Author: Congressional Budget Office

Publisher: CreateSpace

Published: 2015-06-25

Total Pages: 24

ISBN-13: 9781514700006

In 2014, governments at various levels spent $165 billion to build, operate, and maintain highways, and they spent $65 billion on mass transit systems. For both types of infrastructure, most of that spending was by state and local governments; about one-quarter of that total came from the federal government, mostly through the Highway Trust Fund. For several decades, the trust fund's balances were stable or growing, but more recently, annual spending for highways and transit has exceeded the amounts credited to the trust fund from taxes collected on gasoline, diesel fuel, and other transportation-related products and activities. Since 2008, in fact, lawmakers have transferred $65 billion from the U.S. Treasury's general fund to the Highway Trust Fund so that the trust fund's obligations could be met in a timely manner. Moreover, with its current revenue sources, the Highway Trust Fund cannot support spending at the current rate. The Congressional Budget Office estimates that spending in fiscal year 2015 for highways and transit programs funded from the Highway Trust Fund will be $44 billion and $8 billion, respectively, whereas revenues collected for those purposes are projected to be $34 billion and $5 billion, respectively. By CBO's estimate, at the end of fiscal year 2015, the balance in the trust fund's highway account will fall to about $2 billion and the balance in its transit account will be about $1 billion. The Department of Transportation (DOT) would probably need to delay payments to states at some point before the end of fiscal year 2015 in order to keep the fund's balance above zero, as required by law. In fact, because of the timing of the deposits to the trust fund, DOT has stated that it would need to delay payments if cash balances fell below $4 billion in the highway account or below $1 billion in the transit account. Then, if nothing changes, the trust fund's balance will be insufficient to meet all of its obligations in fiscal year 2016, and the trust fund will incur steadily accumulating shortfalls in subsequent years.