Call for Reform of the Highway Trust Fund
On Friday, I joined over 100 economists and public policy experts from universities, think tanks, and corporations across the country in a letter to the 119th Congress, urging practical reforms for public policy, particularly regarding the highway trust fund. Our message is straightforward: Congress should take bipartisan, incremental steps to stabilize and sustain the Fund.
The Highway Trust Fund, for a long time, represented a clear user fee concept: those who use the roads would pay for them. This system provided reliable funding and encouraged better fiscal management.
However, Congress has consistently resolved funding gaps by pulling from the general fund, which compromises the principles that made the system robust while masking the underlying issues.
Right now, the system is faltering. Fuel taxes haven’t kept up with inflation, rising construction costs, or the enhanced fuel efficiency of vehicles. Moreover, with an increasing number of electric and hybrid vehicles on the road, there’s a notable lack of contribution from fuel taxes associated with these vehicles. This reliance on general funds has, again, obscured the actual problems.
It’s important for Congress not to feel pressured to tackle every long-term challenge in a single bill. Instead, lawmakers could make meaningful strides with the upcoming surface transportation reauthorization, which needs to be passed by September 30.
Initially, legislators should reinforce the user-pays principle, making sure that all road users contribute fairly—this includes drivers of electric and hybrid vehicles—through clear and enforceable methods. Fairness is crucial here; when some users are exempt, the financial load inevitably shifts to others, including taxpayers.
Next, Congress should enhance price sensitivity. Heavy commercial vehicles inflict more wear on highways and bridges than regular cars, so user fees should better reflect the vehicle weight and the impact on the roads. Refined charges would improve fairness and create clearer economic signals regarding infrastructure expenses, making it a more defensible approach.
Additionally, lawmakers ought to assess the possibility of transitioning from a per-gallon fuel tax to a mileage-based user fee. If structured well, these road usage charges would be based on distance traveled and the vehicle’s characteristics.
Of course, any shift must protect core user-pays principles while being considerate of low-income households, small businesses, and farmers. Pilot programs in certain states show that mileage-based systems can also safeguard privacy and keep public trust intact. Instead of stalling modernization, Congress should build on those successful models.
Moreover, Washington needs to lessen its dependence on general fund bailouts and establish clearer expectations for revenue reform ahead of the next significant reauthorization cycle. Temporary measures undermine fiscal responsibility and sow uncertainty for national planners and private investors.
Merely reforming revenue won’t be enough to secure the system. Modern transportation infrastructure relies on digital systems for vehicle navigation and logistics management. The U.S. economy significantly depends on GPS for positioning and timing, and a breakdown in this domain, overseen by the Department of Transportation, could have ripple effects through freight networks, emergency services, and daily commutes.
Countries like China and Russia have shown capabilities to tamper with satellite systems and GPS signals. Extended outages could lead to losses amounting to billions of dollars per day. To counter these threats, vehicles sold in the U.S. should include reliable backup positioning technologies.
Furthermore, supply chain security demands attention. Chinese firms like BYD and CATL dominate global battery production, raising concerns about espionage and strategic inadequacies tied to companies closely aligned with the Chinese Communist Party.
The U.S. should enhance domestic battery production and charging infrastructure, while seeking to decrease reliance on foreign-controlled systems that can jeopardize data security and resilience.
Finally, Congress should look into sensible federal deregulation to cut the costs of overly expensive transportation projects. They should also require state and local partners to streamline permitting processes and reduce redundant requirements, ensuring that every dollar from the Highway Trust Fund is optimized and that projects are completed more efficiently.
These proposals transcend partisan lines. They embody pragmatic strategies rooted in fiscal responsibility and national security. Reliable road funding is more than just a budgetary concern; it’s vital for economic competitiveness, national mobility, and public safety. By reinforcing the user-pays principle, modernizing revenue systems, safeguarding digital infrastructures, and bolstering supply chains, Congress can show a unified commitment to ensuring a secure transportation future for America.
The 119th Congress has a chance to rejuvenate the Highway Trust Fund. It’s time for lawmakers to step up and take charge.
