The Highway Trust Fund Is Broken: Why Gas Taxes No Longer Pay for Roads—and What Comes Next

If you’ve driven on a pothole-riddled interstate or sat through a construction delay on a bridge that was last upgraded when floppy disks were cutting edge, you already know something is off about how we fund roads. But the problem runs deeper than crumbling asphalt.

For decades, the United States had a clean, simple, and arguably fair deal: The more you drive, the more you pay for roads. Gas taxes, tolls, and vehicle fees created a dedicated revenue stream that kept highway funding separate from general taxes. Non-drivers didn’t subsidize drivers. Drivers paid their own way.

That deal is dead. And the numbers prove it.

The Gas Tax Model: A Once-Working System That Hasn’t Kept Up

Let’s rewind to the principles that built the Interstate Highway System. The federal gas tax was set at 18.4 cents per gallon. States layered their own gas taxes on top. Add registration fees and occasional tolls, and the revenue flowed into the Highway Trust Fund—a pot of money intended solely for building and maintaining major roads and bridges.

The logic was elegant: Gas consumption served as a proxy for road usage. Drive a gas-guzzler? Pay more. Drive a compact car? Pay less. Take the bus or ride a bike? Pay nothing. Non-drivers—those who couldn’t or chose not to own a car—were off the hook. Taxpayers who didn’t use the roads weren’t subsidizing those who did.

That philosophy works beautifully—when two conditions hold true: fuel efficiency stays flat, and vehicle miles traveled rises predictably. Neither is true today.

The $275 Billion Transfer: General Taxpayers Now Subsidize Drivers

Here’s where the math falls apart. The federal gas tax hasn’t been raised since 1993. Think about that: 1993 was the year Jurassic Park hit theaters, the internet was still a novelty, and the average car got about 20 miles per gallon. Today, hybrids, plug-in EVs, and increasingly efficient gasoline engines mean vehicles travel far more miles per gallon. That means drivers buy less gas per mile—and pay less tax per mile.

In fiscal year 2025 alone, the gap between what drivers contributed and what roads actually cost hit $30.6 billion. That deficit didn’t appear overnight. The Highway Trust Fund has run a deficit every single year for more than a quarter century. To keep the fund solvent, Congress has done the fiscal equivalent of taking money from the household budget: over the past 15-plus years, lawmakers have transferred roughly $275 billion from the general Treasury into the Highway Trust Fund.

Where does that general Treasury money come from? Income taxes. Corporate taxes. Sales taxes. Borrowed money that adds to the national debt. In other words, people who don’t drive—or can’t afford to drive—are now subsidizing drivers to the tune of billions of dollars annually.

That’s not sustainable. And it’s not fair.

The EV Problem: Clean Cars, Dirty Funding Gap

Electric vehicles are a massive win for the environment and a massive problem for the gas tax model. As EV adoption surges, the pool of gas tax revenue shrinks. Every EV on the road is a car that pays zero cents per gallon in federal gas tax. Some states have started charging EV registration fees to compensate, but those fees are flat—they don’t scale with miles driven. A part-time EV commuter pays the same as a gig driver logging 40,000 miles a year.

The Congressional Budget Office projects the Highway Trust Fund will continue to bleed red ink unless something changes. And with fuel efficiency improving even in conventional vehicles—thanks to stricter CAFE standards and better engine technology—the trend line points in one direction: less gas tax revenue per mile driven.

What’s the Alternative? A Road Usage Charge

The obvious fix isn’t a new tax on EVs or a higher gas tax. It’s a complete rethinking of how we charge for road use. Enter the Road Usage Charge (RUC), also known as a vehicle miles traveled (VMT) tax.

A RUC charges drivers based on actual miles driven, not gallons burned. Everyone pays their fair share for the pavement they wear out, regardless of fuel type. This solves the gas tax’s three biggest problems:

1. Revenue stagnation disappears. As more EVs hit the road, revenue stays stable because per-mile charges remain constant.

2. Fairness returns. A driver of a 40-mpg hybrid pays the same per-mile rate as a driver of a 20-mpg SUV, because road wear depends primarily on weight and miles, not fuel type. (Heavier vehicles could face higher rates, but that’s a separate policy debate.)

