"America Builds: The Need for a Long-Term Solution for the Highway Trust Fund"
Hearing•House Transportation and Infrastructure Subcommittee on Highways and Transit•Apr 29, 2025 · 10:15 AM
Summary
House Transportation and Infrastructure Subcommittee on Highways and Transit held a hearing on Apr 29, 2025 at 10:15 AM in Rayburn House Office Building, Room 2167. 5 witnesses appeared.
Record
The meeting has its video, its transcript, witnesses and documents on the record.
Video
The proceedings, as the committee streamed them.
Transcript
The transcript runs to 8,368 lines and 474,617 characters, as the Government Publishing Office printed it.
1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34 AMERICA BUILDS: THE NEED FOR A LONG-TERM5 SOLUTION FOR THE HIGHWAY TRUST FUND67=======================================================================89 (119-17)1011 HEARING1213 BEFORE THE1415 SUBCOMMITTEE ON16 HIGHWAYS AND TRANSIT1718 OF THE1920 COMMITTEE ON21 TRANSPORTATION AND INFRASTRUCTURE22 HOUSE OF REPRESENTATIVES2324 ONE HUNDRED NINETEENTH CONGRESS2526 FIRST SESSION2728 __________2930 APRIL 29, 20253132 __________3334 Printed for the use of the35 Committee on Transportation and Infrastructure3637[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3839 Available online at: https://www.govinfo.gov/committee/house-40 transportation?path=/browsecommittee/chamber/house/committee/41 transportation4243 __________4445 U.S. GOVERNMENT PUBLISHING OFFICE4660-847 PDF WASHINGTON : 20254748-----------------------------------------------------------------------------------4950 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE5152 Sam Graves, Missouri, Chairman53 Rick Larsen, Washington, Ranking Member5455Eleanor Holmes Norton, Eric A. ``Rick'' Crawford,56 District of Columbia Arkansas,57Jerrold Nadler, New York Vice Chairman58Steve Cohen, Tennessee Daniel Webster, Florida59John Garamendi, California Thomas Massie, Kentucky60Henry C. ``Hank'' Johnson, Jr., Georgiaott Perry, Pennsylvania61Andre Carson, Indiana Brian Babin, Texas62Dina Titus, Nevada David Rouzer, North Carolina63Jared Huffman, California Mike Bost, Illinois64Julia Brownley, California Doug LaMalfa, California65Frederica S. Wilson, Florida Bruce Westerman, Arkansas66Mark DeSaulnier, California Brian J. Mast, Florida67Salud O. Carbajal, California Pete Stauber, Minnesota68Greg Stanton, Arizona Tim Burchett, Tennessee69Sharice Davids, Kansas Dusty Johnson, South Dakota70Jesus G. ``Chuy'' Garcia, Illinois Jefferson Van Drew, New Jersey71Chris Pappas, New Hampshire Troy E. Nehls, Texas72Seth Moulton, Massachusetts Tracey Mann, Kansas73Marilyn Strickland, Washington Burgess Owens, Utah74Patrick Ryan, New York Eric Burlison, Missouri75Val T. Hoyle, Oregon Mike Collins, Georgia76Emilia Strong Sykes, Ohio, Mike Ezell, Mississippi77 Vice Ranking Member Kevin Kiley, California78Hillary J. Scholten, Michigan Vince Fong, California79Valerie P. Foushee, North Carolina Tony Wied, Wisconsin80Christopher R. Deluzio, Pennsylvania Tom Barrett, Michigan81Robert Garcia, California Nicholas J. Begich III, Alaska82Nellie Pou, New Jersey Robert P. Bresnahan, Jr.,83Kristen McDonald Rivet, Michigan Pennsylvania84Laura Friedman, California Jeff Hurd, Colorado85Laura Gillen, New York Jefferson Shreve, Indiana86Shomari Figures, Alabama Addison P. McDowell, North87 Carolina88 David J. Taylor, Ohio89 Brad Knott, North Carolina90 Kimberlyn King-Hinds,91 Northern Mariana Islands92 Mike Kennedy, Utah93 Robert F. Onder, Jr., Missouri94 Jimmy Patronis, Florida9596 Subcommittee on Highways and Transit9798 David Rouzer, North Carolina,99 Chairman100Eleanor Holmes Norton, District of101 Columbia, Ranking Member102John Garamendi, California Eric A. ``Rick'' Crawford,103Henry C. ``Hank'' Johnson, Jr., Georgiakansas104Jared Huffman, California Daniel Webster, Florida105Julia Brownley, California Thomas Massie, Kentucky106Mark DeSaulnier, California Brian Babin, Texas107Jesus G. ``Chuy'' Garcia, Illinois Mike Bost, Illinois108Chris Pappas, New Hampshire Doug LaMalfa, California109Marilyn Strickland, Washington Bruce Westerman, Arkansas110Patrick Ryan, New York Pete Stauber, Minnesota111Val T. Hoyle, Oregon Tim Burchett, Tennessee112Emilia Strong Sykes, Ohio Dusty Johnson, South Dakota113Jerrold Nadler, New York Jefferson Van Drew, New Jersey114Nellie Pou, New Jersey Troy E. Nehls, Texas115Kristen McDonald Rivet, Michigan Burgess Owens, Utah116Laura Friedman, California Eric Burlison, Missouri117Laura Gillen, New York Mike Collins, Georgia118Shomari Figures, Alabama, Kevin Kiley, California119 Vice Ranking Member Vince Fong, California120Steve Cohen, Tennessee Tony Wied, Wisconsin121Dina Titus, Nevada Tom Barrett, Michigan122Salud O. Carbajal, California Robert P. Bresnahan, Jr.,123Greg Stanton, Arizona Pennsylvania, Vice Chairman124Sharice Davids, Kansas Jeff Hurd, Colorado125Seth Moulton, Massachusetts Jefferson Shreve, Indiana126Robert Garcia, California Addison P. McDowell, North127Rick Larsen, Washington (Ex Officio) Carolina128 David J. Taylor, Ohio129 Brad Knott, North Carolina130 Kimberlyn King-Hinds,131 Northern Mariana Islands132 Mike Kennedy, Utah133 Sam Graves, Missouri (Ex Officio)134135 CONTENTS136137 Page138139Summary of Subject Matter........................................ vii140141 STATEMENTS OF MEMBERS OF THE COMMITTEE142143Hon. David Rouzer, a Representative in Congress from the State of144 North Carolina, and Chairman, Subcommittee on Highways and145 Transit, opening statement..................................... 1146 Prepared statement........................................... 3147Hon. Eleanor Holmes Norton, a Delegate in Congress from the148 District of Columbia, and Ranking Member, Subcommittee on149 Highways and Transit, opening statement........................ 3150 Prepared statement........................................... 5151Hon. Sam Graves, a Representative in Congress from the State of152 Missouri, and Chairman, Committee on Transportation and153 Infrastructure, opening statement.............................. 5154 Prepared statement........................................... 6155Hon. Rick Larsen, a Representative in Congress from the State of156 Washington, and Ranking Member, Committee on Transportation and157 Infrastructure, prepared statement............................. 101158159 WITNESSES160161Carlos M. Braceras, P.E., Executive Director, Utah Department of162 Transportation, on behalf of the American Association of State163 Highway and Transportation Officials (AASHTO), oral statement.. 8164 Prepared statement........................................... 10165Ty Johnson, President, Fred Smith Company, on behalf of the166 National Asphalt Pavement Association (NAPA), oral statement... 20167 Prepared statement........................................... 22168Jeff Davis, Senior Fellow, Eno Center for Transportation, oral169 statement...................................................... 28170 Prepared statement........................................... 30171Brian Burkhard, P.E., Vice President and Global Principal for172 Advanced Mobility Systems, Jacobs, oral statement.............. 40173 Prepared statement........................................... 42174Adie Tomer, Senior Fellow, Brookings Institution, oral statement. 49175 Prepared statement........................................... 51176177 SUBMISSIONS FOR THE RECORD178179Letter to Hon. Sam Graves, Chairman, and Hon. Rick Larsen,180 Ranking Member, Committee on Transportation and Infrastructure,181 from the CHARGE Coalition, Submitted for the Record by Hon.182 Jesus G. ``Chuy'' Garcia....................................... 68183Letter to Members of Congress from 26 National Transportation and184 Construction Associations, Submitted for the Record by Hon.185 Dusty Johnson.................................................. 83186Submissions for the Record by Hon. David Rouzer:187 Letter of April 29, 2025, from John A. Costa, International188 President, Amalgamated Transit Union....................... 102189 Letter of April 29, 2025, to Hon. Sam Graves, Chairman,190 Committee on Transportation and Infrastructure, from David191 C. Bauer, President and Chief Executive Officer, American192 Road & Transportation Builders Association................. 102193 Statement of Ian Jefferies, President and Chief Executive194 Officer, Association of American Railroads................. 103195 Letter of May 13, 2025, to Hon. David Rouzer, Chairman, and196 Hon. Eleanor Holmes Norton, Ranking Member, Subcommittee on197 Highways and Transit, from David R. Hill, Executive Vice198 President-Energy, Bipartisan Policy Center................. 105199 Letter of April 30, 2025, to Hon. Sam Graves, Chairman, and200 Hon. Rick Larsen, Ranking Member, Committee on201 Transportation and Infrastructure, from the National202 Asphalt Pavement Association; National Stone, Sand & Gravel203 Association; Portland Cement Association; and National204 Ready Mixed Concrete Association........................... 106205 Letter of April 30, 2025, to Hon. Sam Graves, Chairman,206 Committee on Transportation and Infrastructure, and Hon.207 David Rouzer, Chairman, Subcommittee on Highways and208 Transit, from NATSO, Representing America's Travel Plazas209 and Truckstops; and SIGMA: America's Leading Fuel Marketers 107210 Letter of April 28, 2025, to Hon. David Rouzer, Chairman, and211 Hon. Eleanor Holmes Norton, Ranking Member, Subcommittee on212 Highways and Transit, from Todd Spencer, President and213 Chief Executive Officer, Owner-Operator Independent Drivers214 Association, Inc........................................... 108215 Letter of April 30, 2025, to Hon. Sam Graves, Chairman, and216 Hon. Rick Larsen, Ranking Member, Committee on217 Transportation and Infrastructure, from Todd Spencer,218 President and Chief Executive Officer, Owner-Operator219 Independent Drivers Association, Inc....................... 110220 Letter of April 29, 2025, to Hon. David Rouzer, Chairman, and221 Hon. Eleanor Holmes Norton, Ranking Member, Subcommittee on222 Highways and Transit, from Sean O'Neill, Senior Vice223 President of Government Affairs, Portland Cement224 Association................................................ 110225 Letter of May 5, 2025, to Hon. Sam Graves, Chairman, and Hon.226 Rick Larsen, Ranking Member, Committee on Transportation227 and Infrastructure, from Dave Heller, Senior Vice President228 of Safety and Government Affairs, Truckload Carriers229 Association................................................ 111230 Letter of April 29, 2025, to Hon. Sam Graves, Chairman, and231 Hon. Rick Larsen, Ranking Member, Committee on232 Transportation and Infrastructure, from Rodney Davis,233 Senior Vice President of Government Affairs, U.S. Chamber234 of Commerce................................................ 112235 Letter of April 25, 2025, to Members of Congress from 26236 National Agriculture Associations.......................... 113237 Letter of April 25, 2025, to Hon. Sam Graves, Chairman,238 Committee on Transportation and Infrastructure, from 31239 National Transportation and Construction Associations...... 113240Submissions for the Record by Hon. Eleanor Holmes Norton:241 Statement of the Alliance for Automotive Innovation.......... 114242 ``The Truth Is Out There: The Cost of Roads Is Bankrupting243 the Highway Trust Fund, Not Electric Vehicles,'' by Dave244 Cooke, Senior Vehicles Analyst, The Equation Blog, Union of245 Concerned Scientists, April 29, 2025....................... 116246 Letter to Hon. David Rouzer, Chairman, and Hon. Eleanor247 Holmes Norton, Ranking Member, Subcommittee on Highways and248 Transit, from Albert Gore, Executive Director, Zero249 Emission Transportation Association (ZETA)................. 122250251 APPENDIX252253Questions from Hon. Dina Titus to Carlos M. Braceras, P.E.,254 Executive Director, Utah Department of Transportation, on255 behalf of the American Association of State Highway and256 Transportation Officials (AASHTO).............................. 125257Questions from Hon. Dina Titus to Adie Tomer, Senior Fellow,258 Brookings Institution.......................................... 126259260[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]261262 April 25, 2025263264 SUMMARY OF SUBJECT MATTER265266 TO: LMembers, Subcommittee on Highways and Transit267 FROM: LStaff, Subcommittee on Highways and Transit268 RE: LSubcommittee Hearing on ``America Builds: The269Need for a Long-Term Solution for the Highway Trust Fund''270_______________________________________________________________________271272 I. PURPOSE273274 The Subcommittee on Highways and Transit of the Committee275on Transportation and Infrastructure will meet on Tuesday,276April 29, 2025, at 10:15 a.m. ET in 2167 of the Rayburn House277Office Building to receive testimony at a hearing entitled,278``America Builds: The Need for a Long-Term Solution for the279Highway Trust Fund.'' The purpose of the hearing is to discuss280the benefits to the Nation of a sustainable, long-term funding281solution for the Highway Trust Fund (HTF), the challenges with282the current funding mechanism, and consideration of other283funding options. At the hearing, Members will receive testimony284from the American Association of State Highway and285Transportation Officials (AASHTO), the National Asphalt286Pavement Association (NAPA), the Eno Center for Transportation287(Eno), Jacobs, and Brookings Metro.288289 II. BACKGROUND290291 The HTF was established by the Highway Revenue Act of 1956292(HRA) (P.L. 84-627) to provide a dedicated Federal revenue293source for the construction of the Interstate Highway294System.\1\ The HRA established a user-pay system where highway295users would pay a three cents per gallon excise tax on motor296fuels, the tax receipts would be deposited in the HTF, and HTF297balances would be dedicated to the construction of Federal-aid298highways.\2\ This structure allowed the program to operate with299contract authority, which allows agencies to enter into300obligations in advance of appropriations, thereby providing a301more dependable source of funding.\3\ This basic construct302remains in place today; however, subsequent acts of Congress303have increased the excise taxes on motor fuels, imposed taxes304on other users, and expanded the number of activities eligible305for funding under the HTF.\4\306---------------------------------------------------------------------------307 \1\ Highway Revenue Act of 1956, Pub. L. No. 84-627.308 \2\ Id.309 \3\ The Highway Trust Fund Explained, The Peter G. Peterson310Foundation, (Mar. 2, 2023), available at https://www.pgpf.org/budget-311basics/budget-explainer-highway-trust-fund#: :text=312The%20Highway%20Trust%20Fund%20(HTF,of%20the%20interstate%20highway%20sy313stem.314 \4\ Dep't of Transp., FHWA, Funding Federal-Aid Highways, (Jan.3152017), available at https://www.fhwa.dot.gov/policy/olsp/316fundingfederalaid/07.cfm.317---------------------------------------------------------------------------318 For the first 50 years, the HTF funding mechanism generally319met the Congressional goal of self-sufficiency.\5\ Since 2001,320spending from the HTF has exceeded revenue deposits. Starting321in 2008, Congress has utilized transfers, mainly from the322General Fund (GF) of the Treasury, to keep the HTF solvent.\6\323The Congressional Budget Office's (CBO's) most recent324projections indicate a cumulative shortfall of nearly $142325billion over the five years following the Fiscal Year (FY) 2026326expiration of the current surface authorization act, the327Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58).\7\328The current HTF projections are based on the FY 2024 enacted329funding levels adjusted for inflation.\8\ Given the HTF's330solvency challenges, Congress must evaluate and consider ways331to fund surface transportation infrastructure in the future.332---------------------------------------------------------------------------333 \5\ Robert S. Kirk & William J. Mallett, Cong. Rsch. Serv.334(R47573), Funding and Financing Highway and Public Transportation Under335the Infrastructure Investment and Jobs Act, (May 24, 2023), available336at https://www.everycrsreport.com/files/2023-05-33724_R47573_2fdd993640445d646286ecfe0df6cc5570d409a6.pdf [hereinafter CRS338R47573].339 \6\ Id.340 \7\ CBO, Highway Trust Fund Accounts, (Jan. 2025), available at341https://www.cbo.gov/system/files/2025-01/51300-2025-01-342highwaytrustfund.pdf.343 \8\ Id.344---------------------------------------------------------------------------345346THE IMPORTANCE OF TRANSPORTATION INFRASTRUCTURE347348 Transportation infrastructure provides a strong physical349platform that facilitates economic growth, ensures global350competitiveness, creates American jobs, and supports national351security. Our Nation's transportation infrastructure is the352backbone of the United States' economy. Transportation353accounted for nine percent of United States gross domestic354product in 2022, up from 8.4 percent in 2021.\9\ In 2023, all355modes of transportation moved an estimated 20.1 billion tons of356goods worth about $18.7 trillion on our Nation's transportation357network. In addition, nearly 16 million Americans,358approximately 10.3 percent of the United States workforce, are359directly employed by transportation-related industries.\10\360---------------------------------------------------------------------------361 \9\ Dep't of Transp., Bureau of Transp. Statistics, Transp.362Statistics Annual Report 2024 (Dec. 2024), available at https://363rosap.ntl.bts.gov/view/dot/79039 [hereinafter BTS].364 \10\ Id.365---------------------------------------------------------------------------366 The surface transportation components of this broader367system play an integral part in the movement of people and368goods. In 2022, highways carried more than 3.2 trillion vehicle369miles, which includes cars, trucks, motorcycles, and buses.\11\370Public transportation continues to recover from pre-pandemic371ridership trends, reaching over 80 percent of 2019 levels.\12\372Of the total freight moved on our Nation's transportation373network, trucks moved 13 billion tons in 2023, valued at over374$13.6 trillion.\13\375---------------------------------------------------------------------------376 \11\ Id.377 \12\ America Builds: A Review of the Nation's Transit Policies and378Programs. Hearing Before the H. Comm. on Transp. and Infrastructure,379119th Cong.--(2025) (statement of Nathanial P. Ford Jr., Chief380Executive Officer, Jacksonville Transp. Authority, on behalf of the381American Public Transp. Ass'n), available at https://382transportation.house.gov/uploadedfiles/04-09-2025_ht_hearing_-383_nathaniel_ford_-_testimony.pdf.384 \13\ Id.385---------------------------------------------------------------------------386 Congestion is a growing challenge across the United States,387affecting both freight shippers and commuters. According to the388Texas A&M Transportation Institute's 2023 Urban Mobility389Report, the national cost of congestion was $224 billion in3902022.\14\ This amounts to approximately $614 million per day.391Nationally, congestion also wasted 3.3 billion gallons of392gasoline and resulted in an extra 8.5 billion hours of travel393time.\15\ Further, the average commuter spent an extra 54 hours394stuck in traffic.\16\395---------------------------------------------------------------------------396 \14\ Texas A&M Transportation Institute, 2023 Urban Mobility Report397(June 2024), available at https://static.tti.tamu.edu/tti.tamu.edu/398documents/mobility-report-2023.pdf.399 \15\ Id.400 \16\ Id.401---------------------------------------------------------------------------402403 III. HIGHWAY TRUST FUND404405SOURCES OF REVENUE406407 The HTF has three long-standing categories of income. These408are:409 LFederal fuel taxes, which include gasoline and410diesel fuel taxes, as well as special fuel, gasohol, and411ethanol/methanol taxes;412 LFederal truck-related taxes, which include taxes413on truck tires, truck and trailer sales, and heavy vehicle414users; and415 LInterest and penalties, which include interest416derived from HTF balances that are invested in special Treasury417securities with interest from these securities credited to the418HTF, and penalties for violations of certain tax and vehicle419safety laws.\17\420---------------------------------------------------------------------------421 \17\ Supra note 4.422423 The HTF receives most of its revenue from the Federal424excise taxes on motor fuel. In FY 2024, the HTF was credited425with $42.5 billion in net tax receipts from highway users and426$7.5 billion in interest and other non-tax deposits, totaling427nearly $50 billion in net deposits.\18\ Of the net tax receipts428from highway users total from last year, approximately 81429percent of revenues derived from gas and diesel fuel taxes, 14430percent from truck and trailer sales, three percent from heavy431vehicle use, and two percent from truck tires.\19\432---------------------------------------------------------------------------433 \18\ Jeff Davis, Highway Trust Fund Ran $26.7 Billion User-Pay434Deficit in FY 2024, Eno Center for Transp., (Nov. 1, 2024), available435at https://enotrans.org/article/highway-trust-fund-ran-26-7-billion-436user-pay-deficit-in-fy-2024/.437 \19\ Id. (numbers tabulated by Transp. and Infrastructure (T&I)438Comm. Staff).439---------------------------------------------------------------------------440 Congress has increased the Federal motor fuel tax rates441four times since the establishment of the HTF.\20\ They were442last adjusted 30 years ago as part of the Omnibus Budget443Reconciliation Act of 1993 (OBRA 1993) (P.L. 103-66).\21\444Currently, the tax on diesel fuel stands at 24.4 cents per445gallon and gasoline stands at 18.4 cents per gallon (see446Appendix 1).\22\ Of the gasoline tax, 0.1 cents goes to the447Leaking Underground Storage Trust Fund, and the remaining 18.3448cents per gallon goes to the Highway Trust Fund. The tax rates449on gas and diesel fuels are not indexed to inflation.450---------------------------------------------------------------------------451 \20\ CRS R47573, supra note 5.452 \21\ Id.453 \22\ Supra note 4.454---------------------------------------------------------------------------455 Several of the taxes deposited into the HTF will either456expire or be significantly reduced in the years following the457expiration of IIJA. For the HTF to continue to be credited with458revenues, Congress must either extend the existing HTF taxes at459their current rates, modify the existing taxes, identify460additional revenue streams, or pursue a combination of these461options. Historically, Congress has extended the existing HTF462taxes in surface transportation authorization bills, which463typically last two years past the authorization of464transportation programs. IIJA extended the taxes on truck and465trailer sales and on tires through the end of FY 2028, and the466taxes on heavy vehicle use through the end of FY 2029.\23\467Absent Congressional action, the current gasoline and diesel468tax levels would each be reduced to 4.3 center per gallon. IIJA469extended the current rates for the gasoline and diesel taxes470through the end of FY 2028.\24\ IIJA also extended the471requirement for the Treasury Department to deposit these tax472revenues in the HTF through the end of FY 2028.\25\473---------------------------------------------------------------------------474 \23\ Ali E. Lohman, Cong. Rsch. Serv. (R48472), The Highway Trust475Fund's Highway Account, (Mar. 27, 2025), available at https://crs.gov/476Reports/R48472?source=search#_477Toc194040932 [hereinafter CRS R48472].478 \24\ Id.479 \25\ Id.480---------------------------------------------------------------------------481482ACCOUNT STRUCTURE483484 For 26 years, the trust fund had a single account and a485single purpose--to fund the Federal highway programs. This486construct changed with a political agreement referred to as the487``Great Compromise'' or the ``80-20 highway-transit split.''488\26\ Implemented in the Surface Transportation Assistance Act489(STAA) of 1982 (P.L. 94-424), the result was a five-cent per490gallon increase in the gasoline tax (for a total gas tax of491nine cents) and the creation of a new mass transit account492(MTA).\27\ The compromise traded an increase in the gas tax for493an agreement to deposit one cent (20 percent of the new tax494increase) into the newly created MTA within the HTF. The495remaining four cents (80 percent of the new tax increase) would496be dedicated to the highway account (HA).\28\ The Great497Compromise agreement only pertained to the gas tax increase in498STAA, not total gas taxes collected. Further, it did not499dictate authorization amounts or spending from either the HA or500the MTA.\29\501---------------------------------------------------------------------------502 \26\ Robert S. Kirk & William J. Mallett, Cong. Rsch Serv.503(R45350), Funding and Financing Highways and Public Transportation,504(May 11, 2020), available at https://crs.gov/reports/pdf/R45350/505R45350.pdf; and Jeff Davis, Explainer: What the ``80-20 Highway-Transit506Split'' Really Is, and What it Isn't, Eno Center for Transp., (July 26,5072021), available at https://enotrans.org/article/explainer-what-the-80-50820-highway-transit-split-really-is-and-what-it-isnt/.509 \27\ Jeff Davis, Highway Trust Fund 101, Eno Center for Transp.,510(updated Aug. 15, 2023), available at https://enotrans.org/article/511highway-trust-fund-101; Dep't of Transp., FHWA, Public Roads--Federal512Aid Highway Act of 1956: Creating the Interstate System (1996),513available at https://highways.dot.gov/public-roads/summer-1996/federal-514aid-highway-act-1956-creating-515interstate-system-sidebars-5160#: :text=The%20trust%20fund%20has%20two,cent%20of%20the517%20new%20revenue.518 \28\ Jeff Davis, Highway Trust Fund 101, Eno Center for Transp.,519(updated Aug. 15, 2023), available at https://enotrans.org/article/520highway-trust-fund-101/ [hereinafter HTF 101].521 \29\ Id.522---------------------------------------------------------------------------523 The HA continued to be largely devoted to construction and524maintenance of highways and bridges. The MTA was created to525fund public transportation such as buses, railways, subways,526and ferries, and also allows for the use of limited funds for527operating expenses in rural and small urbanized areas.\30\ This528new structure represented a move away from the user-pays529principle originally envisioned for the HTF.\31\ Road users530began to pay for transit programs, which constituted a531diversion of funds from highway program purposes.\32\ According532to a 2013 study by the University of California, Berkeley and533the National Bureau of Economic Research, ``the congestion534relief benefits alone may justify transit infrastructure535investments.'' \33\ However, the same study acknowledged that536``previous economic research does not support the hypothesis537that transit generates a large reduction in traffic538congestion.'' \34\539---------------------------------------------------------------------------540 \30\ CRS R47573, supra note 5.541 \31\ Joshua Schank, et. al., Reagan Devolution: The Real Story of542the 1982 Gas Tax Increase, Eno Center for Transp., (Sept. 9, 2015),543available at https://enotrans.org/eno-resources/reagan-devolution-the-544real-story-of-the-1982-gas-tax-increase-2/.545 \32\ Richard Weingroff, Busting the Trust, FHWA Public Roads (July/546Aug. 2013), available at https://highways.dot.gov/public-roads/547julyaugust-2013/busting-trust.548 \33\ Michael L. Anderson, Subways, Strikes, and Slowdowns: The549Impacts of Public Transit on Traffic Congestion, University of Calif.,550Berkley & Nber, (Aug. 30, 2013), available at https://are.berkeley.edu/551 mlanderson/pdf/Anderson_transit.pdf.552 \34\ Id.553---------------------------------------------------------------------------554555TAX DEPOSITS INTO HTF ACCOUNTS556557 Fuel taxes enacted prior to 1982 and truck-related taxes558continue to be deposited into the HA of the HTF, but all fuel559tax increases enacted in 1982 or later are deposited into the560HA and MTA consistent with the 80-20 highway-transit split (see561Appendix 2).\35\ The percentage of gasoline and diesel fuel562taxes deposited into the MTA totals 15.6 percent.\36\ However,563when the Federal truck-related taxes are included, about 13564percent of total HTF tax receipts are deposited into the565MTA.\37\566---------------------------------------------------------------------------567 \35\ HTF 101, supra note 28.568 \36\ Id.569 \37\ Id.570---------------------------------------------------------------------------571572SOLVENCY573574 Beginning in FY 2001, and in each subsequent fiscal year to575date, HTF outlays have exceeded revenue deposits.\38\ For576example, in FY 2024, the HTF collected $49.9 billion in577revenues and interest and spent $70.6 billion.\39\ Some reasons578for the imbalance include:579---------------------------------------------------------------------------580 \38\ CRS R47573, supra note 5.581 \39\ Supra note 7.582---------------------------------------------------------------------------583 LThe Federal fuel tax rates have not increased at584the Federal level since 1993 and are not indexed to inflation.585The gas and diesel taxes have each lost approximately 73586percent of their respective purchasing power between FY 1993587and FY 2023.\40\ If Congress had indexed the current rate of58818.3 cents per gallon for inflation in 1993, the Federal gas589tax would be approximately 40.6 cents per gallon in 2025.\41\590---------------------------------------------------------------------------591 \40\ CRS R48472, supra note 23.592 \41\ Email from CBO to Majority Staff, H. Comm. on Transp. and593Infrastructure (Apr. 10, 2025, 11:33 a.m.) (on file with Comm.).594595 LGas tax revenue has and will continue to decline596as people purchase more fuel-efficient vehicles, including597electric vehicles.\42\598---------------------------------------------------------------------------599 \42\ HTF 101, supra note 28.600601 LThe pandemic and resulting lockdowns caused a602temporary but sharp decline in economic activity, driving, and603commuting.\43\604---------------------------------------------------------------------------605 \43\ John Gallagher, COVID-19 Draining the Highway Trust Fund,606Freight Waves (Apr. 15, 2020), available at https://607www.freightwaves.com/news/covid-19-draining-the-highway-trust-fund.608609 LLabor and construction materials costs have610increased, specifically increasing more sharply with COVID-611related supply shortages, safety-related requirements, and a612tight labor market. Highway construction costs increased 13.9613percent in 2023, less than in 2022 when costs increased 26.5614percent, the largest historical increase.\44\ The Bureau of615Transportation statistics estimates that higher construction616costs reduce what can be bought for transportation under IIJA617by 30 to 40 percent.\45\618---------------------------------------------------------------------------619 \44\ BTS, supra note 9.620 \45\ Id.621622 LCongress has continued to pass surface623transportation legislation that increases both highway and mass624transit authorizations far beyond what the HTF can support with625current revenue sources.\46\626---------------------------------------------------------------------------627 \46\ Supra note 7.628629 CBO projects that annual HTF tax collections will decrease630from $44.1 billion in FY 2025 to $37.9 billion in FY 2035, a631more than 14 percent decrease.\47\ Within these respective632amounts, gas tax collections drop from $25.1 billion to $15.3633billion, or a 39 percent decrease, over the same period.\48\634Truck and trailer tax receipts are projected to increase by 48635percent from $6.2 billion in FY 2025 to $9.2 billion in FY6362035.\49\ Collections on diesel fuel and kerosene, truck tire,637and heavy vehicle use remain relatively flat over the next638decade.\50\639---------------------------------------------------------------------------640 \47\ CBO, Budget and Economic Outlook: 2025 to 2035 (Jan. 2025),641available at https://www.cbo.gov/system/files/2025-01/51138-2025-01-642Revenue-Projections.xlsx643 \48\ Id.644 \49\ Id.645 \50\ Id.646---------------------------------------------------------------------------647 Because of the nature of ``reimbursable'' programs like648those funded by the HTF, there may be cash in the fund that is649not needed for immediate use. It is important to understand650that this is not a ``surplus,'' or excess cash. Rather, those651amounts will be needed over time to pay states as they submit652vouchers related to prior obligations.\51\ Absent Congressional653action, and if the HTF were to experience a shortfall, the654United States Department of Transportation (DOT) may implement655cash management procedures to slow reimbursements to state and656local governments and reduce apportionment funds to states.\52\657---------------------------------------------------------------------------658 \51\ Supra note 4.659 \52\ CRS R48472, supra note 23.660---------------------------------------------------------------------------661 Both the HA and the MTA have separate self-sufficiency662calculations to test for solvency, the Byrd and Rostenkowski663tests, respectively.\53\ Each test compares financial664commitments to projected financial resources in the account for665the next four fiscal years and requires automatic reductions in666program apportionments associated with the account that cannot667cover its commitments.\54\ The contract authority668authorizations for transit have exceeded MTA revenue669projections for the next four years, and therefore, the670Rostenkowski Test was triggered beginning in FY 2020.\55\671Congress has continued to enact laws that cancel or suspend the672transit apportionment reductions required by the Rostenkowski673Test since FY 2020.\56\674---------------------------------------------------------------------------675 \53\ HTF 101, supra note 28.676 \54\ Id.677 \55\ Id.678 \56\ Id.679---------------------------------------------------------------------------680 To ensure that the HTF could continue to pay its681obligations, Congress has transferred a total of $275 billion682from the GF and other sources into the HTF beginning in6832008.\57\ Most recently, IIJA transferred a total of $118684billion to maintain solvency through FY 2026.\58\685---------------------------------------------------------------------------686 \57\ Id.687 \58\ IIJA, Pub. L. No. 117-58, 135 Stat. 429.688---------------------------------------------------------------------------689690 IV. PROGRAMS FUNDED BY THE HIGHWAY TRUST FUND691692 The HTF provides funding for a number of highway, transit,693and highway safety programs (surface transportation programs)694administered by the Federal Highway Administration (FHWA), the695Federal Transit Administration (FTA), the Federal Motor Carrier696Safety Administration (FMCSA), the National Highway Traffic697Safety Administration (NHTSA), and the Office of the Secretary698of Transportation (OST). These agencies administer surface699transportation programs in partnership with states, public700transit agencies, and other local authorities. While Federal701agencies provide financial and technical assistance, state and702local partners select projects and carry out the programs on a703day-to-day basis.\59\704---------------------------------------------------------------------------705 \59\ Supra note 4.706---------------------------------------------------------------------------707 Congress most recently reauthorized surface transportation708programs with the enactment of IIJA. The law reauthorizes709Federal surface transportation programs through FY 2026. In710total, it authorizes approximately $530 billion over five years711for Federal-aid highways, Federal transit, and highway safety712programs to improve our Nation's infrastructure. Approximately713$382.9 billion is authorized from the HTF.\60\ Of this total,714approximately $303.5 billion is administered by FHWA, $69.9715billion by FTA, $4.5 billion by FMCSA, and $5.1 billion by716NHTSA.\61\ Of the remaining funds, IIJA authorized $89.1717billion in multiyear advance appropriations from the General718Fund, which is a change to the funding structure of highway and719transit programs; and the remaining amount is budget authority720subject to future appropriations acts.\62\721---------------------------------------------------------------------------722 \60\ IIJA, Pub. L. No. 117-58, 135 Stat. 429 (numbers tabulated by723Transp. and Infrastructure (T&I) Comm. Staff).724 \61\ Id.725 \62\ Id.726---------------------------------------------------------------------------727 IIJA's five-year average funding for HTF programs728administered by these modal agencies increased significantly729compared to the same average under the previous authorization,730the Fixing America's Surface Transportation Act (FAST Act)731(P.L. 114-94). Specifically, HTF-derived funding for FHWA732programs increased by 35 percent, FTA programs by 43 percent,733FMCSA programs by 38 percent, and NHTSA programs by 36734percent.\63\735---------------------------------------------------------------------------736 \63\ Id.; FAST Act of 2015, Pub. L. No. 114-94, 129 Stat. 1312737(comparative numbers tabulated by T&I Comm. Staff).738---------------------------------------------------------------------------739740 V. FUNDING OPTIONS FOR THE HTF741742 Presuming that Congress continues to support the HTF as a743funding mechanism for the Federal-aid highways, Federal744transit, and highway safety programs, long-term changes to the745funding structure of the fund are required. In order to rely746solely on the HTF as a funding source, Congress must either747increase revenue dedicated to the fund or reduce spending, or748some combination of the two.\64\ However, Congress has not749agreed on a long-term strategy. Considerations in the750development of a long-term strategy include the Federal751Government's responsibility for transportation funding, the752proper distribution of expenditures on highways as opposed to753mass transit, and other specific policy proposals.\65\754---------------------------------------------------------------------------755 \64\ CRS R47573, supra note 5.756 \65\ Id.757---------------------------------------------------------------------------758 Several options that would increase revenues into the HTF759that have been discussed include:760 LRaising motor fuel taxes and/or indexing the761motor fuel tax to inflation.\66\ This option would require a762significant increase and may not be viable in the long-term as763motor vehicles become more fuel efficient.\67\ For example, CBO764recently estimated that increasing the Federal taxes on765gasoline and diesel fuel by 15 cents per gallon in January 2025766would reduce the deficit by $211.6 billion over the next ten767years.\68\ This estimate assumes the tax would be indexed for768inflation each year using the chained consumer price index for769all urban consumers, and incorporates an offsetting reduction770in income and payroll tax revenue.\69\771---------------------------------------------------------------------------772 \66\ Id.773 \67\ Brianna Fernandez, Raising the Gas Tax is Not a Long-Term Fix774to the Highway Trust Fund, American Action Forum (Apr. 24, 2018),775available at https://www.americanactionforum.org/insight/raising-gas-776tax-not-long-term-fix-highway-trust-fund/777#: :text=April%2024%2C%202018-778,Raising%20the%20Gas%20Tax%20is%20Not%20a%20Long779%2DTerm,for%20the%20Highway%20Trust%20Fund&text=As%20of%202021%2C%20the780%20Highway,transit%20projects%20%E2%80%93%20will%20be%20insolvent.;781Addressing the Long-Term Solvency of the Highway Trust Fund: Hearing782Before the S. Comm. on Environment and Public Works, 117th Cong., (Apr.78314, 2021), available at https://www.cbo.gov/publication/78457138#: :text=Lawmakers%20have%20several%20options%20for,movement%2C%20o785r%20on786%20electric%20vehicles.787 \68\ CBO, Budget Options: Increase Excise Taxes on Motor Fuels and788Index Them for Inflation, (Dec. 12, 2024), available at https://789www.cbo.gov/budget-options/60963.790 \69\ Id.791792 LImposing a Federal tax or fee on electric793vehicles (EVs) and depositing the revenues into the HTF.794Although this would address a fairness argument by requiring EV795motorists that do not pay for their use of roads to pay into796the HTF, such a tax would not, by itself, result in a797---------------------------------------------------------------------------798sustainable HTF.799800 LImposing an annual tax or fee on vehicles at the801time of a vehicle's annual registration.\70\ Congress may802choose to either replace or supplement the existing Federal803motor fuel taxes with a Federal annual registration fee.804---------------------------------------------------------------------------805 \70\ CRS R48472, supra note 23.806807 LReplacing or supplementing motor fuel taxes with808a vehicle miles traveled (VMT) charge.\71\ VMT pilot programs809were first funded under the FAST Act. IIJA continued to provide810funds for these pilot programs and required DOT to establish a811Federal System Funding Alternative Advisory Board as well as a812national VMT pilot program.\72\ The Biden Administration813notified Congress of the selection of members to the Federal814System Funding Alternative Advisory Board on January 15,8152025.\73\ In 2022, FHWA estimated that total VMT by all vehicle816types is projected to increase by 22 percent from 2019 to8172049.\74\818---------------------------------------------------------------------------819 \71\ CRS R47573, supra note 5.820 \72\ FAST Act of 2015, Pub. L. No. 114-94; IIJA, Pub. L. No. 117-82158, 135 Stat. 429.822 \73\ Email from FHWA to Staff, H. Comm. on Transp. and823Infrastructure (Jan. 15, 2025, 12:38 p.m.) (on file with Comm.).824 \74\ Dep't of Transp., FHWA, 2022 FHWA Forecasts of Vehicle Miles825Travelled (VMT), (July 2022), available at https://www.fhwa.dot.gov/826policyinformation/tables/vmt/2022_vmt_forecast_827sum.pdf.828829 LTransfer general revenues from the GF into the830HTF. Transferring funding into the HTFhas been the de facto831funding policy to sustain the HTF for the 18 years prior to832FY2026.\75\833---------------------------------------------------------------------------834 \75\ CRS R47573, supra note 5.835---------------------------------------------------------------------------836837 VI. WITNESSES838839 LMr. Carlos M. Braceras, P.E., Executive Director,840Utah Department of Transportation, on behalf of the American841Association of State Highway and Transportation Officials842(AASHTO)843 LMr. Ty Johnson, President, Fred Smith Company, on844behalf of the National Asphalt Pavement Association (NAPA)845 LMr. Jeff Davis, Senior Fellow, Eno Center for846Transportation847 LMr. Brian Burkhard, P.E., Vice President and848Global Principal for Advanced Mobility Systems, Jacobs849 LMr. Adie Tomer, Senior Fellow, Brookings Metro850851 Appendix 1: Current Highway Trust Fund User Fees \76\852---------------------------------------------------------------------------853854 \76\ Supra note 4.855856------------------------------------------------------------------------857 Tax Type Tax Rate858------------------------------------------------------------------------859Federal Motor Fuel Taxes................................................860------------------------------------------------------------------------861Gasoline and gasohol...................... 18.4 cents per862 gallon\\863Diesel.................................... 24.4 cents per864 gallon\\865Special Fuels:866 General rate............................ 18.4 cents per gallon867 Liquefied petroleum gas................. 18.3 cents per gasoline-868 equivalent gallon869 Liquefied natural gas................... 24.3 cents per gallon diesel-870 equivalent gallon871 M85 from natural gas.................... 9.25 cents per gallon872 Compressed natural gas.................. 18.3 cents per gasoline-873 equivalent gallon874------------------------------------------------------------------------875Other Federal Taxes on Truck Users......................................876------------------------------------------------------------------------877Tires (maximum rated load capacity):878 0-3,500 pounds.......................... No Tax879 Over 3,500 pounds....................... 9.45 cents per each 10880 pounds in excess of 3,500881Truck and Trailer Sales................... 12 percent of retailer's882 sales price for tractors883 and trucks over 33,000884 pounds gross vehicle weight885 (GVW) and trailers over886 26,000 pounds GVW887Heavy Vehicle Use......................... Annual tax: Trucks 55,000888 pounds and over GVW, $100889 plus $22 for each 1,000890 pounds (or fraction891 thereof) in excess of892 55,000 pounds (maximum tax893 of $550)894------------------------------------------------------------------------895\\ $0.1 cent is deposited in the Leaking Underground Storage896 Tank Trust Fund897898 Appendix 2: Federal Highway User Fees \77\899---------------------------------------------------------------------------900901 \77\ Dep't of Transp., FHWA, Highway Statistics Series, (2020),902available at https://www.fhwa.dot.gov/policyinformation/statistics/9032020/fe21b.cfm.904---------------------------------------------------------------------------905February 2020906Table FE-21B907908----------------------------------------------------------------------------------------------------------------909 Distribution of Tax910 --------------------------------------------------911 Highway Trust Fund912 Tax Effective -----------------------------------------913 User Tax Rate Date Leaking General914 Highway Mass Underground Fund915 Account Transit Storage Tank Trust916 Account Fund917----------------------------------------------------------------------------------------------------------------918 Fuel Taxes (Cents per Gallon)919----------------------------------------------------------------------------------------------------------------920Gasoline and Gasohol fuels............... 18.4 10/1/1997 15.44 2.86 0.1 -921Diesel and Kerosene fuels................ 24.4 10/1/1997 21.44 2.86 0.1 -922Alternative fuels \2\....................923Liquefied Petroleum Gas.................. 18.3 \ 1/1/2016 16.17 2.13 - -924 3\925Liquefied Natural Gas.................... 24.3 \ 10/1/2006 22.44 1.86 - -926 4\927Compressed natural gas................... 18.3 \ 10/1/2006 17.07 1.23 - -928 3\929Other Special Fuels...................... 18.4 10/1/1997 15.44 2.86 0.1 -930----------------------------------------------------------------------------------------------------------------931 Other Taxes--All Proceeds to Highway Account932----------------------------------------------------------------------------------------------------------------933Tires.................................... Tax is imposed on tires sold by manufacturers, producers, or934 importers at the rate of $.0945 ($.04725 in the case of a bias ply or935 super single tire) for each 10 pounds of the maximum rated load936 capacity over 3,500 pounds.937Truck and trailer sales.................. 12 percent of retailer's sales price for tractors and trucks over938 33,000 pounds gross vehicle weight (GVW) and trailers over 26,000939 pounds GVW. The tax applies to parts and accessories sold in940 connection with the vehicle sale.941Heavy vehicle use........................ Annual tax:942 Trucks 55,000-75,000 pounds GVW, $100 plus $22 for each 1,000 pounds943 (or fraction thereof) in excess of 55,000 pounds944 Trucks over 75,000 pounds GVW, $550945----------------------------------------------------------------------------------------------------------------946Source: Office of Highway Policy Information, Federal Highway Administration.947\2\ Alternative fuels is any liquid other than gas oil, fuel oil or any product taxable under Section 4081 of948 the Internal Revenue Code (gasoline, diesel, kerosene, and diesel-water emulsion.)949\3\ Changes to tax rate included in the Surface Transportation and Veterans Health Care Choice Improvement Act950 of 2015. Amounts for these products are defined as having a rate ``per energy equivalent of a gallon of951 gasoline.'' Computation details can be found in 26 USC 4041.952\4\ Changes to tax rate included in the Surface Transportation and Veterans Health Care Choice Improvement Act953 of 2015. Amounts for these products are defined as having a rate ``per energy equivalent of a gallon of954 diesel.'' Computation details can be found in 26 USC 4041.955956AMERICA BUILDS: THE NEED FOR A LONG-TERM SOLUTION FOR THE HIGHWAY TRUST957 FUND958959 ----------960961 TUESDAY, APRIL 29, 2025962963 House of Representatives,964 Subcommittee on Highways and Transit,965 Committee on Transportation and Infrastructure,966 Washington, DC.967 The subcommittee met, pursuant to call, at 10:12 a.m., in968Room 2167, Rayburn House Office Building, Hon. David Rouzer969(Chairman of the subcommittee) presiding.970 Mr. Rouzer. The Subcommittee on Highways and Transit will971come to order.972 I ask unanimous consent that the chairman be authorized to973declare a recess at any time during today's hearing.974 Without objection, so ordered.975 I also ask unanimous consent that Members not on the976subcommittee be permitted to sit with the subcommittee at977today's hearing and ask questions.978 Without objection, so ordered.979 As a reminder, if Members wish to insert a document into980the record, please also email it to DocumentsTI@mail.house.gov.981 I now recognize myself for the purposes of an opening982statement for 5 minutes.983984 OPENING STATEMENT OF HON. DAVID ROUZER OF NORTH CAROLINA,985 CHAIRMAN, SUBCOMMITTEE ON HIGHWAYS AND TRANSIT986987 Mr. Rouzer. Today's hearing focuses on the importance of988long-term certainty and stability for the Highway Trust Fund.989This timely discussion is part of a series of subcommittee990hearings as we work to develop and enact an on-time, multiyear991surface bill.992 Congress created the Highway Trust Fund in 1956 to provide993a dedicated Federal revenue source, based on a user-pays model,994for the construction of the Interstate Highway System. Congress995began with a 3-cents-per-gallon excise tax on gasoline996allocated to the trust fund. Currently, the Highway Trust Fund997is funded by excise taxes on gas and diesel fuels, as well as998taxes on truck tires, truck and trailer sales, and heavy999vehicle users, with the most recent adjustment to the tax on1000gas and diesel fuels in 1993.1001 Since 2001, spending from the Highway Trust Fund has1002exceeded its revenues. During the most recent fiscal year, the1003Highway Trust Fund collected nearly $50 billion in revenues and1004interest but spent $70.6 billion, a deficit of more than $201005billion, which is a pretty significant gap. To ensure the trust1006fund's continued solvency, Congress has transferred a total of1007$275 billion from the Treasury's General Fund to the Highway1008Trust Fund since 2008.1009 Without a serious solution, our State, local, and private-1010sector partners risk losing a reliable funding source critical1011to project delivery and our national economy. While General1012Fund bailouts have offered short-term relief at the expense of1013the individual American taxpayer, they do not address the long-1014term challenges that plague the Highway Trust Fund.1015 The last several surface transportation authorization bills1016have continued to authorize highway and mass transit1017authorizations beyond what the Highway Trust Fund can1018reasonably support. The current surface transportation law, the1019Infrastructure Investment and Jobs Act, increased Highway Trust1020Fund spending by more than 36 percent, but made no reforms to1021revenue streams, resulting in a $118 billion General Fund1022transfer to cover that gap.1023 Now, there are a number of different thoughts about how to1024address the fundamental structural challenges of the current1025funding mechanism to fund the Highway Trust Fund, and all have1026their pros and cons. Meanwhile, gasoline and diesel taxes,1027which have remained unchanged since 1993, have lost 73 percent1028of their purchasing power. If Congress had chosen to index the1029gas and diesel taxes to inflation back in 1993, an additional1030$480 billion in Federal revenues would have been raised, most1031of which would have been deposited into the Highway Trust Fund.1032 Obviously, gas tax revenue will continue to decline as cars1033become more fuel efficient. Electric vehicles require no fuel,1034and therefore, obviously, are not paying into the Highway Trust1035Fund. CBO estimates gas tax revenues, the majority of the trust1036fund receipts, will decline by nearly 40 percent--40 percent--1037over the next decade.1038 Fortunately, this committee is intent on addressing the1039shortfall in a fair and equitable manner. Through1040reconciliation, this committee will propose a $200 annual1041registration fee on electric vehicles at the Federal level,1042which will raise tens of billions of dollars in additional1043revenue for the Highway Trust Fund over the next decade to1044better ensure that all users of our roads are paying to1045maintain those roads.1046 While a step in the right direction, and the first real1047attempt by Congress to address the trust fund solvency problems1048in more than 30 years, this fee alone, of course, will1049certainly not solve the estimated $142 billion shortfall.1050 Given that backdrop, we look forward to hearing from our1051witnesses on potential solutions and new, innovative methods we1052might employ to fund our surface transportation programs. And1053so, therefore, I thank each of you for being here today.1054 [Mr. Rouzer's prepared statement follows:]10551056 Prepared Statement of Hon. David Rouzer, a Representative in Congress1057 from the State of North Carolina, and Chairman, Subcommittee on1058 Highways and Transit1059 Today's hearing focuses on the importance of long-term certainty1060and stability for the Highway Trust Fund. This timely discussion is1061part of a series of Subcommittee hearings as we work to develop and1062enact an on-time, multi-year surface bill.1063 Congress created the Highway Trust Fund in 1956 to provide a1064dedicated federal revenue source, based on a user-pays model, for the1065construction of the Interstate Highway System. Congress began with a1066three-cents per gallon excise tax on gasoline allocated to the Trust1067Fund. Currently, the Highway Trust Fund is funded by excise taxes on1068gas and diesel fuels, as well as taxes on truck tires, truck and1069trailer sales, and heavy vehicle users, with the most recent adjustment1070to the tax on gas and diesel fuels in 1993.1071 Since 2001, spending from the Highway Trust Fund has exceeded its1072revenues. During the most recent fiscal year, the Highway Trust Fund1073collected nearly $50 billion in revenues and interest but spent $70.61074billion, a deficit of more than $20 billion, a significant gap. To1075ensure the Trust Fund's continued solvency, Congress has transferred a1076total of $275 billion from Treasury's General Fund to the Highway Trust1077Fund since 2008.1078 Without a serious solution, our state, local, and private sector1079partners risk losing a reliable funding source critical to project1080delivery and our national economy. While General Fund bailouts have1081offered short-term relief at the expense of the individual American1082taxpayer, they do not address the long-term challenges that plague the1083Highway Trust Fund.1084 The last several surface transportation authorization bills have1085continued to authorize highway and mass transit authorizations beyond1086what the Highway Trust Fund can reasonably support. The current surface1087transportation law, the Infrastructure Investment and Jobs Act,1088increased Highway Trust Fund spending by more than 36 percent, but made1089no reforms to revenue streams, resulting in a $118 billion General Fund1090transfer to cover the gap.1091 There are a number of different thoughts about how to address the1092fundamental structural challenges of the current funding mechanism to1093fund the Highway Trust Fund, and all have their pros and cons.1094Meanwhile, gasoline and diesel taxes, which have remained unchanged1095since 1993, have lost 73 percent of their purchasing power. If Congress1096had chosen to index the gas and diesel taxes to inflation back in 1993,1097an additional $480 billion in federal revenues would have been raised,1098most of which would have been deposited into the Highway Trust Fund.1099 Obviously, gas tax revenue will continue to decline as cars become1100more fuel efficient. Electric vehicles obviously require no fuel and1101therefore are not paying into the Highway Trust Fund. CBO estimates gas1102tax revenues, the majority of Trust Fund receipts, will decline by1103nearly 40 percent over the next decade.1104 Fortunately, this committee is intent on addressing this shortfall1105in a fair and equitable manner. Through reconciliation, this committee1106will propose a $200 annual registration fee on electric vehicles at the1107federal level, which will raise tens of billions of dollars in1108additional revenue for the Highway Trust Fund over the next decade to1109better ensure that all users of our roads are paying to maintain roads.1110While a step in the right direction and the first real attempt by1111Congress to address the Trust Fund's solvency problems in more than 301112years, this fee alone will certainly not solve the estimated $1421113billion shortfall.1114 Given that backdrop, I look forward to hearing from our witnesses1115on potential solutions and new innovative methods we might employ to1116fund our surface transportation programs. Thank you all for testifying1117here today.11181119 Mr. Rouzer. I now recognize our ranking member for 51120minutes for an opening statement.1121 Ms. Norton.11221123OPENING STATEMENT OF HON. ELEANOR HOLMES NORTON OF THE DISTRICT1124 OF COLUMBIA, RANKING MEMBER, SUBCOMMITTEE ON HIGHWAYS AND1125 TRANSIT11261127 Ms. Norton. Thank you.1128 I want to thank subcommittee Chairman Rouzer for holding1129this hearing.1130 The Highway Trust Fund guarantees predictable funding to1131State and local partners, empowering communities to build the1132infrastructure they need. However, since 2008, trust fund1133spending has outpaced revenue, a trend that is projected to1134exhaust the trust fund by 2028. Therefore, Congress must find a1135sustainable solution to ensure the solvency of the trust fund.1136 To date, Congress has transferred $275 billion from the1137General Fund to the Highway Trust Fund, including $118 billion1138in the Infrastructure Investment and Jobs Act. This infusion of1139funds enabled critical investments in roadway, bridge and1140freight infrastructure, roadway safety upgrades, and transit1141network expansions. Without the General Fund transfers, these1142and many other priorities would have been sidelined.1143 Supplementing the Highway Trust Fund revenue with General1144Fund transfers has been necessary because Congress has not1145raised the gas tax in over 30 years, which has eroded its1146purchasing power.1147 The Infrastructure Investment and Jobs Act supported1148several pilot projects to study other funding options, such as1149a road user charge that would levy a fee on miles driven rather1150than gallons of fuel consumed. Congress should consider the1151full menu of options to ensure the solvency of the Highway1152Trust Fund, including a national road user charge.1153 Whatever Congress decides, the solution must meet several1154criteria.1155 First, we need to provide a sustainable revenue source for1156the Highway Trust Fund that allows this committee to continue1157to enact multiyear surface transportation bills.1158 Second, we must retain and strengthen the Mass Transit1159Account of the Highway Trust