Who Pays for Roads, Bridges, and Transit
Key takeaways
- States and localities own most roads, bridges, transit systems, and water systems and pay about three quarters of public infrastructure spending.
- Federal highway and transit aid comes mostly from the Highway Trust Fund, fed by an 18.4 cent gas tax unchanged since 1993.
- Congress has transferred more than 275 billion dollars from general revenue to keep the trust fund solvent since 2008.
- The 2021 Infrastructure Investment and Jobs Act authorized about 1.2 trillion dollars, including 550 billion in new spending.
- The 2021 law's highway and transit programs expired on September 30, 2026, and Congress has been working on a replacement.
- Debates center on how to pay for roads as cars use less gas, and how much Washington should spend versus the states.
Roads, bridges, transit, airports, ports, water pipes, and broadband are paid for by a mix of fuel taxes, tolls, fares, local taxes, user fees, and federal grants. The federal government sets standards and sends money, but states and localities plan, build, and own most of it.
This guide explains who pays for what, how federal transportation money is raised and spent, and the current debates.
The Federal Transit Administration funds buses, subways, and light rail run by local agencies. Amtrak, a federally chartered corporation, runs intercity passenger trains with federal support, and freight railroads are private. Airports are mostly owned by cities and funded by passenger fees and federal grants from ticket taxes, while the Federal Aviation Administration runs air traffic control, which Congress funded for a major modernization in 2025.
The bipartisan Infrastructure Investment and Jobs Act of 2021 authorized about 1.2 trillion dollars over five years, including 550 billion in new spending for roads and bridges, rail, transit, broadband, water and lead pipes, the power grid, and electric vehicle chargers. In 2025 the new administration paused and rewrote some programs and canceled some grants, prompting lawsuits.
Federal highway and transit programs are authorized in multiyear laws, and the 2021 law's programs expired on September 30, 2026, with Congress working on a new bill and short-term extensions. Debates include how to replace a shrinking gas tax, through an electric vehicle fee or a mileage tax, how much to spend on transit and rail versus roads, how to speed permits, and whether Washington should hand more responsibility back to the states.
States and local governments own nearly all roads and bridges except on federal lands, along with transit systems, water and sewer systems, and most airports, and they pay about three quarters of public infrastructure spending, from fuel taxes, tolls, fares, property and sales taxes, and bonds. The federal role is mostly money and standards, through the Transportation Department and agencies such as the Federal Highway Administration and the Army Corps of Engineers.
Since 1956 federal highway aid has come from the Highway Trust Fund, fed mainly by an 18.4 cent per gallon gas tax and 24.4 cent diesel tax unchanged since 1993. As inflation eroded the tax and cars became more efficient, the fund ran short, and Congress has transferred more than 275 billion dollars from general revenue since 2008. Most money reaches states by formula, with states typically paying 20 percent of project costs.
The Army Corps of Engineers builds and maintains dams, levees, and navigable waterways, and federal revolving loan funds help localities pay for drinking water and sewer upgrades. Ports are run by state and local authorities with federal help for dredging. Broadband money from the 2021 law, about 42 billion dollars, goes to states to connect underserved areas, under rules rewritten in 2025 to favor lower-cost options such as satellite.
See the department in the fifteen cabinet departments, the budget in how the federal budget works, or taxes in who taxes what.