3. Non-drivers stop subsidizing roads. If everyone who drives pays per mile, general taxpayers—who are currently funneling $30 billion-plus annually into the Highway Trust Fund—can keep their money for schools, health care, or tax cuts.

Several states are already piloting RUC programs. Oregon, Utah, and Virginia have test programs where volunteers pay a small per-mile fee instead of the gas tax. The pilot results show that RUC is administratively feasible, privacy concerns can be addressed with multiple reporting options (odometer photos, plug-in devices, or smartphone apps), and drivers accept the system once they understand the fairness argument.

Why Congress Won’t Raise the Gas Tax (and Why It Shouldn’t)

You might wonder: Why not just raise the federal gas tax? It’s been 18.4 cents for 32 years. Adjusting for inflation alone would put it closer to 40 cents per gallon. If we’d indexed it to construction costs, it would be even higher.

The political reality is that raising the gas tax is toxic. Voters see it as a tax hike on everyone who drives, even though the alternative—a general fund transfer—is an invisible tax hike on everyone who files a tax return. Politicians prefer hidden taxes, which is exactly what the $275 billion in general fund transfers represent.

But even if Congress had the stomach for a gas tax increase, it wouldn’t solve the structural problem. Higher gas taxes would accelerate EV adoption (good for the climate, bad for revenue) and penalize rural drivers who have no transit alternative. A RUC, on the other hand, is revenue-neutral for most drivers: you pay roughly what you would pay under a properly indexed gas tax, but the system adapts to future vehicle technologies.

The B2B GTM Lesson: Business Models That Don’t Adapt Become Subsidies

Here’s where this story connects to the B2B world. The gas tax model is a textbook example of a revenue model that worked brilliantly in a stable environment but failed catastrophically when conditions changed. Sound familiar?

We see the same dynamic in SaaS pricing: per-seat models that worked in the 2010s break in the era of AI agents and usage-based consumption. We see it in lead generation: paying per click worked when search was the only game, but attribution models collapsed when buyers started using seven channels before booking a demo. We see it in customer success: basing retention on annual contract value (ACV) misses the reality that usage patterns determine renewal risk.

The Highway Trust Fund’s $30.6 billion deficit is a mirror for any B2B business that hasn’t revisited its pricing model in three-plus years. If your revenue model relies on assumptions from 1993—flat consumption, predictable usage, no category disruption—you’re running on fumes.

Actionable Playbook: How to Audit Your Revenue Model for Structural Risk

If you’re a VP of Sales, CRO, or founder, here’s a three-step playbook inspired by the highway funding crisis:

Step 1: Identify your “gas tax” equivalents

List every revenue stream in your business that depends on a proxy for value rather than actual value delivered. Per-seat licensing is the classic. Flat retainer fees are another. If your best customers use your product 5x more than your worst customers but pay the same amount, that’s a gas tax problem in reverse—you’re leaving money on the table.

Step 2: Model the “EV adoption” scenario

What happens when a disruptive technology or behavior change hollows out your proxy? For gas taxes, it was EVs and fuel efficiency. For SaaS, it might be AI agents that eliminate the need for user seats, or usage-based competitors that offer lower entry prices. Run a scenario where 30% of your customers cut consumption by half. Does your revenue model survive? If not, you have a structural deficit.

Step 3: Transition to a road usage charge model

Move toward pricing that correlates with actual value delivered. Usage-based pricing, outcome-based pricing, or hybrid models (base fee + variable component) are the RUC equivalents. They ensure that revenue adjusts as customer behavior changes. They also make you resilient to disruption.

The Bottom Line

The Highway Trust Fund is running a $30.6 billion annual deficit because we’re using a 1993 pricing model in a 2025 world. We’ve already transferred $275 billion in general tax money to prop it up—and that’s only buying time, not solving the problem.

The solution is a road usage charge that ties payment to actual miles driven, not gallons burned. It’s fair, sustainable, and future-proof.

B2B revenue leaders should take note. If your pricing model hasn’t changed since 1993—or even 2020—you’re already running a deficit. The question isn’t whether you’ll need to change. It’s whether you’ll adapt before Congress has to bail you out.