Transportation in The United States - Funding

Funding

Federal, state, and local tax revenues support upkeep of most roads, which are generally free to drivers. There are also some toll roads and toll bridges. Most other forms of transportation charge a fee for use as they are not given much, if any, tax support by Congress.

Government funding of transportation exists at many levels. Federal funding for highway, rail, bus, water, air, and other forms of transportation is allocated by Congress for several years at a time. The current authorization bill is the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which runs from 2005 to 2009. A Congressionally chartered committee is considering future funding issues.

Though earmarks are often made for specific projects, the allocation of most federal dollars is controlled by metropolitan planning organizations (MPOs) and state governments. Usually "matching" funds are required from local sources. All projects have a sponsoring agency that will receive the funding from the various federal and local sources, and be responsible for implementing the project directly or through contracts. Large projects require a Major Investment Study and a both a Draft and a Final Environmental Impact Review. A patchwork of federal laws and accounts govern the allocation of federal transportation dollars, most of which is reserved for capital projects, not operating expenses. Some roads are federally designated as part of the National Highway System and get preferential funding as a result, but there are few federally maintained roads outside of Washington D.C. and national parks.

State governments are sovereign entities which use their powers of taxation both to match federal grants, and provide for local transportation needs. Different states have different systems for dividing responsibility for funding and maintaining road and transit networks between the state department of transportation, counties, municipalities, and other entities. Typically cities or counties are responsible for local roads, financed with block grants and local property taxes, and the state is responsible for major roads that receive state and federal designations. Many mass transit agencies are quasi-independent and subsidized branches of a state, county, or city government.