WASHINGTON, D.C. – While the current drama on Capitol Hill has all eyes trained on the wrangling in the U.S. Senate over the SAVE America Act proposed by Republican Sen. Mike Lee, Utah’s senior senator is also quietly attempting to balance the federal budget for highways.
In early February, Lee introduced the Balance the Highway Trust Fund Act to rein in runaway spending and transportation budgets that have long exceeded their original purposes.
“Runaway highway spending has turned a ‘temporary tax’ into a money pit for federal dollars,” according to Lee.
“The Highway Trust Fund was created to support our nation’s critical roadways, but is consistently rerouted to unnecessary and inefficient programs.”
Established in 1956, the Highway Trust Fund (HTF) was intended to provide a more dependable source of funding from the federal government for the construction of the interstate highway system. The HTF is comprised of two accounts – one largely devoted to construction and maintenance of highways and bridges, while another was intended to fund capital expenditures on buses, railways, subways, ferries and other modes of public mass transit.
In 2022, for example, state and local governments funded around four-fifths ($180 billion) of total spending for highways. But federal HTF funding also played an important role in facilitating many projects.
The federal government contributed $52 billion in highway investments that same year, 96 percent of which went towards specific capital projects, such as the funding of interstate road networks.
About 80 percent of HTF revenue comes from the federal excise taxes on motor fuel commonly known as the “gas tax,” the Congressional Budget Office reports. Taxes on tires and heavy trucks make up the rest of HTF income.
Since 1993, fuel tax rates have been fixed at 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel.
But federal revenue generation has failed to keep pace with mounting construction costs, the increasing need for repair of aging roads, lower fuel consumption rates due to improved engine efficiency and the advent of hybrid and electric vehicles.
All of those factors have contributed to increased deficit spending for transportation projects by Congress, members of Lee staff in Washington explain.
For example, after more than a quarter of a century and $6.8 billion in awarded federal funds, construction of California’s promised high-speed rail service between San Francisco and Los Angeles is bogged down and may not be completed until 2038. Even then, mass transit experts predict that the high-speed trains will never come close to paying for themselves.
But Lee’s proposal would ensure that federal highway and transit spending does not exceed estimated revenues flowing into the Highway Trust Fund.
Specifically, the Balance the Highway Trust Fund Act would prohibit the U.S. Department of Transportation’s obligations for federal-aid highway and highway safety construction programs from exceeding annual gas tax revenue estimates by the Secretary of the Treasury.
That proposal would also limit annual obligations from the account for mass transit to the net amount of mass transit receipts each fiscal year.
“This bill will eliminate the highway deficit to keep our roads functioning within their budget and without the waste,” Lee concludes.