FEDERAL FUNDING: Highway Trust Fund may run out even faster than expected

Updated figures show the highway account running out of money in early September

March 24, 2014

The U.S. DOT has updated its online Highway Trust Fund (HTF) ticker, showing earlier and greater financial strain than previous figures.

With the updated numbers, the highway account of the HTF could potentially fall below $4 billion in late July, weeks before last month's projection of early August. The updated figures show the highway account running out of money in early September, several weeks early than last month's estimates.

U.S. DOT prefers to keep a minimum of $4 billion in the highway account in order to properly manage day-to-day financial transactions. At some point between when the account falls below $4 billion but before the account runs out of money, U.S. DOT will institute cash-management strategies designed to keep the account solvent. These strategies may include reimbursing states weekly instead of daily or paying states for only a portion of the reimbursement requests they submit.

According to U.S. DOT, the highway account of the HTF began FY 2014 (Oct. 1, 2013) with a balance of $1.6 billion cash. Soon after the start of the fiscal year, the account received a $9.7 billion transfer from the General Fund. However, U.S. DOT said "the surface transportation program continues to outlay at a greater pace than receipts are coming in. As a result, the cash balance has dropped by nearly $3.3 billion since the General Fund transfer occurred." The highway account holds less than $8.6 billion in cash, as of the end of February.

U.S. DOT reported that the mass transit account of the HTF currently holds $3.2 billion. That account began the fiscal year with a balance of $2.5 billion in cash, then received an additional $2 billion from the General Fund. U.S. DOT projects that account will hold about $1 billion by the end of the fiscal year.

While the highway account is not scheduled to run out of money until later this summer, state transportation departments are already making decisions on future projects, as funding is uncertain going forward. Those decisions are being made now, going into the busy summer construction season. Arkansas State Highway and Transportation Department, for example, just announced the suspension of 10 highway projects due to the looming HTF shortfall.

The Highway Trust Fund ticker is available at http://www.dot.gov/highway-trust-fund-ticker.

Related Articles

The funding from the recently signed Infrastructure Investment and Jobs Act (IIJA) will integrate well into the South Carolina DOT's (SCDOT) 10-Year…
November 23, 2021
U.S. Secretary of Transportation Pete Buttigieg today announced that the Biden Administration will invest nearly $1 billion in infrastructure through…
November 19, 2021
Several associations in the surface transportation construction industry have responded to the passage of the bipartisan Infrastructure Investment…
November 17, 2021
The Federal Transit Administration (FTA) announced key priorities and funding for public transportation as a result of President Biden signing the …
November 16, 2021