Hearing

• Mr. Kris Strickler, Director, Oregon Department of Transportation | Written Testimony
• Dr. Chad Shirley, Ph.D., Principal Analyst, Microeconomics Studies Division, Congressional Budget Office | Written Testimony
• Mr. Jeff Davis, Senior Fellow, Eno Center for Transportation | Written Testimony
• Ms. Reema Griffith, Executive Director, Washington State Transportation Commission | Written Testimony

Opening statement, as prepared, of Highways and Transit Subcommittee Chairman Rick Crawford (R-AR) from today’s hearing, entitled “Running on Empty: The Highway Trust Fund”:

The issue before us today is how do we ensure we have the resources to build and maintain a surface transportation system that will meet the needs of our nation and allow us to remain competitive in the 21^st century.

As most here know, the Highway Revenue Act of 1956 created the Highway Trust Fund to provide a dependable source of funding for development of the Interstate Highway System. It was established as a user-pays model. Highway users would pay excise taxes on fuel, which would be deposited in the Highway Trust Fund and dedicated to the construction of federal-aid highways.

Although subsequent acts of Congress increased taxes on motor fuels, imposed new taxes, and expanded the programs eligible for funding through the Trust Fund, the basic construct remains in place today.

Highway Trust Fund revenues come from transportation-related excise taxes. The majority of revenues— 84 percent to be exact — are from federal taxes on gasoline and diesel fuel, and 14 percent comes from heavy-duty truck-related taxes.

The Highway Trust Fund currently finances most federal government spending for highways, transit, and highway safety programs. Since 2001, however, spending from the Trust Fund has exceeded revenue deposited into the fund.

Beginning in 2008, the Trust Fund has relied on a total of $275 billion in transfers, mainly from the General Fund of the Treasury, to remain solvent. Although critical to the Highway Trust Fund’s short-term operations, government bailouts are not a long-term solution, nor do they address the underlying, multifaceted, and structural problem.  

First, the purchasing power of fuel taxes, which have remained unchanged since 1993, has eroded by 55 percent over the last 30 years. At the same time, funding authorized from the Highway Trust Fund for federal-aid highway, highway safety, and federal transit programs has more than tripled.

Additionally, more fuel-efficient vehicles and the use of alternative fuel sources have further eroded Trust Fund receipts. For example, electric vehicle drivers pay nothing at the federal level for their use of roadways.

The Biden Administration’s desired CAFE standards could result in reduced motor fuel consumption of 200 billion gallons by 2050. That’s billions of dollars in lost revenue, but not lost wear and tear on our highways. These factors have contributed to the widening gap between Highway Trust Fund receipts and expenditures.

Meanwhile, the movement of freight on our roads and highways is expected to increase by 50 percent in tonnage and double in value by 2050. In terms of highway usage, vehicle miles traveled are projected to grow by 22 percent by 2049.

At the same time, driverless vehicles and other advances in technology are going to change the way freight and passengers move throughout our transportation network. To keep pace with these developments, our system requires sustainable and reliable resources. Unfortunately, the current method of funding our federal transportation programs no longer meets those needs.

The Infrastructure Investment and Jobs Act authorized $118 billion in transfers into the Highway Trust Fund to ensure the fund can meet its obligations until the law expires. Beyond the expiration of IIJA in 2026, the Highway Trust Fund will once again go broke, requiring additional congressional action to provide solvency for the fund.  

We need to work together to reform the Highway Trust Fund to ensure that users who benefit from the system pay into the system. A long-term, sustainable solution is necessary to provide our state, local, and private sector partners the certainty they need to plan and build their projects.

We need a solution so that we can build a modern and efficient transportation system to meet the needs of our 21^st century economy. Our nation demands, and deserves, a system that will move people and goods safely and efficiently, expand opportunities across all communities, enhance American prosperity, and ensure American industry and innovation continue to lead the world.

Our witnesses will offer potential solutions and discuss innovative new approaches for funding our surface transportation programs. I thank them for appearing before us today.