How Congress Can Fix the Highway Trust Fund

Testimony

How Congress Can Fix the Highway Trust Fund

Testimony before the House Ways and Means Committee on reauthorizing the highway bill and creating a sustainable highway transportation funding model based on user fees

My name is Robert Poole. I direct the transportation policy program at Reason Foundation, a nonprofit think tank with offices in Los Angeles and in Washington, DC. I’m a graduate of MIT with two degrees in mechanical engineering, and additional graduate study in operations research at NYU.

I have been studying surface transportation policy since 1988, when I researched and wrote the Reason Foundation policy study that inspired the first toll concession project in California, which became the prototype for express toll lane projects nationwide. My transportation research over the years includes highway finance, congestion pricing, bus rapid transit, and many related topics. I have served on transportation advisory bodies to the states of California and Texas, and have advised the state DOTs of close to a dozen states, as well as the Federal Highway Administration, the Federal Transit Administration, the Office of the Secretary of Transportation, and the Government Accountability Office.

I was a founding member of the Transportation Research Board standing committee on Congestion Pricing, and am a current member of its standing committee on Managed Lanes. My testimony today draws on my more than 25 years of transportation policy research.

As is widely known, the federal Highway Trust Fund (HTF) is no longer being supported exclusively by highway user revenues. Since 2008, Congress has shifted over $60 billion in general fund money into the HTF, so as to avoid reductions in annual federal highway and transit spending. Given the intense pressures being placed on general fund monies and “discretionary” spending due to the overall federal budget’s problems, there are serious concerns about whether such HTF bailouts can continue. At the same time, there appears to be little political support-House, Senate, or Administration-for fuel tax increases that would bring HTF revenues into alignment with current and projected spending.

In my testimony I suggest that Congress needs to take these realities seriously as it develops a bill to reauthorize the federal program. I offer for the Committee’s consideration four recommendations to guide a fundamental rethinking of the federal role, as follows:

  1. Preserve and strengthen the users-pay/users-benefit principle on which the HTF was founded, and which remains the basis for most state highway programs.
  2. Set meaningful priorities for the Highway Trust Fund, to balance spending with existing revenues.
  3. Encourage state efforts to develop mileage-based user fee models that address the many current unknowns and concerns over this proposed transition.
  4. Give states improved tools to make their existing transportation funding go further.

Continue Reading the Full Testimony (.pdf)

Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation.