Title: The Highway Trust Fund Explained
Headings: The Highway Trust Fund Explained
The Highway Trust Fund Explained
Where does the Highway Trust Fund get its funding?
What is the outlook for the Highway Trust Fund?
Why is the Highway Trust Fund important for American competitiveness?
What are some viable options to address the future of the Highway Trust Fund?

Content: The Congressional Budget Office (CBO) reports that the Highway Trust Fund received 82 percent ($36 billion) of its revenue in 2019 from excise taxes on motor fuel, commonly known as the “gas tax.” Since 1993, fuel tax rates have been fixed at 18.4 cents per gallon for gasoline, and 24.4 cents per gallon for diesel. Taxes on tires and heavy vehicles (trucks) make up the rest of the fund’s income. Because the federal gas tax is not pegged to inflation, the purchasing power of the revenue has eroded over time — 18.4 cents buys 43 percent less in 2019 than it did in 1993. What’s more, rising construction costs and the growing needs of an aging highway system have placed a greater strain on the fund, resulting in recurring funding shortfalls in recent years. Decreasing fuel consumption as a result of both higher fuel efficiency from gasoline-powered vehicles as well as from more hybrid and electric cars on the road will ensure that those shortfalls persist if left unaddressed. TWEET THIS
HTF funding shortfalls have generally been filled by transfers from the Treasury’s general fund; such transfers have shifted a total of $144 billion to the fund since 2008, including $70 billion authorized in the Fixing America’s Surface Transportation Act in 2015. Such transfers do not bring in any new federal revenues, but they allow spending from the fund to continue. What is the outlook for the Highway Trust Fund?