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Will New Congress Seek Reforms to Highway Taxation?

Could the 116th Congress be the perfect storm for mileage-based user fees? With a divided Congress and with the current surface transportation law expiring at the end of September 2020, shoring up the Highway Trust Fund with user fee alternatives to fuel taxes could be a bipartisan affair.

In the House, likely incoming Transportation and Infrastructure Committee Chairman Peter DeFazio (D-OR) would be wise to seek broad support for reforming the ailing Highway Trust Fund. Federal fuel tax rates were last raised in 1993 and provide the vast majority of revenue for the Highway Trust Fund. Unfortunately, since 2008, Congress has outspent what it has collected, leading to approximately $140 billion in general fund bailouts over the last decade.

Making matters more challenging, rising fuel economy and increasing penetration of electric vehicles will make the already-regressive fuel taxes even more regressive, disproportionately hurting the poor in rural and exurban communities. Charging road users directly for their road use, rather than using a proxy such as fuel or tire taxes, is the best way to restore the users-pay/users-benefit principle to its rightful place at the center of surface transportation policy.

Rep. DeFazio’s home state is a pioneer in mileage-based user fees (MBUFs), launching the first statewide pilot in 2015. His Oregon colleague Rep. Earl Blumenauer (D-OR) has long been an MBUF champion. Even better, this concept enjoys bipartisan support. Outgoing Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) floated a legislative proposal this past summer that would have studied replacing fuel taxes with MBUFs. Possible incoming committee Ranking Member Sam Graves (R-MO), who is currently the outgoing chairman of its Highways and Transit Subcommittee, signaled his support for MBUFs over gas tax increases in an op-ed earlier this year.

DeFazio himself, while a vocal proponent of increasing the gas tax, has also shown interest in MBUFs. Last year, he praised Oregon’s road usage charge pilot program. This puts him in roughly the same boat with the White House. The February 2018 Economic Report of the President touted the benefits of MBUFs and highlighted Oregon’s ongoing experiment.

Senators have been quieter on the MBUF front, but given the existing support among transportation leaders in the House, the new Congress appears well positioned to address the ailing Highway Trust Fund. This may turn out to be the bipartisan “infrastructure plan” that has been eluding Washington for the past two years. We hope incoming congressional leadership sees it that way.