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Washington, D.C. – Opening remarks, as prepared, of Transportation and Infrastructure Committee Chairman Sam Graves (R-MO) and Highways and Transit Subcommittee Chairman David Rouzer (R-NC) from today’s hearing, entitled “America Builds: The Need for a Long-Term Solution for the Highway Trust Fund”:

Transportation and Infrastructure Committee Chairman Sam Graves

Thank you, Chairman Rouzer, and thank you to our witnesses for being here today, as we discuss the importance of long-term certainty and stability for the Highway Trust Fund. The Trust Fund has faced an insolvency crisis dating back to at least 2008, as current user fees are no longer sufficient to sustain necessary investment in our surface infrastructure needs.

The Infrastructure Investment and Jobs Act (IIJA) failed to address this issue and only made matters worse by increasing spending from the Highway Trust Fund by $102 billion and relying on a bailout of the Trust Fund with a $118 billion General Fund transfer.

Let me be clear. Republicans support investing in infrastructure, but our highway funding system is founded upon the principle that roadway users must pay for their use of the system. Failing to restructure our surface transportation funding sources will have severe consequences for our nation’s transportation system and the American people.

That is why tomorrow, as part of reconciliation, the Committee will take the first step towards HTF solvency and stability. We will vote on a proposal to leverage existing state vehicle registration systems and assess a new fee of $200 on electric vehicles (EVs), $100 on hybrid vehicles, and a $20 fee on most other passenger vehicles. If successful, these new user fees would represent the first new funding streams into the Highway Trust Fund in more than 30 years.

Nearly 40 states already have a special registration fee for EVs. It is time for the federal government to assess a fee on EVs that, for years, have not paid gasoline or diesel taxes, the primary source of Highway Trust Fund revenues.

Most importantly, this proposal continues the user-pays principle and ensures EVs no longer get a free ride on our highways. While EVs and hybrids will start paying these fees into the system in the near term, the $20 fee would not go into effect until 2031. This delay gives this committee the opportunity to consider restructuring the broken trust fund tax structure with a fairer system to ensure solvency for years to come.

Let me close by once again underscoring the significance of this proposal. The Trust Fund is broken. Our reconciliation bill will take the first step towards fixing it, unlocking the path towards permanently fixing the Trust Fund. This gives our committee a significant head start in our reauthorization process and sets us up for success.

We must act now to save the Trust Fund before it’s too late.

Highways and Transit Subcommittee Chairman David Rouzer

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, a significant gap.  To ensure the Trust Fund’s continued solvency, Congress has transferred a total of $275 billion from 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, the Infrastructure Investment and Jobs Act, increased Highway Trust Fund spending by more than 36 percent, but made no reforms to revenue streams, resulting in a $118 billion General Fund transfer to cover the gap.

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 percent 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 obviously require no fuel and therefore are not paying into the Highway Trust Fund.  CBO estimates gas tax revenues, the majority of Trust Fund receipts, will decline by nearly 40 percent 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 roads.  While a step in the right direction and the first real attempt by Congress to address the Trust Fund’s solvency problems in more than 30 years, this fee alone will certainly not solve the estimated $142 billion shortfall. 

Given that backdrop, I look forward to hearing from our witnesses on potential solutions and new innovative methods we might employ to fund our surface transportation programs.  Thank you all for testifying here today.

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