Senate Transportation hears state revenue options as experts warn federal highway fund shortfall

The Senate Transportation Committee heard an overview of state and federal transportation revenue options and near‑term risks to federal funding during a virtual briefing led by the American Association of State Highway and Transportation Officials (AASHTO) and the National Conference of State Legislatures (NCSL).

"We are essentially the trade association that represents all 52 state departments of transportation across the country," said Jim Timon, executive director of AASHTO, summarizing the association's role in convening state DOTs and collecting information on how states raise and use transportation revenue. Timon told senators that the federal landscape is strained: the Infrastructure Investment and Jobs Act (IIJA) provided "roughly, almost $600,000,000,000 over 5 years," but the Federal Highway Trust Fund has required repeated transfers from the U.S. general fund and risks running negative beginning in 2028 unless new revenue is identified.

Timon described the scale of recent federal support and the fiscal challenge: "Since 2008, Congress has transferred $275,000,000,000 from general funds to the Highway Trust Fund," and continuing the level of IIJA funding in a future authorization would require new revenue or transfers. He also cited a sharp rise in construction costs, saying there has been "a 70% increase in highway construction cost over the last 4 or 5 years," which reduces the purchasing power of both federal and state dollars.

Presenters outlined a menu of state options already in use or under consideration. NCSL transportation program director Douglas Shinkle and researcher Matt Wicks summarized approaches that states have adopted to shore up revenue: electric vehicle (EV) annual registration fees (39 states, with ranges from about $50 to $300 for passenger vehicles), per-kilowatt-hour fees at public chargers (nine states), transportation‑network‑company (TNC) fees for Uber/Lyft trips (state and local examples), retailer delivery fees (Colorado and Minnesota cited as current adopters), managed lanes and tolling, and pilot or voluntary road‑usage charge (RUC) programs (Oregon, Utah, Virginia; Hawaii launching a mandatory RUC for EVs on a delayed schedule).

Matt Wicks provided examples and early revenue results: Pennsylvania's low per‑kWh fee generated roughly $1 million in its first year; Colorado's retail delivery fee produced just under $76 million in its first year; Minnesota's delivery fee is structured differently and includes exemptions for some necessities. NCSL presenters emphasized tradeoffs: EV registration fees are administratively simple but do not track road use; RUCs better align payment with mileage but raise privacy and interstate collection questions and are costlier to administer in the near term.

Committee members pressed for details on delivery fees, exemptions and how states allocate new revenue. Senator Rebecca White, who said she has introduced delivery fee legislation (S.75), asked whether other states dedicate delivery fee revenue to climate‑related programs. Doug Schinkle said Colorado directs a portion of its retail delivery fee to clean‑vehicle and charging investments. Timon and NCSL staff offered to connect Vermont lawmakers with bill sponsors and state administrators in Colorado and Minnesota for specifics.

Lawmakers also asked about the federal timeline. Timon said Congress is seeking to accelerate reauthorization work and that draft House and Senate bills could appear in the summer or early fall, giving states earlier signals about possible funding levels. He cautioned that a lack of timely federal approvals and temporary administrative pauses can delay planning and construction work; he described ongoing outreach to the U.S. Department of Transportation to resolve transition issues affecting formula and discretionary grants.

The committee directed staff to collect follow‑up materials and contact information: presenters agreed to share state bill sponsors and program details, and committee staff agreed to accept NCSL resources for dissemination.

The briefing was discussion‑focused: no formal motions or votes on policy were taken during the session.