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Build America Transportation Investment Center (BATIC) Institute: An AASHTO Center for Excellence
Build America Transportation Investment Center (BATIC) Institute: An AASHTO Center for Excellence

Funding

The vast majority of surface transportation funding in the U.S. is derived from public sources at the federal, state, and local levels. In 2010, approximately $205 billion was invested in highways and another $54 billion in transit—$16.6 billion toward capital investments and $37.8 billion toward operating expenses.

Taxes on motor fuel are a significant source, about 25 percent of highway funding in 2010. Vehicle and other taxes and fees, including sales taxes and property taxes provided another 22 percent for highways. Appropriations from general funds, themselves primarily supported by taxes, accounted for about 27 percent, although this includes nearly $12 billion from the American Reinvestment and Recovery Act. The remainder of highway funding was derived from tolls, bond proceeds, and investment income.

Although passenger fares were the largest source of transit funding in 2010, they only accounted for about 22 percent of total revenues. Motor fuel tax collections and general fund appropriations each represented about 17 percent of total funding. Sales taxes and other public funds also were significant sources.

The various revenue sources that contribute to Federal, state, and local surface transportation funding are summarized in the tables below, presenting highway and transit funding separately. The numbers are taken from 2010 FHWA and FTA data.

Revenue Sources for Highway Funding ($ billions, 2010)
Revenue Type Federal Share State Share Local Share Total Share
User Charges1                
Motor Fuel Taxes $26.1 44.24% $30.3 27.80% $1.0 1.88% $57.4 25.97%
Vehicle Taxes and Fees $2.6 4.41% $22.8 20.92% $1.5 2.82% $26.9 12.17%
Tolls $0.0 0.00% $7.9 7.25% $1.7 3.20% $9.6 4.34%
Subtotal $28.7 48.64% $61.0 55.96% $4.1 7.72% $93.8 44.42%
Other Revenue                
Property Taxes & Assessments $0 0.00% $0.0 0.00% $9.4 17.70% $9.4 4.25%
Other Taxes and Fees $0.6 1.02% $6.6 6.06% $4.9 9.23% $12.2 5.52%
Bond Proceeds $0 0.00% $25.9 23.76% $7.1 13.37% $33.0 14.93%
Investment Income and Other Receipts $0 0.00% $8.2 7.52% $5.6 10.55% $13.9 6.29%
General Fund Appropriations2 $29.6 50.17% $7.2 6.61% $21.8 41.05% $58.6 26.52%
Subtotal $30.2 51.19% $48.0 44.04% $48.9 92.09% $127.1 57.51%
Total Revenues $59.0 100.00% $109.0 100.00% $53.1 100.00% $221.0 100.00%
Funds Drawn From (or Placed in) Reserves3 ($11.9)   ($3.7)   ($0.1)   ($15.7)  
Total Expenditures $47.1 22.94% $105.3 51.29% $52.9 25.77% $205.3 100.00%

1 Amounts shown represent only the portion of user charges that are used to fund highway spending; a portion of the revenue generated by motor-fuel taxes, motor-vehicle taxes and fees, and tolls is used for mass transit and other non-highway purposes.

2 The $29.6 billion shown for Federal reflects $14.7 billion transferred from the General Fund to the Highway Trust Fund in 2010, as well as the expenditure in 2010 of $11.9 billion of the funding authorized for use on highways by the Recovery Act. The remainder supported expenditures by the FHWA and other Federal agencies that were not paid for from the Highway Trust Fund.

3 The $11.9 billion figure shown for Federal reflects the increase in the balance of the Highway Account of the Highway Trust Fund from the prior year. Without the $14.7 billion transfer of general funds to the Highway Account, this balance would have declined. While the increase in the Highway Account balance in 2010 and the amount of Recovery Act funds expended for highways during 2010 both round to $11.9 billion, this is entirely coincidental.

Source: 2013 USDOT Conditions and Performance Report

Revenue Sources for Transit Funding ($ billions, 2010)
Revenue Type Federal Share State Share Local Share Total Share
Public Funds                
Motor Fuel Taxes $8.29 80.02% $0.59 5.00% $0.18 0.56% $9.06 16.67%
General Fund Appropriations $2.07 19.98% $3.04 25.76% $3.96 12.31% $9.07 16.69%
Income Taxes $0.0 0.00% $0.48 4.07% $0.08 0.25% $0.56 1.03%
Sales Taxes $0.0 0.00% $3.14 26.61% $4.56 14.17% $7.70 14.17%
Property Taxes $0.0 0.00% $0.03 0.25% $0.42 1.31% $0.45 0.83%
Other Dedicated Taxes $0.0 0.00% $2.33 19.75% $0.29 0.90% $2.62 4.82%
Other Public Funds $0.0 0.00% $2.19 18.56% $8.53 26.51% $10.72 19.73%
Subtotal $10.36 100.00% $11.80 100.00% $18.02 56.00% $40.18 73.94%
System-Generated Funds                
Passenger Fares $0.0 0.00% $0.0 0.00% $12.13 37.69% $12.13 22.32%
Other Revenue1 $0.0 0.00% $0.0 0.00% $2.03 6.31% $2.03 3.74%
Subtotal $0.0 0.00% $0.0 0.00% $14.16 44.00% $14.16 26.06%
Total Revenues $10.36 100.00% $11.80 100.00% $32.18 100.00% $54.34 100.00%

1 Other system-generated revenue includes advertising and concessions, park-and-ride lots, investment income, and rental of excess property and equipment.

Source: 2013 USDOT Conditions and Performance Report