenue
sources into the HTF would only exacerbate the challenge of paying for
the scheduled 2026 reauthorization of surface transportation programs.
We are grateful for the support Congress has provided for the
nation's surface transportation infrastructure network and look forward
to working with you to ensure users of the system equitably pay for
their maintenance and expansion.
Sincerely,
American Road & Transportation Builders Association.
Associated General Contractors of America.
American Society of Civil Engineers.
International Union of Operating Engineers.
American Public Transportation Association.
Associated Equipment Distributors.
American Concrete Pavement Association.
American Short Line and Regional Railroad Association.
Association of Equipment Manufacturers.
Independent Lubricant Manufacturers Association.
American Concrete Pipe Association.
American Institute of Steel Construction.
National Steel Bridge Alliance.
American Traffic Safety Services Association.
National Ready Mixed Concrete Association.
National Asphalt Pavement Association.
Portland Cement Association.
American Subcontractors Association.
Design-Build Institute of America.
Association of American Railroads.
National Stone, Sand & Gravel Association.
Precast/Prestressed Concrete Institute.
American Council of Engineering Companies.
Transportation Intermediaries Association (TIA).
Laborers International Union of North America.
National Utility Contractors Association.
Mr. Johnson of South Dakota. So, Mr. Johnson, any thoughts
from you all or from the broader pavement and asphalt industry
about our bill?
Mr. Johnson. I haven't read the bill, but from your
question, we do think EVs--everyone should pay their share. EVs
are heavier. They do weigh more than normal combustion
vehicles, and they do have more wear and tear. And we believe
that all users should be paying into the system to help support
it.
Mr. Johnson of South Dakota. Mr. Braceras, I was grateful
to hear about Utah's experience. If we were to do something at
the Federal level, would that complicate Utah's efforts, or
would they mesh pretty well?
Mr. Braceras. I think they would mesh pretty well,
Congressman. I think there are some details as I reviewed your
bill that we could work through. But I think it would work
really well.
Mr. Johnson of South Dakota. Anything in particular from
either of you gentleman? And, Mr. Johnson, you haven't read the
bill yet, so maybe you get off the hook.
But, Mr. Braceras, is there anything we should--any way we
should try to improve our bill, or do you think we are pretty
close to the Goldilocks spot?
Mr. Braceras. As I went through this bill and talked with
staff, I made the comment, ``It's a very thoughtful bill.'' And
I think there are, obviously, as these things move through the
process, there are tweaks that need to be made. Right now, I
look at the way the money is being received at the State level.
There are different--every State receives money through
different organizations, but that is all stuff that could be
worked out.
So I think it is a good start.
Mr. Johnson of South Dakota. Well, I would echo Mr. Johnson
who said to Mr. Stanton's very good question that the worst
thing we could do is nothing. And I would observe that trying
to make sure everybody pays their fair share is a very
important ingredient, a critical ingredient in the something we
must do with surface transportation reauthorization.
Mr. Braceras, let's stay with you. I suspect we all know
that studies indicate that an EIS through Federal Highway takes
7 years. That is an obnoxious length of time. And it is almost
a uniquely American problem. The same kind of highway project
you can get done in Italy and France in 2 years does take 7
years in this country.
When the Italians seem to be a paragon of efficiency,
perhaps America has lost its way.
And so I have got a bill that would, in essence, require
that the agencies use a cloud-based platform to have an e-NEPA
process. Of course, last week, President Trump signed an
Executive order that would do much the same thing.
Your observations, sir, about my bill and the President's
Executive order?
Mr. Braceras. Yes, I think there is a lot we can do in this
country to actually move projects forward. We seem more
inclined anymore to stop things than we are to build things.
So one of the things we have done in the State of Utah, we
were one of the first States to take on what is called NEPA
assignment. So we are the decisionmakers on the EIS for the
highway side of things. And I was challenged when we first did
that, is, why do you want to do that? Are you trying to
shortchange the process?
And it's: no. I want to stand up with my citizens and
explain why I made a decision. I don't want to point behind me
and say, ``The Feds made me do this.'' We have been able to
demonstrate we can deliver environmental projects faster, both
environmental assessments and EISs, significantly faster by
taking on that NEPA assignment.
And I think there are other ways that we could work with
the Federal Government to find--we need to build more in this
country.
Mr. Johnson of South Dakota. That is exactly properly said.
Mr. Johnson, I am sorry. I am out of time.
And I would just close by noting that given the strength of
the comments by both of you, I would just ask my colleagues to
look at both of those bills and consider signing on.
And with that, Mr. Chairman, I would yield back. Sorry.
Mr. Rouzer. Mr. Carbajal.
Mr. Carbajal. Thank you, Mr. Chairman.
Mr. Tomer, research shows that on average, States
suballocate just 14 percent of transportation funds to local
governments, well below the proportion of travel occurring on
locally owned infrastructure. In 15 States, that share is less
than 5 percent.
What does this disparity suggest about the need for Federal
reforms that better empower local and regional partners?
Mr. Tomer. Yes. Thank you for the question, Representative.
I think at its core, what it speaks to is, we have some
faults inside our user-pay kind of concepts. Everyone is paying
but not everyone is getting their money back. And so I think
there is a really fresh opportunity, particularly in this
Congress, with lessons from the IIJA period in particular, to
think about, how do we make sure that the kind of fiscal
resources are being returned if we are thinking about this kind
of user-pay and user-benefits system that so many folks,
including your colleagues here, have mentioned today.
Now, part of the challenge is the Federal Government has
chosen, really for decades upon decades, to apportion the money
directly to the States, and that could work. What we are seeing
inside our numbers, though, is that once the States control
their fiscal resources, they are not passing it back to their
regional partners.
So I think the question before this Congress is, how much
should, at least for Federal funds, should the Federal
Government be electing where those should be, kind of who
should be the recipient of those, and does it want to weigh in
any further than that?
Mr. Carbajal. Thank you.
Mr. Tomer, metropolitan planning organizations, MPOs, serve
as a vital conduit between Federal transportation policy and
real-world implementation in the communities where most
Americans live and work, composed largely of local elected
officials.
MPOs offer both deep public engagement and regional
coordination. Yet their role is often constrained by limited
authority and insufficient Federal recognition.
How can Congress better elevate and support the unique role
MPOs and, by extension, local governments play in advancing
national infrastructure goals?
Mr. Tomer. Yes. Thank you for the question. It is great.
Let me answer in two parts. I am going to be respectful to my
colleagues so they have a chance to answer questions, too.
The first one is that the Congress has done some impressive
experimentation with performance measurement, performance
management with our metropolitan colleagues. The question is,
how can we extend that beyond them, also to their State peers,
thinking about what are we trying to get out of the system.
What I like about both parties is they are constantly
talking about accountability, and there are some real
opportunities there.
The second one is that--and let's all be frank. I mean, we
actually just--we will have some upcoming research being
published in a couple weeks on this. Basically every Member of
Congress, no matter how it is designed, they represent a
metropolitan area.
And what is so--I am going to sound like such a nerd here--
but what is so cool about metropolitan areas is our
jurisdictions are fixed, for the most part, unless you are like
in a Nashville or Indianapolis and have some--Louisville has
some fascinating expansions. But the question is at the
metropolitan scale, how do we actually come together beyond
those jurisdictional boundaries to actually work at the scale
of where economies work.
Now, the Federal Government's opportunity here, especially
because it has mandated their existence in these places, they
actually exist. They are a board-like structure where
municipalities come together. How can we empower them to
actually deliver more?
So we personally are fans of actually passing more fiscal
authority to them from the Federal level, making sure they can
then work with their member municipalities and think about
investments that make sense for them and doing that alongside
their State colleagues.
So there are a lot of opportunities here.
Mr. Carbajal. Thank you.
Mr. Johnson, I know we are discussing how to best fund
future highway bills via user fees, but it also comes down to
how best to maximize these precious resources. Can you help
give me some insight on how your industry is helping stretch
taxpayer dollars for road construction using materials like
reclaimed asphalt, RAP?
Mr. Johnson. Thank you for the opportunity to speak about
RAP.
The asphalt industry, reclaimed asphalt is one of the most
recycled products in the world, in the country. Through the
process of maintenance, we remove a lot of asphalt or remove a
lot of roads, and 100 percent of that product is able to go
back into our asphalt mixes.
As much as 40 percent of our new asphalt going on the road
is made with recycled asphalt. It is reclaimed from other jobs.
It is not going to landfills. It saves us money. It saves the
taxpayers money. It saves us energy. It is one of the
highlights of our industry.
Mr. Carbajal. Thank you.
I am out of time. I have one more question for you. So I am
going to submit it, and hopefully we will get an answer from
you on the record.
Mr. Johnson. All right. Thank you.
Mr. Carbajal. But thank you so much.
Mr. Chairman, I am out of time.
Mr. Rouzer. Mr. Shreve, you are recognized.
Mr. Shreve. Thank you, Mr. Chairman.
Thanks to our witnesses.
I represent central Indiana. So I am one of those, Mr.
Tomer, one of those communities that is something of a hybrid.
Keenly interested in the subject. This is our fifth
subcommittee hearing. In my district, I have got the Interstate
465, the ring road around Indianapolis, and four interstate
highways that traverse the district.
I am going to point this question in the direction of Mr.
Burkhard.
My district is a combination of urban, suburban, and rural.
And in your dense submitted testimony, you spoke about the TPA
in Tennessee. And that program is just a few years in the
making. It may be possible for a Hoosier to learn something
from a Volunteer, possibly.
But the relevance to that program caught my eye because it
spoke to freeing up funding to invest in the condensed
urbanized areas so as to move dollars into some of the rural
communities. And in your testimony, you spoke about the
extraordinary three- to five-fold return ratio on that.
We can't begin to flesh out all the written testimony that
the witnesses offer us, but if we could spotlight some of your
experience that you have seen in Tennessee and what that may
portend as a model as we figure out how we can fund these
improvements, these--what was the term? The choice lanes in,
say, 465, so as to have more dollars to work with on our
arterials that emanate out from urban centers like Indianapolis
or Louisville.
Mr. Burkhard. Thank you for your question.
Yes. Jacobs was fortunate to have been able to work on part
of a P3 program in Tennessee, and the thing that I think I hear
resounding is speed, speed to delivery, and that was one of the
biggest results of that effort.
Tennessee sought to accelerate their investment into
infrastructure and passed a resolution to put $3 billion into
State funding to add choice lanes. These choice lanes are
managed lanes, they are tolled facilities, and they provide a
means of revenue to help repay the investments.
And it becomes a desirable business investment from
concessionaires who will take on the asset to continue to
improve that asset, and they are being held accountable for
those lanes for a set amount of time.
And so that is a model that we are seeing at some other
locations across the State and that we participated on. Choice
lanes or managed lanes is definitely a viable method.
Mr. Shreve. Mr. Burkhard, if the act was passed by the
Tennessee Legislature in 2023 and given the 7-year sort of lead
time that we have accepted at the moment that it may take to
build out some of this infrastructure, can we draw conclusions
as to whether or not this model is working in Tennessee? Or is
it very much in the beta testing stage?
Mr. Burkhard. Yes. It is too early to tell. Although, we
are already working alongside the State-appointed PMO office,
program management office, consulting organization. So it has
moved into high gear. And so, yes, I would say it is too early
to tell.
Mr. Shreve. All right. Okay. Thank you.
Mr. Johnson, just briefly. In my home State, we suffered
flooding just this month. In North Carolina, you really took it
on the chin.
You talked in your testimony about improvements,
enhancements in the way in which we design our highways from a
resiliency standpoint. Is a stretch of highway constructed
today materially different in its environmental resiliency than
it was 25 years ago?
Mr. Johnson. In my opinion, it is not substantially
different from what it was 25 years ago.
Mr. Shreve. All right. I didn't know if there was some
secret sauce that we hadn't figured out at INDOT as we are
building stretches of highway that are susceptible to flooding.
Mr. Johnson. No.
Mr. Shreve. Not so.
All right. Thank you.
I yield back.
Mr. Rouzer. Mr. Figures.
Mr. Figures. Thank you, Chairman Rouzer, Ranking Member
Holmes, who I know is not with us, but thank you guys for
pulling this hearing together.
I represent Alabama, a part of Alabama, Mobile up to
Montgomery and kind of everything between Mississippi and
Georgia. So a lot of rural areas are part of the makeup of my
district.
And in being in a rural district, like many of my
colleagues here, we rely heavily on long stretches of Federal
highways to move freight, access to essential services. This is
only going to be amplified, particularly in the Mobile area but
also regionally with the expansion of the port in Mobile, which
come about 60 days or so, give or take, will be the deepest
port in the Gulf of Mexico.
And so we expect the freight that comes through the gulf
through the Port of Mobile to expand greatly, exponentially.
And so it is very critical that we are focusing on trying to
secure the type of sustained infrastructure investment that we
struggle year over year to do.
Mr. Johnson, I want to start with you because you had a
colleague here at one of our last hearings, Janet Kavinoky from
Vulcan, headquartered in Alabama, not quite in my district but
up in Birmingham, and she testified earlier about the
importance of the Highway Trust Fund.
Can you give me a little more detail on what the asphalt
industry as a whole can do to extend the Highway Trust Fund
dollars?
Mr. Johnson. The asphalt industry, like is stated in a
couple of other questions, we constantly are trying to improve
our cost structure, trying to make asphalt as cheap as
possible, make the quality as long life as possible, constantly
trying to find ways to be innovative through different design
methods and using recycled materials to make those dollars go
as far as possible.
Mr. Figures. And, Mr. Davis, from your perspective, does
the Highway Trust Fund in its current status, does it
sufficiently account for the infrastructure needs in low
income--low population, rather--in rural communities across the
country?
Mr. Davis. At present, it is not satisfying all the needs
anywhere because even though the spending has crept up
substantially in the last couple years, cost inflation on
materials and labor has crept up even higher. So it is not
getting the job done in rural areas.
But that is not to say that rural areas are being
disproportionately discriminated against with funding. Things
are rough everywhere.
Mr. Figures. Do you have any particular ideas that this
committee should keep in mind to make sure that--because as I
see it and throughout my lifetime coming from Alabama, you have
your main cities in Alabama, which for the most part, they are
located right on main interstates, as they are everywhere,
Mobile, Montgomery, Birmingham, Huntsville.
