WASHINGTON — Both the highway trust fund and transit account — key sources of federal transportation funding - will run out of money in fiscal year 2015 under the recently enacted transportation law, according to new projections by the Congressional Budget Office.
The new projections, which show both receipts and outlays through fiscal 2022, reflect the implementation of a compromise transportation bill signed into law last month.
The $105 billion, two-year highway law uses general fund transfers to patch funding holes in the highway trust fund, a primarily gasoline tax-backed source of revenue states depend on to back GARVEE bonds and perform basic road maintenance.
Prior to the new law's passage, a series of short-term extensions had led the CBO to predict the trust fund would go broke at some point in 2013. Under the new projections, the trust fund's balance sheet would fall to $4.1 billion by the end of fiscal 2014 and reach insolvency at some point the following year. It would receive more than $16 billion in transfers from the general fund during that time, the CBO projects.
The transit account's balance would also fall to $500 million by the end of fiscal 2014 and also become insolvent the following year.
A Republican plan to replace dedicated transit funding a one-time appropriation of $40 million was scrapped during final negotiation of the legislation that was enacted, after sparking fears from mass transit issuers that the move could jeopardize their bonds.
The CBO estimates are projections of what outcomes analysts find most likely under current law, but results could vary based on changes in revenue or spending.