Tolling of Interstate Highways: Issues in Brief

Robert S. Kirk
Specialist in Transportation Policy

The prohibition of tolling of federal-aid highways dates back to the Federal Road Act of 1916 (39 Stat. 355). Subsequent legislation modified the prohibition to the point where now the only significant part of the federal-aid highway system under the toll prohibition is the Interstate Highway System, comprising approximately 47,000 miles of the roughly 1-million-mile federalaid highway system. Congress, in approving the Federal-Aid Highway Act and Highway Revenue Act of 1956 (P.L. 84-621; 70 Stat. 374), rejected the use of tolls or user fees to finance construction in favor of creating a highway trust fund supported by dedicated fuel taxes. However, certain existing expressway segments that were incorporated into the Interstate Highway System already had tolls in 1956, and they are not covered by the tolling prohibition.

In recent years the revenues flowing into the highway trust fund have been insufficient to maintain even current levels of federal funding for highways. Political resistance to raising the federal fuels tax is high. The fuel taxes dedicated to the highway trust fund, currently 18.3 cents per gallon of gasoline and 24.3 cents per gallon of diesel fuel, were last raised in 1993.

Historically, interest in toll financing has increased during periods of constrained federal funding. Since the Interstate Highways make up nearly all federal-aid highway segments that are still under the tolling prohibition, advocates of expanded use of tolling focus their efforts on giving states more flexibility to impose tolls on the Interstates within their borders.


Date of Report: March 12, 2012
Number of Pages: 5
Order Number: R42404
Price: $19.95

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The Federal Excise Tax on Gasoline and the Highway Trust Fund: A Short History

James M. Bickley
Specialist in Public Finance

Excise taxes have long been a part of our country’s revenue history. In the field of gasoline taxation, the states led the way with Oregon enacting the first tax on motor fuels in 1919. By 1932, all states and the District of Columbia had followed suit with tax rates that ranged between two and seven cents per gallon. The federal government first imposed its excise tax on gasoline at a one-cent per gallon rate in 1932. The gas tax was enacted to correct a federal budgetary imbalance. It continued to support general revenue during World War II and the Korean War.

Economists know the gasoline excise tax as a “manufacturer’s excise tax” because the government imposes it at production (i.e., the producer, refiner, or importer) for efficiency in collection. Particularly in the short run, when the demand for gasoline is relatively inelastic, economists recognize that any increase in the gasoline tax ultimately falls on the consumer.

The Highway Revenue Act of 1956 established the federal Highway Trust Fund (HTF) for the direct purpose of funding the construction of an interstate highway system, and aiding in the finance of primary, secondary, and urban routes. Each time Congress has extended the Highway Trust Fund it has also extended the federal excise tax on gasoline.

For FY2011, the Congressional Budget Office estimated that revenues and interest credited to the Highway Trust Fund will total $36.9 billion, which will be divided into the Highway Account ($31.8 billion) and the Mass Transit Account ($5.1 billion). CBO also estimated that the fund’s three primary revenue sources and their yields will be the gasoline tax ($24.0 billion), the diesel tax ($8.7 billion), and the tax on trucks and trailers ($2.2 billion). On September 16, 2011, President Obama signed H.R. 2887, Surface and Air Transportation Programs Extension Act of 2011 (P.L. 112-30), which extended, through March 31, 2012, current surface transportation programs and the motor fuel, heavy truck, and truck tire taxes that support the HTF.

On November 9, 2011, the Senate Environment and Public Works Committee marked up and reported favorable on the highway provisions of S. 1813, the Moving Ahead for Progress in the 21st Century Act (MAP-21). S. 1813 is a two-year reauthorization bill for FY2012-FY2013 that basically funds the Federal-Aid Highway Program at the baseline level, adjusted for inflation. This bill would also make substantial changes to the structure, formulas, and funding distribution of the federal highway program. As of February 7, 2012, all committees of jurisdiction had marked up their titles. On March 1, 2012, these titles were folded into S.Amdt. 1761 to S. 1813.

