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Federal Highway Funding Guide

Federal Highway Funding was established in 1956 as a dependable finance source for the maintenance of the US Interstate Highway System and other main roads. Money for this fund comes indirectly from the federal fuel tax of 24.4 cents per gallon of diesel and 18.4 cents per gallon of gasoline. From 1992-2001, the federal funding for highways was $214,575,775,050 for all the collective states. The majority of these funds went to bridge/road repair and building new roads. A significant portion also went to road safety and traffic safety products, and a small amount was allocated to research and pedestrians/bicycles facilities.

Fuel Taxes
The Highway Revenue act required a 3 cent tax, which started in the 1950s and continued to 1982. During the Reagan Administration, the tax was increased to 9 cents, with 8 cents allocated to Highway Funding and 1 cent given to the Mass Transit Account. The gasoline fuel tax currently stands at 18.4 cents, but there are plans to raise the tax as high as 40 cents per gallon over the next five years.

Funding Challenges
Occasionally, politicians have attempted to suspend taxes that provide support to federal highway funding. The Wall Street Journal reports that there have been at least 6 attempts by individual members of Congress to suspend gas taxes, although all of them have failed thus far. Currently, this money is solely allocated for expanding and repairing the national highway system.

Finance Methods
Funding for highways is derived from taxes on motor fuel, heavy vehicle use, sales of trailers and trucks, and truck tires. Essentially, the people who utilize the highway system regularly provide the most funding for its maintenance. Although the money goes to the general treasury, it is still credited to the Fund. In 2008, the Highway Fund was depleted and required an $8 billion transfer by Congress from the general revenue funds. At the moment, government administration is considering making funding changes to address the crumbling highway system.