AASHTO Journal, 18 April 2014
The Highway Trust Fund is still on track to run out of money at the end of August and it should drop below a $4 billion balance in July, according to the latest U.S. Department of Transportation estimates released this week. The monthly numbers continue to show an HTF balance in the red before the end of the year. Last month’s HTF ticker demonstrated a similar outlook.
USDOT prefers to keep a minimum of $4 billion in the highway account in order to properly manage day-to-day financial transactions. At some point between when the account falls below $4 billion but before the account runs out of money, USDOT will likely institute cash management strategies designed to keep the account solvent. These strategies may include reimbursing states weekly instead of daily or paying states for only a portion of the reimbursement requests they submit.
According to USDOT, the highway account of the HTF began FY 2014 (Oct. 1, 2013) with a balance of $1.6 billion cash. Soon after the start of the fiscal year, the account received a $9.7 billion transfer from the General Fund. However, USDOT said “the surface transportation program continues to outlay at a greater pace than receipts are coming in. As a result, the cash balance has dropped by nearly $3.3 billion since the General Fund transfer occurred.” The highway account holds roughly $8.4 billion in cash, as of March 28.
USDOT reported that the mass transit account of the HTF currently holds $3.2 billion, the same amount as last month’s update. That account began the fiscal year with a balance of $2.5 billion in cash, then received an additional $2 billion from the General Fund. USDOT projects that account will hold about $1 billion by the end of the fiscal year.
While the highway account is not scheduled to run out of money until later this summer, state transportation departments are already making decisions on whether to move forward with future projects, as funding is uncertain going forward. Those decisions are being made now, going into the busy summer construction season.