AMERICAN ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS
CENTER FOR EXCELLENCE IN PROJECT FINANCE
Where Are We Headed?
Since its inception in 1956, the Highway Trust Fund (HTF) has helped to ensure that Federal highway user fees are spent for transportation purposes. However, as a result of the weak U.S. economy, the increasing discrepancy between receipts and outlays in the HTF in recent years has created a solvency crisis. Without three intra-governmental transfers from the general fund of the U.S. Treasury, totaling $34.5 billion since 2008, balances in the Highway and Mass Transit Accounts would have fallen close to zero over the course of the last several years. The recurring potential for severe cutbacks in Federal funding for state highway and transit programs combined with the significantly reduced purchasing power of motor fuels taxes is creating a near-term crisis for investment in our nation’s transportation assets.
At the same time, investment needs continue to grow. As seen in the exhibit below, according to the National Surface Transportation Infrastructure Financing Commission (Financing Commission), over the period from 2008–2035, revenues generated under current policies provide enough resources to meet only 44 percent of the requirements to maintain the current system; similarly, such revenues can fund only 36 percent of the costs to improve the system.
Over the period referenced above, the Financing Commission’s baseline revenue forecast projects an average annual growth rate of 0.9 percent in current-law HTF net revenues. Assuming a 2.0 percent average annual inflation rate, Federal program purchasing power in 2008 dollars would drop to $27.1 billion by 2035, a 25.5 percent decline from 2008.
About the AASHTO Center for Excellence in Project Finance
“Established by the American Association of State Highway and Transportation Officials (AASHTO) and the U.S. Department of Transportation (USDOT) through Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), the mission of the AASHTO Center for Excellence in Project Finance is to provide support to State Departments of Transportation in the development of finance plans and project oversight tools and to develop and offer training and state-of-the-art finance methods to advance transportation projects and leverage funding.”