Why It Matters

A Congressional Research Service report on surface transportation reauthorization released September 8 projects the Highway Trust Fund's balance will approach zero by fiscal 2028, forcing Congress to choose between raising revenue or cutting highway programs before year-end. The report, titled "Surface Transportation Reauthorization: Federal Highway Programs," examines the incoming reauthorization bill, the BUILD America 250 Act, which offers starkly different approaches to funding America's roads, each with consequences for state departments of transportation, the Trump administration's policy agenda, and the public's access to federal highway dollars.

The Big Picture

The Infrastructure Investment and Jobs Act authorized $365 billion for highway programs through 2026, with $304 billion drawn from the Highway Trust Fund itself and $47 billion from multiyear advance appropriations out of the Treasury's General Fund. That represented a 62 percent increase in average annual highway funding compared to the prior surface transportation law in nominal dollars, though inflation has eroded much of the gain. In 2025 dollars, the purchasing power of funding in FY2005 was $92 billion, exceeding the $74 billion allocated for FY2025 under current law.

The BUILD America 250 Act, introduced by Rep. Sam Graves (R-MO) in May and ordered to be reported from committee, would authorize $75 billion annually in Highway Trust Fund contract authority plus $3 billion subject to future appropriations over five fiscal years. That represents a seven percent increase over current IIJA levels but marks a departure in funding strategy. Unlike the IIJA, which included $47 billion in multiyear advance appropriations from the general fund, the BUILD America 250 Act contains no such advance appropriations, relying instead on future congressional action to fund new programs.

The bill also proposes annual registration fees of $130 for electric vehicles, increasing to $150 by 2032, and $35 for plug-in hybrids, increasing to $50 by 2031. As of 2024, roughly 4.5 million light-duty EVs and 1.5 million light-duty PHEVs were registered in the United States. States would be required to administer these fees and remit revenues to the federal government, facing penalties 25 percent higher than fee revenues for non-compliance.

The report also documents how the Trump administration has reshaped highway program priorities since January 2025. Following executive orders on climate and diversity initiatives, the Federal Highway Administration and the Office of the Secretary removed guidance, updated requirements, and suspended funding for certain programs. In September 2025, the Office of the Secretary reportedly terminated grant agreements under multiple competitive discretionary grant programs. A federal judge ruled on January 26, 2026, that suspending obligations for the National Electric Vehicle Infrastructure Program violated the Administrative Procedure Act.

The Bottom Line

Congress faces a structural funding problem: fuel taxes, which have not been raised since 1993, have lost 74 percent of their purchasing power, while highway spending needs continue to grow. The BUILD America 250 Act's proposed EV registration fees would create a new revenue stream but shift the burden to vehicle owners rather than fuel consumers. More fundamentally, the bill abandons the general fund support model that the IIJA pioneered, making future highway programs dependent on annual appropriations battles rather than guaranteed multiyear funding. Whether Congress passes this bill, modifies it, or pursues an alternative, the outcome will determine whether highway investment expands, contracts, or stagnates, and whether states and local governments must shoulder more of the burden.

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