CBO: Highway Fund to be Bankrupt Oct. 1

The Congressional Budget Office said its projections show that the Highway Trust Fund will have insufficient funds to meet its obligations starting in fiscal year 2015, the first day of which is Oct. 1.

CBO made the announcement Feb. 4, less than a month after U.S. Transportation Secretary Anthony Foxx said the trust fund may begin “bouncing checks” by August.

Foxx said the situation is so dire that he has begun posting a monthly ticker update on the balance in the trust fund, which is projected to begin sliding toward insolvency this summer when states are drawing down their matching funds during the highway construction season.

“Under current law, the Highway Trust Fund cannot incur negative balances and has no authority to borrow additional funds,” the CBO said in its announcement. “CBO’s baseline for highway spending incorporates the assumption that obligations incurred by the Highway Trust Fund will be paid in full.”

CBO said that the Department of Transportation has indicated that it needs “at least $4 billion in cash balances available in the highway account and at least $1 billion in the transit account to meet obligations as they are due.”

As a result, projections show that the highway account may have to delay some of its payments during the latter half of 2014, the CBO said.

Congress already has appropriated about $10 billion for fiscal 2014 for the trust fund, which is no longer taking in enough revenue from fuel taxes and truck excise taxes to cover government transportation expenditures of more than $50 million a year.

The current funding authorization law, MAP-21, expires Sept. 30. Congress has not yet come up with a new proposed law or with new funding proposals.