Highway Trust Fund Already Feeling Effects of Declines in Driving
The decline in driving by Americans may already be hastening the demise of the Highway Trust Fund.
Numbers released by the Congressional Budget Office show the long-term outlook for the fund has gotten worse this year, and research suggests it could get even worse. The CBO’s May report on the trust fund showed that outlays for highway and transit projects are expected to outstrip revenue from motor fuels taxes and other excise fees by about $7 billion in fiscal 2015.
That outlook is considerably bleaker than just a month ago, when the CBO was projecting a $6 billion shortfall in fiscal 2015.
Congress technically has until the end of fiscal 2014 to work out a solution, because the surface transportation law (PL 112-141) enacted last year funds it through September 2015. But the flagging tax collections — thanks to a combination of fewer miles driven and better vehicle fuel economy — could increase pressure on Congress to fix the trust fund sooner.
However, the options available to lawmakers are limited. In recent years, Congress has plugged holes in the Highway Trust Fund through emergency appropriations of general tax revenue, but there has been growing opposition to further transfers.
There also appears to be no appetite for raising gas taxes, let alone a more ambitious overhaul such as a shift to a vehicle mileage tax. A CBO analysis of the trust fund in April said Congress would need to add 10 cents to the current gas tax rate of 18.4 cents per gallon to keep the fund solvent in fiscal 2015.