As America takes one step closer to introducing fees on electric vehicles that don't pay gas taxes, advocates are warning Congress that they're missing the bigger picture: a massive network of highways that we simply can't afford to keep expanding, no matter how many EV fees or cuts to transit we might be tempted to try.
Representatives on the House Transportation and Infrastructure Committee formally proposed an annual federal registration fee of $200 on electric vehicles (and $100 on hybrids) on Wednesday, which chairman Sam Graves (R-Mo.) claimed could "save the Highway Trust Fund before it's too late." The EV fee was latter upped to $250 during the amendment process, while a proposed $20 fee on gas-powered cars was killed.
Those provisions, should they pass the full house, would go into effect immediately, and would be the first new revenue source into the fund in decades.
Proponents of the move argue it's necessary in light of Congress's decades-long refusal to increase the gas tax, which makes up the Highway Trust Fund's largest revenue source.
And without increases to that tax or cuts to the highway programs federal infrastructure laws predominantly fund, lawmakers have found themselves stuck in decades of endless debates over how to make ends meet — even as the problem has grown steadily worse with the rising popularity of electric vehicles, improvements in fuel efficiency on gas-powered cars, and slowdowns in the rate at which driving is increasing year to year.
Meanwhile, matters got drastically worse after the Infrastructure Investment and Jobs Act touched off an explosion in transportation spending — and in particular, highway expansion.
"It seems we may be doomed to repeat the same hearing every couple of years, like the movie 'Groundhog Day,' where nothing ever changes — until we flip the script and make radical, positive changes," said Representative Julia Brownley (D-Calif.) at an April 29 hearing on the future of the Fund.
Coincidentally, the film Brownley references was released back in 1993 — the very same year the gas tax was last increased.
'The wrong direction'
Throughout the hearing and the debate over the reconciliation bill, few lawmakers expressed doubt that America needs more transportation dollars — even if they didn't agree that the deadly and polluting transportation system we're getting in exchange is worth what we're paying for it.
Multiple testimonies noted that taxes drivers pay on things like gasoline, diesel, and heavy truck tires have failed to cover the nation's transportation bills since 2007, requiring Congress to pull hundreds of billions in general fund bailouts and systematically undermining the principle of "user pays," which many claim as the foundation of America's roadway policies.
Jeff Davis of the Eno Center for Transportation testified that last year, only 60 cents out of every dollar in the Highway Trust Fund came from highway user taxes — and he estimates that by "2030 or 2031, we'll fall below the 50 percent mark."
Democrats on the committee, meanwhile, argued that the new EV fees would be drastically insufficient to plug those gaping holes, while disincentivizing Americans from buying cleaner cars — and that the larger reconciliation bill they're attached to would slash programs Americans badly need, like the Neighborhood Access and Equity grants, to fund tax breaks for billionaires.
"This is just the wrong direction: trying to raise revenue by taking us back to dirty, smoggy infrastructure to pay for big tax cuts for folks like Elon Musk," said like André Carson (D-Ind.).
Witnesses further argued that even if the roughly 20 percent of funding that currently goes to the Trust Fund's mass transit account were cut — which some Republicans, disturbingly, have argued it should be— America would still come up about $23 billion short on its transportation bills, while sacrificing mass modes that can save America and families money over time.
And since that shortfall is only on track to get worse, some argue it's time to abandon the user pay myth once and for all, and have a deeper conversation about why we can't afford our car-centric status quo.
"My back-of-the-envelope calculations say that while the EV [fee] is significant, it wouldn't come close to actually closing the amount of revenue that you need to get another five-year [surface transportation reauthorization] bill. ... If Congress decides they want to continue the user pay system — and they should consider that question — revenues and spending need to be aligned," added Davis.
'The Trust Fund is just a tool'
Several witnesses and lawmakers argued that Congress could get out of its Highway Trust Fund time warp by getting real about the size of its shortfall — and creating a transportation network we can actually afford to maintain, even as we work to find new revenue sources to repair the roads we already have.
On the revenue side, other witnesses argued that Congress should first look to a wider "menu of policy responses" beyond EV fees alone, as Adie Tomer of Brookings Metro put it. That might include increased vehicle registration fees on all cars, road user charges like congestion pricing or the vehicle miles traveled fees that Congress paid researchers to study under the Infrastructure Investment and Jobs Act, and even private financing instruments.
More important, though, Tomer says that Congress needs to look at how we're spending all that transportation money, as well as who is making those decisions — because right now, cities aren't getting their fair share.
A recent study he conducted found that while motorists log 34 percent of their miles on local roads, state DOTs give back only 16 percent of their total federal disbursements to the local communities that are generating so much of their revenue.
“Said plainly, the Trust Fund itself is a national asset; still, the Trust Fund is just a tool," he added. "It doesn't differentiate between where gasoline and diesel were consumed. The Trust Fund isn't codified to advance any specific economic competitiveness goals you may have. It's only there to support the execution on your congressionally programmed priorities.
"The Trust Fund is well-suited to channel investment," Tomer continued. "Yet it would be a wasted opportunity if Congress did not [pair] considerations of new revenue with efforts to rethink how the country measures need — [and] who controls the funding.”
At the very least, Congress needs to accept the hard truth that "the National Highway System is a giant money pit, emptying federal, state, and local coffers alike, with total maintenance costs 3.5 times higher in 2023 than in 1993, even after adjusting for inflation," as David Cooke memorably wrote in an article for the Union of Concerned Scientists, which was published in response to House's EV fee proposal.
"Until our infrastructure reflects a system that works for everyone, we should not be asking families to invest more of their hard-earned money in it ... If Congress is going to evaluate the effectiveness of federal transportation funding, it must look at both sides of the ledger, not just where the money is coming from but where it is going." Cooke continued. "Otherwise, the costs will continue to balloon unsustainably, as we see with the Highway Trust Fund."
This article was updated to reflect changes introduced during the amendment process.
