The Highway Trust Fund "guarantees" specific annual funding levels
for most highway programs on the basis of projected receipts to the
fund. It also makes annual adjustments to these funding levels on
the basis of actual receipts and revised projections of trust fund
revenue. These adjustments are called the Revenue Aligned Budget
Authority (RABA). GAO concludes that the fiscal year 2003 RABA
calculation appears reasonable. Although the RABA adjustment is
clearly severe, it reflects the many ways in which an economic
downturn affects the calculation. In late January 2002, the
administration announced that the fiscal year 2003 RABA adjustment
would be a negative $4.965 billion. Within a few days of the
announcement, the administration reported that an error had been
made and the correct amount was a negative $4.369 billion--a $600
million difference. Treasury is taking steps to improve its
internal controls in order to prevent this type of error from
reoccurring. The use of ethanol blended fuel instead of gasoline
reduces Highway Trust Fund revenue because it is partially exempt
from the standard excise tax on gasoline and 2.5 cents of the tax
received on each gallon of gasohol sold is transferred to the
General Fund. Gasohol use is projected to rise and the impact of
these tax provisions will grow as well. The RABA adjustment could
be changed in several ways to help reduce fluctuations in highway
funding. However, Congress and the administration must weigh the
advantages and disadvantages of these and other ways to stabilize
highway funding and increase Highway Trust Fund revenues.
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