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 2015, state and local governments spent $168 billion, or 6 percent of direct general spending, on highways.2 Highways and roads were the sixth-largest source of direct general spending at the state and local level in 2015, and they have been since 1996. Before that, highway and road spending fluctuated between ranking fourth and fifth as a share of total state and local spending.

Forty-five percent of highway and road spending goes toward operational costs, such as 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 highway-related items that are integral to highway projects. Since 1977, capital spending has grown as a share of total highway and road spending. Ninety-one percent of all 2015 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 2015, 4 percent of local direct general spending went to highways compared with 8 percent of state direct general spending. State spending is typically for highways and tollways, whereas local governments spend more money on local streets and roads.

Nationally, 60 percent of state and local direct general spending on highways and roads ($124 billion) occurs at the state level. Local spending accounts for more than 50 percent of total direct general expenditures on highways and roads in only seven states. Federal intergovernmental transfers to state and local governments accounted for $44 billion dollars in 2015, accounting for 26 percent of total state and local highway and road spending. That share is up from 22 percent in 1992.

Highway user charges, such as tolls and revenues from highway concessions, equaled 10 percent ($17 billion) of total highway and road direct general expenditures. Charges have been growing faster than total highway and road spending in real terms: in 1977, charges constituted only 7 percent of highway and road expenditures.  This excludes revenue from gasoline taxation, which equaled $43 billion dollars, or 26 percent of total highway and road spending,  in 2015.

How have highway and road expenditures changed over time?

In 1977, state and local governments spent $90 billion on highways and roads (in 2015 inflation-adjusted dollars). In 2015, they spent almost twice that amount ($168 billion).
Between 1977 and 2015, 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 2015.

How and why does spending differ across states?

Across the US, state and local governments spent $525 per capita on highways and roads in 2015. In 2015, North Dakota spent the most per capita on highways and roads (at $2,229 per person), followed by state and local governments in Alaska ($2,150), Wyoming ($1,243), Vermont ($1,189), and South Dakota ($1,078).  State and local governments in Arizona spent the least on highways and roads (at $320 per person), followed by Georgia ($321), South Carolina ($333), Tennessee ($341), and Michigan ($368).

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, the US average was $544 for every 10,000 miles traveled.5 The highest spender was Alaska ($3,143), followed by North Dakota ($1,681), the District of Columbia ($1,321),6 Vermont ($1,018), and South Dakota ($992). Spending per vehicle mile traveled spending is lowest in Georgia ($277), Tennessee ($293), and South Carolina ($315).

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)
A new tool to get under the hood of state and local budget choices
Tracy Gordon, TaxVox (2017)
Assessing Fiscal Capacities of States: A Representative Revenue System–Representative Expenditure System Approach, Fiscal Year 2012
Tracy Gordon, Richard Auxier, and John Iselin (2016)
Prepping for the 2018 Legislative Session
Richard Auxier and Erin Huffer (2017)
Prepping for the New Session: End-of-Summer Reading for State Budget Analysts
Norton Francis, Sarah Gault, and Yifan Zhang (2016)
Prepping for the New Session: End-of-Summer Reading for State Budget Analysts
Norton Francis, Tracy Gordon, and Megan Randall (2015)
Governing with Tight Budgets: Long-Term Trends in State Finances
Norton Francis and Frank Sammartino (2015)
State Budgets in the Trump Era
Kim Rueben and Richard Auxier (2017)

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, 1977–2015, accessed via the Urban-Brookings Tax Policy Center Data Query System, October 12, 2017, 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/2015/    

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.