Explainer: What the “80-20 Highway-Transit Split” Really Is, and What it Isn’t

Explainer: What the “80-20 Highway-Transit Split” Really Is, and What it Isn’t

July 26, 2021  | Jeff Davis

There has been a lot of talk in the last week about the “80-20 highway-transit split,” and not all of it was accurate. Herewith: a brief explainer.

What 80-20 originally meant:

In 1982, a political deal was struck whereby urban legislators would vote for a huge 5 cent-per-gallon gasoline and diesel fuel tax increase demanded by highway interests (taking the total from 4 cents per gallon to 9 cents per gallon, more than doubling the tax rate), in exchange for 1 cent of the tax increase – 20 percent – going to a new Mass Transit Account in the Highway Trust Fund.

This 80-20 split of fuel tax increases was retained when the 5 cent gas/diesel tax increase from the 1990 budget deal was eventually deposited in the HTF, and was also retained when the 4.3 cent fuels tax increase from the 1993 budget deal was eventually deposited in the Trust Fund.

Year Increase 80% to Highway Acct. 20% to Mass Transit Acct.
1982 5 cents 4 cents 1 cent
1990 5 cents 4 cents 1 cent
1993 4.3 cents 3.44 cents 0.86 cent
TOTAL 14.3 cents 11.44 cents 2.86 cents

HTF excise taxes have not been increased since 1993. However, the taxes that were in existence prior to 1982 are all still retained in the Highway Account, and none of that money goes to the Mass Transit Account. This includes the 12 percent sales tax on new heavy trucks and tractor-trailers, which is the only one of the Trust Fund taxes that is a percentage of a sales price, which means it is the only one of the Trust Fund taxes that is effectively indexed for inflation.

As a result, Mass Transit Account tax receipts have never come close to being 20 percent of total Trust Fund tax receipts. Over the last 20 years, the average has hovered around 13 percent of total Trust Fund tax receipts – not 20 percent.

What 80-20 later came to mean:

Mass transit started off receiving money from the General Fund of the Treasury, and even after transit started getting money from the Highway Trust Fund as well, the General Fund continued to play a significant part in supporting transit program funding.

Over the 1983-2003 period (the spans of the 1982, 1987, 1991 and 1998 multi-year transportation funding authorization laws), total funding authorizations for mass transit programs averaged 19.7 percent of total funding authorizations for highway and highway safety programs, from all sources.

This started out as a coincidence – if there was a plan to have an 80-20 split of total authorizations, no one ever mentioned it at a committee hearing or on the House floor or Senate floor prior to 2002. The earliest reference we can find to an 80-20 split of funding was a statement by the Surface Transportation Policy Project in a September 2002 House hearing, noting that “We are at the point where the relative distribution of roughly 80/20 split may have to be revised to meet the rising needs for transit capital.”

However, total authorizations for mass transit programs in the 2005, 2012 and 2015 reauthorization laws have, consciously, been kept around the 80-20 mark. (The totals below exclude railroad funding in FAST because most prior authorizations did not address railroads.)

What 80-20 has never meant:

Contrary to what some people have been saying, there has never been an 80-20 highway-transit split of Highway Trust Fund contract authority. Early on, authorizations for Mass Transit Account contract authority were constrained by the tax revenues projected to flow into the Account, which, as explained earlier, have never been above around 14 percent of total Trust Fund tax revenue.

The 2005 SAFETEA-LU law used a one-time accounting trick that drastically slowed down Mass Transit Account cash flow for a few years and allowed contract authority to exceed projected receipts. At the end of the SAFETEA-LU period, the Trust Fund ran out of money, and since then, the Mass Transit Account has received 21.0 percent of the General Fund bailout funding approved by Congress, which has allowed the Transit Account’s share of total Trust Fund spending to continue growing. But transit spending out of the Trust Fund is still a good bit short of 20 percent of the total.

The House-passed INVEST in America Act would give the Mass Transit Account 20 percent of total Trust Fund contract authority for the first time, up from the 17.4 percent under the 2015 FAST Act. (Which is why the bill gives the Transit Account 26.4 percent of the $148 billion General Fund bailout transfer in section 11002 – because the Mass Transit Account is much more insolvent, as a percentage of dedicated revenues, than is the Highway Account.)

Share

Related Articles

House to Debate Infrastructure Bill Monday, with Possible Reconciliation Bill Later in the Week

House to Debate Infrastructure Bill Monday, with Possible Reconciliation Bill Later in the Week

House Majority Leader Steny Hoyer (D-MD) announced to the House this afternoon that "On Monday, September 27, pursuant to the Rule passed...

Deadlines Start Catching Up with Congress Next Week

Deadlines Start Catching Up with Congress Next Week

After a very slow month, Congress will have to making moves next week to pass some key fiscal policy legislation next week, staring down a...

How Long Can the Highway Trust Fund Go Without Another Bailout?

How Long Can the Highway Trust Fund Go Without Another Bailout?

The Federal Highway Administration briefed states last month on new procedures that would be used in the even that the cash balance in the...

30 Years Ago: The Failure of the

30 Years Ago: The Failure of the "Nickel for America"

(I meant to revisit this on August 1, on the 30th anniversary of the event, but the rollout of the bipartisan infrastructure bill bumped...

The Infrastructure Bill's Twin 2027 Problems

The Infrastructure Bill's Twin 2027 Problems

As of this writing, it appears likely that the bipartisan infrastructure bill will be the law of the land by October 1 and will...

House Passes Budget, Sets Sept. 27 As Passage Deadline for Bipartisan Infrastructure Bill

House Passes Budget, Sets Sept. 27 As Passage Deadline for Bipartisan Infrastructure Bill

By a perfectly attended party-line vote of 220 to 212, the House of Representatives has adopted a special rule (H. Res. 601) that...

Three things the infrastructure plan missed

Three things the infrastructure plan missed

It does include reauthorization of the HTF and a $118 billion bailout from the Treasury’s general fund to meet the needs of the...

Senate BIB Funding Totals - Combined Trust Fund and General Fund

Senate BIB Funding Totals - Combined Trust Fund and General Fund

The Senate-passed bipartisan infrastructure bill provides $454.2 billion in guaranteed funding over five years for the "traditional"...

Will the Bipartisan Infrastructure Bill Breach the Debt Ceiling?

Will the Bipartisan Infrastructure Bill Breach the Debt Ceiling?

What does the debt ceiling have to do with bailing out the Highway Trust Fund? Quite a lot, actually. Section 80103 of the...

Senate Passes Bipartisan Infrastructure Bill

Senate Passes Bipartisan Infrastructure Bill

It took a lot longer than expected, but just before noon today, the U.S. Senate passed the bipartisan infrastructure bill by a roll call...

10 things to know about the infrastructure bill

10 things to know about the infrastructure bill

The bill would borrow some $118 billion from general revenue to meet the needs of the nation’s highways, bringing the grand total of...

Explainer: What the

Explainer: What the "80-20 Highway-Transit Split" Really Is, and What it Isn't

There has been a lot of talk in the last week about the "80-20 highway-transit split," and not all of it was accurate. Herewith: a brief...

Be Part of the Conversation
Sign up to receive news, events, publications, and course notifications.
No thanks