Biden Electric Car, Gas Tax Policies Spur Rebuke on Highway Fund

Republicans warned President Joe Biden’s top transportation official that the administration’s policies could worsen the diminishing solvency of the Highway Trust Fund.

Lawmakers pointed to the administration’s push toward more electric vehicles, which don’t pay a tax at the pump, and Biden’s urging for Congress to temporarily suspend the national gasoline tax as major hurdles to sufficient funding for the country’s highways. The main source of money for the Highway Trust Fund, the gasoline tax, hasn’t increased since 1993. Biden recently called on lawmakers to enact a gas tax pause as prices reached record highs in recent months.

“The administration is focusing on promoting electric cars and has championed a gas tax holiday, those are things that take away revenue, not add to it,” Rep. Daniel Webster (R-Fla.) said at a House Transportation and Infrastructure hearing Tuesday about the infrastructure law.

The bipartisan law (Public Law 117-58) included more than $100 billion to bail out the Highway Trust Fund, and about $125 million to pilot a national miles-traveled fee and more state mileage-tax programs. The Congressional Budget Office said earlier this year that the trust fund will be exhausted by fiscal 2027, even with the transfers from the trust fund.

Transportation Secretary Pete Buttigieg called general fund transfers a “legitimate way” to fund transportation, but said it wasn’t the only way, and the decision of how to pay for roads as the US fleet electrifies would be up to Congress.

Photo: Shawn Thew/EPA/Bloomberg

Transportation Secretary Pete Buttigieg speaks during a news conference in the Eisenhower Executive Office Building in Washington, D.C., on March 7, 2022.

“Ultimately, there are some profound policy considerations that will need to be addressed in terms of the long-term viability of the Highway Trust Fund,” Buttigieg told lawmakers. “In some way, shape, or form, we need to be prepared for a model of sustainable highway trust funding that is different from the one that we’ve inherited.”

Committee ranking member Sam Graves (R-Mo.) said he is worried about the precedent it sets to keep pulling in general fund dollars.

“We’ve obviously got a lot of vehicles on the road that aren’t paying for the use of the road,” Graves, who didn’t vote for the infrastructure law, said.

Rep. Beth Van Duyne (R-Texas) noted that EVs weigh more, which can damage roads, and are currently getting a “free ride” on highways since they don’t have to pay the gas tax.

Buttigieg noted that user fee pilots authorized by the infrastructure law could provide data to lawmakers if they seek to overhaul how the federal government funds highways, although he noted that general fund transfers will remain a possibility.

“There’s nothing illegitimate about general fund dollars being used for this purpose,” Buttigieg told reporters after the hearing. “It just may or may not be the answer that Congress and the country decide to go in.”

The idea of moving to a user fee has attracted bipartisan interest. House Transportation and Infrastructure Chair Peter DeFazio (D-Ore.) has also advocated for moving toward a sustainable way to fund it, such as a vehicle miles-traveled fee.

Webster asked about a tolling model, but Buttigieg said it was difficult to see how that could be carried out widely.

“As we continue the transition toward electric vehicles and zero-emitting vehicles, it means that we are going to need to have other means for filling gaps in the Highway Trust Fund,” Buttigieg said. “Ultimately, this will be not a technical decision, but a policy one and that largely comes down to whether Congress will continue to hold to the user pays principle or seek an alternative means for funding.”

To contact the reporter on this story: Lillianna Byington in Washington at lbyington@bloombergindustry.com

To contact the editors responsible for this story: Sarah Babbage at sbabbage@bgov.com; Robin Meszoly at rmeszoly@bgov.com