Pew Report: U.S. Transportation Funding Needs an Overhaul

The Pew Charitable Trusts

The United States is facing major challenges in maintaining investments in the country’s highways and transit systems, which will require policymakers to make difficult choices in the years ahead, says the latest report from the Pew Charitable Trusts.

These decisions will be made not just at the federal level, but also at the state and local levels. The report  -- “Intergovernmental Challenges in Surface Transportation” -- examines the role that each level of government plays in paying for highway and transit infrastructure, the key problems facing this multilayered system of funding, and their causes. In addition, it identifies central principles that policymakers need to consider as they weigh options and consider solutions. 

DOWNLOAD “Intergovernmental Challenges in Surface Transportation” HERE

The study notes that the gas tax, a major revenue source for surface transportation, hasn’t generated enough money in recent years to keep up with the rising cost of construction. The federal gas tax has not been raised since 1993. 

More fuel-efficient vehicles and changed driving habits increase the pressure on the multilayered funding system. The Highway Trust Fund has drawn down its balance and borrowed $54 billion from general fund revenues.

Another deadline for the trust fund comes next May. There is a projected $162 billion revenue shortfall over the next decade. The federal money, for the most part, reimburses state and local governments. Those grants could eventually be delayed or reduced.

This report is the first in a series, Fiscal Federalism in Action, that will describe how the federal-state fiscal relationship works in several policy areas to which both levels of government make significant financial contributions.

The Bottom Line

$207 billion: Average annual transportation funding 2007-11; $82 billion is state, $74 billion is local, $51 billion is federal

$162 billion: Projected federal highway trust fund shortfalls in the next decade

$54 billion: Transfers since 2008 to compensate for Highway Trust Fund shortfalls

$510: Average annual state and local transportation spending per capita nationwide, 2007-11

$164: Average annual federal transportation spending per capita nationwide, 2007-11

18.3 cents: Federal gas tax per gallon, unchanged since 1993

SOURCE: Pew Charitable Trusts