Fund. Transit, which is an1160essential part of our transportation system, improves mobility,1161reduces pollution, reduces congestion for drivers, and supports1162millions of private-sector jobs.1163 Eliminating the Mass Transit Account, a proposal Congress1164hears periodically, would not make up for the Highway Trust1165Fund's shortfall. According to Jeff Davis, one of our1166witnesses, the Highway Trust Fund will face an annual $401167billion gap between revenue and spending by 2027. Transit1168spending will account for only $17 billion, or less than half1169of the shortfall. Congress must reject any attempts to1170eliminate the Mass Transit Account, which would hurt people,1171our economy, and our environment without solving the problem.1172 Third, we need to direct more Highway Trust Fund resources1173to places that need them the most: local roads are what I mean.1174According to research by the Brookings Institution, local roads1175are entitled to a much larger share of Federal resources than1176they receive, and they tend to be in much worse condition than1177State roads.1178 There are several paths that Congress may choose to take1179that would guarantee reliable funding, maintain the Mass1180Transit Account, and direct more resources to local partners.1181 I look forward to today's discussion.1182 Thank you.1183 [Ms. Norton's prepared statement follows:]11841185 Prepared Statement of Hon. Eleanor Holmes Norton, a Delegate in1186 Congress from the District of Columbia, and Ranking Member,1187 Subcommittee on Highways and Transit1188 I would like to thank Subcommittee Chair Rouzer for holding this1189hearing. The Highway Trust Fund guarantees predictable funding to state1190and local partners, empowering communities to build the infrastructure1191they need. However, since 2008, Trust Fund spending has outpaced1192revenue, a trend that is projected to exhaust the Trust Fund by 2028.1193Therefore, Congress must find a sustainable solution to ensure the1194solvency of the Trust Fund.1195 To date, Congress has transferred $275 billion from the General1196Fund to the Highway Trust Fund, including $118 billion in the1197Infrastructure Investment and Jobs Act. This infusion of funds enabled1198critical investments in roadway, bridge and freight infrastructure,1199roadway safety upgrades and transit network expansions. Without the1200General Fund transfers, these and many other priorities would have been1201sidelined.1202 Supplementing the Highway Trust Fund's revenue with General Fund1203transfers has been necessary because Congress has not raised the gas1204tax in over 30 years, which has eroded its purchasing power.1205 The Infrastructure Investment and Jobs Act supported several pilot1206projects to study other funding options, such as a road user charge1207that would levy a fee on miles driven rather than gallons of fuel1208consumed. Congress should consider the full menu of options to ensure1209the solvency of the Highway Trust Fund, including a national road user1210charge.1211 Whatever Congress decides, the solution must meet several criteria.1212First, we need to provide a sustainable revenue source for the Highway1213Trust Fund that allows this Committee to continue to enact multiyear1214surface transportation bills.1215 Second, we need to retain and strengthen the Mass Transit Account1216of the Highway Trust Fund. Transit, which is an essential part of our1217transportation system, improves mobility, reduces pollution, reduces1218congestion for drivers and supports millions of private sector jobs.1219 Eliminating the Mass Transit Account--a proposal Congress hears1220periodically--would not make up for the Highway Trust Fund's shortfall.1221According to Jeff Davis, one of our witnesses, the Highway Trust Fund1222will face an annual $40 billion gap between revenue and spending by12232027. Transit spending will account for only $17 billion, or less than1224half of the shortfall. Congress must reject any attempts to eliminate1225the Mass Transit Account, which would hurt people, our economy and our1226environment without solving the problem.1227 Third, we need to direct more Highway Trust Fund resources to the1228places that need them most: local roads. According to research by the1229Brookings Institution, local roads are entitled to a much larger share1230of federal resources than they receive, and they tend to be in much1231worse condition than state roads.1232 There are several paths that Congress may choose to take that would1233guarantee reliable funding, maintain the Mass Transit Account and1234direct more resources to local partners. I look forward to today's1235discussion. Thank you.12361237 Mr. Rouzer. I now recognize the chairman of the full1238committee, Mr. Graves, for 5 minutes for an opening statement.12391240 OPENING STATEMENT OF HON. SAM GRAVES OF MISSOURI, CHAIRMAN,1241 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE12421243 Mr. Graves. Thank you, Chairman Rouzer, and I want to thank1244all of our witnesses for being here today as we discuss the1245importance of long-term certainty and stability in the Highway1246Trust Fund.1247 The trust fund is facing an insolvency crisis dating back1248to at least 2008. Its current user fees are no longer1249sufficient to sustain necessary investment in our surface1250transportation needs.1251 The Infrastructure Investment and Jobs Act, or IIJA, failed1252to address the issue, and it only made matters worse by1253increasing spending from the Highway Trust Fund by $102 billion1254and relying on a bailout of the trust fund with $118 billion1255from a General Fund transfer.1256 Let me be clear: Republicans support investing in1257infrastructure, but our highway funding system is founded upon1258the principle that roadway users must pay for their use of the1259system. Failing to restructure our surface transportation1260funding sources is going to have severe consequences for our1261Nation's transportation system and the American people.1262 That is why tomorrow, as part of the reconciliation package1263that we are going to be working on, the committee will take the1264first steps towards Highway Trust Fund solvency and stability.1265We will vote on a proposal to leverage existing State vehicle1266registration systems and assess a new fee of $200, as was1267pointed out, on electric vehicles; $100 on hybrid vehicles; and1268a $20 fee on most other passenger vehicles. If successful,1269these new user fees would represent the first new funding1270stream into the Highway Trust Fund in more than 30 years.1271 Nearly 40 States already have a special registration fee1272for EVs. It is time for the Federal Government to assess a fee1273on EVs that, for years, have not paid any gasoline or diesel1274taxes, which is, obviously, the primary source of the Highway1275Trust Fund revenues at this point.1276 Most importantly, this proposal continues the user fee1277principle and ensures EVs no longer get a free ride on our1278highways. While EVs and hybrids will start paying these fees1279into the system in the near term, the $20 fee would not go into1280effect until 2031. This delay gives the committee the1281opportunity to consider restructuring the broken trust fund tax1282structure with a fairer system to ensure solvency for many1283years to come.1284 And let me close by once again underscoring the1285significance of this proposal. The trust fund is broken. Our1286reconciliation bill will take the first steps towards fixing1287it, unlocking the path towards permanently addressing the trust1288fund issue. This gives our committee a significant head start1289in our reauthorization process and sets us up for success.1290 We have to act now to save the trust fund before it is too1291late.1292 And with that, Chairman Rouzer, I appreciate the1293opportunity, and I yield back.1294 [Mr. Graves' prepared statement follows:]12951296 Prepared Statement of Hon. Sam Graves, a Representative in Congress1297 from the State of Missouri, and Chairman, Committee on Transportation1298 and Infrastructure1299 Thank you, Chairman Rouzer, and thank you to our witnesses for1300being here today, as we discuss the importance of long-term certainty1301and stability for the Highway Trust Fund. The Trust Fund has faced an1302insolvency crisis dating back to at least 2008, as current user fees1303are no longer sufficient to sustain necessary investment in our surface1304infrastructure needs.1305 The Infrastructure Investment and Jobs Act (IIJA) failed to address1306this issue and only made matters worse by increasing spending from the1307Highway Trust Fund by $102 billion and relying on a bailout of the1308Trust Fund with a $118 billion General Fund transfer.1309 Let me be clear. Republicans support investing in infrastructure,1310but our highway funding system is founded upon the principle that1311roadway users must pay for their use of the system. Failing to1312restructure our surface transportation funding sources will have severe1313consequences for our nation's transportation system and the American1314people.1315 That is why tomorrow, as part of reconciliation, the Committee will1316take the first step towards HTF solvency and stability. We will vote on1317a proposal to leverage existing state vehicle registration systems and1318assess a new fee of $200 on electric vehicles (EVs), $100 on hybrid1319vehicles, and a $20 fee on most other passenger vehicles. If1320successful, these new user fees would represent the first new funding1321streams into the Highway Trust Fund in more than 30 years.1322 Nearly 40 states already have a special registration fee for EVs.1323It is time for the federal government to assess a fee on EVs that, for1324years, have not paid gasoline or diesel taxes, the primary source of1325Highway Trust Fund revenues.1326 Most importantly, this proposal continues the user-pays principle1327and ensures EVs no longer get a free ride on our highways. While EVs1328and hybrids will start paying these fees into the system in the near1329term, the $20 fee would not go into effect until 2031. This delay gives1330this committee the opportunity to consider restructuring the broken1331trust fund tax structure with a fairer system to ensure solvency for1332years to come.1333 Let me close by once again underscoring the significance of this1334proposal. The Trust Fund is broken. Our reconciliation bill will take1335the first step towards fixing it, unlocking the path towards1336permanently fixing the Trust Fund. This gives our committee a1337significant head start in our reauthorization process and sets us up1338for success.1339 We must act now to save the Trust Fund before it's too late.13401341 Mr. Rouzer. Ranking Member Larsen has yielded back. So we1342will now go to introduction of the witnesses.1343 Mr. Kennedy, I understand that you have a witness that you1344would like to introduce.1345 Dr. Kennedy of Utah. That is correct, Mr. Chairman.1346 Mr. Rouzer. You are recognized.1347 Dr. Kennedy of Utah. Thank you very much, Chairmen Rouzer1348and Graves, and to the ranking member, Madam Norton.1349 I am great grateful to introduce Mr. Carlos Braceras,1350somebody who I have known for 10 years. As a State legislator,1351he is an outstanding resource, and on the Federal level, we are1352going to have a great experience being able to have him here.1353 He brings a wealth of leadership and expertise to today's1354discussion. He has dedicated 38 years of his service--even1355though he looks like he is 20 years old--he has been actually1356working for the Utah Department of Transportation for 38 years1357where he has served as executive director since 2013.1358 He has been a national leader in transportation innovation1359and currently chairs the AASHTO Agency Administration Managing1360Committee, and has also been recently appointed to be the Chair1361of the Federal System Funding Alternative Advisory Board.1362 I had the privilege of working with Mr. Braceras in the1363State legislature in order to pass legislation that launched1364Utah's statewide road usage charge program. Thanks to his1365leadership, Utah now has one of the first and largest RUC1366programs in the country for alternative fuel vehicles.1367 Mr. Braceras has consistently demonstrated innovative1368leadership, helping Utah become a national model for1369transportation planning and project delivery.1370 I look forward to engaging with him and our other1371distinguished witnesses during today's hearing.1372 Thank you, Mr. Chair.1373 With that, I yield back.1374 Mr. Rouzer. We also have with us Ty Johnson, who is1375testifying on behalf of the National Asphalt Pavement1376Association and also a great North Carolinian.1377 Great to have you here.1378 Jeff Davis, representing the Eno Center for Transportation;1379Brian Burkhard, representing Jacobs; and Adie Tomer,1380representing Brookings Metro.1381 I particularly thank each of you for being here and look1382forward to your great insights.1383 Briefly, I would like to take a moment and explain our1384lighting system. It is pretty self-explanatory. There are three1385lights in front of you. Green means go. Yellow means red is1386soon to come. And red means close it up just as quickly as you1387can if you haven't already.1388 I ask unanimous consent that the witnesses' full statements1389be included in the record.1390 Without objection, so ordered.1391 I also ask unanimous consent that the record of today's1392hearing remain open until such time as our witnesses have1393provided answers to any questions that may be submitted to them1394in writing.1395 Without objection, so ordered.1396 I also ask unanimous consent that the record remain open1397for 15 days for any additional comments and information1398submitted by Members or witnesses to be included in the record1399of today's hearing.1400 Without objection, so ordered.1401 So as your written testimony has been made part of the1402record, the subcommittee asks that you limit your oral remarks1403to 5 minutes.1404 With that, Mr. Braceras, you are recognized for 5 minutes.14051406TESTIMONY OF CARLOS M. BRACERAS, P.E., EXECUTIVE DIRECTOR, UTAH1407 DEPARTMENT OF TRANSPORTATION, ON BEHALF OF THE AMERICAN1408 ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS1409(AASHTO); TY JOHNSON, PRESIDENT, FRED SMITH COMPANY, ON BEHALF1410 OF THE NATIONAL ASPHALT PAVEMENT ASSOCIATION (NAPA); JEFF1411 DAVIS, SENIOR FELLOW, ENO CENTER FOR TRANSPORTATION; BRIAN1412 BURKHARD, P.E., VICE PRESIDENT AND GLOBAL PRINCIPAL FOR1413 ADVANCED MOBILITY SYSTEMS, JACOBS; AND ADIE TOMER, SENIOR1414 FELLOW, BROOKINGS INSTITUTION14151416TESTIMONY OF CARLOS M. BRACERAS, P.E., EXECUTIVE DIRECTOR, UTAH1417 DEPARTMENT OF TRANSPORTATION, ON BEHALF OF THE AMERICAN1418 ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS1419 (AASHTO)14201421 Mr. Braceras. Chair Rouzer, Ranking Member Norton, members1422of the subcommittee, good morning and thank you for the1423opportunity to testify.1424 My name is Carlos Braceras. I am the executive director of1425the Utah Department of Transportation, and I am a past1426president of the American Association of State Highway and1427Transportation Officials.1428 I am honored to share the perspective of State departments1429of transportation nationwide, along with some insights from1430Utah.1431 Transportation is the backbone of America's quality of life1432and its economy. Every schoolbus route, every emergency1433response, and every product on our store shelves begins with a1434safe, reliable trip on our roads and bridges.1435 When transportation works, people barely notice it. When it1436fails, communities and commerce grind to a halt.1437 We must recognize that the system is truly a nationwide1438network. When transportation is successful in Utah, we1439contribute to the success of North Carolina. Likewise,1440transportation challenges in Utah negatively impact States on1441the other side of the country.1442 The Highway Trust Fund is vital to building and maintaining1443a strong, effective transportation network. Let me give you one1444specific example.1445 Using the Bridge Formula funds from the IIJA, Utah1446identified 90 bridges that were in need of work. Seventy-six of1447them were owned by rural communities off the State system. By1448the end of the current program, every one of those bridges that1449had been in poor condition will have been repaired or replaced.1450This results in better safety and mobility for users of the1451system and lifts the burden from local governments whose1452budgets are overstressed.1453 This Bridge Formula Program is an example of how formula1454funding allows States to plan strategically and to effectively1455deliver the priorities that are most important to our State and1456local communities.1457 The important benefits of an effective transportation1458system now face a critical risk. The Highway Trust Fund is1459deteriorating. Since 2008, the Highway Trust Fund has spent1460more than it collects, because the primary revenue source, a1461per-gallon fuel tax that is not indexed for inflation, shrinks1462as vehicles become more efficient, consuming less fuel or no1463fuel at all, and inflation continues to erode the purchasing1464power.1465 Absent congressional action, we will face a shortfall of1466roughly $20 billion next year. States will be forced to delay1467projects, contractors will pull back, and costs will rise,1468undermining the very efficiency that taxpayers expect.1469 To avoid that outcome, we need a long-term reauthorization1470that does two things.1471 First, it must extend the current IIJA investment levels1472and at least keep pace with inflation so State DOTs can plan1473and deliver projects with confidence.1474 Second, it must modernize how we pay for the system,1475because a 21st-century network cannot run on a 20th-century1476revenue model.1477 The principles that have served this country for nearly 1001478years is a user-pay approach. Simply put, those who use the1479transportation system help pay for it.1480 In Utah, we put that philosophy into practice with the1481Nation's first statewide operational road usage charge program.1482We have learned valuable lessons for how to address concerns1483about fairness, privacy, freedom of choice, and cost to1484administer.1485 Our experience in Utah demonstrates that it is possible to1486effectively address challenges and concerns associated with the1487road use charge model, and we believe solutions can be1488implemented nationwide.1489 We recognize that a mileage-based user fee is not a silver1490bullet, but Utah's experience shows that it can be part of a1491diversified toolbox that also includes an inflation-indexed1492fuel tax while the fleet continues to rely on gasoline and1493diesel, targeted fees, and, yes, General Fund contributions.1494 Members of the subcommittee, transportation is essential1495for our extraordinary economy and quality of life in America.1496States need the certainty and the resources to build a safer,1497more resilient, and more innovative transportation future. A1498timely, long-term, fully funded reauthorization will let every1499State--urban, suburban, and rural--deliver the projects our1500citizens expect and deserve.1501 On behalf of Utah and my colleagues in all 50 States, thank1502you for your leadership and for the chance to testify. I look1503forward to your questions.1504 [Mr. Braceras' prepared statement follows:]15051506 Prepared Statement of Carlos M. Braceras, P.E., Executive Director,1507 Utah Department of Transportation, on behalf of the American1508 Association of State Highway and Transportation Officials (AASHTO)1509 Introduction1510 Chair Rouzer, Ranking Member Norton, and Members of the1511Subcommittee, thank you for the opportunity to appear today at this1512important hearing on America Builds: The Need for a Long-Term Solution1513for the Highway Trust Fund.1514 My name is Carlos Braceras, and I serve as Executive Director of1515the Utah Department of Transportation (UDOT) and on the Board of1516Directors of the American Association of State Highway and1517Transportation Officials (AASHTO). I also served as AASHTO President1518from 2018 to 2019. AASHTO represents the state departments of1519transportation (state DOTs) of all 50 states, the District of Columbia,1520and Puerto Rico. In addition to serving as a past AASHTO President, I1521am also Chair of the AASHTO Agency Administration Managing Committee1522and Chair of the Technical Working Group of the AASHTO Center for1523Environmental Excellence. I am also the past Chair for the AASHTO1524Committee on Design. I also serve on the National Academies of1525Science's Transportation Research Board Executive Committee and am a1526past Chair.1527 I first joined UDOT with degrees in engineering and geology in15281986. Before my appointment as the Executive Director in May 2013, I1529served as the Deputy Director for twelve years with previous experience1530as a Region Director, Major Project Manager, Chief Geotechnical1531Engineer, and Chief Value Engineer.1532 I would like to extend AASHTO's utmost gratitude to you and your1533colleagues on the House Transportation and Infrastructure Subcommittee1534on Highways and Transit (the Subcommittee) for your dedicated1535leadership on surface transportation policy and your oversight of1536Infrastructure Investment and Jobs Act (IIJA) implementation. As AASHTO1537members look forward to the reauthorization of surface transportation1538programs prior to the IIJA's expiration in September 2026, state DOTs1539appreciate the sound policy and stable funding provided through this1540multiyear bill. The federally-assisted state-administered program and1541the formula-based funding that underpins the surface transportation1542bill remains foundational to the work of every single state DOT in1543meeting the goals of our country and improving safety, mobility, and1544access for everyone as articulated in AASHTO's 2021-2026 Strategic1545Plan.1546 The IIJA's highway formula funds are vital to the federal surface1547transportation system, enabling us to strategically improve outcomes.1548These federal funds, combined with Utah's robust state-funded program,1549are significantly benefiting all of our state's citizens. I would like1550to share an example of how the IIJA is supporting UDOT's mission to1551enhance quality of life through transportation. As an engineer, the1552example I am most appreciative of is the Bridge Formula Program, which1553has been one of the most valuable elements of IIJA for Utah. We have1554identified 90 bridges for improvements, which we prioritized with a1555goal to address as many bridges owned by local governments as1556possible--of the 90 bridges prioritized, 76 are locally-owned. Without1557the Bridge Formula Program, many of these bridges would not be improved1558for quite some time. However, after implementation of the five-year1559IIJA Bridge program, all bridges that were in poor condition at the1560time of prioritization will be addressed. This will result in increased1561safety and accessibility in locations where needs are high and1562resources are short.1563 In determining how to sustain foundational federal investment1564throughout the country upon the IIJA's expiration next year, today's1565hearing is an important example of Congress's oversight1566responsibilities. As the owners and operators of transportation1567infrastructure in every corner of the country, UDOT and the other state1568DOTs appreciate the opportunity to offer our perspective on this vital1569issue.1570 AASHTO's Vision and Core Policy Principles for Reauthorization1571 To inform your crucial work on surface transportation1572reauthorization, I want to point out that earlier this month, AASHTO's1573Board of Directors unanimously adopted the state DOTs' collective1574vision and core policy principles for the upcoming bill. Our vision1575calls for a world-class transportation system that supports and1576strengthens the nation's transportation infrastructure for a strong1577economy with improved safety and mobility. We believe achieving this1578vision requires the following:1579 Federal funding stability: Stable federal funding is1580necessary to keep the pipeline of planned investments in transportation1581improvements, maintenance, and operations moving forward; a disruption1582to this stability will translate into project delays that increase1583costs resulting in fewer projects per dollar.15841585 Formula-based federal funding paired with state1586contributions: This approach to federal funding reflects the proven1587federal-state commitment that ensures the flexibility necessary for1588each state to best meet its unique investment needs.15891590 Current funding levels plus inflation must be the1591baseline: The baseline for the next bill must grow from current levels1592and keep up with inflation to advance safety and mobility in a1593meaningful way.15941595 User pay principles for all vehicles: Congress should1596ensure all vehicle types pay their fair share to fund transportation1597and to sustain the Highway Trust Fund.15981599 AASHTO's Core Policy Principles are as follows:1600 1. Prioritize formula-based federal funding to states.16011602 Congress should prioritize formula funding for core1603federal highway and transit programs that optimally balance national1604goals with state and local decision making, including the National1605Highway Performance Program, Surface Transportation Block Grant1606Program, Highway Safety Improvement Program, National Highway Freight1607Program, Congestion Mitigation and Air Quality Improvement, and Bridge1608Formula Program.16091610 Congress should strengthen the federally-assisted state1611administered program by allowing maximum transferability among formula1612program categories, without federal approval, to ensure the right1613project can be funded at the right time.16141615 Congress should increase the formula-based program's1616share of the Federal-aid Highway Program to 95% to support faster and1617more effective delivery of projects that go through the state and local1618planning process.16191620 Congress should consolidate programs that have similar1621policy objectives and allow states and local governments flexibility to1622optimize delivery. Such programs include Carbon Reduction,1623Transportation Alternatives Set-aside, PROTECT, and National Electric1624Vehicle Infrastructure formula programs.16251626 In addition to prioritizing formula funding, Congress1627should reserve discretionary grants only for projects of utmost federal1628interest.16291630 2. Improve project delivery and program administration by1631increasing flexibility, simplifying environmental regulations, and1632reducing program burdens.16331634 Congress should eliminate or reduce all federal1635regulatory and programmatic burdens that are not explicitly required in1636law including performance measures.16371638 Congress should support interested states who want to1639assume more federal responsibilities and the associated accountability.16401641 Congress should direct executive branch agencies to1642fully implement One Federal Decision to speed up the review timeline1643for projects and improve accountability for all parties involved in a1644project.16451646 Congress should modernize the NEPA process, rules, and1647definitions such as ``major projects'' and ``federal actions'' to1648better align federal resource agencies' review and permitting actions1649that improve transportation and environmental outcomes while reducing1650delays.16511652 Congress should support grandfathering environmental1653documents under development from new environmental regulations or1654listings that occur during the existing review process, such as1655consideration of updated listing of new endangered species after all1656consultations were previously completed.16571658 3. Create a more safe, resilient, and efficient future by1659supporting state DOTs' ability to harness innovation and technology.16601661 Congress should expand eligibility to fund technology1662and institute procurement flexibility across all modes with an emphasis1663on the safe and efficient movement of people and goods.16641665 Congress should sustain support for research,1666development, and technology transfer activities that drive innovation1667for state DOT programs across the country.16681669 Congress should call for collaborative industry1670consideration of governance frameworks and standards for seamless1671infrastructure and vehicle connectivity.16721673 I am very supportive of AASHTO's vision and core policy principles1674concerning the upcoming surface transportation reauthorization bill. I1675would like to highlight the importance of prioritizing formula funding1676over discretionary funding.1677 While the IIJA has introduced many competitive discretionary1678funding programs, these have, at times, caused administrative1679inefficiencies at the federal, state, and local levels.1680 Formula funding offers administrative efficiency and the1681predictability essential for effective infrastructure planning.1682Furthermore, these funds enable Utah to allocate resources according to1683our local needs and priorities. I believe the next reauthorization bill1684should prioritize formula-based funding while limiting discretionary1685funding.1686 I view discretionary funding as a windfall--beneficial but1687unreliable. Discretionary grant programs are most effective in targeted1688circumstances and should be used for projects that align with1689established goals, which have been identified through collaborative1690long-range planning with local governments. Utah's FrontRunner 2X1691Project, which aims to expand our commuter rail capacity by adding1692tracks in strategic locations, is a prime example. This project aligns1693with Utah's long-range transportation plan, is necessary to address the1694mobility needs for our fast-growing urban population and would meet a1695critical need for the 2034 Winter Olympics. To ensure its timely1696completion, UDOT has applied for a discretionary grant through the1697Capitol Investment Grant Program. Targeting discretionary grants toward1698projects that align with established goals would allow an increased1699focus of funds on formula-based funding, offering states the greatest1700opportunity for sustainable infrastructure development.1701 Importance of the Highway Trust Fund1702 In 1956, Congress created the Highway Trust Fund (HTF) as part of1703the Highway Revenue Act of that year. It serves today as the primary1704mechanism by which the federal government provides resources to states,1705local governments, and transit agencies for highway and transit1706investments. The sources of revenue into the HTF fall into two1707categories: (1) motor vehicle fuel taxes on gasoline (18.4 cents per1708gallon) and diesel (24.4 cents per gallon); and (2) various fees1709related to heavy truck use. Motor fuel taxes account for the vast1710majority of revenue into the HTF, at approximately 90% of HTF receipts.1711Other revenues (not based on motor fuel consumption) account for only1712about 10% of HTF receipts.1713 The HTF has several key policy features from its inception almost171470 years ago. It is based upon the important ``user pays'' principle,1715which ensures federal highway users pay for the roads. It also ensures1716these user fees are used specifically for transportation purposes--as1717regularly defined and updated by Congress--through the application of1718``budgetary firewalls'' that prevent the diversion of revenues to non-1719transportation activities. The historical predictability and1720reliability of HTF revenues supporting multiyear capital investments1721has enabled the federal surface transportation funding program to serve1722as an ideal means for supporting state DOTs, local governments, and1723transit agencies throughout the country.1724 Resources from the HTF are provided in the form of contract1725authority, a unique federal budgeting mechanism that allows for the1726obligation of funds without the need for an annual appropriation.1727Instead, the appropriations process provides the authority to liquidate1728(i.e., pay) these obligations. Federal surface transportation1729authorization legislation provides contract authority on a multiyear1730basis, with the IIJA providing it for five years from fiscal year 20221731through fiscal year 2026. Providing annual contract authority levels at1732the beginning of the five-year authorization timeline allows state DOTs1733to plan and manage their programs of transportation projects, giving1734them the much-needed certainty and stability to effectively and1735efficiently fund transportation investments. This certainty and1736stability allow states to be strategic in their investments. Utilizing1737a sophisticated asset management business approach to program the right1738project at the right time allows for better outcomes: increased safety,1739better asset conditions, and lower cost of asset ownership.1740 While the HTF provided stable, reliable, and substantial highway1741and transit funding for decades, this is no longer the case. Since17422008, the HTF has been sustained through a series of General Fund1743transfers. With the transfer of $118 billion into the HTF to pay for1744the IIJA, the total amount transferred now stands at over $275 billion.1745While state DOTs are grateful for past efforts to supplement the HTF1746with General Fund transfers, this is not a viable long-term solution.1747Upon expiration of the IIJA, states will be left uncertain about how to1748plan for projects in the future.1749 According to the January 2025 Congressional Budget Office (CBO)1750baseline, this year's HTF spending is estimated to exceed receipts by1751$29.4 billion, with this annual gap growing to $50 billion by 2035. If1752Congress were to reauthorize federal transportation programs for five1753years after the expiration of the IIJA, just to maintain current1754investment levels from HTF adjusted for inflation, CBO estimates the1755gap between necessary revenue into the HTF and five-year expenditures1756from it would be roughly $142 billion. The IIJA was unique because it1757also provided a substantial amount of crucial transportation funding1758through advance appropriations from the General Fund. Sustaining this1759funding will require about $195 billion in additional resources in the1760next five-year bill.1761 As we near the end of the IIJA, every state is in the position of1762making assumptions regarding anticipated federal funding after fiscal1763year 2026. Every state has a multiyear State Transportation Improvement1764Program (STIP) that includes all of the projects we anticipate1765delivering over the programmed period of time. Each state will be1766making their own unique assumptions. In Utah, our currency is trust. We1767look at the STIP as a promise made to our citizens, and we are very1768proud that we deliver our projects on time and within budget. Having1769them in the fiscally constrained STIP is what allows us to do that.1770During our current programming cycle, we are making the assumption that1771the federal program will be flat after FY 2026 because we do not know1772what reauthorization will look like. We do not want to make commitments1773that we may not be able to deliver. That is why a timely long-term1774authorization is so important.1775 The funding provided from the IIJA continues to play a critical1776role in allowing every state and community across the country to1777address their immediate and longstanding transportation needs. State1778DOTs and their partners in the transportation industry do everything in1779their power to deliver needed priority projects as quickly as possible,1780but due to the nature of large capital programs, many of the projects1781take several years to complete. We cannot emphasize enough the need for1782stable and predictable funding from the HTF that makes it possible for1783state DOTs to strategically plan their transportation programs,1784especially when they include large projects that need a reliable flow1785of funding over multiple years. These projects are what connect people,1786enhance quality of life, and stimulate economic growth in each1787community where they are built.1788 Utah was the fastest growing state in the country over the past 101789years, placing rapidly increasing demands on our transportation system.1790Our ability to provide the necessary additional roadway capacity is1791being outpaced by population growth, so the pressure to deliver capital1792projects is urgent and acute. We are in the enviable position of having1793State leaders that understand the value of transportation1794infrastructure investment, so we have a healthy state-funded budget for1795capacity projects. However, an effective transportation system also1796requires a proactive approach to maintenance and operations. In Utah,1797we depend on a reliable funding program for road and bridge maintenance1798and repairs and safety projects as a critical piece of our overall1799funding approach. I believe that Utah is an ideal model as a partner1800with the federal government because we bring substantial state funding1801to the critical federal-state partnership.18021803 Figure 1: Utah Transportation Funding Snapshot1804[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]18051806 The Impact of Inflation1807 A major challenge for state DOTs since the IIJA's enactment in1808November 2021 has been inflation--both in terms of how much each dollar1809can buy in transportation expenditures, and in the decades-long loss of1810purchasing power of the federal gas tax.1811 At its outset, the level of funding authorized in the IIJA was1812often described as ``historic, or generational'' including its $673.81813billion in transportation funding for roads, bridges, transit,1814airports, ports, and rail. Of that $673.8 billion, the largest share--1815or $379.3 billion--was for highway infrastructure, with roughly 20% of1816the total highway allocation to be distributed in each of the five1817fiscal years from 2022 through 2026.1818 State DOTs are grateful for this funding. However, since the first1819year of the IIJA, the nation as a whole--and the transportation sector1820in particular--have experienced a significant loss of purchasing power1821due to inflation. According to USDOT's Bureau of Transportation1822Statistics (BTS), their ``modest inflation'' scenario for the IIJA1823estimates a 31% loss in purchasing power for the total of its five1824fiscal years from fiscal 2022 to 2026, reducing the $379.3 billion in1825nominal dollars for highways to $260.5 billion in real dollars. The1826BTS's ``high inflation'' scenario estimates a 40% loss in purchasing1827power of IIJA funding, reducing $379.3 billion in nominal dollars to1828$224.2 billion in real dollars. It should be noted that the nominal1829increase in formula funding to states from the last year of the FAST1830Act to the first year of the IIJA was 31%--which translates to1831essentially standing still in terms of purchasing power under the BTS's1832``modest inflation'' scenario or experiencing a 9% loss under the1833``high inflation'' scenario.18341835Figure 2: IIJA Funds Authorized for Highways by Fiscal Year and Amount1836 Reduced by Construction Cost Inflation1837[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]18381839 Another sobering data point comes from the FHWA's National Highway1840Construction Cost Index, which shows a 70% increase between October18412020 and June 2024. According to the Eno Center for Transportation,1842since the end of 2020, the federal government has lost $61.5 billion of1843the value of its spending increases on roads and bridges due solely to1844increased construction costs.18451846Figure 3: National Highway Construction Cost Index: Seasonally Adjusted1847 from 2016 Q3 to 2024 Q21848[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]18491850 This substantial construction cost inflation has occurred while the1851purchasing power of HTF revenues continues to decline substantially.1852Federal fuel taxes are flat, per-gallon excise taxes that have not been1853adjusted since 1993 and thus have lost more than half of their value1854over the last 35 years. This loss of purchasing power is especially1855stark when compared to the costs of other basic goods and services1856during the same period.18571858 Figure 4: Sample of Nominal Price Changes Relative to Federal Gas Tax1859[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]18601861 Utah has not been immune to these significant construction cost1862increases. We typically program for project costs to increase between18634% and 5% annually. However, the recent rate of inflation has far1864exceeded the norm. In 2021, we saw construction costs increase by 16%,1865followed by a 12% increase in 2022 and an 8% increase in 2023. In 2024,1866costs returned to the 5% to 6% range. Our current six-year program1867includes over $9.5 billion in projects, and inflation has impacted the1868costs for all of them. To manage these cost increases, we have had to1869delay projects unless new funding became available. Delaying projects1870decreases the benefits to the public, as timely project delivery is1871essential for realizing the safety and mobility benefits of these1872projects.18731874 Figure 5: National Fuel Tax Purchasing Power Erosion1875[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]18761877 Options for Addressing the Future Highway Trust Fund Funding Gap1878 Should Congress wish to address the HTF revenue gap, which AASHTO1879strongly urges this body to do, there is no shortage of technically1880feasible tax and user fee options that Congress could consider to1881generate additional HTF revenue. Three broad categories of revenue for1882the HTF exist:1883 Raising or indexing the rates of existing HTF revenue1884streams such as the excise tax on gasoline and diesel, user fees on1885heavy vehicles, and sales taxes on trucks, trailers, and truck tires;1886 Identifying and creating new federal revenue sources for1887the HTF, including, for example, imposing an annual fee on electric and1888hybrid vehicles or a tax on alternative fuels such as electricity; and1889 Redirecting revenue generated by existing federal sources1890into the HTF, including, for example, customs duties, income taxes, and1891other revenues from the General Fund.18921893 The following is a matrix that demonstrates the breadth of1894potential HTF revenue mechanisms, including a column that shows an1895illustrative rate or percentage increase and the associated revenue1896yield estimated.18971898Figure 6: Matrix of Illustrative Surface Transportation Revenue Options1899[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]19001901 State Innovations To Address Transportation Funding Shortages1902 Just as the HTF relies primarily on the fuels tax, states have long1903derived a large portion of their road funding from the gas tax.1904However, the gas tax at the state level also continues to be eroded due1905to inflation along with the growing use of fuel-efficient vehicles.1906 Since 2016, over two-thirds of all states and the District of1907Columbia have enacted legislation to increase their transportation1908revenues. These actions have included raising the rates of existing1909transportation taxes or fees; indexing revenues so they automatically1910track with inflation or rising construction costs; and establishing a1911wide variety of new revenue sources. AASHTO's Transportation Governance1912and Finance report (3rd edition), published in 2022, found over 1001913sources of revenue in place at the state level just to support roads1914and bridges.1915 In 2003, the Utah Legislature recognized that fuel tax revenues1916were increasingly insufficient to support necessary investments in our1917transportation system, so they established a Transportation Planning1918Task Force. Among other funding mechanisms, the Task Force explored the1919possibility of a road usage charge program as a potential strategy to1920address the critical issue that fuel taxes are failing to meet the1921growing demand for additional transportation capacity and preserving1922the system assets. The decline in the effectiveness of the fuel tax1923stems from multiple factors, including: (a) continuous improvements to1924the fuel economy of motor vehicles in general; (b) increased adoption1925of electric, hybrid, and alternative fuel vehicles, which generate1926little to no fuel tax revenue; and (c) inflation continuing to outpace1927the growth in fuel tax revenue year after year.1928 To address the inability of the fuel tax to raise sufficient1929revenue for our state transportation system, Utah has implemented the1930following policies:1931 State Sales Tax Earmarks: A portion of state sales tax1932revenue is allocated to Utah's capacity program, starting at 8.3% in19332006 with incremental increases to an earmark of 27.68% in 2025.1934 Fuel Tax Increases: The state raised fuel taxes from 191935cents per gallon in 1998 to 24 cents, and again in 2016 to 29 cents per1936gallon.1937 Fuel Tax Indexing: Fuel taxes have been indexed to the1938Consumer Price Index since 2019. In 2025, fuel taxes increased to 38.51939cents per gallon.1940 Motor Vehicle Registration Fee Increases and Indexing:1941Registration fees were increased multiple times between 1997 and 2009,1942with indexing beginning in 2009.1943 Annual Fee for Alternative Fuel and Hybrid Vehicles:1944These fees were introduced in 2016. In 2025, electric vehicles paid1945$139, plug-in hybrids paid $60, and hybrids paid $23.1946 Local Option Sales Taxes for Transportation: Utah's first1947local option sales tax, dedicated to public transit, was adopted in19481975. Currently, local governments can implement up to five local1949option sales taxes, totaling 1.25%, for various uses, including public1950transportation, highways, active transportation, and airports.19511952 In Utah, we have come to the realization that there is not a silver1953bullet for funding transportation. We believe it takes a strong federal1954partnership, a variety of user fees, and sales tax or other general1955revenue sources. Each of these components play an important role that1956enables us to take care of what we have and to address the needs of our1957growing population.1958 The federal government is a critical partner in addressing1959transportation, and it should be noted that federal transportation1960funding does not displace or discourage state and local investment. In1961fact, as evidenced by significant transportation infrastructure1962investment needs, further strengthening and reaffirmation of the1963federally assisted, state-implemented foundation of the national1964program is even more critical now than in the past.1965 User Based Funding Approach1966 As the revenue yield from fuel taxes has decreased, interest1967continues to grow in potential user-pays approaches that charge people1968based on how many miles they drive rather than how much fuel they buy.1969The gas tax was originally intended to serve as a user fee, but over1970time has become increasingly decoupled from usage as vehicles become1971less dependent on--or entirely independent from--petroleum fuel. A1972user-pays funding model would realign the link between what you use and1973what you pay. Many terms are used for this type of user-pays system,1974including a vehicle miles traveled (VMT) fee, a mileage-based user fee1975(MBUF), and a road usage charge (RUC) as we call it in Utah. For the1976purposes of this discussion, I will use ``road usage charge'' as a term1977referring to the user-pay funding approach generally.1978 Recognizing the need for further demonstration, research, and1979testing of road usage charging models, in 2015 Congress established the1980Surface Transportation Systems Funding Alternatives (STSFA) program in1981the Fixing America's Surface Transportation (FAST) Act. At this1982juncture, 51 RUC-related pilots and studies in a number of states have1983been funded through the STSFA program. In addition, multistate and1984regional pilots on the East and West Coasts were completed with STSFA1985support. These pilots have garnered findings and lessons learned on1986topics such as reporting methods, account management, public1987acceptance, interoperability, and impacts on commercial vehicles, which1988will help inform the future of any mileage-based system.1989 The IIJA continued the exploration of road usage charges through1990two RUC programs: (1) the Strategic Innovation for Revenue Collection,1991a five-year, $75 million grant program for states, local governments,1992and metropolitan planning organizations to further study user-based1993funding models; and (2) the National Motor Vehicle Per-Mile User Fee1994Pilot, providing $50 million to conduct a national RUC pilot for up to19951,000 participants in each of the 50 states, the District of Columbia,1996and Puerto Rico. In addition, I am honored to serve as Chair of the1997Federal System Funding Alternative Advisory Board created as part of1998the IIJA to provide practical state DOT perspectives to inform the1999pilot program. The Board members have been named, and I hope that the2000Board will be activated soon.2001 The RUC holds many potential benefits, such as looking at the2002``market rate'' to access crowded segments of the road network and2003helping to reduce excessive road wear. In addition, mileage fees for2004trucks could vary based on axle weight (for example, higher for trucks2005with fewer axles) and type of route (higher for travel on lightly2006engineered routes). This would encourage truckers to adopt trailer2007configurations designed to reduce axle loads and to travel, where2008possible, on heavily engineered highways or main arterials.2009 With that said, concerns have also been raised about the equity of2010the RUC compared to fuel taxes. A common perception has been that RUC2011is unfair to rural residents. States that have examined this issue have2012found that while rural residents tend to drive longer distances, they2013use less fuel-efficient vehicles to do so and thus pay more in gas2014tax--both in total and per mile--than urban residents. Rural residents2015likely wouldn't pay more than they do under a gas tax model, while2016urban residents--who tend to drive more efficient vehicles--would2017likely pay a little more. When it comes to ensuring privacy, a RUC can2018rely on metering options that provide no information about the location2019of travel, rely on a trusted third party to protect and secure private2020data, use technology with built-in privacy safeguards, and be supported2021by privacy legislation that clearly distinguishes between permissible2022and impermissible uses of personal travel data--or a combination of the2023above.2024 In Utah, we implemented the nation's first operational statewide2025road usage charge (RUC) program in January 2020, applying and testing2026the principles and practices described earlier. Through this2027experience, we have gathered numerous lessons that we believe will2028benefit the national pilot, as we learned from states with prior RUC2029programs. Several key features of our program are designed to2030specifically address common concerns about potential road usage charge2031programs.2032 Our program currently applies only to electric vehicles, as they2033benefit from the highway system but do not contribute fuel tax revenue,2034ensuring fairness. Furthermore, participation in our program is opt-in.2035Electric vehicle owners can choose to pay a flat fee at vehicle2036registration, ensuring their contribution to the transportation system2037without mandatory RUC participation. While the program's parameters may2038evolve, we believe providing choice is crucial, especially in the2039initial implementation years. We also recognize that individuals have2040varying levels of comfort with data privacy, particularly concerning2041location information. Therefore, we offer multiple options for2042collecting and submitting mileage data, including the option to report2043only odometer readings. A national pilot, and any potential future2044nationwide program, should be developed with careful consideration. Our2045experience in Utah demonstrates that it is possible to effectively2046address challenges and concerns associated with the RUC model.2047 A RUC is a fair way to ensure that owners of all vehicles--2048including those that use little or no gas and thus pay little or no gas2049tax--pay for their use of the roads.2050 Conclusion2051 I believe it is clear to all policy makers that an effective2052transportation system is critical to our economy, mobility, health, and2053communities. It offers a huge lever to affect success, today and in the2054future. We can coalesce around a shared vision of providing people2055freedom to go where they want, when they want, how they want--and to do2056so safely. We connect people with what matters most: jobs, recreation,2057communities, healthcare, educational opportunities, and--most2058importantly--the people we care about. We connect people to these2059things through a travel experience that is frictionless: People don't2060even notice it because it just works.2061 Achieving a future world-class transportation system--essential for2062our nation's security and economic vitality--requires predictable2063revenue sources that keep up with inflation.2064 The current funding trajectory of the HTF--the backbone of the2065federal transportation surface transportation program--is declining and2066remains unsustainable. Given its foundational role in funding highway2067and transit investments in every corner of the country, AASHTO looks2068forward to assisting you and the rest of your House colleagues in2069finding and implementing a viable set of revenue options for the HTF to2070ensure continued investment in our future through transportation.20712072 Mr. Rouzer. Mr. Johnson.20732074 TESTIMONY OF TY JOHNSON, PRESIDENT, FRED SMITH COMPANY, ON2075 BEHALF OF THE NATIONAL ASPHALT PAVEMENT ASSOCIATION (NAPA)20762077 Mr. Johnson. Good morning, full Transportation and2078Infrastructure Committee Chairman Graves, Ranking Member2079Larsen, and Highways and Transit Subcommittee Chairman Rouzer,2080Ranking Member Norton, and members of the committee.2081 Thank you for the opportunity to speak today about the2082Highway Trust Fund and the vital role it plays in securing the2083future of our national surface transportation system.2084 My name is Ty Johnson. I am proud to serve as president of2085Fred Smith Company, a Raleigh-based heavy highway construction2086company employing over 1,200 dedicated men and women throughout2087North Carolina. Our company builds roads and bridges,2088manufactures asphalt, and has proudly contributed to the2089infrastructure that keeps our communities connected for nearly2090100 years.2091 I am a lifelong North Carolinian, born in Durham and2092educated at NC State University where I earned a degree in2093civil engineering. I have spent my entire 30-year career in the2094heavy highway industry serving in many positions at our2095company.2096 Today, I am honored to speak not only for Fred Smith2097Company, but also on behalf of the 1,100 member companies of2098the National Asphalt Pavement Association, the only national2099trade association exclusively representing the asphalt paving2100industry for the past 70 years.2101 Our members are in every State and operate in every2102congressional district. The asphalt pavements we provide cover2103over 94 percent of the entire national roadway market, and our2104industry is ubiquitous with any policies focused on highway2105funding, expansion, and maintenance.2106 However, we cannot talk about America's infrastructure2107future without first talking about the solvency of the Highway2108Trust Fund. My hope is to provide this committee on the HTF's2109real world impacts on contractors and material providers, like2110Fred Smith Company and others in the asphalt industry, who work2111with State DOTs and HTF-backed projects every day throughout2112the country.2113 I believe four clear user fee pathways must be considered2114for HTF solvency, and while NAPA is agnostic on any one option2115we must pursue, these four would certainly make major financial2116strides.2117 One option is to immediately index and raise the gas tax,2118which hasn't occurred since 1993. Another is to capture all2119users of the national roadway system within the HTF, explicitly2120EV and any hybrid drivetrains that pay little to no funds into2121the HTF currently.2122 Additionally, you could implement a national vehicle-miles2123traveled program that will provide an equitable capture of the2124roads we use and frequency, which can be deployed without2125privacy concerns and could implement various collection2126mechanisms.2127 Lastly, a national fee on gross vehicle weight restrictions2128would capture any vehicle on our roadways and tier a vehicle's2129fee based off its weight and, thus, its literal impact on our2130national roadway network.2131 Each of these options has merit, and together, implemented2132in some capacity or in tandem, offer a pathway to sustainable2133long-term funding.2134 In North Carolina, we understand the stakes. Our State2135maintains more roads than nearly any other, over 80,000 miles2136of highway and 13,500 bridges. In 2023 alone, North Carolina2137received $1.6 billion in Federal funds from the HTF to support2138critical projects like the widening of I-95 and improvements to2139I-85 and I-77 in Charlotte.2140 Every $1 billion in infrastructure investment supports2141approximately 13,000 America jobs. At Fred Smith Company and2142across the entire asphalt industry, we provide good-paying2143careers that support families and communities. But without2144reliable HTF funding, that workforce we proudly employ and the2145projects they deliver are at risk.2146 While we are doing what we can to help, the asphalt2147industry is stretching every Federal dollar, given asphalt is2148America's most recycled material. Every year, over 90 million2149tons of reclaimed asphalt pavement are reused, saving State2150DOTs more than $3 billion annually. With the right policies and2151incentives, we can further expand this cost-saving practice and2152deliver greater value for every taxpayer dollar without2153sacrificing pavement performance.2154 But it is not just how we support the HTF with user fees,2155it's what HTF resources mean for the safety of our employees.2156As you know, last week was National Work Zone Awareness Week, a2157sobering reminder that more than 100 road workers lose their2158lives annually in work zones. HTF programs, like the Work Zone2159Safety Contingency Fund, support technologies and strategies2160that keep our workers and the traveling public safe.2161 Members of the committee, the Highway Trust Fund is not2162just a financial mechanism. It is the backbone of our Nation's2163surface transportation network. The current user-fee system is2164unsustainable, but the solutions are within reach and the2165choices are real.2166 On behalf of Fred Smith Company and the members of NAPA, we2167are eager to partner with you in shaping a bold, bipartisan2168reauthorization package that financially secures the HTF and2169positions our country for decades of economic growth and2170mobility.2171 Thank you for the opportunity to speak today. I look2172forward to your questions and to supporting your work in2173ensuring the financial future of our national surface2174transportation network.2175 [Mr. Johnson's prepared statement follows:]21762177 Prepared Statement of Ty Johnson, President, Fred Smith Company, on2178 behalf of the National Asphalt Pavement Association (NAPA)2179 Introduction2180 Transportation and Infrastructure Committee Chairman Sam Graves,2181Ranking Member Rick Larsen, Highways Subcommittee Chairman David2182Rouzer, Ranking Member Eleanor Holmes Norton, and other members of the2183committee, thank you for inviting me today to discuss the Highway Trust2184Fund (HTF) and its financial security ahead of the upcoming surface2185transportation reauthorization package.2186 My name is Ty Johnson, President of Fred Smith Company, a Raleigh-2187based construction company employing more than 1,200 hard-working men2188and women throughout North Carolina. Fred Smith Company manufactures2189materials and builds roads and bridges as a major asphalt paving and2190heavy highway contractor. I'm proud to share that we are at the cusp of2191our centennial year, as we'll celebrate 100 years as a company in 2027.2192 I was born in Durham and am a lifelong resident of North Carolina.2193I attended NC State University where I earned a Civil Engineering2194degree in 1995. After graduating, I began working as a grading foreman2195for a family-owned heavy-highway construction company in Raleigh. This2196will be my 30th year working for this same company, which became Fred2197Smith Company in 2009. I have served in many positions with most of2198those years spent leading our estimating pursuits. In 2024, I was named2199President of the company and have enjoyed my leadership position this2200past year. The heavy-highway industry has provided me with many2201fulfilling opportunities. My story is similar to my colleagues and2202industry peers, who take pride in building the roadways that connect2203Americans to their families, communities, and commerce. My hope is that2204I will continue to see many others advance their careers and improve2205their lives through hard work and perseverance in the heavy-highway and2206paving industries.2207 Fred Smith Company operates within a larger family of construction2208companies, spanning services in asphalt mix production, aggregate2209facilities, and liquid asphalt terminals across eight states. Together,2210we comprise Construction Partners, Inc. (CPI). Within CPI, publicly2211funded projects make up the majority of our business and include local2212and state roadways, interstate highways, airport runways, and bridges.2213We also perform private sector projects that include paving and2214sitework for office and industrial parks, shopping centers, local2215businesses, and residential developments.2216 I am proud to join you on behalf of the 1,100 U.S. member companies2217of the National Asphalt Pavement Association (NAPA) the only trade2218association representing the asphalt pavement industry in the United2219States for 70 years. NAPA member companies are located in every state2220and have operations in every single congressional district providing2221roadbuilding services for families, businesses, communities, and states2222to thrive. NAPA is eager to partner and collaborate with the T&I2223Committee as we collectively work toward the next highway2224reauthorization. As I share my testimony, I look forward to sharing the2225funding challenges facing the HTF, the user fee solutions we should be2226considering, an insight on how the HTF supports programs like work zone2227safety, and how the asphalt industry is helping leverage precious2228federal funding.2229 The Challenge: Stagnant Highway Trust Fund User Fees2230 The investment and certainty that the HTF brought from its2231inception in 1956 and over the past seven decades facilitated the2232planning, development, and maintenance of the U.S. roadway2233infrastructure network--the consistency and reliability of which2234underpins our national economic competitiveness. Despite its2235importance, the Highway Trust Fund has been running on empty. Since22362008, Congress has transferred more than $150 billion from the general2237fund to cover shortfalls. The HTF's primary revenue source--the federal2238gas tax--has not been increased since 1993, and it is not indexed to2239inflation. Adjusted for inflation, its purchasing power has fallen by2240nearly 50%. Without HTF solutions, economic progress quickly evaporates2241with more road closures, increased delays for road repairs, and traffic2242increasing exponentially in our major cities, ports of entry and border2243crossings, and national highways.2244 This consistent decline in user-fee revenues is exacerbated by2245increasing fuel efficiency across all classes of automobiles and the2246prevalence of electric vehicles (EVs)--a growing market share that does2247not contribute into the federal HTF system in spite of the additional2248wear and tear EVs have on our roadways due to their heavier gross-2249vehicle weight from batteries. The result to the HTF is a growing2250mismatch between revenue and need, and that gap will get exponentially2251larger without the implementation of new user fee approaches. I2252understand that perhaps as early as tomorrow, this Committee will have2253a markup via the Budget Reconciliation instructions, and EV fees are2254under consideration--we greatly appreciate seeing those funds generated2255from highway users going into the HTF. It sounds self-explanatory, but2256we must have all highway users paying into the HTF and we2257wholeheartedly support capturing all users, including EV drivetrains,2258within HTF revenues.2259 The biggest issue and opportunity facing this Committee is to2260provide a solution for consistent, robust investment in our nation's2261highways and fix the HTF. With the current highway reauthorization2262legislation, Infrastructure Investment and Jobs Act (IIJA), expiring on2263September 30, 2026, we know many members of the Committee will be2264focused on the policies, project priorities, and scope of a future2265multi-year surface transportation reauthorization; but none of that is2266possible unless we implement solutions to support the financial2267solvency of the HTF. While the current state of the HTF seems2268challenging, we have tremendous opportunity to usher in a new era of2269HTF expansion and improvements for many future decades of road2270expansion and maintenance.2271 Speaking on behalf of a 100-year-old company and the 1,100 members2272of NAPA, we want to help you and be part of the solution for ensuring2273American's highway infrastructure continues to serve our nation and2274people well.2275 Seeking Durable Revenue Solutions: Reevaluating the HTF User-Fee Model2276 Let's not ignore the financial red flags; the current system has2277long been broken. A more equitable and sustainable user-fee model is2278required. Because the asphalt industry, and virtually every corner of2279the construction and transportation sectors, understand action must be2280taken, we support HTF solvency via user fee generation. Given the2281dependence every citizen has on our national surface transportation2282network, our elected officials need to take bold steps toward HTF2283solutions. Some options this Committee should consider include:2284 Modernizing the federal gas tax by indexing it to2285inflation.2286 Ensuring EVs contribute their fair share into the HTF,2287through registration fees or similar mechanisms.2288 Exploring road usage charges or vehicle miles traveled2289(VMT) fees that better reflect wear and tear on infrastructure.2290 Gross vehicle weight registration fees, which would2291capture all road users equitably.2292 The opportunity for private investment through expanded2293public-private partnerships (P3) and infrastructure banks that focus2294exclusively on surface transportation projects.22952296 Understanding various revenues options exist, the asphalt industry2297would like to highlight those with the most data, durability and2298financial promise. Let's explore four of the most viable options.22991. Federal Gas Tax Increase and Index:2300 The federal gas tax has not increased since 1993, which stands at230118.4-cent per gallon gasoline tax and 24.4-cent per gallon diesel tax,2302and the gas tax is not indexed for inflation. Despite no changes to2303this revenue source in more than 30 years, the gas tax remains the main2304revenue source for the HTF. According to the National Council of State2305Legislatures \1\ (NCSL), since 2013, 35 states and the District of2306Columbia have all raised their local gas taxes to help pay for2307infrastructure. While some were accomplished via ballot measures, a2308majority of these increases were drafted, debated, and passed through2309state legislatures. It should be noted that over two-thirds of the2310electorate have supported state and local measures to enact modest2311increases to gas tax receipts in order to grow and maintain their2312roadway network. Taking the same initiative at the federal level would2313dramatically help the HTF. Previous failed legislation that would have2314indexed and increased the gas tax 25 cents over 5 years would have2315raised HTF receipts almost $375 billion over a ten-year window,2316according to ENO Trans.