October 19, 2018

The booming economy and corporate tax cuts caused a surge in the sales of heavy trucks and trailers in fiscal year 2018, causing gross receipts of the Highway Trust Fund to increase by 5.0 percent over fiscal year 2017.

However, the mainstay of the HTF is still the gasoline tax, and any growth in the number of cars on the road or in the mileage they drive was almost completely offset by slowly rising average fuel economy – receipts from the gas tax were only up 0.3 percent over last year.

Although some passenger cars and pickup trucks use diesel fuel, the vast majority of highway diesel sold each year is for the trucking industry, and gross diesel tax receipts grew by 3.3 percent.

As the unaudited year-end data from the Treasury Department shows, total gross receipts of the Trust Fund were $2.2 billion higher in 2018 than in 2017 ($44.767 billion versus $42.653 billion). $1.2 billion of that was from truck and trailer sales; $351 million was from diesel, $83 million from gasoline, and a whopping $363 million of the increase was because interest rates went up and therefore the interest earned by the HTF balances (invested in special Treasury securities) went up as well.

Truck sales are the most volatile component of the HTF’s various tax blend – the minute that the business cycle has a turndown, those tax receipts will drop by a far greater percentage than will the gas or diesel taxes.

The following numbers (a) are unaudited and (b) are gross numbers that do not reflect the transfer of some of that diesel tax money to the Airport And Airway Trust Fund (diesel fuel and jet fuel are basically the same thing and, because the tax is collected upstream, there are annual problems with fuel getting taxed at the wrong rate depending on its end use) or the transfer of some of that gasoline tax money to a sport boating trust fund based on the estimate of how much taxed gas people buy at gas stations and then put in their boats.