CRS Report Explores Long-Term Highway Funding Solutions

The Congressional Research Service last month published a report exploring the current state of highway and public transportation funding, identifying the problems of that funding long-term, and possible solutions to funding surface transportation in the future.

The report focuses on the long-term funding for transportation, noting that the current funding path — gas tax revenue — has fallen short in recent years and will continue to do so.

“Congress has yet to address the surface transportation program’s fundamental revenue issues, and has not given serious consideration to raising fuel taxes in recent years,” according to the report. “Instead, Congress has financed the federal surface transportation program by supplementing fuel tax revenues with transfers from the U.S. Treasury general fund. The most recent reauthorization act, MAP-21, authorized spending on federal highway and public transportation programs through Sept. 30, 2014, and provided for general fund transfers to finance the programs. MAP-21 did not address concerns about funding of surface transportation programs over the long-term.”

In order to combat these funding issues in the long-term, the report explores several options for Congress to address financing surface transportation going forward:

• Raising the gas tax, which may help more in the short-term than in the long-term, the CRS said.
• Replacing the gas tax with a sales tax, which has been done, along with other solutions, in some states such as Virginia (see related AASHTO Journal story here).
• Utilizing a vehicle-miles traveled system instead of a gas tax, which is being tested by some state transportation departments, like Oregon (see related AASHTO Journal story here).
• Looking to the private sector and other non-grant funding sources such as tolls and public private partnerships, which states are already utilizing where they can.

While these are all options, the CRS report did stress that each option comes with its own political concerns. A VMT system, for example, raises privacy concerns, while advocating for a higher gas tax is politically difficult in many states. Another issue that could arise from the complexity of this, CRS said, was that Congress could eliminate the Highway Trust Fund system altogether, leading to a complete reallocation of obligations and responsibilities of all state, federal, and local partners.

The full 33-page report, “Funding and Financing Highways and Public Transportation,” is available here.