Interstate Highway System - Financing

Financing

About 70 percent of the construction and maintenance costs of Interstate Highways in the United States have been paid through user fees, primarily the fuel taxes collected by the federal, state, and local governments. To a much lesser extent they have been paid for by tolls collected on toll highways and bridges. The Highway Trust Fund, established by the Highway Revenue Act in 1956, prescribed a three-cent-per-gallon fuel tax, soon increased to 4.5 cents per gallon. In 1993 the tax was increased to 18.4 cents per gallon, where it remains as of 2012.

The rest of the costs of these highways are borne by general fund receipts, bond issues, designated property taxes, and other taxes. The federal contribution comes overwhelmingly from motor vehicle and fuel taxes (93.5 percent in 2007), and it makes up about 60 percent of the contributions by the states. However, any local government contributions are overwhelmingly from sources besides user fees. The portion of the user fees spent on highways themselves covers about 57 percent of their costs, with about one-sixth of the user fees being sent to other programs, including the mass transit systems in large cities. In the northeastern United States, some large sections of Interstate Highways that were planned or constructed before 1956 are still operated as toll roads. Others have had their construction bonds paid off and they have become toll-free, such as in Connecticut (I‑95), Maryland (I‑95), Virginia (I‑95), and Kentucky (I‑65).

As American suburbs have expanded, the costs incurred in maintaining freeway infrastructure have also grown, leaving little in the way of funds for new Interstate construction. This has led to the proliferation of toll roads (turnpikes) as the new method of building limited-access highways in suburban areas. Some Interstates are privately maintained (for example, the VMS company maintains I‑35 in Texas) to meet rising costs of maintenance and allow state departments of transportation to focus on serving the fastest-growing regions in their states.

Parts of the Interstate System might have to be tolled in the future to meet maintenance and expansion demands, as has been done with adding toll HOV/HOT lanes in cities such as San Diego, Salt Lake City, Minneapolis, Houston, Denver, Dallas, Atlanta, and Fairfax County, Virginia. Although part of the tolling is an effect of the SAFETEA‑LU act, which has put an emphasis on toll roads as a means to reduce congestion, present federal law does not allow for a state to change a freeway section to a tolled section for all traffic.

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