Intergovernmental Funding of
Surface Transportation
AUGUST 2014
Takeaways
• Surface transportation funding system is
interconnected.
• Real overall spending has declined.
• Federal and state governments rely heavily on
declining fuel tax revenues.
• Common funding challenges and interconnection
call for dialogue across all levels of government.
All Levels of Government Fund Highway and
Transit
Own-source spending by level of government, 2007-11
annual average
25%
40%
36%
Federal
$51 billion
State
$82 billion
Local
$74 billion
Source: Pew analysis of U.S. Census Bureau, 2007-2011 Annual Survey of State and Local Government Finances.
OWN SOURCE REVENUE
The Surface Transportation Funding System
FY 2011 Expenditures
$58
Billion
Federal
Government
$1 Billion
$46
Billion
$103
Billion
State
Government
$80 Billion
$11
Billion
$73 Billion
Own source flows
$23
Billion
Local
Government
Intergovernmental transfers
$107
Billion
Direct spending on projects
Source: Pew analysis of U.S. Census Bureau, 2011 Annual Survey of State and Local Governments. Numbers may not add up due to rounding.
Size of Federal Role Within Each State Varies
Federal share of total surface transportation expenditures,
FY 2007-2011
Federal Share,
National Average
24%
Less than 22%
22% - 24%
25% - 29%
30% - 34%
35% or greater
Note: Map does not include direct federal spending on transportation, which cannot be broken out by state.
Source: Pew analysis of U.S. Census Bureau, 2007-2011 Annual Survey of State and Local Government Finances.
Highway Trust Fund Faces Growing Shortfalls
Actual and projected revenue and outlays
70
60
Billions of dollars
50
Transfers from general fund
Revenues
Outlays
End-of-year balance
40
30
20
10
0
Notes: Numbers are not adjusted for inflation.
Source: Pew analysis of Congressional Budget Office and Federal Highway Administration data.
Federal and State Highway and Transit
Expenditures are Falling
Expenditures by level of government, inflation-adjusted
$120
State
$100
Billions of 2011 dollars
$100.2
$79.8
$80
Local
$77.7
$73.0
$60
$57.0
$59.3
Federal
$40
$43.6
Recovery Act
$20
$0
2002
2003
2004
2005
2006
2007
2008
2009
Notes: Inflation-adjusted using Bureau of Economic Analysis' price index for state and local government investment in
structures (Table 3.9.4, Line 36). Years are in state fiscal years.
Source: Pew analysis of U.S. Census Bureau, 2002-2011 Annual Survey of State and Local Government Finances.
2010
2011
Both Federal and State Governments Reliant on
Fuel and Vehicle Taxes
Funding resources used for highways by level of government,
2012
100%
90%
7%
13%
19%
18%
14%
80%
70%
12%
13%
6%
60%
11%
15%
Other taxes, fees, investment
income, and other receipts
Property taxes
General fund
50%
21%
40%
30%
Bond proceeds
66%
20%
Tolls
47%
31%
10%
Vehicle tax
Fuel tax
3%
4%
0%
Federal
State
Local
Note: Local vehicle tax revenue include a small amount of fuel tax revenue as well. Federal revenues are in federal fiscal years, state
and local revenues are in their own fiscal years or calendar years, depending on how they report their data to FHWA.
Source: Pew analysis of Federal Highway Administration 2012 data (Tables HF-10, SDF, and FE-210). Local data is estimated by FHWA.
Federal and State Governments Face Falling
Fuel Tax Revenues
Federal and state fuel tax revenues, inflation-adjusted
60
State
Billions of 2012 dollars
50
Federal
40
30
20
10
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Note: Inflation-adjusted using Bureau of Economic Analysis' price index for state and local government investment in structures (Table 3.9.4,
Line 36). Federal revenues are in federal fiscal years, state revenues are in state fiscal years (normally July-June) or calendar years, depending
on how they report their data to FHWA.
Source: Pew analysis of Federal Highway Administration data, Tables FE-210 and SDF.
Takeaways
• Surface transportation funding system is
interconnected.
• Real overall spending has declined.
• Federal and state governments rely heavily on
declining fuel tax revenues.
• Common funding challenges and interconnection
call for dialogue across all levels of government.
Ethan Pollack
[email protected]
pewstates.org/fiscal-federalism