Then you get to these long stretches in between those
cities, and those are often the forgotten territories in terms
of investments, infrastructure, and otherwise.
Do you have any specific ideas that we can do to keep in
mind to make sure that we are continuing to flow those
investments, Highway Trust Fund investments, to those rural and
lower population communities?
Mr. Davis. In this case, it kind of begins and ends with
the State DOT because the Federal Government doesn't
particularly prescribe the degree to which the dollars given to
the States have to be spent, urban versus rural.
I believe 55, 60 percent of one program gets suballocated
by population, but that doesn't really account for the vast
majority of spending.
And Congress has traditionally been hesitant to force more
urban versus rural highway decisions on States, preferring to
let them make their minds up themselves.
Mr. Figures. Yes. And this is for anyone who wants to chime
in on it. But we have talked about the need for the balance
between EVs and the emerging EVs on the road to contribute to
the Highway Trust Fund.
How do we go about--how do you guys suggest that we go
about doing that in a more efficient way, given how they are
charged, like how they receive their fuel?
I guess we will start right here with you, Mr. Braceras.
Mr. Braceras. Congressman, was the question how would we
start to implement an EV charge?
Mr. Figures. No. How do you guys suggest that we go about
collecting----
Mr. Braceras [interrupting]. Oh, yes. I think that is the
big question for road usage charge.
I think the way to do this is through the telematics in the
vehicle. So we have got about 50/50 of our customers right now
are either choosing to do an odometer read and send that
picture of the odometer read to us, or we have agreements with
the OEMs, the car companies, and they will then give us just
that mileage that that car is driven within our State.
That it the most cost-effective way we have found, because
we have done these plug-ins into the OBD-II port, and that is
more expensive. And so I am pretty sure if the phone companies
figured out how to charge a lot of people, we could probably
figure out how to charge a lot of people as well.
Mr. Figures. Well, thank you guys for your time and
patience.
And I yield back.
Mr. Rouzer. Mr. McDowell, you're up if you're ready.
Mr. McDowell. Thank you, Chairman.
The funding mechanism of the Highway Trust Fund was
designed to set up a self-replenishing source of funding for
infrastructure projects, but for nearly two decades, the fund
has been sustained through transfers from the General Fund of
the Treasury.
The Congressional Budget Office's most recent projections
show that once the current surface transportation bill expires,
the Highway Trust Fund will have a $142 billion shortfall over
the next 5 years.
The funding structure established in the 1950s simply does
not work in the 21st century. We have all seen the increasing
number of hybrid and fully electric vehicles on the road,
especially over the past few years. I am all for consumer
choice, but EV owners have been reaping the benefits of the
highway system without contributing their fair share for long
enough.
Despite making up a growing proportion of cars on the road,
EVs avoid paying the user fees that other vehicle owners pay in
the form of fuel taxes, all while causing way more wear and
tear on road surfaces.
According to the Department of Transportation's own data,
EV batteries are heavier, sometimes up to 50 percent heavier,
than the traditional internal combustion engines that they are
replacing. The cost and frequency of road repairs is
increasing, and we must consider ways that all road users can
be a part of the solution. Simply put, EVs cannot continue to
get a free ride.
As the witnesses today have already attested to, the
stability of the Highway Trust Fund impacts each State's
ability to prioritize roadway improvements, which are vital to
keeping drivers safe on the roads we all use.
North Carolina is a prime example of a State that stands to
lose a lot if Congress does not act to fix this funding
shortfall. Our State's population is growing, resulting in more
drivers on the roads. This growth, coupled with the increased
costs of construction due to inflation brought on by the
previous administration, will continue to raise both the cost
and frequency of highway repairs.
When viewed through this lens, adding hurricane damage in
the mix is like throwing lighter fluid on a fire.
As a proud Congressman from the State of North Carolina, I
am going to ensure that my State has the resources it needs to
tackle these safety challenges head on.
I want to thank the witnesses for being here to testify
today before this subcommittee, and I look forward to the
discussion today.
Mr. Johnson, I appreciate you being here. For those that
may not know, the company--Fred Smith Company--has been
operating and growing in North Carolina for nearly 100 years.
It has over 1,200 employees across my home State. There are
even a couple of Smiths that live in my district.
But today, you are representing the asphalt pavement
industry, which has operations in every State across the
country. And, in fact, the Bureau of Transportation Statistics
at DOT estimates that one-tenth of our Nation's workforce is
directly employed by transportation-related industries.
So the value of your perspective and the work that this
committee accomplishes has a significant impact on your
business plans. With that in mind, does the Highway Trust Fund
solvency help with your company's projections regarding what
projects you bid on for a slate of work during a given paving
season?
Mr. Johnson. Yes. Thank you, Congressman.
So our State DOT does a really good job projecting out
projects that they have in their plans, and we count on those
for our planning and our future investments. And when we see
those jobs sliding because of funding, lack of funding, then we
are hesitant to pull the trigger on making additional
investments in our company, in our asphalt plants, and in
hiring more employees and training our employees for future
positions due to growth.
So without that consistent funding, it definitely makes us
question and not pull the trigger on certain investments.
Mr. McDowell. Gotcha.
As you mentioned in your testimony, North Carolina ranks
second in the Nation for the number of State-maintained roads
with more than 80,000 miles of highway and over 13,500 bridges.
Could you briefly describe the importance that HTF funding
has across our State alone, and how do variables, such as
hurricane damage or projected population growth, magnify the
scope of that impact?
Mr. Johnson. So the HTF funds about 25 percent of our total
roadway program in the State, which is very significant. We
perform a lot of projects for Fred Smith Company and others
across the State that would not happen without the HTF.
And as you mentioned the hurricane, we met with the State
DOT last week, and they are anticipating a $5 billion cost to
repair Hurricane Helene, and we are looking at some serious
deficits in the State funding due to that.
So the FHWA has been working very well with the State DOT
to reimburse those funds. So we appreciate that. But it is a
big mountain to climb.
Mr. McDowell. Sure thing. Thank you, sir.
And, Mr. Chairman, I yield back.
Mr. Rouzer. Mr. Taylor.
Mr. Taylor. Thank you, Chairman Rouzer and Ranking Member
Norton, for holding this hearing today.
Thank you to our witnesses for their time and testimony. I
know it is a big sacrifice to be here, and we appreciate you
all very much.
I represent a very rural part of Ohio. It is a place where
we have 4 of the 5 poorest counties and 9 of the 20 poorest
counties in the State of Ohio. So I would like to focus for a
minute on the selling points we have had for VMT.
Mr. Burkhard, the only basis for VMT being sold as a
benefit to rural communities today that I have heard is that
their cars get worse mileage. Are there others? Just so I am
clear.
Mr. Burkhard. Are you asking if there are other sources
other than----
Mr. Taylor [interrupting]. Somebody else asked you how it
was cheaper for rural communities to have VMT.
Mr. Burkhard. Yes.
Mr. Taylor. And you just said gas mileage. Are there any
others?
Mr. Burkhard. Yes. There were studies done through the
TETC, which is The Eastern Transportation Coalition, I-95
corridor. And they did studies with Georgia and Maryland and
determined that rural participants ended up paying anywhere
from 7 to 9 percent less than they would have paid with a fuel
tax.
Mr. Taylor. Okay. This is from a study done where? I am
sorry.
Mr. Burkhard. This is through the TETC, which is The
Eastern Transportation Coalition which, among other things,
supports mileage-based user-fee studies with several of its
member States, and this is a study that was done through that
program.
Mr. Taylor. So they said they paid less, but were there
reasons other than the fact that their cars are getting worse
mileage or just that is the [inaudible] that came out of that?
Mr. Burkhard. Yes, sir. Mostly it was due to the fact that
their vehicles were lower gas mileage. So the idea of mileage-
based user fee is that everyone pays the same amount per mile.
And as it is now, people are unfairly burdened when they have
vehicles that have lower gas mileage and that tends to----
Mr. Taylor [interrupting]. Okay. So what I am hearing is no
other reason besides their cars get worse mileage.
Mr. Davis, do you know of any other reason that it is
supposed to benefit rural communities other than their cars get
worse mileage?
Mr. Davis. No. Generally speaking, VMT is traditionally a
little higher in the rural areas than urban, although the
growth lately has been more in urban than rural.
Mr. Taylor. Does anyone know, either of you two know what
the baseline miles per gallon they use for urban and suburban
areas versus rural areas? Or did they just test a few cars?
Does anybody know about the methodology?
Because it really doesn't make a lot of sense to me that,
say, you get 28 miles per gallon driving in a suburban area. I
would think you would get less than that in an urban area
because you are sitting at stoplights all the time. Say you get
roughly 20 in a rural area, it is----
Mr. Burkhard [interrupting]. I think it is 23, but we can
get back to you on that.
Mr. Taylor. Twenty-three for?
Mr. Burkhard. Twenty-three miles per gallon.
Mr. Taylor. Which? For rural or for nonrural?
Mr. Burkhard. For rural.
Mr. Taylor. Okay.
Mr. Burkhard. Yes.
Mr. Taylor. Okay. So that makes it even better for the
rural folks. So say you are averaging 28 in nonrural areas, it
is like now it is going to be probably a 12- or 13-percent
difference in mileage. In my district, probably a 200-percent
difference in miles driven. That is not really sustainable. It
doesn't make sense to me that that would save the people in my
district money.
I mean, am I explaining myself to where it makes sense?
Okay.
And, again, there is no other basis for it?
Okay. All right. Thank you. I appreciate that very much.
Before I served in Congress, I owned a ready-mix concrete
business. So I will echo some of Congressman Collins' comments
from earlier. But I know the planning and work that goes into
carrying out infrastructure projects.
Mr. Johnson, how is the projected shortfall on the Highway
Trust Fund impacting the asphalt pavement industry regarding
project timelines, workforce stability, and project planning?
You only have 30 seconds, but if you want to hit the highlights
and you want to add stuff later, you can submit it.
Mr. Johnson. Yes. Of course.
So the shortfall has slowed down projects. It slowed down
projects. It has slowed down our growth. It has made the
environment much more competitive. And it is delaying projects,
which is impacting our entire industry significantly.
Mr. Taylor. Thank you, everybody.
And I yield back, Chairman.
Mr. Rouzer. Mr. Kennedy, you are recognized.
Dr. Kennedy of Utah. Thank you, Mr. Chair. It is a pleasure
to be here, and I am grateful for this important hearing being
convened.
Our Nation's infrastructure is the backbone of economic
opportunity, public safety, and quality of life. For decades,
the Highway Trust Fund has played a role in building and
maintaining that backbone. Yet today, we face a stark reality.
The trust fund is on an unsustainable path, threatening the
ability of States and localities to plan and deliver critical
projects.
We must work together to create a durable path forward that
restores certainty, empowers innovation for States, and meets
the needs of a growing and dynamic America.
Mr. Braceras, as a friend from Utah I have known for many
years, as we talked about at the earlier part, I will ask you a
series of questions, if that is all right.
We both know Utah has been a national leader in piloting
road usage charge programs. Can you speak to the lessons
learned from Utah's experience with RUC programs and how it
could translate to sustainable transportation funding efforts
nationally?
Mr. Braceras. Yes. Thank you, Congressman, for that
question. I thought you had been promoted there for a minute,
but that was quick.
Dr. Kennedy of Utah. For a minute, yes.
Mr. Braceras. So going back to probably 2003, 2004, that is
when our legislature kind of looked at transportation funding
across the board and determined that we are not going down a
sustainable path. And that is where the road usage charge
program came from.
So I would say a lesson learned for us in this is you have
to lead with your policy principles. You can't just jump into a
program and say this mathematically makes sense. You have to
lead with the policy principles.
So we focus on protecting people's privacy. We don't use
the word: we are going to ``track'' you. That is not what
anyone wants. And so we think that through.
One of the questions that Congressman Taylor asked earlier
about benefits to rural citizens, one of the things that we
found where the Farm Bureau was part of our convening board and
coming up with the policies was, we wouldn't charge if you are
not on a public road.
So rural users spend more time on nonpublic roads than
urban users. And so by having the ability to not charge when
you are on private roads, that was a benefit that the rural
community found in this.
Now, I think--I don't see the road usage charge being as
this panacea that is going to solve the problem. And we look at
this as it is a combination of multiple revenue sources. So as
we start to see more vehicles participate in the road usage
charge program, we are trying to imagine that matching up with
the decline in the purchasing power of the fuel tax.
So, we in Utah, we not only increased the 5-cent gas tax
increase in 2015, but we also indexed it, and we have indexed
that to CPI. And so every year, that is adjusted to CPI. Every
year, we are seeing road usage charge coming in, and we also
bring in General Fund moneys to do our capacity projects.
So basically, fuel tax, both Federal and State, is being
used, the user fee is being used to operate and maintain the
roadways, that day-to-day activities. And the capital expansion
is coming from our statewide sales tax of which, by statute, it
is earmarked at 27.5 percent of the General Fund is going to
just capacity projects.
And so we found that it is going to take several revenue
sources to be able to solve because there is so much need out
there.
Dr. Kennedy of Utah. Thank you for that answer.
I will add the idea that comes to me is, it is important--
and we have worked on these things, you know that I have been
in healthcare my whole career--and the Medicaid parameters
around a Federal-State partnership.
I am interested in your thoughts. If we go 50 years in the
future, as the decades unfold, what role do you see States
playing in collaboration with the Federal Government over the
next 50 years in regards to funding, maintaining, building
these roads, bridges, and other infrastructure that we need?
Mr. Braceras. I think that is one of the successes that we
have in this country, it is the Federal, State, local
partnerships. The projects are picked through a collaboration
with local governments and the State government, but it is a
State-administered, federally assisted program.
We can't do this without the Federal Government, because
this is a national transportation system that every State
depends on. Our economy, our security depends on this. And so
what I see going forward is, I anticipate we are going to see
much greater dependence on road usage charging for that
operation and maintenance piece.
But I believe as a country we still need to make a
commitment that we are going to continue to build new projects,
new transit projects, new road projects, because that is going
to be what is going to generate the economic growth in our
country.
Dr. Kennedy of Utah. Thank you for that statement.
And I will finish this by saying that there is a great deal
of redtape and difficulty that we put on ourselves through
Federal oversight and regulatory burden, and I, along with many
others, are interested in reducing and eliminating, when
necessary, those regulatory frameworks that actually are
nonfunctional for us.
