Transportation Funding

Recent News:

Thurs, Nov 3, 2024:  CBO – Baseline Projections for the Highway Trust Fund Accounts

Wed, Oct. 18, 2023:  House Transportation and Infrastructure Committee Hearing: Running on Empty: The Highway Trust Fund

The Highway Trust Fund (HTF) finances most federal government spending for highways and mass transit:  

• The trust fund has separate accounts for highways and mass transit.
• Most spending from the HTF for highway and mass transit programs is through federal grants to state and local governments.
• Revenues for the trust fund come from transportation-related excise taxes, primarily federal taxes on gasoline and diesel fuel.
• The Highway Revenue Act of 1956 provides for the transfer from the General Fund to the Highway Trust Fund of revenue from the motor fuel tax, and certain other taxes paid by highway users.
• Before 2008, excise tax revenues were sufficient to pay for outlays from the HTF, but since 2008, Congress has sustained highway spending by transferring general revenues to the fund, including $70 billion in 2016 as required by the Fixing America’s Surface Transportation (FAST) Act in order to support highway and mass transit programs over the five-year life of the Act.

Important Note on Budgetary Treatment of Highway and Public Transportation Spending:

• Background:  Federal spending consists of two types of numbers — budget authority and outlays.
  • Outlays are disbursements by the Treasury.  When the Treasury issues a check in FY 2019, that is an FY 2019 outlay.
  • Budget authority, on the other hand, is legal authority for an agency to enter into obligations that will result in outlays.
• Highway and transit spending is a particular type of budget authority, known as “contract authority,” that allows states and cities to enter into contracts.  When payments are made in fulfillment of those contracts, federal outlays are recorded.
• In general, budget authority and outlays can be either “mandatory,” which means they are enacted into law by Congress’ authorizing committees; or “discretionary” which means the spending is annually appropriated by the House and Senate Appropriations Committees.   (Explanation of mandatory vs. discretionary spending.)
• HTF spending is unique. Typically, a program’s budget authority and outlays are either mandatory or discretionary — but transportation spending is both;  the BA is mandatory and the outlays are discretionary.
• Why?  Because HTF contract authority is provided in multi-year authorizing legislation and is therefore “mandatory,” but the outlays that flow from the HTF budget authority are subject to annual “obligation limitations” set by the Appropriations Committees in annual discretionary appropriation acts.
• An important consequence of this unusual funding arrangement is that:
  • Annual spending levels for highways and public transportation are set by three authorizing committees (listed below) and the Appropriations Committees.
  • In addition, the revenue levels for the HTF — which also constrain spending — are set by the Ways & Means and Finance Committees.
  • Finally, the Budget Committees set committee allocations that may periodically impact HTF contract authority levels.
  • Consequently, 14 committees and subcommittees are involved in setting funding levels for transportation.
• Another consequence of this hybrid funding arrangement is that neither the PAYGO requirements or discretionary spending caps apply to HTF spending.

FAST and other “Highway Bills” –  MAP-21, SAFETEA-LU, TEA-21, ISTEA

• CRS: Reauthorizing Highway and Transit Funding
• APTA: FAST Primer
• CBO:  Cost Estimate on the FAST Act  Dec 2015
• CRS Chart: Public Transportation Funding Authorized by the FAST Act  Dec 2015
• U.S. Department of Transportation FAST summary
• CRS: Surface Transportation Funding and Programs Under MAP-21 – the Moving Ahead for Progress in the 21st Century Act (P.L. 112-141)  Sept 2012
• CRS: SAFETEA-LU Aug 2005
• CRS: The Transportation Equity Act for the 21st Century (TEA-21)  Sept 1998
• ISTEA Reauthorization Issues  April 1998
• CRS Intermodal Surface Transportation Efficiency Act of 1991  (ISTEA)
• CRS: Federal Aid to Roads and Highways Since the 18th Century – A Legislative History

House and Senate Committees with Jurisdiction:

• Links to Authorizing Committees (jurisdiction over multi-year Highway Bills):
  • Senate Commerce, Science, and Transportation Committee  (Wicker)
  • Commerce Minority Website  (Cantwell)
  • Banking, Housing, & Urban Affairs (jurisdiction over urban mass transit)  (Crapo)
  • Banking Minority Releases (Brown)
  • House Transportation and Infrastructure Committee (DeFazio)
  • House Minority Website (Graves)
• Links to Appropriations Committees (set obligation limitations for HTF spending):
  • Senate Appropriations Committee (Shelby)
  • Senate Appropriations Committee – Minority  (Leahy)
  • Senate Transportation-HUD Subcomm  (Collins / Reed)
  • House Appropriations Committee (Lowey)
  • House Appropriations Committee – Minority (Granger)
  • House Transportation-HUD Subcomm (T-HUD) (Price / Diaz-Balart)
• Links to Tax Committees (set HTF revenue levels)
  • Senate Finance Committee (Hatch)
  • Senate Finance Committee – Minority  (Wyden)
  • House Ways and Means Committee  (Neal)
  • House Ways and Means Committee – Minority (Brady)
• Links to Budget Committees (allocations to authorizing committees – Budget Function 400)
  • Senate Budget Committee (Enzi)
  • Senate Budget Committee – Minority (Sanders)
  • House Budget Committee (Yarmuth)
  • House Budget Committee – Minority (Womack)
    

Key Administration Links:

• Federal Transit Administration
• Bureau of Transportation Statistics
• USDOT Office of Transportation Policy
• National Transit Database (NTD)
• Intelligent Transportation Systems
• Federal Railroad Administration
• DOT Rulemaking Page
• Link to Grant Programs under FAST
  

Additional Resources on Highway Trust Fund:

• CRS: Reauthorizing Highway and Transit Funding
• CBO: Federal Highway Spending and Revenues
• FHwA (Federal Highway Administration):  Funding Federal-Aid Highways
• TPC:  What is the Highway Trust Fund and How is it Financed?
• CRS: The Federal Excise Tax on Motor Fuels and the Highway Trust Fund  Aug 2015
• JCT: Long-Term Financing of the Highway Trust Fund
• CRS: Funding and Financing Highways and Public Transportation
• PGPF: The Highway Trust Fund Explained