The Congressional Budget Office (CBO) released a report this week examining different approaches for providing Federal funding to states for highway infrastructure investment. The report was focused on making better investment decisions realizing that the federal government’s main source of funds for highways—gasoline tax revenues dedicated to the Highway Trust Fund—has been insufficient to pay for federal spending on highways. Since 2008, lawmakers have transferred about $143 billion from other sources to maintain a positive balance in the trust fund. It also noted that, adjusted for changes in construction costs, total federal spending on highways buys less now than at any time since the early 1990s.
CBO examines three approaches lawmakers could consider to make highway spending more productive:
- Charging drivers for their road usage. Such pricing could take the form of per-mile charges (mileage based user fees), congestion charges, or tolls on Interstate highways.
- Distributing funds based on benefits and costs. allocating more funding to programs or projects with economic benefits that were expected to outweigh the costs—rather than allocating funds on a geographic basis or providing fixed allocations to states.
- Linking spending to performance measures such as congestion, road quality, bridge quality, and safety.
The report doesn’t take a position on any of the proposals and does not take political considerations into account, especially on the distribution of the federal funding.