With that, Mr. Chair, thank you for the time to ask these
questions.
Thank you to the witnesses for their willingness to be here
and take their time with us.
And I yield back.
Mr. Rouzer. Mr. Kiley.
Mr. Kiley of California. Thank you, Mr. Chair.
Underlying today's discussion about how we can shore up the
Highway Trust Fund has been sort of an implicit premise--or at
least sometimes this premise is there--that the more we spend,
the better our roads are going to be, the better our
transportation infrastructure is going to be. But that premise
is not necessarily true.
Most obviously, when you just look at the fact that
inflation has caused the cost of building to go up so much in
recent years, I think it is something like 40-percent reduction
in the purchasing power under the Infrastructure Act since it
passed.
But another example of that would be my own State of
California, which has the highest gas tax of any State in the
country, yet has among the worst roads. And our taxpayers seem
to pay more and more while the potholes get deeper and deeper.
And so, Mr. Braceras, you seem to have had some success in
Utah in terms of actually getting a better return on your
investment. So would you have any advice to us in California as
to how we can do better?
And maybe, Mr. Johnson, if you also wanted to weigh in on
this broader question of how, apart from the question of how we
shore up the trust fund, how do we actually get more of a
return on the funds we are investing?
Mr. Braceras. Thank you for that question.
So I think one of the ways to get more return on the
investment is the predictability of the funding. We can be more
strategic. We apply an asset management, every State DOT, asset
management business approach to try to determine which project
to do and at what time. If you can do the right project at the
right time, you can get better outcomes.
And so that predictability, knowing that you are going to
have X amount of money coming in every year, allows you. And
recognize that pavement conditions, bridge conditions,
especially in a large State like yours, take a long-term
commitment. You need to look at trends.
So what we did is in the mid-2000s, we realized at that
time we didn't have enough money to maintain all of our roads
at the same standard that we felt we needed to. So we stopped
maintaining what we called low-volume roads. We did reactive
maintenance, is all we did.
And we showed our legislature every year that we predict
with this investment this is going to be the pavement
condition, the trends that you are going to see. And then we
told them that with a 5-cent gas tax, we could turn that
condition around and start to improve it. And we have been able
to do that with performance measures.
So I think holding States and local governments accountable
for outcomes, give them the flexibility to figure out how to do
it, what projects to do it with, but hold them accountable for
outcomes and realize that these investments in infrastructure,
you have to look at trends that take a long time to turn a very
large ship.
Mr. Kiley of California. So, sir, what does that
accountability look like with the performance measures?
Mr. Braceras. I am sorry?
Mr. Kiley of California. What does the accountability look
like with those performance measures?
Mr. Braceras. So for us in Utah, in this one case, we were
looking at pavement condition. And so we were using the
performance measure that the public sees, the seat of their
pants. We call it IRI, International Roughness Index.
But what we were actually using with the engineers in the
back room was Overall Condition Index, looking at all the
distresses within the pavement system. And we were using that
asset management approach to predict with different investment
levels what that outcome would look like.
Does that make sense?
Mr. Kiley of California. Yes. And you said but the
accountability part is if the locality doesn't meet that
standard, what happens then?
Mr. Braceras. Yes. So I don't get taken to the woodshed. I
would probably get fired. But for my legislature, every year,
we are reporting how we are doing with that investment. So
reporting on safety, pavement condition, bridge condition,
mobility. We are looking at delays.
All of those things take place almost on a monthly basis by
legislature, and that is really, I think, the accountability
process where they are making sure we are investing all the
dollars, the State dollars and the Federal dollars, to get the
best outcomes.
Mr. Kiley of California. That is very helpful. Thank you.
And, Mr. Johnson, do you have anything you wanted to add?
Mr. Johnson. Sure. Yes. I agree with Mr. Braceras. It
definitely falls on the State DOTs. And they need predictable
funding so that they can plan the maintenance preparations and
they can prioritize which projects are most important so they
can get them on schedule and they can hold those schedules.
Because delay in schedules does nothing but make congestion
worse and the cost go up.
Mr. Kiley of California. Thank you very much.
I yield back.
Mr. Rouzer. Mr. Owens, you are recognized.
Mr. Owens. Thank you, Chairman Rouzer and Ranking Member
Norton.
I thank our witnesses today for joining us.
For nearly 70 years, the Highway Trust Fund has connected
our communities and facilitated the interstate commerce that
has made America the economic envy of the world. However, for
too long, we have kicked this Highway Trust Fund solvency down
the road, as it is a problem that will not go away, and it
hasn't.
In Utah's Fourth District, one of the fastest growing
regions in the country, infrastructure projects are
meticulously studied, planned, and executed, sometimes decades
in advance. To support these projects and others across the
country, this community must pursue predictable, reliable, and
fiscally responsible solutions that empower States and support
innovation.
Mr. Braceras, it is an honor again to host you today. Your
presence today reflects your outstanding leadership at UDOT and
Utah's role as a national leader in innovation and
infrastructure solutions.
Could you please share with the committee what actions the
State of Utah has taken to shore up its transportation funding
over the past years, particularly as the State's population has
grown.
Mr. Braceras. Thank you for that question, Congressman.
So in the State of Utah, we rely heavily on the Federal
program. It makes up just under 18 percent of our total funding
for a $2.5 billion budget, is what we manage in the State of
Utah.
So we are, compared to a lot of States, we are a relatively
small State by population, we are a large geographic State, but
we are a very urban State as well.
And so the Federal program is critical. We use that mostly,
almost exclusively, to take care of our pavements and our
bridges, our Federal program.
And then we use the State's gas tax money to operate the
system and also do things like install traffic signals, turn
lanes, passing lanes, those types I will call them operational
fixes.
And then we use the State general sales tax, 27.5 percent
of the statewide general sales tax, where the legislature has
determined there is a nexus. So we have been talking a lot
about user fees here. The legislature determined there is a
nexus between the vehicle sales, sales of vehicles, and
vehicle-related services. And that was the nexus that they used
to establish the percentage.
And that percentage is used for capacity projects, and we
use it for highway capacity projects, as well as transit
capacity projects, as well as active transportation projects
that we are doing around the State.
And so that is kind of the funding. We also have aviation,
rural transit program, and other funding pieces, but that is
the major solutions that our legislature has determined.
Because if we are going to continue to grow, transportation is
one of those foundational elements to our quality of life and
our economy.
Mr. Owens. Okay.
And could you also please outline what it would mean for
the State of Utah if Congress does not address the long-term
solvency of the Highway Trust Fund?
Mr. Braceras. Yes. Sorry, sir. Was it how would we propose
addressing?
Mr. Owens. Yes. What would it mean to our State if the
Congress does not address this long-term solvency problem?
Mr. Braceras. Oh. Yes. Thank you for that.
So every State develops what we call a 5-year STIP,
Statewide Transportation Improvement Program. And so here the
IIJA is about to expire here in September of 2026. We all are
making decisions because we have 5 years of projects because we
have to get the projects ready to go.
We are all making guesses of what Congress is going to do
in terms of what your funding level is going to be. I have
chosen to be conservative, and I have programmed flat.
So I have taken the last year of funding for IIJA, and I am
assuming we are going to at least have a flat budget because
basically the STIP is a commitment of projects. It is a promise
that I am making to our citizens that we are going to deliver
those projects.
So if Congress brings more money in, I am going to scramble
to find the projects to fill that up. If Congress does not fund
it at that last level, then we are going to be cutting
projects--we don't cut them. We push them back. We delay those
projects.
And so that is why it is critical. If we want to deliver
projects on time at the best cost and get the best outcomes, we
need to have that predictability.
And I would suggest that funding the formula programs
provides the States the best predictability to be able to get
projects out so our partners, the contractors, the
consultants--they need to plan. They need to have
predictability to make the investments they need to deliver the
projects that we ask them to do.
Mr. Owens. Thank you.
I just want to kind of wrap up by saying I have made the
point as often as I can that Utah should be the model. We
innovate. We grow. We collaborate like no other State in the
Union. So I hope they take my advice and use Utah as that
example.
Thanks so much. Appreciate it.
I yield back.
Mr. Rouzer. The gentleman yields back.
Are there any other questions from Members who have not yet
had the opportunity to ask?
I don't see any.
And, therefore, I want to thank our witnesses. Appreciate
your testimony today. It was very helpful, very instructive, a
lot of good dialogue here that will be very helpful as we move
forward.
So, with that, the subcommittee stands adjourned.
[Whereupon, at 1:01 p.m., the subcommittee was adjourned.]
Submissions for the Record
----------
Prepared Statement of Hon. Rick Larsen, a Representative in Congress
from the State of Washington, and Ranking Member, Committee on
Transportation and Infrastructure
Thank you, Chairman Rouzer and Ranking Member Norton, for holding
this hearing.
The Subcommittee has explored through the ``America Builds''
hearing series why robust investment in our transportation
infrastructure matters. Today, we will discuss how to keep the long-
term funding certainty for highway and transit programs going--by
discussing the future of the Highway Trust Fund.
The Highway Trust Fund provides predictable and steady funding for
states, counties, cities, Tribes and transit agencies to build and
maintain roads, bridges, freight corridors, transit systems and bike
and pedestrian infrastructure. These investments keep our economy
moving and our communities connected, getting people and goods where
they need to go.
Highway Trust Fund dollars are uniquely reliable, since they are
shielded from the ups and downs of the annual appropriations process
and government shutdown threats. Predictable funding over several years
allows states and localities to plan and deliver complex infrastructure
projects. Predictable cash flow also translates into dependable, good-
paying jobs for workers. However, over the past two decades, the Trust
Fund has faced an ongoing shortfall, requiring multiple interventions
from Congress to keep grants, safety improvements, and workforce
development initiatives going.
Congress has not raised the federal gas tax since 1993. Not
surprisingly, the revenue from gas and diesel taxes does not buy what
it used to in infrastructure projects. If the federal fuel taxes were
indexed to inflation, the current 18.3 cent tax on gasoline would be
over 40 cents per gallon and the diesel tax would be over 53 cents per
gallon (compared to 24.3 cents today).
Congress has transferred $275 billion in General Fund revenue into
the Highway Trust Fund since 2008 to keep investments going. States
have also stepped up to fill in some of the lost fuel tax revenue.
Since 2013, 35 states and Washington, DC, have increased their state
gas taxes. Additionally, at least 39 states assess annual EV fees,
ranging from $50 to $290. Electric vehicles are not the cause of
today's Trust Fund insolvency--but as they become more prevalent,
incorporating them into a user-pays system is appropriate.
The Bipartisan Infrastructure Law also funded state and national
pilot projects to study the viability of transitioning from a fuel tax
to a road user charge. As states continue to explore options to fund
transportation investment, Congress can learn from these efforts. 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 BIL's robust levels.
What also should not be up for debate is that the entities who,
thanks to the BIL, now reap the benefits of federal support--cities,
counties, tribal governments, and MPOs--must continue to have access to
reliable funding. These entities are active participants in solving
transportation problems and know local needs best. As we will hear in
testimony from Mr. Tomer today, these entities also own proportionally
more infrastructure than they get support for in federal dollars
compared to their state partners. Reliable highway, transit, and rail
funding in the BIL has supported 90,000 infrastructure projects that
are underway in every congressional district.
My home state of Washington has benefited from $3.3 billion in
Highway Trust Fund dollars, putting women and men to work modernizing
our infrastructure. Last month, the American Society of Civil
Engineers' Infrastructure Report Card showed that we are making
progress in improving our infrastructure and called for sustained
investment to keep the momentum going. Additionally, the National
Highway Traffic Safety Administration reported that last year was the
first time since 2020 that roadway fatalities fell below 40,000, a
testament to the BIL's focus on safety.
These encouraging signs of progress are years in the making and
will need sustained support to continue. The BIL's down payment on our
future should be the norm, not the exception, going forward. A cleaner,
greener, safer, and more accessible transportation system is possible,
but it requires continuing serious investment.
I look forward to hearing from our witnesses today about
sustainable funding solutions to address state and local infrastructure
needs.
Letter of April 29, 2025, from John A. Costa, International President,
Amalgamated Transit Union, Submitted for the Record by Hon. David
Rouzer
April 29, 2025.
Dear Representative:
On behalf of the nearly 200,000 members of the Amalgamated Transit
Union (ATU), the largest union representing transit workers in the
United States, I write in support of Chair Sam Graves and the House
Transportation and Infrastructure Committee's effort to support public
transportation by working to close the massive shortfall in the Highway
Trust Fund (HTF).
The federal gas tax is no longer capable of sustaining the HTF on
its own. New sources of revenue are needed to ensure that Congress will
not have to continually bail out the HTF through General Fund
transfers.
ATU appreciates the Committee's protection of the Federal Transit
Program and recognition of the key role it plays in sustaining our
economy. Every $1 invested in public transportation generates
approximately $5 in economic returns. Each year, millions of Americans,
including many union members, rely on the bus or train to get to work
every day. ATU looks forward to working with the Committee in the
months ahead as it works to reauthorize the vital transit programs
which provide the resources to help ATU members move our nation.
Sincerely,
John A. Costa,
International President, Amalgamated Transit Union.
Letter of April 29, 2025, to Hon. Sam Graves, Chairman, Committee on
Transportation and Infrastructure, from David C. Bauer, President and
Chief Executive Officer, American Road & Transportation Builders
Association, Submitted for the Record by Hon. David Rouzer
April 29, 2025.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20515.
Dear Chairman Graves:
The American Road & Transportation Builders Association strongly
supports the package of highway user fees released today as part of the
House Transportation & Infrastructure (T&I) Committee's budget
reconciliation proposal.
The user fee concept has been a cornerstone of federal investments
in critical highway, bridge and public transportation improvements
since the creation of the Interstate Highway System nearly 70 years
ago. These resources support the national infrastructure network that
serves as the circulatory system of the U.S. economy and enables the
personal mobility synonymous with the freedom entitled to every
American.
Highway Trust Fund (HTF) revenues, however, have not kept pace with
the growing demands placed on the nation's surface transportation
system, thereby necessitating the practice of relying on federal
general funds to supplement a revenue base that has remained static for
over 20 years. As a result, state transportation improvement programs
that rely on federal-aid for over 50 percent of their capital
investments have been plagued by uncertainty from recurring trust fund
revenue shortfalls.
