The federal Highway Trust Fund spent $30.6 billion more in the just-ended fiscal year 2025 than it took in from taxes, fees, and penalties levied upon highway users. This is a $4.9 billion increase over the corresponding user-pay deficit of $26.7 billion in fiscal 2024. This is per the year-end release of Table FE-1 by the Federal Highway Administration earlier this week.

Taxes. The net total from the five highway user taxes (gasoline/gasohol, diesel/special fuels, new trucks/tractors/trailers, heavy vehicle tire sales, and heavy vehicle use sticker) increased by $1.2 billion over last year, from $42.5 billion to $43.7 billion. Unfortunately, we do not have a breakdown of the specific taxes yet, since the Treasury Department started hiding those monthly reports from the public last year, meaning that the public has to wait until the Treasury Bulletin in March of next  year to know.

But the aggregate net totals were an $882 million increase in net tax receipts for the Highway Account of the Trust Fund and a $319 million increase in net receipts for the Mass Transit Account. This is relevant once you convert to percentage increases – a 2.4 percent bump for the HA but a 6.4 percent increase in MTA receipts. And that means that motor fuel tax receipts increased by 6.4 percent, because the Mass Transit Account gets 2.86 cents per gallon of both the gasoline and diesel taxes and none of the trucking taxes. And it also means that the receipts from the three trucking taxes probably decreased somewhat, because those three taxes only go towards the Highway Account. We would guess that the trucking tax receipts probably dropped by around $1.5 billion, and it was likely the sales tax on new truck sales that did it, because that tax is by far the most volatile of the five Highway Trust Fund excises.

Spending. While tax receipts only increased by $1.2 billion, Trust Fund spending, pushed upwards by the massive funding increase provided by the IIJA infrastructure law in 2021, increased by $5.2 billion. Highway Account outlays, once adjusted to get rid of a $389 million TIFIA credit re-scoring*, rose by $2.6 billion (+4.5 percent), but Mass Transit Account spending rose by almost as much – $2.5 billion (+15.7 percent).

The relationship between spending and user tax revenues in the Mass Transit Account continues to get much more worse than the already horrible relationship between the two in the Highway Account.

We won’t know the specific outlay breakdown by agency until Treasury releases the Combined Statement, which should normally happen in a month or so, but with shutdowns, who knows.

User-Pay Deficit. As a result of the above, the user-pay deficit increased by $3.9 billion. $1.7 billion of that was in the Highway Account, and $2.2 billion was in the Mass Transit Account.

Put another way, in the Highway Account, just over one-third of the FY 2025 outlays were paid for by some kind of General Fund transfer, not FY 2025 highway user taxes, fines, or penalties. ($21.141 billion user-pay deficit = 36.3% of $58.193 billion in outlays.)

But in the Mass Transit Account, almost 60 percent of the FY 2025 outlays were paid for by some kind of General Fund transfer ($9.468 billion user-pay deficit = 58.3 percent of $16.234 billion in outlays).

Interest. The amount of balances in the Trust Fund has dropped by almost $50 billion from the beginning of FY 2204 to the end of FY 2025. That means less money invested in Treasury Securities rolling over every business day, which would mean lower interest costs even if interest rates had gone up slightly. Accordingly, total interest “earned” by the Trust Fund dropped from $6.1 billion in FY 2024 to $3.9 billion in FY 2025.

We now treat interest as being no different than the various emergency bailout transfers because the interest is not being earned on tax deposits, it’s being earned on what is left of the $118 billion bailout transfer made by the IIJA and still unspent. This author believes that you don’t get to print money and then print more money so you can credit yourself with interest on that money that you just printed and get that taken seriously. Hence the term “user-pay deficit” as distinct from a strict cash flow deficit.

A full summary is below.

*We have decided not to show the outlays from TIFIA re-scoring in our spending totals, and so we can also remove the reimbursement for those outlays from the General Fund out of the Trust Fund’s receipt totals. We feel comfortable doing this because unlike regular Trust Fund outlays, which represent real work in the economy (land and materials purchased, human beings paid, etc.), a TIFIA re-score is an accrual accounting visualization, not nearly the same thing. Using imaginary money to pay for imaginary outlays is fine. It’s when you use imaginary money to pay for real outlays, as we have been doing since 2007 to the scale of around $200 billion so far, that you have a problem.