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: For example, state and local governments funded nearly three-quarters ($131 billion) of total spending for highways in 2017. However, funding from the HTF also plays an important role in facilitating many projects. In 2017, the federal government contributed $46 billion in highway investment, 95 percent of which went towards specific capital projects, such as the Interstate Highway System. Federal assistance comes most often in the form of grants and other direct contributions, but also in a number of financing mechanisms like tax-preferred bonds and direct federal credit programs that allow states and localities to finance projects on more favorable terms. Where does the Highway Trust Fund get its funding? 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.