Proposal Would Replace Federal Fuels Taxes With a National Per Mile User Fee

Shuster Offers Plan to Sustain Highway Trust Fund


July 24, 2018


Congressman Bill Shuster, outgoing chairman of the House Transportation and Infrastructure Committee, is proposing the end to federal gas taxes in 10 years with a shift at that point to a tax system based on vehicle miles traveled (VMT).  And for the next 10 years he is proposing a fuels tax increase to sustain the faltering Highway Trust Fund.

Shuster’s “discussion draft” proposes an increase of 15-cent per gallon above the current federal gasoline tax of 20 cents with the increase phased in over three years. The 35-cent per gallon rate would then be inflation indexed until September 2028 when it would be replaced with an alternate revenue source to be recommended by a Highway Trust Fund Commission voted up or down by the Congress. There would be a corresponding 20-cent per gallon increase on diesel phased in over the same period.

There is essentially no likelihood these ideas will be seriously considered before Shuster's retirement from the Congress at the end of the year.

In a “vision statement” Shuster said his bill “serves as a framework and a new starting point for Congress to begin to seriously address, in a fiscally responsible and bipartisan manner, how we are going to provide the Nation with the 21st Century infrastructure it needs and deserves.”

 He points out that the Highway Trust (HTF) is in serious trouble.  The Congressional Budget Office estimates that it will go insolvent as soon as the fall of 2020 and will be a cumulative shortfall of more than $160 billion by the fall of 2028.

The framework includes the following elements:


-- A national per mile user fee surface transportation system to test if such can replace the existing user fees on gasoline and diesel.

-- Raising the user fees on intercity and local buses.

-- Establishing a 10% user fee on the wholesale price of electric batteries.

-- Establishing a 10% user fee on wholesale price of bicycle tires.

-- Increasing the federal user fees on gasoline by 15 cents per gallon and 20 a gallon on diesel fuel.


-- Extending the authority of the Highway Trust Fund through September 30, 2021.

-- Authorizing a new National Infrastructure Investment Program for competitive grants with 30% set aside for rural projects.

-- Authorizing set-aside within the FAST Act’s National Significant Freight and Highway Projects Program for a future congress to authorize nationally significant highway, bridge and freight projects.




"This proposal reforms and addresses the short-term and long-term solvency of the HTF, and ultimately eliminates the federal gas and diesel taxes. By ensuring its short-term solvency, we can thoughtfully look at the future needs of the HTF and produce a solution that fully supports appropriate investment in our Nation’s vital transportation infrastructure."

"The proposal creates a Highway Trust Fund Commission of experts to study how best to achieve the long-term solvency of the HTF and recommend to Congress a 21st century solution. The results of the Commission will take the form of a legislative recommendation that will be presented to Congress for a simple up-or-down vote. However, the Commission cannot propose to continue or adjust the gas and diesel taxes. An innovative solution must be proposed."

"The proposal also establishes a national, voluntary pilot program to test the viability of replacing current HTF user fees with a per-mile user fee. This pilot program will help address a variety of policy issues associated with a per-mile user fee and provide Congress with important

"This proposal also recognizes that a number of surface transportation system users do not currently pay into the system, even though they benefit from it. The proposal lays out a simple principle: if you are using the system in some manner, then you should help pay for it.
Capturing all users of the system is a fair requirement which will benefit everyone.
This represents one responsible solution for ensuring the solvency of the HTF."