The proposal you are advancing would restore equity to the HTF's
user fee foundation by ensuring owners of electric vehicles financially
support improvements to the road and bridge network from which they
directly benefit and begins an overdue dialogue about how to pay for
future federal surface transportation investments.
We urge all members of the House T&I Committee to support your
proposal to help provide their states with a robust and reliable
federal partner in the shared goal of delivering a 21st century
national surface transportation network.
Sincerely,
David C. Bauer,
President & CEO, American Road & Transportation Builders
Association.
Statement of Ian Jefferies, President and Chief Executive Officer,
Association of American Railroads, Submitted for the Record by Hon.
David Rouzer
On behalf of the members of the Association of American Railroads
(AAR), thank you for the opportunity to provide this statement for the
record. AAR freight railroad members account for approximately 84
percent of U.S. freight railroad mileage, 93 percent U.S. freight rail
employees, and 97 percent of U.S. freight rail revenue. The major
freight railroads in Canada and Mexico are AAR members, as are Amtrak
and several commuter rail systems.
Railroads Are Indispensable to Our Economy
For nearly 200 years, freight railroads have been central to
America's economic development, linking businesses across the country
and around the globe. Today, railroads serve nearly every industrial,
wholesale, retail, and resource-based sector of our economy. Each year,
America's freight railroads transport more than 1.5 billion tons of
freight and 28 million carloads and intermodal units--including huge
volumes of agricultural products, chemicals, construction materials,
food, manufactured goods, energy supplies, industrial equipment, and
more--across a network spanning more than 135,000 miles.
Freight rail also offers significant public benefits. A single
train can take hundreds of trucks off the highways, alleviating
congestion and reducing taxpayer costs associated with highway
construction and maintenance. On average, railroads are three to four
times more fuel efficient than trucks, meaning moving freight by rail
instead of truck reduces greenhouse gas emissions by up to 75 percent.
Rail employees are also highly compensated: in 2023, the average U.S.
Class I freight rail employee earned total compensation of $149,000. By
contrast, the average compensation per full-time equivalent U.S.
employee in 2023 was $97,200, just 65 percent of the rail figure.
Unlike trucks, barges, and airlines, America's privately-owned
freight railroads operate overwhelmingly on infrastructure they own,
build, maintain, and pay for themselves. From 1980 to 2024, America's
freight railroads spent nearly $840 billion (approximately $1.36
trillion in today's dollars) of their own funds on capital expenditures
and upkeep expenses related to locomotives, freight cars, tracks,
bridges, tunnels and other infrastructure and equipment. ``Crumbling''
might describe some U.S. infrastructure, but not freight rail.
Railroads and Trucks: Partners and Competitors
Rail intermodal is the long-haul movement of shipping containers
and truck trailers by rail, combined with a truck or water movement at
one or both ends. Intermodal allows railroads, ocean carriers, trucking
companies, and intermodal customers to take advantage of the best
attributes of various transportation modes. Today, just about
everything on a retailer's shelves, as well as many industrial goods
such as auto parts, may have traveled on an intermodal train.
Intermodal now accounts for approximately 25 percent of U.S. freight
rail revenue, more than any other traffic segment.
Railroads and trucks are partners on most intermodal shipments,
working seamlessly together to deliver safe, reliable, and cost-
effective transportation services. At the same time, though, railroads
and trucks are fierce competitors. Virtually every intermodal shipment
that moves via rail and truck could move solely by truck if rail rates
and service offerings were not competitive. In addition, railroads and
trucks compete intensively for vast segments of the non-intermodal
freight market, with customers choosing which mode to use based on
which one provides the best overall value. For the freight
transportation system to function at its best, it is essential that
rail and truck carriers compete on a level playing field, with policies
that do not tilt the market in favor of one mode over the other.
Unfortunately, that's not the case today. The United States has
historically relied on a user-pays system to fund investments in
highway infrastructure, but revenues into the Highway Trust Fund (HTF)
have failed to keep pace with spending needs. According to a recent
report by Congressional Budget Office (CBO), balances in both the
highway and transit accounts of the HTF will be exhausted in 2028. The
CBO says that if the taxes that are currently credited to the trust
fund remained in place and if funding for highway and transit programs
increased annually at the rate of inflation, the shortfalls accumulated
in the HTF highway and transit accounts from 2024 to 2033 would total
$241 billion.\1\
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\1\ Testimony of Chad Shirley, Principal Analyst Microeconomic
Studies Division, Congressional Budget Office before the U.S. House of
Representatives Subcommittee on Highways and Transit, Committee on
Transportation and Infrastructure, October 18, 2023.
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This shortfall has previously been covered by transfers from the
general fund, but general fund transfers to the HTF distort the freight
transportation marketplace in favor of trucking and put other
transportation modes at an unfair competitive disadvantage. This is
especially problematic for railroads, which build, maintain, and pay
for virtually all the infrastructure over which they operate.
Studies indicate that trucks cause the overwhelming share of the
damage to our nation's roads and bridges as compared to other vehicles,
and the fuel taxes and other fees heavy trucks pay do not come close to
covering the costs of that damage.\2\ The taxes and fees trucks pay to
help maintain our nation's roads and bridges have not been
substantially changed since 1993, resulting in a multi-billion-dollar
annual underpayment compared to the damage trucks cause.
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\2\ Congress should require that the Federal Highway Administration
finalize the highway cost allocation study required in the last surface
transportation reauthorization. This would provide needed precision
regarding the damage to our nation's roadways caused by each highway
user class.
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Congress should remedy this modal inequity by either increasing the
fuel tax or imposing a vehicle-miles traveled fee or a weight-distance
fee for motor carriers. An appropriate user fee would be self-
sustaining; would not increase taxes or fees for non-highway
transportation modes; and would create a competitive tax environment
across modes. While AAR supports ensuring that electric passenger
vehicles contribute to the HTF in proportion to the wear they cause on
highways, Congress must also ensure that the same standard applies to
commercial motor vehicles, whether electric or diesel-powered.
On a related note, Congress should reject calls to increase federal
truck size and weight limits until, at a minimum, trucks pay the full
cost of the damage they cause to our roads and bridges. The existing
multi-billion-dollar annual underpayment would become even greater if
truck length and weight limits were increased. Raising truck size and
weight limits would also artificially shift freight from rail to truck.
Given rail's inherent environmental advantages and the many other
benefits of moving freight by rail, imposing artificial impediments to
rail, such as increasing federal truck size and weight limits, is not
sound policy.
Conclusion
All transportation modes are crucial to our nation, and railroads
agree that non-rail U.S. transportation infrastructure should be world-
class, just as U.S. freight rail infrastructure is world-class.
Everyone involved in freight transportation knows that no country can
be a first-rate economic power without first-rate logistics and
transportation capabilities across modes.
Moreover, when it comes to transportation, we are all in this
together. The various modes of transportation compete fiercely against
each other. That competition is both healthy and necessary. But the
modes also cooperate extensively in countless markets, and that
cooperation is essential too. It is therefore entirely fitting that
policymakers recognize and support the interdependence of our supply
chains.
I respectfully suggest, though, that current public policy does not
always reflect the full value railroads offer. Freight rail represents
a viable and socially beneficial complement to highway freight
movement. This does not mean we should stop building highways or ignore
the vital role trucks play. But it does mean policymakers should more
fully account for the economic, environmental, and infrastructure
benefits that freight railroads provide. A balanced policy framework
that recognizes rail's potential will help ensure a more efficient,
more resilient, and more sustainable freight transportation system for
the nation.
Letter of May 13, 2025, to Hon. David Rouzer, Chairman, and Hon.
Eleanor Holmes Norton, Ranking Member, Subcommittee on Highways and
Transit, from David R. Hill, Executive Vice President-Energy,
Bipartisan Policy Center, Submitted for the Record by Hon. David Rouzer
May 13, 2025.
The Honorable David Rouzer,
Chairman,
Highways and Transit Subcommittee, House Committee on Transportation
and Infrastructure, Washington, DC 20515.
The Honorable Eleanor Holmes Norton,
Ranking Member,
Highway and Transit Subcommittee, House Committee on Transportation and
Infrastructure, Washington, DC 20515.
RE: House Subcommittee on Highways and Transit Hearing on ``America
Builds: The Need for a Long-Term Solution for the Highway Trust Fund''
(April 29, 2025)
Dear Chairman Rouzer and Ranking Member Norton,
The federal Highway Trust Fund (HTF), which supports the
construction and maintenance of our nation's highways and transit
systems, is facing a cash flow crisis. Since the gas tax is not
currently indexed to inflation, its purchasing power has decreased
significantly since 1993, when it was last raised. Reduced purchasing
power and fuel consumption have led the HTF to become increasingly
reliant on transfers from the U.S. Treasury Department's general fund--
over $275 billion since 2008--to maintain spending at the levels
authorized by Congress.
According to the Congressional Budget Office's most recent
projections, the HTF is expected to run out of money sometime in 2028.
After that, Congress will be confronted with HTF revenue shortfalls of
about $40 billion annually (and increasing over time) that must be
covered through increased revenues, decreased spending, or additional
general fund bailouts--$340 billion cumulatively through 2035.
Over the years, the Bipartisan Policy Center has worked to outline
politically viable, fiscally responsible policy options to sustainably
fund federal transportation programs, while also focusing on the
equally important question of how to spend transportation funding more
effectively. One past effort, spearheaded by former Reps. Bill Shuster
and Joe Crowley, noted a need to reinforce the user-pay, user-benefit
principle that underlies the HTF. The former lawmakers recommended a
series of policy changes to raise the revenues needed to support stable
federal transportation spending, account for increased fuel efficiency
and electric vehicle (EV) adoption, and secure bipartisan support.
As the subcommittee considers ways to improve the long-term
stability of the HTF, we write to highlight these options, including
the need for a modest fee on EVs and an increase in the gas tax to
address expected HTF deficits in the near term, while providing
sufficient time and resources to transition to a vehicle miles traveled
(VMT) fee as the long-term solution.
While the gas tax long served as a fair, reasonable, and reliable
way to fund the HTF, electric and hybrid vehicle use has grown
significantly, and fuel efficiency continues to improve for gas-powered
cars. A fuel tax alone is no longer appropriate or sustainable.
Under the current system, EV owners use highways and bridges
constructed and maintained with HTF funding without contributing to the
fund's revenue. EVs are typically heavier than gasoline-powered cars of
a similar size and can have a greater impact on road wear and
associated costs. Although EVs comprise less than 2% of light-duty cars
on the road today, EV market penetration is expected to increase
rapidly over the next few decades--which means less gas consumption per
vehicle and thus less revenue for the HTF.
As a stop-gap policy, a fee on EVs would not only increase revenues
to pay for critical programs but also increase fairness by ensuring
that all those who are benefiting from safe and well-maintained
highways are paying something to support their construction and
maintenance. At least 39 states have already moved to implement similar
EV registration fees, ranging from $50 to as much as $250 annually, to
help offset declining revenues from state gas taxes.
However, a fee on EVs alone will not be enough to bridge the gap
between the HTF's revenues and expenditures. Increasing the gas tax to
bring it in line with the rate of inflation since it was last adjusted
in 1993 and indexing it to inflation going forward remains the most
straightforward option to secure the HTF's near-term financial
stability.
The most effective long-term solution to funding the HTF would be
to transition to a VMT fee, which would be based on miles driven rather
than gallons of gas purchased. Charging drivers based on the amount
they drive, regardless of how their vehicle is powered or what type of
vehicle they may buy in the future, is the most direct way to ensure
that the HTF can continue to operate in a fiscally responsible way. The
Infrastructure Investment and Jobs Act included provisions to establish
a national per-mile road usage fee pilot program, while continuing to
support state-level pilots, reflecting similar BPC recommendations. Yet
the pilot was not prioritized and remains woefully behind in its
implementation--an additional opportunity for this subcommittee as it
weighs the HTF's future.
Taking steps now to secure reliable revenue for the HTF going
forward will prevent negative consequences for drivers across the
country, such as worsening congestion and safety, as well as increasing
damage to vehicles, which would require owners to spend money on
repairs.
We stand ready to assist as you put forward and build bipartisan
support for the policies needed to secure the HTF's financial future
and more effectively invest limited federal dollars in critical
transportation infrastructure.
Sincerely,
David R. Hill,
Executive Vice President-Energy, Bipartisan Policy Center.
CC: Sam Graves, Chair, House Transportation and Infrastructure
Committee
Rick Larsen, Ranking Member, House Transportation and
Infrastructure Committee
Letter of April 30, 2025, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from the National Asphalt Pavement Association; National Stone, Sand &
Gravel Association; Portland Cement Association; and National Ready
Mixed Concrete Association; Submitted for the Record by Hon. David
Rouzer
April 30, 2025.
The Honorable Sam Graves,
Chair,
Committee on Transportation and Infrastructure, 1135 Longworth House
Office Building, Washington DC 20510.
The Honorable Rick Larsen,
Ranking Member,
Committee on Transportation and Infrastructure, 2163 Rayburn House
Office Building, Washington, DC 20510.
Dear Chairman Graves and Ranking Member Larsen,
Investing in our nation's critical surface transportation network
provides the American people and businesses the opportunity to thrive.
In 2022, our nation's road and bridge network facilitated the movement
of over 19 billion pounds of freight worth an estimated $18 trillion--
72% of our nation's cargo. In addition to freight, our highway system
paves the way for people to move efficiently and effectively to school,
sports, work and travel.
This critical highway system relies on funding from Congress via
the highway trust fund. Since its inception, the highway trust fund has
been a user-based system, meaning funding for maintenance and
construction of the network comes from the highway users. These
revenues are primarily derived from gas and diesel taxes as well as
truck excise taxes, however, over the last 2 decades, declines in
revenues have created significant budget shortfalls within the trust
fund. Revenues from the trust fund have not been adjusted since the gas
tax was raised in 1993 and each year these revenues decline due to a
more fuel-efficient fleet and an increase in electric vehicles.
Currently, those electric vehicles do not pay a federal user-fee,
although, 38 states around the country have implemented a similar fee.
We support the Committee's efforts to raise revenues for the trust
fund through user fees--by implementing an electric vehicle
registration fee and ensuring all road-users continue to pay into the
system. While these proposals will not completely address the
shortfalls in the trust fund, they begin the critical work of finding a
sustainable funding source for the highway trust fund We also encourage
the Committee to ensure that revenues collected new fee are remitted to
and remain in the highway trust fund.
