Each year, the federal government spends approximately $50 billion on surface transportation programs that support highways, public transportation, and intercity passenger rail. Of this total, $46 billion comes from the Highway Trust Fund, or HTF, which is capitalized by a federal tax of 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel.
Dramatic improvements in vehicle fuel efficiency and reduced driving have substantially decreased the amount of gas tax revenue deposited in the HTF each year. In fact, gas tax revenues have fallen so dramatically that since fiscal year 2008, Congress has transferred $54 billion in general fund revenues into the HTF to prevent insolvency. The most recent transfers, authorized as part of the surface transportation bill, Moving Ahead for Progress in the 21st Century, were intended to keep the trust fund healthy through the end of this fiscal year. Unfortunately, current projections show that the highway account will run out of money as early as this August. But the story does not end there.
For more on this topic, please see:
- Understanding the Highway Trust Fund and the Perils of Inaction by Kevin DeGood