How to Refuel the Highway Trust Fund
For nearly two decades, the Highway Trust Fund has spent more on highways than it collects from fuel taxes, mainly because the federal gas tax hasn’t been raised since 1993 and vehicles now use far less fuel per mile. The rise of electric vehicles, which pay no fuel tax, has widened the gap. As a result, highway spending is projected to exceed revenue by about $17 billion in 2026. Analysts argue that Congress must use the upcoming 2026 highway reauthorization to overhaul transportation funding and restore the “user-pays” system so drivers—especially heavy commercial trucks that cause the most road damage—contribute proportionally to the wear they impose.
The report concludes that the most efficient and fair solution is replacing fuel taxes with a vehicle-miles-traveled (VMT) fee that charges higher rates for heavier vehicles. Such a system would close the EV funding gap, properly price freight movement and generate stable, long-term highway revenue. If a full VMT system is politically difficult to adopt immediately, the authors propose transitional options, such as applying a VMT fee only to trucks while modestly raising the gas tax and adding a flat EV fee for passenger cars. Examples from other states and countries show that well-designed user fees can sustainably fund transportation infrastructure and reduce economic distortions.