Thank you for your dedication and commitment to addressing the
challenges associated with financing our nation's critical surface
transportation network. This proposal is a great step in the right
direction, ensuring a fair and equitable solution that maintains the
highway trust fund and its historic user-fee approach. Our nation's
roads and bridges are the foundation of the economy, and these policies
and investments will have lasting impacts for generations to come.
Sincerely,
National Asphalt Pavement Association.
National Stone, Sand & Gravel Association.
Portland Cement Association.
National Ready Mixed Concrete Association.
Letter of April 30, 2025, to Hon. Sam Graves, Chairman, Committee on
Transportation and Infrastructure, and Hon. David Rouzer, Chairman,
Subcommittee on Highways and Transit, from NATSO, Representing
America's Travel Plazas and Truckstops; and SIGMA: America's Leading
Fuel Marketers; Submitted for the Record by Hon. David Rouzer
April 30, 2025.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20515.
The Honorable David Rouzer,
Chairman,
Subcommittee on Highways and Transit, Committee on Transportation and
Infrastructure, U.S. House of Representatives, Washington, DC
20515.
Dear Chairman Graves and Subcommittee Chair Rouzer:
NATSO, Representing America's Travel Centers and Truckstops, and
SIGMA: America's Leading Fuel Marketers (together, the
``Associations'') \1\ strongly support several of the provisions
included in the House Transportation and Infrastructure Committee's
(the ``Committee's'') proposal for reconciliation pursuant the
Concurrent Resolution on the Budget for Fiscal Year 2025. Specifically,
the Associations' offer our support for the proposed registration fees
for motor vehicles and the rescission of grant funds for a sustainable
aviation fuel (``SAF'') grant program.
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\1\ NATSO currently represents approximately 5,000 travel plazas
and truckstops nationwide, comprising both national chains and small,
independent locations. SIGMA represents a diverse membership of
approximately 260 independent chain retailers and marketers of motor
fuel. The retail fuels and convenience industry provide 2.38 million
jobs at approximately 120,000 retail establishments across the country.
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The Committee's areas of jurisdiction under the budget
reconciliation process offer an opportunity to build a reliable,
efficient, and well-capitalized surface transportation system. The
budget reconciliation process is also an opportunity to support
reliable energy from a variety of sources at reasonably low, stable
prices. In this respect, the Associations urge the Committee to advance
technology-neutral policies that encourage investment in alternative
refueling infrastructure that lowers fuel prices for consumers.
The Associations welcome the Committee's proposal to adopt a
technology-neutral highway funding mechanism that ensures all vehicles
utilizing federal roads and bridges contribute to the Highway Trust
Fund. Though the proposed vehicle registration fee would not result in
proportionate contributions from electric vehicles that do not pay the
federal gas tax, it represents an important first step in establishing
a technology-neutral approach to highway funding. Ultimately, the
proposed approach could pave the way for a long-term, sustainable
funding mechanism that equitably assesses fees on all Interstate
highway users. The Associations applaud the proposal.
The Associations also strongly support the Committee's efforts to
rescind funding the unnecessary, inefficient SAF grant program (``FAST
Grant Program'') created in the Democratic Inflation Reduction Act of
2022.\2\ Republicans voted unanimously against the enactment of this
program. The FAST Grant Program utilizes taxpayer funds to divert
existing biofuel production capacity toward sustainable jet fuel
production to meet the Biden Administration's `ESG' goals.
Specifically, the FAST Program funded projects to dismantle active
ethanol and advanced biofuel capacity to construct costly new SAF
facilities on the taxpayer dime.\3\
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\2\ See Public Law 117-169 at Sec. 40007 and 49 U.S. Code 44504.
\3\ The Biden Administration utilized the FAST Grant Program to
award $16.8 million in taxpayers funds to convert an existing ethanol
and isobutanol fuel refinery in Luverne, Minnesota, to a facility for
SAF production. See https://www.faa.gov/newsroom/biden-harris-
administration-announces-nearly-300-million-awards-sustainable-
aviation-fuels#.
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Because of the relative production inefficiencies of SAF and the
limited availability of biofuel feedstocks, projects funded under the
FAST Grant Program will result in a decrease in overall biofuel
production capacity. In turn, the reduced availability of ethanol and
other advanced biofuels will raise fuel prices for consumers at the
pump. Congress should ensure that incentives for alternative fuels are
technology-neutral and direct biofuel feedstocks towards their most
efficient, environmentally-compelling use case. The Associations are
grateful that the Committee is proposing to rescind funding for this
program that, if left unchecked, will ultimately result in higher over-
the-road fuel prices.
The Associations are eager to work with the Committee to advance
well-designed policies that support a robust, well-capitalized surface
transportation system where consumers have access to low-cost and
reliable refueling infrastructure. We encourage the Committee to adopt
the budget reconciliation proposal as drafted.
Sincerely,
NATSO, Representing America's Travel Plazas and Truckstops.
SIGMA: America's Leading Fuel Marketers.
cc: Republican Members of the House Transportation and Infrastructure
Committee
Letter of April 28, 2025, to Hon. David Rouzer, Chairman, and Hon.
Eleanor Holmes Norton, Ranking Member, Subcommittee on Highways and
Transit, from Todd Spencer, President and Chief Executive Officer,
Owner-Operator Independent Drivers Association, Inc., Submitted for the
Record by Hon. David Rouzer
April 28, 2025.
The Honorable David Rouzer,
Chairman,
House Committee on Transportation and Infrastructure, Subcommittee on
Highways and Transit, 2165 Rayburn House Office Building,
Washington, DC 20515.
The Honorable Eleanor Holmes Norton,
Ranking Member,
House Committee on Transportation and Infrastructure, Subcommittee on
Highways and Transit, 2165 Rayburn House Office Building,
Washington, DC 20515.
Re: America Builds: The Need for a Long-Term Solution for the Highway
Trust Fund
Dear Chairman Rouzer and Ranking Member Holmes Norton,
On behalf of the 150,000 members of the Owner-Operator Independent
Drivers Association (OOIDA), we write to share the highway funding
priorities of small-business truckers. Professional truck drivers cover
tens of billions of miles on American highways each year, so our
members can speak from experience about the significant need to update
and maintain our roads. Between the current diesel fuel tax and other
trucking-specific taxes and fees, the trucking industry contributes
about half of user fee funding that goes in to the Highway Trust Fund
every year. We understand the value of an efficient highway network and
support efforts to increase HTF revenues so long as they are done in a
fair and equitable way.
The federal gasoline and diesel taxes are proven mechanisms that
provide a transparent and efficient way to fund highway construction
and maintenance. The costs of administering these user fees are
extremely low--estimated to be less than 1% of all revenues
collected.\1\ Congress should be looking to build on this relatively
stable and predictable system. Therefore, we support efforts to
increase dedicated revenues to the HTF through reasonable and impartial
increases to federal gasoline and diesel taxes.
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\1\ Transportation Research Board, Costs of Alternative Revenue
Generation Systems, Report 689 (National Highway Cooperative Research
Program, 2011)
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In addition to these traditional user fees, we a support a recent
proposal from this committee that would require electric vehicles to
pay an annual registration fee to the HTF. Truckers remain frustrated
that electric vehicles currently pay nothing despite having equal
access to the roads, bridges, and highways maintained by other road
users. We also support H.R. 1253/S. 536, the Fair Sharing of Highways
and Roads for Electric Vehicles Act (Fair SHARE Act), which would
impose a one-time fee on electric vehicles and a fee on heavy-duty
battery modules. These proposals would ensure that electric vehicles
finally start to pay their fair share for our nation's infrastructure.
While we support these types of measures to raise revenue, we are
steadfastly opposed to proposals that would disproportionately burden
truckers. One potential funding mechanism we are concerned with is a
vehicle miles traveled (VMT) tax. While this concept may sound
appealing in theory, there are far too many questions and uncertainties
for Congress to begin implementing any sort of VMT program in the next
highway bill.
First, there will be significant costs associated with a VMT tax,
including the costs for equipment to establish the system, the
administrative cost for highway users and the government to track and
collect taxes, and the costs to enforce the program. Implementation and
administrative fees are likely to be at least ten times as high as the
current fuel tax system \2\ and will be especially burdensome for small
businesses.
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\2\ CBO, Issues and Options for a Tax on Vehicle Miles Traveled by
Commercial Trucks (2019)
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While we are opposed to moving forward with a VMT program in
general, we are particularly concerned about proposals that would
single out the trucking industry for a truck-only VMT. This would
assure that truckers pay a disproportionate cost to prop up the HTF. We
also oppose any efforts to utilize Electronic Logging Devices (ELDs) to
implement a VMT for trucks. Small-business truckers have already borne
a significant cost for complying with the ELD mandate, and utilizing
ELDs for VMT would create new costs and greater privacy issues.
The Infrastructure Investment and Jobs Act required U.S. Department
of Transportation to implement a national VMT Pilot Program to study
the feasibility of a VMT. The advisory board that will help structure
the pilot program has been formed, but has not held any meetings yet.
Therefore, we believe it would be premature for Congress to pursue this
policy at this time.
OOIDA also remains opposed to the expansion of tolling. Tolling
systems lack the efficiency and effectiveness of the current funding
mechanisms. Research has shown that tolling is an extremely wasteful
method of generating revenue compared to fuel taxes, with as much as
30% of funds going to administrative costs \3\ rather than the
construction and rehabilitation of roads and bridges. Additionally,
toll roads consistently fail to meet revenue projections, creating
unanticipated funding shortfalls, which can lead to deteriorating road
conditions and early toll rate increases.
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\3\ Transportation Research Board, Costs of Alternative Revenue
Generation Systems, Report 689 (National Highway Cooperative Research
Program, 2011)
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Truckers predominantly pay tolls out-of-pocket, as shippers seldom
reimburse toll charges under the freight rate system. For small
trucking businesses, any expansion of tolling, especially on major
highways like Interstates, will directly impact their bottom line.
Often operating on the slimmest of margins, new out-of-pocket expenses
would diminish an owner-operator and their family's income.
Finally, we understand that there are proposals to repeal the
Federal Excise Tax (FET) on heavy-duty trucks. While we certainly don't
oppose repealing a tax on our industry, Congress must first identify an
offset to account for lost HTF revenues. Without such a pay-for,
inequitable financial burdens would likely fall on small-business
truckers and owner-operators to make up the difference.
As your committee consider ways to raise additional revenue for the
HTF, we hope that you will keep America's small-business truckers'
concerns in mind. We look forward to working with you to rebuild our
nation's transportation infrastructure.
Sincerely,
Todd Spencer,
President & CEO, Owner-Operator Independent Drivers Association,
Inc.
Letter of April 30, 2025, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Todd Spencer, President and Chief Executive Officer, Owner-
Operator Independent Drivers Association, Inc., Submitted for the
Record by Hon. David Rouzer
April 30, 2025.
The Honorable Sam Graves,
Chairman,
House Committee on Transportation and Infrastructure, 2165 Rayburn
House Office Building, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
House Committee on Transportation and Infrastructure, 2165 Rayburn
House Office Building, Washington, DC 20515.
Re: Support for EV/Hybrid Annual Fee
Dear Chairman Graves and Ranking Member Larsen,
On behalf of the Owner-Operator Independent Drivers Association
(OOIDA), representing 150,000 small-business truckers and professional
drivers, we write in support of the proposal before the Committee to
assess an annual fee on electric and hybrid vehicles. Professional
truck drivers cover tens of billions of miles on American highways each
year, so our members can speak from experience about the significant
need to update and maintain our roads. Our members understand the value
of an efficient highway network and support efforts to increase Highway
Trust Fund (HTF) revenues so long as they are done in a fair and
equitable way.
America's truckers are the backbone of our supply chain and make
significant contributions to maintaining our roads and bridges by
paying several taxes that support the HTF. However, truckers remain
frustrated that electric vehicles currently pay nothing to the HTF
despite having equal access to the roads and highways maintained by
taxpayers.
We believe that this proposal for an annual fee on electric and
hybrid vehicles is the very least that these vehicle owners should be
paying to help maintain our infrastructure. OOIDA and the 150,000
truckers we represent support this proposal which would help ensure
fairness on America's roadways.
Sincerely,
Todd Spencer,
President & CEO, Owner-Operator Independent Drivers Association,
Inc.
Letter of April 29, 2025, to Hon. David Rouzer, Chairman, and Hon.
Eleanor Holmes Norton, Ranking Member, Subcommittee on Highways and
Transit, from Sean O'Neill, Senior Vice President of Government
Affairs, Portland Cement Association, Submitted for the Record by Hon.
David Rouzer
April 29, 2025.
The Honorable David Rouzer,
Subcommittee Chair,
Highways and Transit Subcommittee, Washington, DC 20515.
The Honorable Eleanor Holmes Norton,
Subcommittee Ranking Member,
Highways and Transit Subcommittee, Washington, DC 20515.
Dear Chairman Rouzer and Ranking Member Norton:
On behalf of the Portland Cement Association, which represents the
majority of cement manufacturers across the country, we appreciate the
opportunity to submit a letter for the record for today's hearing,
``America Builds: The Need for a Long-Term Solution for the Highway
Trust Fund.'' We appreciate the opportunity to share our perspective on
the importance of addressing the long-term solvency of the Highway
Trust Fund.
Our members manufacture cement, the primary ingredient in concrete,
an essential construction material to building roads, bridges, tunnels,
culverts, pipes, transit, and sidewalks in communities across the
country. Cement and concrete product manufacturing, directly and
indirectly, employs 577,000 people across the country, and our
collective industries contribute over $130 billion to the nation's
economy.
As members of the subcommittee know, receipts into the Highway
Trust Fund come from taxes on highway fuel, tires, heavy vehicle use
tax, and truck/trailer sales taxes. The motor fuel tax, 18.3 cents per
gallon for gasoline and 24.4 cents per gallon for diesel, is the
primary funding mechanism for the Highway Trust Fund and has remained
unchanged since 1993. Over the past 30 years, the purchasing power of
these taxes have lost significant purchasing power, while authorized
funding from the Highway Trust Fund for federal-aid highway, roadway
safety, and transit programs have more than tripled. Additionally, as
there has been a move to more fuel-efficient electric vehicles,
revenues collected for the Highway Trust Fund have further eroded.
