The federal government has been writing itself IOUs to fund America's highways for nearly two decades. The bill comes due in 2028. That's the year the Congressional Budget Office (CBO) projects the Highway Trust Fund's (HTF) highway account goes negative. It is the point at which dedicated tax revenues will no longer cover what Congress has authorized to spend. For asphalt contractors whose project pipelines run directly through the federal-aid highway system, this needs to be on your radar. It is a business problem, and the window to solve it is closing faster than most people in the industry want to admit.
"There is sort of this recognition that the right idea, probably, is to just increase the gas and diesel taxes," said Rebecca Higgins, Vice President of Policy at the Eno Center for Transportation (ECT), and co-author of a March 2026 report, "The Last Exit: Fixing the Highway Trust Fund while Solvency is still Solvable," maps the options Congress faces on top of this reauthorization cycle. "But there would have needed to be a mass of people willing to all stand up at the same time and say, yes, we're going to do this. And there is not a willingness to all jump together."
That political reluctance is one of the core problems and has been for a long time.
How We Got Here
The HTF has operated on a structural deficit since 2008, absorbing more than $275 billion in General Fund transfers to cover the gap between what the 18.4-cent federal gas tax generates and what highway and transit programs actually spend. The Eno Center report calculates that in 2026, tax receipts cover just sixty percent of HTF spending. Without intervention, the unified fund goes negative $22 billion by FY2028 and reaches a $154 billion deficit by 2032.
CBO February 2026 Baseline Projections, via Eno Center for Transportation, "The Last Exit: Fixing the Highway Trust Fund while Solvency is still Solvable," March 2026. Figures in billions of dollars, end-of-fiscal-year balances.
The gas tax hasn't changed since 1993. According to a parallel analysis by Consumer Reports, the purchasing power of that tax has eroded by eighty-one percent in that time — driven primarily by a seventy-seven percent increase in highway construction costs, with fuel efficiency gains and EV adoption are both certainly factors in how we got here, they only account for relatively minor portions of the shortfall. The EVs-killed-the-trust-fund narrative, in other words, is largely a political distraction, however, last year's establishing of EV related user fees was a positive step in the right direction.
"EV adopts is mostly going to be the big variable in what things look like in the future, the next ten years, but in terms of how we got to this year, EVs have not really been a significant factor. When people were talking about EV fees, that was about getting the principle established for the future," said Jeff Davis, Senior Fellow and Editor of Eno Transportation Weekly.
The deeper structural problem is that the gas tax's elegance as a collection mechanism has always been its fatal flaw as a long-term funding strategy. Davis explained that the IRS currently processes roughly 1,300 points of taxation to collect approximately $35 billion a year in fuel excise revenue. Switching that system to a vehicle-miles-traveled fee would push the collection points north of two hundred million.
"No matter what eventually we wind up taxing," Davis said, "we will miss the gas tax when it's gone."
That administrative reality is why alternatives to the gas tax, however logical in theory, face such steep implementation hurdles. Any replacement has to raise comparable revenue at a comparable administrative cost, and nothing currently on the table clears that bar cleanly.
Why This Cycle Is Different
Congress has punted on HTF solvency nine times since 2008, each time opting for a General Fund transfer rather than a structural fix. This isn't a single administration's or even a single political party's fault, there are plenty of blame to go around for past failures to act. The Eno Center report argues this reauthorization cycle is the last realistic window to act before the problem becomes genuinely unmanageable.
If Congress kicks the can again, the next reauthorization cycle would expire in the mid-2030s and land directly on top of projected Social Security trust fund insolvency in 2032 and Medicare Part A insolvency in 2036. At that point, Congress would face simultaneous demands to rescue multiple major trust funds, and the political bandwidth to give highway and transit programs another bailout simply may not exist. Both Fitch and Moody's have already downgraded U.S. credit adding external fiscal pressure that wasn't present in prior cycles.
But there is also one meaningful piece of good news embedded in the current CBO projections: for the first time in years, HTF receipts are expected to grow modestly over the next decade even without a rate increase. That means a gas tax hike, if Congress moves on one, would function as a durable long-term fix rather than another short-term bridge, and could be meaningful change from where the math stood five or ten years ago.
What Are We Going To Do, And What's It Gonna Cost?
The ECT report presents Congress with three structural paths and one extended delay.
The cut-back on spending scenario is the most politically straightforward and the most damaging for contractors. Achieving HTF solvency through spending reductions alone would require an immediate forty-eight percent cut to both highway and transit obligation limits. This would mean a first-year reduction of $30.1 billion to highway programs. The Associated General Contractors of America (AGC) called that prospect bluntly unworkable.
