HIGHWAY TRUST FUND. HOW ARE PUBLIC PROJECTS FUNDED? General Fund Generated by general revenues Bonds Usually by referenda User Fees Pay as you go.

Highway Trust Fund

How are Public Projects Funded?

• General Fund• Generated by general revenues

• Bonds• Usually by referenda

• User Fees• Pay as you go

Beginnings (Interstate)

• Federal Aid Highway Act (1956)• Authorized Interstate Highway System• Federally funded infrastructure• Public Works• Public Benefits

Beginnings (HTF)

• Established by Highway Revenue Act 1956• Highway Account (other accounts added later)

• Transit Account• LUSTT fund• General Account

• All of this is meant as a user fee• Mechanism: Gas Tax

Goals

• Create a self-funding mechanism• Originally targeted just towards highways• Transit now a beneficiary

• Political

Cause: Less Driving, Increased Fuel Efficiency

Determination of Apportionments

• Interstate Construction• Interstate Maintenance• NHS• Bridge• Surface Transportation Program• Interstate Substitution

Program Categories Equity Adjustments

Determination of Apportionments

• Minimum Allocation• CMAQ• Donor State Bonus• Interstate Reimbursement• Hold Harmless• 90% Payment Adjustment• Metropolitan Planning

Apportionment Categories

• Surface Transportation Program• Most flexible program

• 10% highway railway crossings• 10% transportation enhancements• 50% obligated in urban areas• 30% obligated anywhere else in state

Apportionment Categories

• CMAQ• Congestion Mitigation and Air Quality• Programs designed to bring metro areas into attainment

• Transit• HOV• Ridesharing

Apportionment Categories

• Interstate Substitution• Funds used by FTA to create a transit substitute for

Interstate Highway usage• Rights of way• Fixed guideways• Bus Lanes

Equity Adjustments

• Minimum Allocation• Guarantee to each state• Receives at least 90% of state’s estimated contributions

to HTF• May be used for

• Interstate Maintenance & Substitute• Bridge• NHS• Surface Transportation Program• CMAQ

Equity Adjustments

• Donor State Bonus• Starts: state with lowest return (in percent)• State brought up to the level of the next lowest state• Continue until authorized funds are exhausted

Equity Adjustments

• Interstate Reimbursement• Provides funding to states based on each state’s share of

the cost of Interstate segments built without federal assistance

• State’s share of national authorization predetermined by ISTEA/TEA21

Equity Adjustments

• Hold Harmless• An established percentage of available national funding

for highway federal aid in each state• No state will receive less than it did under

• Previous legislation• Previous apportionments

Equity Adjustments

• 90% Payment Adjustment• Every state is guaranteed to receive at least 90% of

every dollar it is estimated to have contributed to the Highway Account of the HTF