The Highway Trust Fund: Who Pays for Highways?

The unveiling of President Biden’s proposed infrastructure plan in April, named the American Jobs Plan, put focus on the continuing need for repair, maintenance, and construction of highways, roads, and bridges across the country.

Any conversation about United States highways and byways easily dovetails into talk about the decades old Highway Trust Fund and the ongoing gas tax. That leads to questions: What exactly is the Highway Trust Fund? What does it pay for? How much are gas taxes and what do they pay for? We have some answers for you.

What is the Highway Trust Fund?

The Highway Trust Fund (HTF), established in 1956, provides a dependable source of funding from the federal government for the construction and maintenance of the interstate highway system. Revenue for the Highway Trust Fund comes largely from excise taxes on motor fuel, which is a fancy way of saying a gas tax. Since 1993, gas tax rates have been fixed at 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel fuel.

• Highway Account – Devoted to the construction and maintenance of highways and bridges.
• Mass Transit Account – Used to make payments on buses, railways, subways, ferries, and other modes of public transit.

Who pays for highway repairs, construction, and maintenance?

State and local governments provide the bulk of the funding for repairing and maintaining highways and surface transportation in general. For instance, in 2017 state and local governments funded almost three-quarters of total spending for highways, which was $131 billion. But the Highway Trust Fund does contribute. That same year, the federal government invested $46 billion in the nation’s highways.

Who pays for local roads?

Maintaining that expressway you use to haul loads or that downtown drag not far from your home is the responsibility of local and state authorities. However, funding those repairs and improvements comes from more than just collecting gas taxes paid by those driving a vehicle. These days, general taxes paid by all taxpayers such as income and sales taxes are just as instrumental as gas taxes to fund local roads and state highway infrastructures. The Highway Trust Fund assists states and municipalities in keeping highways healthy on the federal level.

What does the gas tax pay for?

Gas taxes – 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel – account for about 85 percent of the Highway Trust Fund.

Who administers federal highway programs and the Highway Trust Fund?

The Highway Trust Fund supports federal highway programs that are administered by the Federal Highway Administration (FWHA). In turn, the Highway Trust Fund is overseen by the Congressional Budget Office (CBO).

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