Demise of Highway Trust Fund Down the Road?

The escalating yearly deficits and the growing unsustainable debt load over the next decade or two, may put the existence of a Highway Trust Fund in danger, if not in doubt. The Reason Foundation recently pointed out in an article that a new Congressional Budget Office (CBO) 10-year outlook report, showed “long-term bad news for the Highway Trust Fund;” due to gas-tax revenue shrinking at an ever-faster rate.  As a result, federal gas tax receipts are now projected to decline from $24 billion this year to less than $18 billion in Fiscal Year 2034 [with half of the Mass Transit Account funds coming from general budget money, as soon as 20226].

With mounting pressure on the overall federal budget to find cuts to “non-essential” expenses, partly due to the spiraling interest costs on the debt service, the Highway Trust Fund could become a casualty.  To counter this potential, Reasons Foundation suggests one possible approach to protect and ensure needed funding is to: “Devolve highways and transit to state and local governments, to insulate them from the federal government’s financial meltdown.” Funding levels have long been a challenge to federal infrastructure programs, but even more important has been the will to prioritize such spending – this hurdle may be easier to overcome at the state and local level in the future.