Highway and Road Expenditures

State and Local Backgrounders Homepage

Spending on highways and roads includes the operation, maintenance and construction of highways, streets, roads, sidewalks, bridges, and other related structures.1 This category includes both regular highways and toll highways, with the major difference being that the latter is operated using fees or tolls.  

How much do state and local governments spend on highways and roads?

In 2016, state and local governments spent $175 billion, or 6 percent of direct general spending, on highways and roads.2 Highways and roads were the sixth-largest source of direct general spending at the state and local level in 2016, and have been since 1996.

Forty-five percent of highway and road spending goes toward operational costs, such as maintenance, repair, snow and ice removal, highway and traffic design and operation, and highway safety. Fifty-five percent goes toward capital spending, namely the construction of both highways and roads. This stands in stark contrast to the five other major spending categories, where capital spending typically accounts for 10 percent or less of total direct spending. Since 1977, capital spending has consistently been between 50 percent and 60 percent of total highway and road spending.

Ninety-one percent of all 2016 highway and road expenditures were for regular highway and road systems; 9 percent were for toll facilities, such as turnpikes, toll ferries, toll bridges, and toll facilities operated by special district governments such as local port authorities.

How does state spending differ from local spending?

State governments spend more of their budgets on highways and roads than do localities. In 2016, 8 percent of state direct general spending went to highways compared with 4 percent of local direct general spending. State spending is typically for highways and tollways, whereas local governments spend more money on local streets and roads.

A majority of funds for highway spending come from state and local governments. Federal intergovernmental transfers to state and local governments accounted for $47 billion dollars in 2016 (27 percent), while states and localities provided the remaining $128 billion. However, the federal share is up from 22 percent in 1992.

Highway user charges, such as tolls and revenues from highway concessions, were 11 percent ($19 billion) of total highway and road direct general expenditures in 2016. Charges have been growing faster than overall highway and road spending in real terms: in 1977, charges contributed only 7 percent of highway and road expenditures. Charges do not include revenue from gasoline taxation, which equaled $45 billion dollars, or 26 percent of total highway and road spending, in 2016.

How have highway and road expenditures changed over time?

In 1977, state and local governments spent $91 billion on highways and roads (in 2016 inflation-adjusted dollars). In 2016, they spent $175 billion. Between 1977 and 2016, other state spending grew faster than highway and road spending. In 1977, 8 percent of state and local spending went to highways and roads compared with 6 percent in 2016.

How and why does spending differ across states?

Across the US, state and local governments spent $541 per capita on highways and roads in 2016. North Dakota spent the most per capita on highways and roads at $2400 per person, followed by Alaska ($2,135), Wyoming ($1,223), South Dakota ($1,216), and Vermont ($999).  Tennessee spent the least on highways and roads at $340 per person, followed by Arizona ($356), Utah ($375), Michigan ($386), and Missouri ($393).

Data: View and download each state's per capita spending by spending category

Per capita spending is an incomplete metric because it doesn’t provide any information about a state’s demographics or its policy decisions. A state’s total spending on highways and roads depends on several factors, including how many drivers are on the road, how many lane miles are in a state, and the usage of public roadways in the state as well as payroll, materials, and other costs. States with high per capita spending come from two general groups: low-population states with low population density (e.g., Alaska, North Dakota, and Wyoming) and places with higher traffic volume, which produces higher costs.3

Because highways and roads are capital intensive, spending rankings change depending on whether a capital project is active in that state. In 2012, for example, Utah and Maryland were two of the highest-spending states because of ongoing capital projects.4 In 2014, they dropped to the lower-middle range of state rankings for per capita highway spending as those projects ended.

Spending per vehicle mile traveled may provide a sense of how much states spend relative to how much use their roads get. Looking at dollars spent as a share of vehicle miles traveled, tthe US average was $551 for every 10,000 miles traveled in 2016.5 The highest spender was Alaska ($3,010), followed by North Dakota ($1,862), South Dakota ($1,102), Pennsylvania ($1,028), and the District of Columbia ($980). Spending per vehicle mile traveled spending is lowest in Tennessee ($294), Missouri ($323), and Indiana ($326).

Interactive Data Tools

What everyone should know about their state’s budget

Further Reading

Infrastructure, the Gas Tax, and Municipal Bonds
Richard Auxier and John Iselin (2017)
High costs may explain crumbling support for US infrastructure
Tracy Gordon, Urban Wire (2015)
Reforming State Gas Taxes
Richard Auxier (2014)
Assessing Fiscal Capacities of States: A Representative Revenue System–Representative Expenditure System Approach, Fiscal Year 2012
Tracy Gordon, Richard Auxier, and John Iselin (2016)
 

Notes
1 Data are from Census expenditure functions E44, F44, G44, E45, F45, and G45.

2 Direct general spending refers to all direct spending (or spending excluding transfers to other governments) except spending specially enumerated as utility, liquor store, employee-retirement, or insurance trust. Unless otherwise noted, all data are from the US Bureau of the Census, Survey of State and Local Government Finance, 1977–2016, accessed via the Urban-Brookings Tax Policy Center Data Query System, January9, 2019, http://slfdqs.taxpolicycenter.org. The census recognizes five types of local government in addition to state government: counties, municipalities, townships, special districts (e.g., a water and sewer authority), and school districts. All dates in sections about expenditures reference the fiscal year unless explicitly stated otherwise. 

3 For an analysis of components of state and local spending using 2012 data, see the Urban Institute’s interactive tool, What everyone should know about their state’s budget.

4 See annotation B on the Highways tab of Urban Institute’s interactive tool “What everyone should know about their state’s budget.”  

5 Calculation from the US Bureau of the Census, Survey of State and Local Government Finance, 1977–2015, accessed via the Urban-Brookings Tax Policy Center Data Query System, October 12, 2017, http://slfdqs.taxpolicycenter.org; and US Department of Transportation, Federal Highway Administration, Highway Statistics 2015 Table 5.4.1: Vehicle-miles of travel, by functional system. https://www.fhwa.dot.gov/policyinformation/statistics/2016/vm2.cfm    

6 The District of Columbia is often an outlier because, although it functions as a state and a locality, it most closely resembles a central city in terms of its population and economic activity, much of which comes from nonresidents. Its ranking among states should be interpreted within this context.