KEY FACTS
- Freight rail self-funds its network, while roads rely on underfunded taxpayer support.
- Congress should update funding via a gas tax hike or vehicle miles traveled (VMT) fee.
- A VMT ensures fairness, making trucks pay their share like railroads do.
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Adapted for listening and narrated by a real person. Read the full narration at the bottom of this page.
Freight railroads—not taxpayers—pay for the maintenance and improvement of the nation’s nearly 140,000-mile rail network. They invest about $25 billion a year into their infrastructure and equipment. This benefits shippers, consumers and the passenger rail systems that operate on freight rail tracks.
The HTF is the financial mechanism for building, maintaining, and repairing roads and bridges.
Since the 1950s, drivers of motor vehicles and trucks have paid federal and state taxes on the purchase of each gallon of gasoline or diesel fuel to support the HTF. When Congress first enacted the gas tax, it was an effective proxy for determining the amount of damage that roadway user did to the highway infrastructure.
Although this user-pays system worked for more than half of a century, gas taxes have failed to keep up with highway maintenance costs, changing fuel prices, more fuel-efficient vehicles, and the introduction of electric vehicles that presently do not pay into the HTF.
The current tax of 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel was last increased in 1993 and loses purchasing power each year. The lack of adequate revenue raised for the HTF is also partly the result of heavy trucks, especially those weighing 80,000 pounds or more.
Large trucks don’t pay for the damage they cause.
Today, these large trucks don’t come close to paying for the damage they cause to our public highway system. The HTF’s continued shortfalls have forced policymakers to transfer a total of $275 billion of general taxpayer funds to repair roads and bridges since 2008. This includes requiring a transfer of $118 billion in the 2021 Infrastructure Investment and Jobs Act (IIJA).
This will only cover the HTF shortfall through 2026. To address the near-term solvency of the HTF, Congress should increase the gas tax. However, Congress must find a reliable, long-term funding solution to maintain and improve our nation’s roads and bridges and restore a user-pays system.
Fair Public Infrastructure Funding
A weight or axle-based Vehicle Miles Traveled (VMT) tax can make public road and bridge infrastructure funding more fair. It ensures passenger and commercial vehicles proportionally pay for their usage.
Incorporating a Sustainable Funding Model
Researchers at the Brookings Institute, the University of Arizona, and the University of Houston have shown that financing highway expenditures by charging drivers and truckers for the distance they drive in the form of a VMT is a more sustainable funding model than gas taxes.
Additionally, the Government Accountability Office noted that “mileage-based user fee initiatives in the U.S. and abroad show that such fees can lead to more equitable and efficient use of roadways by charging drivers based on their actual road use and by providing pricing incentives to reduce road use.”
Restoring Modal Equity
Implementation of a VMT would rebalance the ongoing modal inequity occurring in the freight transportation market stemming from the trucking industry’s underpayment into the HTF. Freight railroads are currently at a competitive disadvantage because they fully fund their infrastructure. In contrast, large trucks underpay their federal cost responsibility by around 27 cents per gallon of fuel. Therefore, they can offer artificially deflated costs. Requiring trucks to pay their fair share will rebalance the playing field between trucks and trains.
Infrastructure Investment & Jobs Act Impact
Implementation of a VMT would rebalance the ongoing modal inequity occurring in the freight transportation market stemming from the trucking industry’s underpayment into the HTF. Freight railroads are currently at a competitive disadvantage because they fully fund their infrastructure, whereas large trucks underpay their federal cost responsibility by around 27 cents per gallon of fuel and, therefore, can offer artificially deflated costs. Requiring trucks to pay their fair share will rebalance the playing field between trucks and trains.
A Highway Cost Allocation Study
This study, undertaken in coordination with State departments of transportation, will determine the direct costs of highway use by various types of users. This includes vehicles of different dimensions, weights, and number of axles.
It will also: (1) Review a broad range of costs, such as those related to safety, emissions, congestion, and noise. This will determine the proportionate share of the costs attributable to each class of highway user. (2) Compare those costs with the user fee revenue contributed to the HTF by those users. Upon completion of this study, DOT will develop recommendations for a set of revenue options. These will fully cover the costs occasioned by highway users.
