News & Insights

Federal Tank Cleanup Fund May Be Raided for Highways

July 21, 2014 | Posted in Blog

The Federal Highway Trust Fund is running out of money, and if it doesn’t receive funding soon, the government will have no funds to use for the construction, repair, and maintenance of roads. This comes at a price tag of about $16 billion per year, which means lawmakers are scrambling to find ways to resupply the trust fund.

One option Congress is considering is to take some of the funds from the federal government’s Leaking Underground Storage Tank Trust Fund, also known as the LUST fund. This fund was created in the 1980s as a response to the growing problem of leaking underground storage tanks in the nation. Revenue for the fund came (and continues to come) from a 0.1-cent-per-gallon tax on gasoline. The fund was very successful, cleaning up “nearly 80 percent of the nation’s 488,000 leaking tank sites,” by 2009, “with a backlog of about 100,000 remaining.”

The fund has been so successful in fact that it now has a significant surplus of $1.4 billion, which continues to grow as the fund earns more than it expands every year. This was even greater in 2012 when the LUST fund had a $3.7 billion surplus. But in 2012 lawmakers took $2.4 billion from the fund and put it in the Highway Trust Fund to pay for a 2-year transportation bill, and they’re now considering taking another $1 billion from the LUST fund to supplement the Highway fund for another year.

The argument goes that because the money in the LUST fund is generated from a tax on transportation, its use in a fund that promotes transportation should be permitted. And there’s no doubt that the Highway Trust Fund needs money. However, there are potential downfalls to this plan, namely, that spill cleanup efforts on the federal level may slow. This may force states to increase their gas taxes to pay for cleanup, effectively taxing petroleum marketers twice. Environmental consequences for a slowdown of cleanup efforts are also a real possibility.

Highway Trust Fund


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