"America Builds: The Need for a Long-Term Solution for the Highway Trust Fund"
House Transportation and Infrastructure Subcommittee on Highways and Transit
2025-04-29
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Source: Congress.gov
Summary
The subcommittee on highways and transit convened to address the Highway Trust Fund's structural deficits, driven by declining fuel tax revenues and increased spending. Witnesses highlighted the $142 billion projected shortfall by 2035, the erosion of fuel tax purchasing power since 1993, and the growing role of electric vehicles. Key topics included the need for sustained user-based funding models, such as an EV fee and mileage-based user charges, and the importance of maintaining mass transit funding. Panelists emphasized the urgency of long-term certainty to support state and local infrastructure investments, with recommendations ranging from increasing fuel taxes to expanding federal partnerships and reforming apportionment formulas to better serve growing rural and urban areas.
Participants
Transcript
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 on 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 documentsti at mail.house.gov. I now recognize myself for the purposes of an opening statement for five minutes. 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, 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, or the Infrastructure Investment and Jobs Act, increased Highway Trust Fund spending by more than 36%, but made no reforms to revenue streams resulting in 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% 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 new 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% 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 those roads. While a step in the right direction in 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. I now recognize our ranking member for five minutes for an opening statement.
Ms. Norton. Thank you. I want to thank Subcommittee Chairman Rausser for holding this hearing. The Highway Trust Fund guarantees predictable to state and local partners, empowering communities to build the infrastructure they need.
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