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.  

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

In 2017, state and local governments spent $181 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 2017, and spending was roughly on par with that on police and corrections.

In 2017, 44 percent of highway and road spending went toward operational costs, such as maintenance, repair, snow and ice removal, highway and traffic design and operation, and highway safety. The other 56 percent went toward capital spending, such as the construction of both highways and roads. This operational-capital divide stands in stark contrast to the five other major state and local 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 direct state and local highway and road spending.

How does state spending differ from local spending and what does the federal government contribute?

State governments spend more of their budgets on highways and roads than localities. In 2017, 8 percent of state direct general spending went to highways and roads 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.

Both state and local governments dedicate motor fuel tax revenue and highway toll revenue to transportation spending. In 2017, state and local motor fuel tax revenue ($47 billion) accounted for 26 percent of highway and road spending while toll facilities ($18 billion) provided another 10 percent. States collected nearly all motor fuel tax revenue but the collection of toll revenue was roughly evenly divided between states and localities. These are not the only state and local sources of highway and road funds, though.

Overall, state and local governments provided three-quarters of highway and road funding ($135 billion) in 2017. Federal intergovernmental transfers for highways and roads were $47 billion dollars in 2017 (26 percent).

How have highway and road expenditures changed over time?

In 1977, state and local governments spent $93 billion on highways and roads (in 2017 inflation-adjusted dollars). In 2017, they spent $181 billion. Between 1977 and 2017, 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 2017.

How and why does spending differ across states?

Across the US, state and local governments spent $560 per capita on highways and roads in 2017. North Dakota spent the most per capita on highways and roads at $2,297 per person, followed by Alaska ($1,909), Wyoming ($1,173), South Dakota ($1,148), and Vermont ($997). Tennessee spent the least on highways and roads at $334 per person, followed by Arizona ($357), Indiana ($367), Missouri ($388), and California ($394).

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, policy decisions, or physical size. 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 but large physical size (e.g., Alaska, North Dakota, and Wyoming) and places with higher traffic volume, which produces higher costs.3

Further, because highways and roads are capital intensive, spending can change dramatically from year to year depending on whether a capital project is active in that state.  For example, Delaware's real per capita spending shifted from $846 in 2010 to $514 in 2015 to $878 in 2017. Similarly,  Wisconsin's real per capita spending bounced from $803 to $672 to $949 from 2015 to 2017.

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, the US average was $567 for every 10,000 miles traveled in 2017.4 The highest spender was Alaska ($2,559), followed by North Dakota ($1,785), the District of Columbia ($1,225), South Dakota ($1,040), and New York ($988). Spending per vehicle mile traveled spending was lowest in Tennessee ($272), Indiana ($299), and New Mexico ($304).

Interactive Data Tools

State and Local Finance Data: Exploring the Census of Governments

State Fiscal Briefs

What everyone should know about their state’s budget

Further Reading

Using Dollars with Sense: Ideas for Better Infrastructure Choices
Urban Institute (2018)

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. The utility sector includes public transit systems. 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 Calculation 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, January 9, 2019, https://slfdqs.taxpolicycenter.org/index.cfm; and US Department of Transportation, Federal Highway Administration, Highway Statistics 2017 Table 5.4.1: Vehicle-miles of travel, by functional system. https://www.fhwa.dot.gov/policyinformation/statistics/2017/vm2.cfm