By Reed Black
The Highway Trust Fund is going broke. Why is that?
A big part of the problem is that many of the fuel tax dollars that are collected never make it to the part of the trust fund that actually pays for highways and bridges.
OOIDA researcher Rene Hill spent six months poring through government documents and calling federal officials for information, sometimes having to pry it out of them. What she found is that in 2005 for example, 35 percent of the $39 billion collected in fuel taxes paid for things other than general road and bridge work.
She also found that the highway fund starts losing money before the money even gets to Washington.
That’s partly because interest earned on it before it gets to the highway fund doesn’t follow the principal to the highway fund.
In 2005, once the $39 billion in taxes collected was actually ready to be placed into the highway fund, the serious highway robbery started. Instead of basing the deposit on actual receipts, the treasury secretary “estimates” how much should go into the highway fund.
Hill said that in 2005, the treasury secretary’s estimate erased $5 billion from the highway fund. Some of that was later returned, but it was used for earmarked projects, not for general road and bridge work.
The remaining $34 billion of the $39 billion in taxes went into the highway fund, Hill said.
But, the so-called “highway fund” is actually made up of many funds, some of which are directly related to highways and some of which aren’t.
For example, $5 billion immediately went to the mass transit fund which pays for things like light rail and bus systems. And, billions of dollars of the remaining money was siphoned off for things not directly related to building or maintaining roads and bridges.
And after some more non-highway apportionments are taken out, we’re left with $25 billion, meaning 35 percent of the $39 billion originally collected in 2005 went somewhere other than to general road and bridge work.
And, the year 2005 was just used as an example.
Hill said that roughly the same thing has been going on for years.
How did it happen?
After all, as Greg Cohen, president of the American Highway Users Alliance, has noted, it didn’t used to be this way.
Cohen said the really big changes in how the highway fund is viewed came in the 1980s and ’90s. That’s when the government started using highway money for things other than highways.
Cohen estimates 30 percent of the federal diesel and gas tax money ends up being spent on things other than general purpose road and bridge work, very close to the 35 percent that Hill found diverted in 2005.
On Aug. 1, something happened that might change how Congress looks at the highway fund. The Interstate 35 bridge collapse in Minneapolis brought immediate calls for more money to repair the nation’s aging bridges and roads.
There’s some talk of raising the federal fuel tax to accomplish that, and the chairman of the House transportation committee is calling for a dedicated, national bridge repair fund that could not be depleted by earmarks or diverted to any other uses.
But, for now, according to Hill, America’s highway fund remains a sieve through which money flows to everything from research for magnetic levitation trains to the recreational trails program.