CBO Says Trust Fund Will Need $85-90 Billion in Added Revenue for Bill Running to June 2021

AASHTO Journal, 5 June 2015

The Congressional Budget Office has estimated Congress will need to shore up the Highway Trust Fund with $85 billion to $90 billion in additional revenue to cover projected shortfalls for a six-year reauthorization that extends its programs through May 31, 2021.

That estimate came in a May 28 letterby CBO Director Keith Hall, responding to a request for information by Rep. Sander Levin, D-Mich., ranking member of the House Ways and Means Committee.

The CBO projection assumes that spending from the trust fund continues at historical rates, which could be altered if the reauthorization included any new program mandates such as a freight corridors component sought by many lawmakers.

The agency said its long-term estimates are subject to substantial change, depending on an array of factors that affect levels of spending and the revenues coming into the trust fund.

Those include, the CBO said, “weather-related construction delays, the responses of states and local governments to federal policies, changes in the price of motor fuels, and the price and demand for certain construction materials and labor.”

As a result, it cautioned, “CBO’s estimates of future shortfalls cannot be relied upon to predict the future cash position of the Highway Trust Fund with certainty.”

The agency also noted that its normal baseline projections are calculated for fiscal years, which end each Sept. 30. “Because there is seasonality to spending for highway and transit projects, outlays for those programs are highest in the summer months and the fourth quarter of the fiscal year,” the CBO said.

The requested estimate for 2021 would carry the trust fund only through the spring of that year, much like happened this year before Congress approved a two-month extension to July 31. So the May 31 projection for 2021 would leave out the three months with the heaviest spending demand that year.

For the near term, based on the Department of Transportation’s cash-management requirements of needing at least $5 billion in the trust fund to assure uninterrupted reimbursements to states for their infrastructure expenses, the CBO said Congress would need to top off the trust fund this summer with $3 billion to carry it through Sept. 30, 2015.

To extend it through Dec. 31, the CBO said the trust fund would need “roughly $8 billion,” of which $6 billion would be needed in the highway account and $2 billion in the transit account.​

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