The Highway Trust Fund is in peril of becoming insolvent if it goes unfunded with yet another impending impasse in the United States Congress. To put this in perspective, if this funding does not go through, a potential 112,000 infrastructure and 5,600 transit projects will be delayed or stop and could result in the loss of 700,000 construction jobs in the next year. Institutional investors should pay attention to this unfolding story because it may lead to opportunities in the U.S. P3 market.
This Highway Trust Fund finances nearly $50 billion in highway, transit and bridge projects per year, and this money comes from the federal tax receipts on an 18.4 cents per gallon gas tax and a 24.4 cents per gallon diesel fuel tax. One aspect of the fund is that it doesn’t add to the federal budget deficit as the monies are directly applied to said projects with states contributing