On Tuesday April 29, the U.S. House Transportation & Infrastructure Subcommittee on Highways and Transit met for a hearing entitled, “America Builds: The Need for a Long-Term Solution for the Highway Trust Fund.” Members called on several witnesses to provide insights on the status, issues, and policy solutions regarding the highway trust fund (HTF). The witnesses brought state DOT, industry, and association perspectives and among the witnesses was the Eno Center’s very own, Jeff Davis. 

Witness List 

Carlos Braceras, P.E., Executive Director, Utah Department of Transportation; on behalf of the American Association of State Highway and Transportation Officials (AASHTO) 

Ty Johnson, President, Fred Smith Company; on behalf of the National Asphalt Pavement Association (NAPA) 

Jeff Davis, Senior Fellow, Eno Center for Transportation 

Brian Burkhard, P.E., Vice President and Global Principal for Advanced Mobility Systems, Jacobs 

Adie Tomer, Senior Fellow, Brookings Metro 

The Highway Trust Fund in 2025 

The goal of this hearing was to review the current state of the Highway Trust Fund (HTF) and the contributing factors that have led to this point, a topic that the Eno Center, and Jeff Davis in particular, has written about extensively. The HTF was created in 1956 to provide a dedicated source of federal funding for the construction and operation of public roads in the United States. Like other trust funds, the HTF follows the “user-pay, user-benefit” principle. The basic premise of this principle is that users of the highway system pay into the trust fund, through various taxes, and the taxes fund operations and improvements of the roadways. Revenue for the HTF comes from five main excise taxes. There are taxes on gasoline, diesel, and on heavy-duty tires. The other two are taxes on sales of new trucks and on the use of heavy trucks. 

In the first 50 years of its existence, revenue and spending were almost equal for the trust fund, and it did not require federal government bailout transfers. The story of the HTF changed in the early 2000s, when spending increased faster than revenue increased, creating a gap. To alleviate this gap, the federal government began transferring money from its General Fund into the HTF to ensure stability between revenue and spending.  

As shown in Figure 1, the red line denotes spending (or outlays) and the blue, orange, and silver columns denote revenue from each of the component taxes. The green column denotes the annual shortfall, which has been covered by transfers from the General Fund beginning in 2008 and totaling $275 billion to date. The chart projects the spending and revenue until FY2035, at which point the annual gap between spending and revenue reaches almost $40 billion. Current spending is around $80 billion while revenue, without General Fund transfers, is hovering around $42 to 43 billion. Davis made it clear in his testimony that the government must bring the spending line down or the revenue line up, if it wants to reduce the gap and reliance on General Fund transfers.  

Figure 1. Highway Trust Fund- FY 2007-2024 (Actual), FY 2025-2034 (CBO Jan. 2025 Baseline) 

Source: Testimony of Jeff Davis, April 29, 2025.  

There are three factors that help explain the state of the HTF in 2025. During the 1950, 60s, and early 70s, total vehicle miles-traveled (VMT) increased by around 4.5 percent per year. The number of miles that people drove each year increased at a rate that allowed spending to increase while keeping the HTF solvent. In later decades, growth of VMT slowed and since 2007, the annual increase in VMT has been around 0.5 percent, which is not enough to keep up with spending increases. Second, vehicles became more fuel-efficient, reducing the spending power of the gas tax as time progressed. Third, Congress last raised the gas tax in 1993, and it has never been tied to inflation, reducing the purchasing power of the gas tax in the past 30 years.  

Jeff Davis testifying before the U.S. House Subcommittee on Highways and Transit, April 29, 2025 

This is the current state of the Highway Trust Fund: increased spending without sufficient HTF revenues to cover it, and an increasing reliance on General Fund transfers. As a result, the HTF has lost reliability as a source that can fully fund surface transportation projects. Members and witnesses were in a consensus that the current state of the HTF is worrisome and requires significant effort to provide stability in dedicated surface transportation funding.  

Issues of Concern 

Given the consensus that the HTF is losing strength, members voiced a number of issues they felt were appropriate to consider as part of the conversation on ensuring stable surface transportation funding. 

