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Non-Road Pricing Revenue: Sources and Tools

State Non-Road Pricing Revenue

Traditional state revenue sources for transportation, which account for the majority of state transportation spending, include motor fuel taxes, vehicle registration fees and taxes, other taxes and fees, and general fund revenues. These funding sources are primarily dedicated to highways but vary by state and may also fund bridges, rail, and ports.

In some cases, the AASHTO Center for Excellence in Project Finance provides more detailed information on these state revenue sources.

Motor Fuel Excise Tax

Each state levies an excise tax on motor fuel purchases. The amount collected ranges from a low of 4¢ per gallon in Florida to a high of 37.5¢ per gallon in Washington, in the case of gasoline. A similar range of charges exist for diesel fuel.

View more information at the AASHTO Center for Excellence in Project Finance

Other Motor Fuel Taxes Including Sales Taxes

Many states levy other taxes and fees on motor fuel purchases including environmental fees and inspection fees, which typically are not devoted to transportation. Other examples include a surcharge in Minnesota to pay the debt service on bonds sold for roadway improvements and the State Comprehensive Enhanced Transportation System tax in Florida, a portion of which is used to fund transportation projects on adopted work programs in districts where the tax is collected. As in some other states, this tax is indexed to the consumer price index. Finally state sales taxes are often devoted to transportation purposes. States with this provision include CA, GA, HI (diesel only), IL, IN, MI, NY, and VA (within a special district). Connecticut and New Jersey have a gross receipts tax levied at the wholesale level.

View more information at the AASHTO Center for Excellence in Project Finance

Vehicle Registration Fees and Taxes

All states collect some form of a vehicle registration fee. State registration fees vary from a flat fee to ones based on vehicle value, weight, age, horsepower, and number of cylinders. Alaska and Georgia do not explicitly fund transportation with these revenues.

View more information at the AASHTO Center for Excellence in Project Finance

General Fund Revenue

State general fund revenues collectively account for approximately 7 to 8 percent of total state highway funding, although not all states use general fund revenues for highway purposes. State general fund proceeds directed to transportation projects amounted to just over $8 billion in 2007 and nearly $7 billion in 2008. State general funds are established through income taxes, sales taxes, property taxes, and other state and local fees.

Other Sources of Non-Road Pricing Funding for Highways (Fees, Taxes and Other Funds)

Other sources of funding for highways include: inspection fees, driver license fees, advertising, rental car taxes, state lottery/gaming proceeds, oil company taxes, vehicle excise taxes, vehicle weight fees, investment income, and other licenses, permits, and fees.

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