Issue Brief: Federal Funding for U.S. Transit and Roadway Infrastructure

Aug 13, 2013 | by
  • Description

The United States' surface transportation infrastructure is funded through a combination of federal, state and local revenue. This revenue is primarily collected through transportation user fees, including state and federal taxes on fuel purchases. Federal fuel taxes on gasoline and diesel make up about 90 percent of revenue for the Highway Trust Fund (HTF), the primary fund for federal investment in surface transportation infrastructure. Federal fuel taxes, which are set per-gallon fees and not based on percentage of sales, have not been changed in 20 years. As construction and maintenance costs rise, the HTF has lost significant purchasing power. Compounding matters, fuel consumption trends have cut into fuel tax revenue. Congress has shown little appetite for increasing the per gallon user fees and has opted to dip into general funds to meet HTF obligations. Infrastructure investment is no longer meeting the needs of the national transportation system, and current revenue from user fees is below investment levels. Transportation infrastructure is deteriorating as a result, putting a strain on the national economy. The nation's transit and roadway infrastructure received a grade of D in the American Society of Civil Engineers' 2013 Report Card on America's Infrastructure; the report highlighted U.S. Department of Transportation studies indicating a $112B annual funding gap to bring roads, bridges and transit to a state of good repair over 20 years. An increasing number of states have taken action; recently Wyoming increased its per gallon fuel tax from 14 to 24 cents. So far, the federal government has not taken similar action.