Dedicated Funding 

The HTF serves as a dedicated source of surface transportation funding. Witnesses including Johnson and Braceras pointed to that function of the HTF as an invaluable benefit. Certainty of funding provides state DOTs, local governments, and metropolitan planning organizations (MPOs) the chance to plan projects and continue to invest in roadway improvements. Witnesses noted that inadequate and unreliable transportation funding creates uncertainty that is a particular challenge in rapidly growing states. States like Utah, Arizona, and North Carolina are fast growing states, with populations in major metro areas increasing significantly. Between 2020 and 2024, the Salt Lake City metro area grew by 3.4 percent, the Phoenix metro area grew by 6.9 percent, and the Raleigh-Cary metro area grew by 10.2 percent. Braceras noted that the ability to plan and deliver surface transportation projects is critical for fast growing populations area in Utah. Rep. Greg Stanton (D-AZ) voiced a similar sentiment that Arizona is growing quickly and that the amount of funding coming from the HTF to the state is not enough.  

Losing a dedicated source of funding has two implications. One, there is less funding for transportation. Two, there is less certainty in transportation funding. State DOTs, local governments, and MPOs would be limited in the projects they can fund currently and in the planning for future projects. Throughout the hearing, witnesses and members alike urged for continued dedicated transportation funding.  

Negative Outcomes of Reduced Funding

Responding to Rep. Stanton, Johnson stated that the biggest mistake Congress could make regarding the future of the HTF is to do nothing. The impact of reduced funding from the HTF could be seen in a variety of ways. Delays in project delivery would increase costs for projects and transportation companies. Higher costs may be passed on to the public or could lead to a reduced workforce. Additionally, reduced funding restricts state DOTs and local governments’ ability to address congestion through roadway improvements. Congestion is a daily part of people’s lives, and something that is only increasing, as highlighted by Rep. Laura Friedman (D-CA). The witnesses discussed that ensuring the stability of transportation funding is paramount, and there are a variety of policy solutions to keep the HTF stable. In any case, there is a need to do something, and keeping the HTF as it is will not be provide a sustainable source of funding. The witnesses bring expertise and efforts from across the transportation industry that are valuable in improving transportation policy, particularly in this context of transportation funding. In particular, Rep. Stanton gave a shout-out to the Eno Center for its work in bipartisan and comprehensive transportation policy research.  

Mass Transit

The HTF has two accounts: one for highways and one for mass transit. About 20 percent of HTF spending goes towards transit and non-highway projects. Several members voiced support for continued mass transit funding, as an important part of improving the transportation system and providing options for the traveling public. The concern over mass transit is regarding the idea of eliminating the mass transit account from the HTF. In 2015, then presidential candidate Marco Rubio proposed to eliminate the Mass Transit account as a part of a transportation plan. Rep. Eleanor Holmes-Norton (D-DC) and Jerry Nadler (D-NY) sought further explanation from the witnesses on the continued importance of mass transit funding and whether eliminating the account would have any impact. Responding to Rep. Holmes-Norton, Davis noted that even if Congress removed the non-highway programs from the HTF, revenue would remain below spending levels, with a $9.5 billion gap.  

Changes to House Rules 

Rep. Julia Brownley (D-CA) suggested a change to the House rules as a partial solution to the HTF challenges. The U.S. House Committee on Ways & Means has jurisdiction over taxes, customs revenues (or tariffs) and over “deposit of public monies,” which includes trust funds. Ways & Means has not held a hearing on the HTF in some time. The suggestion would be shifting the jurisdiction from Ways and Means to the U.S. House Transportation & Infrastructure Committee, giving the Committee more power to make changes in the HTF taxes structure. 

(Ed. Note: In 1955, Speaker Rayburn actually let the Public Works Committee write its own taxes for the Interstate Highway Bill, bypassing the Ways and Means Committee entirely. It was a controversial move, and may have contributed to the House defeating the bill and going home for the year. (See Richard Weingroff’s article “Kill the Bill.” When they came back in 1956, they put Ways and Means back in charge, and we got the Interstate Highway Act/Highway Revenue Act combo out of it.)

Policy Recommendations 

Tuesday’s hearing was an opportunity to voice concerns about the HTF and discuss the merits of various policy solutions to keep the HTF stable. 

