 State Transportation Funding
State transportation revenues are not keeping pace with escalating construction costs and burgeoning needs. All states face a shortfall between revenue expected from existing sources and projected needs to both maintain existing infrastructure and build new projects. These shortfalls, coupled with construction cost increases that exceed inflation by two to three times, mean that states are well short of needed transportation revenues. The cumulative national shortfall for transportation funding to keep pace with projected needs has been estimated at $1 trillion through 2015. Of this, $34 billion is the annual unmet need to maintain existing roads and transit facilities. The National Surface Transportation Policy and Revenue Study Commission has said that the revenue gap for all modes of transportation is $155 billion to $200 billion per year.
States are continuously seeking new revenues for transportation by tapping traditional funding sources such as the gas tax and motor vehicle fees and increasing other sources such as tolling and private capital. The Minnesota bridge collapse in 2007 lent urgency to finding solutions.
Trends
- State general funds are coming under increasingly consideration as a source of transportation revenue, as fuel tax revenue continues to decline due to erosion by inflation, less driving and the use of fuel efficient vehicles.
- The trend to borrow funds for transportation projects will continue.
- States will attempt to save money through more efficient project completion and improved overall performance in the existing transportation system.
- States have increasingly turned to partnerships that involve the private sector in transportation project financing, construction, maintenance and operation.
- Tolling is a growing source of revenue in over 30 states.
- Local governments will continue to be a significant source of transportation funding, generating 28 percent of all highway funding in recent years.
- Finally, public transit improvements also are expected as lawmakers seek to provide alternatives to automobile travel in an era of much higher gasoline prices.
Resources
The State Surface Transportation Funding Crisis, Legisbrief, February 2008
Because state transportation revenues are not keeping pace with escalating construction costs and needs, states are seeking new funding sources.
2008 Minnesota Transportation Funding Bill
In 2008, Minnesota legislators confronted a problem common in most states: the lack of funds to keep their roads in an adequate state of repair.
State Transportation Funding in 2007
Transportation funding issues continued to trouble legislators in 2007. There's general agreement that the capacity and maintenance of highways and other forms of transportation falls short of meeting the nation's transportation needs. This is a summary of state action in 2007.
Surface Transportation Funding: Options for States, 2006
This book explains the basics of transportation funding. It details federal, state and local revenue and funding sources and provides information about specific highway and public transportation expenditures. Beyond funding mechanics, the report explores potential obstacles to surface transportation funding decisions, including economic conditions, changing consumer preferences, political concerns and legal considerations. The report finds that many challenges—including the declining value of the gas tax against inflation, opposition to tax and fee increases, citizen initiatives, constitutional and statutory restrictions on the use of gas tax revenues, and federal lawmaking—significantly affect state transportation resources.
Surface Transportation Funding provides a menu of options for legislators to consider to improve transportation funding in their state. Although many new or previously untapped transportation revenue sources may be available to state lawmakers, the report finds that a variety of other options can be used to provide a more balanced approach to transportation funding. The report closely examines three long-term state transportation funding trends: greater use of public-private partnerships, greater reliance on financing, and exploration of funding innovations such as the vehicle mileage fee.
Transportation Funding Legislation Database
NCSL's Transportation Funding Legislation Database tracks 17 different transportation funding issues under consideration in the states. The database is intended to record current legislation and executive orders. When available, it provides bill or executive order summaries, links to the legislation, sponsor information and status information. The database does not provide information about existing transportation funding laws.
 Transportation
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