Intergovernmental Challenges in Surface Transportation Funding

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.

These decisions will be made not just at the federal level, but also at the state and local levels. This report 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.

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.