Highway Trust Fund Looking for Answers

Why It Matters

Without decisive action, the HTF’s deficit will force additional federal bailouts and jeopardize both highway and transit projects, threatening the nation’s broader infrastructure agenda.

Key Takeaways

• Vehicle miles traveled growth slowed to ~1% annually, eroding fuel‑tax base
• Raising federal gasoline tax 17¢ per gallon could close deficit
• Congress weighs EV/Hybrid user fees and possible state devolution
• Transit account may run out by 2027, risking another bailout

Pulse Analysis

The Highway Trust Fund, created in 1956 to bankroll the interstate system, has been propped up by more than $272 billion in general‑revenue transfers since its 2007 insolvency. As the nation’s vehicle fleet shifts toward hybrids and electric models, the traditional fuel‑tax base erodes, leaving the fund’s revenue growth at a meager 1% per year. This structural shortfall threatens not only road construction but also the roughly $6‑$8 billion annually earmarked for public transit, a segment poised to exhaust its balance by 2027.

Policymakers are weighing a suite of remedies. A 17‑cent increase to the federal gasoline tax—effectively doubling the 18.3‑cent rate set in 1993—could instantly shore up revenues, but it faces steep political resistance. Alternative proposals include user fees on electric and hybrid vehicles, and a more radical devolution that would strip federal fuel taxes, handing revenue collection to states. Indiana’s recent law permitting tolls on its interstates illustrates how states might fill the gap through tolls and public‑private partnerships, potentially converting more of the national highway network into revenue‑generating assets.

The stakes extend beyond highways. A shortfall in the transit account could trigger another federal bailout, undermining confidence in long‑term infrastructure financing. Stakeholders—from the U.S. Chamber of Commerce to transit agencies—are urging Congress to act before the 2027 deadline. A bipartisan solution that blends modest tax adjustments with targeted user fees and state‑level innovations could preserve the HTF’s solvency while aligning funding mechanisms with the evolving vehicle landscape.