Funding the Nation's Surface Transportation System
The nation's surface transportation system is critical to the economy and affects the daily life of most Americans. However, the costs to repair and upgrade the nation's surface transportation system to meet current and future demands are estimated in the hundreds of billions of dollars, and a sustainable solution to funding surface transportation has yet to be found.
Funding the nations surface transportation program has been designated high risk for several reasons, including:
- Motor fuel and other highway use taxes that support the Highway Trust Fundthe major source of federal surface transportation fundingare eroding. Federal motor fuel tax rates have not increased since 1993, and the 18.4 cent per gallon tax on gasoline enacted in 1993 is worth about 11.5 cents today. This trend will continue with the introduction and adoption of more fuel efficient and alternative fuel vehicles in the years ahead.
- In March 2012, the Congressional Budget Office estimated that over $100 billion in additional revenues would be required to maintain current spending levels plus inflation through 2022.
- Congress transferred more than $34 billion in general revenues to the Highway Trust Fund from fiscal year 2008 to 2010, and in 2012, appropriated an additional $18.8 billion in general revenues for fiscal years 2013 and 2014. This approach has effectively broken the link between highway taxes paid and benefits received by users and may not be sustainable given competing demands and the federal governments growing fiscal challenge.
- A sustainable solution to funding surface transportation is based on balancing revenues to and spending from the Highway Trust Fund. New revenues from users can come only from taxes and fees, and ultimately major changes in transportation spending, revenues, or both will be needed to bring the two into balance.