Federal Highway Trust Fund failed to grow in FY 2017

WASHINGTON – The federal Highway Trust Fund, which uses fuel taxes and excise taxes to fund road construction and mass transit, showed no growth during the fiscal year that ended September 30.

The AASHTO Journal, published by the American Association of State Highway and Transportation Officials, said the fund failed to grow because a large decline in retail taxes on commercial trucks more than offset mild gains from fuel taxes.

The publication said Treasury Department reports on the various Highway Trust Fund contributions for the last two fiscal years showed that gasoline tax receipts of nearly $26.6 billion in the year through September were up 1.8 percent from the previous year, while diesel taxes generated about $10.7 billion, for a 4.6 percent increase.

The combined 2017 increase in receipts from taxes on gasoline, diesel and related fuels was about $941 million, for a 2.6 percent gain.

However, revenue from retail truck taxes for the trust fund reached only $3.1 billion in fiscal 2017, down by 27 percent, more than enough to offset the relatively small gains from motor fuel user fees.

“Those numbers reflect the volatility that stems from such revenue streams as equipment sales, which can fluctuate sharply based on market demand or changes in interest rates for high-cost purchases,” the Journal said.

Joung Lee, policy director for the American Association of State Highway and Transportation Officials, told the AASHTO Journal that the 2017 excise tax receipts help explain why industry groups are lobbying Congress to find ways to add dedicated revenues to the trust fund.

“Congress and the nation cannot depend on the trust fund’s current mix of fees to even keep growing year to year, depending on market conditions,” Lee said, “and it continues to generate far less than Congress has authorized the trust fund to spend. That means the current $13 billion funding gap will widen to $23 billion by 2027 unless lawmakers address this structural problem.”


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