For the first time in history, an electric vehicle (EV) is the best selling vehicle in the world for 2023. The Tesla Model Y dethroned the long-standing king of car sales, the Toyota Corolla. While in the U.S. market, things look a bit different, with Ford's F-series trucks continuing to outsell every other make and model, two of Tesla's offerings are in the top 10. The Model Y hit at number four in America going into the final quarter of 2023.
This trend should ring as significant to the road building and asphalt industry, as the Federal Highway Administration's (FHWA) highway trust fund (HTF) gets its finances primarily through the taxes on fossil fuels. You pay it at the pump. These fund are what pay for the big infrastructure and road projects that make up a not-insignificant portion of contractors' state and federal work.
According to FHWA the HTF was created as a user-supported fund: highway users would pay taxes, the tax receipts would flow into the HTF, and HTF balances would be dedicated for use on highway projects (later expanded to surface transportation projects). This overall construct is still in place, but the tax structure has changed since the HTF year was created (1956).
The HTF has three long-standing sources of income:
- Federal fuel taxes;
- Other Federal taxes on truck users; and
- Interest on invested balances.
However, there's one big problem. These sources have failed to produce enough income to fully cover the expenses incurred for almost the past two decades. The last time gas taxes were increased was 1993. It's incredibly unpopular, borderline political suicide, to discuss increasing the gas tax. Yet, there is clearly a problem that must be addressed. The EV paradigm is here, and the HTF issues are only going to get more dire.
Highways and Transit Subcommittee Chairman Rick Crawford (R-AR) announced that the Subcommittee will hold a hearing focused on the current solvency challenges associated with and the importance of a sustainable, long-term funding solution for the Highway Trust Fund. The hearing, entitled “Running on Empty: The Highway Trust Fund,” will be held at 10:00 a.m. ET on Wednesday, October 18, 2023, in 2167 Rayburn House Office Building.
The hearing will be live streamed here at this link: https://transportation.house.gov/calendar/eventsingle.aspx?EventID=406894
Witness List:
- Mr. Kris Strickler, Director, Oregon Department of Transportation
- Dr. Chad Shirley, Ph.D., Principal Analyst, Microeconomics Studies Division, Congressional Budget Office
- Mr. Jeff Davis, Senior Fellow, Eno Center for Transportation
- Ms. Reema Griffith, Executive Director, Washington State Transportation Commission
If you are unable to watch the hearing live, ForConstructionPros will have follow-up coverage and analysis here after its conclusion.
