October 19, 2018

As part of the Treasury Department’s year-end financial reporting for fiscal year 2018, new reports from the Bureau of the Public Debt show that excise tax receipts for the Airport and Airway Trust Fund grew by 5 percent versus last year, while customs duties received by the Harbor Maintenance Trust Fund were up by 9 percent.

(Excise tax receipts for the Inland Waterways Trust Fund were only up by 1.1 percent over last year.)

Aviation. Treasury (unhelpfully) does not record the receipts of the 7.5 percent tax on airfares, the receipts of the passenger flight segment tax, the receipts of the Alaska/Hawaii flight segment tax, and the 7.5 percent tax on frequent flier miles separately – they bundle them together into one line called “transportation of persons,” which is up by 4.1 percent over last year. Taxes on international arrivals and departures were up by 6.5 percent, and the receipts from the air cargo waybill tax were up by 7.1 percent.

Receipts from the various aviation fuel taxes (including transfers from the Highway Trust Fund for jet fuel originally taxed as its chemical twin, diesel fuel) were up by a combined 5.9 percent.

Harbor maintenance. The various customs duties that support the Harbor Maintenance Trust Fund were up by 9.0 percent in 2018 versus 2017. Separately, interest income on the gargantuan $9+ billion balance in the Trust Fund rose by 65 percent due to the increased interest rate environment, so total receipts and interest for the Trust Fund were up by almost 13 percent in 2018.

As reported separately in this week’s ETW by Alex Laska, U.S. port activity surged this year with shippers trying to get goods into the United States before the onset of Trump tariffs. Since the HMTF customs duties are based on the dollar value of cargo, the tariffs may significantly downgrade HMTF receipts in FY 2019.

As has been noted repeatedly in prior ETW articles, the balance buildup in the HMTF has been a long time coming. We are not 100 percent sure of the final balance in the HMTF because it takes Treasury a few weeks longer to report detailed outlays than it does to record detailed receipts. The Treasury report linked above only shows transfers from Treasury to the Corps of Engineers, and the final outlays may be a couple of million dollars different from that number. But it appears that, despite a significant increase in spending by the Appropriations Committees, the Trust Fund at the end of FY18 was between $9.3 and $9.4 billion, up from $9.1 billion at the end of FY17.