Long-Term Viability of Fuel Taxes for Transportation Finance

For the past several decades, the building and maintenance of the nation's infrastructure has depended upon a steady and adequate stream of revenue, which has mostly come from state and national fuel taxes. Each year, the nation -- acting collectively through local and state government and federal agencies- -spends more than $100 billion to construct, maintain, regulate, and operate surface transportation systems. Fortunately, there has been a reliable mechanism for raising the necessary funds- -the fuel tax. About 25 to 30 percent of the $100 billion comes from federal sources, which are distributed by the federal government back to state and local authorities. Nearly 90 percent of federal revenues come from taxes on petroleum fuel. Fuel taxes are also a mainstay of state transportation revenues, accounting for roughly half of state expenditures on highways. At the local level, transportation agency funding (not including transfer payments from states and federal agencies) typically depends on general tax revenues, property taxes, and other sources. Based on aggregate estimates, it appears that between 55 and 60 percent of highway construction, operations, and maintenance is paid for from user fees, of which the fuel tax is the primary source. Transit capital funding is also heavily dependent upon fuel taxes because the 80 percent federal funding match for new capital is funded from the Highway Trust Fund. Transit operating costs are funded from a wide variety of local and state sources.


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  • Status: Completed
  • Contract Numbers:

    Project 20-62

  • Sponsor Organizations:

    Federal Highway Administration

    1200 New Jersey Avenue, SE
    Washington, DC  USA  20590

    American Association of State Highway & Transportation Officials

    444 North Capitol Street, NW, Suite 225
    Washington, DC    20001

    National Cooperative Highway Research Program

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC  USA  20001
  • Project Managers:

    Jencks, Crawford

  • Performing Organizations:

    Transportation Research Board

    500 Fifth Street, NW
    Washington, DC  USA  20001
  • Principal Investigators:

    Morris, Joseph

  • Start Date: 20031001
  • Actual Completion Date: 20050930
  • Source Data: RiP Project 8598

Subject/Index Terms

Filing Info

  • Accession Number: 01460848
  • Record Type: Research project
  • Source Agency: National Cooperative Highway Research Program
  • Contract Numbers: Project 20-62
  • Files: RiP, USDOT
  • Created Date: Jan 3 2013 1:33PM