As we approach the expiration of the Fixing America’s Surface Transportation (FAST) Act, both the Government Accountability Office (GAO) and Congressional Budget Office (CBO)have issued reports highlighting the long-term financial health of the Highway Trust Fund (HTF).
First established in 1956, the Highway Trust Fund (HTF) is the federal fund that pays for bridges, roads, and transit. In 1983, the HTF was divided into two accounts which includes highways, receiving 80% of the revenue, and transit, receiving 20% of the revenue. The HTF has been funded by the federal gas tax rate and has been raised numerous times since its founding but the current rate has been stagnate for over a quarter century cutting its real value by 40% when inflation is factored in. This has led to the HTF currently running a deficit of nearly $12 billion in fiscal year (FY) 2019, with a $7.9 billion deficit for the highway account and $3.6 billion deficit for the transit account. Under the current projected revenue, by FY 2022 the combined deficit will grow to nearly $18 billion.
GAO’s findings support this growing concern, stating in their report that the highway account baseline is able to meet all obligations through 2021, but becomes exhausted in 2022. In January 2019, CBO estimated that $159 billion in additional funding would be required to maintain current spending levels, plus inflation, from 2022 through 2029.
Similarly, CBO recently reported that new forecast projects that the highway account will need another bailout at the end of fiscal 2021 under current spending levels. In FY 2021, the highway account is projected to end the year with $5.9 billion in balances. However, the transit account is projected to end FY 2021 $235 million below was is needed. Despite this mixed information, the CBO is projecting that total revenue will be $426 billion over the next 10 years, but needs an additional $193 billion, or 45% more, to maintain current spending levels.
In the American Society of Civil Engineers’ (ASCE) 2017 Infrastructure Report Card, our bridges, rail, road, and transit received grades of C+, D, and D- respectively. These subpar grades are a result of our dated federal gas tax and inability to properly fund the HTF and our current transportation infrastructure needs. Continued underinvestment of the HTF will cause our transportation infrastructure to further degrade. Simply put, we will be unable to compete in the ever-changing, 21st century global marketplace.
ASCE has and will continue to urge Congress to pass legislation increasing our federal gas tax and provide a sustainable, long-term funding solution for surface transportation infrastructure funding.