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Road Spending by State Funded by User Taxes and Fees, Including Federal Gas Tax Revenues

2 min readBy: Joseph Bishop-Henchman

This morning we released a report ranking state and local road spending financed by user taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es and fees (like tolls and gasoline taxes), finding that every state finances most of its road spending though general taxes (like property taxes, sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. es, and general funds). We also included a table on transportation generally, including mass transit, water transportation, air transportation, and parking.

We’ve gotten a fair amount of attention, with many people surprised that roads are so heavily subsidized. One critique we’ve gotten is that we did not include federal aid as a “user charge.” That’s because it’s not: federal aid is dispensed to the states at the mercy of the federal government and is not connected to users. The table looked at state-local revenues and state-local spending.

However, a fair argument could be made that the portion of federal aid (about $28 billion) financed by the 18.3 cent per gallon federal gas taxA gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. ought to be included, which would be a federal-state-local table of road spending provided by user taxes and fees. We ran the numbers, using Federal Highway Administration data for 2010, and that table is below. The percentages are higher, and some states jump around (primarily due to federal funding formula generosity toward small states like Rhode Island) though the conclusion is the same: user taxes and fees do not cover the costs of road spending in any state.

Share of Federal, State, & Local Road Spending
Covered by User Taxes and User Fees
Alabama 55.4% 16
Alaska 19.9% 50
Arizona 47.0% 29
Arkansas 61.4% 7
California 34.4% 48
Colorado 55.4% 17
Connecticut 53.1% 22
Delaware 79.8% 1
Florida 65.0% 6
Georgia 49.7% 24
Hawaii 44.1% 36
Idaho 49.2% 25
Illinois 37.6% 43
Indiana 56.4% 14
Iowa 53.8% 20
Kansas 47.7% 27
Kentucky 46.3% 32
Louisiana 44.8% 35
Maine 55.6% 15
Maryland 45.8% 33
Massachusetts 60.4% 8
Michigan 50.1% 23
Minnesota 36.4% 45
Mississippi 47.0% 28
Missouri 42.3% 38
Montana 53.1% 21
Nebraska 42.2% 39
Nevada 42.9% 37
New Hampshire 57.6% 13
New Jersey 60.2% 9
New Mexico 38.6% 42
New York 54.7% 19
North Carolina 68.3% 4
North Dakota 41.8% 40
Ohio 58.7% 11
Oklahoma 47.0% 30
Oregon 36.1% 46
Pennsylvania 45.3% 34
Rhode Island 69.8% 2
South Carolina 55.0% 18
South Dakota 37.4% 44
Tennessee 59.8% 10
Texas 58.7% 12
Utah 32.4% 49
Vermont 40.6% 41
Virginia 47.7% 26
Washington 46.8% 31
West Virginia 66.9% 5
Wisconsin 68.5% 3
Wyoming 34.9% 47
District of Columbia 4.8% (51)
U.S. Average 50.7%

Source: Tax Foundation calculations from U.S. Census Bureau, State and Local Government Finance and Federal Highway Administration data. Road spending is federal and state motor fuel tax revenue and state highway revenue divided by state highway spending.