NCSL - National Conference of State Legislatures
04/14/2021 | News release | Distributed by Public on 04/14/2021 10:53
Transportation Funding and Financing: State Approaches
By Kristen Hildreth
With improved fuel efficiency, increased use of electric and hybrid vehicles, and a slow growth in vehicles miles traveled, revenue flowing into the Highway Trust Fund (HTF) via the motor fuel tax has proven insufficient to support surface transportation programs.
As of March 1, the Congressional Budget Office has estimated, based on current trajectories, that the HTF has sufficient balances to cover expected outlays until summer 2022, but unless additional revenues or transfers are authorized, the HTF could diminish to the point that the U.S. Department of Transportation may have to delay payments to states for completed work.
That issue of solvency, and funding uncertainty was the focus of a hearing today by the Senate Environment and Public Works Committee.
Douglas Shinkle, NCSL's transportation program director testified on behalf of NCSL providing a comprehensive overview of what states across the nation have done to develop and deploy new funding and financing mechanisms to meet the rising costs of construction, operation and maintenance of transportation infrastructure.
He indicated that states have enacted and implemented increased gas taxes, indexed those gas taxes to an economic indicator such as the consumer price index, created new tolling programs, enhanced vehicle registration fees and undertaken efforts to 'lock-box' transportation revenues solely for transportation purposes.
Additionally, he outlined the new pioneering approaches states are taking to fund and finance needed transportation investment, such as studying and creating road user charging programs, enacting fees on electric and hybrid vehicles, charging fees for transportation network company rides, enhancing vehicle registration fees, and utilizing public-private partnerships for large transportation capital projects.
During questioning from committee members Shinkle responded to inquiries ranging from how states are handling privacy concerns surrounding road use charges, where electric vehicle fee revenue is being used, and other ways to bring the private sector dollars into transportation funding and financing to add onto public dollar investments.
In addition to outlining state examples, NCSL urged Congress to not drive away from a user-fee, formula based national transportation funding stream as they work to develop mechanisms to ensure sufficient and stable long-term transportation funding and encouraged continued outreach to and consultation with states to develop a shared, long-term vision for funding and financing surface transportation systems that will enhance the nation's prosperity and quality of life for all Americans.
Watch a video recording of the hearing.
Read Shinkle's written testimony on behalf of NCSL.
Kristen Hildreth is senior policy specialist-state federal relations for NCSL's Natural Resources and Infrastructure Committee.