AASHTO Journal - EPW Hearing Focuses on Highway Trust Fund Solvency Solutions

The Senate Committee on Environment and Public Works examined possible revenue solutions to ensure the solvency of the Highway Trust Fund during a hearing on April 14 – with much of the discussion focused on vehicle mile travelled or VMT user-fee funding methods.

The committee heard from five witnesses: Joseph Kile, director of microeconomic analysis for the Congressional Budget Office; Jack Basso, chair of the Mileage Based User Fee Alliance; Patricia Hendren, executive director of the Eastern Transportation Coalition; Robert Poole, director of transportation policy at the Reason Foundation; and Douglas Shinkle, transportation program director for the National Conference of State Legislatures.

It also reviewed written testimony submitted by several organizations, including the American Association of State Highway and Transportation Officials.

Sen. Tom Carper, D-Del., the committee’s chairman, noted in his opening statement that there should be “common principles” regarding surface transportation needs both parties in Congress can agree upon as it works towards compromise on reauthorization legislation.

“One of those is that the roads, highways, and bridges in this country are in bad shape and something needs to be done about it,” Sen. Carper said. “The second principle is that climate change is real and that we need to combat it, adapt to it, and focus on resiliency as a result of it. The third principle is that things worth having are worth paying for. The last principle I hope we can adhere to is that those who use our roads, highways, and bridges have a responsibility to pay for them.”

To that end, Sen. Shelley Moore Capito, R-W.Va., the EPW committee’s ranking member, noted in her opening statement that, “the Highway Trust Fund, which is the source of funding for federal surface transportation projects, is once again – as it has over the last several years – facing a cash shortfall. This shortfall must be addressed for us to move forward with a [reauthorization] bill.”

She echoed Sen. Carper’s position that “all who use our surface transportation system should contribute to its upkeep and expansion. Today, that is not the case with all of the users. We should consider the unique impacts on certain Americans, including those in rural areas and lower income individuals – [trying] to minimize administrative and cost burdens [while] providing states and other non-federal partners with options to use various financing tools.”

Sen. Capito added that while “this is not an easy problem to solve I am willing to consider various solutions so we can discuss how to pay for our nation’s infrastructure.”

In a statement for the record submitted to the EPW committee, AASHTO noted that there has been no increase in the federal gasoline tax of 18.4 cents per gallon since 1993. Alongside improvements over the last few decades in fuel efficiency, increased use of alternative fuel vehicles, the loss of fuel tax purchasing power, and the ever-growing costs of maintaining the nation’s transportation network, “there is recognition that our current funding model is not sustainable” to keep pace with long-term system needs.

“The current trajectory of the Highway Trust Fund – the backbone of federal surface transportation program – is simply unsustainable, as it will have insufficient resources to meet current federal investment levels beyond fiscal year 2021,” AASHTO noted.

To investigate new revenue sources, the organization said a number of states launched user-based alternative revenue pilot programs with the help of the Surface Transportation Systems Funding Alternatives or STSFA program established by the Fixing America’s Surface Transportation or FAST Act in 2015.

AASHTO noted the STSFA program awarded $73.7 million to fund 37 state pilot projects over the last six years to demonstrate user-based alternative revenue mechanisms across the country – from California and Oregon to Utah, Missouri, and Ohio.

“Each state pilot has taken a slightly different approach with their in attempt to address the unique needs and challenges in their state,” AASHTO said. “Findings and lessons learned from the state pilots will help inform the next steps for a mileage-based system.”

The organization added in a separate letter to Congressional leadership on April 13 – a letter co-signed by 31 other transportation organizations – that those pilot programs provide “valuable lessons learned” in terms of constructing and implementing a national vehicle miles traveled or VMT user-fee program.

“It is now time for Congress to leverage the progress made to-date [with those pilot tests] and create a comprehensive national VMT implementation program … [as] a much-needed long-term replacement for the user fees that we currently rely on to build our roads and bridges,” AASHTO emphasized in its letter.

However, regardless of the method used to shore up the Highway Trust Fund, other witnesses at the EPW hearing stressed that traditional formula disbursement methods should remain in use.

“Congress must not drive away from a user-fee [and] formula-based national transportation funding stream,” emphasized NCLS’s Shinkle, in his written testimony.

“This would ensure that funds are distributed in a predictable and stable manner to all states and territories,” he added.

“Formula funding also allows for efficient project and multi-year program delivery wherein transportation needs, and projects are identified by states, metropolitan planning organizations, and local elected officials for funding prioritization,” Shinkle said. “States are best aware of the transportation needs within their boundaries.”