Lawmakers are revisiting an old idea as they consider how to replenish the long exhausted Highway Trust Fund: tax electric vehicles.
Talk has been picking up in both chambers as key committees work to write legislation to approve highway spending over the next several years.
“We’ve had a lot of conversations about how do EVs start to contribute to the Highway Trust Fund,” said Rep. Rick Crawford (R-Ark.), a senior member of the House Transportation and Infrastructure Committee.
“There are a variety of ideas being kicked around, but I think the consensus is they need to start making a contribution to the Highway Trust Fund,” Crawford said during an interview last week.
The topic could emerge during a Senate Environment and Public Works hearing Wednesday, when Transportation Secretary Sean Duffy is set to present the administration’s priorities for the highway bill. The bipartisan infrastructure law only runs through fiscal 2026.
The Highway Trust Fund provides most of the federal government’s funding for roads and mass transit. It’s mostly fed by taxes on gasoline, 18.3 cents per gallon, and diesel fuel, 24.4 cents per gallon. Taxes on truck sales and truck tires also go to the trust fund, but they’re a smaller source of revenue.
The fuel-tax rates haven’t been changed since 1993 and revenue has fallen short of trust fund’s spending since 2008, according to the Congressional Budget Office. Cars and trucks have become increasingly more fuel efficient, which has slowed down revenue growth, and the cost of construction has risen with inflation.
Since 2008, Congress has provided more than $275 billion to cover the shortfall in the trust fund. The 2021 bipartisan Infrastructure Investments and Jobs Act pumped $118 billion into the fund over five years.
The infrastructure law funding runs out in 2026, and expenditures in the trust fund are projected to exceed revenue by 2028, according to CBO.
Conservatives in Congress say EVs need to pay their fair share of highway taxes. Sen. Deb Fischer (R-Neb.) has introduced a bill the last two sessions to impose a one-time fee up to $1,550 for new electric vehicles.
“It’s only fair that they pay into the Highway Trust Fund just like other cars do,” Fischer said of her “FAIR Share Act,” co-sponsored by Sen. Cynthia Lummis (R-Wyo.). “The Fair SHARE Act will require EVs to pay their fair share for the upkeep of America’s infrastructure.”
Fischer’s bill would mandate a one-time tax of $1,000 for each EV sold and an extra $550 for vehicles with batteries that weigh over 1,000 pounds. It would not affect hybrid cars.
House Transportation and Infrastructure Chair Sam Graves (R-Mo.), has pushed the idea of a fee on the miles a vehicle travels, which would capture revenue from EVs and other cars and trucks. Already, 39 states charge fees or taxes on EVs.
The infrastructure law included a provision that required the Department of Transportation to start a pilot program to study a federal vehicle-miles traveled fee, but the effort was never completed.
EV advocates agree that new vehicles need to help but argue that the new industry can’t be expected to solve a multi-decade funding crisis. A typical driver, logging 12,000 miles a year, would pay between $75 and $100 a year in fuel taxes at the current level.
“EVs didn’t break the trust fund and crushing EVs doesn’t save the trust fund,” Genevieve Cullen, president of the Electric Drive Transportation Association, said in an interview.
Other lobbying groups, including the American Road and Transportation Builders Association and the American Trucking Association, agree there’s a need for broader reforms to fix the highway fund’s problems.
“The major issue has been the unwillingness to address the revenue side of the equation,” said Dean Franks, senior vice president of congressional relations for ARTBA.
There appears to be broader support in Congress for a flat fee — like Fischer has floated — since it’s far simpler than taxing drivers by the mile.
An EV industry advocate said some of the proposals have been drafted in good faith and not intended to be punitive. But the advocate, speaking on condition of anonymity to be candid, pointed to the gasoline tax staying the same for decades.
“There’s never been any political will at the federal level to increase gas prices for people, which is both understandable and also disappointing,” the person said. “Because now we’re going to have to do something vastly differently.”
Crawford said he hasn’t heard much from the EV industry on the matter, but said, “I think they know they are going to have to get creative about how they address this particular topic.”
Schedule: The hearing is Wednesday, April 2, at 10 a.m. in 406 Dirksen and via webcast.
Witness: Transportation Secretary Sean Duffy.
This story also appears in Climatewire.
