The United States’ Highway Trust Fund finances most federal government spending for highways and mass transit. Currently, this fund is in jeopardy as the Highway Trust Fund is running low on funding. Current trends indicate it will run out by 2028. The primary source of revenue for the Highway Trust Fund is from federal taxes on gasoline and diesel fuel. However, due to increasing fuel efficiencies and the growing use of electric vehicles, the Highway Trust Fund has seen a sharp decline in funding.
Members of the U.S. House of Representatives’ Transportation and Infrastructure Committee agree that there has been a budgetary shortfall in the Highway Trust Fund for many years. Specifically, the Highway Trust Fund has needed significant transfers of general revenues to remain solvent. Solutions that House Members propose to fund the Highway Trust Fund include transitioning from collecting a gas tax to a tax based on miles driven by a car. An advantage of a vehicle mileage tax is that it could adjust to reflect the additional costs of congestion by increasing tolls or the tax rate in certain locations at certain times of the day. A vehicle mileage tax would not, however, provide an incentive for driving more fuel-efficient vehicles—a stated goal. Alternatively, Congress could completely abandon the user-pay principle and simply pay for highways through general revenues.
In light of the Highway Trust Fund’s looming insolvency, whatever the Committee decides, it should be implemented soon.
For more information on what this upcoming legislation could mean for your business, contact the qualified attorneys at Rock, Fusco & Connelly.