Highway Trust Fund:
Financial Condition as of September 30, 1997
RCED-98-171R: Published: Apr 24, 1998. Publicly Released: Apr 24, 1998.
- Full Report:
Pursuant to a congressional request, GAO provided information on the highway account and mass transit account balances as of September 30, 1997, and compared these balances to commitments.
GAO noted that: (1) the Department of Transportation (DOT) estimates that the highway account had a balance of $12.6 billion at the end of fiscal year (FY) 1997 compared to unpaid commitments of $44.9 billion; thus, commitments exceeded the account balance by $32.3 billion; (2) this situation is permissible, however, because of the nature of the federal-aid highway program; (3) although the federal government makes commitments to reimburse a certain amount of funds, payment occurs only when actual bills are submitted for completed work; (4) thus, commitments can exceed the current balance in the account, but they should not exceed the anticipated amounts that could be paid from trust fund revenues at a future date; (5) the safety mechanism ensuring that sufficient funds exist in the highway account to liquidate commitments is the Byrd Amendment; (6) under this statutory provision, outstanding commitments cannot exceed the balance in the highway account plus 2 years' revenues from future highway user taxes and interest; (7) while unpaid commitments in the highway account at the end of FY 1997 exceed the account balance, the balance plus 2 years' revenues will provide more than enough funds to liquidate these commitments; (8) the trust fund's mass transit account operates much the same way as the highway account; (9) although the transit account can also look to future revenue, this was not necessary at the close of FY 1997; (10) DOT officials suggest that both the highway account and the mass transit account maintain a minimum balance to guard against unforseen disruptions to highway user tax income or inaccurate revenue projections; and (11) during the revision of the Intermodal Surface Transportation Efficiency Act reauthorization period, DOT officials recommended that the highway account maintain a balance of up to $3 billion and the transit account, $0.5 billion.