As Congress works on priorities for the next multiyear legislation to fund highways, bridges and public transit, it will need to find a mechanism to cover the costs of these programs.
Funding for previous surface transportation bills was based in part on fuel taxes from the Highway Trust Fund, but the fund repeatedly spent its revenue. The Congressional Budget Office estimates that the current HTF will run out of money by 2028, largely because the federal gas tax has not increased since 1993.
“We’re really not seeing a lot of deep thinking about how to develop good policy in this space and almost no consideration of the impact on consumers,” said Chris Harto, Consumer Reports’ sustainability advocacy manager.
Harto co-authored a CR report outlining five principles that policymakers should consider when assessing the fairness and feasibility of potential road funding. These include the proportionality of user fees; easy collection of user fees; fair contributions between commercial road users and consumers; protect consumer privacy; and a solution that maintains revenue stability as future vehicles and fuel types change.
The report says the trust fund’s inability to cover transportation infrastructure projects stems from three factors: rising costs of highway construction and maintenance, more fuel-efficient vehicles and electric vehicles. Electric vehicles accounted for a 2% reduction in the purchasing power of the federal gas tax, while inflation was responsible for 77%.
U.S. Rep. Sam Graves, chairman of the House Transportation and Infrastructure Committee, proposed a $250 annual registration fee for electric vehicles, but that would leave the average EV driver paying more than three times more in annual federal vehicle taxes than the average owner of a new gas-powered vehicle, according to a CR analysis.
The CR report also found that rates paid by heavy trucks do not contribute equitably, which it says should be addressed in upcoming surface transport legislation. According to CR, an 80,000-pound truck does about 300 times more damage per mile than a passenger vehicle.
While CR does not endorse any one funding method, it outlined the pros and cons of six different approaches.
- Fuel tax: Low friction to collect, no privacy issues, but politically difficult to increase.
- EV registration fees: Easy to collect at the state level, no privacy issues, but don’t consider individual driving habits or different types of electric vehicles.
- Vehicle rates per miles driven: It accurately captures road use and can provide steady income if indexed to inflation, but comes with some privacy issues.
- Public charging tax for electric vehicles: There is no privacy issue, but it negatively affects private EV owners who cannot charge at home and business users who do not have access to fleet chargers.
- Tolls: Easy to collect and can be used to mitigate traffic congestion, but may be vulnerable to driver behavior change.
- Federal General Fund: Easy but depends on Congress to pass, doesn’t take into account individual road use and impact.
The National League of Cities supports gradual increases in federal fuel taxes, which would then be indexed for inflation in future years, Brittney Kohler, the NLC’s legislative director of transportation and infrastructure, said in an earlier interview.
Transportation funding is not entirely dependent on the Highway Trust Fund. Additional appropriations from Congress add programs, increasing the total funding available. In President Donald Trump’s fiscal year 2027 budget request, released April 3, he asked for $26.6 billion in discretionary budget authority for the Department of Transportation, an increase of $1.6 billion, or 6.2 percent, over the 2026 enacted level.
