May 21 the Congressional Budget Office (CBO) released a new report on the revenues and spending choices lawmakers face in addressing the shortfall in the Highway Trust Fund (HTF), as well as options for subsidizing state and local governments’ financing of highway projects.
Absent any change, the HTF is expected to suffer a funding shortfall in 2021, which would amount to $189 billion by 2030. The current authorization for highway spending is set to expire at the end of September, and lawmakers are expected to past short-term funding extensions while they determine what course to take to fund the HTF going forward.
The CBO report provides members of Congress several revenue-generating mechanisms for consideration. The options presented include an increase in the current federal fuels excise taxes, new user-based taxes such as a one on vehicle miles traveled (VMT), on freight shipments carried by trucks, or on electric vehicles. The report also identifies transfers from the Treasury’s general fund as a viable mechanism, which is an approach Congress has taken in the past.
Lawmakers have recently been discussing the idea of imposing a VMT tax that would only apply to commercial trucks, as it may raise fewer implementation concerns related to administering the fee and on privacy considerations. The exact structure and concept of a “truck-only” VMT are still very much unclear at this time.