This week in the House of Representatives, a House Subcommittee began to review policies and programs from the U.S. Department of Transportation. The policies and programs in question specifically affect the trucking industry. In the process of reviewing the policies, witnesses were called upon to provide testimony regarding how the policies affect the industry and explain what challenges the industry faces today. The main witnesses called upon were four major industry stakeholders.
The subcommittee holding the hearing is the Highways and Transit Subcommittee.
One of the main witnesses, Lewie Pugh, the Executive Vice President of the Owner-Operator Independent Drivers Association, also known as OOIDA, believes this hearing will be history making. Pugh explained it as “the opportunity to pass the most pro-trucker highway bill in history.”
Currently, the subcommittee is mainly discussing the Highway Trust Fund, or HTF.
According to the Tax Foundation, the fund has a projected deficit of over $270 billion from just 2025 to 2034. This has raised a number of eyebrows, prompting the hearing. Some, such as the executive chairman of the expeditor company Load One, John Elliot, supports fuel tax increases in order to bolster the fund. However, his support does have the caveat that there be an annual cap placed. Furthermore, all funds that have been raised have to be dedicated to critical highway infrastructure projects.
This is not a foreign option to many in the subcommittee.
It has long been known that the fuel economy determines highway funding. The better the fuel economy is, the more highway funding goes down. This is because highway funding largely comes from fuel taxes. This has already been on many people’s radars as the automotive industry as a whole moves in a more electronic direction. When more people operate electric vehicles, less people spend money on gas. This means there is less money for highway funding projects.
Currently, the fuel tax is 18.4 cents per gallon of gas.
This fuel tax level is for regular gasoline. The fuel tax for diesel is 24.4 cents per gallon. This fuel tax level was first set in 1993 and has remained unchanged since then. However, this does not mean that this exact amount automatically goes to highway funding projects. There is a 1% for every dollar spent administrative fee that has to be accounted for as well. Since 1993, much has changed in the economy, automotive industry, and the conditions of our highways. Because this has remained unchanged to a fault, many now support an increase in the tax rate.
The discussions being held in this subcommittee related to the possible industry changes are still ongoing. Any change that will be made is still far off as there are many more steps that will need to be taken before any law is passed.