Collectively, these facts have contributed to the widening gap between
the Highway Trust Fund receipts and expenditures.
Since fiscal year 2008, outlays from the Highway Trust Fund have
consistently exceeded its receipts. To address this gap, Congress has
transferred a total of $275 billion in general revenue to the Highway
Trust Fund. The Congressional Budget Office projects receipts to
Highway Trust Fund will not be able to meet outlays starting in fiscal
year 2028. Specifically, the Congressional Budget Office projects the
Highway Trust Fund to have a negative balance of over $22 billion in
fiscal year 2028.\1\ Additionally, to continue the investments in
highways, public transit, safety, and multi-modal projects, with
adjustments for inflation and regardless of Infrastructure Investment
and Jobs Act funding source, Congress will need to find approximately
$260 billion in funding.
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\1\ https://www.cbo.gov/system/files/2025-01/51300-2025-01-
highwaytrustfund.pdf
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These numbers demonstrate the need to address the long-term
solvency of the Highway Trust Fund so that recipients of federal-aid
highway funding can plan, engineer and design, and move forward with
the construction of critical transportation projects across the
country. The funding mechanisms of the Highway Trust Fund have a user
fee structure. A long-term funding solution to address the solvency of
the Highway Trust Fund should maintain this structure. With
improvements to vehicle efficiency and the growth of electric and
hybrid vehicles, a fee on these vehicles and dedicating the revenues
solely to the Highway Trust Fund would help ensure all users of the
system are paying for its upkeep. While a fee of electric and hybrid
vehicles alone would only partly enhance Highway Trust Fund revenues,
it is an important component of addressing the long-term solvency of
the Highway Trust Fund.
We look forward to working with the Transportation and
Infrastructure Committee to not only address the long-term solvency of
the Highway Trust Fund but to pass a long-term reauthorization of the
surface transportation program so communities can continue making
critical investments in transportation infrastructure. If you have any
questions, please do not hesitate to reach out to me.
Sincerely,
Sean O'Neill,
Senior Vice President, Government Affairs, Portland Cement
Association.
Letter of May 5, 2025, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Dave Heller, Senior Vice President of Safety and Government
Affairs, Truckload Carriers Association, Submitted for the Record by
Hon. David Rouzer
May 5, 2025.
The Honorable Sam Graves,
Chairman,
House Committee on Transportation and Infrastructure, 2165 Rayburn
House Office Building, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
House Committee on Transportation and Infrastructure, 2165 Rayburn
House Office Building, Washington, DC 20515.
Re: Support for EV/Hybrid Annual Fee
The Truckload Carriers Association (TCA), with offices at 555 E
Braddock Road, Alexandria, VA, is the only national trade association
whose sole focus is the truckload segment of the trucking industry. The
association represents dry van, refrigerated, flatbed, and rail
intermodal carriers operating in 48 contiguous U.S. states, Alaska,
Mexico, and Canada. As a significant part of an industry with over half
a million companies operating millions of power units within the United
States.
The TCA and its membership favor a fee for all Hybrid and Electric
Vehicle Users. We have consistently backed efforts such as Senator Deb
Fischer's (R-NE) ``Stop EV Freeloading Act,'' now known as the ``Fair
SHARE Act,'' and we are equally supportive of the House companion bill
championed by Representative Dusty Johnson (R-SD-At Large).
At TCA, we believe every vehicle traveling on our nation's highways
should invest in the Highway Trust Fund regardless of its power source.
This includes electric vehicles, which often weigh more than
conventional vehicles and can cause greater wear and tear on our
infrastructure.
We would be remiss if we also did not voice our longstanding
support for increasing the federal fuel tax, provided it is indexed to
inflation or includes an appropriate annual cap. The tax stands at 18.4
cents per gallon for gasoline and 24.4 cents per gallon for diesel,
which has not been raised since 1993.
Thank you for the opportunity to submit this letter. TCA looks
forward to collaborating with the House Transportation and
Infrastructure Committee in any way we can to support a strong and
sustainable future for our highway system.
Sincerely,
Dave Heller,
Senior Vice President of Safety and Government Affairs,
Truckload Carriers Association.
Letter of April 29, 2025, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Rodney Davis, Senior Vice President of Government Affairs, U.S.
Chamber of Commerce, Submitted for the Record by Hon. David Rouzer
April 29, 2025.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20515.
Dear Chairman Graves and Ranking Member Larsen:
As your committee advances the budget reconciliation process, the
U.S. Chamber of Commerce commends you for exploring opportunities to
restore the Highway Trust Fund (HTF) as the primary mechanism financing
critical surface transportation projects through targeted ``user
fees.''
This is a debate that is long overdue. With existing user fees on
gasoline, diesel, and other motor fuels no longer keeping pace with
surface transportation investment needs, the HTF requires additional or
alternative sources of revenue to remain solvent. Your committee's
consideration of new user fees--including an ``electric vehicle (EV)
fee'' on EVs and hybrids, and a ``universal fee'' on all passenger
vehicles--helps provide options for long-term solvency of the HTF, and
importantly greater certainty on our ability to fund our Nation's
transportation infrastructure.
Following the reconciliation process, this debate must continue as
part of the surface transportation and infrastructure reauthorization.
Modernizing the current user fee system to reflect the realities of
rising construction costs, permitting delays, inflation, increasing
fuel efficiency, and the growing number of electric vehicles, can help
ensure all users contribute meaningfully to our nation's highway
system.
Thank you for considering our views and your work to pass this
meaningful budget reconciliation legislation. We look forward to
working with you on enacting this into law as well as working with you
to pass the next surface transportation and infrastructure
reauthorization bill later this year.
Sincerely,
Rodney Davis,
Senior Vice President, Government Affairs, U.S. Chamber of
Commerce.
Letter of April 25, 2025, to Members of Congress from 26 National
Agriculture Associations, Submitted for the Record by Hon. David Rouzer
April 25, 2025.
Dear Members of Congress:
Investments in roads and bridges are vital to America's agriculture
industry. These infrastructure improvements significantly enhance rural
communities and strengthen our industry supply chains, ensuring
efficient delivery of crop inputs for successful harvests and efficient
connections between farmers and their domestic and global markets.
A sufficiently and predictably funded Highway Trust Fund (HTF)
makes this all possible. However, the HTF is facing challenges that
could lead to insolvency within a few years. Further, although Congress
established the HTF as a ``user-pays'' system, not all highway users
are contributing equitably. Electric vehicles do not contribute to the
HTF at all because they are not subject to the federal fuel tax. Hybrid
vehicles, while subject to the fuel tax on the gasoline they consume,
contribute less than traditional internal combustion vehicles.
Additionally, EVs and hybrid vehicles have heavy batteries that cause
more road wear compared to conventional vehicles.
Fairness is a core value on the farm and across rural America. This
principle extends to ensuring that all vehicle users, regardless of
their fuel type or technology, contribute equitably to the upkeep and
improvement of our roads and bridges. It has come to our attention that
the House Republicans are seeking to include an equitable solution in
their upcoming budget reconciliation package. The undersigned
organizations, representing the American agriculture industry, urge
Congress to act and ensure that these vehicles contribute an amount
comparable to what gasoline and diesel vehicles pay to the Highway
Trust Fund (HTF), with all revenues dedicated to the HTF. We encourage
a simplistic design for raising revenue from EV and hybrid vehicle
owners, such as a supplement to annual registration fees, and to avoid
creating a duplicative tax, such as a vehicle miles tax, for gas and
diesel vehicle owners. More than 30 states have implemented fees on EV
and hybrid vehicle owners to offset revenue lost from traditional gas
taxes.
We appreciate Congress' ongoing support of American agriculture and
the transportation network that enables a successful rural economy.
Sincerely,
Agricultural and Food Transporters Conference.
Agricultural Retailers Association.
Agriculture Transportation Coalition.
Amcot.
American Cotton Shippers Association.
American Farm Bureau Federation.
American Feed Industry Association.
American Soybean Association.
Corn Refiners Association.
Fresh Produce Association of the Americas.
Hardwood Federation.
International Fresh Produce Association.
National Aquaculture Association.
National Association of Wheat Growers.
National Corn Growers Association.
National Cotton Council.
National Council of Farmer Cooperatives.
National Grain and Feed Association.
National Grange.
National Potato Council.
North American Millers' Association.
North American Renderers Association.
Specialty Soya & Grains Alliance.
The Fertilizer Institute.
USA Rice.
U.S. Meat Export Federation.
Letter of April 25, 2025, to Hon. Sam Graves, Chairman, Committee on
Transportation and Infrastructure, from 31 National Transportation and
Construction Associations, Submitted for the Record by Hon. David
Rouzer
April 25, 2025.
The Hon. Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20515.
Dear Chairman Graves:
Investing in the nation's infrastructure provides far-reaching
economic benefits. Recent congressional support for roads, bridges and
public transportation systems has helped deliver much-needed projects
to every congressional district across the country. These improvements
have enhanced safety, mobility and efficiency nationwide.
These outcomes are made possible by the continuity and
predictability of funding supported by a healthy Highway Trust Fund
(HTF). At present, HTF revenues are generated primarily through user
fees on the sale of gas and diesel fuels, along with transfers from the
General Fund to make up for insufficient revenues.
However, improvements to vehicle efficiency and the influx of
hybrid and electric vehicles have resulted in a system where all users
of the system are not treated fairly. Instead, some users pay for the
maintenance of the system, while other users pay less or nothing at
all. At the same time, user fee revenue has not met system needs.
The undersigned organizations urge you to include a fee on electric
and hybrid vehicles in the committee's upcoming reconciliation measure
and dedicate the revenues solely to the HTF. While this solution would
only partly enhance HTF revenues, it would help ensure all users of the
system are paying for its upkeep.
We are grateful for the support Congress has provided for the
nation's surface transportation infrastructure network and look forward
to working with you to ensure users of the system equitably pay for
their maintenance and expansion.
Sincerely,
American Road & Transportation Builders Association.
Associated General Contractors of America.
American Society of Civil Engineers.
International Union of Operating Engineers.
American Public Transportation Association.
American Trucking Associations.
American Association of State Highway and Transportation Officials.
Associated Equipment Distributors.
American Concrete Pavement Association.
American Short Line and Regional Railroad Association.
Association of Equipment Manufacturers.
Independent Lubricant Manufacturers Association.
American Concrete Pipe Association.
American Institute of Steel Construction.
National Steel Bridge Alliance.
American Traffic Safety Services Association.
National Ready Mixed Concrete Association.
National Asphalt Pavement Association.
Portland Cement Association.
American Subcontractors Association.
Design-Build Institute of America.
Association of American Railroads.
National Stone, Sand & Gravel Association.
Precast/Prestressed Concrete Institute.
American Council of Engineering Companies.
Transportation Intermediaries Association (TIA).
Laborers International Union of North America.
National Utility Contractors Association.
Concrete Reinforcing Steel Institute.
American Coal Ash Association.
Essential Minerals Association.
cc: Transportation and Infrastructure Committee Members
Statement of the Alliance for Automotive Innovation, Submitted for the
Record by Hon. Eleanor Holmes Norton
Chairman Graves, Ranking Member Larsen, and Members of the
Subcommittee:
On behalf of the Alliance for Automotive Innovation (Auto
Innovators), thank you for holding this important hearing entitled
America Builds: The Need for a Long-Term Solution for the Highway Trust
Fund. We respectfully request that this letter be submitted for the
hearing record.
Auto Innovators represents advanced manufacturers producing nearly
all vehicles sold in the United States and all car batteries produced
domestically, as well as major equipment suppliers, semiconductor
makers, and technology companies. Together, we form the foundation of a
sector that supports 10 million American jobs across all 50 states,
drives $1.2 trillion into the economy annually--nearly 5% of GDP--and
powers the industrial backbone of our nation. Every dollar invested in
vehicle manufacturing generates $4.23 in economic value, creating a
multiplier effect that uplifts entire communities.
As Congress tackles transportation funding, fairness must be a
guiding principle: all drivers--regardless of what they drive--should
contribute equitably to maintaining America's roads and bridges.
We agree: all drivers should pay their fair share--no matter what they
drive.
The auto industry supports a fuel and technology-neutral approach
to infrastructure funding. Whether someone drives a hybrid, a battery
electric vehicle (BEV), or a traditional gas-powered car, all should
contribute equitably to maintaining our nation's roads and bridges. A
fair and sustainable funding mechanism should reflect this principle of
equity, regardless of drivetrain or energy source.
But a budget reconciliation maneuver is the wrong way to do it.
Using reconciliation to impose a new EV fee, including on hybrid
vehicles with internal combustion engines (ICE), is fundamentally
flawed. What is more, routing revenues to the General Fund instead of
the Highway Trust Fund does nothing to address the long-term solvency
of the Highway Trust Fund and undermines the very rationale for
implementing a road user fee in the first place.
The numbers don't add up.
Some proposals have suggested that an EV fee could raise between
$20 billion and $40 billion over ten year (FY2026-2035). Our industry
analysis shows the actual revenue potential is closer to $1 billion per
year--even under generous assumptions. Presenting this fee as a major
offset is simply not supported by the numbers.
Hybrid and Electric Vehicle Technology Overview and Equity
Considerations
As policymakers consider transportation funding solutions, it's
important to recognize the differences across hybrid and electric
vehicle technologies--and to ensure any new user fees are applied
fairly and equitably. Owners of electric vehicles should not be
retroactively penalized with new fees after already making their
purchasing decisions. Instead, any new user fee should be structured to
mirror the current financial contribution made by internal combustion
engine (ICE) vehicle owners through the gas tax. According to
calculations by the American Highway Users Alliance (AHUA), a charge of
approximately $165 per year would be an equitable equivalent for
vehicles weighing less than 8,500 pounds.
It's important to note that not all hybrid vehicles are created
equal, and assigning a flat fee across all hybrid types would be
inappropriate given their differences in technology and fuel usage:
1. Mild Hybrid Electric Vehicles (MHEVs):
a. The least complex and most cost-effective type of hybrid.
b. Utilize a small electric motor and battery pack primarily to
assist the internal combustion engine, especially during acceleration,
start/stop, and regenerative braking.
c. MHEVs cannot run on electric power alone for extended periods
and primarily rely on gasoline, making their operational profile closer
to a traditional ICE vehicle.