"A nearly fifty percent reduction in federal highway investment would immediately translate into fewer projects, halted or delayed procurements, and significant uncertainty for contractors and state transportation officials," said Brian Turmail, AGC Vice President of Association and Industry Image. "For our members, that kind of unpredictability makes it harder to plan their workforce and make long-term investments."
The increased revenue path is the one option the data points toward. The Eno Center calculates that an immediate ten-cent-per-gallon motor fuel tax increase starting October 1, 2026, phased up to 17.8 cents per gallon by 2036, would generate roughly $300 billion in additional revenue over ten years and close the solvency gap. Boom. Done. Each additional penny of gas tax yields approximately $2 billion per year to the fund.
AGC has long supported the user-pay principle but has not endorsed a specific mechanism.
"Reliable funding allows contractors to plan ahead, invest in equipment and workforce, and deliver projects more efficiently," Turmail said. "Our priority is ensuring that whatever approach is taken provides consistent, dependable funding without adding unnecessary complexity."
New vehicle registration fees and VMT charges are also on the table. The ECT estimates a flat $120 annual federal registration fee on all vehicles would fill the shortfall, capturing EV and hybrid drivers who currently contribute little to the HTF. A VMT fee of 2.4 cents per mile would replace all current revenues. However, it comes with significant administrative and political hurdles.
Then there is devolution — shifting funding authority to states — which is the structural wildcard. Some states have actually been more willing to raise fuel taxes than Congress. State fuel tax receipts grew seventy-four percent between 2000 and the present, while federal receipts grew just nine percent. But devolution doesn't erase the $130 billion in outstanding federal HTF obligations already on the books, and AGC sees the risk clearly.
"The federal-aid highway program plays an important role in providing consistent funding and a coordinated national approach to infrastructure investment," Turmail said. "Moving entirely away from that structure would introduce additional uncertainty."
The September Deadline Nobody Wants To Talk About
The 2028 insolvency date gets most of the attention, but Higgins pointed to a nearer pressure point that contractors should have on their radar more readily.
"The real deadline is this September, for the authorization," she said. "Without that, the future contract authority isn't authorized. By September, we'll have a sense of what next year holds, and maybe multiple years."
The Mass Transit Account, which is more severely underfunded than the highway account, reaches a zero balance in mid-2027, and nearly a year before the highway account crisis point. Davis noted that dynamic actually provides contractors with useful intelligence.
"You'll be able to see how Congress reacts to that before the deadline hits for highway contractors," he said. "You'll have a little bit of an advantage to know what the sense is on Capitol Hill."
That congressional response to the transit account crisis will tell the industry a great deal about whether lawmakers are willing to make hard choices or reach again for the General Fund. Davis suggested the most realistic outcome this cycle involves a combination of modest revenue measures, spending restraint, and general fund support structured outside the trust fund rather than deposited into it. That would be a more "budgetary honest" approach, in his words, than the fungible transfers of the past two decades.
What To Watch
Davis and Higgins offered a counterintuitive piece of reassurance on the immediate outlook. Because contract authority spends out slowly, with the money let today often authorized one-to-three years ago, and much of the work currently in procurement already legally obligated. That will not disappear even if the fund runs dry.
"The contracts might be funding what was obligated last year, and it's just going to be spent this year," Higgins said. "The federal government has made an obligation to reimburse that money, so that money won't go away."
Davis added a wrinkle that most contractors don't know: when the trust fund hits zero, the government remains legally obligated to keep signing new contracts. The pain doesn't come from project cancellations, it comes from delayed reimbursements to states.
"The degree to which a trust fund zero-balance crisis hits contractors depends on how good the state is in its cash management," he said. Some states have months of redundancy built in. Others would feel it quickly.
For contractors making capital investment decisions right now, whether that be a new plant, expanded workforce, or heavy equipment, the practical guidance is to watch September's reauthorization outcome closely, track how Congress handles the transit account crisis in 2027 as a leading indicator, and understand that active procurement almost certainly draws on already-obligated funding that is legally protected regardless of what happens to the trust fund balance.
The bigger question is which pathway Congress chooses to restore solvency, and whether it has the political will to choose one at all, and how will that choice shape federal highway investment for the next decade.
"Deferring this decision to a future generation," the Eno Center report concludes, "will make it all the more difficult to address when the bill finally comes due."
For an industry that builds the roads everyone else drives on, that bill is already visible on the horizon.