A National Motor VMT User Fee Pilot
Congress provided a total of $50 million over five years to undertake a voluntary pilot program. This will test the design, acceptance, implementation, and financial sustainability of a national VMT. It will also address the need for additional revenue for surface transportation infrastructure and provide recommendations. This program will test various methods to track vehicle miles traveled and include both passenger and commercial motor vehicles. As part of this effort, DOT will establish and test varying VMT fees each year. This will be for passenger motor vehicles, light trucks, and medium- and heavy-duty trucks to reflect estimated impacts on infrastructure, safety, congestion and the environment.
Strategic Innovation for Revenue Collection
This grant program will provide a total of $75 million over five years for pilot projects at the State, local, and regional level. These will test the design, acceptance, equity, and implementation of a road usage fee and other user-based alternative revenue mechanisms to maintain the long-term solvency of the HTF.
The program should further ongoing research conducted by the FHA under the Surface Transportation System Funding Alternatives program. This was authorized in the FAST Act and provided a total of $73.7 million to 37 projects across the nation. It will test the design, implementation, and acceptance of user-based systems, such as a mileage-based fee.
Read the AAR Audio Narration
Understanding Trucks & the Highway Trust Fund
This is AAR Audio, and you’re listening to Understanding Trucks & the Highway Trust Fund.
America has two major freight transportation networks.
One is the highway system.
The other is freight rail.
Both move the goods our economy depends on.
But there’s one major difference between them.
Freight railroads largely pay for their own infrastructure.
Highways don’t.
Every year, freight railroads privately invest tens of billions of dollars to maintain nearly 140,000 miles of track across the country.
They replace bridges.
Upgrade signals.
Expand capacity.
And modernize their network.
Those investments are overwhelmingly paid for by the railroads themselves.
Highways operate differently.
Most are built and maintained through public funding, with much of that money coming from the Highway Trust Fund.
The Highway Trust Fund works much like a shared bank account for America’s roads and bridges.
For decades, drivers and trucking companies paid into it through federal fuel taxes.
The idea was simple.
The more you drove and the more fuel you used, the more you contributed toward maintaining the roads you used.
For many years, that system worked well.
But transportation has changed.
Cars travel farther on a gallon of fuel.
Electric vehicles use little or no gasoline.
Construction costs have increased.
And the federal gas tax hasn’t been raised since 1993.
As a result, the Highway Trust Fund no longer collects enough money to pay for the nation’s road and bridge needs.
Since 2008, Congress has transferred hundreds of billions of dollars from general taxpayer funds just to keep the Highway Trust Fund afloat.
Heavy trucks are another part of the challenge.
The heavier a vehicle is, the more wear it places on roads and bridges.
But government studies have found that the heaviest trucks don’t fully cover those costs through the taxes and fees they pay.
That leaves taxpayers making up the difference.
It also creates an uneven playing field.
Freight railroads fully fund the infrastructure they use.
While public roads require additional taxpayer support.
So, what’s the solution?
One proposal is called a Vehicle Miles Traveled, or VMT, fee.
Instead of paying based primarily on how much fuel a vehicle uses, drivers would pay based on how many miles they actually travel.
The concept is straightforward.
The more you use the roads, the more you contribute toward maintaining them.
Some proposals would also account for a vehicle’s weight, since heavier vehicles create more wear on the infrastructure.
Other proposals suggest that electric and hybrid vehicles pay registration fees since they don’t contribute through the gas tax.
Researchers, transportation experts, and federal agencies have studied mileage-based funding for years.
They’ve concluded it could provide a more stable, long-term way to pay for roads and bridges than relying on fuel taxes alone.
Congress has already funded pilot programs across the country to test how a national mileage-based system could work.
Those programs are evaluating everything from technology and privacy to fairness and long-term financial sustainability.
All of this matters because transportation works best when every mode competes on a level playing field.
Railroads pay to build and maintain their own network.
Road users contribute to public highways through taxes and fees.
The question is whether those payments accurately reflect the costs each user places on the system.
If they don’t, taxpayers end up covering the difference.
And the market becomes distorted.
The Highway Trust Fund was built on a simple principle.
The people who use the infrastructure should help pay for it.
As transportation continues to evolve, many experts agree the funding system will need to evolve too.
The goal isn’t to raise money for the sake of raising money.
It’s to create a fair, sustainable system that keeps America’s roads, bridges, and freight network strong for decades to come.
THE BOTTOM LINE
The Highway Trust Fund was designed as a user-pays system, but today it relies heavily on taxpayer support as revenues fall short of spending. Restoring a sustainable, user-based funding model—where all users pay their fair share—will be critical to maintaining and improving the nation’s transportation infrastructure.