\2\2317---------------------------------------------------------------------------2318 \1\ https://www.ncsl.org/transportation/recent-legislative-actions-2319likely-to-change-gas-taxes#: :2320text=Since%202013%2C%2035%20states%20and,their%20state%20gas%20tax%20rat2321e.2322 \2\ https://enotrans.org/article/how-much-money-would-a-gas-tax-2323increase-raise/2324---------------------------------------------------------------------------23252. Registration Fees for EVs:2326 As new technologies lead the vehicle market toward hybrid and2327electric vehicle (EV) options, we must determine how all users of our2328roads pay for the maintenance and expansion of using them. EVs do not2329pay into the HTF at the federal level, yet inflict more wear and tear2330compared to traditional vehicles due to the weight and size of their2331battery components. It is imperative that Congress provide a solution2332to capture this market of growing highway users that are currently not2333paying any Federal tax to use our national highway system. Despite no2334federal fees, at least 39 states have some variation of an EV fee to2335help offset roadway maintenance cost. According to NCSL \3\, 32 of2336those states also assess a registration fee for both plug-in and non-2337plug-in hybrid electric vehicles with combustible engines, ensuring all2338potential drivetrains are captured. EV registration fees range from a2339low of $50 in Colorado to a high of $290 in New Jersey starting in23402028. At least 10 states structure the additional registration fees to2341grow over time by tying the fees to the consumer price index or another2342inflation-related metric.2343---------------------------------------------------------------------------2344 \3\ https://www.ncsl.org/transportation/special-registration-fees-2345for-electric-and-hybrid-vehicles2346#: :text=For%20example%2C%20at%20least%2039,vehicles%20or%20alternative%234720fuel2348%20vehicles.2349---------------------------------------------------------------------------23503. National VMT Fee:2351 A viable option to consider would be a national vehicle miles2352traveled (VMT) fee, which has been discussed before this Committee. In2353fact, NAPA led a coalition letter during a previous hearing on this2354topic, underscoring the need to examine this revenue option further and2355press DOT to convene their VMT advisory group--as mandated under IIJA--2356in earnest. VMT fees have long been studied and show real promise, with2357states like Utah and Oregon compiling years of data on local VMT2358measures, with other states like Virginia soon to implement their own2359programs. This approach aligns revenue generation directly with road2360usage, offering a sustainable alternative to fuel taxes. Thus, VMT fees2361provide a consistent and predictable funding stream that reflects2362actual road usage, rather than fuel consumption patterns that are2363subject to change. And a VMT fee would capture all users, regardless of2364drivetrain, ensuring all users are paying their share into the HTF.2365Lastly a VMT would not be discriminatory on rural America or cause an2366invasion of privacy; there are various collection mechanisms that could2367be considered that don't include any record of one's driving patterns.23684. National Gross Vehicle Weight Fees:2369 A novel approach that eliminates any dependence on new user-capture2370technologies or dramatic administrative burdens is a national gross2371vehicle weight (GVW) fee. This option would categorize all roadway2372users--motorcycles, passenger cars, delivery vans, and long-haul2373commercial trucks--into specific GVW classes with a corresponding fee.2374Many states already have a variation of this fee at the local level. A2375national fee would be collected by the states during their current2376processes for collecting state registration fees. Adding the federal2377fee would not require a significant cost to operate nor would it2378require a significant amount of time to transition, given every state2379has registration fee collection agencies and processes. Furthermore,2380this revenue has options to grow, since the number of vehicles in the2381national fleet continues to increase year over year, and the schedule2382below could generate $70 billion. A rough schedule \4\ of GVW fees2383could look like this:2384---------------------------------------------------------------------------2385 \4\ American Highway Users Alliance (AHUA) GVW one-pager2386---------------------------------------------------------------------------2387 $135 for most passenger cars2388 $165 for large SUVs and pickup trucks2389 Up to $4,600 for the largest commercial trucks (18-2390wheelers)2391User-Fee Summary:2392 While no one solution will resolve HTF solvency on its own, we must2393be willing to consider an array of options in tandem. This Committee2394has a unique opportunity to draft a highway reauthorization package2395that bolsters the HTF not just for a few years, but establishes a2396durable financial foundation for decades to come and for generations of2397Americans reliant on a world-class surface transportation system. The2398asphalt industry is eager to work with you as these options develop and2399work with other elected officials to support these proposals in a2400future highway reauthorization package.2401 Economic Growth Relies on a Strong Transportation Network2402 The economic argument for fully and properly funding the Highway2403Trust Fund is overwhelming. According to the White House's Council of2404Economic Advisors, every $1 billion invested in transportation2405infrastructure supports an estimated 13,000 American jobs \5\. These2406are good-paying jobs that support families and build communities--many2407of which can be found in the asphalt industry and at companies like2408mine. In 2018, the national roadway network facilitated the transport2409of over $18 trillion in annual economic activity via 5.25 trillion ton-2410miles of freight \6\. Many goods--whether manufactured in Detroit or2411imported through Long Beach or Baltimore--move on highways and roads2412paved with asphalt, maintained in part by the Highway Trust Fund.2413---------------------------------------------------------------------------2414 \5\ https://www.whitehouse.gov/blog/2011/09/09/american-jobs-act-2415state-state.2416 \6\ https://www.fhwa.dot.gov/policy/otps/TPS_2020_Trends_Report.pdf2417---------------------------------------------------------------------------2418 Fred Smith Company has had the privilege to positively impact the2419people of NC through its construction projects by easing congestion,2420opening new areas for development, and providing better ride quality on2421major highways and thoroughfares. Smoother roads mean the pavements2422last longer compared to rough surfaces, and for commuters this2423translates to less wear and tear on their vehicles, mitigating their2424own out-of-pocket maintenance costs. We have previously, and are2425currently, participating in multiple projects to add capacity, improve2426ride quality, and improve road safety on interstates I-40, I-85, and I-242795 and major arteries such as US-1, US-264, and US-401. All of these2428projects are dependent on funding through the Highway Trust Fund, and2429as I'll share, the local impacts cannot be overstated.2430 North Carolina Impacts from HTF-Backed Projects2431 In my home state of North Carolina--a state of 10.7 million people,2432with a rapidly growing economy and one of the largest state-maintained2433highway networks in the country--the impact of the HTF cannot be2434overstated. From reducing congestion in urban corridors to connecting2435rural communities to job centers, the HTF is critical to road2436construction, economic development, and motoring safety in the Tar Heel2437State.2438 North Carolina ranks second in the nation for the number of state-2439maintained roads, with more than 80,000 miles of highway and over244013,500 bridges. The North Carolina Department of Transportation (NCDOT)2441is responsible for maintaining a road system that supports major urban2442hubs like Charlotte, Raleigh, and Greensboro as well as rural counties2443stretching from the rugged Appalachian Mountains to the beaches of the2444Atlantic coast. This diverse and expansive transportation network2445requires consistent and flexible funding--something only the Highway2446Trust Fund has reliably provided over the years.2447 In 2023, North Carolina received approximately $1.6 billion in2448federal highway and transit funds through the HTF. These funds were2449instrumental in advancing dozens of major road construction projects2450across the state, including:2451 Widening I-95 near Fayetteville and Rocky Mount, one of2452the most important commercial corridors in the eastern United States.2453 Improving I-85 and I-77 interchanges in Charlotte,2454addressing major congestion bottlenecks in one of the country's2455fastest-growing cities.2456 Reconstructing bridges in rural counties like Yancey,2457Graham, and Northampton that are essential for school buses, emergency2458responders, and freight vehicles.24592460 Because North Carolina maintains more roads than most states,2461federal support fills a critical gap. State funding--drawn from gas2462taxes, vehicle fees, sales taxes, and toll revenues--cannot alone cover2463the scale of infrastructure need; the same is true for almost any other2464State DOT. The HTF ensures that state and local governments have the2465predictable, multi-year funding needed to plan, build, and complete2466major projects on time.2467 In North Carolina, HTF support translates to tens of thousands of2468construction, engineering, and manufacturing jobs annually. And these2469funds supported thousands of jobs on projects such as the I-26 widening2470in western NC, I-95 modernization, and numerous bridge replacement2471projects across the state.2472 Furthermore, better roads reduce shipping delays, lower2473transportation costs for goods and services, and attract commercial2474investment and manufacturing growth. Areas like the Research Triangle2475and Charlotte metro have seen booming tech, financial, and logistics2476industries--sectors that rely heavily on an efficient road network.2477Road construction funded by the HTF also strengthens the state's2478agriculture sector, which remains one of the largest in the nation.2479Understanding the local impacts are critical, and as in any other2480state, North Carolina cannot continue to grow without HTF support.2481 Why We Need a Fully Funded Highway Trust Fund for the Future2482 Despite recent federal investments through IIJA, America still2483faces a $1.2 trillion infrastructure funding gap through 2039,2484according to the American Society of Civil Engineers. More than 40% of2485the nation's roads are in poor or mediocre condition, and one in three2486bridges needs repair or replacement. Congestion on major urban highways2487is worsening, costing drivers billions of dollars in lost productivity2488and fuel annually. Meanwhile, rural and tribal communities continue to2489lack sufficient connectivity altogether--roads constructed 80 years ago2490are still the same singular connector despite dramatic increases to2491population and traffic. The HTF is the only mechanism capable of2492delivering stable, equitable, and long-term funding to address this2493national crisis, with local impacts in North Carolina communities and2494across the country. While IIJA supplied historic investments into2495highway construction and maintenance, the purpose of the HTF is to2496ensure continuity and certainty of funding over the longer term.2497 Fred Smith Company understands this pressing need, as North2498Carolina's population is projected to grow by nearly 3 million people2499in the next 25 years, and the state's highway system must be ready to2500meet this demand. Major HTF-funded initiatives like the I-540 Southeast2501Extension in Wake County, the US-70 improvements in eastern North2502Carolina, and the future I-87 corridor are all examples of how long-2503term, federally supported planning is helping prepare for the state's2504future needs. Moreover, road construction today increasingly2505incorporates resilience to changing weather events--designing roads to2506withstand heavier rainfall, flooding, heat, and major natural disasters2507that weren't anticipated in decades past. The HTF enables North2508Carolina to invest in modern engineering practices that protect2509communities and ensure the longevity of infrastructure investments.2510 As North Carolina is trying to satisfy the future needs of our2511growing state, we are also dealing with the effects of Hurricane2512Helene, which devastated the western part of our state last fall.2513Helene has significantly impacted the financial position of our NCDOT,2514which is projecting the total cost of repairs caused by the hurricane2515to our transportation network to approach $5 billion. In most cases,2516the state will pay for these repairs as they are performed and then2517must wait for partial reimbursement from the Federal government. The2518non-reimbursed costs as well as the cash outlay will deplete state2519funds slated for maintenance of roads and bridges and will cause delays2520to these programs. The funding impact is expected to last four years,2521directly affecting and delaying other infrastructure projects in the2522state. We need the Federal dollars now more than ever, and that2523translates to real impacts on not just our p2524 HTF Solvency Helps Improve Work Zone Safety2525 While we've outlined impacts and user fee options, I want to share2526what HTF solvency means for a core focus within the asphalt industry--2527safety. I'd love to build these HTF-backed projects, but doing so along2528major roadway corridors comes with risks, and the asphalt contractor2529plays a critical role in the project delivery of a new or reconstructed2530roadway. Last week was National Work Zone Awareness Week, meant to2531encourage safe driving through work zones. According to FHWA, each year2532about 100 road workers lose their lives in work zones and roughly half2533of those fatalities involve being struck by a vehicle \7\. We need to2534make sure funding is available to provide the most effective traffic2535control measures available to ensure the safety of these men and women.2536HTF ensures that FHWA and State DOTs have resources to support work2537zone safety improvements, including bipartisan programs like the Work2538Zone Safety Contingency Funds (WZSCF) to allow for funding2539flexibilities to deploy proven technologies that protect workers and2540drivers alike.2541---------------------------------------------------------------------------2542 \7\ https://workzonesafety.org/work-zone-data/2543---------------------------------------------------------------------------2544 The hard-working members of the heavy highway construction industry2545are indispensable. We have a very skilled workforce that constructs2546very complex projects, often in very challenging conditions and dynamic2547work sites. In North Carolina, our workforce has many options for2548employment, and we constantly are competing for top talent with other2549industries. If our industry were to lose some of its talent due to a2550slowdown in work, we may not get them back. If the highway workforce2551shrinks, it will lead to slower project delivery and higher costs. All2552outcomes directly attributable to the financial health of the HTF and2553the asphalt industry can help us see those dollars are executed2554responsibly.2555 How the Asphalt Industry Helps Saves HTF Dollars2556 I also want to highlight how the asphalt industry is doing2557everything in its power to stretch federal resources as far as2558possible. Some of you may not know, but asphalt is the most recycled2559product in the country. Our pavements are fully recyclable into new2560pavements, meaning we can exponentially increase the life natural2561resources, delivering quality roads at lower costs. Annually, more than256290 million tons of reclaimed asphalt pavement (RAP) are deployed2563throughout the national roadway network, saving State DOTs more than $32564billion \8\. Using RAP saves dramatically on virgin material costs--2565aggregates and asphalt binder--while exceeding performance specs for2566normal road usage. We encourage the Committee to consider working with2567FHWA and State DOT partners to expand the use of RAP to leverage2568federal resources responsibly. While the national average use of RAP2569stands at around 21% \9\, we have the capacity and willingness to do2570more--saving precious taxpayer dollars in the process.2571---------------------------------------------------------------------------2572 \8\ https://www.asphaltpavement.org/uploads/documents/2573Sustainability/NAPA_RAP_2574Benefits_for_Pavement_Owners_1121.pdf2575 \9\ https://www.asphaltpavement.org/uploads/documents/IS138-25762021_RAP-RAS-WMA_2577Survey_508_-_WITH_APPENDICES.pdf2578---------------------------------------------------------------------------2579 Conclusion2580 I am encouraged by the discussion and perspectives shared by my2581colleagues on the witness panel, and I thank you for taking HTF2582solvency seriously in the next highway reauthorization package. As you2583have heard from my testimony, we can't discuss the critical road and2584highway projects, policies, and programs facing our national roadway2585network unless we first adequately address the financial solvency of2586the HTF. It is essential to the work the Fred Smith Company proudly2587delivers to North Carolina's citizens throughout the state. It allows2588our NCDOT to implement the big projects needed to maintain our local2589economies and ultimately advance our national economic competitiveness.2590We need the HTF, and we need it to work properly. I look forward to2591sharing the asphalt industry's positive impact in connection with the2592great people our industry employs and the critical road projects we2593pave. Thank you for the invitation this morning and I look forward to2594answering your questions.2595 __________2596 Attachment2597 October 18, 2023.2598The Honorable Sam Graves,2599Chairman of the House Transportation and Infrastructure Committee,26001135 Longworth House Office Building, Washington, DC 20515.2601The Honorable Rick Larsen,2602Ranking Member of the House Transportation and Infrastructure2603 Committee,26042163 Rayburn House Office Building, Washington, DC 20515.2605 Dear Chairman Graves and Ranking Member Larsen:2606 Thank you for today's hearing examining the financial solvency of2607the Highway Trust Fund (HTF) and potential solutions, including the2608creation and implementation of a national vehicle miles traveled (VMT)2609program, titled ``Running on Empty: The Highway Trust Fund''. The2610undersigned organizations represent a diverse set of transportation2611stakeholders, all of whom support augmenting the current HTF user-fee2612system to ensure financial solvency ahead of the next multi-year2613surface transportation reauthorization law.2614 HTF revenues have long struggled to meet increasing infrastructure2615investment needs. Federal motor fuels taxes have remained stagnant2616since 1993, with the prospects of an increase dim. Instead, Congress2617has chosen to provide General Fund and other transfers to keep the HTF2618solvent, totaling $275 billion since 2008. The Congressional Budget2619Office estimates that the HTF will require another $150 billion in2620revenues to pay for continued spending at baseline levels from 2027-26212031, not including additional resources that will be necessary to2622maintain advance appropriations investments included in the2623Infrastructure Investment and Jobs Act (IIJA). Congress must consider a2624long-term solution to ensure HTF viability and the future health of our2625surface transportation system, while maintaining the user fee principle2626upon which the HTF is founded. A VMT or mileage-based user fee to2627replace all current motor fuel taxes and fees can certainly be a2628potential solution, and work has been underway to explore feasibility.2629 Congress has created programs to explore alternatives to the gas2630tax, like 2016's Surface Transportation System Funding Alternatives2631(STSFA) Program, which has provided $73.7 million to 37 projects in2632states across the nation to assist with the design, implementation, and2633acceptance of user-based systems, such as a vehicle mileage-based user2634fee.2635 While these programs have been invaluable to better understand this2636user system and areas of improvement, there is more immediate work that2637needs to occur in order to realize VMT potential and broader2638implementation. Under IIJA, Congress required the Department of2639Transportation (DOT) to establish a national pilot to ``test the2640design, acceptance, implementation, and financial sustainability'' of a2641VMT system.\1\ It requires the creation of a Federal System Funding2642Alternative Advisory Board that will provide an annual report to2643Congress and ultimately create recommendations for a possible permanent2644VMT program. We urge DOT to convene this panel as quickly as possible2645and utilize the $50 million over 5 years authorized under IIJA.2646---------------------------------------------------------------------------2647 \1\ ENO Report--https://enotrans.org/eno-resources/driving-change-2648advice-for-the-national-vmt-2649fee-pilot/2650---------------------------------------------------------------------------2651 A national VMT pilot program will provide valuable lessons and2652identify several important factors for the successful implementation of2653a permanent, truly user-based VMT program. Getting this information now2654and leveraging Congress's oversight function to ensure a national VMT2655program is successful will help in answering the toughest question2656facing the next surface transportation authorization: how do we fix the2657HTF?2658 Thank you again for this important hearing and we look forward to2659working with you and your staff to ensure we secure the information2660needed to support a comprehensive national VMT program ahead of the2661next surface transportation reauthorization package.2662 Sincerely,2663 American Association of State Highway and Transportation2664 Officials.2665 American Concrete Pavement Association.2666 American Concrete Pipe Association.2667 American Council of Engineering Companies.2668 American Institute of Steel Construction.2669 American Iron and Steel Institute.2670 American Road & Transportation Builders Association.2671 American Society of Civil Engineers.2672 American Traffic Safety Services Association.2673 Associated General Contractors of America.2674 Associated Equipment Distributors.2675 Association of American Railroads.2676 Association of Equipment Manufacturers.2677 Concrete Reinforcing Steel Institute.2678 CRH.2679 FP\2\, Formerly the Foundation for Pavement Preservation.2680 Granite Construction.2681 Maryland Asphalt Association.2682 National Asphalt Pavement Association.2683 National Ready Mixed Concrete Association.2684 National Stone, Sand & Gravel Association.2685 National Steel Bridge Alliance.2686 Ohio Contractors Association.2687 Portland Cement Association.26882689CC: House Ways and Means Committee Chairman Smith and Ranking Member2690Neal2691 Senate Environment and Public Works Committee Chairman Carper and2692Ranking Member Capito2693 Senate Finance Committee Chairman Wyden and Ranking Member Crapo26942695 Mr. Rouzer. Mr. Davis, you are recognized.26962697 TESTIMONY OF JEFF DAVIS, SENIOR FELLOW, ENO CENTER FOR2698 TRANSPORTATION26992700 Mr. Davis. Chairman Rouzer, Ranking Members Norton and2701Larsen, and members of the subcommittee, my name is Jeff Davis.2702I am a senior fellow at the Eno Center for Transportation, a2703nonpartisan think tank founded by traffic pioneer William2704Phelps Eno in 1921 to carry on his work increasing the safety2705and flow rate of vehicular traffic.2706 We are a 501(c)(3) nonprofit that now studies all modes of2707transportation up and down the Federalist chain of Government.2708 Established in 1956, the Highway Trust Fund is part of the2709``user-pay, user-benefit'' tax principle. Simply put, the2710Federal budget is kept in two separate books. All spending2711accounts are kept in one book. All receipt accounts are kept in2712a separate book. The sum totals of the two books get compared2713to determine the Federal deficit or surplus.2714 A Federal trust fund account is a bridge between the two2715books, a way of linking receipt accounts with specific taxes on2716certain groups with spending accounts that benefit those groups2717over a long period of years. It is a visibility exercise, not a2718fiduciary relationship.2719 Simply put, the first 50 years of the Highway Trust Fund2720worked well. It raised the $676 billion in taxes on highway2721users and spent the same amount, plus $7 billion in interest,2722building the interstate system and meeting other road, bridge,2723and transit needs.2724 Since 2007, however, things have been out of balance.2725Spending was 28 percent higher than tax receipts, necessitating2726$275 billion in bailout transfers, almost all from the General2727Fund.2728 This happened for three reasons: a slowdown in the rate at2729which total driving increased year to year, a slow increase in2730automotive fuel efficiency, and a political system that keeps2731increasing trust fund spending each year without regard to2732revenue levels.2733 The problem on the spending side has been more acute lately2734since the enactment of the Bipartisan Infrastructure Law. Trust2735fund tax receipts in 2024 were almost $1 billion less than 32736years prior, while trust fund spending increased by $17 billion2737over that same period.2738 In the future, things get worse, as chart 1 from my2739testimony will show. This shows--the columns, the vertical2740columns, are tax revenues for the trust fund, and then the2741green ones on top are the General Fund bailouts and the year2742they get spent, and then the red line is spending.2743 You can see that CBO projections at the current rates of2744spending levels, the trust fund will run out of money again in2745mid-2028. And after that, the immediate revenue gap will be2746around $40 billion a year, rising to $50 billion a year by27472035, or $340 billion over that period cumulative.2748 Put another way, only 60 cents out of every dollar paid out2749of the trust fund last year came from highway user taxes. The2750rest came from some other kind of General Fund subsidy or2751transfer. In about 2030 or 2031, we fall below the 50-percent2752mark, 50 cents on the dollar. And by 2035, CBO says trust fund2753taxes will only support 43 cents out of every dollar of2754outlays.2755 Now, make no mistake, the trust fund didn't go broke2756because of electric vehicles, but the rate of EV adoption2757controls the rate at which motor fuel tax receipts will2758continue to decline in the future.2759 If Congress decides they want to continue the user-pay2760system--and they should consider that question--revenues and2761spending need to be aligned.2762 At present, three of the five Highway Trust Fund excise2763taxes tax the extent of highway system use. Gasoline, diesel,2764and heavy truck tires are all proxies for road mileage.2765 The other two taxes on trucks don't measure the extent of2766road use, the 12-percent sales tax and the Heavy Vehicle Use2767Tax annually. They are more system access charges.2768 So in terms of taxes that measure road usage, so far, there2769doesn't appear to be the willingness in the political system to2770increase motor fuel taxes. And while Congress has encouraged2771research into a national mileage fee, the implementation cost2772and complexity of such a fee probably mean that it wouldn't be2773practical to get it done in time for the next reauthorization2774bill. That leaves taxing road access, the potential for road2775use, instead of the extent of actual road use.2776 The committee apparently released this morning a national2777vehicle registration fee proposal it will consider tomorrow2778focused on, first, electric vehicles and hybrids and eventually2779expanding to all motor vehicles.2780 Although such fees do not fully measure system use, they2781are as consistent with the user-pay system as either of the two2782current truck taxes are. But, again, remember how big the2783problem is. We are only 60 percent self-sufficient right now,2784dropping below 50 percent in 2030 or 2031.2785 In terms of dollars, just remember one figure: $42 to $432786billion a year of revenue at most forever versus 80-some2787billion dollars in receipts by the time the IIJA--in spending--2788by the time the IIJA is done. You have either got to bring the2789$41 or $42 billion line up or the $80 billion line down, or2790some combination, and that means that you either double2791revenues or else cut spending by the end of this bill.2792 My back of the envelope calculations say that the EV fee,2793while it is significant, wouldn't come close to actually2794closing the amount of revenue that you need to get another 5-2795year bill.2796 This concludes my testimony. I would be happy to answer any2797questions.2798 [Mr. Davis' prepared statement follows:]27992800 Prepared Statement of Jeff Davis, Senior Fellow, Eno Center for2801 Transportation2802 Chairman Rouzer, Ranking Member Norton, and members of the2803Subcommittee, my name is Jeff Davis and I am a Senior Fellow at the Eno2804Center for Transportation, a nonpartisan think tank founded by traffic2805pioneer William Phelps Eno in 1921 to carry on his work increasing the2806safety and flow rate of vehicular traffic. We are a 501(c)(3) nonprofit2807organization that now studies all modes of transportation up and down2808the federalist chain of government. I have been studying the Highway2809Trust Fund since 1996, and I wrote my first article predicting a future2810Trust Fund insolvency crisis back in February 2006.2811 What Is the Highway Trust Fund?2812 Established in 1956, the Highway Trust Fund is part of the ``user-2813pay, user-benefit'' tax principle which has dominated state2814transportation funding since the early 20th century and which was first2815adopted by the federal government after World War II. Federal aviation2816(1970), inland waterway (1978), and harbor maintenance (1986) programs2817have since been put on the user-pay system with their own trust2818funds.\1\2819---------------------------------------------------------------------------2820 \1\ See my testimony [https://docs.house.gov/meetings/PW/PW12/282120231018/116425/HHRG-118-PW12-Wstate-DavisJ-20231018.pdf] before this2822subcommittee on October 18, 2023, for a full history of the user-pay2823paradigm.2824---------------------------------------------------------------------------2825 Simply put, the federal budget is kept in two separate books. All2826spending accounts are kept in one book, and all receipt accounts are2827kept in a separate book. The sum totals of the two books are compared2828on a daily, monthly, and annual basis to determine the federal deficit2829or surplus.2830 A federal trust fund account is a bridge between the two books--a2831way of linking receipt accounts from specific taxes on certain groups2832with spending accounts that benefit those groups, over a long period of2833years. It is a visibility exercise, not a fiduciary relationship.2834 How Has the Highway Trust Fund Performed?2835 For the first 50 years of its existence, the Highway Trust Fund2836worked according to plan. During that period, total user tax receipts2837on gasoline, diesel fuel, and the trucking industry were $676 billion,2838only $7 billion less than highway (and later, mass transit) outlays,2839which was more than made up for by interest earned on balances.\2\ But2840since then, Trust Fund spending has exceeded user tax receipts by $2082841billion, far more than interest can compensate for, which has2842necessitated over $275 billion in special bailout transfers from the2843General Fund, the last of which was in the 2021 infrastructure law and2844will keep the Trust Fund solvent into 2028. (A complete list of those2845transfers is in Appendix A of this testimony.)2846---------------------------------------------------------------------------2847 \2\ The payment of interest from the General Fund to a trust fund2848account is another kind of subsidy, but it is widely accepted and dates2849back at least to the establishment of the Unemployment and Social2850Security Trust Funds in the 1930s, so this committee is probably not2851the place to reargue the concept.2852---------------------------------------------------------------------------28532854 Table 128552856------------------------------------------------------------------------2857HTF: The First 50 Years (1957-2006) The HTF Since Then (2007-2024)2858------------------------------------------------------------------------2859Net user tax receipts: $676.0 Net user tax receipts: $724.52860 billion billion2861------------------------------------------------------------------------2862Outlays: $682.6 billion (101% of Outlays: $932.2 billion (128% of2863 net user tax receipts) net user tax receipts)2864------------------------------------------------------------------------2865Interest/Fines: $30.1 billion Interest/Fines: $17.8 billion2866------------------------------------------------------------------------2867Special Bailout Transfers: net zero Special Bailout Transfers: $275.52868 (on two occasions, short-term billion2869 loans by GF to HTF were made and2870 then repaid with interest)2871------------------------------------------------------------------------28722873 Why has this happened? Three reasons.2874 1. That total amount that people drive doesn't increase as fast as2875it used to. For the first 50 years of the Trust Fund, the total amount2876of driving in the U.S., measured in vehicle miles-traveled (VMT),2877increased by an average of 3.2 percent per year, enough to keep pace2878with inflation in many years. Since 2007 the increase has only averaged2879a half-percent per year.28802881 2. Starting in the mid-1970s, vehicles got more fuel-efficient,2882rendering a cents-per-gallon tax an ever-worsening proxy for a tax on2883driving. The number of gallons of motor fuel taxed each year increased2884by an average 2.6 percent for the first 50 years, but now only2885increases by an average 0.3 percent per year.28862887 3. The political system has been unwilling to increase tax rates2888to keep pace with increasing Trust Fund spending or to restrain2889spending to stay in line with Trust Fund tax receipts. Over the first289050 years, Congress acted four times to increase the gasoline tax rate,2891from 3 cents per gallon to 18.3 cents per gallon, which helped2892counteract lost buying power due to inflation. But that last increase2893was in 1993.28942895 Table 228962897------------------------------------------------------------------------2898 HTF: The First 50 Years (1957-2006) The HTF Since Then (2007-now)2899------------------------------------------------------------------------2900VMT increases an average 3.2%/year VMT increases an average of 0.5%/2901 year2902------------------------------------------------------------------------2903Taxed gallons of motor fuel Taxed gallons of motor fuel2904 increased by an average of 2.6%/ increased by an average of 0.3%/2905 year year2906------------------------------------------------------------------------2907Tax rates were increased so that the The present 18.3 cents/gal.2908 gasoline tax rate in 2006 (18.3 gasoline tax rate is the same as2909 cents/gal.) was 6.1 times the rate it was in 2007, having not been2910 in 1957 (3.0 cents/gal.) increased since 19932911------------------------------------------------------------------------29122913 The gasoline tax is the largest, but not the only, excise tax on2914highway users that supports the Trust Fund. There are currently five2915such excise taxes, which collectively raised $42.5 billion in fiscal2916year 2024. The gasoline tax raised 58 percent of that total.29172918 Table 329192920 The Five Highway Trust Fund Excise Taxes on Highway Users2921------------------------------------------------------------------------2922 IRC FY 2024 Net2923 Tax on Section Tax Rate Receipts2924------------------------------------------------------------------------2925Gasoline and gasohol......... 4081 18.3 cents/ $24.771 billion2926 gallon.2927Diesel and special fuels..... 4041 24.3 cents/ $9.456 billion2928 gallon.2929Sale of new trucks/trailers.. 4051 12% of MSRP.... $6.055 billion2930Use of very heavy trucks..... 4481 Weight-based; $1.460 billion2931 up to $550/2932 year.2933Tires for heavy trucks/buses. 4071 Weight-based; $748 million2934 up to $75 per2935 tire.2936------------------------------------------------------------------------2937 FY24 TOTAL2938 $42.489 BILLION2939------------------------------------------------------------------------29402941 Revenue stagnation is only half of the problem. The bigger problem2942of late is on the spending side, which keeps increasing to cover system2943costs and construction inflation. Fiscal year 2024 was the year when2944the big spending increases from the IIJA finally showed up in terms of2945Trust Fund cash flow. Outlays went from $60 billion in 2023 to $702946billion in 2024, and the baseline predicts that outlays will cross the2947$80 billion per year mark in 2027 or 2028. Meanwhile, at current tax2948rates, receipts will either remain flat at around $43 billion per year2949or else decrease steadily, depending on the adoption rate of electric2950vehicles into fleets and other fuel economy developments.29512952 Table 429532954 The Last Ten Years of Highway Trust Fund Cash Flow (Billion $)2955----------------------------------------------------------------------------------------------------------------2956 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY242957----------------------------------------------------------------------------------------------------------------2958Net Tax Receipts................ 40.8 41.2 41.0 42.6 43.6 42.4 43.4 46.6 42.1 42.52959Outlays......................... 51.8 54.3 54.4 55.2 56.1 58.2 53.7 53.6 60.1 70.62960----------------------------------------------------------------------------------------------------------------29612962 What Do Future Highway Trust Fund Projections Look Like?2963 Looking forward, the Congressional Budget Office's January 20252964baseline projections say that, under current law tax rates and spending2965levels (with discretionary inflation), the Trust Fund will go from a2966$28 billion user-pay deficit last year to a $50 billion user-pay2967deficit a decade from now, in 2035.2968 Put another way, last year, only 60 cents of every dollar paid out2969of the Trust Fund came from highway user taxes--the rest came from some2970kind of General Fund subsidy or transfer. In 2030 or 2031, CBO projects2971we will drop below the 50 cents-on-the-dollar threshold, and by 2035,2972highway user taxes at current rates will only support 43 cents of every2973dollar of Trust Fund outlays.29742975 Chart 12976[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]29772978 See Appendix B of this written testimony for all of the numerical2979detail on the latest CBO baseline.2980 (A note on baselines: the next CBO baseline update, this spring or2981summer, will look somewhat different. The spending line will be at2982least $1 billion per year higher because the January baseline was2983constructed while USDOT was operating under the half-year continuing2984resolution, so FY 2025 spending was held at the FY 2024 total and all2985subsequent years reflected that. The subsequent enactment of a full-2986year funding bill increases Trust Fund spending obligations by $1.32987billion in 2025 and that number will be inflated for subsequent years2988in the next baseline. But on the revenue side, things should improve,2989because the Trump Administration has taken formal steps to pull back2990EPA and USDOT greenhouse gas emission and fuel economy regulations that2991CBO had previously assumed would significantly increase market2992penetration of electric and plug-in hybrid vehicles.)2993 Sometime in 2028, probably spring or early summer, the Trust Fund2994is scheduled to run out of money again. At current law spending levels2995and tax receipt projections, this means that Congress will have to2996start bridging a Trust Fund revenue gap of around $40 billion per year,2997either through increased revenues, decreased spending, or additional2998bailouts from the General Fund. That annual gap would rise to $502999billion by 2035 (a cumulative $340 billion).3000 How Do Electric Vehicles Affect Trust Fund Finances?3001 Electric cars, pickup trucks, and vans are not subject to any3002current Highway Trust Fund excise taxes. But make no mistake--the3003Highway Trust Fund's current dire financial situation was not caused by3004electric vehicles. The current insolvency crisis began in the fall of30052008--just as the first few dozen handmade Tesla Roadsters were being3006delivered. And only 1 million hybrid-electric vehicles had been sold by3007the end of 2007, out of 136 million registered automobiles that year.3008EVs and hybrids did not cause the Highway Trust Fund to go broke.3009 However, unless tax rates are changed, the rate of EV adoption3010controls the rate of change of the revenue half of the Trust Fund's3011future fiscal imbalance.3012 At present, EV adoption is accelerating, and the latest official3013projections have that rate increasing in the future. The Energy3014Department's latest official outlook assumes that the tax credits and3015strong regulatory incentives for EV adoption enacted in the last3016Administration will remain in place:30173018 Table 530193020 Energy Department Projections for EV/Hybrid Composition of US Light-Duty Vehicle Fleet3021 Million light-duty vehicles. Assumes all Biden-era tax credits and regulations remain in place.3022--------------------------------------------------------------------------------------------------------------------------------------------------------3023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 20353024--------------------------------------------------------------------------------------------------------------------------------------------------------3025Electric................................................ 4.8 6.9 10.0 13.8 18.2 23.0 28.7 34.9 41.6 48.4 55.1 61.63026Plug-In Hybrid.......................................... 1.4 1.9 2.5 3.2 3.8 4.6 5.4 6.3 7.4 8.3 9.3 10.23027Regular Hybrid.......................................... 7.7 8.8 9.9 10.8 11.5 12.3 13.0 13.7 14.3 15.1 15.8 16.63028ICE..................................................... 251.5 249.0 246.0 242.4 237.8 232.1 225.5 217.9 209.4 200.8 192.4 184.23029 -----------------------------------------------------------------------------------------------3030 Total................................................. 265.4 266.6 268.4 270.1 271.2 272.0 272.6 272.7 272.7 272.6 272.5 272.43031--------------------------------------------------------------------------------------------------------------------------------------------------------3032Source: Energy Information Administration, Annual Energy Outlook 2025, Table 39, Reference Case30333034 CBO used similar assumptions for EV and hybrid adoption in its3035January baseline, which showed relatively flat VMT growth combined with3036the above EV/hybrid adoption rates to drag gasoline tax receipts from3037$25 billion per year to $15 billion per year over a decade:30383039 Table 630403041 CBO January 2025 Baseline Forecast for Net Gasoline Tax Receipts to HTF (Billion $$)3042----------------------------------------------------------------------------------------------------------------3043 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY353044----------------------------------------------------------------------------------------------------------------304524.8 25.1 24.7 24.1 23.2 22.2 20.9 19.4 18.1 17.0 16.1 15.33046----------------------------------------------------------------------------------------------------------------30473048 But even if consumers were to abruptly stop buying electric3049vehicles entirely, Congress would still face a gigantic Highway Trust3050Fund revenue hole. Remember: VMT doesn't increase like it used to, and3051is projected to only increase by 0.4 percent per year from now on3052(light duty vehicles only), meaning that gasoline tax receipts can't3053grow faster than that unless the tax rate is increased or people start3054buying more gas guzzlers.3055 The chart below shows two Trust Fund revenue scenarios and two3056Trust Fund spending scenarios. The solid lines are the January 2025 CBO3057baseline, with spending adjusted for the full-year FY25 totals. The3058revenue baseline assumes all current law tax credits and policies to3059promote EV adoption will continue. The alternative revenue scenario3060assumes that EVs stop selling, causing gasoline tax receipts to3061increase at 0.5 percent per year. The alternative spending scenario3062extends all IIJA Division J appropriations for surface transportation3063modes at baseline levels, but with that new spending supported by the3064Trust Fund, instead of the General Fund.30653066 Chart 23067[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]30683069 With heavy (baseline) EV market penetration, the Trust Fund's3070revenue hole with baseline spending is around $50 billion a decade from3071now. If you stop selling EVs entirely, the revenue hole would still be3072around $40 billion in 2035.3073 What Can Be Done to Remedy this Situation?3074 First, Congress has to take a long, hard look and ask, do we want3075to continue the user-pay, user-benefit paradigm here? If so, it should3076be strengthened, with the Trust Fund made solvent by a combination of3077surface transportation user taxes and spending cuts. If not, then any3078combination of real general revenues can be used to plug the hold in3079the Trust Fund, or you could get rid of the Trust Fund entirely and go3080to a blend of annual appropriations and multi-year advance3081appropriations out of the General Fund.3082 However, the title of this hearing is ``The Need for a Long-Term3083Solution for the Highway Trust Fund,'' so we will take Trust Fund3084abolition off the table for now.3085 The Revenue Side3086 At present, three of the five Highway Trust Fund excise taxes3087attempt to tax the extent of highway system use. The gasoline, diesel3088fuel, and heavy truck tire tax are all proxies for taxing road3089mileage--the more miles driven by an internal combustion engine (ICE)3090vehicle, the more gallons of gasoline or diesel fuel the operator3091purchases, and the more the tires on a tractor-trailer have to be3092replaced. None of these is a perfect proxy for VMT, but the degree of3093highway use contributes greatly to the amount of taxes paid.3094 The other two taxes do not measure the extent of road use. The 123095percent federal excise tax on new trucks, tractors, and trailers is3096only levied once, at the manufacturer, and the annual usage tax on the3097heaviest trucks is only levied once per year. For these ``highway3098access'' taxes, the degree of highway use is irrelevant to the amount3099of tax paid.3100 In terms of taxes that measure road usage, there does not appear to3101be the willingness in the current political system to increase motor3102fuel taxes. While Congress, in the 2015 and 2021 reauthorization laws,3103has encouraged research into a mileage fee or road user charge that3104would eventually replace motor fuel taxes, the 50-state pilot program3105funded mandated by the 2021 authorization law, which was supposed to be3106complete by now, has still not moved forward. The implementation costs3107and complexity of a national VMT fee/RUC are such that it probably3108would not be practical to implement in time for the next3109reauthorization bill, even if the political willpower were there.3110 That leaves taxing road access--the potential for road use--instead3111of the extent of actual road use. In order to access the road network,3112you need a vehicle and a license. Levying a tax or fee on either one of3113those would be a tax on road system access similar to the existing3114truck Federal Excise Tax (FET) or Heavy Vehicle Use Tax (HVUT).3115 There has been much discussion of some kind of federal tax or fee3116on electric vehicles simply because they currently pay nothing into the3117federal Highway Trust Fund. Several states have taken steps to levy EV3118fees for deposit into their road funds.3119 In terms of what the average ICE vehicle pays in fuel taxes, here3120is the latest data from the Federal Highway Administration.31213122 Table 731233124 Latest FHWA Vehicle Operation Statistics for Light-Duty Vehicles (2023)3125------------------------------------------------------------------------3126 Light-Duty3127 -----------------------------------------3128 Short WB Long WB Total3129------------------------------------------------------------------------3130Number of Reg. Vehicles....... 197,134,299 62,103,995 259,238,2943131Avg. VMT per Vehicle.......... 