The Highway Trust Fund Ran a $17.8 Billion Structural Deficit in FY 2023

The Highway Trust Fund ran a $17.6 billion deficit in the just-ended fiscal year 2023 once interest on bailout money is excluded from its cash flow, the Federal Highway Administration reported this week.

Tax receipts and interest were reported last week by the Treasury Department, and FHWA filled in the spending and balance gaps on the year-end Table FE-1 this morning.

For the Highway Account, $37.4 billion in net user tax receipts were more than offset by $50.2 billion in outlays and an additional $1.1 billion transfer to mass transit. In the Mass Transit Account, $4.8 billion in tax receipts and the aforementioned $1.1 billion transfer from highways were dwarfed by $10.0 billion in outlays.

Put another way, user taxes and safety penalties only supported 73 percent of Highway Account spending and only 59 percent of Mass Transit Account spending.

Because of the spike in interest rates, interest on balances (which represent previous bailouts, mostly the $118 billion bailout transfer from the IIJA in November 2021) totaled 11.8 percent of total Trust Fund deposits in 2023. That is the highest interest share of total Trust Fund deposits in 40 years, since interest formed 11.5 percent of total deposits in fiscal 1983. The difference is, the interest in 1983 was earned on balances that represented actual user tax payments, impounded by the Johnson and Nixon Administrations and then withheld from obligation by the Budget and Appropriations Committees after 1975. That interest was not earned on bailout transfers.

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