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Auto Group Proposes Replacing Gas Tax With Vehicle Weight Fee

a close up of a gas pump with gas prices

WASHINGTON, D.C. (WOWO) A leading auto industry group is calling for a major shift in how the federal government funds highway and infrastructure projects, as concerns grow over a looming budget shortfall.

The Alliance for Automotive Innovation is proposing that the longstanding federal gasoline tax be eliminated and replaced with a fee based on vehicle weight. The plan would function similarly to a registration fee and apply to all vehicles on the road.

Supporters of the proposal say the current system no longer reflects how Americans drive. Revenue from the federal gas tax has declined significantly over time as vehicles have become more fuel-efficient and electric vehicles have gained market share, according to Fox Business.

The Highway Trust Fund, which supports federal spending on roads, bridges and transit systems, is projected to become insolvent by 2028. Analysts warn that without changes, the fund could face a steep reduction in spending, potentially cutting nearly half of its budget.

Federal gas taxes have remained unchanged since the early 1990s and are not indexed to inflation, further reducing their real value. Lawmakers have repeatedly transferred money from the federal government’s general fund to keep infrastructure projects running.

The proposed vehicle fee is intended to ensure that all drivers contribute to maintaining the nation’s transportation system, regardless of fuel type or driving habits. Debate over possible changes is expected as current transportation funding laws approach expiration later this year.

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