Congress will propose nearly anything other than raising the gas tax to fix the highway trust fund. If Congress actually addressed the program’s total failure to deliver outcomes, maybe it would be easier to build broad support for raising significant new transportation funding.
Since 2008, the federal highway trust fund has received infusions from the general fund totaling over $280 billion. The federal gas tax has not been increased above its current level of 18 cents per gallon since 1993. With every reauthorization of the program, there is always a looming date (currently 2028) when the Highway Trust Fund will go broke. Yet, every time we come around to discussions on the next surface transportation reauthorization, delusional thinking about how to fund the federal transportation program emerges.
For nearly two decades, rather than increasing the gas tax, Congress has resorted to infusions from the general fund to pass a multi-year transportation bill. Congress has come up with all sorts of convoluted machinations to delude themselves into thinking they aren’t increasing the deficit.
For the 2012 MAP-21 transportation reauthorization and its short-term extension in 2014, Congress used many questionable budget maneuvers to make it look like they were paying for the infusions with cuts elsewhere. The most memorable of these was“pension-smoothing,” a bizarre accounting trick that delayed pension contributions—and the tax relief that comes with them—to more than 10 years in the future, beyond the horizon the Congressional Budget Office considers when calculating the impact on the deficit. This means we lose more tax revenue today to pay for the 2012 MAP-21 transportation bill than we would have back then.
Congress has also made a few attempts to adopt a vehicle miles traveled (VMT) user fee. In fact, a federal pilot program supported the adoption of voluntary VMT fees in several states starting in 2015, but none of them ever incorporated it into their mandatory fee structure. However, a few states allow drivers of fuel-efficient and electric vehicles (EVs) to choose VMT fees as a more affordable alternative to higher registration fees. For example, Oregon will make its OReGO VMT fee an alternative to higher registration fees for fuel-efficient and electric vehicles (EVs) starting in 2028. Virginia, Utah, Hawai’i, and Vermont are actively pursuing similar strategies. A federal VMT fee is extremely unlikely in the foreseeable future because of privacy concerns, states’ limited capacity, and Congress’s lack of political will.
The latest insult-to-our-intelligence proposals to address federal highway trust fund insolvency are punitive federal EV fees. Most states have already adopted punitive EV registration fees that are far higher than what gasoline-powered car drivers pay in gas taxes. House Transportation and Infrastructure Chair Sam Graves proposed highly punitive annual federal EV registration fees: $250 for EV owners and $100 for hybrids (who also pay the gas tax). These proposed EV fees are more than double what gas-powered car owners pay on average in federal gas taxes. In 2019, the average fuel economy was 22.3 miles per gallon for an average of 11,484 miles driven. This means the average car driver’s 18.4 cents-per-gallon federal gas tax added up to $94.76 annually.
EV drivers need to pay their share, especially as EVs become a larger share of cars on the road. However, there’s a problem with trying to solve a fiscal issue on the backs of a tiny minority of drivers. Highly punitive fees would slow EV adoption without changing the projected date that the Highway Trust Fund goes broke.
Transportation for America wants to see changes in this broken program before we put more money into it, and all these ridiculous funding proposals and machinations have drawn our attention away from a central question: The gas tax is simple, efficient, directly linked to the use of our nation’s roads and highways, and is already in place. Why has Congress not had the political will to raise the gas tax for more than a generation?
To answer that, you need to ask what the federal transportation program is accomplishing with the hundreds of billions it has spent over the last few decades. And the answer isn’t pretty. The highway trust fund was created in 1956 to build the interstate highway system, which has been completed for over three decades. Since then, the program has staggered forward on autopilot with diminishing and even deleterious returns. Congestion is up in every major metro area; road deaths are up, especially for people walking; state of repair has not markedly improved; and transportation is the largest contributor to greenhouse gas emissions and is the only sector with increasing emissions. The program’s approach of doling out vast sums of formula funding to state DOTs with little accountability, and the state DOTs’ penchant for widening highways instead of investing in basic repair, is obviously not going to fix these failures.
Until we can reorient the program to address today’s needs and require greater accountability for achieving outcomes in safety, access, environmental impact, and state of repair, Americans have no good reason to support increased taxes to pay for the program. Show us something better we can get for our money. Then we’ll see public support for raising revenue to pay for it.
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