The United States Highway Trust Fund is a transportation fund which receives money from a federal fuel tax of 18.4 cents per gallon on gasoline and 24.4 cents per gallon of diesel fuel and related excise taxes.[1] It currently has three accounts, the Highway Account which funds road construction, a smaller 'Mass Transit Account' which supports mass transit and also a 'Leaking Underground Storage Tank Trust Fund'. It was established 1956 to finance the United States Interstate Highway System and certain other roads. The Mass Transit Fund was created in 1982. The federal tax on motor fuels yielded $28.2 billion in 2006.[2] In 2008 the fund required an additional $8 billion from general taxation due to reduced receipts from fuel tax in order to meet its obligations.
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Prior to the 1956 Highway Revenue Act and the establishment of the Highway Trust Fund roads were financed directly from the General Fund of the U.S. Treasury. The 1956 Act directed federal fuel tax to the fund to be used exclusively for highway construction and maintenance. The Highway Revenue Act mandated a three cent tax. The original Highway Revenue Act was set to expire at the end of fiscal year 1972. In the 1950s the gax tax was increased to four cents. The 1982 Surface Transportation Assistance Act, approved by President Ronald Reagan in January 1983, increased the tax to nine cents with one cent going into a new Mass Transit Account to support public transport. In 1990 the gas tax was increased by President George H. W. Bush with the Omnibus Budget Reconciliation Act of 1990 to fourteen cents - with 2.5 cents of the increase going to the Highway Fund and the other 2.5 cents going towards deficit reduction. In 1993 President Clinton increased the gas tax to 18.4 cents with the Omnibus Budget Reconciliation Act of 1993 with all of the increase going towards deficit reduction. The Taxpayer Relief Act of 1997 redirected the 1993 increase to the Fund.[3]
The Senate Committee on Commerce, Science and Transportation, formed in 2005, discussed raising the federal gas tax to 40 cents per gallon over five years, rising 5-8 cents annually for five years and then also indexed to inflation.
During 2008 the fund required support of $8 billion from general revenue funds to cover a shortage in the fund. This shortage was due to lower gas consumption as a result of the recession and higher gas prices.[4] Further transfers of $7 billion and $19.5 billion were made in 2009 and 2010 respectively. [5]
During the 2008 presidential campaign, Senator John McCain proposed a 'gas holiday', a suspension in the tax during the peak summer driving season. Senator Hillary Clinton endorsed this idea soon afterwards while Senator Barack Obama opposed the suspension. Clinton proposed a 'windfall tax' on oil companies, which would make up for the lost revenue from the federal tax on gasoline and diesel fuel without affecting any projects. [2]
Since 2000, there have been at least half a dozen attempts by individual members of Congress to suspend the federal gas tax, which raises money to repair and expand the highway system. All have failed. [6]
The Fund receives hypothocated tax revenues derived from excise taxes on highway motor fuel and truck related taxes on truck tires, sales of trucks and trailers, and heavy vehicle use. Money goes to the general treasury but is then credited to the fund.
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