OPINION:
When it comes to infrastructure investment, Americans can usually count on Congress to come together. We don’t have to look far for recent examples of bipartisanship.
The response to the tragic Francis Scott Key Bridge collapse in March was swift, with the channel reopening to maritime commerce in less than two months.
Just last week, Congress overwhelmingly passed, and the President signed, the Federal Aviation Administration (FAA) reauthorization package.
And we are now past the halfway point of the largest modern federal investment package, the $1.3 trillion Infrastructure Investment & Jobs Act, benefiting our nation’s surface transportation network.
Despite differences, Congress can still get important things done.
Still, there’s one data point that is well known yet rarely acted upon – the financial solvency of the Highway Trust Fund (HTF). Absent any user-fee solutions, the nonpartisan Congressional Budget Office predicts the HTF will face a financial gap of $250 billion by the end of the next decade. Stated simply, money put into the HTF won’t keep up with money going out. This is a looming fiscal cliff that we can’t afford to ignore any longer.
Congress has a duty to facilitate and support interstate commerce. It is one of the bedrocks of the Constitution, specifically the third clause of Article I, Section 8, usually cited as the commerce clause. But, in the past 25 years, we have missed the opportunity to create a long-term and sustainable solution to our exponentially growing infrastructure needs. Let me explain.
As the piggy bank responsible for all our nation’s federally supported surface transportation projects, the HTF has teetered on financial insolvency for years. Its intent is to utilize user fees to financially support itself, ensuring the HTF can remain independently operable by deriving funding from those directly benefiting from the investments it provides.
The HTF’s primary revenue source has been the Federal fuel tax (commonly referred to as the gas tax), which is efficiently collected from gasoline and diesel consumption. However, the Federal fuel tax hasn’t been raised since 1993. Meanwhile, infrastructure needs are expanding and revenues declining as fuel-efficient and electric vehicles grow in popularity. This issue is compounded when you consider inflationary impacts on materials, labor, and equipment, along with the costs of implementing more complex projects. The HTF is ill-equipped to self-fund, and instead has become dependent on general fund transfers from the Treasury, which in turn has spurred avoidable spending fights in Congress.
If we maintain current spending under IIJA without any new user fee generation, the HTF will be insolvent by 2028. Let me reiterate: if no action is taken, the HTF will be in a financial hole in excess of $250 billion by the end of the next decade. That is a big number and a gap we all want to avoid.
While increasing the Federal fuel tax would be the simplest means to dramatically improve the HTF, it likely won’t happen, as “raising a tax” is a politically toxic position for either party to champion. More importantly, due to improved drivetrains and EVs, the Federal fuel tax will never be the only solution. That is why we need to shift gears (pun intended) on new user fee models that ensure the HTF can grow to fully support the evolution of our surface transportation network.
Vehicle miles traveled (VMTs) is one promising solution that received Congressional support in 2015’s Fixing America’s Surface Transportation (FAST) Act. Data and pilot programs stemming from that investment illustrate how VMTs could work proportionally to the distance and frequency of various highway users. Moreover, IIJA included a $50 million provision to allow the DOT to further study the VMT model on a national scale, building upon work done in states like Colorado, Minnesota, and Oregon, to name a few. VMT isn’t a new idea; it’s been pragmatically studied for years.
Through IIJA’s VMT provision, the DOT would convene an advisory council, including input from stakeholders such as state and local governments, frequent highway users (like the trucking industry), and vehicle manufacturers to report suggestions and feasibility of a national program. Unfortunately, the DOT has been slow to establish this council, only issuing requests for participants at the end of 2023, meaning the chances are unlikely of sufficient data and reports being ready prior to IIJA’s expiration. NAPA, along with more than 20 national trade organizations and infrastructure sector partners, sent a joint letter to the House Transportation & Infrastructure Committee urging the DOT to move expeditiously, and encouraging Congress to follow the process and outcomes closely.
We do not, however, think VMT is the holy grail. We should explore various solutions, or some combination, to close the HTF gap. Other promising solutions include user fee models that focus on gross vehicle registrations at the state level, project-specific public-private partnerships, and capturing the EV market. The latter is imperative, because EV users do not pay into the HTF, despite their vehicles carrying heavy batteries that inflict more wear and tear on roads faster than other vehicles.
Further, a policy that was overlooked in 1993, and unaddressed in IIJA, was indexing the Federal fuel tax for inflation to ensure user fees could keep up with current dollars without continued political fracas. We can’t afford a similar mistake that allows a rapidly expanding vehicle market to grow without paying into the HTF. We need to ensure all roadway users are captured and everyone pays their fair share to establish a financially independent HTF. NAPA looks forward to working on this critical issue with the House Ways & Means Committee and Chairman Jason Smith, R-Missouri, who recognizes the need to capture all users on our roadways. We thank committee members for their leadership in tackling this vital funding gap.
Americans cannot afford to underinvest in the roads and highways they rely on every day for connection and commerce. The time to act is now. The 119th Congress may tackle a tax package alongside the next highway reauthorization package. Unlike other industries arguing for their respective tax break or extender, the infrastructure community will be coming to Congress with revenue-generating options – a nice break from the norm, and a chance to avoid the HTF’s financial cliff.
• Audrey Copeland, PhD, PE, is President & CEO of the National Asphalt Pavement Association, which represents U.S. asphalt pavement producers, paving contractors, equipment manufacturers and distributors, suppliers, researchers, engineers, and consultants to advance asphalt pavements as an essential part of sustainable transportation infrastructure that paves the way for thriving communities and commerce.
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