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Delaware Gas Tax Funds Subsidize General Fund

While Congress has subsidized the Highway Trust Fund with over $60 billion since 2008, some states may do the opposite, i.e., transfer funds from their gas tax-filled transportation trust funds to the state's general fund to cover operating expenses.
February 7, 2015, 11am PST | Irvin Dawid
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"Gov. Jack Markell proposed transferring nearly $40 million for the second year out of Delaware's Transportation Trust Fund to help cover general fund expenses and balance the budget," according to AASHTO Journal.

This practice provides red meat for opponents of raising gas taxes as they often argue that raising gas taxes doesn't necessarily mean that the additional funds will be used for transportation purposes, defeating the argument that gas taxes are user fees

The Journal adds that last year "the governor also proposed raising the gasoline tax by 10 cents a gallon to sharply increase infrastructure spending, but it did not advance in the legislature."

Of course, the funds transfer works both ways, more often toward subsidizing road spending. Last year we noted that Delaware "lawmakers agreed to raise $30 million for paving projects by borrowing money and increasing weekend tolls on a state highway."

Even Markel's ten-cent gas tax increase proposal was based on borrowing as we noted a year ago:

On Jan. 29, 2014 Markell proposed "a 10-cent increase to the state gas tax that he says would generate $50 million per year for the state's Transportation Trust Fund. He is proposing that DelDOT borrow an additional [$50 million a year for five years] to make up the rest," writes Barban.

The Journal didn't indicate the reason for the Transportation Trust Fund transfer, nor even if it would be repaid. According to Delaware online, Markel was open to "suggestions from legislators that a 'lock-box' be used for new transportation funds."

On the federal level, "roughly $70 billion since 2008, including the latest patch" has been transferred by Congressional authorization from the general fund to the Highway Trust Fund, according to The Hill in August, 2014. 

Full Story:
Published on Friday, February 6, 2015 in AASHTO Journal
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