11,026 11,360 11,1063132Fuel Consumed per Vehicle 447 633 4923133 (Gal.).......................3134Times 18.3 Cents per Gallon... $81.80 $115.84 $90.043135------------------------------------------------------------------------3136Source: FHWA, Highway Statistics 2023, Table VM-1. ``Short WB'' =3137 wheelbase of 121 inches or less. ``Long WB'' = wheelbase over 1213138 inches.31393140 Per the latest Federal Highway Administration data (Table VM-1 in3141Highway Statistics 2023), the average fuel consumption per registered3142light-duty vehicle in 2023 was 492 gallons. Multiply that by the3143current gasoline tax rate of 18.3 cents per gallon and you get a3144ballpark number of $90 per year that an EV driven the average amount3145should pay into the Trust Fund, were EVs to be taxed in the same amount3146as an internal combustion vehicle.3147 However, that is the mean (average) amount--total registered3148vehicles divided by total estimated VMT and gallons. There are more3149registered cars than registered drivers, so the miles on a driver's3150``main'' vehicle will be higher.3151 If one assumed a $90 per EV federal registration fee, then using3152the Energy Department's EV adoption assumptions from Table 5, above,3153the $90 EV fee would bring in $900 million in 2026, rising to $5.53154billion in 2035. Higher fees would bring in more money, as would any3155fees charged on hybrid vehicles. (The assumed EV adoption rates in3156Table 5 will probably shrink in next year's Outlook as the Trump3157Administration rolls back GHG regulations and if Congress enacts3158policies less friendly to EVs.)3159 The Spending Side3160 In recent years, spending out of the Trust Fund has been increasing3161at a faster rate than tax revenues have been decreasing. Inexorable3162spending growth, along with static revenues, got us to where we are3163today, with highway user taxes only supporting 60 cents out of every3164dollar spent by the Trust Fund. As I mentioned earlier, at the current3165rates we will drop below the 50 cents on the dollar mark in 2030 or31662031. ($41 or $42 billion in user tax receipts versus $82 to $833167billion in outlays.)3168 This means that unless you cut spending, you have to double3169revenues from somewhere or else have more general fund bailouts.3170 There used to be a widespread belief among many legislators that if3171you could just cut back the ``non-essential'' or ``non-traditional''3172elements of Trust Fund spending, that the Trust Fund could once again3173live within its means without tax increases. These legislators tended3174to be from districts who got minimal value out of the Mass Transit3175Account.3176 This attitude may have been mathematically valid once, but no3177longer. The following table shows the contract authority provided by3178the IIJA for the Federal Highway Administration in 2026, by program.3179 Assume that Congress throws the Federal Transit Administration, the3180National Highway Traffic Safety Administration, and the Federal Motor3181Carrier Safety Administration completely out of the Highway Trust Fund,3182immediately. And then Congress goes down the FHWA budget and throws out3183all of the ``non-traditional'' items--no more transportation3184alternatives, carbon reduction, CMAQ, EV charging, metropolitan3185planning, emission reduction grants, climate change resilience, pilot3186programs, none of it--just ``traditional'' concrete, asphalt, and3187steel. That still leaves new FHWA contract authority around $9.53188billion above all of the projected highway user tax receipts for that3189year:31903191 Table 83192[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]31933194 This is not meant as a criticism of mass transit or of non-3195traditional Trust Fund spending, only that this once-commonly held idea3196is no longer valid because of the recent rate of overall spending3197growth. I am merely pointing out that fixing the spending side of the3198Highway Trust Fund imbalance is just as important as fixing the revenue3199side imbalance, but tends to get less attention.3200 This concludes my testimony, and I would be happy to answer any3201questions.3202 Appendix A3203[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]32043205 Appendix B3206[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]32073208 Appendix C3209 Comparison of Federal Highway Trust Fund Highway Account Receipts3210 Attributable to the States and Federal-Aid Apportionments and3211 Allocations from the Highway Account3212[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]32133214 Mr. Rouzer. Mr. Burkhard.32153216 TESTIMONY OF BRIAN BURKHARD, P.E., VICE PRESIDENT AND GLOBAL3217 PRINCIPAL FOR ADVANCED MOBILITY SYSTEMS, JACOBS32183219 Mr. Burkhard. Good morning, Chairmen Graves and Rouzer,3220Ranking Members Larsen, Holmes Norton, and members of the3221Subcommittee on Highways and Transit.3222 My name is Brian Burkhard. I am vice president and global3223principal for advanced mobility systems at Jacobs. I appreciate3224this opportunity to testify today as you examine the need for a3225long-term solution for the Highway Trust Fund.3226 We like to say at Jacobs that we are challenging today to3227reinvent tomorrow by solving the world's most critical3228problems, and helping communities solve their infrastructure3229challenges has never been more complex.3230 As one of America's leading consulting and advisory firms,3231Jacobs delivers infrastructure projects that enhance mobility3232and efficiency across all modes of transportation, and much of3233this work is supported by the Highway Trust Fund.3234 Nearly every project I have worked on in my career has been3235made possible by the Highway Trust Fund. These are projects3236that keep our transportation systems reliable, safe, and3237resilient. Moreover, because of the improvements and3238efficiencies they realize for goods movement and mobility, they3239drive the American economy forward.3240 The Highway Trust Fund represents a founding principle that3241has formed the basis of the Federal transportation policy for3242over half a century, the ``user-pays, user-benefits''3243principle. But the Highway Trust Fund continues to be in3244trouble, and our current path is uncertain unless we address3245the fund's long-term structural issues.3246 Fortunately, there are several alternatives to relying on a3247fuel tax to fund our transportation infrastructure needs. These3248include an EV fee and a mileage-based user fee or road user3249charge.3250 First, an EV fee could be a short-term stopgap measure to3251reduce the fuel tax deficit caused by EVs. Nearly 40 States3252have adopted EV fees, usually in the form of the annual fee3253paid during vehicle registration. Some States have implemented3254additional fees based on vehicle weight or have instituted fees3255on public EV charging stations.3256 However, EV fees should not be viewed as a panacea to the3257fund's problem. Rather, they should be considered in parallel3258with a longer term fix to the gas tax.3259 Additionally, these one-time or annual payments are not3260precise assessments on transportation usage, and they do not3261align with the continued impact that a vehicle imposes on the3262system.3263 As stated in the National Surface Transportation3264Infrastructure Financing Commission's report in 2009, required3265by SAFETEA-LU, the most viable approach to efficiently fund3266investment in surface transportation in the medium and long run3267will be a user charge system based more directly on miles3268driven rather than indirectly on fuel consumed.3269 Congress has helped States and interstate organizations3270test the feasibility of mileage-based user fees, but now3271national leadership is critical and the USDOT should move3272forward on the national pilot as defined and required by the3273IIJA.3274 Full Federal implementation of a mileage-based user fee3275pilot program must be accompanied by a robust education3276campaign to ensure drivers understand how the program works,3277the positive impact on rural communities, and the opportunities3278for privacy protections. Moving to a true transportation usage-3279based system is imperative in the long run.3280 Lastly, the role of private financing and P3s has grown in3281interest in helping to close the gap between limited public3282funding and our growing needs. P3s have been used for centuries3283across the world and are becoming more prominent in the U.S.3284thanks to Federal financing programs, such as the tax-exempt3285private activity bonds and low-interest rate TIFIA loans. P3s3286can accelerate project delivery and encourage cost-saving3287innovation, but they are not suitable for all project types,3288particularly those without sustainable funding sources.3289 Encouraging private-sector participation, ideation, and3290efficiency is good for infrastructure, and we urge this3291committee to make these financing programs more accessible so3292States and localities can accelerate project delivery.3293 This committee knows all too well that our infrastructure3294funding gap has continued to grow, and we encourage continued3295collaboration to ensure that the Federal Government remains a3296committed partner in funding our transportation infrastructure.3297 Ensuring the solvency of the Highway Trust Fund while3298adhering to the user-pays principle is essential for continued3299economic growth and is needed to improve the safety of our3300Nation's transportation systems.3301 Thank you for the opportunity to testify, and I look3302forward to your questions.3303 [Mr. Burkhard's prepared statement follows:]33043305 Prepared Statement of Brian Burkhard, P.E., Vice President and Global3306 Principal for Advanced Mobility Systems, Jacobs3307 Why the Highway Trust Fund is Important3308 Good morning, Chairmen Graves and Rouzer, Ranking Members Larsen3309and Holmes Norton, and Members of the Subcommittee on Highways and3310Transit.3311 My name is Brian Burkhard, and I am Vice President and Global3312Principal for Advanced Mobility Systems at Jacobs.3313 I want to thank you for this opportunity to testify today as you3314examine the need for a long-term solution for the Highway Trust Fund.3315 I have over 37 years of experience in transportation systems and3316infrastructure development. Throughout my career, I have led innovative3317initiatives across connected and automated vehicle technology, wireless3318electric vehicle (EV) charging systems, and major capital improvement3319projects. I have been grateful for the opportunity to help states and3320local governments plan, design, build, operate and maintain complex3321transportation system solutions that have resulted in improved3322mobility, increased goods movement, positive economic impacts, and3323lasting safety. To say that the Highway Trust Fund is responsible for3324my personal career would be an understatement. Nearly every project3325that I have worked on has been made possible by funding that comes from3326the Highway Trust Fund.3327 We like to say at Jacobs that we're ``challenging today to reinvent3328tomorrow by solving the world's most critical problems,'' and helping3329communities solve their infrastructure challenges has never been more3330complex. As one of America's leading consulting and advisory firms,3331Jacobs delivers crucial infrastructure projects that enhance mobility3332and efficiency across all transportation modes, including aviation,3333rail and transit, highways and bridges, and ports and maritime. Much of3334this work is supported by the Highway Trust Fund, and we understand3335that the advent of electric vehicles, improved vehicle fuel efficiency,3336and the limitations of the current federal fuel tax, all pose great3337challenges to assuring that there is enough money to repair and build3338America's transportation infrastructure. Jacobs is proud to have3339studied and piloted alternatives to the fuel tax, through our work on3340Mileage-Based User Fees (MBUFs), and to have also engaged in3341alternative funding and financing methods on projects across the United3342States.3343 Jacobs works to create equitable, sustainable, and smart3344infrastructure that connects people and drives economic development.3345Like other larger engineering and consulting firms working in3346transportation, we understand that the Highway Trust Fund is an3347integral funding source for nearly all the work we do for our state and3348local transportation clients. Averaging out the local match dollars,3349the Highway Trust Fund provides about 25 percent of the funding for3350these projects.3351 Transportation professionals like me are attracted to designing,3352building, and maintaining infrastructure because of how broad3353stretching the impacts are to American's lives. Transportation3354infrastructure is the backbone of daily life in America and can3355influence job accessibility, commute times, and even housing choices. A3356well-maintained system boosts efficiency, reduces costs, and enhances3357safety, while outdated infrastructure can lead to congestion, higher3358accident rates, and increased transportation expenses. For businesses,3359strong infrastructure facilitates commerce, lowers logistics costs, and3360fosters competitiveness.3361 Projects that are funded by the Highway Trust Fund keep our3362transportation systems reliable, safe, and resilient. Moreover, they3363drive the American economy forward--these infrastructure projects3364impact how communities can economically thrive because of improvements3365and efficiencies in goods movement and enhancements in mobility. And on3366the global stage, the improvements to our transportation infrastructure3367are essential to America's competitiveness. This is why Congress must3368prioritize ensuring that we have a robust Highway Trust Fund to power3369our infrastructure and our economy.3370 Why the Highway Trust Fund is in Jeopardy3371 As we all know, the Highway Trust Fund continues to be in trouble.3372Highway Trust Fund expenditures are growing quicker than its sources,3373as our nation's transportation infrastructure needs grow. According to3374the Congressional Budget Office, the deficit between outlays and3375inflows was approximately $20 billion in 2024 and is expected to3376increase to over $45 billion by 2034 \1\. The federal fuel tax, which3377accounts for about 80% of the Highway Trust Fund's receipts, has not3378been adjusted for inflation since 1993 and, when adjusted for3379inflation, is half the revenue of what it was in 1994. According to the3380Environmental Protection Agency's 50 Years of EPA's Automotive Trends3381Report, fuel efficiency has doubled since 1975 and an increasing share3382of vehicles using our transportation system today do not pay any fuel3383tax at all \2\. The net effect of all these issues results in a3384downward trend in federal revenue per vehicle-mile-traveled and a3385growing insolvency issue with the Highway Trust Fund.3386---------------------------------------------------------------------------3387 \1\ Details About Baseline Projections for Selected Programs--3388Highway Trust Fund Accounts: January 2025. (2025, January).3389Congressional Budget Office. https://www.cbo.gov/system/files/2025-01/339051300-2025-01-highwaytrustfund.pdf.3391 \2\ 50 Years of EPA's Automotive Trends Report. (2025, January 15).3392Environmental Protection Agency. https://www.epa.gov/greenvehicles/50-3393years-epas-automotive-trends-report.3394---------------------------------------------------------------------------3395 Our current path is unsustainable. Simply raising the gas tax would3396be a short-term solution to address the solvency of the Highway Trust3397Fund, but does not address the long-term structural issues to maintain3398a user-pays, user-benefits model of federal transportation investment.3399Instead, we at Jacobs urge this committee to consider alternatives to3400the federal fuel tax to fund transportation infrastructure projects.3401 Alternatives to the Fuel Tax3402 Fortunately, there are several alternatives to relying on a fuel3403tax to fund our transportation infrastructure needs. The following are3404some prevailing funding alternatives in practice across the country3405today:3406Electric Vehicle (EV) Fees3407 Many states have introduced annual fees on electric vehicles (EVs)3408to compensate for lost fuel tax revenue. Currently, 39 states have3409adopted EV fees, with amounts ranging from $50 to $250 per year,3410depending on the state \3\. Some states, like Maryland and Wisconsin,3411also impose additional taxes on electricity used at public charging3412stations to further offset revenue losses.3413---------------------------------------------------------------------------3414 \3\ Special Registration Fees for Electric and Hybrid Vehicles.3415(2025, February 25). National Conference of State Legislatures. https:/3416/www.ncsl.org/transportation/special-registration-fees-for-electric-3417and-hybrid-vehicles.3418[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]34193420 Figure 1_Annual EV Registration Fees by State (Source: National3421---------------------------------------------------------------------------3422 Governors Association, 2020)34233424 Common approaches to EV fee assessment include a flat annual fee3425that EV owners pay during vehicle registration. Tiered fees have been3426applied in some states for heavier EVs or may even adjust these3427according to vehicle type. Some states even structure these EV fees to3428grow over time by tying the fees to an inflation-related metric. A few3429states tax electricity used at public EV chargers to mimic fuel taxes.3430 At the federal level, an annual registration fee on EVs could be a3431short-term stop gap measure to reduce the fuel tax deficit in the3432Highway Trust Fund caused by EVs. However, this should not be viewed as3433addressing the entire shortfall and should be considered in parallel3434with a longer-term fix to the gas tax.3435 There are some important considerations to keep in mind with an EV3436fee. First, policymakers must be transparent with the public that these3437EV fees are transportation user fees intended to replace the gas tax3438and will be used for transportation investments. Additionally, an3439annual fee should be priced to mirror the lost gas tax for each class3440of vehicle so that the fee is as closely tied to transportation usage3441as possible to maintain the trusted ``user pays'' principle that has3442guided federal transportation funding for decades. Second, a one-time3443or annual fee is still not a precise fee assessment on transportation3444usage as it does not adjust to all miles driven by each vehicle.3445Whereas usage fees, like the fuel tax, increase with miles driven, a3446single fee assessment does not align with the continued impact that a3447vehicle imposes on the transportation system over the life of the3448vehicle. With a single fee, a person who only drives 5000 miles in a3449year would be paying the same as someone driving 20,000 miles in a3450year.3451 Third, it is appropriate to consider the multitude of taxes and3452fees EVs may be subject to compared to gasoline-powered vehicles. Many3453states include a variety of annual battery electric fees, kilowatt hour3454fees, and sales or electricity taxes on public EV charging. While3455making sure EVs pay their fair share is necessary for infrastructure3456sustainability, these fee methodologies could disincentivize EV3457adoption and may be more punitive than gasoline-powered vehicle3458ownership. A related problem is that annual, upfront registration fees3459disproportionately affect lower-income vehicle purchasers in contrast3460with usage fees or motor fuel taxes, which can be paid incrementally.3461Overall, it is imperative that Congress maintain a transparent ``user3462pays'' principle when guiding any new transportation usage fees.3463Mileage-Based User Fees (MBUFs)3464 Motor fuel taxes link highway use with the associated costs of3465building and maintaining roads as well as other indirect costs3466associated with usage of the transportation system, such as pollution3467and congestion. But motor fuel taxes are an imperfect user fee because3468they do not differentiate among vehicles that cause greater or lesser3469road wear for the same amount of fuel consumed or between travel on3470crowded and uncrowded roads. As concluded by the National Surface3471Transportation Infrastructure Financing Commission in 2009 and stated3472in their Final Report: ``The most viable approach to efficiently fund3473investment in surface transportation in the medium to long run will be3474a user charge system based more directly on miles driven rather than3475indirectly on fuel consumed.'' \4\3476---------------------------------------------------------------------------3477 \4\ Paving Our Way: A New Framework for Transportation Finance.3478(2009, February). National Surface Transportation Infrastructure3479Financing Commission.3480---------------------------------------------------------------------------3481 To address this imperfection, a concept has emerged called Mileage-3482Based User Fees (MBUFs), also known as Vehicle Miles Traveled (VMT)3483taxes or a Road User Charging (RUC) fee. Under an MBUF system, drivers3484would be charged for the number of miles they drive instead of the3485amount of fuel they purchase, creating a direct connection between the3486amount you pay and your use of the transportation network (see Figure34872). Recent legislation has directed studies on MBUF, including a3488national pilot program to assess its design, acceptance, and3489sustainability.3490[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]34913492 Figure 2_Comparison of Fuel Taxes Paid and MBUF Paid by Vehicle Fuel3493 Efficiency (Assuming a Single per mile MBUF Rate Applied to all3494 Vehicles)34953496 Figure 3 simplifies how an MBUF system could work. Data collection3497and reporting are necessary to identify the number of miles traveled.3498Miles driven can be measured through periodic odometer readings,3499vehicle GPS systems, devices that can plug into a vehicle's on-board3500diagnostic port, cellular on-board units, or even a driver's3501smartphone. If location data is included, it can be used to3502differentiate by state where a vehicle has driven. Alternatively,3503odometer readings or automated data without location can be used to3504simply measure the number of miles driven. Regardless of how miles are3505measured, these would be sent to an account manager. Once an account3506manager collects mileage data, invoices the driver, and collects the3507MBUF, it transfers it to the beneficiary, in this case, the State.3508[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]35093510 Figure 3_How MBUF Works35113512 Some MBUF concepts have considered the use of a multi-state3513clearinghouse that could track cross-state travel and re-distribute3514MBUF funds collected based on out-of-state mileage.3515 MBUF, or RUC, program pilots have been funded and studied3516extensively across the United States. The Surface Transportation System3517Funding Alternatives (STSFA) grant program, established by the FAST3518Act, contributed funding but required a local match, to explore MBUF3519revenue mechanisms through study, demonstrations, and piloting. This3520program aimed to conduct outreach and increase public awareness of the3521need for new alternatives to the fuel tax and to identify ways to3522minimize the administrative costs associated with MBUF systems.3523 Through STSFA or independent initiatives, Jacobs has had the3524opportunity to assist several states and coalitions in exploring MBUF3525programs. The current state of those and other programs are as follows:3526 Oregon, Utah and Virginia: These states have operational3527MBUF programs (participation in these programs are currently3528voluntary).3529 + Oregon conducted America's first MBUF pilot in 2013, which led3530to the establishment of OReGO--Oregon's statewide RUC program. It3531allows enrolled users to have their miles tracked with a GPS device or3532a non-GPS odometer tracker and gives enrollees a credit against taxes3533they pay at the pump. Since 2015, high MPG and EV vehicles can be3534enrolled in a voluntary program where drivers pay 1.9 cents per mile.3535Oregon is considering mandatory registration.3536 + In 2018, Utah was the second operational MBUF system in the3537U.S. EVs are allowed to enroll at a rate of 1 cent per mile in lieu of3538an annual flat EV fee.3539 + Virginia became the third operational MBUF system in the U.S.3540in 2022 by establishing a ``Highway Use Fee.'' Drivers can elect to pay35410.94 cents per mile capped out at $109 per year.35423543 Hawai'i: Passed the first mandatory RUC legislation in35442023. Starting on July 1, 2025, most EV drivers can choose to pay a 0.83545cent per-mile RUC charge or flat annual RUC that is capped at $50 per3546year. By the end of this year, Hawai'i will present a RUC transition3547plan to the legislature with steps on how to implement a RUC charge to3548all vehicles in Hawai'i by 2033.35493550 Washington, California, Wyoming, Colorado, Minnesota,3551Kansas, Missouri, Texas, Ohio, New Hampshire, Pennsylvania, Delaware,3552North Carolina, and others: These states have launched or are3553developing pilot programs to study the feasibility and implementation3554of RUCs with trucks or light-duty vehicles.3555 + Caltrans is testing RUC through the establishment of real3556monies collection and issuance of fuel tax credits. This pilot is3557evaluating opportunities and challenges in the establishment of this3558system and to consider how such a system might scale statewide.3559 + Colorado implemented their first road charge pilot program3560with 100 vehicles over a 4-month period. The participants of this pilot3561supported the RUC concept and appreciated its fairness to charge on3562miles-traveled rather than fuel consumption. The pilot demonstrated3563that mileage-reporting mechanisms could be effective in collection of3564data without major issues. The pilot also exposed policy challenges3565like privacy in mileage-reporting and how to integrate with existing3566transportation funding mechanisms.35673568 The Eastern Transportation Coalition (TETC)--Since 2017,3569TETC is a leading consortium of 19 states and Washington DC, of which 93570have explored RUC and its potential impacts. TETC has piloted several3571aspects of RUC, including community outreach and communication through3572participant surveys, focus groups, and messaging. This program has3573conducted 12 passenger vehicle pilots engaging nearly 3000 passenger3574vehicles.3575 + An urban-rural analysis was conducted in Georgia and Maryland.3576When moving from a gas tax to an MBUF, Georgia's rural residents would3577pay 9% less per year and Maryland's rural residents would pay 7% less3578per year.3579 + In North Carolina, TETC helped create AdvaNCe Transportation3580Together, a collaboration between NCDOT, the business community, and3581other private-public partners exploring transportation funding. The3582result is an online public education forum that provides information on3583how transportation is funded today, the problem with the current3584funding model, and potential solutions. Public engagement and education3585on the need for more sustainable funding options is key to any future3586MBUF's success.35873588 RUC America--RUC America is a consortium of states that3589pools resources to study the viability of MBUF. RUC America has funded3590over 24 research projects studying the feasibility of road usage3591charging across the interests of 19 state DOTs. Oregon and Utah are3592member states that are actively operating RUC programs. The second tier3593consists of states that are conducting, or have conducted, RUC research3594pilot projects and includes California, Colorado, Hawaii, Pennsylvania3595and Washington. The remaining states are monitoring transportation3596trends and evaluating the road usage charge environment.3597 + One project through RUC America was to evaluate how automated3598vehicle (AV) systems could be utilized to enable an MBUF. The pilot3599utilized data from an AV delivery company to identify the opportunities3600and challenges associated with AV-based systems and assess their3601potential integration into a RUC framework.36023603 As a member of the advisory panel that convened for the Eno3604Center's 2023 report entitled Driving Change: Advice for the National3605VMT Fee Pilot, I was encouraged by the report's findings on the need3606for and importance of a national pilot to explore the framework,3607policies, and implementation of a federal MBUF.3608 U.S. DOT should move forward on a national pilot to test the3609design, acceptance, implementation, and financial sustainability of an3610MBUF system in keeping with the ``user pays, user benefits'' principle3611of federal transportation funding. Since time is of the essence and a3612Federal Advisory Board has already been established for this3613initiative, USDOT must not stall on this important and needed3614evaluation.3615 Full federal implementation must be accompanied by a robust3616education campaign to ensure that drivers understand how the program3617works, to describe the positive impact on rural communities and3618opportunities for privacy protections. Incorporating ``choice'' into3619these programs is essential for their success. Building upon the3620individual state pilots and findings, a national pilot will be3621essential in the evaluation of a potentially lasting and fair solution3622to our Highway Trust Fund problem. In the meantime, EV fees could3623potentially offer a stop-gap solution but by no means should be3624considered a panacea to address tax parity with traditional vehicles.3625 The Role of Private Financing in Transportation Investment3626 In 2023, federal, state and local governments spent nearly $3503627billion on highways and mass transit infrastructure with the federal3628government responsible for roughly 25% of this spending, largely3629through the Highway Trust Fund \5\. While the federal government3630supports transportation investments in a variety of ways, outside3631direct grants from the Highway Trust Fund (i.e. TIFIA and Private3632Activity Bonds), the role of private financing and public-private3633partnerships (P3s) has grown in interest to help close the gap between3634limited public infrastructure spending and need. The federal government3635and states have enabled P3 projects in a variety of ways over the past3636few decades, however the U.S. still lags many other developed countries3637in utilizing P3s. While progress is being made, the federal government3638can do more to be a willing partner to embrace the private sector's3639drive for innovation and efficiency in transportation project delivery.3640---------------------------------------------------------------------------3641 \5\ Public Spending on Transportation and Water Infrastructure,36421956 to 2023. (2025, February 26). Congressional Budget Office. https:/3643/www.cbo.gov/publication/60874.3644---------------------------------------------------------------------------3645Public-Private Partnerships (P3s)3646 Public-Private Partnerships (P3s) have been used for centuries, but3647their modern application in infrastructure financing gained momentum in3648the late 20th century. Historically, P3s were employed in colonial3649charters, toll roads, and early railroads in the U.S. The 1990s and36502000s saw a global surge in P3 adoption, particularly in Canada, the3651U.K., and Australia, where governments encouraged private investment in3652public infrastructure. In the U.S., P3s became more prominent as3653infrastructure needs have outpaced the public sector's ability to3654maintain and improve assets, and with federal financing programs, such3655as the Transportation Infrastructure Finance and Innovation Act (TIFIA)3656and private activity bonds (PABs), supporting their expansion.3657 P3s involve a long-term agreement between a government agency and a3658private entity to finance, build, operate, and maintain infrastructure3659projects. The private sector typically provides upfront capital, while3660the public sector ensures regulatory oversight. Common P3 models3661include:3662 Design-Build-Finance-Operate (DBFO)--The private partner3663handles all aspects, with revenue generated through tolls or fees.3664 Build-Operate-Transfer (BOT)--The private entity operates3665the project for a set period before transferring ownership to the3666government.3667 Lease-Develop-Operate (LDO)--The government leases an3668asset to a private firm for upgrades and operation.36693670 P3s have been used in various sectors, including transportation,3671water systems, and public buildings, and offer owners an opportunity to3672maximize and extend their limited public funding. Many states fund3673their transportation investments with a pay-as-you-go model where costs3674are covered by current revenues, rather than by borrowing or3675accumulating debt. While this can reduce the burden of debt on3676taxpayers, it also limits the ability for states and localities to fund3677large or complex projects that may dwarf their current revenues.3678 In 2023, Tennessee passed the Transportation Modernization Act3679(TMA) which gave TDOT authority to enter into P3s to address urban3680congestion, while freeing up funding to invest in rural communities3681\6\. The state allocated $3 billion in state funding into identified3682critical corridors to add ``choice lanes'' in each direction which will3683be financed and operated by a concessionaire. It is estimated that3684Tennessee's initial investment into the concession will result in a 3-3685to-5-fold return in the form of transportation infrastructure3686improvements.3687---------------------------------------------------------------------------3688 \6\ Transportation Modernization Act. (2025, April 25). Tennessee3689Department of Transportation. http://tn.gov/tdot/build-with-us/3690transportation-modernization-act.html3691---------------------------------------------------------------------------3692 Since Congress established tax-exempt PABs and low-interest-rate3693TIFIA loans, the large majority of U.S. P3 projects have used one or3694both financing methods to leverage private investment on more3695advantageous terms than in the commercial market. These long-term and3696flexible financing options are invaluable tools for making P3s and3697transportation projects a reality. We strongly urge this Committee to3698make both financing programs more accessible so states and localities3699can accelerate project delivery of critical transportation projects.3700 P3s can accelerate project delivery by removing delays typically3701associated with traditional government funding and can create3702sustainable funding sources through tolls or other fees. P3s leverage3703private sector investment reducing taxpayer burden and transfer of risk3704to the private sector while encouraging cost saving innovation and3705efficiencies through value engineering.3706 However, P3 contracts can be complex with lengthy and legally3707intricate negotiations and may not be suitable for all types of3708projects. Private financing can result in more expensive projects due3709to risk coverage and some P3s have lacked transparency on pricing and3710service quality. All told, P3s are investment partnerships that require3711good faith negotiation between the private and public sectors to3712maximize benefit for the traveling public.3713 Conclusion3714 Congress should continue to provide--and reauthorize as needed--the3715current array of formula funding, federal grants, loans, loan3716guarantees, and bonding options to help state DOTs and local project3717sponsors.3718 Above all else, Congress should seek to adhere to the ``user pays''3719principle and do its best to provide our nation with a robust Highway3720Trust Fund.3721 Recent surface transportation laws have not solved the enduring3722Highway Trust Fund dilemma, but the Infrastructure Investment and Jobs3723Act (IIJA) did find a bipartisan solution through the use of advanced3724appropriations to help communities fund critical infrastructure. The3725U.S. infrastructure funding gap is well known, with the American3726Society of Civil Engineers 2024 Bridging the Gap study finding an over3727$3.5 trillion investment gap just to reach of state of good repair3728across all infrastructure modes \7\. However, inflationary pressures3729and rising materials and project costs are forcing communities to cut3730back on their programs. We urge this Committee to continue to work3731together and seek out funding sources outside of the federal fuel tax,3732including the use of advanced appropriations, to ensure the solvency of3733the Highway Trust Fund and to drive economic growth and improve the3734safety of our nation's transportation system.3735---------------------------------------------------------------------------3736 \7\ 2025 Report Card for America's Infrastructure. (2025). American3737Society of Civil Engineers. https://infrastructurereportcard.org/3738economics/.3739---------------------------------------------------------------------------3740 Thank you again Chairmen Graves and Rouzer, Ranking Members Larsen3741and Holmes Norton, and Members of the Subcommittee for the opportunity3742to testify.3743 I look forward to your questions.37443745 Mr. Rouzer. Mr. Tomer.37463747 TESTIMONY OF ADIE TOMER, SENIOR FELLOW, BROOKINGS INSTITUTION37483749 Mr. Tomer. Chairman Rouzer, Ranking Member Norton, and3750members of the Subcommittee on Highways and Transit, thank you3751for the opportunity to testify before you today.3752 My name is Adie Tomer. I am a senior fellow at the3753Brookings Institution here in Washington, DC.3754 I want to start by noting that my remarks today, plus my3755written testimony, strictly represent my personal views and do3756not in any way reflect the views of the Brookings Institution,3757its other scholars, employees, officers, or trustees.3758 This hearing comes at an opportune time. The Highway Trust3759Fund is one of the most powerful fiscal instruments in your3760investment toolbox. Its unique design allows lawmakers to3761approach investment through multiyear cycles, the same approach3762used by the State and local owners of our surface3763transportation network.3764 The trust fund delivers not just funds but certainty, and3765the net effect has been a transformation in how people and3766goods move across America. Said plainly, the trust fund itself3767is a national asset.3768 Still, the trust fund is just a tool. It doesn't3769differentiate between where gasoline and diesel were consumed.3770The trust fund isn't codified to advance any specific economic3771competitiveness goals you may have. It is only there to support3772the execution on your congressional program priorities.3773 This next reauthorization presents another opportunity to3774adopt investment policies that will promote economic3775competitiveness for generations to come.3776 The Highway Trust Fund will continue to be a powerful tool3777to achieve that overarching objective, especially if it is3778coupled with targeted improvements to what it funds and how it3779distributes that funding. I have three high-level3780recommendations to that end.3781 First, it is vital to keep investing more in the network.3782We spend generations building out all our roads and rails, and3783the roadways alone are now worth over $5 trillion, according to3784the BEA. All those facilities interweave to move over 1 billion3785person-trips and over 55 million tons of freight every day. It3786is in our best interest to keep maintaining and modernizing3787that network.3788 Yet, Congress is actually falling short of its past3789commitments. Even with the IIJA money now coursing through the3790system, the share of GDP that Congress spends on highways and3791transit is below the average from 1991 to 2023, and it would3792look even worse if we went back to 1956.3793 Not only is spending falling behind, but significant3794inflation within the construction industry means we have lost3795purchasing power, too.3796 This is a missed opportunity. Per CBO's own research, when3797Federal grants increase, State and local governments actually3798spend more on surface transportation infrastructure, too.3799 Second, it is critical to rethink where and in what the3800Federal Government invests. Multiple sections in chapters 233801and 49 of the U.S. Code have enshrined national goals for the3802country's surface transportation network, including: promoting3803system reliability, improving safety, supporting regional3804economic development, and reducing project delays.3805 Multiple of those areas deserve extra attention, including3806our persistently bad safety record and how Federal compliance3807impacts project delivery timelines.3808 But I want to call particular focus today to our local3809roadway network. Per our recent research at Brookings, 493810percent of locally owned principal arterials--again, these are3811main roadways--are in poor condition, compared to 7 percent of3812mileage on similar State-owned roads.3813 One of the likely causes is fiscal extraction. Even though3814locally owned roads carry 34 percent of all VMT in the country,3815a relative proxy for many of the trust fund's revenues, current3816rules apportion all of their gas tax receipts to States. This3817annual subsidy is hurting system reliability and limiting3818economic development, but more direct regional funding could3819address it.3820 Finally, the Congress should use spending targets and3821programmatic reforms to inform your consideration of new3822revenues.3823 The United States is incredibly fortunate to have the3824fiscal capacity to invest at the scale we need and to have3825access to a range of instruments to reach our spending targets.3826 Just as importantly, the menu of policy responses is well-3827established and thoroughly researched. Vehicle registration3828fees, road user charges, and private financing instruments are3829all viable options alongside established alternatives, such as3830increasing gas taxes or transferring General Fund revenues. The3831challenge is building consensus and selecting fiscal3832instruments that match your goals.3833 I recommend Congress set up a bipartisan working group to3834pool your published knowledge and then use that working group3835to address thorny questions, like tax incidence, compliance3836cost, and spending timelines.3837 To conclude, the trust fund is well suited to channel3838investment dollars. Yet, it would be a wasted opportunity if3839Congress did not couple considerations of new revenue with3840efforts to rethink how the country measures need, who controls3841the funding, and the process by which funding recipients comply3842with Federal rules.3843 Thank you again for the opportunity.3844 [Mr. Tomer's prepared statement follows:]38453846 Prepared Statement of Adie Tomer, Senior Fellow, Brookings Institution3847 Chairman Rouzer, Ranking Member Norton, and members of the3848Subcommittee on Highways and Transit of the Committee on Transportation3849and Infrastructure, thank you for the opportunity to testify before3850you. My name is Adie Tomer and I'm a senior fellow at the Brookings3851Institution. I want to emphasize that my written remarks--plus what3852we'll discuss during the hearing--are strictly my personal views and do3853not in any way reflect the views of the Brookings Institution, its3854other scholars, employees, officers, or trustees.3855 This hearing comes at an opportune time. The Highway Trust Fund is3856one of the most powerful fiscal instruments in the federal government's3857investment toolbox. The Trust Fund's unique design allows federal3858lawmakers to approach investment through multiyear cycles, which is3859exactly what state, regional, and local owners of physical3860infrastructure assets need to plan and invest with confidence. Decades3861of steady use of the Trust Fund's design have helped catalyze3862significant improvements in the country's surface transportation3863network, making a profound impact on how people and goods move across3864America. Said plainly, the Trust Fund is a national asset.3865 At the same time, Congress and the extensive stakeholder community3866know that the Trust Fund needs mechanical improvements. Revenues have3867failed to keep up with outlays for over two decades. Fortunately, the3868menu of policy responses is well established and thoroughly researched.3869Vehicle registration fees, road user charges, and private financing3870instruments are all viable options alongside established alternatives3871such as increasing gas taxes or transferring general fund revenues. The3872federal government has the capacity to shore up the Trust Fund and a3873proven record of doing so.3874 However, deciding on mechanical solutions would be short-sighted if3875not married to candid debate around what kinds of investments the Trust3876Fund should support and the aggregate level of investment the country3877needs. The federal government is already falling behind historic3878investment levels, which has the knock-on effect of reducing total3879state and local investment too. Meanwhile, emerging challenges such as3880a poor roadway safety record should force a fresh look at what national3881goals we're failing to achieve and what kinds of spending would better3882address the performance gaps.3883 As this Committee and your peers take the lead on surface3884transportation reauthorization, you have a profound opportunity to3885adopt investment policies that will create more economically dynamic3886and secure communities for generations to come. The Highway Trust Fund3887is a powerful tool to help achieve that overarching goal, especially if3888coupled with targeted improvements to what it funds and how it3889distributes that funding.3890 Why America needs to continue investing in surface transportation3891 It's important to start with exactly why surface transportation3892matters so much to our economy and society. Every day, all of our3893streets, highways, rail lines, and intermodal facilities accommodate3894over 1 billion trips and move over 55 million tons of freight.\1\ Even3895the country's $526 billion in international goods traded by maritime3896and air freight in 2023 wouldn't be possible without surface3897transportation network links to their local producers and consumers.\2\3898---------------------------------------------------------------------------3899 \1\ Adie Tomer and Ben Swedberg, ``Connecting the DOTs: A survey of3900state transportation planning, investment, and accountability3901practices'', Brookings Institution, 2024. Available online at: https://3902www.brookings.edu/articles/connecting-the-dots-a-survey-of-state-3903transportation-planning-investment-and-accountability-practices/3904[accessed April 2025].3905 \2\ Bureau of Transportation Statistics; see: https://data.bts.gov/3906stories/s/Moving-Goods-in-the-United-States/bcyt-rqmu/3907---------------------------------------------------------------------------3908 Most of that surface infrastructure is publicly owned and a3909testament to the collaborative nature of America's federalist system.3910States predominantly own major roadways such as the federal interstate3911highways, but many also own transit systems, intercity rail, and other3912surface assets. Localities own even more assets, including almost half3913(44%) of the country's federal-aid highway system and the vast majority3914of transit systems.\3\ The Bureau of Economic Analysis values the3915country's government-owned highway and streets structures at $4.943916trillion, and that doesn't even include all the various transportation3917equipment owned by public agencies or other private and public3918transportation structures.\4\3919---------------------------------------------------------------------------3920 \3\ Adie Tomer and Ben Swedberg, ``Highway shakedown: How local3921road users are subsidizing state highway investments'', Brookings3922Institution, 2025. Available online at: https://www.brookings.edu/3923articles/highway-shakedown-how-local-road-users-are-subsidizing-state-3924highway-investments/ [accessed April 2025].3925 \4\ Table 7.1, Fixed Asset Account Tables, 2023, Bureau of Economic3926Analysis3927---------------------------------------------------------------------------3928 While the federal government owns very little of the physical3929network, federal lawmakers have long understood the national imperative3930to invest in other's assets. Multiple sections in Chapters 23 and 49 of3931the United States Code have enshrined national goals for the country's3932surface transportation network, including promoting system reliability,3933improving safety, supporting regional economic development, and3934reducing project delays. National law is clear: The federal government3935should use its fiscal resources to make direct investment in the3936network and induce more investment by state and local peers.3937 That grand investment effort is never complete, though, because the3938network itself will perpetually need improvement and the demands placed3939on the entire system will always change with time. Recent indicators3940underscore just how pressing today's investment needs are, both on the3941network itself and for the households and businesses that depend on it:3942 States successfully built out the interstate highway3943network during the second half of the 20th century, with the Trust Fund3944largely underwriting the effort. Now local roads are suffering; per3945recent Brookings research, 49% of locally owned principal arterial3946mileage--America's major roadways--is in poor condition, compared to 7%3947of mileage on similar state-owned roads.\5\3948---------------------------------------------------------------------------3949 \5\ Tomer and Swedberg, 2025.39503951 Certain transit system components need upgrades to reach3952a state of good repair, including 14% of vehicles and 17% of3953systems.\6\ In total, the U.S. Department of Transportation (USDOT)3954estimates the replacement cost (otherwise known as the ``reinvestment3955backlog'') for transit assets falling below the state of good repair at3956over $100 billion.3957---------------------------------------------------------------------------3958 \6\ U.S. Department of Transportation, see: https://3959www.fhwa.dot.gov/policy/25cpr/pdf/CP25_Full_Report.pdf#page=5339603961 Even after constant focus among government officials at3962all levels, roadway injuries and fatalities are still stubbornly high.3963Fatalities alone increased by nearly 10,000 per year in the decade3964leading up to 2022.\7\3965---------------------------------------------------------------------------3966 \7\ This is as reported by the Federal Highway Administration's39672022 Highway Statistics, and includes data since 1967.39683969 The growing quantity of extreme weather events--which3970keep costing the country more each decade--have begun to impact surface3971transportation assets. The washing away of vital arteries in North3972Carolina, regularly submerged roads in Miami, and melted transit cables3973---------------------------------------------------------------------------3974in Portland, Ore. all demonstrate the need to harden essential assets.39753976 Addressing the country's maintenance needs and contemporary3977challenges requires significant fiscal commitment. The Infrastructure3978Investment and Jobs Act (IIJA) did increase nominal spending, but even3979those funds are failing to keep up with historic averages. When3980comparing nominal federal spending on highways and transit to gross3981domestic product (GDP)--a way to control for economic era--the most3982recent year was below average spending from 1991 to 2023, and even3983worse if looking at averages back to 1956.39843985 Federal spending is especially important because it induces further3986spending by state and local governments, particularly on highways. The3987Congressional Budget Office's research found that ``state and local3988governments reduce their own per capita spending on highway capital by398926 cents for an additional dollar of annual federal formula grants;3990that finding is toward the lower end of a broad range of estimates in3991the existing literature. The rate of substitution decreases as state3992and local governments run larger deficits, such that, all else being3993equal, those governments spend more of their own funds on highways when3994federal grants increase [emphasis added].'' \8\3995---------------------------------------------------------------------------3996 \8\ Sheila Campbell and Chad Shirley, ``Fiscal Substitution in3997Spending for Highway Infrastructure'', Congressional Research Service,39982021. Available online at https://www.cbo.gov/system/files/2021-10/399957430-Fiscal-Substitution.pdf [accessed April 2025].4000---------------------------------------------------------------------------4001 The Highway Trust Fund is a national asset--and a range of revenue4002 sources can support long-term solvency4003 Federal legislators gave future lawmakers a great gift in 1956.4004Establishing the Highway Trust Fund separated many federal4005transportation programs from the annual appropriations negotiations4006that most domestic discretionary spending programs must navigate. For4007the seven decades since then, Congress has continued to use multiyear4008authorizations to deliver the kinds of guaranteed funding that4009complement the capital budgeting approach and lengthy construction4010cycles used by their state and local partners. Passing those multiyear4011authorizations depends on a solvent Highway Trust Fund, meaning there4012are enough available funds with the highway and mass transit accounts4013to cover multiple years of committed federal expenditures.4014 Maintaining a solvent Trust Fund has always required lawmakers to4015closely follow changes in the marketplace and adopt revenue-related4016reforms when necessary. Over the Trust Fund's first five decades, the4017addition of millions of new drivers, the stretching of average trip4018distances, and the dramatic rise in trucking volumes all boosted4019gasoline tax and other revenues that effectively get deposited directly4020into the Trust Fund. Yet even with those market developments, lawmakers4021still needed to increase the gas tax multiple times between 1956 and40221993 to keep up with proposed spending.\9\4023---------------------------------------------------------------------------4024 \9\ ``The Federal Excise Tax on Motor Fuels and the Highway Trust4025Fund: Current Law and Legislative History'', Congressional Research4026Service, 2016. Available online at https://crsreports.congress.gov/4027product/pdf/RL/RL30304 [accessed April 2025].4028---------------------------------------------------------------------------4029 The market patterns and revenue responses shifted in the 21st4030century, but maintaining the investment power of the Highway Trust Fund4031has not wavered. Average trip distances stopped growing at the same4032rate, the rate of new drivers slowed, and greater fuel efficiency all4033led to missing expected revenue targets. The emergence of electric4034vehicles only accelerated the reduction in relative gas tax4035returns.\10\ And while legislators continued to increase nominal4036spending in reauthorizations, they chose not to increase the gas tax or4037adopt new direct revenue sources to make up the revenue-spending gap.4038Instead, Congress chose general fund transfers as their preferred4039method to keep the Trust Fund solvent.\11\4040---------------------------------------------------------------------------4041 \10\ Julie Hotchkiss and Kalee Burns, ``Electric Vehicles,4042Potholes, and Taxes: Who Pays the Price?'', Federal Reserve Bank of4043Atlanta, 2023. Available online at https://www.atlantafed.org/-/media/4044documents/research/publications/policy-hub/2023/07/11/04--electric-4045vehicles-potholes-and-taxes--who-pays-price.pdf [accessed April 2025].4046 \11\ ``Funding and Financing Highways and Public Transportation4047Under the Infrastructure Investment and Jobs Act (IIJA)'',4048Congressional Research Service, 2023. Available online at https://4049www.congress.gov/crs-product/R47573 [accessed April 2025].4050---------------------------------------------------------------------------4051 Relying on general fund transfers has caused consternation among4052many stakeholders, but it's worth recognizing that every decision made4053by past bill authors adhered to the same general principle: The federal4054government is a more helpful investor in surface transportation4055networks when it can tap the multiyear spending authority the Highway4056Trust Fund unlocks. Whether it's general fund transfers, increasing the4057gas tax, or using any number of other fiscal instruments, maintaining4058Trust Fund solvency will always require some level of debate and4059eventual agreement among federal lawmakers.4060 That's exactly where this current Congress now sits as it starts4061the next reauthorization process. Per a January update from the4062Congressional Budget Office, the Trust Fund could easily face a $1804063billion total shortfall over the next five-year authorization.\12\4064Continuing to deliver the scale of investment the country needs--and4065doing so through the Trust Fund model--will require this Congress to4066understand revenue alternatives and consider how those work in4067different combinations.4068---------------------------------------------------------------------------4069 \12\ Highway Trust Fund Accounts, Congressional Budget Office,40702025. Available online at https://www.cbo.gov/system/files/2025-01/407151300-2025-01-highwaytrustfund.pdf [accessed April 2025].4072---------------------------------------------------------------------------4073 We certainly are not short on fiscal instruments to choose from.4074There are multiple proposals circulating to add national vehicle4075registration fees, some of which apply to all vehicles and some of4076which would only apply to electric vehicles. A road user charge, or4077vehicle miles traveled (VMT) fee, is continuing to be tested4078domestically and abroad. The gas tax could easily be raised either as a4079flat amount or through a new indexed system. Lawmakers could adopt a4080targeted sales tax to tap the steady growth in e-commerce. Even with4081inconsistent performance, there are still some individuals asking to4082use even more private financing models to extend the reach of public4083funds. Finally, the general fund will continue to be available. All of4084these alternatives have their merits, and various combinations could4085address long-term revenue needs.4086 Fortunately, there is also no shortage of available research on how4087each of these alternatives work in practice. Industry experts and4088independent researchers can all help you answer critical but thorny4089questions under each. For example:4090 How would each instrument spread tax incidence among4091different households, businesses, and geographies?4092 What are the compliance costs to ensure any new vehicle4093registrations system can minimize fraud and avoid double-charging4094owners vis-a-vis state laws?4095 Road user charges are the ideal instrument for many, but4096what are the realistic timelines to establish a national system and4097what kinds of complementary policies (such as a national ID) are4098necessary to make it work?40994100 I recommend Congress set up a serious, bipartisan working group to4101pool published knowledge, address those thorny questions, and share the4102results with the public. The group's mandate should be narrow: to4103provide unbiased information on how well each revenue instrument could4104support multiyear federal funding for surface transportation. One model4105for this approach would be a more streamlined version of SAFETEA-LU's4106fiscal study commissions. If executed well, the group can help build4107trust among lawmakers--and trust has always been an invaluable4108ingredient in Congress' ability to pass bipartisan surface4109transportation authorizations.4110 Spending policies will continue to determine the Highway Trust Fund's4111 real-world impact4112 The Highway Trust Fund is an invaluable tool for federal lawmakers,4113their state and local counterparts, and the broader transportation4114industry. But it's still just a tool. The Trust Fund itself doesn't4115differentiate between where gasoline and diesel were consumed. The4116Trust Fund isn't codified to advance any specific economic4117competitiveness goals. It's simply there to facilitate execution on4118congressional priorities through formula funding programs.4119 That's why any debate around the Trust Fund's solvency isn't just4120about fiscal mechanics. The first-order questions revolve around4121measuring our progress against established national goals, considering4122what kinds of projects will help address deficiencies, and determining4123where those investments should take place. Answering those difficult4124questions will help to estimate total investment needs and how much4125revenue is needed to fill that gap.4126 I applaud this Congress for initiating conversations to answer4127those first-order questions, including through public hearings such as4128this one. Since this specific hearing is focused on Trust Fund solvency4129and capabilities, there are three specific areas that I recommend4130Congress address:4131 1) Eliminate the local to state subsidy.