Title: Highway Trust Fund Basics: A Primer on Federal Surface Transportation Spending | The Heritage Foundation
Headings: Highway Trust Fund Basics: A Primer on Federal Surface Transportation Spending
Highway Trust Fund Basics: A Primer on Federal Surface Transportation Spending
Highway Trust Fund Overview
Condition of the Nation’s Roads and Bridges
State Action on Transportation Funding
Proposed Approaches to Address the Highway Trust Fund Budget
Conclusion
Authors

Content: Diversions from Highway Spending. Congress and the states divert roughly 25 percent of the Highway Trust Fund spending to non-highway projects that are not federal priorities. [ 12] The largest of these diversions is the Mass Transit Account, which spent some $8 billion in 2014 on buses, rail, streetcars, and other projects that should fall under the responsibility of municipal or state governments. Other programs include the Transportation Alternatives Program, which spent $820 million in 2014 on undertakings such as sidewalks, bike paths, scenic overlooks, vegetation management, and recreational trails. [ 13] These diversions sap funds that could be spent on the highway system—the purpose of the highway trust fund—and shortchange the motorists and shippers that pay directly into the system through fuel taxes. Unique Budgetary Treatment. The Highway Trust Fund is unique in that its contract authority—the authority to obligate funds in advance of an appropriation act, similar to budget authority—is classified as mandatory, while its outlays are classified as discretionary spending. This hybrid status creates an unusual scenario in which normal budget constraints for mandatory and discretionary spending do not apply to the Highway Trust Fund. As the Committee for a Responsible Federal Budget explains: Currently, budget rules limit new discretionary spending through statutory caps on budget authority and limit new mandatory spending by applying pay-as-you-go rules to mandatory outlays.