Highway Trust Fund

How are Public Projects Funded?

• General Fund• Generated by general revenues

• Bonds• Usually by referenda

• User Fees• Pay as you go

Beginnings (Interstate)

• Federal Aid Highway Act (1956)• Authorized Interstate Highway System• Federally funded infrastructure• Public Works• Public Benefits

Beginnings (HTF)

• Established by Highway Revenue Act 1956• Highway Account (other accounts added later)

• Transit Account• LUSTT fund• General Account

• All of this is meant as a user fee• Mechanism: Gas Tax

Goals

• Create a self-funding mechanism• Originally targeted just towards highways• Transit now a beneficiary

• Political

Cause: Less Driving, Increased Fuel Efficiency

Determination of Apportionments

• Interstate Construction• Interstate Maintenance• NHS• Bridge• Surface Transportation Program• Interstate Substitution

Program Categories Equity Adjustments

Determination of Apportionments

• Minimum Allocation• CMAQ• Donor State Bonus• Interstate Reimbursement• Hold Harmless• 90% Payment Adjustment• Metropolitan Planning

Apportionment Categories

• Surface Transportation Program• Most flexible program

• 10% highway railway crossings• 10% transportation enhancements• 50% obligated in urban areas• 30% obligated anywhere else in state

Apportionment Categories

• CMAQ• Congestion Mitigation and Air Quality• Programs designed to bring metro areas into attainment

• Transit• HOV• Ridesharing

Apportionment Categories

• Interstate Substitution• Funds used by FTA to create a transit substitute for

Interstate Highway usage• Rights of way• Fixed guideways• Bus Lanes

Equity Adjustments

• Minimum Allocation• Guarantee to each state• Receives at least 90% of state’s estimated contributions

to HTF• May be used for

• Interstate Maintenance & Substitute• Bridge• NHS• Surface Transportation Program• CMAQ

Equity Adjustments

• Donor State Bonus• Starts: state with lowest return (in percent)• State brought up to the level of the next lowest state• Continue until authorized funds are exhausted

Equity Adjustments

• Interstate Reimbursement• Provides funding to states based on each state’s share of

the cost of Interstate segments built without federal assistance

• State’s share of national authorization predetermined by ISTEA/TEA21

Equity Adjustments

• Hold Harmless• An established percentage of available national funding

for highway federal aid in each state• No state will receive less than it did under

• Previous legislation• Previous apportionments

Equity Adjustments

• 90% Payment Adjustment• Every state is guaranteed to receive at least 90% of

every dollar it is estimated to have contributed to the Highway Account of the HTF