A Guide to Transportation Funding Options was developed in the wake of recent legislative changes. The aim of the first phase of the project was to compile information on various funding options for transportation. These options include taxes and fees, State general funds, Tribal funds, and outside sources. Listed below are some of the key sources of transportation funding. In addition, the first phase of the project also compiled information on Transportation Financing Options.
Taxes and fees
The federal government funds many transportation projects, including transit, highways, and bicycle and pedestrian programs. State and local governments also contribute to this fund. Taxes on vehicles are one source of transportation funding. These funds help build and repair roads and bridges. Combined with user fees, these funds provide more than half of all government funding for transportation. The federal government also contributes almost half of all transportation spending. State and local governments use a variety of funding sources to pay for transportation, including property taxes and fees.
User fees and taxes are the primary transportation funding sources, though states can use a combination of both. For example, the fuel tax, which covers nearly half of all road spending in the United States, can be replaced by a gasoline tax. This funding mechanism is inefficient, and fuel-efficient cars and trucks reduce the cost of operating roadways. In addition, the gas tax itself has been declining over time. General taxes cover about half of the transportation costs.
State general fund
Transit services may be funded from a State general fund. General fund revenues include property taxes, sales taxes, and other forms of taxation. While these sources can provide significant funding for transit systems, they tend to be less predictable than other options. The amount of transportation funds available from the general fund varies by State. For example, in California, about 45% of transit funds come from sales tax, while just under half of all transportation funding comes from general funds.
While motor fuel taxes account for most highway funding, other State and local revenue sources also provide significant funding. State governments raised $121.4 billion in highway revenue in 2014, including $53 billion in bond proceeds and $68.4 billion from motor fuel and motor vehicle taxes. Investment income and toll revenues provided another $7.6 billion in transportation funding, while property taxes and other taxes provided about half of that. Moreover, local governments use other sources of revenue to pay for transportation projects, including tolls and other fees.
Tribal transportation funding is one way to help Native American tribes provide safe and reliable transportation for their members. The federal government supports transportation projects and programs that help tribal communities improve their quality of life. The Tribal Transportation Program supports public transportation services for tribal members, including those from Alaska Native villages. The Tribal Transportation Program supports public transportation for Alaska Native villages and for tribal members of American Indian tribes. The federal government provides transportation funding through a number of programs and grants.
One of these programs, known as the Transportation Trust Fund, addresses transportation issues in the Indian country. It is funded through competitive discretionary programs that award funds to projects that reduce transportation-related deaths. While transportation fatalities are higher in tribal communities than in the nation as a whole, they are disproportionately high in Indian countries. In addition, the Transportation Trust Fund promotes the development of strategic Transportation Safety Plans to address these problems. It also provides economic development opportunities for the tribes.
Outside funding sources
A number of federal and state programs provide money for transportation. However, some states do not directly fund transportation projects and must partner with local, state, and regional government agencies to provide funds. Federal Lands Access Program funds are a prime example of these partnerships. Federal funds support transportation projects on federal lands, but park staff must coordinate with local partners to determine how best to use these funds. This fact sheet outlines some of the ways that park staff can leverage outside funding sources.
Most state governments raise funds for transportation through the state gas sales tax. Since the tax is not index-based, the effective gas tax rate has declined nearly 30% since the last increase in gas taxes. This loss of revenue is an estimated $10B annually. In addition to gas tax money, state and local governments may also raise funds through a variety of other mechanisms, such as sales and property taxes. However, different provinces have placed constitutional restrictions on the use of transportation funds.