\13\ From 1956 through the4132end of the century, Congress and the states perfected a system to4133capture revenue from the growing pool of drivers to build highways4134mostly from scratch. The resulting 160,000-mile network is still4135instrumental in promoting goods trade and shortening trip times across4136the country, making that network's maintenance an ongoing national4137priority. Yet while that original build-out was essentially complete in4138the early 1990s, the federal government is still generating tax revenue4139from use of local roads but apportioning almost all spending to the4140states.4141---------------------------------------------------------------------------4142 \13\ Tomer and Swedberg, 2024.41434144 With 34% of national VMT occurring on locally owned roads, the4145current tax-and-spend system is fundamentally unfair to local4146government officials and directly contributes to poor conditions on the4147local roadways that every vehicle uses. Returning some Trust Fund4148resources to localities and their shared regions is both a fairer4149approach and a prudent response to the country's greatest maintenance4150---------------------------------------------------------------------------4151needs.41524153 2) Improve asset management systems.\14\ Congress and state4154departments of transportation (DOTs) deserve enormous credit for the4155success of Transportation Asset Management Plans (TAMPs). Each plan4156must include the state's asset management objectives, measures, and4157targets for asset condition, with a particular focus on the national4158highway system. State DOTs must also include investment strategies--4159based on their analysis and asset management--that would support4160improving asset conditions and achieving performance targets and4161national goals. Since adopted in MAP-21, states are meeting those4162requirements and bringing more accountability to the overall investment4163process.4164---------------------------------------------------------------------------4165 \14\ Ibid.41664167 Congress will be able to stretch the reach of Trust Fund4168dollars if they expand what TAMPs cover. Expanding monitoring to all4169principal arterials will ensure state and federal officials have data4170on all major roadways--enhancing the likelihood they'll prioritize4171investment in roads irrespective of their owner. Federal law could also4172consider setting a ceiling on recommended roadway quality, which could4173help spread spending to more roadway segments each year. Congress can4174reference innovations such as those in Maryland and Minnesota as4175---------------------------------------------------------------------------4176lawmakers consider specific reforms.41774178 3) Manage the tensions between efficiency and compliance. It's4179natural for people of every governing philosophy to apply their own4180distinct views to how the federal surface transportation program should4181operate. Those who are passionate about protecting against waste,4182fraud, and abuse will want to ensure programs have the appropriate4183safeguards and paperwork to match. Those concerned with long-term4184actuarial costs will want project selection to account for4185environmental risk exposure. Those who believe public spending should4186support domestic industries will want to add related elements to4187spending decisions. All these ancillary priorities can easily be4188defended, mostly because there is a moral position underpinning each.41894190 However, lawmakers must be clear-eyed: Every additional4191compliance step creates a greater degree of friction on how quickly4192federal capital can be mobilized to support construction, procurement,4193and other essential activities. The issue is more pressing because the4194transportation industry has faced steep inflation over the past few4195years, which is already limiting the purchasing power of each public4196investment dollar. Federal lawmakers should closely monitor how much4197specific spending rules align with their ambitions for each formula4198spending program.4199 Conclusion4200 The United States has the capacity to keep investing enough in our4201surface transportation network to promote national economic4202competitiveness and security--and the Highway Trust Fund is a well-4203suited tool to channel investment dollars to where they will advance4204such national goals. Yet it would be a wasted opportunity if Congress4205did not couple considerations of new revenue with efforts to reform how4206the country measures need, who controls the funding, and the processes4207by which funding recipients comply with federal rules.42084209 Mr. Rouzer. Well, thank each of you very much.4210 We will now turn to questions from the panel. I will4211recognize myself for 5 minutes for questions.4212 I will start with Mr. Johnson.4213 It was great to be with you back home in North Carolina4214when we went and toured the project you are working on there on4215I-95. And, by the way, I think we have been working on I-954216since I was born.4217 But in any event, talk to us a little bit about the4218importance of trust fund solvency in terms of timelines and4219sustainability, just the importance of keeping projects on4220task.4221 Mr. Johnson. Thank you, Congressman Rouzer, for that4222question, and also for your time in coming to visit with us and4223to our plant and see our paving operations on I-95. It was a4224privilege to be able to do that.4225 So my two biggest concerns as president of Fred Smith4226Company are the safety of our employees and to make sure that4227we have enough work for all of our employees.4228 The Highway Trust Fund in North Carolina provides about 254229percent of the funds needed to fund the DOT road program. So4230that 25 percent is very critical to our company and to our4231employees.4232 The highway industry in North Carolina is sized--the number4233of employees we have and the equipment and resources we have is4234sized to maintain a certain dollar amount spent for the highway4235program. And if the funds were to be reduced and the amount of4236money coming in and available were to be reduced, that would4237severely impact our industry.4238 That would mean that we would potentially have layoffs and4239reduction in workforce, which would be devastating to our4240company and our communities.4241 Also, knowing that that money is there and it is consistent4242and it is sufficient and we know it is coming, allows us to4243invest in our company and invest in our communities, whether4244that be buying and installing, putting up new asphalt plants,4245or buying more equipment, or expanding our offices, hiring more4246employees, be willing to train our employees. Knowing that the4247money is available and it's coming and it's dedicated is4248critical for us to make those decisions.4249 The work we do is extremely expensive. The equipment and4250the materials that we buy cost a lot of money. And with any4251uncertainty if that work will be there to put that equipment4252and those people to work, it makes us question whether we want4253to grow and expand in our communities.4254 So in addition to those, the long-term effects, if we do4255have a slowdown and the workforce shrinks, then when the work4256does come around, if there is more work that comes later, it is4257going to cost more. It is going to take longer, because the4258workforce is going to be smaller. Just supply and demand. If4259there is more work and we have fewer people, then it is going4260to cost more, and the project is going to be delayed.4261 And that is just talking about our company. When you are4262looking at what it means to our communities and the traveling4263public, without having that funding to be able to keep up with4264the demands in our State, whether it be people who live in our4265State or people who just transit through our State, it really4266impacts the mobility, the ride quality. We can't maintain4267roads.4268 So just having the Highway Trust Fund solvent, knowing that4269it is there and that our DOT can plan out the work and know4270that the money, the funds will be available when the time comes4271to build it, that we can count on those jobs being there and4272the opportunities are there, this means so much for our4273planning of our resources and our labor force that when there4274is doubt with our State or with our company, it just makes it4275challenging to grow and to invest.4276 So the renewal of the Highway Trust Fund, it's critical to4277our employees and our communities.4278 Mr. Rouzer. Thank you very much. You covered it well.4279 Mr. Braceras, let me ask you. Utah is a growing State.4280North Carolina is a growing State. How have you traversed the4281pitfalls, all the pros and cons of addressing your issues4282there?4283 Mr. Braceras. Thank you, Mr. Chair.4284 Growth is so exciting, but it is also one of the biggest4285concerns our citizens have, the rate of growth.4286 And Utah is a little--we like to say we are unique, and4287some people might roll your eyes at that. But we are a very4288urban State, believe it or not. We are the seventh most4289urbanized State in the country, because 65 percent of the land4290in Utah is owned by the Federal Government.4291 So we have amazingly beautiful places to go recreate in.4292But our growth is all concentrated on basically what we call4293the Wasatch Front. And what we are seeing with that explosive4294growth is a concern both from the quality of life that4295everybody is experiencing, and congestion has been one of the4296rising concerns.4297 So the ability to plan and get projects ready to go is4298really critical, and that is I think what Mr. Johnson was4299talking about. We all, States, have a 5-year plan of projects4300because it takes a long time to deliver those projects. We know4301for every section of road, we have a plan for every section of4302pavement in our State, every bridge in the State.4303 And if we can deliver those projects when it is needed4304most, we follow the deterioration curve of a pavement, and we4305say, you know what, we could make an investment, a lower cost4306investment at the right time, and we could stretch out the life4307of that roadway.4308 So if we----4309 Mr. Rouzer [interrupting]. I will need to shut you down4310there. I don't want to go too far over time since I am chairman4311and have to keep everybody else in line.4312 But anyhow, thank you. You can weave your answer into some4313other questions when you have a little more time later.4314 Ms. Norton.4315 Ms. Norton. Thank you, Mr. Chairman.4316 Mr. Braceras, under your leadership, the Utah Department of4317Transportation is working to increase ridership on the4318FrontRunner commuter rail line. This transit project will help4319meet the demands of rapid population growth in Utah by4320providing an alternative to driving along a crucial corridor.4321 To do so, the FrontRunner project will need more than $14322billion in Federal capital investment grant funding. Should4323Congress consider bringing the CIG program into the Highway4324Trust Fund to further the program's reliability across surface4325transportation bills?4326 Mr. Braceras. Thank you, Ranking Member Norton, for that4327question.4328 Like we mentioned earlier, the State of Utah is growing4329really fast, and we feel like we have a three-legged stool to4330address our mobility needs. One is, we are still continuing to4331add capacity to the roadways. We need to increase our transit4332usage.4333 And I appreciate you mentioning the FrontRunner project. It4334is one of the most important projects we are working on with4335our partners at Utah Transit Authority, as well as our partners4336at the MPOs.4337 We are trying to take the service--right now, peak-hour4338service is every 30 minutes, and we are trying to get to 15-4339minute peak-hour service. And so that is why we feel very4340positive about our ability to compete in the Capital4341Improvement Grant program to be able to fully fund the4342FrontRunner project, which we think is a critical project for4343the 2034 Olympics that we have coming up.4344 In direct response to your question, ma'am, I think you are4345going to have to look at--if you move it into the Highway Trust4346Fund, something is going to have to give. And right now I think4347we can demonstrate across this country there is more demand,4348there are more needs in the Highway Trust Fund than we can even4349fund right now.4350 So we are comfortable competing with where the CIG program4351is currently today, and we think we are going to be able to4352deliver--well, we know we are going to deliver that project4353prior to 2030.4354 Ms. Norton. Mr. Davis, public transit benefits everyone by4355reducing air pollution, easing congestion for drivers,4356connecting people to essential services, and providing good-4357paying jobs. However, Congress routinely hears calls to save4358money by eliminating the Mass Transit Account from the Highway4359Trust Fund.4360 Why would this fail to solve the Highway Trust Fund's4361solvency problem? And how would it harm transit?4362 Mr. Davis. Thank you, ma'am.4363 Traditionally, there was a traditional rural bias in the4364highway program from day one back in 1916. Urban highways used4365to be illegal under Federal law till about 1944. They couldn't4366use Federal money. And the rural bias of the program still4367exists to some extent because you got to have roads through a4368long stretch of nowhere that connect big city A to big city B.4369 The highway guys resented, I believe, mass transit, letting4370them into the system originally, because the program as it was4371in the 1970s and 1980s was much more about the 10 or so big4372legacy cities that had existing rail systems.4373 Since then, under Senator Shelby in particular, the transit4374system has branched out a lot, a lot more emphasis on transit4375in midsize and smaller cities, rural bus service, things like4376that, trying to deliver more specific usability to rural areas.4377 But the fact that political parties have gotten polarized,4378and population density is now as good a metric as you can find4379for political polarization, hasn't really helped things. But4380regardless of why people may have been opposed to mass transit4381out of the trust fund in the first place, the fact is that4382outlays have grown so great now that it wouldn't fix things.4383 On page 9 of my testimony, I did a hypothetical where if4384you threw mass transit and motor carrier safety and highway4385safety out of the trust fund and then went through just4386highways and got rid of all the congestion relief, Green New4387Deal stuff, alternatives, bike paths, anything, you are still4388$9\1/2\ billion short in 2026 of having the Federal Highway4389Administration by itself sufficient on the entire existing4390system of taxes.4391 So the days of when throwing the nontraditional, noncore4392highway programs out would have balanced things have long since4393passed us by.4394 Ms. Norton. My time has expired.4395 Mr. Rouzer. Mr. Crawford.4396 Mr. Crawford. Thank you, Mr. Chairman. I appreciate you4397conducting this hearing today.4398 Thank you to the witnesses here, as well.4399 As we all know, electric vehicles are notoriously heavy by4400comparison to the combustion engine vehicle counterparts. As we4401have seen over the last several years, the production of EVs is4402continually rising, resulting in more on the road. So more on4403the road means more wear and tear on our infrastructure.4404 And I am all for vehicle choice, and I wouldn't tell4405someone what car they can or can't purchase. But I have some4406concerns about the fact that currently there is no model for EV4407owners to pay into the trust fund that actually pays for the4408wear and tear imparted on those roads. And I think we just4409can't sustain that level of fatigue. It is unfair to the rest4410of the drivers who continue to pay into that system.4411 So I wondered if you could speak on how having EV owners4412pay their share into the Highway Trust Fund can address that4413discrepancy.4414 Mr. Braceras, we can start with you if you want to weigh4415in.4416 Mr. Braceras. Yes.4417 So going back to 2003, 2004, the Utah Legislature was4418asking this same question, and that is when the legislature4419made a decision that we wanted to proceed forward with finding4420a way to implement a road usage charge, and it was about the4421principle of fairness.4422 And so we have been doing pilots over the years. In 2020,4423we did launch our road usage charge program. And the way this4424was done was the legislature imposed a $140 a year fee--4425registration fee, we will call it--on electric vehicles. And if4426they chose to participate in the road usage charge program--so,4427choice--then they could waive that fee, and they would be4428charged on the actual miles that they drove.4429 The marketing slogan we used at the time, because we were4430worried if people would participate, was: if you drive less,4431you pay less. And we capped it at the $140, that maximum fee.4432 Mr. Crawford. I have got to tell you, that is a real4433bargain, $140 on the front end versus what they would pay, what4434gas burners are paying, diesel burners are paying. That seems4435like everybody would be jumping out there and saying, ``Yes,4436sign me up.''4437 Mr. Braceras. Yes. If I may, Mr. Chairman.4438 It is, we figure, about $100 less than what a gasoline4439operator would pay for that same usage.4440 Mr. Crawford. Wow. I don't know how you arrived at that4441number necessarily, but it seems like a heck of a bargain for4442EV users to be able to pay at that low rate on the front end.4443But that is something that we can discuss.4444 I guess another concern that I have is, Mr. Braceras, you4445stated in your testimony the privacy component to implementing4446the user-pay system and how important it is for ensuring4447privacy safeguards. We all talk about that, privacy, but guess4448what? We are all carrying these around [indicating cell phone].4449These are the transponders that mark everybody in the room at4450any given time.4451 And so, we are having the conversation about, ``Well, I4452want to safeguard my privacy,'' and yet, we are walking around4453having that conversation while we have got one of these4454[indicating cell phone]--or two--in our pockets at any given4455time.4456 So how do we balance that? I fully get it. I serve on the4457Intel Committee. I get the risk associated with that, sharing4458data with various entities. How do we bridge that gap, number4459one?4460 Number two, if we are talking about vehicle-miles traveled,4461how do we do it in a way that is conscious of the fact that it4462could create a cash flow problem? Because right now, we pay as4463we go. User pays, yes, the current model, we pay as we go. So4464we don't really feel it.4465 But if we are paying that, vehicle-miles traveled after the4466fact as we go in to register our vehicles, now we are talking4467about for working folks you are going from maybe $65 in some4468States to register your vehicle to maybe $1,600, because now4469you are paying for the miles in arrears.4470 How are we going to address that?4471 Mr. Braceras. Well, one of the things that we are doing if4472you opt into our road usage charge program, we can do it by4473monthly payments.4474 And to touch on privacy real quick, there is a different4475standard between the way the public looks at privacy with a4476private company, my phone company, versus the way people think4477of Government. You would think we would trust our Government4478more, but that is not the case.4479 So, we think it is really important to always lead with4480privacy, talk about your principles, and talk about how you are4481going to protect it, how important that is.4482 Mr. Crawford. Thank you. I appreciate that.4483 I have got a lot of other topics I would like to address,4484but I have only got 30 seconds. So, I am going to give you that448530 seconds back, Chairman.4486 Mr. Rouzer. I thank the gentleman.4487 Mr. Johnson, you are recognized.4488 Mr. Johnson of Georgia. Thank you, Mr. Chairman, and also4489Ranking Member Norton, for convening this hearing, and thank4490you to the witnesses for your testimony.4491 Every day, Americans are stuck in traffic, stranded by4492failing transit, and forced to risk their safety on crumbling4493roads and bridges. When local roads are ignored, it's not the4494powerful who feel it first; it's the working class, the people4495who can't afford a second car or a detour, who feel it first.4496 We were promised an administration that would put people4497first, and instead, the American people received cuts to4498funding, chaos, and complete disregard for the rule of law.4499That neglect continues to leave bridges collapsing, buses4500breaking down, and opportunities out of reach.4501 But it didn't just start 100 days ago. The Grover Norquist4502``no new tax'' pledge, called the Taxpayer Protection Pledge,4503has been in force since 1986. And since 1990, the majority, the4504overwhelming majority of Republicans in Congress, most of whom4505have signed on to that Taxpayer Protection Pledge, have refused4506to vote for a tax increase.4507 So, in 1993, when the Highway Trust Fund increased to 184508cents a gallon for the gas tax, most Republicans voted against4509it. And they have continued to vote against it each and every4510time there has been an opportunity to increase it. And so that451118 cents per gallon was not indexed to inflation, so the money4512is being eaten up. And that is what is causing our roads and4513bridges to crumble.4514 And so now we have a proposal to produce some revenue into4515the Highway Trust Fund by charging EV owners a $200-a-month4516assessment, which--I am not disagreeing with that. I think the4517EV owners should pay into the system.4518 But I wonder whether or not Grover Norquist is going to say4519that that is a tax increase, and if he does--the same way he4520has said that increasing the Highway Trust Fund is a tax4521increase and he is opposed to it--my friends on the other side4522of the aisle will be opposed to it also. And then we will4523continue--while cutting taxes for the top 1 percent in this4524country, we will continue to see our roads and bridges4525crumbling because we are failing to invest.4526 We know what smart investment looks like. It means giving4527communities the certainty to plan not just for the next4528election, but for the next generation. It means ensuring local4529governments aren't left to fight for scraps and that cleaner,4530smarter transportation is part of the solution, not an4531afterthought.4532 The future of our transportation system and the strength of4533our economy depend on it.4534 Mr. Tomer, the Department of Transportation recently sent a4535letter to grant recipients warning that it could pull Federal4536funding from cities and States that don't align with its4537interpretation of immigration enforcement or antidiscrimination4538laws.4539 In practice, that means that if a community limits4540cooperation with ICE or if DOT deems a local policy--DEI:4541diversity, equity, and inclusion--discriminatory, it could lose4542access to critical infrastructure funding for roads, bridges,4543and transit systems. This raises serious concerns.4544 Mr. Tomer, how effective is it to tie transportation4545funding to these kinds of legal and political debates?4546 Mr. Tomer. I appreciate the question, Representative.4547 I can't speak to the politicization of some of this, and I4548am certainly not an immigration lawyer. What I can speak to in4549an apolitical way is that delivering on projects and, as I4550mentioned in my opening statement, the certainty that the4551Highway Trust Fund promotes is good for economic development4552for communities of all kinds----4553 Mr. Johnson of Georgia [interrupting]. Yes, but my question4554has to do with these extraneous requirements having nothing to4555do with transportation impinging and preventing transportation4556projects from being funded. It's wrong, isn't it?4557 Mr. Tomer. I can't speak to what the----4558 Mr. Johnson of Georgia [interrupting]. Well, let me ask Mr.4559Burkhard.4560 What do you have to say about it, sir?4561 Excuse me for interrupting, Mr. Tomer. I am running out of4562time.4563 Real quick, Mr. Burkhard.4564 Mr. Burkhard. Yes. I would say that transportation programs4565are funded by the Highway Trust Fund and are bipartisan4566programs, and Congress' continued support for them showcases4567how invaluable they are in improving our transportation.4568 Mr. Johnson of Georgia. Okay. So everybody is afraid to4569cross Donald Trump. I get it.4570 But thank you all for your appearance today, and I yield4571back.4572 Mr. Rouzer. Mr. Webster.4573 Mr. Webster of Florida. Thank you, Mr. Chairman, for having4574this meeting. And it is certainly a timely subject, probably4575the most important one we are addressing.4576 So, Mr. Johnson, you talked about some of the proposals4577that are out there. How would you approach the various funding4578proposals we have had before us regarding Highway Trust Fund4579solvency?4580 Mr. Johnson. Could you repeat the question again?4581 Mr. Webster of Florida. Well, I will try to. I might have4582forgotten what it was.4583 So, we have a lot of proposals out there regarding the4584funding of transportation and the future of it. So how would4585you approach the solvency of the transportation fund? How would4586you do that?4587 Mr. Johnson. Well, thank you for that question.4588 The asphalt industry supports anything that allows the HTF4589to retain its financial stability. We are agnostic to what4590particular method it is.4591 The four that I laid out earlier that we have mentioned4592are: raising the gas tax, fees for EV fees, vehicle-miles4593traveled, or the tiered weight fees. Any four of those we would4594be acceptable with.4595 Mr. Webster of Florida. So, you are not wed to any4596particular proposal then, right?4597 Mr. Johnson. No, sir. Anything that adds funds so that we4598can perform more of the work that we do for our communities, we4599are for it.4600 Mr. Webster of Florida. Great.4601 So, Mr. Burkhard, how would you, kind of, approach a--if we4602had an infrastructure bank--which we don't have, but if we did,4603a Federal infrastructure bank--it leverages only private money;4604no tax dollars in it--could you see that enhancing the funding4605of the infrastructure of this country?4606 Mr. Burkhard. Yes. I believe an infrastructure bank could4607be used to supplement a lot of the current funding tools. As4608Mr. Johnson alluded to, there are many methods that,4609collectively, can help fund our transportation improvements,4610and we see that infrastructure bank is a good option.4611 And it also could signal the Federal Government's openness4612and commitment to working with the private sector and would4613also provide a clearinghouse that could attract eligible other4614private financing.4615 So we see the infrastructure bank as one of many potential4616solutions to address the funding challenges.4617 Mr. Webster of Florida. Thank you so much.4618 I yield back.4619 Mr. Rouzer. Ms. Brownley.4620 Ms. Brownley. Thank you, Mr. Chairman.4621 Mr. Chairman, I have been a member of the House4622Transportation and Infrastructure Committee since 2015, and in4623the over 10 years that I have served on this committee, we have4624had several hearings about the need for long-term funding4625solutions for the Highway Trust Fund.4626 In those 10 years, we have passed two prior surface4627transportation authorization bills, the 2015 FAST Act and the46282021 IIJA, and in both of these bills, we were forced to rely4629on general revenue transfers to shore up the Highway Trust4630Fund.4631 But it is not just the last two surface transportation4632reauthorizations that relied on this mechanism. As we have4633heard in testimony today and many times before, Congress has4634not raised the gas tax since 1993, which is the primary source4635of revenue for the Highway Trust Fund, and the revenues coming4636into the trust fund have not kept pace with outlays since 2001.4637 But here we are again, having the same conversation about4638the problem, while the House Ways and Means Committee, which4639has jurisdiction over the revenues, has been unable to come up4640with a solution. So, I really wish we were having a joint4641hearing with Ways and Means. It might be more productive.4642 Another alternative that I think we should consider is a4643change to the House rules to give the House Transportation and4644Infrastructure Committee jurisdiction over the revenue piece of4645the Highway Trust Fund. Maybe then we could really make some4646headway on a long-term solution.4647 Until we find one, it seems we may be doomed to repeat the4648same hearing every couple of years like the movie ``Groundhog4649Day'' where nothing ever changes until we flip the script and4650make radical, positive changes.4651 Yesterday, I went on the House Ways and Means website and4652searched for the words ``Highway Trust Fund'' to find the date4653of their last hearing on this subject. Would you be surprised4654to know that the search returned not a single result?4655 Does anyone know when the last time was that the House Ways4656and Means Committee had a hearing focused specifically on4657Highway Trust Fund? I am asking any of you who are testifying4658here today.4659 Mr. Davis. There was one around 2004, I think.4660 Ms. Brownley. And what did they conclude?4661 Mr. Davis. They wound up not recommending a significant4662rate increase, although there was some weird stuff with the way4663the ethanol was taxed. They found things around the edges and4664found some extra dollars for the trust fund, much of which4665wound back up in Bill Thomas' district as earmarks.4666 Ms. Brownley. Well, thank you. I don't think that--I think4667my opinion, my argument here, still stands pretty firm, but I4668will move on.4669 So, Mr. Braceras, I appreciate your testimony noting the4670importance of the Olympics, and understanding both your State4671and my State--I am from California--are both anticipating a4672great, great Olympics.4673 But my question to you is, have you had any discussions4674with the city of Los Angeles, the State of California, with4675regards to awareness that the Federal Government needs to pitch4676in here, understanding that I think both in Salt Lake City4677ahead of the 2002 Olympic Games and in Atlanta ahead of the46781996 Games the Federal Government certainly provided resources4679to ensure that we had success with the Olympic Games?4680 So have you had any further conversations with Los Angeles4681with regards to upping the awareness around this issue?4682 Mr. Braceras. Yes, ma'am, we have. We all talk together, us4683transportation geeks, and so we talk and leverage what we4684learned in 2002. We have shared that with Los Angeles and with4685the transit districts there as well. And we are going to4686certainly have some folks on the ground there during the Games4687to learn as well.4688 So we go back and forth. It is a good conversation.4689 Ms. Brownley. So are you getting any positive feedback from4690the Federal Government with regards to additional funding to4691support the Games?4692 Mr. Braceras. I know my delegation, the Utah delegation, is4693very interested in helping Utah prepare for the 2034 Games. And4694when we think about preparing it, we don't want to build4695projects just for the Games. We look at the Games as an4696operational event.4697 So we are going to look to the Federal Government for4698support on things like security. We are going to have to bring4699in a lot more transit vehicles, buses mostly. And so we look4700for that support from the Federal Government. We received it4701prior to 2002, and we expect to be successful going forward.4702 Ms. Brownley. Thank you.4703 I yield back, Mr. Chairman.4704 Mr. Rouzer. Mr. Babin.4705 Dr. Babin. Thank you, Mr. Chairman. Appreciate the hearing4706today. And I am honored to be seated here on this esteemed4707committee for another important round of surface transportation4708reauthorization.4709 I am also glad that we are discussing the Highway Trust4710Fund, the continued solvency of which is absolutely critical to4711the longstanding health of our Nation's roads and highways and4712bridges going into the future.4713 But--and my friends on the committee who have been here a4714while know this--I am very concerned that my home State of4715Texas is continuing to pay more than their fair share, more4716than they get out of it. Texans receive a paltry 84-percent4717rate of return on Highway Trust Fund programs, meaning that for4718every dollar the State puts in, they only get 84 cents back.4719 Mr. Chairman, I look forward to working with you and my4720other colleagues on this committee on the dais to try to4721correct this issue.4722 With that said, I will move into my questions.4723 Mr. Burkhard, you note in your testimony that rural4724residents in States like Georgia and Maryland would end up4725paying less under a mileage-based user fee as compared to the4726current gas tax.4727 Could you explain why a mileage-based fee works better for4728rural communities?4729 Mr. Burkhard. Yes. Thank you for your question,4730Congressman.4731 Many folks in the rural communities have vehicles that have4732lower gas mileage--lower than, in some cases, 20 miles per4733gallon. And so they pay quite a bit more in comparison to more4734efficient vehicles, which tend to be people that are living in4735suburban or urban communities. And so that is where the cost4736differential happens.4737 And, interestingly, this is part of what we are finding in4738working with States on their mileage-based-user-fee pilots, is4739that education is essential to these programs to ensure that4740people understand the result of the mileage-based user fee.4741 Dr. Babin. Thank you.4742 And just a followup: How can Congress act to make sure that4743a mileage-based fee does not overburden our trucking industry,4744who collectively log thousands of miles driven?4745 Mr. Burkhard.4746 Mr. Burkhard. Can you repeat the question, please?4747 Dr. Babin. How can Congress act to make sure that a4748mileage-based fee does not overburden our trucking industry,4749who drives thousands of miles?4750 Mr. Burkhard. Absolutely. Absolutely. Yes, a tiered program4751that would address the weight of vehicles is what the mileage-4752based-user-fee pilots are looking at, and so making sure that4753that fair share is attributed as the vehicles put wear on the4754transportation system. That is how we would feel that should be4755approached.4756 Dr. Babin. Okay. Thank you.4757 And, Mr. Braceras, I am also concerned with the redtape4758surrounding the deployment of projects in our rural areas. Do4759you see any opportunities to streamline Federal requirements4760tied to Highway Trust Fund dollars that would help rural State4761departments of transportation to deliver projects more4762efficiently and cost-effectively?4763 Mr. Braceras. Thank you for the question.4764 Dr. Babin. Yes, sir.4765 Mr. Braceras. Absolutely, there are always opportunities to4766improve and streamline the way we deliver our projects.4767 We work closely with our local governments, and we actually4768provide the technical expertise to help our governments deliver4769those projects.4770 Now, other examples that we utilize is, where a local4771government may want to do the project on their own, we do an4772exchange for Federal dollars. So we will exchange 85 cents on4773the dollar, and the local communities then can have the4774flexibility to execute their projects the way they want. They4775feel it is much more effective, and they can deliver those4776projects faster.4777 So that is one tool that we utilize in Utah on an ongoing4778basis.4779 Dr. Babin. I gotcha. Thank you.4780 Mr. Chairman, I yield back.4781 Mr. Rouzer. Mr. Garcia.4782 Mr. Garcia of Illinois. Thank you, Mr. Chairman and Ranking4783Member, and, of course, all the witnesses here today.4784 It is clear that the Highway Trust Fund status quo is no4785longer viable. The billions of dollars that Congress has4786transferred from the General Fund to the Highway Trust Fund4787since 2008 tells us as much.4788 All Americans are subsidizing driving, whether they4789actually drive or not. And what have we received in return?4790Lots of bad stuff. Traffic and congestion. According to INRIX,4791a transportation analytics company, the typical U.S. driver4792lost 43 hours in traffic in 2024.4793 Our communities also suffer from heavy pollution. The4794American Lung Association estimates that 46 percent of all4795Americans are living in places that get failing grades for4796unhealthy levels of ozone or particulate matter.4797 People of color and people with lower incomes4798disproportionately live in areas affected by higher levels of4799air pollution, leaving them vulnerable to respiratory diseases,4800heart disease, and adverse birth outcomes.4801 But despite all these facts--worsening traffic, public4802health risks, and environmental injustice--Congress continues4803to prioritize highway spending over public transit via the 80-480420 split--that is, 80 percent for highways and 20 percent for4805public transit. It is a funding paradigm that is outdated and4806unresponsive to the needs of local communities.4807 I am a big supporter of increasing funding for public4808transit and getting on par with highway spending.4809 Mr. Tomer, as you point out in your testimony, the USDOT4810estimates that the reinvestment backlog of transit assets4811falling below the state of good repair is over $100 billion.4812The backlog ranges from transit vehicles like buses and4813railcars to system components like train signals.4814 How would shifting the funding split in the Highway Trust4815Fund towards public transit help transit systems address the4816reinvestment backlog and improve their service?4817 Mr. Tomer. Yes, Representative Garcia, thank you for the4818question.4819 The Congress has been really clear over the past few4820decades that, as we have finished the grand project that was4821building out the national interstate system--and bundled under4822the formal ``National Highway System'' moniker, right, which my4823colleague Mr. Davis spoke about--and this original fiscal4824system we set up was, in fact, capturing user fees from all4825users, because that National Highway System--it didn't exist4826yet, right? We had to pool this money. The States were the4827right entity to give it to to build out that network.4828 Now that that network has been built, the Congress,4829particularly since 1991 with Senator Moynihan and other4830leadership, have been looking for different ways to offer4831flexibilities, both to States, to other potential recipients,4832those who work directly with the States to think about4833different flexibilities, and that is inclusive of transit.4834 What I think you are raising, and both with the FTA's own4835conditions assessments, frankly, sister data, if you will, from4836the Federal Highway Administration, is that we need to think4837differently about investments particularly in regions and4838localities, giving them flexibilities to make the investments4839that work right for them.4840 We know even in the State of California, right, there is4841only so much real estate left to build, and, in fact, we need4842to build, kind of, better in the locations where people already4843live and think differently about how people move around.4844 So it is not just that there is this backlog of investment.4845I think the Congress has been clear about giving those4846flexibilities, and investing more in transit is clearly one of4847those areas where the need exists.4848 Mr. Garcia of Illinois. Thank you for that.4849 Next, I would like to briefly discuss a proposal to have4850EVs pay into the Highway Trust Fund. My Republican colleagues4851are pursuing a punitive fee of $200 on EVs as part of4852reconciliation. That is despite the fact that the average4853passenger vehicle paid $82 into the Highway Trust Fund last4854year.4855 Mr. Davis, what amount would you recommend setting an EV4856fee that does not tax drivers unfairly based on the kind of4857vehicle that they choose?4858 Mr. Davis. Based on the statistics the Federal Highway4859Administration published a couple of months ago, the 20234860averages, the average short-wheelbase vehicle, under 1124861inches, paid about $80 in gasoline taxes, and the average long4862wheelbase, sort of the bigger truck or an SUV, van, paid about4863$112, so about a $90-a-year average.4864 As Mr. Crawford mentioned, there is a weight differential4865for EVs, particularly on the heavier end. You could maybe juice4866that up to have EVs pay a bit more. But $200 a year seems a4867little more than the average ICE vehicle, plus that weight4868differential Mr. Crawford was talking about. So it is not4869ridiculously out of proportion, but maybe a little bit more.4870 Mr. Garcia of Illinois. Thank you.4871 Mr. Chairman, before I yield back, I seek through unanimous4872consent to submit a letter for the record from the CHARGE4873Coalition detailing how a $200 EV fee is harmful on consumers4874and fails to address the solvency issues with the Highway Trust4875Fund.4876 Mr. Rouzer. Without objection.4877 [The information follows:]48784879 Letter to Hon. Sam Graves, Chairman, and Hon. Rick Larsen, Ranking4880Member, Committee on Transportation and Infrastructure, from the CHARGE4881 Coalition, Submitted for the Record by Hon. Jesus G. ``Chuy'' Garcia4882 Dear Chairman Graves, Ranking Member Larsen and Members of the4883House Committee on Transportation and Infrastructure:4884 As a unique coalition of advocates focused on industry, health,4885energy, transit, consumer, environmental, accessibility, and clean4886technology advocacy, we are writing to urge Congress to oppose any4887proposal to include new fees on Americans with electric vehicles (EVs)4888in the federal budget reconciliation process. Using the budget4889reconciliation process to impose new fees on drivers circumvents the4890important role of bipartisan discussion in the Surface Transportation4891Reauthorization process and undermines stated priorities to support the4892``user pays'' principle.4893 The Highway Trust Fund has been unsustainable for far longer than4894electric vehicles have been on the road in any meaningful numbers. The4895federal gas tax has not been increased since the 1990s. Inflation,4896increases in construction costs and improved efficiency of the internal4897combustion fleet have caused the Highway Trust Fund to be reliant on4898general fund infusions since 2008. To reach sustainability, Congress4899should examine how all drivers, including EV drivers, contribute to it.4900That conversation must occur during a bipartisan Surface Transportation4901Reauthorization process, not within a partisan reconciliation.4902 EV drivers should contribute to the transportation system's upkeep4903and efficiency, but current proposals, including an annual $2004904registration fee, are neither fair nor appropriate. While individuals'4905use of the transportation system varies, the average fuel consumption4906per light duty vehicle in 2023 was 447 gallons.\1\ At the current4907federal gas tax rate of 18.4 cents per gallon, the average light duty4908vehicle would have paid only $82.25 in federal taxes to federal trust4909funds that year. Combined with state EV registration fees, which are4910similarly high compared to state gas tax revenues per user,\2\ EV4911drivers would be paying disproportionate and discouragingly high taxes4912under such a proposal. This annual fee structure for electric vehicles4913would not solve the revenue gap in the Highway Trust Fund. Adding4914additional barriers to EV adoption places an undue burden on American4915consumers and companies who are already facing rising prices on4916vehicles across the board.4917---------------------------------------------------------------------------4918 \1\ FHWA Highway Statistics Series 2023, Table VM-14919 \2\ Atlas Public Policy, EV drivers in 36 states pay a surplus of4920fees each year4921---------------------------------------------------------------------------4922 The undersigned respectfully urge Congress to reject the inclusion4923of EV fees in any reconciliation package, and instead advocate for a4924fair and transparent approach to policy development through Surface4925Transportation Reauthorization.4926 Sincerely,4927Alliance of Nurses for Healthy Environments.4928Ample.4929CALSTART.4930Center for Biological Diversity.4931Clean Fuels Michigan.4932Coltura.4933Drive Electric Dayton.4934Earthjustice Action.4935East Metro Strong.4936Ecology Center.4937Environmental Defense Action Fund.4938Environmental Law & Policy Center.4939EVHybridNoire.4940Fresh Energy.4941Forth.4942GreenLatinos.4943Health Care Without Harm.4944It's Electric, Inc.4945League of Conservation Voters (LCV).4946Michigan Energy Innovation Business Council.4947Mobilify Southwestern Pennsylvania.4948Native Sun Community Power Development.4949Natural Resources Defense Council.4950Plug In America.4951Project Green Home.4952Public Citizen.4953Respiratory Health Association.4954Sierra Club.4955Southern Environmental Law Center.4956Southwest Energy Efficiency Project.4957Texas EV Alliance.4958Transportation for America.4959Union of Concerned Scientists.4960ZETA.49614962 Mr. Garcia of Illinois. Thank you.4963 I yield back.4964 Mr. Rouzer. Mr. LaMalfa.4965 Mr. LaMalfa. Thank you, Mr. Chairman. Appreciate it.4966 Mr. Davis, I have a couple questions for you.4967 On your history with the Highway Trust Fund and research,4968what do you see are the turning points that have led us to this4969current structural deficit we have? And--well, let's go from4970there, please.4971 Mr. Davis. The first turning point was so slow that I4972didn't notice it really until a couple years ago, that back in4973the glory days, the 1950s and 1960s, VMT, the amount driven,4974was increasing by 4\1/2\ percent per year on average. That is4975higher than inflation. Then that started to change in the 1980s4976and then again in the early 2000s, so now it is only increasing4977by less than one-half of 1 percent a year.4978 So, even if you stopped selling EVs tomorrow----4979 Mr. LaMalfa [interrupting]. One-half of 1 percent a year of4980increased miles?4981 Mr. Davis. VMT. And so, even if you stopped selling EVs and4982gasoline mileage stayed right where it is, that is the most4983that gas-tax receipts could go up without a rate increase, is4984about one-half of 1 percent per year.4985 And then, starting after the OPEC embargo and then Iran,4986the mileage kept getting better and better, so fewer gallons4987per mile. And then, finally, the last few bills, starting in49882005, have intentionally increased spending greater than4989anticipated revenue. So we are--three separate things.4990 Mr. LaMalfa. The whole full-court press that we have heard4991from Government and from different entities is that we want4992people to drive more efficient vehicles.4993 And so what is the reward in that? Are you using less gas?4994But then now Government looks at it like, well, you are not4995using enough gas, you are not generating enough tax. So, what4996is the catch?4997 Mr. Davis. It made sense as a matter of energy policy after4998OPEC and then environmental policy to encourage that. But4999people didn't realize until it was too late that you had5000Federal energy and environmental policy at loggerheads with5001Federal highway finance policy, which was based on the number5002of gallons sold. And no one put it together until it was too5003late, apparently.5004 Mr. LaMalfa. Yes. Okay.5005 And we were talking about rural areas a little bit and5006people who might have lower mileage vehicles because they need5007four-wheel drive or they are doing the types of jobs and such5008in agriculture or mining or timber or things like that.5009 So, aren't they still paying at the pump a proportionate5010amount to what they drive? I mean, the worse the mileage is,5011the more you are going to pay, right?5012 Mr. Davis. Yes, sir. That is correct.5013 Mr. LaMalfa. Okay.5014 So, expand on how the electric vehicles are playing a role5015these days in lack of revenue.5016 Mr. Davis. Well, currently, EVs don't pay any taxes to the5017Highway Trust Fund, and----5018 Mr. LaMalfa [interrupting]. Yet, a minute ago, we heard it5019called it is a punitive tax to put any kind of tax on it. What5020do you think about that?5021 Mr. Davis. You can argue the level, but EVs should be5022paying something if you are going to continue the user-pay/5023user-benefit system. That philosophical decision needs to be5024made, whether to continue user-pay/user-benefit or move on to5025something else. Because if you continue user-pay, that limits5026the universe of new revenue sources you can find to highway and5027transit users.5028 But if you are going to continue user-pay, EVs should5029definitely pay something. It just becomes a question of what5030level and how to collect it.5031 Mr. LaMalfa. It would seem so, yes.5032 So, how much heavier is an EV vehicle compared to, let's5033say, the same size of car that is not EV?5034 Mr. Davis. It depends on--it is really bad on the truck and5035SUV side. The Ford F-150 Lightnings and those Hummers are5036several thousand pounds heavier than their equivalents. But on5037the smaller car end, it is not so much.5038 I remember at one point the Chevy Volt, or Bolt, whichever5039it was----5040 Mr. LaMalfa [interposing]. Yes.5041 Mr. Davis [continuing]. Had the exact--had, within 505042pounds, the same weight and wheelbase as the Corvette. And if5043you drive a Corvette the way God meant you to drive a Corvette,5044you are using a lot of gallons of gas, but the Bolt could5045follow that behind there at the same speed and pay nothing.5046 So, that was my old example of why EVs should pay5047something.5048 Mr. LaMalfa. God bless America on that, right?5049 What do you see--well, I want--there has been a lot of talk5050about this vehicle mileage tax, and I am greatly concerned5051about the methods that it will be collected.5052 What do you see, Mr. Davis, is going to be the actual5053collection and tracking method that is most likely to be used?5054 Mr. Davis. I continue to worry about the administrative5055costs, because, right now, the gas tax is so easy to collect5056because it is collected at the refinery or tank farm.5057 Mr. LaMalfa. Yes.5058 Mr. Davis. 1,300 points of collection versus 285 million5059registered auto vehicles.5060 The IRS still hasn't considered how much they are going to5061have to invest in manpower and technology to implement such a5062tax, and it would not be quick to implement.5063 Mr. LaMalfa. Exactly. That is my concern, is that you are5064going to create a whole new bureaucracy to chase people around5065on their mileage they put on each one of their vehicles,5066versus, when you pay at the gas pump, the system is already5067there to do it. So, why do we want to do that?5068 And then I wonder how intrusive it is to be tracking5069people's mileage. Are we going to end up with those little5070bing-bong things that you drive through the tollgates? Are we5071going to have GPS on there tracking people, where they go and5072what they do?5073 What do you see on that?5074 Mr. Davis. The time is up, but you can do it that way, or5075you can just do an odometer measure once a year, which is not5076intrusive at all. So, there are a variety of ways to implement5077a fee.5078 Mr. LaMalfa. Yes, all right. And certainly not invading5079people's privacy on that.5080 So, thank you, Mr. Chairman. I yield back.5081 Mr. Rouzer. Mrs. Sykes.5082 Mrs. Sykes. Thank you, Mr. Chairman and Ranking Member, for5083holding this meeting. Obviously, this is a lively topic, and I5084am glad to be a part of it.5085 So, I am just going to kind of jump right into it, because5086we have been talking about the solvency, or lack thereof, of5087the Highway Trust Fund, and we have seen that the expenditures5088have exceeded the revenue, which obviously is a problem, and5089this trend has continued over several decades. And for5090communities without State resources to make up for these lost5091funds, like many of the communities I serve, this would be5092devastating.5093 Ohio has certainly received billions of dollars from the5094Highway Trust Fund, and we host millions of travelers that come5095through our State using our very robust highway system. And our5096ability and our--the fact that we are centrally located allows5097for us to welcome all of these visitors, but not without5098additional costs.5099 So, I have heard a couple of solutions here over the months5100that we have been preparing for this conversation, including5101increasing the gas tax, for short; adding a new tax to EVs and5102hybrids; and creating a mileage-based user fee.5103 And I think I want to focus our conversation back on the5104people who are going to be impacted by all of those decisions5105the most, the American public. Because between the tariffs on5106vehicles that change in the blink of an eye--that might even be5107changing today--the cost of living that has not been addressed5108as promised, my constituents just don't have the money to pay5109more in gas taxes. And the cost of owning a car seems like it5110is going to not be a reality for many individuals, between the5111tariffs, the uncertainty, and increasing whatever costs might5112come about by these discussions.5113 So I just want to ask the panel, and I will start to my5114left: How do you justify increasing this? What would you say to5115me as I go back to my community and say, these are the options5116on the table, after you are currently struggling to pay your5117bills, in order to pay for this Highway Trust Fund?5118 In 30 words or less. I believe in you. You can all do this.5119 Mr. Braceras. First of all, I believe that transportation5120is one of those foundational issues that all of our citizens5121need to have functioning well and that our responsibility in5122Government is to be able to provide that at the lowest cost for5123our citizens.5124 And, really, by--I got a call from the Wall Street5125Journal--I am not doing 30 words; sorry--from the Wall Street5126Journal in 2015 when we passed a gas-tax increase, and they5127said, ``I thought Utah was a conservative State.'' And I said,5128``We are. Conservative people take care of what they have. That5129is a lower cost of ownership.''5130 So I would recommend that being able to connect the5131benefits that they receive from transportation to the costs5132that they pay is an important component.5133 Mrs. Sykes. Thank you. Mr. Johnson.5134 Mr. Johnson. Thank you.5135 So I just want to say that the heavy highway paving5136industry is a very competitive industry. The money that is5137spent by the Federal Government and the State government goes5138very far because it is a very competitive industry. We work5139hard every day to try to get our costs as low as possible, and5140that cost is passed along to the users.5141 And we believe, in order to maintain those communities and5142be able to service those communities, the Highway Trust Fund5143needs to be funded by the users so that we can continue to5144provide that service and that connectivity that the communities5145need.5146 Mrs. Sykes. Thank you. Mr. Davis.5147 Mr. Davis. Beyond just the general sentiment that there is5148no such thing as a free lunch and we haven't been paying for5149what we use and it is time that we did that, it is important to5150emphasize the extent to which the Highway Trust Fund supports5151both mass transit and roads in wherever your district is and5152that it is the cooperative nature of the State and local5153program to get your constituents where they need to go. And if5154we let the Federal side of it atrophy too far, local commuting5155and local connectivity to the national system will suffer.5156 Mrs. Sykes. We only have 30 seconds left. Mr. Burkhard.5157 Mr. Burkhard. Yes. I would say that, ultimately, goods5158movement--improved goods movement and mobility will make the5159local economy thrive. So telling your local business owners5160that investments in transportation will actually help them and5161will make their lives better.5162 Mrs. Sykes. Mr. Tomer.5163 Mr. Tomer. This money gets you to work. It gets your kids5164to daycare or to school.5165 But what I would make sure that they are asking back of you5166is, how do we make sure we see these returns back in our5167community in the way we want to see them?5168 Mrs. Sykes. Thank you so much.5169 And I just hope, as we continue this conversation, we don't5170forget about the fact that the cost of living is entirely too5171high in this country and we are considering who is going to5172have to shoulder this burden as we make decisions moving5173forward.5174 Thank you, Mr. Chair. I yield back.5175 Mr. Rouzer. Mr. Barrett, you are recognized.5176 Mr. Barrett. Thank you, Mr. Chairman, and thank you all for5177being here and for your participation in today's hearing.5178 Mr. Johnson, I had a question for you. How can we be sure5179that additional dollars--because a lot of the focus of this5180hearing today is around the injection of more money into the5181Highway Trust Fund that will ultimately make its way into State5182governments, local governments, or into the system that will5183result in the paving of roads that is the part that your5184organization does. But how can we be sure that investment of5185more dollars will actually yield more miles of road or more5186infrastructure, more bridges built, things like that?5187 It has been one of my frustrations, coming from State5188government before serving in this role, was that we injected5189more money into our transportation budget, but it always felt5190like the rate of inflation around funding of highway projects,5191road building, and everything else far exceeded the rate of5192inflation in the overall economy and we weren't always yielding5193more miles of paved road, for example.5194 Can you help me understand how we can expect a correlating5195benefit for more money being spent?5196 Mr. Johnson. Yes. Thank you for that question.5197 As I stated just in my previous answer there, our industry5198is very competitive. Almost every project that we perform for5199the Government is a low-bid situation. So we are constantly5200trying to try new methods, new innovative techniques, work5201harder to get our costs lower so that we can provide the5202roadway at the lowest possible price.5203 And we are continuing to innovate through recycled asphalt5204pavement or new, innovative designs in order to try to keep5205that as low as possible so those dollars go as far as possible.5206 Mr. Barrett. Sure. And I know that there is a bid process5207and everything else, but we are dealing with sourcing of5208aggregate and some of the other scarcity of materials and5209workforce issues. We have, I think, 7 million men in America5210that are on the sidelines, not working and not seeking work5211right now. I think we have a whole bunch of issues combined5212that are contributing to this that could be addressed.5213 And I am not suggesting that we don't need more money into5214the system, but I also want to make sure that any additional5215investment we do would be met with a commensurate increase in5216output that would actually be to the benefit of drivers. I5217think one of their biggest frustrations is they feel like taxes5218or fees or other things go up and they don't actually see the5219outcome in result and benefit of infrastructure.5220 I did have another question. I am not sure who on the panel5221would be best for this--maybe, Mr. Davis, this would be more in5222your bucket--but the VMT issue of total miles traveled.5223 Where do you see the relationship between total miles5224traveled and, I guess, the obligation for the user to pay for5225that use of the roads versus the person who might drive5226relatively little, but still needs those roads available for5227the time that they do drive?5228 So somebody who may not travel very often still needs that5229road to connect them--it needs to be available all the time for5230them to drive and visit relatives, go to the doctor, and pursue5231the obligations that they have.5232 So, I guess, placing the entire cost expectation on the5233number of miles driven versus the, I guess, comparative ratio5234of having the available infrastructure, where do you see that5235falling, and would we be placing all of our eggs in one basket?5236And would it affect rural drivers like those in my district who5237may travel further but still need--other folks need the benefit5238of the highway system, whether they drive every day or not?5239 Mr. Davis. That is an excellent point.5240 Right now, as I mentioned, three of the five existing5241taxes--the gasoline, diesel, and heavy truck tire--tax5242basically the extent of your driving. If you drive more----5243 Mr. Barrett [interposing]. Right.5244 Mr. Davis [continuing]. 