Increasing the Gas Tax 

As mentioned, the gas tax has remained unchanged since 1993 and is not indexed to inflation. The tax per gallon paid in 2025 is the same amount as in1993, which means it has significantly lost purchasing power as construction costs have increased. Increasing the gas tax would increase revenues going into the HTF in the short term, but with more fuel-efficient vehicles and more people buying electric cars and hybrids, the long-term reliability of the gas tax comes into question. The projection shown in Figure 1 indicates that the revenues from the gas tax are expected to start declining around 2027. An increase in the gas tax may increase revenue, but that does not guarantee that gas tax revenues will not still decline over time.  

EV Fees 

Electric vehicles (EVs) are increasingly present on roadways. Total registered EVs (including battery electric and plug in hybrid) in 2021 was around 2.13 million, compared to around 100,000 in 2012. As EVs do not use gas or diesel, EVs do not contribute to the HTF and therefore, EV drivers are using the roadway but not contributing to the federal transportation funding the same way a driver of an internal combustion engine (ICE) vehicle does. In following the user-pay, user-benefit principle, there are calls to implement a fee on EVs that would go into the HTF. Several members voiced support for the idea of an EV fee. Rep Dusty Johnson (R-SD) highlighted that an EV fee would create an environment where EV drivers pay into the HTF and that would fall in line with the user-pay, user-benefit principle. As part of the reconciliation plan, Republican House members proposed several annual registration fees for certain vehicles. The proposed plan would instate a $200 annual fee for EVs, $100 fee for hybrids, and a $20 fee for ICE vehicles. On Wednesday, Republicans changed their plan and took out the annual fee for ICE vehicles and raised the proposed EV fee to $250.  

VMT/RUC/MBUF 

A vehicle miles-traveled (VMT) fee, also known as a road user charge (RUC) or mileage-based user fee (MBUF) is a proposed policy where drivers pay a fee based on how many miles they drove each year. This policy is an alternative to the gas tax. Rather than paying into the HTF through gallons of gas, some see the MBUF as a more direct tax on how much a driver “uses” the system, based on miles. Utah is one state that has a RUC program, which implements a RUC for all drivers. The program includes two elements: an annual EV fee of $140 and a RUC based on miles driven. EV drivers could opt into the RUC and waive the EV fee, so they only pay the RUC. This was a policy decision to provide an alternative to the gas tax and provide EV drivers the option to not pay the EV fee given their participation in the RUC.  

Several members voiced concerns over a milage-based fee, suggesting that rural drivers would face a heavier burden than urban or suburban drivers on account of the fact that vehicle-miles traveled can be higher in rural areas. 

National Infrastructure Bank 

Rep. Daniel Webster (R-FL) asked about what value a national infrastructure bank would have on surface transportation funding. A national infrastructure bank would be a government body that provides loans to various entities for financing infrastructure projects. Responding to the representative, Burkhard noted that a national infrastructure bank would be a useful supplemental tool in addition to current funding. According to the conversation, an infrastructure bank would be privately funded rather than from taxes. This model would be an opportunity for increased public-private partnerships and signal an openness from the government to working with the private sector.  

Impacts on the Public 

Rep. Emilia Sykes (D-OH) reminded the committee that the efforts to fix the HTF ought to be mindful of the public. Transportation costs account for around 15 percent of household income on average in 2022. The transportation cost as part of household income is higher in lower-income households compared to higher-income households. Increases in the gas tax, establishing an EV fee, or having a MBUF could mean a higher cost for transportation for some. Additionally, all of these policies are built on the premise that one has a car. Car ownership by itself can be a significant cost for people, and the representative urged the witnesses and other members to reflect on how to justify these policies to the American people. 

Braceras responded with the notion that transportation is foundational for everyone and that it is critical to connect the costs associated with transportation with its benefits. Davis and Johnson noted that HTF is an important resource for funding projects designed to keep roads, bridges, and transit in good condition. Burkhard added that an efficient movement of goods and freight on the roadways keeps the economy thriving. Echoing an earlier sentiment, Tomer emphasized understanding the returns in transportation investments, including improved mobility.