As lawmakers begin shaping the next multiyear surface transportation bill, a central challenge remains: how to sustainably fund highways, bridges and transit systems as traditional revenue sources fall short.
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According to a new report from Consumer Reports, policymakers must rethink how transportation infrastructure is financed as the Highway Trust Fund faces a projected shortfall by 2028. The fund has long relied on federal fuel taxes, but revenues have struggled to keep pace with rising construction costs and evolving vehicle technologies.
“We’re not really seeing a whole lot of deep thought into how to actually develop good policy in this space and almost no consideration of impact on consumers,” said Chris Harto, manager of sustainability advocacy for Consumer Reports.
The report outlines five key principles that should guide policymakers as they evaluate funding mechanisms for the next transportation bill. These include ensuring that user fees are proportional to road usage, easy to collect, fairly distributed between commercial and consumer users, protective of consumer privacy and capable of maintaining long-term revenue stability.
The funding challenge stems from multiple factors. Construction and maintenance costs have increased significantly, while more fuel-efficient vehicles and the rise of electric vehicles are reducing fuel tax revenues. Consumer Reports estimates that electric vehicles alone have reduced the purchasing power of the federal gas tax by about 2%, while inflation accounts for 77% of the decline.
Lawmakers, including Sam Graves, have proposed new approaches such as a $250 annual registration fee for electric vehicles. However, the report notes that such a fee could result in EV owners paying significantly more in federal vehicle taxes than drivers of gasoline-powered vehicles.
The analysis also highlights disparities in how road usage costs are distributed. Heavy-duty trucks, for example, contribute disproportionately to road wear. An 80,000-pound truck can cause up to 300 times more damage per mile than a passenger vehicle, according to the report.
Consumer Reports reviewed six potential funding mechanisms, each with trade-offs. Increasing fuel taxes remains one of the simplest options to administer, though it faces political resistance. Electric vehicle registration fees are easy to collect but fail to account for actual road usage.
Vehicle-miles-traveled fees offer a more precise approach by charging drivers based on how much they use the roads, though they raise privacy concerns. Taxes on public EV charging, tolling systems and reliance on federal general funds were also examined, each presenting unique benefits and limitations.
The National League of Cities has supported gradual increases in federal fuel taxes indexed to inflation as a potential path forward. Meanwhile, federal budget proposals continue to supplement transportation funding beyond the trust fund.
In a recent budget request, Donald Trump proposed $26.6 billion in discretionary funding for the Department of Transportation for fiscal year 2027, representing a 6.2% increase over 2026 levels.
As Congress debates the next surface transportation bill, the decisions made will shape infrastructure investment and project pipelines for years to come. For construction owners and contractors, the outcome will directly influence funding availability, project timing and long-term market stability.
Originally reported by Dan Zukowski Senior Reporter in Construction Dive.
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