2 more gallons, the truck burns5245more tires. And the other two are just once a purchase or once5246a year for system access.5247 And I think a blend of those concepts in the future is5248probably accurate. Because a good amount of it is based on VMT5249wear and tear--not just wear and tear, but also congestion, but5250system access is an area that we haven't taxed enough on the5251individual side that perhaps there is room for.5252 Mr. Barrett. Sure.5253 And you alluded--and I have only got a few seconds left, so5254I apologize. But you alluded to, if we don't do a VMT or a5255user-based fee, like, some other application of building the5256Highway Trust Fund would be necessary. Do you have any5257alternative methods?5258 We seem to be at a stalemate between VMT, gas tax,5259degrading value of that with fuel economy and electric5260vehicles. What would be an alternative method of doing this5261that you would feel would be fair?5262 Mr. Davis. User fee is better, but if you are going to keep5263a trust fund, if it is not user fee, at least it has to be5264reliable. That is the most important thing, is a reliable,5265year-to-year sense of revenue, as little volatility as5266possible.5267 At one point, there was a suggestion for a crude oil barrel5268tax. I believe Mr. DeFazio chased that for a while. And5269something like that would be not directly highway user, because5270you are taxing the plastics industry and whoever else uses oil,5271but it would be better than nothing, and it would be less5272volatile.5273 Mr. Barrett. Okay. Thank you.5274 Thank you, Mr. Chair.5275 Mr. Rouzer. Mr. Nadler, you are recognized.5276 Mr. Nadler. Thank you, Mr. Chairman.5277 Mr. Braceras, your testimony calls for the committee to5278reauthorize the funding baseline in the BIL plus inflation.5279 Do you view that baseline as solely covering the Highway5280Trust Fund programs? Or do you mean that baseline to include5281the programs covered by advance appropriations as well?5282 Mr. Braceras. I mean both, sir. I think we need to take the5283baseline that you have used for advance appropriation for the5284surface transportation system and take that combined with the5285Highway Trust Fund and we need to grow that for inflation in5286order to just meet the basic needs that we have in front of us5287today.5288 Mr. Nadler. Thank you.5289 For decades, the Highway Trust Fund was funded primarily5290through gas taxes paid by drivers. But that hasn't been the5291full story for a long time. Today, gas-tax revenues cover5292barely half of the trust fund's spending--I think this was5293mentioned earlier--and Congress has repeatedly used general5294taxpayer dollars, including more than $275 billion since 2008,5295to keep it solvent.5296 That means every taxpayer, including millions of Americans5297who don't own a car and rely on public transit, are already5298helping to fund the system. Transit riders are paying into the5299trust fund too, and they deserve a fair share of the5300investment.5301 Mr. Davis, you have written extensively about the Highway5302Trust Fund's history and the political compromises that shaped5303its evolution, including the creation of the Mass Transit5304Account in 1982. As you have noted, transit investments often5305relieve congestion, expand access to jobs, and protect road5306infrastructure by reducing wear and tear.5307 Given these benefits, can you discuss the importance of5308maintaining and strengthening dedicated transit funding within5309the Highway Trust Fund?5310 Mr. Davis. If you go back and look at the debates in the53111970s and early 1980s, the urban lobby was arguing about facts5312on the ground. They said, ``Okay, our big cities don't need5313more urban cross-freeways, we need more transit,'' and they5314really didn't care where the money came from. The trust fund5315lobby, on the other hand, was saying, ``The Highway Trust Fund5316was user-pay/user-benefit, and that is the way it is set up,5317and this is a violation of that.'' And both sides were correct,5318because they were having different arguments at the same time,5319talking past each other.5320 And it took--in 1972, it took until the urban vote got big5321enough that they were able to defeat a highway bill for the5322first time. And eventually in 1973, they wound up getting a5323compromise to open the trust fund up to transit projects when5324the locals would select.5325 And then again in 1982, they realized early on that they5326were going to need the urban vote, and so they went ahead with5327the penny-for-transit 80-20 split of the new revenue for a Mass5328Transit Account then.5329 So what it took in the past was the plain fact that the5330bill couldn't pass without the votes that demanded mass-transit5331funding. It was pure and simple.5332 And since then, you have had--the Mass Transit Account5333still only gets about 13 percent of trust fund revenues,5334because the trucking revenues and the pre-1982 gas and diesel5335revenues are still entirely devoted to the Highway Account. So5336they are getting about 20 percent of trust fund spending but5337only about 13 percent of trust fund revenues, so the Mass5338Transit Account----5339 Mr. Nadler [interrupting]. Wait a minute. Thirteen percent5340of----5341 Mr. Davis [continuing]. Is much more extended----5342 Mr. Nadler [interrupting]. Thirteen percent of trust fund5343revenues comes from where?5344 Mr. Davis. Well, it goes to the Mass Transit Account. They5345get about 13 percent of the revenues, depending on how volatile5346trucking is. And they are getting 20 percent of the--roughly 205347percent of the spending.5348 So the Mass Transit Account is much more overleveraged than5349the Highway Account at present, and something has to be done to5350ameliorate that as well.5351 Mr. Nadler. Yes, especially since gas-tax revenues cover5352barely half of the trust fund's spending and the other half is5353coming from the taxpayer.5354 Mr. Davis. Yes.5355 Mr. Nadler. Mr. Tomer, your testimony highlights the urgent5356need for investments in transit assets and the growing backlog5357of repairs.5358 Given shifting demographics, climate challenges, and the5359need to connect all Americans to economic opportunity, how5360critical is it that Congress preserve and expand Federal5361investments in public transit? And what risks do we face if we5362fail to do so?5363 Mr. Tomer. Yes, I appreciate the question, Representative5364Nadler.5365 Study after study, kind of, all across the intellectual5366spectrum shows that transit produces net benefits to society,5367what economists will also often wonkily call, like,5368``agglomeration economy spillovers.'' The point is, this helps5369grow places. It helps get people to work, particularly in a5370more affordable manner. It provides net economic benefit to not5371just the communities it is in, but the country as a whole.5372 The question, I think, for the Congress, as my colleague5373was just speaking to, is: How do you set up the revenue system5374in a sustainable way to make sure that you can, kind of, invest5375in all-of-the-above solutions that make sense for each of these5376communities?5377 Mr. Nadler. Thank you.5378 I yield back.5379 Mr. Rouzer. Mr. Collins, you are recognized.5380 Mr. Collins. Thank you, Mr. Chairman.5381 I was making some notes there on something that was just5382said. Sorry about that.5383 Listen, I just want to take a few minutes and I want to5384speak from the perspective of a trucker, because I am in the5385trucking business. It is all I have done all my life.5386 And I guess the first thing I want to start out with is5387just a list of taxes that we pay from the trucking industry.5388 I mean, first of all, we pay for IRP tags, which is5389supposed to be the International Registration Plan, for every5390truck, every tag, every year.5391 Then we have got FET tax on new purchases, which is based5392on the purchase price, which, when I bought my first truck back5393in the early 1990s, fully loaded, decked out, was $81,000.5394Today, it is pushing over $200,000 per truck. Trailers are the5395same way. We pay FET tax on every tire we buy. And, by the way,5396there are 18 tires on an 18-wheeler. And we use a lot of them.5397 We pay fuel tax based on fuel mileage in every State across5398this country, no matter whether you buy fuel in that State. And5399the tax is based on the tax rates for that State.5400 We also pay the Federal highway use tax, which has gone up5401over years. We used to pay it in arrears based on how many5402trucks you did have for the past year. Now we pay it upfront on5403how many trucks you have today in one lump sum, and there is no5404refund if you wreck or if you sell the truck, period.5405 So that is just a conglomeration of what we pay to stay out5406there on the road.5407 And when you look at things like what we have had to watch5408over the past administration with the IIJA, with $1.245409trillion, whatever it is, that was spent, when less than half5410of it went to fix our roads and bridges out there. The majority5411of it, we had to watch as they built bike paths and put--I5412don't even know if they ever built an EV charger. But we had to5413watch as our taxpayer dollars were spent on something that was5414unnecessary, when we are out there sitting in congested roads,5415can't move, roads that need potholes fixed, bridges that need5416to be replaced.5417 On average, road construction, from the time it starts to5418the time it is finished: 7\1/2\ years before they get started5419on the road, 10 years to finish it. What does that tell you?5420They spend most of the time on permits and all of these5421lawsuits from all of these environmentalists out there that are5422suing us.5423 Then you take the contractor that is building the road. Do5424you realize that they pad their bills by 30 percent just to pay5425for all these crazy permits, for all of these frivolous5426lawsuits that are going on?5427 I guess--one other thing--I wanted to--I have to ask a5428couple questions.5429 Mr. Johnson, asphalt, if I remember right, right?5430 Mr. Johnson. [Nonverbal response.]5431 Mr. Collins. Asphalt price is based on what, petroleum5432price? Does it go up when petroleum goes up?5433 Mr. Johnson. [Nonverbal response.]5434 Mr. Collins. Goes down when petroleum goes down?5435 Mr. Johnson. [Nonverbal response.]5436 Mr. Collins. Okay.5437 Mr. Davis, this is a question--I didn't understand you.5438Now, it is really a question I have been looking for. Does mass5439transit pay more into the Federal highway use trust fund than5440what they get back? Or do they get more out of it than what5441they pay in?5442 Mr. Davis. There are no specific taxes on the use of mass5443transit that go to the trust fund. Now, a lot of people who----5444 Mr. Collins [interrupting]. But they get mass--they get5445mass--they get Federal highway use tax trust fund----5446 Mr. Davis [interrupting]. Well, I take the subway5447occasionally, but I also own a car. So, there are people who--5448--5449 Mr. Collins [interrupting]. But mass transit gets Highway5450Trust Fund----5451 Mr. Davis [interposing]. Yes.5452 Mr. Collins [continuing]. Money? Okay.5453 Mr. Davis. Yes. Taxes on highway users are deposited to5454mass transit.5455 Mr. Collins. I think it is somewhere around $6 billion to5456$8 billion a year, something like that? I think that is it?5457 Mr. Davis. It is about $5 billion a year in----5458 Mr. Collins [interrupting]. Okay. That was the answer I was5459looking for. Thank you.5460 Listen. Truckers--and I know we are looking at how we are5461going to set this up. Ninety-eight percent of the trucking5462companies out there are 10 trucks or less. These are5463generational. We work off of pennies per mile, 2\1/2\-percent5464return. Truckers have paid enough into the tax system.5465 If you want to do something, get your priorities right.5466Congress needs to get their priorities right and quit spending5467money on all this junk out there like bike trails. Put it into5468the roads and the bridges that we need fixed and replaced out5469there. Get these frivolous lawsuits off of everybody. Get some5470loser payout--give me some good tort reform; you will reduce5471the cost of what it is costing to build these roads and bridges5472out there.5473 And you know what? Mr. Johnson, make us energy-independent.5474You start producing oil here in our country, then you will see5475the price of gas, you will see the price of petroleum come5476down.5477 And, oh, by the way, the EPA, who has hounded on the5478truckers forever--we have gotten less fuel mileage every time5479the EPA makes a decision out there. Our fuel mileage goes down,5480so we pay more just by buying a gallon of fuel.5481 The other thing I would like to say--I know I am out of5482time. I think we just need to block-grant money to these States5483and let them handle how to best use it and fix their own roads5484and expand their own roads and bridges.5485 Thank you, Mr. Chairman, and I yield back.5486 Mr. Rouzer. Ms. Friedman, you are recognized.5487 Ms. Friedman. Thank you, Mr. Chair.5488 And thanks to the witnesses for coming here today.5489 As we discuss all these challenges facing the Highway Trust5490Fund, I want to just take a minute to talk about how we use the5491money that is in there.5492 Something that L.A. knows a lot about is traffic5493congestion. The national statistics on highway congestion in54942022 shows that the cost of congestion was $244 billion5495nationwide. That is about $614 million a day that we spend5496because of congestion.5497 It also wastes billions of gasoline nationally, with about549821 wasted gallons of gasoline per driver per year. It releases5499about 24 million tons of excess greenhouse gases into the5500atmosphere.5501 And congestion resulted in an extra 8.5 billion hours of5502traffic delays across the country. In L.A. alone, each commuter5503spent an extra 122 hours per year sitting in traffic. Nobody5504likes doing that, least of all me.5505 Between 1993 and 2017, we have added 30,500 new freeway5506lane miles of roads in the largest 100 urbanized areas. That is5507a 42-percent increase in freeway lane miles. States alone spent5508more than $500 billion on highway capital investments in5509urbanized areas, with a significant portion spent on highway5510expansions.5511 Now, in that same timeframe that we were expanding all5512these highways and putting billions and billions of dollars5513into those projects, traffic congestion in those 100 urbanized5514areas has grown by 144 percent.5515 The evidence is clear--and study after study shows this--5516that highway expansions--now, they do a lot of things.5517Sometimes they add roads to places that didn't have them5518before. Sometimes they make our roads a lot safer. And there5519are certainly places where we need to expand our highways. But5520when it comes to congestion, there is not really evidence that5521expanding highways to deal with the congestion is doing5522anything except making congestion worse because of induced5523demand.5524 Now, in my community, where we have widened the I-5 freeway5525and many other roads, we have seen no measurable decrease in5526congestion, and it has come at a lot of cost to the residents5527who live around those highways, many of whom saw a marked5528decrease in their quality of life.5529 And, at the same time, that money that went into those5530expansions didn't go into things that we know reduces5531congestion, namely, more investments in mass transit, in urban5532mass transit.5533 Transit is estimated to reduce CO2 emissions by 37 million5534metric tons annually. Individuals who ride on public5535transportation instead of driving can save more than $13,000 a5536year. That is over $1,000 per month.5537 And, certainly, for many people in our urban areas, they5538can't afford to own and operate a car, and so they are transit-5539dependent. And because of our lack of investment in transit, we5540have given them, many times, really just terrible qualities of5541life because transit doesn't work well enough for them. It is5542too slow, and it doesn't come fast enough.5543 And, also, robust public transportation systems take users5544off the road, which does reduce congestion and makes the roads5545not wear as quickly.5546 Every $1 billion we invest in public transportation5547sustains $5 billion in long-term economic impact and 50,0005548jobs, which sounds like a great value for taxpayers' money.5549 So I am going to ask Mr. Tomer: To your knowledge, is it5550standard practice across the country that, when we are looking5551at investing our transportation dollars and our highway funds,5552that communities are doing a cost-benefit analysis of the same5553investment going into mass transit or going into a highway5554widening? I know that some communities have done this, but is5555this common practice? And should it be?5556 Mr. Tomer. Thank you for the question, Representative.5557 The--look, every State and community is different, and I5558think we know that. That is actually one of the, kind of, great5559features of this country.5560 Our cost-benefit analyses have come under attack for5561decades now from academics--and this is really civil attack, I5562want to be clear, like, a civil discourse. The question is,5563what are you trying to achieve? I mean, we have to be blunt5564with all of ourselves here. What are we trying to solve?5565 We know--and I really appreciate you bringing this up--that5566induced demand is effectively an economic truth. You can't5567endlessly expand highways once you have built out a community.5568It is a fallacy to tell our households that suddenly this is5569going to solve congestion, because we know it is not.5570 What bothers me the most, frankly--and I think it is in the5571tenor of today's conversation--it slows down freight, slows5572down trucking. I hate when deliveries are late to my house, and5573I am sure businesses feel far worse when it is their bottom5574line.5575 So I think what is key here is, how do we think about5576sensible cost-benefit analysis that makes sense for each one of5577these communities. Oftentimes, transit, like in Greater Los5578Angeles, right--voters, over two-thirds, approved this5579expansion because it is what made sense to them after, for5580generations, frankly, trying a different solution.5581 It is going to look different in different places, but,5582again, as we keep adding people to this country, which is a5583truly bipartisan goal, we are going to have to think about how5584we can realistically fit all of them and our businesses and5585their freight in these growing communities.5586 Ms. Friedman. Well, thank you, because doing things the5587same way over and over again with bad results is not a good way5588for us to move forward.5589 I yield back. Thank you.5590 Mr. Rouzer. Mr. Stauber.5591 Mr. Stauber. Thank you very much.5592 Thanks to all of you for being here and your testimony.5593 The previous Biden administration pushed an unsustainable5594mandate on the American people: electric vehicles. They tried5595to take the choice away from the American taxpayer.5596 Former Secretary Buttigieg and I frequently sparred on this5597topic. I often had to remind him that the cars, electric5598vehicles, were unaffordable, inoperable in cold-weather5599climates, and the infrastructure simply didn't exist to make it5600work.5601 And when they siphoned billions of taxpayer dollars to pay5602for their Green New Deal agenda, they eliminated the Buy5603America provisions and used child slave labor to expedite the5604process. Obviously, I disagreed.5605 Some people have bought into the EV way of life, and that5606is fine. What I have always wanted above anything else is5607consumer choice, flexibility for the American people to do what5608is best for them.5609 But it is important to note that the current state of play5610is not fair. EVs currently benefit from the highway system but5611do not contribute to it. What is worse is that they are heavy5612vehicles and far harder on our roads.5613 Mr. Braceras, could you talk a little more about the annual5614fee the State of Utah has utilized in an effort to address EV5615usage?5616 Mr. Braceras. Thank you. Yes.5617 So the State of Utah approached the idea here with one of5618fairness and choice. And so we recognized that EVs were not5619paying their fair share for their use of the roadway, but we5620wanted to give people a choice on how they would do this.5621 So we approached it by doing the $140 annual fee on EVs,5622and then we have a road usage charge program, kind of a5623parallel program. And so folks can opt in to the road usage5624charge program, they don't pay the $140 fee, and they will only5625pay for the miles that they drive.5626 And so it is trying to be fair to the EV users but also5627fair to the rest of the highway users. And we have found this5628to be a fairly--it is well-accepted from our users. Obviously,5629if you have a choice, you have decided you like that approach.5630But we think that was--we feel very comfortable with that5631approach.5632 I anticipate--now, this is Carlos, not my State5633legislature. We anticipate that our next steps going forward5634will be to require EV users to go into the road usage charge5635program. But that is still a--that is a policy debate still to5636take place.5637 Mr. Stauber. I think EV and hybrid fees are an important5638step to addressing parity on the roads and ensuring5639transportation infrastructure remains a shared responsibility.5640 When the Biden administration mandated EV use, can you5641imagine being in northern Minnesota when it is 35 below trying5642to get to work when the battery has 50 percent less usage or5643even less than that?5644 And it was disappointing that we had to push, continuously5645push the former administration to allow us to have choice, just5646like you did for your citizens in Utah. You gave them a choice5647and an opportunity for them to choose.5648 That is what the American people wanted. They didn't want5649the EV mandate forced down their throat.5650 Mr. Chair, I yield back.5651 Mr. Rouzer. Mr. Stanton.5652 Mr. Stanton. Thank you very much, Mr. Chairman.5653 And thank you to the witnesses for being here for this5654very, very important hearing.5655 Highway Trust Fund is essential. It helps States build out5656and maintain their infrastructure. But it is in need of real5657reform to make sure States like Arizona, my home State, get a5658fair deal. We need to be pragmatic about how this investment5659upkeeps highway and transit, keeping families and businesses5660connected.5661 So I want to thank all of the witnesses for your5662recommendations as we work to develop a strong bipartisan5663surface transportation reauthorization bill.5664 In Arizona, like most States, we make the most of the5665formula funding that is allotted. ADOT uses Highway Trust Fund5666dollars to maintain its more than 28,000 lane miles.5667 Federal formula funds are also used to modernize and5668improve safety along existing roadways, like U.S. 93,5669connecting parts of rural western Arizona, which recently5670received Federal funds to turn a two-lane highway into a four-5671lane divided highway, making it much, much safer.5672 Projects like this improve safety for Arizonans, lessen5673congestion, and allow for more freight transportation to move5674across the State, an important part of our commerce.5675 But even with investments like these, Arizona is doing more5676with less. Arizona has added more than 2 million people since5677just 2000. Our economy has grown exponentially. But current5678funding formulas are decades old and rely woefully on outdated5679census information and traffic data.5680 Arizona is one of the fastest growing States in the5681country, but this year, we received one of the lowest5682percentage of funds relative to our State's contribution.5683Continuing to rely on this antiquated formula to determine5684future investments isn't just inefficient policy. It puts fast5685growing States at a significant disadvantage and undermines our5686ability to tackle our significant and growing infrastructure5687needs.5688 Just yesterday, I introduced a bipartisan bill with my5689colleague, Congressman Tony Gonzales of Texas, to modernize5690this formula. Texas is another fast growing State that has not5691seen the level of investment to keep up with its population.5692 Our Highway Formula Fairness Act will allow for the5693Decennial Census to be considered when calculating5694apportionment for many States that have increased population5695since the previous census to receive funding that reflects that5696growth. It is just common sense.5697 The bill would also require the Secretary of Transportation5698to conduct a highway formula modernization study to assess the5699methods and data that are currently used to apportion Federal-5700aid highway funds so we can keep up building and improving.5701 Mr. Braceras, thank you for your perspective both as a5702representative of AASHTO and as executive director for Utah. In5703your testimony, you reflected on that, like Arizona, Utah has5704seen increased growth. In fact, Utah was also one of the5705fastest growing States in the country.5706 How would having a 10-year census number as part of the5707apportionment calculation for the Highway Trust Fund impact5708your State of Utah?5709 Mr. Braceras. Thank you. Thank you, Congressman, for the5710question.5711 And, yes, like Arizona, Utah is growing tremendously right5712now, and it is really one of the biggest concerns that our5713citizens have.5714 I would say, let's use the best data we can have to make a5715more informed decision. So, I am always a fan of getting the5716best data, the more recent data we can have, to be able to make5717those decisions. So, very supportive of the idea of that.5718 Mr. Stanton. All right.5719 And like Utah, Arizona has needs to improve our existing5720older infrastructure while keeping up with the growth needs. We5721need to do both.5722 Mr. Johnson, in your testimony, you focused on Federal5723investments for project delivery, workforce development, and5724economic activity as it relates to North Carolina. You brought5725up the importance of maintaining a user-based trust fund to5726ensure that critical road and bridge funding is not5727reprioritized.5728 In your opinion, what would be the biggest mistake we could5729make regarding the Highway Trust Fund in this upcoming highway5730bill? What would cause the most harm on future highway5731construction funding?5732 Mr. Johnson. Thank you for your question, Congressman.5733 The biggest mistake we could do is to do nothing. It is a5734broken system. We know it has been a broken system. And there5735are numerous different alternatives out there that could help5736fix the system. So it is just asking Congress to make a choice5737and hopefully fix the system for the long term.5738 Mr. Stanton. I really appreciate that.5739 By the way, the irony of it is that infrastructure5740investment is probably the most popular investment we can make5741at the Federal level. People do not mind if they need to pay5742more. They know they are getting an infrastructure investment,5743which improves their lives and they know improves their local5744economy.5745 Finally, I just have a statement.5746 Mr. Davis, I don't have a question, but just to say thank5747you to the team at Eno. The work that you do in providing5748support in a bipartisan way for this committee is important and5749will make us have a better surface transportation bill, and it5750is very much appreciated.5751 Thank you. I yield back.5752 Mr. Rouzer. Mr. Johnson.5753 Mr. Johnson of South Dakota. Thank you, Mr. Chairman.5754 Math is a stubborn thing, of course, and the math tells us5755that if Congress does not act, the Highway Trust Fund will be5756insolvent in just 3 years. And because math is such a stubborn5757thing, we know that if Congress does not act, that we will be5758in a $50 billion hole by the year 2035.5759 In fact, since 2008, we have put $275 billion from the5760General Fund into the Highway Trust Fund, and at the same time,5761of course, we don't have everybody paying into the system.5762 Now, a user-pays system works pretty well when everybody5763pays in. It really falls apart when you have free riders.5764 That is why I was so grateful to hear Mr. Stauber and Mr.5765Braceras have a back-and-forth about my bill with Deb Fischer5766that would make sure that everybody is paying their fair share.5767And I was grateful for so many of the witnesses for addressing5768this issue in their testimony.5769 And to make it clear, our bill, my bill with Senator5770Fischer, would just say, hey, for those EVs, they are going to5771pay their fair share. We have calculated what would be a fair5772amount if they were an internal combustion engine. Of course,5773we have an accounting for the heavier weight because of the5774battery.5775 It seems like it is an idea that is gaining some steam. And5776so, Mr. Chairman, I would ask for unanimous consent to enter5777this letter of support for my bill signed by 26 national5778associations.5779 Mr. Rouzer. Without objection, so ordered.5780 [The information follows:]57815782 Letter to Members of Congress from 26 National Transportation and5783 Construction Associations, Submitted for the Record by Hon. Dusty5784 Johnson5785 Dear Members of Congress:5786 Investing in the nation's infrastructure provides far-reaching5787economic benefits. Recent congressional support for roads, bridges and5788public transportation systems has helped deliver much-needed projects5789to every congressional district across the country. These improvements5790have enhanced safety, mobility and efficiency nationwide.5791 These outcomes are made possible by the continuity and5792predictability of funding supported by a healthy Highway Trust Fund5793(HTF). At present, HTF revenues are generated primarily through user5794fees on the sale of gas and diesel fuels, along with transfers from the5795General Fund to make up for insufficient revenues.5796 However, improvements to vehicle efficiency and the influx of5797hybrid and electric vehicles have resulted in a system where all users5798of the system are not treated fairly. Instead, some users pay for the5799maintenance of the system, while other users pay less or nothing at5800all. At the same time, user fee revenue has not met system needs.5801 The undersigned organizations call on Congress to pass a fee on5802electric vehicles comparable to what gas and diesel vehicles pay and5803dedicate the revenues solely to the HTF. While this solution would only5804partly enhance HTF revenues, it would help ensure all users of the5805system are paying for its upkeep.5806 Further, we ask Congress to oppose any measures that would strip5807existing revenue from the HTF. Proposals to reduce or eliminate revenue5808sources into the HTF would only exacerbate the challenge of paying for5809the scheduled 2026 reauthorization of surface transportation programs.5810 We are grateful for the support Congress has provided for the5811nation's surface transportation infrastructure network and look forward5812to working with you to ensure users of the system equitably pay for5813their maintenance and expansion.5814 Sincerely,5815American Road & Transportation Builders Association.5816Associated General Contractors of America.5817American Society of Civil Engineers.5818International Union of Operating Engineers.5819American Public Transportation Association.5820Associated Equipment Distributors.5821American Concrete Pavement Association.5822American Short Line and Regional Railroad Association.5823Association of Equipment Manufacturers.5824Independent Lubricant Manufacturers Association.5825American Concrete Pipe Association.5826American Institute of Steel Construction.5827National Steel Bridge Alliance.5828American Traffic Safety Services Association.5829National Ready Mixed Concrete Association.5830National Asphalt Pavement Association.5831Portland Cement Association.5832American Subcontractors Association.5833Design-Build Institute of America.5834Association of American Railroads.5835National Stone, Sand & Gravel Association.5836Precast/Prestressed Concrete Institute.5837American Council of Engineering Companies.5838Transportation Intermediaries Association (TIA).5839Laborers International Union of North America.5840National Utility Contractors Association.58415842 Mr. Johnson of South Dakota. So, Mr. Johnson, any thoughts5843from you all or from the broader pavement and asphalt industry5844about our bill?5845 Mr. Johnson. I haven't read the bill, but from your5846question, we do think EVs--everyone should pay their share. EVs5847are heavier. They do weigh more than normal combustion5848vehicles, and they do have more wear and tear. And we believe5849that all users should be paying into the system to help support5850it.5851 Mr. Johnson of South Dakota. Mr. Braceras, I was grateful5852to hear about Utah's experience. If we were to do something at5853the Federal level, would that complicate Utah's efforts, or5854would they mesh pretty well?5855 Mr. Braceras. I think they would mesh pretty well,5856Congressman. I think there are some details as I reviewed your5857bill that we could work through. But I think it would work5858really well.5859 Mr. Johnson of South Dakota. Anything in particular from5860either of you gentleman? And, Mr. Johnson, you haven't read the5861bill yet, so maybe you get off the hook.5862 But, Mr. Braceras, is there anything we should--any way we5863should try to improve our bill, or do you think we are pretty5864close to the Goldilocks spot?5865 Mr. Braceras. As I went through this bill and talked with5866staff, I made the comment, ``It's a very thoughtful bill.'' And5867I think there are, obviously, as these things move through the5868process, there are tweaks that need to be made. Right now, I5869look at the way the money is being received at the State level.5870There are different--every State receives money through5871different organizations, but that is all stuff that could be5872worked out.5873 So I think it is a good start.5874 Mr. Johnson of South Dakota. Well, I would echo Mr. Johnson5875who said to Mr. Stanton's very good question that the worst5876thing we could do is nothing. And I would observe that trying5877to make sure everybody pays their fair share is a very5878important ingredient, a critical ingredient in the something we5879must do with surface transportation reauthorization.5880 Mr. Braceras, let's stay with you. I suspect we all know5881that studies indicate that an EIS through Federal Highway takes58827 years. That is an obnoxious length of time. And it is almost5883a uniquely American problem. The same kind of highway project5884you can get done in Italy and France in 2 years does take 75885years in this country.5886 When the Italians seem to be a paragon of efficiency,5887perhaps America has lost its way.5888 And so I have got a bill that would, in essence, require5889that the agencies use a cloud-based platform to have an e-NEPA5890process. Of course, last week, President Trump signed an5891Executive order that would do much the same thing.5892 Your observations, sir, about my bill and the President's5893Executive order?5894 Mr. Braceras. Yes, I think there is a lot we can do in this5895country to actually move projects forward. We seem more5896inclined anymore to stop things than we are to build things.5897 So one of the things we have done in the State of Utah, we5898were one of the first States to take on what is called NEPA5899assignment. So we are the decisionmakers on the EIS for the5900highway side of things. And I was challenged when we first did5901that, is, why do you want to do that? Are you trying to5902shortchange the process?5903 And it's: no. I want to stand up with my citizens and5904explain why I made a decision. I don't want to point behind me5905and say, ``The Feds made me do this.'' We have been able to5906demonstrate we can deliver environmental projects faster, both5907environmental assessments and EISs, significantly faster by5908taking on that NEPA assignment.5909 And I think there are other ways that we could work with5910the Federal Government to find--we need to build more in this5911country.5912 Mr. Johnson of South Dakota. That is exactly properly said.5913 Mr. Johnson, I am sorry. I am out of time.5914 And I would just close by noting that given the strength of5915the comments by both of you, I would just ask my colleagues to5916look at both of those bills and consider signing on.5917 And with that, Mr. Chairman, I would yield back. Sorry.5918 Mr. Rouzer. Mr. Carbajal.5919 Mr. Carbajal. Thank you, Mr. Chairman.5920 Mr. Tomer, research shows that on average, States5921suballocate just 14 percent of transportation funds to local5922governments, well below the proportion of travel occurring on5923locally owned infrastructure. In 15 States, that share is less5924than 5 percent.5925 What does this disparity suggest about the need for Federal5926reforms that better empower local and regional partners?5927 Mr. Tomer. Yes. Thank you for the question, Representative.5928 I think at its core, what it speaks to is, we have some5929faults inside our user-pay kind of concepts. Everyone is paying5930but not everyone is getting their money back. And so I think5931there is a really fresh opportunity, particularly in this5932Congress, with lessons from the IIJA period in particular, to5933think about, how do we make sure that the kind of fiscal5934resources are being returned if we are thinking about this kind5935of user-pay and user-benefits system that so many folks,5936including your colleagues here, have mentioned today.5937 Now, part of the challenge is the Federal Government has5938chosen, really for decades upon decades, to apportion the money5939directly to the States, and that could work. What we are seeing5940inside our numbers, though, is that once the States control5941their fiscal resources, they are not passing it back to their5942regional partners.5943 So I think the question before this Congress is, how much5944should, at least for Federal funds, should the Federal5945Government be electing where those should be, kind of who5946should be the recipient of those, and does it want to weigh in5947any further than that?5948 Mr. Carbajal. Thank you.5949 Mr. Tomer, metropolitan planning organizations, MPOs, serve5950as a vital conduit between Federal transportation policy and5951real-world implementation in the communities where most5952Americans live and work, composed largely of local elected5953officials.5954 MPOs offer both deep public engagement and regional5955coordination. Yet their role is often constrained by limited5956authority and insufficient Federal recognition.5957 How can Congress better elevate and support the unique role5958MPOs and, by extension, local governments play in advancing5959national infrastructure goals?5960 Mr. Tomer. Yes. Thank you for the question. It is great.5961Let me answer in two parts. I am going to be respectful to my5962colleagues so they have a chance to answer questions, too.5963 The first one is that the Congress has done some impressive5964experimentation with performance measurement, performance5965management with our metropolitan colleagues. The question is,5966how can we extend that beyond them, also to their State peers,5967thinking about what are we trying to get out of the system.5968 What I like about both parties is they are constantly5969talking about accountability, and there are some real5970opportunities there.5971 The second one is that--and let's all be frank. I mean, we5972actually just--we will have some upcoming research being5973published in a couple weeks on this. Basically every Member of5974Congress, no matter how it is designed, they represent a5975metropolitan area.5976 And what is so--I am going to sound like such a nerd here--5977but what is so cool about metropolitan areas is our5978jurisdictions are fixed, for the most part, unless you are like5979in a Nashville or Indianapolis and have some--Louisville has5980some fascinating expansions. But the question is at the5981metropolitan scale, how do we actually come together beyond5982those jurisdictional boundaries to actually work at the scale5983of where economies work.5984 Now, the Federal Government's opportunity here, especially5985because it has mandated their existence in these places, they5986actually exist. They are a board-like structure where5987municipalities come together. How can we empower them to5988actually deliver more?5989 So we personally are fans of actually passing more fiscal5990authority to them from the Federal level, making sure they can5991then work with their member municipalities and think about5992investments that make sense for them and doing that alongside5993their State colleagues.5994 So there are a lot of opportunities here.5995 Mr. Carbajal. Thank you.5996 Mr. Johnson, I know we are discussing how to best fund5997future highway bills via user fees, but it also comes down to5998how best to maximize these precious resources. Can you help5999give me some insight on how your industry is helping stretch6000taxpayer dollars for road construction using materials like6001reclaimed asphalt, RAP?6002 Mr. Johnson. Thank you for the opportunity to speak about6003RAP.6004 The asphalt industry, reclaimed asphalt is one of the most6005recycled products in the world, in the country. Through the6006process of maintenance, we remove a lot of asphalt or remove a6007lot of roads, and 100 percent of that product is able to go6008back into our asphalt mixes.6009 As much as 40 percent of our new asphalt going on the road6010is made with recycled asphalt. It is reclaimed from other jobs.6011It is not going to landfills. It saves us money. It saves the6012taxpayers money. It saves us energy. It is one of the6013highlights of our industry.6014 Mr. Carbajal. Thank you.6015 I am out of time. I have one more question for you. So I am6016going to submit it, and hopefully we will get an answer from6017you on the record.6018 Mr. Johnson. All right. Thank you.6019 Mr. Carbajal. But thank you so much.6020 Mr. Chairman, I am out of time.6021 Mr. Rouzer. Mr. Shreve, you are recognized.6022 Mr. Shreve. Thank you, Mr. Chairman.6023 Thanks to our witnesses.6024 I represent central Indiana. So I am one of those, Mr.6025Tomer, one of those communities that is something of a hybrid.6026 Keenly interested in the subject. This is our fifth6027subcommittee hearing. In my district, I have got the Interstate6028465, the ring road around Indianapolis, and four interstate6029highways that traverse the district.6030 I am going to point this question in the direction of Mr.6031Burkhard.6032 My district is a combination of urban, suburban, and rural.6033And in your dense submitted testimony, you spoke about the TPA6034in Tennessee. And that program is just a few years in the6035making. It may be possible for a Hoosier to learn something6036from a Volunteer, possibly.6037 But the relevance to that program caught my eye because it6038spoke to freeing up funding to invest in the condensed6039urbanized areas so as to move dollars into some of the rural6040communities. And in your testimony, you spoke about the6041extraordinary three- to five-fold return ratio on that.6042 We can't begin to flesh out all the written testimony that6043the witnesses offer us, but if we could spotlight some of your6044experience that you have seen in Tennessee and what that may6045portend as a model as we figure out how we can fund these6046improvements, these--what was the term? The choice lanes in,6047say, 465, so as to have more dollars to work with on our6048arterials that emanate out from urban centers like Indianapolis6049or Louisville.6050 Mr. Burkhard. Thank you for your question.6051 Yes. Jacobs was fortunate to have been able to work on part6052of a P3 program in Tennessee, and the thing that I think I hear6053resounding is speed, speed to delivery, and that was one of the6054biggest results of that effort.6055 Tennessee sought to accelerate their investment into6056infrastructure and passed a resolution to put $3 billion into6057State funding to add choice lanes. These choice lanes are6058managed lanes, they are tolled facilities, and they provide a6059means of revenue to help repay the investments.6060 And it becomes a desirable business investment from6061concessionaires who will take on the asset to continue to6062improve that asset, and they are being held accountable for6063those lanes for a set amount of time.6064 And so that is a model that we are seeing at some other6065locations across the State and that we participated on. Choice6066lanes or managed lanes is definitely a viable method.6067 Mr. Shreve. Mr. Burkhard, if the act was passed by the6068Tennessee Legislature in 2023 and given the 7-year sort of lead6069time that we have accepted at the moment that it may take to6070build out some of this infrastructure, can we draw conclusions6071as to whether or not this model is working in Tennessee? Or is6072it very much in the beta testing stage?6073 Mr. Burkhard. Yes. It is too early to tell. Although, we6074are already working alongside the State-appointed PMO office,6075program management office, consulting organization. So it has6076moved into high gear. And so, yes, I would say it is too early6077to tell.6078 Mr. Shreve. All right. Okay. Thank you.6079 Mr. Johnson, just briefly. In my home State, we suffered6080flooding just this month. In North Carolina, you really took it6081on the chin.6082 You talked in your testimony about improvements,6083enhancements in the way in which we design our highways from a6084resiliency standpoint. Is a stretch of highway constructed6085today materially different in its environmental resiliency than6086it was 25 years ago?6087 Mr. Johnson. In my opinion, it is not substantially6088different from what it was 25 years ago.6089 Mr. Shreve. All right. I didn't know if there was some6090secret sauce that we hadn't figured out at INDOT as we are6091building stretches of highway that are susceptible to flooding.6092 Mr. Johnson. No.6093 Mr. Shreve. Not so.6094 All right. Thank you.6095 I yield back.6096 Mr. Rouzer. Mr. Figures.6097 Mr. Figures. Thank you, Chairman Rouzer, Ranking Member6098Holmes, who I know is not with us, but thank you guys for6099pulling this hearing together.6100 I represent Alabama, a part of Alabama, Mobile up to6101Montgomery and kind of everything between Mississippi and6102Georgia. So a lot of rural areas are part of the makeup of my6103district.6104 And in being in a rural district, like many of my6105colleagues here, we rely heavily on long stretches of Federal6106highways to move freight, access to essential services. This is6107only going to be amplified, particularly in the Mobile area but6108also regionally with the expansion of the port in Mobile, which6109come about 60 days or so, give or take, will be the deepest6110port in the Gulf of Mexico.6111 And so we expect the freight that comes through the gulf6112through the Port of Mobile to expand greatly, exponentially.6113And so it is very critical that we are focusing on trying to6114secure the type of sustained infrastructure investment that we6115struggle year over year to do.6116 Mr. Johnson, I want to start with you because you had a6117colleague here at one of our last hearings, Janet Kavinoky from6118Vulcan, headquartered in Alabama, not quite in my district but6119up in Birmingham, and she testified earlier about the6120importance of the Highway Trust Fund.6121 Can you give me a little more detail on what the asphalt6122industry as a whole can do to extend the Highway Trust Fund6123dollars?6124 Mr. Johnson. The asphalt industry, like is stated in a6125couple of other questions, we constantly are trying to improve6126our cost structure, trying to make asphalt as cheap as6127possible, make the quality as long life as possible, constantly6128trying to find ways to be innovative through different design6129methods and using recycled materials to make those dollars go6130as far as possible.6131 Mr. Figures. And, Mr. Davis, from your perspective, does6132the Highway Trust Fund in its current status, does it6133sufficiently account for the infrastructure needs in low6134income--low population, rather--in rural communities across the6135country?6136 Mr. Davis. At present, it is not satisfying all the needs6137anywhere because even though the spending has crept up6138substantially in the last couple years, cost inflation on6139materials and labor has crept up even higher. So it is not6140getting the job done in rural areas.6141 But that is not to say that rural areas are being6142disproportionately discriminated against with funding. Things6143are rough everywhere.6144 Mr. Figures. Do you have any particular ideas that this6145committee should keep in mind to make sure that--because as I6146see it and throughout my lifetime coming from Alabama, you have6147your main cities in Alabama, which for the most part, they are6148located right on main interstates, as they are everywhere,6149Mobile, Montgomery, Birmingham, Huntsville.6150 Then you get to these long stretches in between those6151cities, and those are often the forgotten territories in terms6152of investments, infrastructure, and otherwise.6153 Do you have any specific ideas that we can do to keep in6154mind to make sure that we are continuing to flow those6155investments, Highway Trust Fund investments, to those rural and6156lower population communities?6157 Mr. Davis. In this case, it kind of begins and ends with6158the State DOT because the Federal Government doesn't6159particularly prescribe the degree to which the dollars given to6160the States have to be spent, urban versus rural.6161 I believe 55, 60 percent of one program gets suballocated6162by population, but that doesn't really account for the vast6163majority of spending.6164 And Congress has traditionally been hesitant to force more6165urban versus rural highway decisions on States, preferring to6166let them make their minds up themselves.6167 Mr. Figures. Yes. And this is for anyone who wants to chime6168in on it. But we have talked about the need for the balance6169between EVs and the emerging EVs on the road to contribute to6170the Highway Trust Fund.6171 How do we go about--how do you guys suggest that we go6172about doing that in a more efficient way, given how they are6173charged, like how they receive their fuel?6174 I guess we will start right here with you, Mr. Braceras.6175 Mr. Braceras. Congressman, was the question how would we6176start to implement an EV charge?6177 Mr. Figures. No. How do you guys suggest that we go about6178collecting----6179 Mr. Braceras [interrupting]. Oh, yes. I think that is the6180big question for road usage charge.6181 I think the way to do this is through the telematics in the6182vehicle. So we have got about 50/50 of our customers right now6183are either choosing to do an odometer read and send that6184picture of the odometer read to us, or we have agreements with6185the OEMs, the car companies, and they will then give us just6186that mileage that that car is driven within our State.6187 That it the most cost-effective way we have found, because6188we have done these plug-ins into the OBD-II port, and that is6189more expensive. And so I am pretty sure if the phone companies6190figured out how to charge a lot of people, we could probably6191figure out how to charge a lot of people as well.6192 Mr. Figures. Well, thank you guys for your time and6193patience.6194 And I yield back.6195 Mr. Rouzer. Mr. McDowell, you're up if you're ready.6196 Mr. McDowell. Thank you, Chairman.6197 The funding mechanism of the Highway Trust Fund was6198designed to set up a self-replenishing source of funding for6199infrastructure projects, but for nearly two decades, the fund6200has been sustained through transfers from the General Fund of6201the Treasury.6202 The Congressional Budget Office's most recent projections6203show that once the current surface transportation bill expires,6204the Highway Trust Fund will have a $142 billion shortfall over6205the next 5 years.6206 The funding structure established in the 1950s simply does6207not work in the 21st century. We have all seen the increasing6208number of hybrid and fully electric vehicles on the road,6209especially over the past few years. I am all for consumer6210choice, but EV owners have been reaping the benefits of the6211highway system without contributing their fair share for long6212enough.6213 Despite making up a growing proportion of cars on the road,6214EVs avoid paying the user fees that other vehicle owners pay in6215the form of fuel taxes, all while causing way more wear and6216tear on road surfaces.6217 According to the Department of Transportation's own data,6218EV batteries are heavier, sometimes up to 50 percent heavier,6219than the traditional internal combustion engines that they are6220replacing. The cost and frequency of road repairs is6221increasing, and we must consider ways that all road users can6222be a part of the solution. Simply put, EVs cannot continue to6223get a free ride.6224 As the witnesses today have already attested to, the6225stability of the Highway Trust Fund impacts each State's6226ability to prioritize roadway improvements, which are vital to6227keeping drivers safe on the roads we all use.6228 North Carolina is a prime example of a State that stands to6229lose a lot if Congress does not act to fix this funding6230shortfall. Our State's population is growing, resulting in more6231drivers on the roads. This growth, coupled with the increased6232costs of construction due to inflation brought on by the6233previous administration, will continue to raise both the cost6234and frequency of highway repairs.6235 When viewed through this lens, adding hurricane damage in6236the mix is like throwing lighter fluid on a fire.6237 As a proud Congressman from the State of North Carolina, I6238am going to ensure that my State has the resources it needs to6239tackle these safety challenges head on.6240 I want to thank the witnesses for being here to testify6241today before this subcommittee, and I look forward to the6242discussion today.6243 Mr. Johnson, I appreciate you being here. For those that6244may not know, the company--Fred Smith Company--has been6245operating and growing in North Carolina for nearly 100 years.6246It has over 1,200 employees across my home State. There are6247even a couple of Smiths that live in my district.6248 But today, you are representing the asphalt pavement6249industry, which has operations in every State across the6250country. And, in fact, the Bureau of Transportation Statistics6251at DOT estimates that one-tenth of our Nation's workforce is6252directly employed by transportation-related industries.6253 So the value of your perspective and the work that this6254committee accomplishes has a significant impact on your6255business plans. With that in mind, does the Highway Trust Fund6256solvency help with your company's projections regarding what6257projects you bid on for a slate of work during a given paving6258season?6259 Mr. Johnson. Yes. Thank you, Congressman.6260 So our State DOT does a really good job projecting out6261projects that they have in their plans, and we count on those6262for our planning and our future investments. And when we see6263those jobs sliding because of funding, lack of funding, then we6264are hesitant to pull the trigger on making additional6265investments in our company, in our asphalt plants, and in6266hiring more employees and training our employees for future6267positions due to growth.6268 So without that consistent funding, it definitely makes us6269question and not pull the trigger on certain investments.6270 Mr. McDowell. Gotcha.6271 As you mentioned in your testimony, North Carolina ranks6272second in the Nation for the number of State-maintained roads6273with more than 80,000 miles of highway and over 13,500 bridges.6274 Could you briefly describe the importance that HTF funding6275has across our State alone, and how do variables, such as6276hurricane damage or projected population growth, magnify the6277scope of that impact?6278 Mr. Johnson. So the HTF funds about 25 percent of our total6279roadway program in the State, which is very significant. We6280perform a lot of projects for Fred Smith Company and others6281across the State that would not happen without the HTF.6282 And as you mentioned the hurricane, we met with the State6283DOT last week, and they are anticipating a $5 billion cost to6284repair Hurricane Helene, and we are looking at some serious6285deficits in the State funding due to that.6286 So the FHWA has been working very well with the State DOT6287to reimburse those funds. So we appreciate that. But it is a6288big mountain to climb.6289 Mr. McDowell. Sure thing. Thank you, sir.6290 And, Mr. Chairman, I yield back.6291 Mr. Rouzer. Mr. Taylor.6292 Mr. Taylor. Thank you, Chairman Rouzer and Ranking Member6293Norton, for holding this hearing today.6294 Thank you to our witnesses for their time and testimony. I6295know it is a big sacrifice to be here, and we appreciate you6296all very much.6297 I represent a very rural part of Ohio. It is a place where6298we have 4 of the 5 poorest counties and 9 of the 20 poorest6299counties in the State of Ohio. So I would like to focus for a6300minute on the selling points we have had for VMT.6301 Mr. Burkhard, the only basis for VMT being sold as a6302benefit to rural communities today that I have heard is that6303their cars get worse mileage. Are there others? Just so I am6304clear.6305 Mr. Burkhard. Are you asking if there are other sources6306other than----6307 Mr. Taylor [interrupting]. Somebody else asked you how it6308was cheaper for rural communities to have VMT.6309 Mr. Burkhard. Yes.6310 Mr. Taylor. And you just said gas mileage. Are there any6311others?6312 Mr. Burkhard. Yes. There were studies done through the6313TETC, which is The Eastern Transportation Coalition, I-956314corridor. And they did studies with Georgia and Maryland and6315determined that rural participants ended up paying anywhere6316from 7 to 9 percent less than they would have paid with a fuel6317tax.6318 Mr. Taylor. Okay. This is from a study done where? I am6319sorry.6320 Mr. Burkhard. This is through the TETC, which is The6321Eastern Transportation Coalition which, among other things,6322supports mileage-based user-fee studies with several of its6323member States, and this is a study that was done through that6324program.6325 Mr. Taylor. So they said they paid less, but were there6326reasons other than the fact that their cars are getting worse6327mileage or just that is the [inaudible] that came out of that?6328 Mr. Burkhard. Yes, sir. Mostly it was due to the fact that6329their vehicles were lower gas mileage. So the idea of mileage-6330based user fee is that everyone pays the same amount per mile.6331And as it is now, people are unfairly burdened when they have6332vehicles that have lower gas mileage and that tends to----6333 Mr. Taylor [interrupting]. Okay. So what I am hearing is no6334other reason besides their cars get worse mileage.6335 Mr. Davis, do you know of any other reason that it is6336supposed to benefit rural communities other than their cars get6337worse mileage?6338 Mr. Davis. No. Generally speaking, VMT is traditionally a6339little higher in the rural areas than urban, although the6340growth lately has been more in urban than rural.6341 Mr. Taylor. Does anyone know, either of you two know what6342the baseline miles per gallon they use for urban and suburban6343areas versus rural areas? Or did they just test a few cars?6344Does anybody know about the methodology?6345 Because it really doesn't make a lot of sense to me that,6346say, you get 28 miles per gallon driving in a suburban area. I6347would think you would get less than that in an urban area6348because you are sitting at stoplights all the time. Say you get6349roughly 20 in a rural area, it is----6350 Mr. Burkhard [interrupting]. I think it is 23, but we can6351get back to you on that.6352 Mr. Taylor. Twenty-three for?6353 Mr. Burkhard. Twenty-three miles per gallon.6354 Mr. Taylor. Which? For rural or for nonrural?6355 Mr. Burkhard. For rural.6356 Mr. Taylor. Okay.6357 Mr. Burkhard. Yes.6358 Mr. Taylor. Okay. So that makes it even better for the6359rural folks. So say you are averaging 28 in nonrural areas, it6360is like now it is going to be probably a 12- or 13-percent6361difference in mileage. In my district, probably a 200-percent6362difference in miles driven. That is not really sustainable. It6363doesn't make sense to me that that would save the people in my6364district money.6365 I mean, am I explaining myself to where it makes sense?6366 Okay.6367 And, again, there is no other basis for it?6368 Okay. All right. Thank you. I appreciate that very much.6369 Before I served in Congress, I owned a ready-mix concrete6370business. So I will echo some of Congressman Collins' comments6371from earlier. But I know the planning and work that goes into6372carrying out infrastructure projects.6373 Mr. Johnson, how is the projected shortfall on the Highway6374Trust Fund impacting the asphalt pavement industry regarding6375project timelines, workforce stability, and project planning?6376You only have 30 seconds, but if you want to hit the highlights6377and you want to add stuff later, you can submit it.6378 Mr. Johnson. Yes. Of course.6379 So the shortfall has slowed down projects. It slowed down6380projects. It has slowed down our growth. It has made the6381environment much more competitive. And it is delaying projects,6382which is impacting our entire industry significantly.6383 Mr. Taylor. Thank you, everybody.6384 And I yield back, Chairman.6385 Mr. Rouzer. Mr. Kennedy, you are recognized.6386 Dr. Kennedy of Utah. Thank you, Mr. Chair. It is a pleasure6387to be here, and I am grateful for this important hearing being6388convened.6389 Our Nation's infrastructure is the backbone of economic6390opportunity, public safety, and quality of life. For decades,6391the Highway Trust Fund has played a role in building and6392maintaining that backbone. Yet today, we face a stark reality.6393The trust fund is on an unsustainable path, threatening the6394ability of States and localities to plan and deliver critical6395projects.6396 We must work together to create a durable path forward that6397restores certainty, empowers innovation for States, and meets6398the needs of a growing and dynamic America.6399 Mr. Braceras, as a friend from Utah I have known for many6400years, as we talked about at the earlier part, I will ask you a6401series of questions, if that is all right.6402 We both know Utah has been a national leader in piloting6403road usage charge programs. Can you speak to the lessons6404learned from Utah's experience with RUC programs and how it6405could translate to sustainable transportation funding efforts6406nationally?6407 Mr. Braceras. Yes. Thank you, Congressman, for that6408question. I thought you had been promoted there for a minute,6409but that was quick.6410 Dr. Kennedy of Utah. For a minute, yes.6411 Mr. Braceras. So going back to probably 2003, 2004, that is6412when our legislature kind of looked at transportation funding6413across the board and determined that we are not going down a6414sustainable path. And that is where the road usage charge6415program came from.6416 So I would say a lesson learned for us in this is you have6417to lead with your policy principles. You can't just jump into a6418program and say this mathematically makes sense. You have to6419lead with the policy principles.6420 So we focus on protecting people's privacy. We don't use6421the word: we are going to ``track'' you. That is not what6422anyone wants. And so we think that through.6423 One of the questions that Congressman Taylor asked earlier6424about benefits to rural citizens, one of the things that we6425found where the Farm Bureau was part of our convening board and6426coming up with the policies was, we wouldn't charge if you are6427not on a public road.6428 So rural users spend more time on nonpublic roads than6429urban users. And so by having the ability to not charge when6430you are on private roads, that was a benefit that the rural6431community found in this.6432 Now, I think--I don't see the road usage charge being as6433this panacea that is going to solve the problem. And we look at6434this as it is a combination of multiple revenue sources. So as6435we start to see more vehicles participate in the road usage6436charge program, we are trying to imagine that matching up with6437the decline in the purchasing power of the fuel tax.6438 So, we in Utah, we not only increased the 5-cent gas tax6439increase in 2015, but we also indexed it, and we have indexed6440that to CPI. And so every year, that is adjusted to CPI. Every6441year, we are seeing road usage charge coming in, and we also6442bring in General Fund moneys to do our capacity projects.6443 So basically, fuel tax, both Federal and State, is being6444used, the user fee is being used to operate and maintain the6445roadways, that day-to-day activities. And the capital expansion6446is coming from our statewide sales tax of which, by statute, it6447is earmarked at 27.5 percent of the General Fund is going to6448just capacity projects.6449 And so we found that it is going to take several revenue6450sources to be able to solve because there is so much need out6451there.6452 Dr. Kennedy of Utah. Thank you for that answer.6453 I will add the idea that comes to me is, it is important--6454and we have worked on these things, you know that I have been6455in healthcare my whole career--and the Medicaid parameters6456around a Federal-State partnership.6457 I am interested in your thoughts. If we go 50 years in the6458future, as the decades unfold, what role do you see States6459playing in collaboration with the Federal Government over the6460next 50 years in regards to funding, maintaining, building6461these roads, bridges, and other infrastructure that we need?6462 Mr. Braceras. I think that is one of the successes that we6463have in this country, it is the Federal, State, local6464partnerships. The projects are picked through a collaboration6465with local governments and the State government, but it is a6466State-administered, federally assisted program.6467 We can't do this without the Federal Government, because6468this is a national transportation system that every State6469depends on. Our economy, our security depends on this. And so6470what I see going forward is, I anticipate we are going to see6471much greater dependence on road usage charging for that6472operation and maintenance piece.6473 But I believe as a country we still need to make a6474commitment that we are going to continue to build new projects,6475new transit projects, new road projects, because that is going6476to be what is going to generate the economic growth in our6477country.6478 Dr. Kennedy of Utah. Thank you for that statement.6479 And I will finish this by saying that there is a great deal6480of redtape and difficulty that we put on ourselves through6481Federal oversight and regulatory burden, and I, along with many6482others, are interested in reducing and eliminating, when6483necessary, those regulatory frameworks that actually are6484nonfunctional for us.6485 With that, Mr. Chair, thank you for the time to ask these6486questions.6487 Thank you to the witnesses for their willingness to be here6488and take their time with us.6489 And I yield back.6490 Mr. Rouzer. Mr. Kiley.6491 Mr. Kiley of California. Thank you, Mr. Chair.6492 Underlying today's discussion about how we can shore up the6493Highway Trust Fund has been sort of an implicit premise--or at6494least sometimes this premise is there--that the more we spend,6495the better our roads are going to be, the better our6496transportation infrastructure is going to be. But that premise6497is not necessarily true.6498 Most obviously, when you just look at the fact that6499inflation has caused the cost of building to go up so much in6500recent years, I think it is something like 40-percent reduction6501in the purchasing power under the Infrastructure Act since it6502passed.6503 But another example of that would be my own State of6504California, which has the highest gas tax of any State in the6505country, yet has among the worst roads. And our taxpayers seem6506to pay more and more while the potholes get deeper and deeper.6507 And so, Mr. Braceras, you seem to have had some success in6508Utah in terms of actually getting a better return on your6509investment. So would you have any advice to us in California as6510to how we can do better?6511 And maybe, Mr. Johnson, if you also wanted to weigh in on6512this broader question of how, apart from the question of how we6513shore up the trust fund, how do we actually get more of a6514return on the funds we are investing?6515 Mr. Braceras. Thank you for that question.6516 So I think one of the ways to get more return on the6517investment is the predictability of the funding. We can be more6518strategic. We apply an asset management, every State DOT, asset6519management business approach to try to determine which project6520to do and at what time. If you can do the right project at the6521right time, you can get better outcomes.6522 And so that predictability, knowing that you are going to6523have X amount of money coming in every year, allows you. And6524recognize that pavement conditions, bridge conditions,6525especially in a large State like yours, take a long-term6526commitment. You need to look at trends.6527 So what we did is in the mid-2000s, we realized at that6528time we didn't have enough money to maintain all of our roads6529at the same standard that we felt we needed to. So we stopped6530maintaining what we called low-volume roads. We did reactive6531maintenance, is all we did.6532 And we showed our legislature every year that we predict6533with this investment this is going to be the pavement6534condition, the trends that you are going to see. And then we6535told them that with a 5-cent gas tax, we could turn that6536condition around and start to improve it. And we have been able6537to do that with performance measures.6538 So I think holding States and local governments accountable6539for outcomes, give them the flexibility to figure out how to do6540it, what projects to do it with, but hold them accountable for6541outcomes and realize that these investments in infrastructure,6542you have to look at trends that take a long time to turn a very6543large ship.6544 Mr. Kiley of California. So, sir, what does that6545accountability look like with the performance measures?6546 Mr. Braceras. I am sorry?6547 Mr. Kiley of California. What does the accountability look6548like with those performance measures?6549 Mr. Braceras. So for us in Utah, in this one case, we were6550looking at pavement condition. And so we were using the6551performance measure that the public sees, the seat of their6552pants. We call it IRI, International Roughness Index.6553 But what we were actually using with the engineers in the6554back room was Overall Condition Index, looking at all the6555distresses within the pavement system. And we were using that6556asset management approach to predict with different investment6557levels what that outcome would look like.6558 Does that make sense?6559 Mr. Kiley of California. Yes. And you said but the6560accountability part is if the locality doesn't meet that6561standard, what happens then?6562 Mr. Braceras. Yes. So I don't get taken to the woodshed. I6563would probably get fired. But for my legislature, every year,6564we are reporting how we are doing with that investment. So6565reporting on safety, pavement condition, bridge condition,6566mobility. We are looking at delays.6567 All of those things take place almost on a monthly basis by6568legislature, and that is really, I think, the accountability6569process where they are making sure we are investing all the6570dollars, the State dollars and the Federal dollars, to get the6571best outcomes.6572 Mr. Kiley of California. That is very helpful. Thank you.6573 And, Mr. Johnson, do you have anything you wanted to add?6574 Mr. Johnson. Sure. Yes. I agree with Mr. Braceras. It6575definitely falls on the State DOTs. And they need predictable6576funding so that they can plan the maintenance preparations and6577they can prioritize which projects are most important so they6578can get them on schedule and they can hold those schedules.6579Because delay in schedules does nothing but make congestion6580worse and the cost go up.6581 Mr. Kiley of California. Thank you very much.6582 I yield back.6583 Mr. Rouzer. Mr. Owens, you are recognized.6584 Mr. Owens. Thank you, Chairman Rouzer and Ranking Member6585Norton.6586 I thank our witnesses today for joining us.6587 For nearly 70 years, the Highway Trust Fund has connected6588our communities and facilitated the interstate commerce that6589has made America the economic envy of the world. However, for6590too long, we have kicked this Highway Trust Fund solvency down6591the road, as it is a problem that will not go away, and it6592hasn't.6593 In Utah's Fourth District, one of the fastest growing6594regions in the country, infrastructure projects are6595meticulously studied, planned, and executed, sometimes decades6596in advance. To support these projects and others across the6597country, this community must pursue predictable, reliable, and6598fiscally responsible solutions that empower States and support6599innovation.6600 Mr. Braceras, it is an honor again to host you today. Your6601presence today reflects your outstanding leadership at UDOT and6602Utah's role as a national leader in innovation and6603infrastructure solutions.6604 Could you please share with the committee what actions the6605State of Utah has taken to shore up its transportation funding6606over the past years, particularly as the State's population has6607grown.6608 Mr. Braceras. Thank you for that question, Congressman.6609 So in the State of Utah, we rely heavily on the Federal6610program. It makes up just under 18 percent of our total funding6611for a $2.5 billion budget, is what we manage in the State of6612Utah.6613 So we are, compared to a lot of States, we are a relatively6614small State by population, we are a large geographic State, but6615we are a very urban State as well.6616 And so the Federal program is critical. We use that mostly,6617almost exclusively, to take care of our pavements and our6618bridges, our Federal program.6619 And then we use the State's gas tax money to operate the6620system and also do things like install traffic signals, turn6621lanes, passing lanes, those types I will call them operational6622fixes.6623 And then we use the State general sales tax, 27.5 percent6624of the statewide general sales tax, where the legislature has6625determined there is a nexus. So we have been talking a lot6626about user fees here. The legislature determined there is a6627nexus between the vehicle sales, sales of vehicles, and6628vehicle-related services. And that was the nexus that they used6629to establish the percentage.6630 And that percentage is used for capacity projects, and we6631use it for highway capacity projects, as well as transit6632capacity projects, as well as active transportation projects6633that we are doing around the State.6634 And so that is kind of the funding. We also have aviation,6635rural transit program, and other funding pieces, but that is6636the major solutions that our legislature has determined.6637Because if we are going to continue to grow, transportation is6638one of those foundational elements to our quality of life and6639our economy.6640 Mr. Owens. Okay.6641 And could you also please outline what it would mean for6642the State of Utah if Congress does not address the long-term6643solvency of the Highway Trust Fund?6644 Mr. Braceras. Yes. Sorry, sir. Was it how would we propose6645addressing?6646 Mr. Owens. Yes. What would it mean to our State if the6647Congress does not address this long-term solvency problem?6648 Mr. Braceras. Oh. Yes. Thank you for that.6649 So every State develops what we call a 5-year STIP,6650Statewide Transportation Improvement Program. And so here the6651IIJA is about to expire here in September of 2026. We all are6652making decisions because we have 5 years of projects because we6653have to get the projects ready to go.6654 We are all making guesses of what Congress is going to do6655in terms of what your funding level is going to be. I have6656chosen to be conservative, and I have programmed flat.6657 So I have taken the last year of funding for IIJA, and I am6658assuming we are going to at least have a flat budget because6659basically the STIP is a commitment of projects. It is a promise6660that I am making to our citizens that we are going to deliver6661those projects.6662 So if Congress brings more money in, I am going to scramble6663to find the projects to fill that up. If Congress does not fund6664it at that last level, then we are going to be cutting6665projects--we don't cut them. We push them back. We delay those6666projects.6667 And so that is why it is critical. If we want to deliver6668projects on time at the best cost and get the best outcomes, we6669need to have that predictability.6670 And I would suggest that funding the formula programs6671provides the States the best predictability to be able to get6672projects out so our partners, the contractors, the6673consultants--they need to plan. They need to have6674predictability to make the investments they need to deliver the6675projects that we ask them to do.6676 Mr. Owens. Thank you.6677 I just want to kind of wrap up by saying I have made the6678point as often as I can that Utah should be the model. We6679innovate. We grow. We collaborate like no other State in the6680Union. So I hope they take my advice and use Utah as that6681example.6682 Thanks so much. Appreciate it.6683 I yield back.6684 Mr. Rouzer. The gentleman yields back.6685 Are there any other questions from Members who have not yet6686had the opportunity to ask?6687 I don't see any.6688 And, therefore, I want to thank our witnesses. Appreciate6689your testimony today. It was very helpful, very instructive, a6690lot of good dialogue here that will be very helpful as we move6691forward.6692 So, with that, the subcommittee stands adjourned.6693 [Whereupon, at 1:01 p.m., the subcommittee was adjourned.]66946695 Submissions for the Record66966697 ----------66986699 Prepared Statement of Hon. Rick Larsen, a Representative in Congress6700 from the State of Washington, and Ranking Member, Committee on6701 Transportation and Infrastructure6702 Thank you, Chairman Rouzer and Ranking Member Norton, for holding6703this hearing.6704 The Subcommittee has explored through the ``America Builds''6705hearing series why robust investment in our transportation6706infrastructure matters. Today, we will discuss how to keep the long-6707term funding certainty for highway and transit programs going--by6708discussing the future of the Highway Trust Fund.6709 The Highway Trust Fund provides predictable and steady funding for6710states, counties, cities, Tribes and transit agencies to build and6711maintain roads, bridges, freight corridors, transit systems and bike6712and pedestrian infrastructure. These investments keep our economy6713moving and our communities connected, getting people and goods where6714they need to go.6715 Highway Trust Fund dollars are uniquely reliable, since they are6716shielded from the ups and downs of the annual appropriations process6717and government shutdown threats. Predictable funding over several years6718allows states and localities to plan and deliver complex infrastructure6719projects. Predictable cash flow also translates into dependable, good-6720paying jobs for workers. However, over the past two decades, the Trust6721Fund has faced an ongoing shortfall, requiring multiple interventions6722from Congress to keep grants, safety improvements, and workforce6723development initiatives going.6724 Congress has not raised the federal gas tax since 1993. Not6725surprisingly, the revenue from gas and diesel taxes does not buy what6726it used to in infrastructure projects. If the federal fuel taxes were6727indexed to inflation, the current 18.3 cent tax on gasoline would be6728over 40 cents per gallon and the diesel tax would be over 53 cents per6729gallon (compared to 24.3 cents today).6730 Congress has transferred $275 billion in General Fund revenue into6731the Highway Trust Fund since 2008 to keep investments going. States6732have also stepped up to fill in some of the lost fuel tax revenue.6733Since 2013, 35 states and Washington, DC, have increased their state6734gas taxes. Additionally, at least 39 states assess annual EV fees,6735ranging from $50 to $290. Electric vehicles are not the cause of6736today's Trust Fund insolvency--but as they become more prevalent,6737incorporating them into a user-pays system is appropriate.6738 The Bipartisan Infrastructure Law also funded state and national6739pilot projects to study the viability of transitioning from a fuel tax6740to a road user charge. As states continue to explore options to fund6741transportation investment, Congress can learn from these efforts. There6742are many options to fund transportation investments that Congress will6743have to debate ahead of the next reauthorization bill. However, what6744should not be up for debate is whether we continue to invest in our6745nation's transportation infrastructure at the BIL's robust levels.6746 What also should not be up for debate is that the entities who,6747thanks to the BIL, now reap the benefits of federal support--cities,6748counties, tribal governments, and MPOs--must continue to have access to6749reliable funding. These entities are active participants in solving6750transportation problems and know local needs best. As we will hear in6751testimony from Mr. Tomer today, these entities also own proportionally6752more infrastructure than they get support for in federal dollars6753compared to their state partners. Reliable highway, transit, and rail6754funding in the BIL has supported 90,000 infrastructure projects that6755are underway in every congressional district.6756 My home state of Washington has benefited from $3.3 billion in6757Highway Trust Fund dollars, putting women and men to work modernizing6758our infrastructure. Last month, the American Society of Civil6759Engineers' Infrastructure Report Card showed that we are making6760progress in improving our infrastructure and called for sustained6761investment to keep the momentum going. Additionally, the National6762Highway Traffic Safety Administration reported that last year was the6763first time since 2020 that roadway fatalities fell below 40,000, a6764testament to the BIL's focus on safety.6765 These encouraging signs of progress are years in the making and6766will need sustained support to continue. The BIL's down payment on our6767future should be the norm, not the exception, going forward. A cleaner,6768greener, safer, and more accessible transportation system is possible,6769but it requires continuing serious investment.6770 I look forward to hearing from our witnesses today about6771sustainable funding solutions to address state and local infrastructure6772needs.67736774Letter of April 29, 2025, from John A. Costa, International President,6775 Amalgamated Transit Union, Submitted for the Record by Hon. David6776 Rouzer6777 April 29, 2025.6778 Dear Representative:6779 On behalf of the nearly 200,000 members of the Amalgamated Transit6780Union (ATU), the largest union representing transit workers in the6781United States, I write in support of Chair Sam Graves and the House6782Transportation and Infrastructure Committee's effort to support public6783transportation by working to close the massive shortfall in the Highway6784Trust Fund (HTF).6785 The federal gas tax is no longer capable of sustaining the HTF on6786its own. New sources of revenue are needed to ensure that Congress will6787not have to continually bail out the HTF through General Fund6788transfers.6789 ATU appreciates the Committee's protection of the Federal Transit6790Program and recognition of the key role it plays in sustaining our6791economy. Every $1 invested in public transportation generates6792approximately $5 in economic returns. Each year, millions of Americans,6793including many union members, rely on the bus or train to get to work6794every day. ATU looks forward to working with the Committee in the6795months ahead as it works to reauthorize the vital transit programs6796which provide the resources to help ATU members move our nation.6797 Sincerely,6798 John A. Costa,6799 International President, Amalgamated Transit Union.68006801 Letter of April 29, 2025, to Hon. Sam Graves, Chairman, Committee on6802 Transportation and Infrastructure, from David C. Bauer, President and6803 Chief Executive Officer, American Road & Transportation Builders6804 Association, Submitted for the Record by Hon. David Rouzer6805 April 29, 2025.6806The Honorable Sam Graves,6807Chairman,6808Committee on Transportation and Infrastructure, U.S. House of6809 Representatives, Washington, DC 20515.6810 Dear Chairman Graves:6811 The American Road & Transportation Builders Association strongly6812supports the package of highway user fees released today as part of the6813House Transportation & Infrastructure (T&I) Committee's budget6814reconciliation proposal.6815 The user fee concept has been a cornerstone of federal investments6816in critical highway, bridge and public transportation improvements6817since the creation of the Interstate Highway System nearly 70 years6818ago. These resources support the national infrastructure network that6819serves as the circulatory system of the U.S. economy and enables the6820personal mobility synonymous with the freedom entitled to every6821American.6822 Highway Trust Fund (HTF) revenues, however, have not kept pace with6823the growing demands placed on the nation's surface transportation6824system, thereby necessitating the practice of relying on federal6825general funds to supplement a revenue base that has remained static for6826over 20 years. As a result, state transportation improvement programs6827that rely on federal-aid for over 50 percent of their capital6828investments have been plagued by uncertainty from recurring trust fund6829revenue shortfalls.6830 The proposal you are advancing would restore equity to the HTF's6831user fee foundation by ensuring owners of electric vehicles financially6832support improvements to the road and bridge network from which they6833directly benefit and begins an overdue dialogue about how to pay for6834future federal surface transportation investments.6835 We urge all members of the House T&I Committee to support your6836proposal to help provide their states with a robust and reliable6837federal partner in the shared goal of delivering a 21st century6838national surface transportation network.6839 Sincerely,6840 David C. Bauer,6841 President & CEO, American Road & Transportation Builders6842 Association.68436844 Statement of Ian Jefferies, President and Chief Executive Officer,6845 Association of American Railroads, Submitted for the Record by Hon.6846 David Rouzer6847 On behalf of the members of the Association of American Railroads6848(AAR), thank you for the opportunity to provide this statement for the6849record. AAR freight railroad members account for approximately 846850percent of U.S. freight railroad mileage, 93 percent U.S. freight rail6851employees, and 97 percent of U.S. freight rail revenue. The major6852freight railroads in Canada and Mexico are AAR members, as are Amtrak6853and several commuter rail systems.6854 Railroads Are Indispensable to Our Economy6855 For nearly 200 years, freight railroads have been central to6856America's economic development, linking businesses across the country6857and around the globe. Today, railroads serve nearly every industrial,6858wholesale, retail, and resource-based sector of our economy. Each year,6859America's freight railroads transport more than 1.5 billion tons of6860freight and 28 million carloads and intermodal units--including huge6861volumes of agricultural products, chemicals, construction materials,6862food, manufactured goods, energy supplies, industrial equipment, and6863more--across a network spanning more than 135,000 miles.6864 Freight rail also offers significant public benefits. A single6865train can take hundreds of trucks off the highways, alleviating6866congestion and reducing taxpayer costs associated with highway6867construction and maintenance. On average, railroads are three to four6868times more fuel efficient than trucks, meaning moving freight by rail6869instead of truck reduces greenhouse gas emissions by up to 75 percent.6870Rail employees are also highly compensated: in 2023, the average U.S.6871Class I freight rail employee earned total compensation of $149,000. By6872contrast, the average compensation per full-time equivalent U.S.6873employee in 2023 was $97,200, just 65 percent of the rail figure.6874 Unlike trucks, barges, and airlines, America's privately-owned6875freight railroads operate overwhelmingly on infrastructure they own,6876build, maintain, and pay for themselves. From 1980 to 2024, America's6877freight railroads spent nearly $840 billion (approximately $1.366878trillion in today's dollars) of their own funds on capital expenditures6879and upkeep expenses related to locomotives, freight cars, tracks,6880bridges, tunnels and other infrastructure and equipment. ``Crumbling''6881might describe some U.S. infrastructure, but not freight rail.6882 Railroads and Trucks: Partners and Competitors6883 Rail intermodal is the long-haul movement of shipping containers6884and truck trailers by rail, combined with a truck or water movement at6885one or both ends. Intermodal allows railroads, ocean carriers, trucking6886companies, and intermodal customers to take advantage of the best6887attributes of various transportation modes. Today, just about6888everything on a retailer's shelves, as well as many industrial goods6889such as auto parts, may have traveled on an intermodal train.6890Intermodal now accounts for approximately 25 percent of U.S. freight6891rail revenue, more than any other traffic segment.6892 Railroads and trucks are partners on most intermodal shipments,6893working seamlessly together to deliver safe, reliable, and cost-6894effective transportation services. At the same time, though, railroads6895and trucks are fierce competitors. Virtually every intermodal shipment6896that moves via rail and truck could move solely by truck if rail rates6897and service offerings were not competitive. In addition, railroads and6898trucks compete intensively for vast segments of the non-intermodal6899freight market, with customers choosing which mode to use based on6900which one provides the best overall value. For the freight6901transportation system to function at its best, it is essential that6902rail and truck carriers compete on a level playing field, with policies6903that do not tilt the market in favor of one mode over the other.6904 Unfortunately, that's not the case today. The United States has6905historically relied on a user-pays system to fund investments in6906highway infrastructure, but revenues into the Highway Trust Fund (HTF)6907have failed to keep pace with spending needs. According to a recent6908report by Congressional Budget Office (CBO), balances in both the6909highway and transit accounts of the HTF will be exhausted in 2028. The6910CBO says that if the taxes that are currently credited to the trust6911fund remained in place and if funding for highway and transit programs6912increased annually at the rate of inflation, the shortfalls accumulated6913in the HTF highway and transit accounts from 2024 to 2033 would total6914$241 billion.\1\6915---------------------------------------------------------------------------6916 \1\ Testimony of Chad Shirley, Principal Analyst Microeconomic6917Studies Division, Congressional Budget Office before the U.S. House of6918Representatives Subcommittee on Highways and Transit, Committee on6919Transportation and Infrastructure, October 18, 2023.6920---------------------------------------------------------------------------6921 This shortfall has previously been covered by transfers from the6922general fund, but general fund transfers to the HTF distort the freight6923transportation marketplace in favor of trucking and put other6924transportation modes at an unfair competitive disadvantage. This is6925especially problematic for railroads, which build, maintain, and pay6926for virtually all the infrastructure over which they operate.6927 Studies indicate that trucks cause the overwhelming share of the6928damage to our nation's roads and bridges as compared to other vehicles,6929and the fuel taxes and other fees heavy trucks pay do not come close to6930covering the costs of that damage.\2\ The taxes and fees trucks pay to6931help maintain our nation's roads and bridges have not been6932substantially changed since 1993, resulting in a multi-billion-dollar6933annual underpayment compared to the damage trucks cause.6934---------------------------------------------------------------------------6935 \2\ Congress should require that the Federal Highway Administration6936finalize the highway cost allocation study required in the last surface6937transportation reauthorization. This would provide needed precision6938regarding the damage to our nation's roadways caused by each highway6939user class.6940---------------------------------------------------------------------------6941 Congress should remedy this modal inequity by either increasing the6942fuel tax or imposing a vehicle-miles traveled fee or a weight-distance6943fee for motor carriers. An appropriate user fee would be self-6944sustaining; would not increase taxes or fees for non-highway6945transportation modes; and would create a competitive tax environment6946across modes. While AAR supports ensuring that electric passenger6947vehicles contribute to the HTF in proportion to the wear they cause on6948highways, Congress must also ensure that the same standard applies to6949commercial motor vehicles, whether electric or diesel-powered.6950 On a related note, Congress should reject calls to increase federal6951truck size and weight limits until, at a minimum, trucks pay the full6952cost of the damage they cause to our roads and bridges. The existing6953multi-billion-dollar annual underpayment would become even greater if6954truck length and weight limits were increased. Raising truck size and6955weight limits would also artificially shift freight from rail to truck.6956Given rail's inherent environmental advantages and the many other6957benefits of moving freight by rail, imposing artificial impediments to6958rail, such as increasing federal truck size and weight limits, is not6959sound policy.6960 Conclusion6961 All transportation modes are crucial to our nation, and railroads6962agree that non-rail U.S. transportation infrastructure should be world-6963class, just as U.S. freight rail infrastructure is world-class.6964Everyone involved in freight transportation knows that no country can6965be a first-rate economic power without first-rate logistics and6966transportation capabilities across modes.6967 Moreover, when it comes to transportation, we are all in this6968together. The various modes of transportation compete fiercely against6969each other. That competition is both healthy and necessary. But the6970modes also cooperate extensively in countless markets, and that6971cooperation is essential too. It is therefore entirely fitting that6972policymakers recognize and support the interdependence of our supply6973chains.6974 I respectfully suggest, though, that current public policy does not6975always reflect the full value railroads offer. Freight rail represents6976a viable and socially beneficial complement to highway freight6977movement. This does not mean we should stop building highways or ignore6978the vital role trucks play. But it does mean policymakers should more6979fully account for the economic, environmental, and infrastructure6980benefits that freight railroads provide. A balanced policy framework6981that recognizes rail's potential will help ensure a more efficient,6982more resilient, and more sustainable freight transportation system for6983the nation.69846985 Letter of May 13, 2025, to Hon. David Rouzer, Chairman, and Hon.6986 Eleanor Holmes Norton, Ranking Member, Subcommittee on Highways and6987 Transit, from David R. Hill, Executive Vice President-Energy,6988Bipartisan Policy Center, Submitted for the Record by Hon. David Rouzer6989 May 13, 2025.6990The Honorable David Rouzer,6991Chairman,6992Highways and Transit Subcommittee, House Committee on Transportation6993 and Infrastructure, Washington, DC 20515.6994The Honorable Eleanor Holmes Norton,6995Ranking Member,6996Highway and Transit Subcommittee, House Committee on Transportation and6997 Infrastructure, Washington, DC 20515.69986999RE: House Subcommittee on Highways and Transit Hearing on ``America7000Builds: The Need for a Long-Term Solution for the Highway Trust Fund''7001(April 29, 2025)70027003 Dear Chairman Rouzer and Ranking Member Norton,7004 The federal Highway Trust Fund (HTF), which supports the7005construction and maintenance of our nation's highways and transit7006systems, is facing a cash flow crisis. Since the gas tax is not7007currently indexed to inflation, its purchasing power has decreased7008significantly since 1993, when it was last raised. Reduced purchasing7009power and fuel consumption have led the HTF to become increasingly7010reliant on transfers from the U.S. Treasury Department's general fund--7011over $275 billion since 2008--to maintain spending at the levels7012authorized by Congress.7013 According to the Congressional Budget Office's most recent7014projections, the HTF is expected to run out of money sometime in 2028.7015After that, Congress will be confronted with HTF revenue shortfalls of7016about $40 billion annually (and increasing over time) that must be7017covered through increased revenues, decreased spending, or additional7018general fund bailouts--$340 billion cumulatively through 2035.7019 Over the years, the Bipartisan Policy Center has worked to outline7020politically viable, fiscally responsible policy options to sustainably7021fund federal transportation programs, while also focusing on the7022equally important question of how to spend transportation funding more7023effectively. One past effort, spearheaded by former Reps. Bill Shuster7024and Joe Crowley, noted a need to reinforce the user-pay, user-benefit7025principle that underlies the HTF. The former lawmakers recommended a7026series of policy changes to raise the revenues needed to support stable7027federal transportation spending, account for increased fuel efficiency7028and electric vehicle (EV) adoption, and secure bipartisan support.7029 As the subcommittee considers ways to improve the long-term7030stability of the HTF, we write to highlight these options, including7031the need for a modest fee on EVs and an increase in the gas tax to7032address expected HTF deficits in the near term, while providing7033sufficient time and resources to transition to a vehicle miles traveled7034(VMT) fee as the long-term solution.7035 While the gas tax long served as a fair, reasonable, and reliable7036way to fund the HTF, electric and hybrid vehicle use has grown7037significantly, and fuel efficiency continues to improve for gas-powered7038cars. A fuel tax alone is no longer appropriate or sustainable.7039 Under the current system, EV owners use highways and bridges7040constructed and maintained with HTF funding without contributing to the7041fund's revenue. EVs are typically heavier than gasoline-powered cars of7042a similar size and can have a greater impact on road wear and7043associated costs. Although EVs comprise less than 2% of light-duty cars7044on the road today, EV market penetration is expected to increase7045rapidly over the next few decades--which means less gas consumption per7046vehicle and thus less revenue for the HTF.7047 As a stop-gap policy, a fee on EVs would not only increase revenues7048to pay for critical programs but also increase fairness by ensuring7049that all those who are benefiting from safe and well-maintained7050highways are paying something to support their construction and7051maintenance. At least 39 states have already moved to implement similar7052EV registration fees, ranging from $50 to as much as $250 annually, to7053help offset declining revenues from state gas taxes.7054 However, a fee on EVs alone will not be enough to bridge the gap7055between the HTF's revenues and expenditures. Increasing the gas tax to7056bring it in line with the rate of inflation since it was last adjusted7057in 1993 and indexing it to inflation going forward remains the most7058straightforward option to secure the HTF's near-term financial7059stability.7060 The most effective long-term solution to funding the HTF would be7061to transition to a VMT fee, which would be based on miles driven rather7062than gallons of gas purchased. Charging drivers based on the amount7063they drive, regardless of how their vehicle is powered or what type of7064vehicle they may buy in the future, is the most direct way to ensure7065that the HTF can continue to operate in a fiscally responsible way. The7066Infrastructure Investment and Jobs Act included provisions to establish7067a national per-mile road usage fee pilot program, while continuing to7068support state-level pilots, reflecting similar BPC recommendations. Yet7069the pilot was not prioritized and remains woefully behind in its7070implementation--an additional opportunity for this subcommittee as it7071weighs the HTF's future.7072 Taking steps now to secure reliable revenue for the HTF going7073forward will prevent negative consequences for drivers across the7074country, such as worsening congestion and safety, as well as increasing7075damage to vehicles, which would require owners to spend money on7076repairs.7077 We stand ready to assist as you put forward and build bipartisan7078support for the policies needed to secure the HTF's financial future7079and more effectively invest limited federal dollars in critical7080transportation infrastructure.7081 Sincerely,7082 David R. Hill,7083 Executive Vice President-Energy, Bipartisan Policy Center.70847085CC: Sam Graves, Chair, House Transportation and Infrastructure7086Committee7087 Rick Larsen, Ranking Member, House Transportation and7088Infrastructure Committee70897090 Letter of April 30, 2025, to Hon. Sam Graves, Chairman, and Hon. Rick7091Larsen, Ranking Member, Committee on Transportation and Infrastructure,7092from the National Asphalt Pavement Association; National Stone, Sand &7093 Gravel Association; Portland Cement Association; and National Ready7094 Mixed Concrete Association; Submitted for the Record by Hon. David7095 Rouzer7096 April 30, 2025.7097The Honorable Sam Graves,7098Chair,7099Committee on Transportation and Infrastructure, 1135 Longworth House7100 Office Building, Washington DC 20510.7101The Honorable Rick Larsen,7102Ranking Member,7103Committee on Transportation and Infrastructure, 2163 Rayburn House7104 Office Building, Washington, DC 20510.7105 Dear Chairman Graves and Ranking Member Larsen,7106 Investing in our nation's critical surface transportation network7107provides the American people and businesses the opportunity to thrive.7108In 2022, our nation's road and bridge network facilitated the movement7109of over 19 billion pounds of freight worth an estimated $18 trillion--711072% of our nation's cargo. In addition to freight, our highway system7111paves the way for people to move efficiently and effectively to school,7112sports, work and travel.7113 This critical highway system relies on funding from Congress via7114the highway trust fund. Since its inception, the highway trust fund has7115been a user-based system, meaning funding for maintenance and7116construction of the network comes from the highway users. These7117revenues are primarily derived from gas and diesel taxes as well as7118truck excise taxes, however, over the last 2 decades, declines in7119revenues have created significant budget shortfalls within the trust7120fund. Revenues from the trust fund have not been adjusted since the gas7121tax was raised in 1993 and each year these revenues decline due to a7122more fuel-efficient fleet and an increase in electric vehicles.7123Currently, those electric vehicles do not pay a federal user-fee,7124although, 38 states around the country have implemented a similar fee.7125 We support the Committee's efforts to raise revenues for the trust7126fund through user fees--by implementing an electric vehicle7127registration fee and ensuring all road-users continue to pay into the7128system. While these proposals will not completely address the7129shortfalls in the trust fund, they begin the critical work of finding a7130sustainable funding source for the highway trust fund We also encourage7131the Committee to ensure that revenues collected new fee are remitted to7132and remain in the highway trust fund.7133 Thank you for your dedication and commitment to addressing the7134challenges associated with financing our nation's critical surface7135transportation network. This proposal is a great step in the right7136direction, ensuring a fair and equitable solution that maintains the7137highway trust fund and its historic user-fee approach. Our nation's7138roads and bridges are the foundation of the economy, and these policies7139and investments will have lasting impacts for generations to come.7140 Sincerely,7141 National Asphalt Pavement Association.7142 National Stone, Sand & Gravel Association.7143 Portland Cement Association.7144 National Ready Mixed Concrete Association.71457146 Letter of April 30, 2025, to Hon. Sam Graves, Chairman, Committee on7147 Transportation and Infrastructure, and Hon. David Rouzer, Chairman,7148 Subcommittee on Highways and Transit, from NATSO, Representing7149 America's Travel Plazas and Truckstops; and SIGMA: America's Leading7150 Fuel Marketers; Submitted for the Record by Hon. David Rouzer7151 April 30, 2025.7152The Honorable Sam Graves,7153Chairman,7154Committee on Transportation and Infrastructure, U.S. House of7155 Representatives, Washington, DC 20515.7156The Honorable David Rouzer,7157Chairman,7158Subcommittee on Highways and Transit, Committee on Transportation and7159 Infrastructure, U.S. House of Representatives, Washington, DC7160 20515.7161 Dear Chairman Graves and Subcommittee Chair Rouzer:7162 NATSO, Representing America's Travel Centers and Truckstops, and7163SIGMA: America's Leading Fuel Marketers (together, the7164``Associations'') \1\ strongly support several of the provisions7165included in the House Transportation and Infrastructure Committee's7166(the ``Committee's'') proposal for reconciliation pursuant the7167Concurrent Resolution on the Budget for Fiscal Year 2025. Specifically,7168the Associations' offer our support for the proposed registration fees7169for motor vehicles and the rescission of grant funds for a sustainable7170aviation fuel (``SAF'') grant program.7171---------------------------------------------------------------------------7172 \1\ NATSO currently represents approximately 5,000 travel plazas7173and truckstops nationwide, comprising both national chains and small,7174independent locations. SIGMA represents a diverse membership of7175approximately 260 independent chain retailers and marketers of motor7176fuel. The retail fuels and convenience industry provide 2.38 million7177jobs at approximately 120,000 retail establishments across the country.7178---------------------------------------------------------------------------7179 The Committee's areas of jurisdiction under the budget7180reconciliation process offer an opportunity to build a reliable,7181efficient, and well-capitalized surface transportation system. The7182budget reconciliation process is also an opportunity to support7183reliable energy from a variety of sources at reasonably low, stable7184prices. In this respect, the Associations urge the Committee to advance7185technology-neutral policies that encourage investment in alternative7186refueling infrastructure that lowers fuel prices for consumers.7187 The Associations welcome the Committee's proposal to adopt a7188technology-neutral highway funding mechanism that ensures all vehicles7189utilizing federal roads and bridges contribute to the Highway Trust7190Fund. Though the proposed vehicle registration fee would not result in7191proportionate contributions from electric vehicles that do not pay the7192federal gas tax, it represents an important first step in establishing7193a technology-neutral approach to highway funding. Ultimately, the7194proposed approach could pave the way for a long-term, sustainable7195funding mechanism that equitably assesses fees on all Interstate7196highway users. The Associations applaud the proposal.7197 The Associations also strongly support the Committee's efforts to7198rescind funding the unnecessary, inefficient SAF grant program (``FAST7199Grant Program'') created in the Democratic Inflation Reduction Act of72002022.\2\ Republicans voted unanimously against the enactment of this7201program. The FAST Grant Program utilizes taxpayer funds to divert7202existing biofuel production capacity toward sustainable jet fuel7203production to meet the Biden Administration's `ESG' goals.7204Specifically, the FAST Program funded projects to dismantle active7205ethanol and advanced biofuel capacity to construct costly new SAF7206facilities on the taxpayer dime.\3\7207---------------------------------------------------------------------------7208 \2\ See Public Law 117-169 at Sec. 40007 and 49 U.S. Code 44504.7209 \3\ The Biden Administration utilized the FAST Grant Program to7210award $16.8 million in taxpayers funds to convert an existing ethanol7211and isobutanol fuel refinery in Luverne, Minnesota, to a facility for7212SAF production. See https://www.faa.gov/newsroom/biden-harris-7213administration-announces-nearly-300-million-awards-sustainable-7214aviation-fuels#.7215---------------------------------------------------------------------------7216 Because of the relative production inefficiencies of SAF and the7217limited availability of biofuel feedstocks, projects funded under the7218FAST Grant Program will result in a decrease in overall biofuel7219production capacity. In turn, the reduced availability of ethanol and7220other advanced biofuels will raise fuel prices for consumers at the7221pump. Congress should ensure that incentives for alternative fuels are7222technology-neutral and direct biofuel feedstocks towards their most7223efficient, environmentally-compelling use case. The Associations are7224grateful that the Committee is proposing to rescind funding for this7225program that, if left unchecked, will ultimately result in higher over-7226the-road fuel prices.7227 The Associations are eager to work with the Committee to advance7228well-designed policies that support a robust, well-capitalized surface7229transportation system where consumers have access to low-cost and7230reliable refueling infrastructure. We encourage the Committee to adopt7231the budget reconciliation proposal as drafted.7232 Sincerely,7233NATSO, Representing America's Travel Plazas and Truckstops.7234 SIGMA: America's Leading Fuel Marketers.72357236cc: Republican Members of the House Transportation and Infrastructure7237Committee72387239 Letter of April 28, 2025, to Hon. David Rouzer, Chairman, and Hon.7240 Eleanor Holmes Norton, Ranking Member, Subcommittee on Highways and7241 Transit, from Todd Spencer, President and Chief Executive Officer,7242Owner-Operator Independent Drivers Association, Inc., Submitted for the7243 Record by Hon. David Rouzer7244 April 28, 2025.7245The Honorable David Rouzer,7246Chairman,7247House Committee on Transportation and Infrastructure, Subcommittee on7248 Highways and Transit, 2165 Rayburn House Office Building,7249 Washington, DC 20515.7250The Honorable Eleanor Holmes Norton,7251Ranking Member,7252House Committee on Transportation and Infrastructure, Subcommittee on7253 Highways and Transit, 2165 Rayburn House Office Building,7254 Washington, DC 20515.72557256Re: America Builds: The Need for a Long-Term Solution for the Highway7257Trust Fund72587259 Dear Chairman Rouzer and Ranking Member Holmes Norton,7260 On behalf of the 150,000 members of the Owner-Operator Independent7261Drivers Association (OOIDA), we write to share the highway funding7262priorities of small-business truckers. Professional truck drivers cover7263tens of billions of miles on American highways each year, so our7264members can speak from experience about the significant need to update7265and maintain our roads. Between the current diesel fuel tax and other7266trucking-specific taxes and fees, the trucking industry contributes7267about half of user fee funding that goes in to the Highway Trust Fund7268every year. We understand the value of an efficient highway network and7269support efforts to increase HTF revenues so long as they are done in a7270fair and equitable way.7271 The federal gasoline and diesel taxes are proven mechanisms that7272provide a transparent and efficient way to fund highway construction7273and maintenance. The costs of administering these user fees are7274extremely low--estimated to be less than 1% of all revenues7275collected.\1\ Congress should be looking to build on this relatively7276stable and predictable system. Therefore, we support efforts to7277increase dedicated revenues to the HTF through reasonable and impartial7278increases to federal gasoline and diesel taxes.7279---------------------------------------------------------------------------7280 \1\ Transportation Research Board, Costs of Alternative Revenue7281Generation Systems, Report 689 (National Highway Cooperative Research7282Program, 2011)7283---------------------------------------------------------------------------7284 In addition to these traditional user fees, we a support a recent7285proposal from this committee that would require electric vehicles to7286pay an annual registration fee to the HTF. Truckers remain frustrated7287that electric vehicles currently pay nothing despite having equal7288access to the roads, bridges, and highways maintained by other road7289users. We also support H.R. 1253/S. 536, the Fair Sharing of Highways7290and Roads for Electric Vehicles Act (Fair SHARE Act), which would7291impose a one-time fee on electric vehicles and a fee on heavy-duty7292battery modules. These proposals would ensure that electric vehicles7293finally start to pay their fair share for our nation's infrastructure.7294 While we support these types of measures to raise revenue, we are7295steadfastly opposed to proposals that would disproportionately burden7296truckers. One potential funding mechanism we are concerned with is a7297vehicle miles traveled (VMT) tax. While this concept may sound7298appealing in theory, there are far too many questions and uncertainties7299for Congress to begin implementing any sort of VMT program in the next7300highway bill.7301 First, there will be significant costs associated with a VMT tax,7302including the costs for equipment to establish the system, the7303administrative cost for highway users and the government to track and7304collect taxes, and the costs to enforce the program. Implementation and7305administrative fees are likely to be at least ten times as high as the7306current fuel tax system \2\ and will be especially burdensome for small7307businesses.7308---------------------------------------------------------------------------7309 \2\ CBO, Issues and Options for a Tax on Vehicle Miles Traveled by7310Commercial Trucks (2019)7311---------------------------------------------------------------------------7312 While we are opposed to moving forward with a VMT program in7313general, we are particularly concerned about proposals that would7314single out the trucking industry for a truck-only VMT. This would7315assure that truckers pay a disproportionate cost to prop up the HTF. We7316also oppose any efforts to utilize Electronic Logging Devices (ELDs) to7317implement a VMT for trucks. Small-business truckers have already borne7318a significant cost for complying with the ELD mandate, and utilizing7319ELDs for VMT would create new costs and greater privacy issues.7320 The Infrastructure Investment and Jobs Act required U.S. Department7321of Transportation to implement a national VMT Pilot Program to study7322the feasibility of a VMT. The advisory board that will help structure7323the pilot program has been formed, but has not held any meetings yet.7324Therefore, we believe it would be premature for Congress to pursue this7325policy at this time.7326 OOIDA also remains opposed to the expansion of tolling. Tolling7327systems lack the efficiency and effectiveness of the current funding7328mechanisms. Research has shown that tolling is an extremely wasteful7329method of generating revenue compared to fuel taxes, with as much as733030% of funds going to administrative costs \3\ rather than the7331construction and rehabilitation of roads and bridges. Additionally,7332toll roads consistently fail to meet revenue projections, creating7333unanticipated funding shortfalls, which can lead to deteriorating road7334conditions and early toll rate increases.7335---------------------------------------------------------------------------7336 \3\ Transportation Research Board, Costs of Alternative Revenue7337Generation Systems, Report 689 (National Highway Cooperative Research7338Program, 2011)7339---------------------------------------------------------------------------7340 Truckers predominantly pay tolls out-of-pocket, as shippers seldom7341reimburse toll charges under the freight rate system. For small7342trucking businesses, any expansion of tolling, especially on major7343highways like Interstates, will directly impact their bottom line.7344Often operating on the slimmest of margins, new out-of-pocket expenses7345would diminish an owner-operator and their family's income.7346 Finally, we understand that there are proposals to repeal the7347Federal Excise Tax (FET) on heavy-duty trucks. While we certainly don't7348oppose repealing a tax on our industry, Congress must first identify an7349offset to account for lost HTF revenues. Without such a pay-for,7350inequitable financial burdens would likely fall on small-business7351truckers and owner-operators to make up the difference.7352 As your committee consider ways to raise additional revenue for the7353HTF, we hope that you will keep America's small-business truckers'7354concerns in mind. We look forward to working with you to rebuild our7355nation's transportation infrastructure.7356 Sincerely,7357 Todd Spencer,7358 President & CEO, Owner-Operator Independent Drivers Association,7359 Inc.73607361 Letter of April 30, 2025, to Hon. Sam Graves, Chairman, and Hon. Rick7362Larsen, Ranking Member, Committee on Transportation and Infrastructure,7363 from Todd Spencer, President and Chief Executive Officer, Owner-7364 Operator Independent Drivers Association, Inc., Submitted for the7365 Record by Hon. David Rouzer7366 April 30, 2025.7367The Honorable Sam Graves,7368Chairman,7369House Committee on Transportation and Infrastructure, 2165 Rayburn7370 House Office Building, Washington, DC 20515.7371The Honorable Rick Larsen,7372Ranking Member,7373House Committee on Transportation and Infrastructure, 2165 Rayburn7374 House Office Building, Washington, DC 20515.73757376Re: Support for EV/Hybrid Annual Fee73777378 Dear Chairman Graves and Ranking Member Larsen,7379 On behalf of the Owner-Operator Independent Drivers Association7380(OOIDA), representing 150,000 small-business truckers and professional7381drivers, we write in support of the proposal before the Committee to7382assess an annual fee on electric and hybrid vehicles. Professional7383truck drivers cover tens of billions of miles on American highways each7384year, so our members can speak from experience about the significant7385need to update and maintain our roads. Our members understand the value7386of an efficient highway network and support efforts to increase Highway7387Trust Fund (HTF) revenues so long as they are done in a fair and7388equitable way.7389 America's truckers are the backbone of our supply chain and make7390significant contributions to maintaining our roads and bridges by7391paying several taxes that support the HTF. However, truckers remain7392frustrated that electric vehicles currently pay nothing to the HTF7393despite having equal access to the roads and highways maintained by7394taxpayers.7395 We believe that this proposal for an annual fee on electric and7396hybrid vehicles is the very least that these vehicle owners should be7397paying to help maintain our infrastructure. OOIDA and the 150,0007398truckers we represent support this proposal which would help ensure7399fairness on America's roadways.7400 Sincerely,7401 Todd Spencer,7402 President & CEO, Owner-Operator Independent Drivers Association,7403 Inc.74047405 Letter of April 29, 2025, to Hon. David Rouzer, Chairman, and Hon.7406 Eleanor Holmes Norton, Ranking Member, Subcommittee on Highways and7407 Transit, from Sean O'Neill, Senior Vice President of Government7408Affairs, Portland Cement Association, Submitted for the Record by Hon.7409 David Rouzer7410 April 29, 2025.7411The Honorable David Rouzer,7412Subcommittee Chair,7413Highways and Transit Subcommittee, Washington, DC 20515.7414The Honorable Eleanor Holmes Norton,7415Subcommittee Ranking Member,7416Highways and Transit Subcommittee, Washington, DC 20515.7417 Dear Chairman Rouzer and Ranking Member Norton:7418 On behalf of the Portland Cement Association, which represents the7419majority of cement manufacturers across the country, we appreciate the7420opportunity to submit a letter for the record for today's hearing,7421``America Builds: The Need for a Long-Term Solution for the Highway7422Trust Fund.'' We appreciate the opportunity to share our perspective on7423the importance of addressing the long-term solvency of the Highway7424Trust Fund.7425 Our members manufacture cement, the primary ingredient in concrete,7426an essential construction material to building roads, bridges, tunnels,7427culverts, pipes, transit, and sidewalks in communities across the7428country. Cement and concrete product manufacturing, directly and7429indirectly, employs 577,000 people across the country, and our7430collective industries contribute over $130 billion to the nation's7431economy.7432 As members of the subcommittee know, receipts into the Highway7433Trust Fund come from taxes on highway fuel, tires, heavy vehicle use7434tax, and truck/trailer sales taxes. The motor fuel tax, 18.3 cents per7435gallon for gasoline and 24.4 cents per gallon for diesel, is the7436primary funding mechanism for the Highway Trust Fund and has remained7437unchanged since 1993. Over the past 30 years, the purchasing power of7438these taxes have lost significant purchasing power, while authorized7439funding from the Highway Trust Fund for federal-aid highway, roadway7440safety, and transit programs have more than tripled. Additionally, as7441there has been a move to more fuel-efficient electric vehicles,7442revenues collected for the Highway Trust Fund have further eroded.7443Collectively, these facts have contributed to the widening gap between7444the Highway Trust Fund receipts and expenditures.7445 Since fiscal year 2008, outlays from the Highway Trust Fund have7446consistently exceeded its receipts. To address this gap, Congress has7447transferred a total of $275 billion in general revenue to the Highway7448Trust Fund. The Congressional Budget Office projects receipts to7449Highway Trust Fund will not be able to meet outlays starting in fiscal7450year 2028. Specifically, the Congressional Budget Office projects the7451Highway Trust Fund to have a negative balance of over $22 billion in7452fiscal year 2028.