2. Full Hybrid Electric Vehicles (HEVs):
a. Also referred to as ``strong hybrids,'' these vehicles
feature a larger electric motor and battery compared to MHEVs.
b. Capable of running on electric power alone, but typically
only for short distances before reverting to gasoline or a combination
of both.
c. HEVs optimize efficiency by using regenerative braking to
capture and reuse energy that would otherwise be lost.
3. Plug-In Hybrid Electric Vehicles (PHEVs):
a. Equipped with even larger battery packs that can be recharged
from external sources such as a home outlet or public charging station.
b. Able to travel a significant distance purely on electric
power before the gasoline engine is engaged.
c. Offer greater fuel efficiency and lower emissions compared to
HEVs and MHEVs.
Given these technical distinctions, policymakers should avoid
imposing a one-size-fits-all fee on hybrids. Instead, a more tailored
approach that reflects a vehicle's actual reliance on gasoline versus
electricity would better ensure fairness, encourage innovation, and
maintain consumer choice--without taxing consumers twice. Moreover,
many hybrid vehicles, particularly MHEVs, serve as affordable, fuel-
efficient options for working families. Imposing a flat, high fee risks
penalizing consumers who are making practical, cost-conscious vehicle
choices.
We're already working on a better solution.
Auto Innovators is actively engaged with the AHUA and other
stakeholders on a thoughtful, durable user fee proposal that
strengthens the Highway Trust Fund in the coming surface transportation
reauthorization. We support the approach AHUA has put forward--it is
smart policy, grounded in principles of fairness, transparency, and
long-term solvency. Their framework aligns with the kind of fuel and
technology-neutral solution the moment calls for, and we believe it
provides a more constructive path forward for the Committee to
consider.
Let's solve the right problem the right way.
The auto industry stands ready to partner with Congress on policies
that are fuel and technology-neutral, transparent, fair, and
sustainable. Drivers of all types of vehicles--hybrids, BEVs, and ICEs
alike--should contribute toward funding the national federal-aid
highway system that they use. But we urge the Subcommittee and full
Committee to reject any reconciliation-based proposals that use vehicle
fees for general revenue and distract from meaningful transportation
funding reform.
We look forward to working with all Members of the Committee to
make long-term reforms to the Highway Trust Fund in the coming surface
transportation reauthorization. We urge the Subcommittee to reject
reconciliation-based proposals and instead commit to enacting long-
term, fuel- and technology-neutral reforms in the next surface
transportation reauthorization. Thank you for your consideration and
for your continued leadership on transportation and infrastructure
policy.
``The Truth Is Out There: The Cost of Roads Is Bankrupting the Highway
Trust Fund, Not Electric Vehicles,'' by Dave Cooke, Senior Vehicles
Analyst, The Equation Blog, Union of Concerned Scientists, April 29,
2025, Submitted for the Record by Hon. Eleanor Holmes Norton
The Truth Is Out There: The Cost of Roads Is Bankrupting the Highway
Trust Fund, Not Electric Vehicles
by Dave Cooke, Senior Vehicles Analyst
The Equation Blog, Union of Concerned Scientists, April 29, 2025, 11:42
a.m.
https://blog.ucs.org/dave-cooke/the-truth-is-out-there-the-cost-of-
roads-is-bankrupting-the-highway-trust-fund-not-electric-vehicles/
__________
Just half of road funding is paid for by road users through funding
mechanisms like fuel taxes or vehicle registration fees, and the
largest share of that (the federal gas tax) has not been raised in over
30 years. However, some in Congress have tried to blame the rise of
electric vehicles and fuel-efficient gasoline-powered vehicles for the
federal government's struggles to fund decades of road-building.
Below I walk through why the federal government's ability to pay
for highways has nothing to do with electric vehicles and everything to
do with Congress's insatiable desire for road-building.
A lot has changed since Congress last adjusted transportation funding
The Highway Trust Fund is responsible for nearly all of the federal
government's spending on transportation, with revenue sourced
predominantly from fuel and excise taxes and, increasingly, injections
of capital from the General Treasury. Apart from these intermittent
transfers, Congress has not meaningfully changed the source of revenue
for the Highway Trust Fund since the last increase in fuel taxes, which
went into effect on October 1, 1993.
How long ago was that? Well, just one-quarter of U.S. adults had
access to a computer, and just 2 percent of the country used the
Internet in 1993. And forget ``smart phones''--the first cell phone
capable of text messaging debuted in 1993, along with the first
battery-operated cell phone.
Fittingly, The X-Files debuted just two weeks before the last
change in federal fuel taxes went into effect--this iconic TV show
dealt with government bureaucracy and the unexplainable, topics which
both sadly resonate in trying to understand the government's approach
to the transportation system.
For more than 30 years, the federal fuel tax has remained unchanged.
The impact of this is to erode the value of the tax. If we look at what
is taken in per mile of travel (i.e. collection of the gas tax) and
factor as well into what we get out of it (building and maintaining
roads), the effectiveness of the federal fuel tax has dropped by more
than 80 percent. The largest culprit of this erosion is the massive
increase in road construction costs_the cost-per-mile of the United
States highway system grows larger each year.
As one can imagine, the passage of time has had a large impact on
the value of the federal fuel tax. The current tax rate on a gallon of
gasoline is just 18.4 cents--and that 18.4 cents doesn't mean the same
today that it did when the tax went into effect in 1993. Inflation, the
general measure of the cost of consumer goods, has more than doubled
since then, which means that the value of the tax to the households
paying it is less than half what it once was. It also hasn't kept pace
with the cost of gasoline, which has increased by nearly a factor of
three--thus, the federal government's share of the cost of a gallon of
gas is about one-third what it used to be. And when it comes to what
you can buy for that share, costs of road construction have far
outpaced general inflation--that revenue buys today less than one-
quarter of what it used to back in 1993.
Factoring in both the amount of tax generated and what that tax is
financing, the effectiveness of the federal fuel tax has dropped by
more than 80 percent since it was last changed in 1993. And the main
reason for that is our ever-more-expensive highway system.
Roads are expensive, and highway expansion even more so
Construction costs have skyrocketed for a number of reasons, but
two stick out: a reduction in competition resulting from consolidation
in the construction industry and a reduction in capacity at the state
departments of transportation to facilitate competitive bidding. But it
isn't just that construction costs have exploded--it's that the highway
system itself is a positive feedback loop of costs begetting even more
costs.
The original interstate system conceived under the Federal-Aid
Highway Act of 1956 was completed in 1992, but rather than stop then
and there, highway expansion has marched onward. Public roads
nationwide have increased in lane-mileage by over 10 percent since the
``completion'' of the Interstate Highway System. This rate of expansion
represents 70 percent of what it was during the construction of the
Interstate Highway System--despite a theoretical completion of the
system, we've barely curtailed expansion.
After World War II, the United States saw a rapid expansion of public
roads, in large part because of the Interstate Highway System. The
original envisioned system was completed in 1992, but highway expansion
has continued at nearly the same pace. (Source: FHWA Highway
Statistics; SM-11 and FM-11 pre-1980; VMT 421-C 1980-2023)
Highway expansion is not a one-time construction cost--new roads
have to be repaired indefinitely, simply adding to repair costs for
infrastructure already built. Moreover, expanding highways results in
an increase in usage not just of the new lanes of road but also for the
built system, too, through a phenomenon known as induced demand,
whereby you reduce barriers to driving and, in turn, increase the
amount of driving that occurs. Commercial trucks, for example, will
increase traffic on an interstate by between 19 and 29 percent for
every 10 percent increase in capacity, resulting in a net negative
impact on traffic flow.
As the country has continued to build out the freeway system, the
infrastructure built creates an ever-increasing cost spiral--even after
adjusting for the increased cost of construction, the amount spent on
repair has more than doubled since 1993, thanks in large part to a
doubling of miles traveled by the largest and heaviest vehicles on the
road (commercial trucks) and an overall increase in travel by over 40
percent. Perhaps this is why the country has a backlog of over $1
trillion in maintenance.
It is the unsustainable costs of our highway system that is
bankrupting the Highway Trust Fund, and this leads to an ever-
increasing share of general public funding to bail it out if nothing
changes. Highways are a costly use of land, with one study finding that
the costs of highway expansion outweigh the benefits by 3 to 1, even
without factoring in external social harms like health impacts from
added traffic pollution. It's clear we should be rethinking the status
quo of never-ending road expansion.
Cars are more efficient now . . . and that's a good thing!
Because the politics of dealing with the actual problem of funding
our highway system is hard, there's a desire to find a scapegoat. In
this case, politicians have turned their attention to how much more
efficient our vehicles are.
Both passenger cars and trucks and heavy-duty vehicles have gotten
more efficient over time. That means that drivers can go farther on a
gallon of gas or diesel. This is an unabashed good thing--improving
efficiency is a critical part of reducing global warming emissions, and
it saves drivers money, something that is especially important with
prices for households on the rise. And when a growing share of those
efficiency gains are about eliminating oil use and the volatility of
gas prices entirely from the equation for families thanks to
electrification, improvements in efficiency are a very good thing.
However, since the funding for the Highway Trust Fund is largely
based on revenues from fuel use, using less fuel per mile means that
part of the reduced costs of fuel to consumers come with reduced
contributions to the Highway Trust Fund. But is this actually a big
deal? Compared with other factors, this is a drop in the bucket.
Since 1993, the passenger cars and trucks on the road have improved
their fuel efficiency by almost 19 percent. Commercial vehicles have
improved by 18 percent. The disproportionate increase in travel by
diesel-powered trucks means that the loss in revenue per mile traveled
is only just over 11 percent as a result of efficiency improvements.
Compared with an erosion of buying power for the HTF of over 78 percent
as the result of skyrocketing construction costs since 1993, or even
just the erosion of value of 54 percent related to general inflation,
it's clear that the story of HTF insolvency is not related to
efficiency.
Electric vehicles are a small share of potential revenue
Even though EV drivers, like all of us, already pay for roads
through general tax revenue, some still claim that it's unfair that EV
drivers don't pay a fuel tax. But this both ignores the way roads are
funded and the taxes that EV drivers already pay for electricity usage.
The notion that EV drivers are getting a free ride is just plain
wrong, thanks in part to taxes and fees levied at the state and local
level, where more than 80 percent of road funding comes from. In 36
states, there is even already a net tax penalty for driving an EV
compared to a gasoline vehicle thanks to the combination of taxes and
fees already in place. But even at the federal level, the lack of a
federal fee on EV drivers is a negligible contribution to any shortfall
in the Highway Trust Fund.
Today, we estimate that EVs are responsible for just over 2 percent
of miles traveled in the U.S. Last year alone, highway construction
costs increased by 6 percent. Even as EVs become a growing share of the
vehicle fleet, we estimate that they will make up just 3 to 8 percent
of road travel between now and 2030, depending on the degree of to
which the current administration succeeds in eliminating EV incentives
and protective vehicle regulations.
At just 3 to 8 percent of mileage traveled, charging EV drivers a
mileage fee comparable to that of gasoline-powered vehicles would have
little impact on the solvency of the Highway Trust Fund, which spends
about 60 percent more than it takes in. However, it could act to
dissuade EV buyers, particularly if accompanied by the elimination of
policies designed to grow a still nascent market. Given the health and
climate benefits of switching to electric vehicles, we should be
focused on enabling that transition, not thwarting it with unnecessary
fees.
Congressional EV fees are both counterproductive and unfair
It's bad enough that the highway lobby is pitching Congress that EV
fees are a meaningful way of addressing transportation revenue (as
noted above, they're too small to make a dent). It's worse still when
that approach not only runs directly counter to our need to move away
from a petroleum-focused transportation but is punitively designed to
overburden those who are making the choice to get off gasoline.
One proposal from Congress from U.S. Representative Dusty Johnson
(R-SD) and Sen. Deb Fischer (R-NE) is designed to disincentivize EV
ownership by forcing an upfront surcharge on EVs. New gasoline car
buyers pay fuel taxes when they fuel, gradually over the lifetime of
the vehicle. If a vehicle is sold, the next owner will pay for the
continued fuel consumed, along with any associated fuel taxes. The
Johnson and Fischer bills, however, impose two fees upfront on EVs,
targeting prospective EV owners--the first is a flat $1000 fee, no
matter any characteristics of the battery-electric vehicle regarding
weight or efficiency. The second is an additional fee of $550 on the
manufacturer (which will be passed on to the vehicle purchaser) for
every battery module weighing more than 1000 pounds--while according to
the bill authors this provision is targeted at heavy-duty electric
trucks, the ambiguity in language could ensnare the over 90 percent of
light-duty EV packs that meet that weight threshold as well.
Compared to the average new gasoline vehicle buyer, an EV buyer would
be forced to spend between 28 and 135 percent more in fees to the
Highway Trust Fund. This is over 2 to 4 times what would be required of
someone purchasing a class-leading efficient hybrid. (Costs shown
utilize a 2 percent social discount rate for future costs over the
lifetime of the vehicle. We have assumed 1:1 representative vehicle
types for the vehicles listed. The average gasoline vehicle achieves a
real-world efficiency of 27.7 mpg while the average class-leading
efficient vehicle would achieve 50.2 mpg.)
An upfront surcharge on an electric vehicle, particularly one that
doesn't exist on a gasoline vehicle, would disproportionately burden EV
drivers with the costs of roads compared to other drivers. Under
current policy, about 8 percent of vehicle miles from now through 2030
would be driven on electricity--with the proposed fees, and assuming
Congress does not let the current fuel taxes expire in 2028 as they are
set to do, EV drivers would pay about 20 percent of all federal taxes
collected from passenger cars and trucks in that same timeframe, hardly
a ``fair share.''
Another recently reported proposal would put an annual fee of $200
for battery-electric vehicles and $100 for plug-in hybrid electric
vehicles, but it's again designed to force EV drivers to pay a
significantly higher share than gasoline drivers. If Congress is going
to enact a fee on EVs, it should be compatible with how we assess fees
on the rest of the fleet. The current fuel tax acts as a market signal
to drivers and rewards efficiency--punishing drivers for using vehicles
that are three times as energy efficient as average while rewarding
drivers using vehicles less than twice as efficient as average is an
inequitable mess.
