The U.S. has been underfunding its highway system for years, resulting in a $836 billion backlog of highway and bridge capital needs. The bulk of the backlog ($420 billion) is in repairing existing highways, while $123 billion is needed for bridge repair, $167 billion for system expansion, and $126 for system enhancement (which includes safety enhancements, operational improvements, and environmental projects). The Federal Highway Administration estimates that each dollar spent on road, highway, and bridge improvements returns $5.20 in the form of lower vehicle maintenance costs, decreased delays, reduced fuel consumption, improved safety, lower road and bridge maintenance costs, and reduced emissions as a result of improved traffic flow.
The federal government is a major source of funding for the construction of highways through the federal Highway Trust Fund and competitive grant programs for specific projects, like TIGER. In 2014, the federal government spent $43.5 billion on capital costs for highway infrastructure (including bridges) and state and local governments spent $48.3 billion. State and local governments are responsible for the operation and maintenance (O&M) of highways (with the exception of roads on federal lands). They spent $70 billion on O&M in 2014, while the federal government spent $2.7 billion.
Federal investment in highways has historically been paid for from a dedicated, user fee-funded source, the Highway Trust Fund. However, the Trust Fund has been teetering on the precipice of insolvency for nine years due to the limitations of its primary funding source, the federal motor fuels tax. The tax of 18.4 cents per gallon for gasoline and 24.4 cents for diesel has not been raised since 1993, and inflation has cut its purchasing power by 40%. Between 2013 and 2017, 17 states and the District of Columbia raised their motor fuels taxes. A number of states are exploring other revenue sources for funding road investment, including mileage-based user fees. With continued improvements in vehicle fuel efficiency and the popularity of hybrid and electric vehicles, mileage-based user fees present a promising long-term funding alternative to the motor fuels tax.
