Best planning and implementation toolbox

Federal and State Funding Sources for Transportation

Purpose of Tool:
Federal transportation funding has historically come from the Highway Trust Fund, which was established in 1956 and is funded by a federal gasoline tax (18.4 cents per gallon) and a federal diesel tax (24.4 cents per gallon). The Highway Trust Fund is divided into three parts: 1) a highway account (15.44 cents per gallon of gasoline and 21.44 cents per gallon of diesel), 2) a mass transit account (2.86 cents per gallon each of gasoline and diesel), and 3) a leaking underground storage tank trust fund (0.1 cents per gallon of gasoline). These funds are distributed to the states based on formulas, depending on each state’s share of the nation’s Interstate vehicle miles. All transportation projects that are federally funded must be included in the Federal Transportation Improvement Program (FTIP). To be included in the FTIP, a project must be in the local/regional TIP and also the State TIP (STIP). The current (2005-2009) federal surface transportation program is known as the Safe, Accountable, Flexible, and Efficient Transportation Equity Act – A Legacy for Users (SAFETEA-LU). This program authorizes the expenditures from the federal Highway Trust Fund and is scheduled for reauthorization in 2009.

State transportation funds for the State of Texas come from the state motor fuels tax (20 cents per gallon), vehicle registration fees, the Texas Mobility Fund, bond proceeds, and local participation. The State of Texas’s total transportation funding is broken down as follows:

  • Federal motor fuels gas tax: 35%;
  • State motor fuels tax: 27%;
  • Vehicle registration fees: 11%;
  • Texas mobility fund: 13%;
  • Bond proceeds: 10%; and
  • Local participation: 4%.

    Benefits of Using Tool:
    Federal and State transportation funding is beneficial to communities and agencies because the funding responsibility for transportation projects is shared.

    Steps Involved to Use Tool:
    Federal and state funding is obtained on a project-by-project basis. In order to be eligible for state funding, a project must be first be included in a local or regional TIP by the metropolitan transportation planning agency, as well as in the STIP. For eligibility for federal funds, a project must undergo this same process, and also be included in the FTIP. Eligibility also depends on the ownership of roadways and if they lie within the federal-aid system. State transportation funding is used for improvements to routes solely owned by the State and not on the federal-aid system, and federal transportation funding is applied to Interstate and US routes.

    Special Requirements to Use Tool:
    An adequate transportation planning staff is necessary to develop the local TIP, where required, which ensures that the appropriate requirements are met for funding from state and federal sources.

    Specials Resources Needed to Use Tool:
    Resources from the state Departments of Transportation and the Federal Department of Transportation are available to provide information regarding funding and funding categories. The federal legislation, SAFETEA-LU, and the Federal Register also include the identification of funding sources and requirements.

    Communities / Agencies that Have Used Tool:
    A majority of transportation agencies and communities involved in transportation planning and implementation throughout the United States and the State of Texas have successfully utilized federal and state funding opportunities.

  • North Central Texas Council of Governments (NCTCOG): The Dallas/Fort Worth Metropolitan Planning Organization (MPO), NCTCOG, regularly develops an updated TIP as required by federal law, in coordination with the Texas Department of Transportation, local governments, and transportation agencies. Development of this TIP enables projects in the region to be considered for federal and state funding. The approved 2008-2011 TIP can be found at the following website: . For more information, contact:

    Christie Jestis - Program Manager
    616 Six Flags Drive
    P.O. Box 5888
    Arlington, TX, 76005

  • Georgia Department of Transportation (GDOT), 17th Street-I-75/85 Project: This project in downtown Atlanta, Georgia is currently under construction and will result in a new I-75/85 interchange at 17th Street, and the replacement of the congested 14th Street Bridge. The majority (approximately 80%) of the funding for this approximately $85 million project comes from the federal government under SAFETEA-LU. For more information, contact:

    Karlene Barron
    GDOT Deputy Communications Director
    One Georgia Center
    600 W. Peachtree St. NW
    18th Floor
    Atlanta, GA, 30308

    Metrics to Use to Monitor Tool Effectiveness:
    Without federal and state funding, communities would not be able to meet their goals for transportation improvements and maintenance. However, transportation needs and costs are growing, and the amount of federal and state funding available is not adequate to meet all of these needs. Many transportation agencies are now seeking ways to fund projects through alternative sources in order to meet their stated goals.

    List of Resources to Obtain Additional Info:
    The following contain more information on federal and state transportation funding:
  • “The Current Status of Federal and State Transportation Funding for Texas,” Safer Roads Coalition, Texas Good Roads/Transportation Association.
  • “Key Facts About Texas’ Road and Bridge Conditions and Funding Options,” TRIP: A National Transportation Research Group, February 2007.
  • Surface Transportation Funding: Options for States. National Conference of State Legislatures, 2006.
  • U.S. Department of Transportation, Federal Highway Administration- SAFETEA-LU.
    “Spotlight: Texas Benefits from Federal Transportation and Energy Reauthorizations,” Federal Funds Watch – Texas Legislative Budget Board, August 2005.