Lawmakers have reached a tentative agreement on the type of infrastructure to fund through the Bipartisan Infrastructure Framework. However, one enormous question still remains—how are we going to pay for all of this?
We Can’t Depend on the Highway Trust Fund
Historically, the federal government has used gas and diesel taxes to pay for investments in highways and transit systems through the Highway Trust Fund (HTF). But did you know that the 18.4-cent federal gas tax hasn’t been changed since 1993?
However, the world has changed drastically in the last 28 years and the federal gas tax hasn’t generated enough money to cover spending since 2008.
- Because our gasoline and diesel fuel taxes are not indexed for inflation, meaning they don’t rise with the cost of living, purchasing power has been reduced
- The costs of building roads have increased
- Vehicles have become more fuel efficient requiring less fuel
- Electric vehicle sales are rapidly increasing with almost 157,000 registered in LA County alone
Stopgap Measures
As a result, many states, like California, have resorted to establishing and increasing their own state gas and fuel taxes. In addition, Congress routinely fills the gap with general funds (non-transportation funds) to ensure the Highway Trust Fund remains solvent. Even with these investments, Caltrans officials say that much more money is needed to address shortcomings in the transportation system. In fact—available funding will address about only 45% of the state’s needs.
We Need Sustainable Long-term Funding
Lawmakers have tossed around various proposals including raising the gas tax and indexing it, charging user fees, raising taxes on corporations and high-income households, and repurposing COVID-19 relief dollars. As they continue their negotiations we must emphasize that we need sustainable, long-term funding that will keep everyone moving forward.
