El Podcast

E175: Roads Are Bankrupt: New Car Fees Are Coming - Jeff Davis

Episode Summary

Foremost transit policy expert Jeff Davis explains why the Highway Trust Fund has been effectively insolvent since 2008. Slower growth in driving, more fuel-efficient vehicles, and decades of resistance to raising the gas tax have undermined the system. He argues that while mileage-based fees are fair in theory, politically viable fixes are more likely to come from EV and registration fees or structured general-fund support than GPS tracking. The conversation also covers EV adoption, state versus federal funding roles, transit subsidies, tolling models, safety mandates, and the long-term impact of autonomous vehicles.

Episode Notes

Jeff Davis breaks down why the Highway Trust Fund has been insolvent since 2008 and what fixes (and tradeoffs) are realistic as EVs grow.

GUEST BIO
Jeff Davis is a Senior Fellow at the Eno Center for Transportation and Editor of Eno Transportation Weekly. He has more than 30 years of experience in federal transportation policy, including eight years working in Washington, D.C., advising on the federal budget, the Highway Trust Fund, and long-term infrastructure funding and governance.

TOPICS (IN ORDER)

• What the Highway Trust Fund is (created to fund interstates via fuel/trucking taxes)
• Why it broke in 2008 (spending > dedicated revenue)
• The 3 drivers: slower VMT growth, higher MPG, tax politics
• Federal vs state roles (federal-aid network + shifting cost shares)
• Reform options: gas tax bump vs mileage fee; privacy/admin hurdles
• EVs: accelerant, not original cause; state fee/VMT pilots
• Transit account inside HTF (how it got there; mismatch perceptions)
• Federal rules vs state flexibility (states using state $$ to avoid red tape)
• AVs: uncertain impact + liability/legal mess
• Underreported issue: safety mandates raise car/rail costs
• International models: truck tolls abroad; toll resistance in U.S.

MAIN POINTS

• Gas tax was a proxy for driving; that proxy is weakening (less VMT growth + better MPG).
• Politics prevented rate increases; since 2008 Congress has plugged holes with general-fund transfers.
• Mileage fees are “fair” in theory but hard in practice (privacy + enforcement + admin scale).
• Registration-based fees (incl. EV fees) may be more feasible.
• Transit funding in HTF is coalition-driven and not a clean “users pay” match.
• Federal dollars come with heavy conditions; some states route federal money to maintenance to minimize paperwork.

TOP 3 QUOTES

• “There’s three big reasons… driving doesn’t increase like it used to… gasoline is a worse proxy… and no one can agree on tax revenue increases.”
• “GPS-based VMT tracking… is perfect economically… [but] the biggest privacy nightmare.”
• “We’re going to miss the gas tax… it’s a very efficient tax.”