Highway Trust Fund Figures Show Earlier Shortfall

Balance could fall below $4 billion, restricting cash flow, in late July and drop to zero in early September, several weeks earlier than last estimated

The U.S. Department of Transportation updated its online Highway Trust Fund ticker, showing earlier and greater financial strain than last month's figures.

With the updated numbers, the highway account of the HTF could potentially fall below $4 billion in late July, weeks before last month's projection of early August. The updated figures show the highway account running out of money in early September, several weeks earlier than last month's estimates.

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 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 less than $8.6 billion in cash, as of the end of February.

USDOT reported that the mass transit account of the HTF currently holds $3.2 billion. 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 future projects, as funding is uncertain going forward. Those decisions are being made now, going into the busy summer construction season. Arkansas State Highway and Transportation Department, for example, just announced the suspension of 10 highway projects due to the looming HTF shortfall(see related AASHTO Journal story here). 

The Highway Trust Fund ticker is available here.