The impact, of course, will not be felt immediately, but it will be substantial enough that policymakers should start thinking about how to deal with it today. CBO estimates that the proposed CAFE standards would gradually lower gasoline tax revenues and eventually cause them to drop by no less than 21%.
Culprit will be resulting drop in gasoline taxes collected starting in 2017
Proposed light-duty CAFE standards expected to cut gasoline-tax collections starting in 2017
With long-term reauthorization of the highway bill still on the table for the House and the Senate, the Congressional Budget Office (CBO) has issued a sobering report on how it expects the Highway Trust Fund to be impacted in future years by the expected tightening of federal corporate average fuel economy (CAFE) standards for light-duty vehicles (cars, SUVs, crossovers, minivans and pickups) manufactured from 2017 through 2025 to up fuel efficiency and cut greenhouse-gas emissions.
As CBO sees it, the Highway Trust Fund– which finances most federal surface-transportation programs and is largely funded by fuel taxes—will be severely impacted by the resulting drop in gasoline tax revenues as more light-duty vehicles meeting the proposed harsher CAFE standards start hitting the road.