Whither the HTF?

By John Latta

The “donor” or “donee” debate still ignites controversy when it comes to the Highway Trust Fund. Did your state ‘donate” (give more in fuel and other highway user taxes and fees) to Washington than it got back, or did you state get back more than it gave?

The big and rich states have complained that they are subsidizing other states to the detriment of their own roads, and Senator Kay Bailey Hutchison (R-Tex) has pushed legislation to allow states to opt out of the HTF.

But a new study by the Government Accountability Office (GAO) shows that nearly all states have gotten back at least as much money from the HTF as they contributed since 2005.

Ironically, the lone exception was Texas which received slightly less than a dollar – 99.7 cents – for every dollar its highway users paid into the system. Other states’ returns per dollar ranged from $1.02 for Arizona to $5.63 for D.C. Of the remaining states, only Alaska at $4.92 topped the $4 mark and five states received between $2 and $3 for every dollar of input.

“In addition, all states, including Texas, received more funding than their highway users’ contributed during both fiscal years 2007 and 2008,” said the report. “In effect, almost every state was a donee state during the first fours years of the current transportation law “(SAFEYTEA-LU).

This was possible because more funding was authorized and apportioned than was collected from the states. The reference is to the almost $30 billion of general revenue channeled to the HTF by Congress since 2008 as the fund staved off bankruptcy largely because more funding was authorized than collected.

Current transportation law includes an equity bonus designed to guarantee states a minimum return. The Equity Bonus Program was used to address rate-of-return issues. It guaranteed about $44 billion. Nearly all states received Equity Bonus funding and about half received a significant increase, at least 25 percent, over their core funding. In effect, the bonus balances donor/donee status by disproportionately using the fund to lift donor states up to equity.