Highway Trust Fund Basics: A Primer on Federal Surface Transportation Spending

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from NCPA,

The Highway Trust Fund’s authorization expired in May and the fund is projected to run out of money this month. Analysis projections by the Congressional Budget Office estimate spending will exceed fuel tax revenues by $180 billion over the next decade if lawmakers do not take action to reform the trust fund, according to Michael Sargent of the Heritage Foundation.

– Over the past six years, Congress has covered Highway Trust Fund shortfalls with $62 billion in “patches” from the Treasury\’s general fund.
– The trust fund is funded primarily by the federal taxes on gasoline and diesel fuel, which are 18.3 cents and 24.3 cents per gallon, but have not changed since 1993.
– In 2015, Highway Trust Fund spending is projected to reach $52 billion. The Highway Account is expected to spend $44 billion, but take in only $34 billion in revenue and interest, while the Mass Transit Account is expected to spend $8 billion compared with $5 billion in revenue, resulting in a combined deficit of $13 billion.

By 2025, the Congressional Budget Office (CBO) predicts that the Highway Trust Fund will take in only $38 billion, but spend $60 billion for a $22 billion deficit if current trends continue. At this pace, it would generate a $180 billion deficit over the next decade, pushing the potential cumulative shortfall to $168 billion.

Spending is outpacing revenues because it has expanded beyond its original purpose of building and maintaining the interstate highway system to funding non-highway projects that are not national priorities. Congress needs to recognize the fundamental problems with the Highway Trust Fund and develop a long-term solution that limits spending and ends diversions to projects that are not federal priorities.

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