The federal Highway Trust Fund spent $26.7 billion more in the just-completed fiscal year 2024 than it received in net highway user tax payments, according to year-end (unaudited) data from the Treasury and Transportation Departments. This means that 38.5 cents out of every dollar spent out of the Trust Fund in 2024 came from General Fund bailouts, not from highway users.

Receipts

The Trust Fund was credited with $42.5 billion in net tax receipts from the five highway user taxes. Net gasoline tax receipts (after transfers out for estimated motor boat usage of HTF-taxed gasoline) totaled $25.2 billion, up 7.5 percent from last year. Diesel fuel taxes (after transfers out for mis-labeled taxes on jet fuel kerosene as diesel) were $9.5 billion, down 4.1 percent from last year. Receipts from the 12 percent tax on new truck and trailer sales were down 15.6 percent from last year, to $6.1 billion.

Other Income

The Trust Fund was credited with $6.1 billion in interest on accrued balances, 6.5 percent more than last year and far above the de minimis annual interest that was expected when Congress wrote the bipartisan infrastructure law in 2021. (Ed. Note: In the past, we were willing to play along with the old assumption that interest on trust fund balances was somehow real money, but since the entirety of this interest has been earned on the $118 billion General Fund bailout transfer from the IIJA, which was not paid for or offset in any way, we feel it’s past time to call this interest just another bailout, this one time-delayed.)

In addition, the Highway Account was credited with $1.3 billion from the General Fund as a reimbursement for the re-scoring of the TIFIA loan portfolio, which was also scored as a $1.3 billion Highway Account outlay in September 2023. (See here for more info.)

NHTSA safety fines and penalties only totaled $17.6 million in 2024, down from $81.0 million in 2023. The difference is that last year, Volvo paid a one-time $65 million penalty and this year they did not. FMCSA user fees totaled an additional $45 million.

Flex

Since 1973, state and local governments have had the flexible authority to shift some of their highway formula funding to mass transit projects, and vice versa. When they do this, the amount of money spent is then transferred as cash between the federal Highway Account and the Mass Transit Account.  Highway-to-transit transfers always outnumber transit-to-highway transfers, but no one can predict the exact amount in advance, because the exact amount depends on decisions made by hundreds of agencies over the course of the year.

In 2024, the “flex” transfer was $1.46 billion in cash being transferred from the Highway Account to the Mass Transit Account, to match an identical amount of outlays made by the Federal Transit Administration that started out as highway money. This is on the high end of the normal range, but not unprecedented. Here are the last 10 years of net highway-to-transit flex transfers:

Outlays

FHWA reports that the Trust Fund made a total of $70.6 billion in outlays in fiscal 2024, a massive 17.4 percent increase over the fiscal 2023 level and the first real outlay indication of the substantial spending increases authorized by the bipartisan IIJA infrastructure law in November 2021. However, as we point out in detail here, $1.3 billion of those outlays are an illusory accounting mechanism for the TIFIA loan program, not a measure of real-world economic activity. Real outlays were $69.2 billion, which was still a $9.4 billion (+15.7 percent) increase over 2023.

The Bottom Line

On the surface, it looks like the Trust Fund ran a $20.6 billion deficit in 2024 – $70.6 billion in outlays minus $50.0 billion in total deposits. But as we mentioned above, $6.1 billion of the deposits were interest paid by the Treasury to the Treasury for the privilege of holding illusory money created by the Treasury in the form of a General Fund bailout of the Trust Fund – not real user-paid tax money. Also, $1.3 billion of the $70.6 billion in outlays (and a matching $1.3 billion non-tax deposit into the Trust Fund) were a TIFIA re-score using accrual accounting, not economic activity measured by cash accounting, and accrual accounting should properly be recorded on a separate line in a cash flow statement, as the government requires publicly traded companies to do.

Also, since the outlay numbers for each account are shown after the flex transfer between accounts, we adjust the receipts line to include the matching flex transfer to keep things even.

Removing the General Fund bailout interest and the accrual accounting adjustment, real user payments (post-flex) and real program outlays were $26.7 billion apart ($69.2 billion in spending minus $42.6 billion in user payments). The Highway Account’s $19.5 billion real deficit amounted to 35 cents of every Highway Account dollar spent. The Mass Transit Account, however, was $7.2 billion in the red, which represents 52.8 cents on every dollar purportedly spent out of the Trust Fund really coming from General Fund bailouts.