COVID-19 Draining The Highway Trust Fund

The Federal Highway Trust Fund (HTF), already gasping for air due to declining revenue, is now getting hit with a case of COVID-19 as fewer vehicles on the road as a result of the pandemic means less money from fuel taxes.

The HTF, which uses revenue collected from gasoline, diesel fuel and the retail sale of trucks to pay for roads and bridges, has been relying on transfers from the U.S. Treasury's general fund to stay solvent for years. Those transfers have so far totaled roughly $144 billion. Without a funding reauthorization, the highway account is scheduled to be exhausted in 2022.

"The federal highway trust fund was already essentially going broke before this pandemic, between more efficient vehicles and just the loss to inflation over the last 25 years," said Matthew Chase, executive director for the National Association of Counties (NACo) during a press conference on April 15.

"At a local level, states like Alabama have already contacted us. The counties rely heavily on their local sales and gasoline taxes for their infrastructure. You can imagine as people are driving less, revenues are plummeting."

Gary Moore, Judge/Executive for Boone County, Kentucky (outside Cincinnati, Ohio), is in charge of a fast-growing county that is relying on gas tax money to fund new roads and widen existing roads.

"The gas tax receipts are really taking a hit in the early days of [the pandemic]," Moore said, pointing out that most of the county's major roads are state highways that are funded with state and federal revenue. "If the state does not have the road-fund dollars to match the federal dollars, the federal dollars don't help us," he said. "So the lack of driving is going to be a major impact."

Chase said that while the CARES Act signed into law March 27 provided needed relief for transit agencies and airports, "what we're going to have to look for is what we do on the road and bridge side as we move forward."

The American Association of State Highway and Transportation Officials (AASHTO) sent a letter to the U.S. Congress last week requesting $50 billion in the next COVID-19 relief package in direct assistance to state departments of transportation (DOTs) that are seeing "a dramatic decrease" in revenues due to the pandemic.

"State DOTs are forecasting a significant reduction in state transportation revenues that will challenge their ability to maintain and operate our transportation system in a way that can support the COVID-19 response," said AASHTO executive director Jim Tymon. "Some state DOTs are already furloughing workers due to funding shortfalls and more will be faced with the same difficult decision about projects and people, unless Congress takes action."

In addition, to address a longer term backlog of $902 billion in total investment for roads and bridges as well as stimulate the economy, AASHTO asked Congress to double the amount of surface transportation funding in the highway bill (currently $226 billion over five years) and reauthorize it for at least six years. The current highway bill legislation, known as the FAST Act, is set to expire at the end of September.

The American Road & Transportation Builders Association also wants policymakers to use highway infrastructure as a means of boosting the economy in the wake of the pandemic. An annual survey released by the group this week estimates that 231,000 bridges in the U.S. – 37% of all U.S. bridges – need to be repaired or replaced at a cost of nearly $164 billion.