\1\ Additionally, to continue the investments in7453highways, public transit, safety, and multi-modal projects, with7454adjustments for inflation and regardless of Infrastructure Investment7455and Jobs Act funding source, Congress will need to find approximately7456$260 billion in funding.7457---------------------------------------------------------------------------7458 \1\ https://www.cbo.gov/system/files/2025-01/51300-2025-01-7459highwaytrustfund.pdf7460---------------------------------------------------------------------------7461 These numbers demonstrate the need to address the long-term7462solvency of the Highway Trust Fund so that recipients of federal-aid7463highway funding can plan, engineer and design, and move forward with7464the construction of critical transportation projects across the7465country. The funding mechanisms of the Highway Trust Fund have a user7466fee structure. A long-term funding solution to address the solvency of7467the Highway Trust Fund should maintain this structure. With7468improvements to vehicle efficiency and the growth of electric and7469hybrid vehicles, a fee on these vehicles and dedicating the revenues7470solely to the Highway Trust Fund would help ensure all users of the7471system are paying for its upkeep. While a fee of electric and hybrid7472vehicles alone would only partly enhance Highway Trust Fund revenues,7473it is an important component of addressing the long-term solvency of7474the Highway Trust Fund.7475 We look forward to working with the Transportation and7476Infrastructure Committee to not only address the long-term solvency of7477the Highway Trust Fund but to pass a long-term reauthorization of the7478surface transportation program so communities can continue making7479critical investments in transportation infrastructure. If you have any7480questions, please do not hesitate to reach out to me.7481 Sincerely,7482 Sean O'Neill,7483 Senior Vice President, Government Affairs, Portland Cement7484 Association.74857486 Letter of May 5, 2025, to Hon. Sam Graves, Chairman, and Hon. Rick7487Larsen, Ranking Member, Committee on Transportation and Infrastructure,7488 from Dave Heller, Senior Vice President of Safety and Government7489 Affairs, Truckload Carriers Association, Submitted for the Record by7490 Hon. David Rouzer7491 May 5, 2025.7492The Honorable Sam Graves,7493Chairman,7494House Committee on Transportation and Infrastructure, 2165 Rayburn7495 House Office Building, Washington, DC 20515.7496The Honorable Rick Larsen,7497Ranking Member,7498House Committee on Transportation and Infrastructure, 2165 Rayburn7499 House Office Building, Washington, DC 20515.75007501Re: Support for EV/Hybrid Annual Fee75027503 The Truckload Carriers Association (TCA), with offices at 555 E7504Braddock Road, Alexandria, VA, is the only national trade association7505whose sole focus is the truckload segment of the trucking industry. The7506association represents dry van, refrigerated, flatbed, and rail7507intermodal carriers operating in 48 contiguous U.S. states, Alaska,7508Mexico, and Canada. As a significant part of an industry with over half7509a million companies operating millions of power units within the United7510States.7511 The TCA and its membership favor a fee for all Hybrid and Electric7512Vehicle Users. We have consistently backed efforts such as Senator Deb7513Fischer's (R-NE) ``Stop EV Freeloading Act,'' now known as the ``Fair7514SHARE Act,'' and we are equally supportive of the House companion bill7515championed by Representative Dusty Johnson (R-SD-At Large).7516 At TCA, we believe every vehicle traveling on our nation's highways7517should invest in the Highway Trust Fund regardless of its power source.7518This includes electric vehicles, which often weigh more than7519conventional vehicles and can cause greater wear and tear on our7520infrastructure.7521 We would be remiss if we also did not voice our longstanding7522support for increasing the federal fuel tax, provided it is indexed to7523inflation or includes an appropriate annual cap. The tax stands at 18.47524cents per gallon for gasoline and 24.4 cents per gallon for diesel,7525which has not been raised since 1993.7526 Thank you for the opportunity to submit this letter. TCA looks7527forward to collaborating with the House Transportation and7528Infrastructure Committee in any way we can to support a strong and7529sustainable future for our highway system.7530 Sincerely,7531 Dave Heller,7532 Senior Vice President of Safety and Government Affairs,7533 Truckload Carriers Association.75347535 Letter of April 29, 2025, to Hon. Sam Graves, Chairman, and Hon. Rick7536Larsen, Ranking Member, Committee on Transportation and Infrastructure,7537 from Rodney Davis, Senior Vice President of Government Affairs, U.S.7538 Chamber of Commerce, Submitted for the Record by Hon. David Rouzer7539 April 29, 2025.7540The Honorable Sam Graves,7541Chairman,7542Committee on Transportation and Infrastructure, U.S. House of7543 Representatives, Washington, DC 20515.7544The Honorable Rick Larsen,7545Ranking Member,7546Committee on Transportation and Infrastructure, U.S. House of7547 Representatives, Washington, DC 20515.7548 Dear Chairman Graves and Ranking Member Larsen:7549 As your committee advances the budget reconciliation process, the7550U.S. Chamber of Commerce commends you for exploring opportunities to7551restore the Highway Trust Fund (HTF) as the primary mechanism financing7552critical surface transportation projects through targeted ``user7553fees.''7554 This is a debate that is long overdue. With existing user fees on7555gasoline, diesel, and other motor fuels no longer keeping pace with7556surface transportation investment needs, the HTF requires additional or7557alternative sources of revenue to remain solvent. Your committee's7558consideration of new user fees--including an ``electric vehicle (EV)7559fee'' on EVs and hybrids, and a ``universal fee'' on all passenger7560vehicles--helps provide options for long-term solvency of the HTF, and7561importantly greater certainty on our ability to fund our Nation's7562transportation infrastructure.7563 Following the reconciliation process, this debate must continue as7564part of the surface transportation and infrastructure reauthorization.7565Modernizing the current user fee system to reflect the realities of7566rising construction costs, permitting delays, inflation, increasing7567fuel efficiency, and the growing number of electric vehicles, can help7568ensure all users contribute meaningfully to our nation's highway7569system.7570 Thank you for considering our views and your work to pass this7571meaningful budget reconciliation legislation. We look forward to7572working with you on enacting this into law as well as working with you7573to pass the next surface transportation and infrastructure7574reauthorization bill later this year.7575 Sincerely,7576 Rodney Davis,7577 Senior Vice President, Government Affairs, U.S. Chamber of7578 Commerce.75797580 Letter of April 25, 2025, to Members of Congress from 26 National7581Agriculture Associations, Submitted for the Record by Hon. David Rouzer7582 April 25, 2025.7583 Dear Members of Congress:7584 Investments in roads and bridges are vital to America's agriculture7585industry. These infrastructure improvements significantly enhance rural7586communities and strengthen our industry supply chains, ensuring7587efficient delivery of crop inputs for successful harvests and efficient7588connections between farmers and their domestic and global markets.7589 A sufficiently and predictably funded Highway Trust Fund (HTF)7590makes this all possible. However, the HTF is facing challenges that7591could lead to insolvency within a few years. Further, although Congress7592established the HTF as a ``user-pays'' system, not all highway users7593are contributing equitably. Electric vehicles do not contribute to the7594HTF at all because they are not subject to the federal fuel tax. Hybrid7595vehicles, while subject to the fuel tax on the gasoline they consume,7596contribute less than traditional internal combustion vehicles.7597Additionally, EVs and hybrid vehicles have heavy batteries that cause7598more road wear compared to conventional vehicles.7599 Fairness is a core value on the farm and across rural America. This7600principle extends to ensuring that all vehicle users, regardless of7601their fuel type or technology, contribute equitably to the upkeep and7602improvement of our roads and bridges. It has come to our attention that7603the House Republicans are seeking to include an equitable solution in7604their upcoming budget reconciliation package. The undersigned7605organizations, representing the American agriculture industry, urge7606Congress to act and ensure that these vehicles contribute an amount7607comparable to what gasoline and diesel vehicles pay to the Highway7608Trust Fund (HTF), with all revenues dedicated to the HTF. We encourage7609a simplistic design for raising revenue from EV and hybrid vehicle7610owners, such as a supplement to annual registration fees, and to avoid7611creating a duplicative tax, such as a vehicle miles tax, for gas and7612diesel vehicle owners. More than 30 states have implemented fees on EV7613and hybrid vehicle owners to offset revenue lost from traditional gas7614taxes.7615 We appreciate Congress' ongoing support of American agriculture and7616the transportation network that enables a successful rural economy.7617 Sincerely,7618Agricultural and Food Transporters Conference.7619Agricultural Retailers Association.7620Agriculture Transportation Coalition.7621Amcot.7622American Cotton Shippers Association.7623American Farm Bureau Federation.7624American Feed Industry Association.7625American Soybean Association.7626Corn Refiners Association.7627Fresh Produce Association of the Americas.7628Hardwood Federation.7629International Fresh Produce Association.7630National Aquaculture Association.7631National Association of Wheat Growers.7632National Corn Growers Association.7633National Cotton Council.7634National Council of Farmer Cooperatives.7635National Grain and Feed Association.7636National Grange.7637National Potato Council.7638North American Millers' Association.7639North American Renderers Association.7640Specialty Soya & Grains Alliance.7641The Fertilizer Institute.7642USA Rice.7643U.S. Meat Export Federation.76447645 Letter of April 25, 2025, to Hon. Sam Graves, Chairman, Committee on7646Transportation and Infrastructure, from 31 National Transportation and7647 Construction Associations, Submitted for the Record by Hon. David7648 Rouzer7649 April 25, 2025.7650The Hon. Sam Graves,7651Chairman,7652Committee on Transportation and Infrastructure, U.S. House of7653 Representatives, Washington, DC 20515.7654 Dear Chairman Graves:7655 Investing in the nation's infrastructure provides far-reaching7656economic benefits. Recent congressional support for roads, bridges and7657public transportation systems has helped deliver much-needed projects7658to every congressional district across the country. These improvements7659have enhanced safety, mobility and efficiency nationwide.7660 These outcomes are made possible by the continuity and7661predictability of funding supported by a healthy Highway Trust Fund7662(HTF). At present, HTF revenues are generated primarily through user7663fees on the sale of gas and diesel fuels, along with transfers from the7664General Fund to make up for insufficient revenues.7665 However, improvements to vehicle efficiency and the influx of7666hybrid and electric vehicles have resulted in a system where all users7667of the system are not treated fairly. Instead, some users pay for the7668maintenance of the system, while other users pay less or nothing at7669all. At the same time, user fee revenue has not met system needs.7670 The undersigned organizations urge you to include a fee on electric7671and hybrid vehicles in the committee's upcoming reconciliation measure7672and dedicate the revenues solely to the HTF. While this solution would7673only partly enhance HTF revenues, it would help ensure all users of the7674system are paying for its upkeep.7675 We are grateful for the support Congress has provided for the7676nation's surface transportation infrastructure network and look forward7677to working with you to ensure users of the system equitably pay for7678their maintenance and expansion.7679 Sincerely,7680American Road & Transportation Builders Association.7681Associated General Contractors of America.7682American Society of Civil Engineers.7683International Union of Operating Engineers.7684American Public Transportation Association.7685American Trucking Associations.7686American Association of State Highway and Transportation Officials.7687Associated Equipment Distributors.7688American Concrete Pavement Association.7689American Short Line and Regional Railroad Association.7690Association of Equipment Manufacturers.7691Independent Lubricant Manufacturers Association.7692American Concrete Pipe Association.7693American Institute of Steel Construction.7694National Steel Bridge Alliance.7695American Traffic Safety Services Association.7696National Ready Mixed Concrete Association.7697National Asphalt Pavement Association.7698Portland Cement Association.7699American Subcontractors Association.7700Design-Build Institute of America.7701Association of American Railroads.7702National Stone, Sand & Gravel Association.7703Precast/Prestressed Concrete Institute.7704American Council of Engineering Companies.7705Transportation Intermediaries Association (TIA).7706Laborers International Union of North America.7707National Utility Contractors Association.7708Concrete Reinforcing Steel Institute.7709American Coal Ash Association.7710Essential Minerals Association.77117712cc: Transportation and Infrastructure Committee Members77137714Statement of the Alliance for Automotive Innovation, Submitted for the7715 Record by Hon. Eleanor Holmes Norton7716 Chairman Graves, Ranking Member Larsen, and Members of the7717Subcommittee:7718 On behalf of the Alliance for Automotive Innovation (Auto7719Innovators), thank you for holding this important hearing entitled7720America Builds: The Need for a Long-Term Solution for the Highway Trust7721Fund. We respectfully request that this letter be submitted for the7722hearing record.7723 Auto Innovators represents advanced manufacturers producing nearly7724all vehicles sold in the United States and all car batteries produced7725domestically, as well as major equipment suppliers, semiconductor7726makers, and technology companies. Together, we form the foundation of a7727sector that supports 10 million American jobs across all 50 states,7728drives $1.2 trillion into the economy annually--nearly 5% of GDP--and7729powers the industrial backbone of our nation. Every dollar invested in7730vehicle manufacturing generates $4.23 in economic value, creating a7731multiplier effect that uplifts entire communities.7732 As Congress tackles transportation funding, fairness must be a7733guiding principle: all drivers--regardless of what they drive--should7734contribute equitably to maintaining America's roads and bridges.7735We agree: all drivers should pay their fair share--no matter what they7736 drive.7737 The auto industry supports a fuel and technology-neutral approach7738to infrastructure funding. Whether someone drives a hybrid, a battery7739electric vehicle (BEV), or a traditional gas-powered car, all should7740contribute equitably to maintaining our nation's roads and bridges. A7741fair and sustainable funding mechanism should reflect this principle of7742equity, regardless of drivetrain or energy source.7743But a budget reconciliation maneuver is the wrong way to do it.7744 Using reconciliation to impose a new EV fee, including on hybrid7745vehicles with internal combustion engines (ICE), is fundamentally7746flawed. What is more, routing revenues to the General Fund instead of7747the Highway Trust Fund does nothing to address the long-term solvency7748of the Highway Trust Fund and undermines the very rationale for7749implementing a road user fee in the first place.7750The numbers don't add up.7751 Some proposals have suggested that an EV fee could raise between7752$20 billion and $40 billion over ten year (FY2026-2035). Our industry7753analysis shows the actual revenue potential is closer to $1 billion per7754year--even under generous assumptions. Presenting this fee as a major7755offset is simply not supported by the numbers.7756 Hybrid and Electric Vehicle Technology Overview and Equity7757 Considerations7758 As policymakers consider transportation funding solutions, it's7759important to recognize the differences across hybrid and electric7760vehicle technologies--and to ensure any new user fees are applied7761fairly and equitably. Owners of electric vehicles should not be7762retroactively penalized with new fees after already making their7763purchasing decisions. Instead, any new user fee should be structured to7764mirror the current financial contribution made by internal combustion7765engine (ICE) vehicle owners through the gas tax. According to7766calculations by the American Highway Users Alliance (AHUA), a charge of7767approximately $165 per year would be an equitable equivalent for7768vehicles weighing less than 8,500 pounds.7769 It's important to note that not all hybrid vehicles are created7770equal, and assigning a flat fee across all hybrid types would be7771inappropriate given their differences in technology and fuel usage:77727773 1. Mild Hybrid Electric Vehicles (MHEVs):7774 a. The least complex and most cost-effective type of hybrid.7775 b. Utilize a small electric motor and battery pack primarily to7776assist the internal combustion engine, especially during acceleration,7777start/stop, and regenerative braking.7778 c. MHEVs cannot run on electric power alone for extended periods7779and primarily rely on gasoline, making their operational profile closer7780to a traditional ICE vehicle.77817782 2. Full Hybrid Electric Vehicles (HEVs):7783 a. Also referred to as ``strong hybrids,'' these vehicles7784feature a larger electric motor and battery compared to MHEVs.7785 b. Capable of running on electric power alone, but typically7786only for short distances before reverting to gasoline or a combination7787of both.7788 c. HEVs optimize efficiency by using regenerative braking to7789capture and reuse energy that would otherwise be lost.77907791 3. Plug-In Hybrid Electric Vehicles (PHEVs):7792 a. Equipped with even larger battery packs that can be recharged7793from external sources such as a home outlet or public charging station.7794 b. Able to travel a significant distance purely on electric7795power before the gasoline engine is engaged.7796 c. Offer greater fuel efficiency and lower emissions compared to7797HEVs and MHEVs.77987799 Given these technical distinctions, policymakers should avoid7800imposing a one-size-fits-all fee on hybrids. Instead, a more tailored7801approach that reflects a vehicle's actual reliance on gasoline versus7802electricity would better ensure fairness, encourage innovation, and7803maintain consumer choice--without taxing consumers twice. Moreover,7804many hybrid vehicles, particularly MHEVs, serve as affordable, fuel-7805efficient options for working families. Imposing a flat, high fee risks7806penalizing consumers who are making practical, cost-conscious vehicle7807choices.7808We're already working on a better solution.7809 Auto Innovators is actively engaged with the AHUA and other7810stakeholders on a thoughtful, durable user fee proposal that7811strengthens the Highway Trust Fund in the coming surface transportation7812reauthorization. We support the approach AHUA has put forward--it is7813smart policy, grounded in principles of fairness, transparency, and7814long-term solvency. Their framework aligns with the kind of fuel and7815technology-neutral solution the moment calls for, and we believe it7816provides a more constructive path forward for the Committee to7817consider.7818Let's solve the right problem the right way.7819 The auto industry stands ready to partner with Congress on policies7820that are fuel and technology-neutral, transparent, fair, and7821sustainable. Drivers of all types of vehicles--hybrids, BEVs, and ICEs7822alike--should contribute toward funding the national federal-aid7823highway system that they use. But we urge the Subcommittee and full7824Committee to reject any reconciliation-based proposals that use vehicle7825fees for general revenue and distract from meaningful transportation7826funding reform.7827 We look forward to working with all Members of the Committee to7828make long-term reforms to the Highway Trust Fund in the coming surface7829transportation reauthorization. We urge the Subcommittee to reject7830reconciliation-based proposals and instead commit to enacting long-7831term, fuel- and technology-neutral reforms in the next surface7832transportation reauthorization. Thank you for your consideration and7833for your continued leadership on transportation and infrastructure7834policy.78357836 ``The Truth Is Out There: The Cost of Roads Is Bankrupting the Highway7837 Trust Fund, Not Electric Vehicles,'' by Dave Cooke, Senior Vehicles7838 Analyst, The Equation Blog, Union of Concerned Scientists, April 29,7839 2025, Submitted for the Record by Hon. Eleanor Holmes Norton7840 The Truth Is Out There: The Cost of Roads Is Bankrupting the Highway7841 Trust Fund, Not Electric Vehicles7842by Dave Cooke, Senior Vehicles Analyst78437844The Equation Blog, Union of Concerned Scientists, April 29, 2025, 11:427845a.m.7846https://blog.ucs.org/dave-cooke/the-truth-is-out-there-the-cost-of-7847roads-is-bankrupting-the-highway-trust-fund-not-electric-vehicles/7848 __________7849 Just half of road funding is paid for by road users through funding7850mechanisms like fuel taxes or vehicle registration fees, and the7851largest share of that (the federal gas tax) has not been raised in over785230 years. However, some in Congress have tried to blame the rise of7853electric vehicles and fuel-efficient gasoline-powered vehicles for the7854federal government's struggles to fund decades of road-building.7855 Below I walk through why the federal government's ability to pay7856for highways has nothing to do with electric vehicles and everything to7857do with Congress's insatiable desire for road-building.7858 A lot has changed since Congress last adjusted transportation funding7859 The Highway Trust Fund is responsible for nearly all of the federal7860government's spending on transportation, with revenue sourced7861predominantly from fuel and excise taxes and, increasingly, injections7862of capital from the General Treasury. Apart from these intermittent7863transfers, Congress has not meaningfully changed the source of revenue7864for the Highway Trust Fund since the last increase in fuel taxes, which7865went into effect on October 1, 1993.7866 How long ago was that? Well, just one-quarter of U.S. adults had7867access to a computer, and just 2 percent of the country used the7868Internet in 1993. And forget ``smart phones''--the first cell phone7869capable of text messaging debuted in 1993, along with the first7870battery-operated cell phone.7871 Fittingly, The X-Files debuted just two weeks before the last7872change in federal fuel taxes went into effect--this iconic TV show7873dealt with government bureaucracy and the unexplainable, topics which7874both sadly resonate in trying to understand the government's approach7875to the transportation system.78767877 For more than 30 years, the federal fuel tax has remained unchanged.7878The impact of this is to erode the value of the tax. If we look at what7879 is taken in per mile of travel (i.e. collection of the gas tax) and7880 factor as well into what we get out of it (building and maintaining7881 roads), the effectiveness of the federal fuel tax has dropped by more7882 than 80 percent. The largest culprit of this erosion is the massive7883 increase in road construction costs_the cost-per-mile of the United7884 States highway system grows larger each year.78857886 As one can imagine, the passage of time has had a large impact on7887the value of the federal fuel tax. The current tax rate on a gallon of7888gasoline is just 18.4 cents--and that 18.4 cents doesn't mean the same7889today that it did when the tax went into effect in 1993. Inflation, the7890general measure of the cost of consumer goods, has more than doubled7891since then, which means that the value of the tax to the households7892paying it is less than half what it once was. It also hasn't kept pace7893with the cost of gasoline, which has increased by nearly a factor of7894three--thus, the federal government's share of the cost of a gallon of7895gas is about one-third what it used to be. And when it comes to what7896you can buy for that share, costs of road construction have far7897outpaced general inflation--that revenue buys today less than one-7898quarter of what it used to back in 1993.7899 Factoring in both the amount of tax generated and what that tax is7900financing, the effectiveness of the federal fuel tax has dropped by7901more than 80 percent since it was last changed in 1993. And the main7902reason for that is our ever-more-expensive highway system.7903 Roads are expensive, and highway expansion even more so7904 Construction costs have skyrocketed for a number of reasons, but7905two stick out: a reduction in competition resulting from consolidation7906in the construction industry and a reduction in capacity at the state7907departments of transportation to facilitate competitive bidding. But it7908isn't just that construction costs have exploded--it's that the highway7909system itself is a positive feedback loop of costs begetting even more7910costs.7911 The original interstate system conceived under the Federal-Aid7912Highway Act of 1956 was completed in 1992, but rather than stop then7913and there, highway expansion has marched onward. Public roads7914nationwide have increased in lane-mileage by over 10 percent since the7915``completion'' of the Interstate Highway System. This rate of expansion7916represents 70 percent of what it was during the construction of the7917Interstate Highway System--despite a theoretical completion of the7918system, we've barely curtailed expansion.79197920 After World War II, the United States saw a rapid expansion of public7921 roads, in large part because of the Interstate Highway System. The7922original envisioned system was completed in 1992, but highway expansion7923 has continued at nearly the same pace. (Source: FHWA Highway7924 Statistics; SM-11 and FM-11 pre-1980; VMT 421-C 1980-2023)79257926 Highway expansion is not a one-time construction cost--new roads7927have to be repaired indefinitely, simply adding to repair costs for7928infrastructure already built. Moreover, expanding highways results in7929an increase in usage not just of the new lanes of road but also for the7930built system, too, through a phenomenon known as induced demand,7931whereby you reduce barriers to driving and, in turn, increase the7932amount of driving that occurs. Commercial trucks, for example, will7933increase traffic on an interstate by between 19 and 29 percent for7934every 10 percent increase in capacity, resulting in a net negative7935impact on traffic flow.7936 As the country has continued to build out the freeway system, the7937infrastructure built creates an ever-increasing cost spiral--even after7938adjusting for the increased cost of construction, the amount spent on7939repair has more than doubled since 1993, thanks in large part to a7940doubling of miles traveled by the largest and heaviest vehicles on the7941road (commercial trucks) and an overall increase in travel by over 407942percent. Perhaps this is why the country has a backlog of over $17943trillion in maintenance.7944 It is the unsustainable costs of our highway system that is7945bankrupting the Highway Trust Fund, and this leads to an ever-7946increasing share of general public funding to bail it out if nothing7947changes. Highways are a costly use of land, with one study finding that7948the costs of highway expansion outweigh the benefits by 3 to 1, even7949without factoring in external social harms like health impacts from7950added traffic pollution. It's clear we should be rethinking the status7951quo of never-ending road expansion.7952 Cars are more efficient now . . . and that's a good thing!7953 Because the politics of dealing with the actual problem of funding7954our highway system is hard, there's a desire to find a scapegoat. In7955this case, politicians have turned their attention to how much more7956efficient our vehicles are.7957 Both passenger cars and trucks and heavy-duty vehicles have gotten7958more efficient over time. That means that drivers can go farther on a7959gallon of gas or diesel. This is an unabashed good thing--improving7960efficiency is a critical part of reducing global warming emissions, and7961it saves drivers money, something that is especially important with7962prices for households on the rise. And when a growing share of those7963efficiency gains are about eliminating oil use and the volatility of7964gas prices entirely from the equation for families thanks to7965electrification, improvements in efficiency are a very good thing.7966 However, since the funding for the Highway Trust Fund is largely7967based on revenues from fuel use, using less fuel per mile means that7968part of the reduced costs of fuel to consumers come with reduced7969contributions to the Highway Trust Fund. But is this actually a big7970deal? Compared with other factors, this is a drop in the bucket.7971 Since 1993, the passenger cars and trucks on the road have improved7972their fuel efficiency by almost 19 percent. Commercial vehicles have7973improved by 18 percent. The disproportionate increase in travel by7974diesel-powered trucks means that the loss in revenue per mile traveled7975is only just over 11 percent as a result of efficiency improvements.7976Compared with an erosion of buying power for the HTF of over 78 percent7977as the result of skyrocketing construction costs since 1993, or even7978just the erosion of value of 54 percent related to general inflation,7979it's clear that the story of HTF insolvency is not related to7980efficiency.7981 Electric vehicles are a small share of potential revenue7982 Even though EV drivers, like all of us, already pay for roads7983through general tax revenue, some still claim that it's unfair that EV7984drivers don't pay a fuel tax. But this both ignores the way roads are7985funded and the taxes that EV drivers already pay for electricity usage.7986 The notion that EV drivers are getting a free ride is just plain7987wrong, thanks in part to taxes and fees levied at the state and local7988level, where more than 80 percent of road funding comes from. In 367989states, there is even already a net tax penalty for driving an EV7990compared to a gasoline vehicle thanks to the combination of taxes and7991fees already in place. But even at the federal level, the lack of a7992federal fee on EV drivers is a negligible contribution to any shortfall7993in the Highway Trust Fund.7994 Today, we estimate that EVs are responsible for just over 2 percent7995of miles traveled in the U.S. Last year alone, highway construction7996costs increased by 6 percent. Even as EVs become a growing share of the7997vehicle fleet, we estimate that they will make up just 3 to 8 percent7998of road travel between now and 2030, depending on the degree of to7999which the current administration succeeds in eliminating EV incentives8000and protective vehicle regulations.8001 At just 3 to 8 percent of mileage traveled, charging EV drivers a8002mileage fee comparable to that of gasoline-powered vehicles would have8003little impact on the solvency of the Highway Trust Fund, which spends8004about 60 percent more than it takes in. However, it could act to8005dissuade EV buyers, particularly if accompanied by the elimination of8006policies designed to grow a still nascent market. Given the health and8007climate benefits of switching to electric vehicles, we should be8008focused on enabling that transition, not thwarting it with unnecessary8009fees.8010 Congressional EV fees are both counterproductive and unfair8011 It's bad enough that the highway lobby is pitching Congress that EV8012fees are a meaningful way of addressing transportation revenue (as8013noted above, they're too small to make a dent). It's worse still when8014that approach not only runs directly counter to our need to move away8015from a petroleum-focused transportation but is punitively designed to8016overburden those who are making the choice to get off gasoline.8017 One proposal from Congress from U.S. Representative Dusty Johnson8018(R-SD) and Sen. Deb Fischer (R-NE) is designed to disincentivize EV8019ownership by forcing an upfront surcharge on EVs. New gasoline car8020buyers pay fuel taxes when they fuel, gradually over the lifetime of8021the vehicle. If a vehicle is sold, the next owner will pay for the8022continued fuel consumed, along with any associated fuel taxes. The8023Johnson and Fischer bills, however, impose two fees upfront on EVs,8024targeting prospective EV owners--the first is a flat $1000 fee, no8025matter any characteristics of the battery-electric vehicle regarding8026weight or efficiency. The second is an additional fee of $550 on the8027manufacturer (which will be passed on to the vehicle purchaser) for8028every battery module weighing more than 1000 pounds--while according to8029the bill authors this provision is targeted at heavy-duty electric8030trucks, the ambiguity in language could ensnare the over 90 percent of8031light-duty EV packs that meet that weight threshold as well.80328033 Compared to the average new gasoline vehicle buyer, an EV buyer would8034 be forced to spend between 28 and 135 percent more in fees to the8035Highway Trust Fund. This is over 2 to 4 times what would be required of8036 someone purchasing a class-leading efficient hybrid. (Costs shown8037 utilize a 2 percent social discount rate for future costs over the8038 lifetime of the vehicle. We have assumed 1:1 representative vehicle8039types for the vehicles listed. The average gasoline vehicle achieves a8040 real-world efficiency of 27.7 mpg while the average class-leading8041 efficient vehicle would achieve 50.2 mpg.)80428043 An upfront surcharge on an electric vehicle, particularly one that8044doesn't exist on a gasoline vehicle, would disproportionately burden EV8045drivers with the costs of roads compared to other drivers. Under8046current policy, about 8 percent of vehicle miles from now through 20308047would be driven on electricity--with the proposed fees, and assuming8048Congress does not let the current fuel taxes expire in 2028 as they are8049set to do, EV drivers would pay about 20 percent of all federal taxes8050collected from passenger cars and trucks in that same timeframe, hardly8051a ``fair share.''8052 Another recently reported proposal would put an annual fee of $2008053for battery-electric vehicles and $100 for plug-in hybrid electric8054vehicles, but it's again designed to force EV drivers to pay a8055significantly higher share than gasoline drivers. If Congress is going8056to enact a fee on EVs, it should be compatible with how we assess fees8057on the rest of the fleet. The current fuel tax acts as a market signal8058to drivers and rewards efficiency--punishing drivers for using vehicles8059that are three times as energy efficient as average while rewarding8060drivers using vehicles less than twice as efficient as average is an8061inequitable mess.8062 The highway trust fund is broken--EV fees aren't going to fix that8063 The Congressional Budget Office showed in their latest analysis of8064the Highway Trust Fund that the Highway Trust Fund is expected to spend8065$213 billion more than it takes in ($261 billion) for fiscal years 20258066through 2030. We estimate even the unfair proposal put forth by8067Congress would raise between just $7-33 billion over that same time8068frame, putting hardly a dent in the deficit even as it penalizes8069families for reducing global warming emissions and public health harms8070from their vehicles.80718072 The Bipartisan Infrastructure Law injected a lot of money into the8073 Highway Trust Fund, but the balance continues to go down while the8074 federal government spends more than it takes in every year. The8075 Congressional Budget Office projects that the Highway Trust Fund will8076be fully depleted sometime in 2028. (The Highway Trust Fund cannot fall8077 below zero_hashed values reflect net annual shortfalls.)80788079 The biggest problem with the Highway Trust Fund isn't what families8080are contributing--it's the poor outcomes from that investment. Adjusted8081for inflation, the federal government may be spending half what it used8082to on brand-new highways, but that still means hundreds of miles of new8083highways every year, at a cost of over $10 million per mile. On top of8084that, major construction projects on existing highways frequently8085result in increased lane-miles--just last year we increased lane-miles8086on over 10,000 miles worth of roads, at a cost of just about $700,0008087per mile.8088 The result of this expansion is a highway system that is not just8089expensive but unsustainable. The federal government has more than8090doubled its spending on road repair since 1993, even after adjusting8091for inflation, and yet the federal share of spending on repair has8092actually gone down because the National Highway System is a giant money8093pit, emptying federal, state, and local coffers alike, with total8094maintenance costs 3.5 times higher in 2023 than in 1993, even after8095adjusting for inflation.8096 Funding more roads won't get us where we need to go8097 Until our infrastructure reflects a system that works for everyone,8098we should not be asking families to invest more of their hard-earned8099money in it. While prioritizing repair over expansion through ``fix it8100first'' or even reducing road lanes via ``road diets'' may be smarter8101ways of investing in our roads, that's hardly typical of where our8102federal dollars go.8103 If Congress is going to evaluate the effectiveness of federal8104transportation funding, it must look at both sides of the ledger, not8105just where the money is coming from but where it is going. Otherwise,8106the costs will continue to balloon unsustainably, as we see with the8107Highway Trust Fund.81088109Letter to Hon. David Rouzer, Chairman, and Hon. Eleanor Holmes Norton,8110Ranking Member, Subcommittee on Highways and Transit, from Albert Gore,8111 Executive Director, Zero Emission Transportation Association (ZETA),8112 Submitted for the Record by Hon. Eleanor Holmes Norton8113 Dear Chairman Rouzer, Ranking Member Norton, and Members of the8114Committee:8115 Zero Emission Transportation Association (ZETA) is an industry8116coalition representing approximately 50 companies spanning the electric8117vehicle (EV) supply chain end-to-end, including critical mineral and8118material producers, cell and battery manufacturers, vehicle8119manufacturers, charging companies and electric vehicle supply equipment8120(EVSE) providers, utility companies, and battery recyclers.8121 Well-funded federal highways are an essential part of a thriving8122transportation system and American EV manufacturers are willing to pay8123their fair share in support of our shared roads. ZETA strongly believes8124that the surface transportation reauthorization process is the8125appropriate legislative vehicle to consider addressing the HTF,8126including how alternative fuel vehicles may contribute to it. We urge8127the Committee to consider any changes to the existing funding structure8128of the HTF through this process. Any novel tax for American drivers8129necessitates a deliberative legislative process. This is the best way8130to ensure that any revenues generated go directly into the HTF, not the8131General Treasury Fund, in both chambers of Congress.8132 Maintaining the same gas tax rate since 1993 without adjusting for8133inflation, advancements in fuel efficiency, and considerably increased8134investment in highway and transportation infrastructure has resulted in8135the inability of the HTF to fully cover the increased expenditures8136authorized by recent highway bills. The balances in both the highway8137and transit accounts of the HTF will be depleted by 2028.\1\ The8138Congressional Budget Office projects that if current taxes remain in8139place and if funding for these programs increases annually at the rate8140of inflation, shortfalls in the HTF's highway and transit accounts will8141total $329 billion over the 2024-2035 period.\2\8142---------------------------------------------------------------------------8143 \1\ The Status of the Highway Trust Fund: 2023 Update. (CBO)8144 \2\ Highway Trust Fund Accounts Baseline Projections. January 2025.8145(CBO)8146---------------------------------------------------------------------------8147 Congress must find a long-term solution to declining real gas tax8148revenue. With non-gas cars increasingly on the road, ZETA believes that8149alternative fuel vehicles are a part of finding a sustainable path to8150solvency. The legislative mechanism for achieving this could8151conceivably take different forms, one of which could be a voluntary8152``vehicle miles traveled'' (VMT) structure to allow drivers to either81531) report their annual odometer readings on annual tax returns or 2)8154accept a flat fee as an alternative. Fairness for taxpayers driving8155electric vehicles would be enhanced by providing drivers who travel8156fewer than 12,000 miles annually with an option to pay a VMT, and to8157preserve the rights of consumers to lower their fuel costs by choosing8158more fuel efficient vehicles, the VMT fee would ideally be calculated8159using measures of fuel efficiency in electric vehicles, such as Miles8160Per Gallon Equivalent (MPGe), as certified for new vehicles by the The8161National Vehicle and Fuel Emissions Laboratory (NVFEL) \3\.8162---------------------------------------------------------------------------8163 \3\ Fuel Economy and EV Range Testing. (EPA)8164---------------------------------------------------------------------------8165 Both VMT and flat fee structures have logistical and other8166challenges, and ZETA would be very interested in the opportunity to8167engage with the Committee as conversations about this topic continue to8168develop. Regardless of the ultimate mechanism, ZETA urges that a8169prospective federal fee be equitable to fees paid by a gas-powered8170vehicle driver. This is not just a matter of parity, but also the only8171way to ensure meaningful long-term solvency.\4\8172---------------------------------------------------------------------------8173 \4\ The Status of the Highway Trust Fund: 2023 Update. (CBO)8174---------------------------------------------------------------------------8175 For instance, the average weight of a new light-duty vehicle is81764,371 pounds.\5\ The two best-selling electric vehicles on the market,8177the Tesla Model 3 and Y, accounting for more than 40 percent of8178sales,\6\ weigh 4,030 and 4,396 pounds, respectively.\7\ \8\ Given that8179average weight and assuming an average annual mileage of around 12,0008180miles, ZETA believes that an annual federal road use fee amounting to8181approximately $100 per vehicle per year would be a fee level8182commensurate with the annual gas tax paid by an internal combustion8183engine vehicle with average fuel efficiency.8184---------------------------------------------------------------------------8185 \5\ The 2024 EPA Automotive Trends Report. (EPA)8186 \6\ What Is the Percentage of Electric Cars in the U.S.?8187(Edmunds.com)8188 \7\ Tesla Model 3. (Tesla)8189 \8\ Tesla Model Y. (Tesla)8190---------------------------------------------------------------------------8191 Putting a disproportionate fee on alternative fuel cars,8192particularly a large fee assessed upfront or directly to the8193manufacturer, would not only create a major hurdle for prospective8194buyers but also fail to meaningfully address the issue of falling gas8195tax revenues and the long-term solvency of the Highway Trust Fund. A8196holistic, tech-neutral approach that doesn't overly burden one part of8197the auto sector is the best way to ensure both fairness in the8198automotive industry and consistent funding for our nation's highway8199system.8200 ZETA is grateful to Chairman Rouzer, Ranking Member Norton, and the8201Members of the Committee for their continuing efforts to fund well-8202maintained, modern, and reliable highway and transit programs.8203Improving the ways to cover the Highway Trust Fund shortfall is8204critical to ensure the safety of roads, bridges, and mass transit in8205the United States, now and in the many years to come.8206 Thank you for your consideration and the opportunity to provide a8207letter for the record on this extremely important issue.8208 Sincerely,8209 Albert Gore,8210 Executive Director, Zero Emission Transportation Association8211 (ZETA).82128213 Appendix82148215 ----------82168217 Questions from Hon. Dina Titus to Carlos M. Braceras, P.E., Executive8218Director, Utah Department of Transportation, on behalf of the American8219 Association of State Highway and Transportation Officials (AASHTO)82208221 Question 1. While we are talking about the National Highway System8222today, I want to spend a minute on the issue of traffic congestion8223impacting my constituents in Las Vegas. According to the Texas A&M8224Transportation Institute's 2023 Urban Mobility Report, the national8225cost of congestion was $224 billion in 2022. Researchers also found8226that the average commuter spent an extra 54 hours stuck in traffic that8227year.8228 How have you managed to balance meeting the need for additional8229transportation system capacity because of the fast-growing population8230in your state with the ability to keep your existing infrastructure in8231a state of good repair?8232 Answer. Utah was the fastest growing state in the country over the8233past 10 years, placing rapidly increasing demands on our transportation8234system. Our ability to provide the necessary additional roadway8235capacity is being outpaced by population growth, so the pressure to8236deliver capital projects is urgent and acute. We are in the enviable8237position of having state leaders that understand the value of8238transportation infrastructure investment, so we have a healthy state-8239funded budget for capacity projects. Remarkably, Utah annually8240appropriates 27.68 percent ($1.3B) of state sales tax revenue to fund8241its capacity program.8242 As you know, an effective transportation system also requires a8243proactive approach to maintenance and operations. In Utah, we depend on8244federal and state funding for road and bridge maintenance and repairs8245and safety projects as a critical piece of our overall funding8246approach. Utah is an ideal model as a partner with the federal8247government because we bring substantial state funding to the critical8248federal-state partnership.8249 In Utah, we have come to the realization that there is not a silver8250bullet for funding transportation. We believe it takes a strong federal8251partnership, a variety of user fees, and sales tax or other general8252revenue sources. Each of these components play an important role8253enabling us to take care of what we have and to address the needs of8254our growing population. To address the inability of the fuel tax to8255raise sufficient revenue for our state transportation system, Utah has8256implemented the following policies:8257 State Sales Tax Earmarks: A portion of state sales tax8258revenue is allocated to Utah's capacity program, starting at 8.38259percent in 2006 with incremental increases to an earmark of 27.688260percent in 2025.8261 Fuel Tax Increases: The state raised fuel taxes from 198262cents per gallon in 1998 to 24 cents, and again in 2016 to 29 cents per8263gallon.8264 Fuel Tax Indexing: Fuel taxes have been indexed to the8265Consumer Price Index since 2019. In 2025, fuel taxes increased to 38.58266cents per gallon.8267 Motor Vehicle Registration Fee Increases and Indexing:8268Registration fees increased multiple times between 1997 and 2009, with8269indexing beginning in 2009.8270 Annual Fee for Alternative Fuel and Hybrid Vehicles:8271These fees were introduced in 2016. In 2025, electric vehicles paid8272$139, plug-in hybrids paid $60, and hybrids paid $23.8273 Local Option Sales Taxes for Transportation: Utah's first8274local option sales tax, dedicated to public transit, was adopted in82751975. Currently, local governments can implement up to five local8276option sales taxes, totaling 1.25 percent for various uses, including8277public transportation, highways, active transportation, and airports.82788279 Question 2. President Trump's Department of Transportation has8280threatened to withhold funding to states that do not follow the Trump8281Administration's immigration agenda or maintain diversity, equity, and8282inclusion programs. I find this deeply concerning. Transportation8283funding not only helps keep our transportation networks operational--it8284also helps ensure that critical infrastructure such as bridges are safe8285for travelers.8286 Can you talk about the importance of federal funding to our8287transportation networks and what the consequences of withholding8288funding for these programs could be? What is the rationale for tying8289funding to immigration? Where is the nexus between the two?8290 Answer. It is clear to all policy makers that an effective8291transportation system is critical to our economy, mobility, health, and8292communities. It offers a huge lever to affect success, today and in the8293future. The transportation network connects people with what matters8294most: jobs, recreation, communities, healthcare, educational8295opportunities, and--most importantly--the people we care about. We need8296to coalesce around a shared funding vision so that people have the8297freedom to go where they want, when they want, how they want--and to do8298so safely.82998300Questions from Hon. Dina Titus to Adie Tomer, Senior Fellow, Brookings8301 Institution83028303 Question 1. Congress created the Highway Trust Fund in 1956 and8304since then, the federal government has been able to provide guaranteed8305funding for transportation projects across the United States through8306the contract authority process.8307 Question 1.a. In your testimony, you highlighted the benefits of8308separating transportation programs from annual appropriations8309negotiations by funding them through the Highway Trust Fund. In your8310opinion, should our rail systems also have guaranteed funding from8311Congress?8312 Answer. All transportation systems benefit from guaranteed funding,8313as the fiscal certainty facilitates long-term planning and executing8314complex, multiyear construction activities. Guaranteed public funding8315is especially important for transportation systems that deliver broad-8316based societal benefits beyond what user fees alone can capture.8317 Intercity passenger rail systems neatly fit into this rubric.8318Facilitating movement of people between different geographic regions--8319whether for private business, tourism, or other activities--creates8320direct trade-related economic activity (like customer sales at local8321retailers) and promotes indirect economic activity (like greater net8322investment in regional businesses). Passenger rail promotes such8323transportation-supported activity while using less energy per passenger8324than aviation and private vehicles, requires less rural and urban land8325than roadways, and promotes agglomeration around stations (which then8326generate higher total tax revenues per acre). Passenger rail can also8327increase connectivity and economic opportunity for smaller communities8328along corridors, which is similar to highways but a benefit aviation's8329point-to-point travel struggles with. These net benefits--far more than8330what each passenger pays on a ticket--is a major reason all G7 members8331provide multiyear public funding for passenger rail networks.8332 For these reasons and others, I do personally support guaranteed8333federal funding from Congress for passenger rail. However, the level of8334support is a critical area to debate, as well as the role of states,8335regions, and private owners and operators in co-supporting such federal8336investments.83378338 Question 1.b. How might our rail systems look different if they had8339guaranteed funding like those programs that rely on the Highway Trust8340Fund?8341 Answer. Simply put, guaranteed federal funding would accelerate8342corridor construction and promote cost efficiency.8343 Guaranteed federal funding would enable Amtrak, state operators,8344and private operators to move projects from planning to construction8345faster, particularly on those corridors targeted for investment. This8346would not only include spending of federal funds, but also enhance the8347ability to attract other public and private capital. It's sensible to8348think of guaranteed federal funding as seed capital or a downpayment8349for these large, complex suites of projects. Overall, the net effect8350from guaranteed federal funding would be more projects in motion. My8351confidence in making this statement is both the experience in our peer8352countries, but also the construction of the interstate highway system8353under similar policy fundamentals.8354 Guaranteed funding also promotes cost efficiency by reducing8355project risk. When designers, builders, and financiers are uncertain if8356a capital project has secured enough total funding, they expend8357additional time to enhance planning documents, keep staff sharpened on8358related knowledge, and searching for supplemental capital--all of which8359requires additional funding resources. Meanwhile, while projects are in8360limbo, those same professionals are not spending time on activities8361that must wait for final project approval, such as executing purchase8362orders for materials and final train sets. Guaranteed federal funding8363reduces such risks.8364 The net result of guaranteed funding is more total investment in8365passenger rail systems and, once projects are completed, greater total8366operations for passengers.83678368 [all]Witnesses
5 witnesses appeared, with 6 papers on file.
- Witness Statement — HHRG-119-PW12-Wstate-BracerasPEC-20250429.pdf
- Witness Statement — HHRG-119-PW12-Wstate-BurkhardPEB-20250429.pdf
Documents
The committee filed 3 documents for the meeting.