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U.S. Highway Management and Funding

The U.S. has one of the, if not the, most extensive highway systems in the world, with 220,516 miles in total expressway and freeway mileage, including the famed interstate highways. This network of roads is managed under a similarly complex administrative system, involving federal, state and local actors. 

On a federal level, the Federal Highway Administration (FHWA) acts as a coordinating and financing agency, overseeing the Federal-Aid Highway Program (FAHP), which reimburses state authorities for the construction of highways but not the maintenance or operations costs. FAHP has its budgetary source in the Highway Trust Fund (HTF), which is almost entirely funded by motor fuel taxes. In 2020, $47.1 billion was authorized under FAHP, accounting for roughly a quarter of all highway-related spending. 

The remaining three-quarters, amounting to $154.7 billion in 2019, comes from state and local authorities, who also own about 75% of the nation’s highways and other public roads. Similar to the federal government, states fund their highway infrastructure through taxes on fuel but also add vehicle licensing fees and tolls to the formula. 

Nevertheless, as new car models are more fuel-efficient and electric vehicles are gaining popularity, state revenues from such “user taxes” are diminishing. By 2018, all but five states could cover more than 90% of their highway maintenance and operations costs using these means, and alternative funding sources, such as the unpopular taxation on vehicle miles traveled (VMT), are being studied. 

Finally, on municipal and county levels, roadways are operated by local public agencies (LPA) that partially depend on property taxes, which number approximately 7,000 nationally. Recently, Metropolitan Planning Organizations (MPOs), federally funded but locally appointed committees, are taking a more active role in highway operations and might have the potential to reform highway management from the bottom up.

Zhengmao Sheng graduated from Brandeis University with a BA in History and Economics and minors in Legal Studies and Politics. He volunteered at The Right to Immigration Institute as an undergraduate and enjoys both reading and hiking. He is an Infrastructure Policy intern at Our National Conversation.


Boesen, Ulrik. “How Are Your State’s Roads Funded?” Tax Foundation, 21 Apr. 2021.

Federal-Aid Highway Program. Department of Transportation, Federal Highway Administration.

Federal-Aid Highway Program (FAHP): In Brief. Congressional Research Service, 1 Mar. 2021.

“Funding Federal-Aid Highways,” Federal Highway Administration, Office of Policy and Governmental Affairs, Jan. 2017. 

“Transportation Funding & Financing,” Build America Transportation Investment Center (BATIC) Institute.

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