The highway trust fund is broken--EV fees aren't going to fix that
The Congressional Budget Office showed in their latest analysis of
the Highway Trust Fund that the Highway Trust Fund is expected to spend
$213 billion more than it takes in ($261 billion) for fiscal years 2025
through 2030. We estimate even the unfair proposal put forth by
Congress would raise between just $7-33 billion over that same time
frame, putting hardly a dent in the deficit even as it penalizes
families for reducing global warming emissions and public health harms
from their vehicles.
The Bipartisan Infrastructure Law injected a lot of money into the
Highway Trust Fund, but the balance continues to go down while the
federal government spends more than it takes in every year. The
Congressional Budget Office projects that the Highway Trust Fund will
be fully depleted sometime in 2028. (The Highway Trust Fund cannot fall
below zero_hashed values reflect net annual shortfalls.)
The biggest problem with the Highway Trust Fund isn't what families
are contributing--it's the poor outcomes from that investment. Adjusted
for inflation, the federal government may be spending half what it used
to on brand-new highways, but that still means hundreds of miles of new
highways every year, at a cost of over $10 million per mile. On top of
that, major construction projects on existing highways frequently
result in increased lane-miles--just last year we increased lane-miles
on over 10,000 miles worth of roads, at a cost of just about $700,000
per mile.
The result of this expansion is a highway system that is not just
expensive but unsustainable. The federal government has more than
doubled its spending on road repair since 1993, even after adjusting
for inflation, and yet the federal share of spending on repair has
actually gone down because the National Highway System is a giant money
pit, emptying federal, state, and local coffers alike, with total
maintenance costs 3.5 times higher in 2023 than in 1993, even after
adjusting for inflation.
Funding more roads won't get us where we need to go
Until our infrastructure reflects a system that works for everyone,
we should not be asking families to invest more of their hard-earned
money in it. While prioritizing repair over expansion through ``fix it
first'' or even reducing road lanes via ``road diets'' may be smarter
ways of investing in our roads, that's hardly typical of where our
federal dollars go.
If Congress is going to evaluate the effectiveness of federal
transportation funding, it must look at both sides of the ledger, not
just where the money is coming from but where it is going. Otherwise,
the costs will continue to balloon unsustainably, as we see with the
Highway Trust Fund.
Letter to Hon. David Rouzer, Chairman, and Hon. Eleanor Holmes Norton,
Ranking Member, Subcommittee on Highways and Transit, from Albert Gore,
Executive Director, Zero Emission Transportation Association (ZETA),
Submitted for the Record by Hon. Eleanor Holmes Norton
Dear Chairman Rouzer, Ranking Member Norton, and Members of the
Committee:
Zero Emission Transportation Association (ZETA) is an industry
coalition representing approximately 50 companies spanning the electric
vehicle (EV) supply chain end-to-end, including critical mineral and
material producers, cell and battery manufacturers, vehicle
manufacturers, charging companies and electric vehicle supply equipment
(EVSE) providers, utility companies, and battery recyclers.
Well-funded federal highways are an essential part of a thriving
transportation system and American EV manufacturers are willing to pay
their fair share in support of our shared roads. ZETA strongly believes
that the surface transportation reauthorization process is the
appropriate legislative vehicle to consider addressing the HTF,
including how alternative fuel vehicles may contribute to it. We urge
the Committee to consider any changes to the existing funding structure
of the HTF through this process. Any novel tax for American drivers
necessitates a deliberative legislative process. This is the best way
to ensure that any revenues generated go directly into the HTF, not the
General Treasury Fund, in both chambers of Congress.
Maintaining the same gas tax rate since 1993 without adjusting for
inflation, advancements in fuel efficiency, and considerably increased
investment in highway and transportation infrastructure has resulted in
the inability of the HTF to fully cover the increased expenditures
authorized by recent highway bills. The balances in both the highway
and transit accounts of the HTF will be depleted by 2028.\1\ The
Congressional Budget Office projects that if current taxes remain in
place and if funding for these programs increases annually at the rate
of inflation, shortfalls in the HTF's highway and transit accounts will
total $329 billion over the 2024-2035 period.\2\
---------------------------------------------------------------------------
\1\ The Status of the Highway Trust Fund: 2023 Update. (CBO)
\2\ Highway Trust Fund Accounts Baseline Projections. January 2025.
(CBO)
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Congress must find a long-term solution to declining real gas tax
revenue. With non-gas cars increasingly on the road, ZETA believes that
alternative fuel vehicles are a part of finding a sustainable path to
solvency. The legislative mechanism for achieving this could
conceivably take different forms, one of which could be a voluntary
``vehicle miles traveled'' (VMT) structure to allow drivers to either
1) report their annual odometer readings on annual tax returns or 2)
accept a flat fee as an alternative. Fairness for taxpayers driving
electric vehicles would be enhanced by providing drivers who travel
fewer than 12,000 miles annually with an option to pay a VMT, and to
preserve the rights of consumers to lower their fuel costs by choosing
more fuel efficient vehicles, the VMT fee would ideally be calculated
using measures of fuel efficiency in electric vehicles, such as Miles
Per Gallon Equivalent (MPGe), as certified for new vehicles by the The
National Vehicle and Fuel Emissions Laboratory (NVFEL) \3\.
---------------------------------------------------------------------------
\3\ Fuel Economy and EV Range Testing. (EPA)
---------------------------------------------------------------------------
Both VMT and flat fee structures have logistical and other
challenges, and ZETA would be very interested in the opportunity to
engage with the Committee as conversations about this topic continue to
develop. Regardless of the ultimate mechanism, ZETA urges that a
prospective federal fee be equitable to fees paid by a gas-powered
vehicle driver. This is not just a matter of parity, but also the only
way to ensure meaningful long-term solvency.\4\
---------------------------------------------------------------------------
\4\ The Status of the Highway Trust Fund: 2023 Update. (CBO)
---------------------------------------------------------------------------
For instance, the average weight of a new light-duty vehicle is
4,371 pounds.\5\ The two best-selling electric vehicles on the market,
the Tesla Model 3 and Y, accounting for more than 40 percent of
sales,\6\ weigh 4,030 and 4,396 pounds, respectively.\7\ \8\ Given that
average weight and assuming an average annual mileage of around 12,000
miles, ZETA believes that an annual federal road use fee amounting to
approximately $100 per vehicle per year would be a fee level
commensurate with the annual gas tax paid by an internal combustion
engine vehicle with average fuel efficiency.
---------------------------------------------------------------------------
\5\ The 2024 EPA Automotive Trends Report. (EPA)
\6\ What Is the Percentage of Electric Cars in the U.S.?
(Edmunds.com)
\7\ Tesla Model 3. (Tesla)
\8\ Tesla Model Y. (Tesla)
---------------------------------------------------------------------------
Putting a disproportionate fee on alternative fuel cars,
particularly a large fee assessed upfront or directly to the
manufacturer, would not only create a major hurdle for prospective
buyers but also fail to meaningfully address the issue of falling gas
tax revenues and the long-term solvency of the Highway Trust Fund. A
holistic, tech-neutral approach that doesn't overly burden one part of
the auto sector is the best way to ensure both fairness in the
automotive industry and consistent funding for our nation's highway
system.
ZETA is grateful to Chairman Rouzer, Ranking Member Norton, and the
Members of the Committee for their continuing efforts to fund well-
maintained, modern, and reliable highway and transit programs.
Improving the ways to cover the Highway Trust Fund shortfall is
critical to ensure the safety of roads, bridges, and mass transit in
the United States, now and in the many years to come.
Thank you for your consideration and the opportunity to provide a
letter for the record on this extremely important issue.
Sincerely,
Albert Gore,
Executive Director, Zero Emission Transportation Association
(ZETA).
Appendix
----------
Questions from Hon. Dina Titus to Carlos M. Braceras, P.E., Executive
Director, Utah Department of Transportation, on behalf of the American
Association of State Highway and Transportation Officials (AASHTO)
Question 1. While we are talking about the National Highway System
today, I want to spend a minute on the issue of traffic congestion
impacting my constituents in Las Vegas. According to the Texas A&M
Transportation Institute's 2023 Urban Mobility Report, the national
cost of congestion was $224 billion in 2022. Researchers also found
that the average commuter spent an extra 54 hours stuck in traffic that
year.
How have you managed to balance meeting the need for additional
transportation system capacity because of the fast-growing population
in your state with the ability to keep your existing infrastructure in
a state of good repair?
Answer. Utah was the fastest growing state in the country over the
past 10 years, placing rapidly increasing demands on our transportation
system. Our ability to provide the necessary additional roadway
capacity is being outpaced by population growth, so the pressure to
deliver capital projects is urgent and acute. We are in the enviable
position of having state leaders that understand the value of
transportation infrastructure investment, so we have a healthy state-
funded budget for capacity projects. Remarkably, Utah annually
appropriates 27.68 percent ($1.3B) of state sales tax revenue to fund
its capacity program.
As you know, an effective transportation system also requires a
proactive approach to maintenance and operations. In Utah, we depend on
federal and state funding for road and bridge maintenance and repairs
and safety projects as a critical piece of our overall funding
approach. Utah is an ideal model as a partner with the federal
government because we bring substantial state funding to the critical
federal-state partnership.
In Utah, we have come to the realization that there is not a silver
bullet for funding transportation. We believe it takes a strong federal
partnership, a variety of user fees, and sales tax or other general
revenue sources. Each of these components play an important role
enabling us to take care of what we have and to address the needs of
our growing population. To address the inability of the fuel tax to
raise sufficient revenue for our state transportation system, Utah has
implemented the following policies:
State Sales Tax Earmarks: A portion of state sales tax
revenue is allocated to Utah's capacity program, starting at 8.3
percent in 2006 with incremental increases to an earmark of 27.68
percent in 2025.
Fuel Tax Increases: The state raised fuel taxes from 19
cents per gallon in 1998 to 24 cents, and again in 2016 to 29 cents per
gallon.
Fuel Tax Indexing: Fuel taxes have been indexed to the
Consumer Price Index since 2019. In 2025, fuel taxes increased to 38.5
cents per gallon.
Motor Vehicle Registration Fee Increases and Indexing:
Registration fees increased multiple times between 1997 and 2009, with
indexing beginning in 2009.
Annual Fee for Alternative Fuel and Hybrid Vehicles:
These fees were introduced in 2016. In 2025, electric vehicles paid
$139, plug-in hybrids paid $60, and hybrids paid $23.
Local Option Sales Taxes for Transportation: Utah's first
local option sales tax, dedicated to public transit, was adopted in
1975. Currently, local governments can implement up to five local
option sales taxes, totaling 1.25 percent for various uses, including
public transportation, highways, active transportation, and airports.
Question 2. President Trump's Department of Transportation has
threatened to withhold funding to states that do not follow the Trump
Administration's immigration agenda or maintain diversity, equity, and
inclusion programs. I find this deeply concerning. Transportation
funding not only helps keep our transportation networks operational--it
also helps ensure that critical infrastructure such as bridges are safe
for travelers.
Can you talk about the importance of federal funding to our
transportation networks and what the consequences of withholding
funding for these programs could be? What is the rationale for tying
funding to immigration? Where is the nexus between the two?
Answer. It is clear to all policy makers that an effective
transportation system is critical to our economy, mobility, health, and
communities. It offers a huge lever to affect success, today and in the
future. The transportation network connects people with what matters
most: jobs, recreation, communities, healthcare, educational
opportunities, and--most importantly--the people we care about. We need
to coalesce around a shared funding vision so that people have the
freedom to go where they want, when they want, how they want--and to do
so safely.
Questions from Hon. Dina Titus to Adie Tomer, Senior Fellow, Brookings
Institution
Question 1. Congress created the Highway Trust Fund in 1956 and
since then, the federal government has been able to provide guaranteed
funding for transportation projects across the United States through
the contract authority process.
Question 1.a. In your testimony, you highlighted the benefits of
separating transportation programs from annual appropriations
negotiations by funding them through the Highway Trust Fund. In your
opinion, should our rail systems also have guaranteed funding from
Congress?
Answer. All transportation systems benefit from guaranteed funding,
as the fiscal certainty facilitates long-term planning and executing
complex, multiyear construction activities. Guaranteed public funding
is especially important for transportation systems that deliver broad-
based societal benefits beyond what user fees alone can capture.
Intercity passenger rail systems neatly fit into this rubric.
Facilitating movement of people between different geographic regions--
whether for private business, tourism, or other activities--creates
direct trade-related economic activity (like customer sales at local
retailers) and promotes indirect economic activity (like greater net
investment in regional businesses). Passenger rail promotes such
transportation-supported activity while using less energy per passenger
than aviation and private vehicles, requires less rural and urban land
than roadways, and promotes agglomeration around stations (which then
generate higher total tax revenues per acre). Passenger rail can also
increase connectivity and economic opportunity for smaller communities
along corridors, which is similar to highways but a benefit aviation's
point-to-point travel struggles with. These net benefits--far more than
what each passenger pays on a ticket--is a major reason all G7 members
provide multiyear public funding for passenger rail networks.
For these reasons and others, I do personally support guaranteed
federal funding from Congress for passenger rail. However, the level of
support is a critical area to debate, as well as the role of states,
regions, and private owners and operators in co-supporting such federal
investments.
Question 1.b. How might our rail systems look different if they had
guaranteed funding like those programs that rely on the Highway Trust
Fund?
Answer. Simply put, guaranteed federal funding would accelerate
corridor construction and promote cost efficiency.
Guaranteed federal funding would enable Amtrak, state operators,
and private operators to move projects from planning to construction
faster, particularly on those corridors targeted for investment. This
would not only include spending of federal funds, but also enhance the
ability to attract other public and private capital. It's sensible to
think of guaranteed federal funding as seed capital or a downpayment
for these large, complex suites of projects. Overall, the net effect
from guaranteed federal funding would be more projects in motion. My
confidence in making this statement is both the experience in our peer
countries, but also the construction of the interstate highway system
under similar policy fundamentals.
Guaranteed funding also promotes cost efficiency by reducing
project risk. When designers, builders, and financiers are uncertain if
a capital project has secured enough total funding, they expend
additional time to enhance planning documents, keep staff sharpened on
related knowledge, and searching for supplemental capital--all of which
requires additional funding resources. Meanwhile, while projects are in
limbo, those same professionals are not spending time on activities
that must wait for final project approval, such as executing purchase
orders for materials and final train sets. Guaranteed federal funding
reduces such risks.
The net result of guaranteed funding is more total investment in
passenger rail systems and, once projects are completed, greater total
operations for passengers.
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