Bumpy Road Ahead: Bracing for Insolvency in the Highway Trust Fund

Abstract

Funding for the federal Highway Trust Fund (HTF) is not keeping up with the deteriorating condition of America’s roads and bridges. HTF outlays have exceeded revenues in almost every year since 2001, and the fund faces an estimated shortfall of $167 billion over the next ten years. In this article the authors argue that instead of a series of one-time fixes, a more permanent solution is needed to provide the Highway Trust Fund (HTF) with sufficient revenues to keep up with increasing needs. They recommend a congestion-adjusted vehicle mileage tax (VMT) as an economically efficient means of tackling infrastructure funding issues in a way that reflects the costs of road use. However, given the serious privacy issues associated with tracking road use, they propose it may be more politically viable to target only commercial vehicles who have lesser expectations for privacy and a higher impact on road wear with a VMT, while private vehicles pay only a higher gas tax. The authors acknowledge that no one likes higher taxes, but if road repairs are worth having, they are worth paying for.