Highway Trust Fund

Congress is now considering ways to reauthorize federal-aid highway and mass transit programs for fiscal years 1992 through 1996. The Highway Trust Fund is the mechanism that provides financing for these programs. Revenues generated by highway user taxes, as well as the interest these revenues earn, accrue to the trust fund and are used to reimburse states and transit authorities for expenditures incurred on approved federal-aid highway and mass transit projects. This fact sheet provides information on four issues related to the Highway Trust Fund: (1) the sources and amounts of trust fund revenues generated during fiscal years 1987 through 1991; (2) the use of these revenues; (3) the estimated balance remaining in the trust fund when federal-aid highway and mass transit programs expire at the end of fiscal year 1991; and (4) the influence that the Budget Enforcement Act of the Omnibus Budget Reconciliation Act of 1990 could have on surface transportation spending during the next reauthorization period.

GAO found that: (1) federal highway user taxes on motor fuels, tires, and trucks support the Fund; (2) during FY 1987 through FY 1991, those taxes generated about $73.46 billion, with about 64 percent of those revenues generated through gasoline taxes; (3) while the majority of highway tax revenues are credited to the Fund for highway and mass transit projects or related activities, exceptions included cleanups of petroleum-contaminated groundwater and general fund contributions for use in deficit reduction; (4) the Fund will have an estimated uncommitted balance totalling $17.7 billion dollars by the end of FY 1991 if all outstanding commitments authorized through FY 1991 for both highway and mass transit programs are liquidated using the existing cash balance plus the allowed future revenues; (5) Department of Transportation officials recommended a $3.5-billion safety cushion to guard against inaccurate revenue projections, which could reduce the estimated uncommitted available funds to $14.2 billion; (6) recent legislation setting annual discretionary spending limits in separate defense, international, and domestic categories will determine, in part, the actual spending limits for federal-aid highway and mass transit programs through FY 1995; and (7) in FY 1994 and FY 1995, there will be a single cap on all discretionary spending, and highway and mass transit programs will have to compete with all discretionary programs for available funds.