On March 5, 2012, in response to a request from Senate Majority Leader Harry Reid, the Congressional Budget Office (CBO) issued estimates for S. 1813, MAP-21, with amendment. CBO estimated that implementing the bill would have discretionary costs of $47.0 billion over the FY2012-FY2017 period. In addition, CBO estimated that implementing the provisions of the bill for the remainder of FY2012 and for FY2013 would result in an end-of-year balance in 2013 of approximately $2 billion in the highway account of the HTF and about $3 billion in the transit account of the HTF. On April 1, 2012, current surface transportation programs are scheduled to expire, and taxes that support the Highway Trust Fund are scheduled to expire or decline. The primary revenue source for the HTF, the gasoline tax, will decline from 18.4 cents per gallon to 4.3 cents per gallon.


Date of Report: March 9, 2012
Number of Pages: 18
Order Number: RL30304
Price: $29.95

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Surface Transportation Reauthorization in the 112th Congress: Summary and Sources

Marc Levinson, Coordinator
Section Research Manager

Legislation to reauthorize federal surface transportation programs is under consideration in both houses of Congress.1 The previous transportation authorization, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA, P.L. 109-59), enacted in 2005, expired on September 30, 2009. Since that time, surface transportation programs and activities have been operated under a series of extensions. The most recent of these, P.L. 112-30, expires on March 31, 2012.

The main obstacle to enactment of a new multi-year bill during the past two years has been the disparity between projected spending and the much lower projections of the revenue flows to the Highway Trust Fund (HTF). Taxes on gasoline and diesel provide approximately 90% of the revenues for the HTF, which historically has funded the entire highway program and roughly 80% of the mass transit program. The Congressional Budget Office (CBO) has projected that the unexpended balance of the highway account of the HTF will reach zero during FY2013 and that the balance in the Mass Transit Account will reach zero in FY2014 (see Appendix Figure A-1).

Surface transportation reauthorization is one of the more legislatively complex issues before Congress, because it addresses matters under the jurisdictions of many committees. Portions of the pending reauthorization bills, under various bill numbers, were marked up in seven different committees (see Table 1) before consolidation under a single bill number in each house.

The Senate reauthorization bill, the Moving Ahead for Progress in the 21st Century Act (S. 1813; MAP-21), would authorize surface transportation programs for two years, through FY2013. Fully funding the bill would require roughly $10 billion in revenues or offsets beyond anticipated HTF revenues.2 On March 1, 2012, Senate Majority Leader Harry Reid introduced S.Amdt. 1761 to S. 1813, and references in this report to MAP-21 are to S. 1813 as amended by S.Amdt. 1761. The House bill, the American Energy and Infrastructure Jobs Act (H.R. 7), links the usual surface transportation reauthorization components with provisions designed to increase oil and gas production, the revenues from which would be provided for highway infrastructure. H.R. 7, counting the already appropriated FY2012, is a five-year bill providing for a total authorization of roughly $260 billion.3 The bills differ significantly in programmatic content and treatment of the HTF. Both are free of program earmarking.


Date of Report: March 7, 2012
Number of Pages: 28
Order Number: R42350
Price: $29.95

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Surface Transportation Reauthorization Legislation in the 112th Congress: Major Provisions Pending in the Senate

Robert S. Kirk, Coordinator
Specialist in Transportation Policy

William J. Mallett
Specialist in Transportation Policy

David Randall Peterman
Analyst in Transportation Policy

John Frittelli
Specialist in Transportation Policy

Linda Luther
Analyst in Environmental Policy

Brent D. Yacobucci
Section Research Manager

Mary Tiemann
Specialist in Environmental Policy

The federal government’s highway, mass transit, and surface transportation safety programs are periodically authorized in a multi-year surface transportation reauthorization bill. The most recent reauthorization act, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU or SAFETEA; P.L. 109-59), expired at the end of FY2009. Since then, the surface transportation programs and activities have been funded under a series of extension acts.

The main obstacle to passage of a new multi-year bill during the past two years has been the disparity between projected spending and the much lower projections of the revenue flows to the highway trust fund (HTF). Taxes on gasoline and diesel provide 90% of the revenues for the HTF, which historically has funded the entire highway program and roughly 80% of the mass transit program. The rates on these taxes, which are on a cents-per-gallon basis, have not been increased since 1993. In addition, the condition of the economy and improvements in fuel economy have held down fuel consumption and as a result are adversely affecting HTF revenues. Consequently, authorizers face a dilemma: how to pass a bill without cutting infrastructure spending, raising the gas tax, or increasing the budget deficit.

