Highway Trust Fund:
Strategies for Safeguarding Highway Financing
RCED-92-245: Published: Sep 15, 1992. Publicly Released: Oct 20, 1992.
- Full Report:
Pursuant to a congressional request, GAO examined the capacity of the Highway Trust Fund's highway account to support a legislative authorization of over $122 billion for federal-aid highway programs, focusing on the reasons for, consequences of, and strategies for dealing with a possible shortfall in the highway account's revenues.
GAO found that the: (1) Federal Highway Administration (FHwA) projects that the highway account's revenues will not be sufficient to make the authorizations legislated for fiscal years 1992 through 1997; (2) anticipated $5.9-billion shortfall in actual and anticipated revenues will trigger the Byrd Amendment financial safeguard, which mandates a reduction in the apportionment of authorizations; (3) shortfall is attributable to revised revenue and cost estimates; (4) Department of the Treasury is not complying with mandates to quarterly estimate and report on the highway account's financial status; and (5) revenue shortfalls would also limit FHwA aid for state highway funding. GAO also found that, to deal with the expected shortfall in the highway account, Congress could: (1) allow the Byrd Amendment to take effect and repeal or incorporate the withheld authority during reauthorization; (2) increase revenues to the highway account; (3) limit annual obligation levels; (4) revise the Byrd amendment safeguard to consider future offsetting revenues for 3 years instead of 2 years; (5) alter the Byrd Amendment safeguard to apply to the full Highway Trust Fund; (6) modify the safeguard to weigh total outstanding obligations, not total outstanding authorizations, against available and anticipated revenues; and (7) completely suspend the Byrd Amendment.
Matters for Congressional Consideration
Status: Closed - Implemented
Comments: The FY 1994 budget used one of the strategies GAO presented--to extend the $.025 currently applied to deficit reduction--and apply a portion of it to the highway account of the Trust Fund.
Matter: Congress may wish to consider a range of strategies to address the expected revenue shortfall in the highway account. GAO has presented seven primary strategies for consideration, some of which will prevent reductions in apportionments and some of which will also solve a long-term projected revenue shortfall.
Status: Closed - Not Implemented
Comments: With recent legislative action directing additional tax revenues to the highway account of the Highway Trust Fund commencing October 1, 1995, the solvency of the highway account appears to be assured through the end of the decade. Under this circumstance, the potential benefit of adjusting the Byrd test reporting requirements is no longer as pronounced.
Matter: Congress may wish to consider requiring the Department of the Treasury to extend the period for reporting the outcome of the Byrd test from 1 fiscal year to 2 fiscal years into the future, thus bringing the reporting requirements into conformity with the Byrd test calculation.