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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 2012, approximately $221 billion was invested in highways and another $58 billion in transit - $16.9 billion toward capital investments and $41.4 billion toward operating expenses.

Taxes on motor fuel are a significant source, about 29 percent of highway funding in 2012. Vehicle and other taxes and fees, including sales taxes and property taxes provided another 25 percent for highways. Appropriations from general funds, themselves primarily supported by taxes, accounted for about 20 percent, which includes $3 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 2012, they only accounted for about 23.5 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 2012 FHWA and FTA data.

Revenue Sources for Highway Funding ($ billions, 2012)
Revenue Type Federal Share State Share Local Share Total Share
User Charges 1
Motor Fuel Taxes $28.10 65.7% $32.80 30.9% $1.00 1.5% $61.90 28.6%
Vehicle Taxes and Fees $5.80 13.6% $22.10 20.8% $1.80 2.7% $29.70 13.7%
Tolls $0.00 0.0% $11.80 11.1% $1.80 2.7% $13.50 6.2%
Subtotal $33.80 79.0% $66.70 62.7% $4.60 6.8% $105.20 48.6%
Other Revenue
Property Taxes & Assessments $0.00 0.0% $0.00 0.0% $10.30 15.3% $10.30 4.8%
Other Taxes and Fees $0.40 0.9% $8.90 8.4% $5.50 8.1% $14.80 6.9%
Bond Proceeds $0.00 0.0% $12.40 11.7% $8.90 13.2% $21.30 9.8%
Investment Income and Other Receipts $2.50 5.8% $11.60 10.9% $6.80 10.1% $20.90 9.6%
General Fund Appropriations 2 $6.10 14.3% $6.70 6.3% $31.40 46.5% $44.10 20.4%
Subtotal $9.00 21.0% $39.50 37.2% $62.90 93.2% $111.40 51.4%
Total Revenues $42.80 100.0% $106.30 100.0% $67.50 100.0% $216.60 100.0%
Funds Drawn From (or Placed in) Reserves 3 $4.60   ($0.40)   $0.60   $4.80 2.2%
Total Expenditures $47.40 21.4% $105.80 47.8% $68.10 30.8% $221.30 102.2%

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. Gross receipts generated by user charges totaled $133.6 billion in 2012.

2 The $6.1 billion shown for Federal reflects $3.0 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 $2.5 billion figure shown for Federal includes $2.4 billion transferred from the balance of the Leaking Underground Storage Tank Fund to the Highway Account of the Highway Trust Fund.

Source: 2015 USDOT Conditions and Performance Report

Revenue Sources for Transit Funding ($ billions, 2012)

Revenue Type Federal Share State Share Local Share Total Share
Public Funds
Motor Fuel Taxes $8.69 80.02% $0.91 7.17% $0.19 0.55% $9.79 16.89%
General Fund Appropriations $2.17 19.98% $3.20 25.2% $4.55 13.23% $9.93 17.13%
Income Taxes $0.00 0.0% $0.40 3.15% $0.09 0.26% $0.49 0.85%
Sales Taxes $0.00 0.0% $3.46 27.24% $5.43 15.78% $8.89 15.34%
Property Taxes $0.00 0.0% $0.01 0.08% $0.65 1.89% $0.66 1.14%
Other Dedicated Taxes $0.00 0.0% $1.92 15.12% $0.57 1.66% $2.49 4.30%
Other Public Funds $0.00 0.0% $2.80 22.05% $7.47 21.72% $10.27 17.72%
Subtotal $10.86 100.0% $12.70 100.0% $18.95 55.09% $42.51 73.34%
System-Generated Funds
Passenger Fares $0.00 0.0% $0.00 0.0% $13.61 39.56% $13.61 23.48%
Other Revenue 1 $0.00 0.0% $0.00 0.0% $1.84 5.35% $1.84 3.17%
Subtotal $0.00 0.0% $0.00 0.0% $15.45 44.91% $15.45 26.66%
Total Revenues $10.86 100.0% $12.70 100.0% $34.40 100.0% $57.96 100.0%

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

Source: 2015 USDOT Conditions and Performance Report