The Senate Environment and Public Works Committee marked up and reported favorably on the highway provisions of S. 1813, the Moving Ahead for Progress in the 21st Century Act (MAP-21), on November 9 2011. MAP-21 is a two-year reauthorization bill (FY2012-FY2013). As of February 7, 2012, all committees of jurisdiction had marked up their titles. These titles were titles were folded into Senate amendment SA 1761, “of a perfecting nature,” to S. 1813, on March 1, 2012. To fully fund the bill, roughly $10.5 billion in new revenues or offsets (to allow for general fund transfers) is needed beyond anticipated HTF revenues and balances. MAP-21 proposes: 

•         A total Federal-Aid Highway Program authorization of $39.4 billion for FY2012 and $40.4 billion for FY2013 (reflecting rescissions), and $400 million for research and education in each fiscal year. 

•         To reduce the total number of highway programs from roughly 90 to 30. The overall Federal-Aid Highway Program would be structured around five large “core” programs, including a new National Freight Program. The existing Equity Bonus Program would be discontinued. 

•         To eliminate individual program formula factors. Instead, each state’s initial amount of the bill’s authorized contract authority would be based on its share of total apportionments and allocations during FY2005-FY2009. 

•         To accelerate project completion, speed up the environmental review process and increase the use of performance measures. 

•         $10.458 billion, annually, for FY2012-FY2013, for transit programs. 

The Senate Finance Committee component of MAP-21 includes provisions to provide roughly $10.5 billion in offsets and revenue transfers to the HTF.


Date of Report: March 7, 2012
Number of Pages: 45
Order Number: R42120
Price: $29.95

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Surface Transportation Reauthorization Legislation in the 112th Congress: Major Provisions Pending in the Senate

David Randall Peterman
Analyst in Transportation Policy

John Frittelli
Specialist in Transportation Policy

Linda Luther
Analyst in Environmental Policy

Brent D. Yacobucci
Section Research Manager

The federal government’s highway, mass transit, and surface transportation safety programs are periodically authorized in a multi-year surface transportation reauthorization bill. The most recent reauthorization act, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU or SAFETEA; P.L. 109-59), expired at the end of FY2009. Since then, the surface transportation programs and activities have been funded under a series of extension acts.

The main obstacle to passage of a new multi-year bill during the past two years has been the disparity between projected spending and the much lower projections of the revenue flows to the highway trust fund (HTF). Taxes on gasoline and diesel provide 90% of the revenues for the HTF, which historically has funded the entire highway program and roughly 80% of the mass transit program. The rates on these taxes, which are on a cents-per-gallon basis, have not been increased since 1993. In addition, the condition of the economy and improvements in fuel economy have held down fuel consumption and as a result are adversely affecting HTF revenues. Consequently, authorizers face a dilemma: how to pass a bill without cutting infrastructure spending, raising the gas tax, or increasing the budget deficit.

On November 9, 2011, the Senate Environment and Public Works Committee marked up and reported favorably on the highway provisions of S. 1813, the Moving Ahead for Progress in the 21st Century Act (MAP-21). MAP-21 is a two-year reauthorization bill (FY2012-FY2013). As of February 7, all committees of jurisdiction had marked up their titles, which are to be folded into MAP-21. To fully fund the bill, roughly $10.5 billion in new revenues or offsets (to allow for general fund transfers) is needed beyond anticipated HTF revenues and balances. MAP-21 proposes: 

• A total Federal-Aid Highway Program authorization of $39.4 billion for FY2012 and $40.4 billion for FY2013 (reflecting rescissions), and $400 million for research and education in each fiscal year. 
• To reduce the total number of highway programs from roughly 90 to 30. The overall Federal-Aid Highway Program would be structured around five large “core” programs, including a new National Freight Program. The existing Equity Bonus Program would be discontinued. 
• To eliminate individual program formula factors. Instead, each state’s initial amount of the bill’s authorized contract authority would be based on its share of total apportionments and allocations during FY2005-FY2009. 
• To accelerate project completion, speed up the environmental review process and increase the use of performance measures. 
• $10.458 billion, annually, for FY2012-FY2013, for transit programs.

Date of Report: February 13, 2012
Number of Pages: 40
Order Number: R42120
Price: $29.95

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