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September 10, 2008

In the Federal Highway Trust Fund game, WA is a winner

The Federal Highway Trust Fund is funded through the federal portion of the fuel tax, which is currently 18.4 cents. According to the Federal Highway Administration, between 1957 and 2005, states have contributed about $575 billion into the Trust Fund.

In return, Congress allocates this money back to states for transportation related projects. This means some states get back more than they contribute (winners) and other states get back less (losers).

Washington is a winner state.

Between 1957 and 2005, Washington has contributed about $10.6 billion into the Highway Trust Fund and received about $14.3 billion in return. Washington State's historical input/output ratio is 1.35.

Nationwide, including the District of Columbia, there are 14 loser states and 37 winner states.
The state with the highest input/output ratio is Alaska (6.66) and the state with the lowest return is Texas (0.88). By design, larger populated states, subsidize states with smaller populations.

Interestingly, between 1957 and 2005, the Trust Fund has taken in about $575 billion and given out about $637 billion. The historical input/output ratio is 1.11.

There have been several efforts over the years to devolve the federal gas tax back to states. But because there are winners and losers, states that have positive input/output ratios are naturally opposed to the idea. Another option is to have states opt out of the federal gas tax program. Because Texas has the lowest input/output ratio, it's not surprising that Texas Senator Kay Bailey Hutchison says she will propose legislation that will do just that.

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