Center for American Progress

RELEASE: New CAP Report Reveals Nearly 40 Percent of NHS Highways Fail to Pay for Themselves, Urges More Flexible Funding Model to Support a Multimodal Transportation System
Press Release

RELEASE: New CAP Report Reveals Nearly 40 Percent of NHS Highways Fail to Pay for Themselves, Urges More Flexible Funding Model to Support a Multimodal Transportation System

Washington, D.C. — A new infrastructure report from the Center for American Progress examines the myth that highways pay for themselves while public transportation does not, and reveals that 40 percent of all National Highway System, or NHS, miles fail to generate sufficient user fee revenues to cover their long-term maintenance costs–even when initial construction and inflation costs are removed from the analysis.

Despite this fact, highway proponents in 30 states have successfully enacted prohibitions against using fuel tax revenues to support public transportation and other multimodal projects, and at the federal level, there is an unofficial rule that no more than 20 percent of fuel tax revenue can support public transit. Contrary to the well-worn argument of highway boosters, CAP’s report demonstrates that every mode of transportation requires a substantial public subsidy; therefore, the source of funds should not determine how those funds are spent. CAP’s analysis provides substantial backing to the argument that limited transportation funding should flow to the highest and most-used mode of transportation, regardless of the source.

“Every type of transportation requires public subsidy. Just because a portion of funding comes from highway drivers does not mean building more highways is the best solution—especially in metropolitan regions. Yet in many states, the source of money dictates how that money must be spent,” said Kevin DeGood, Director of Infrastructure Policy at CAP and lead author of the report. “Rather than predetermining what must be built, we should encourage planners to make investment decisions based on what will provide the most benefit, rather than where the money comes from.”

CAP’s report also finds that subsequent highway investments yield only modest gains at the expense of more productive projects, and further analysis also strongly suggests that an even higher share of minor arterial roadways, collectors, and other local roads fail to cover their long-term costs. CAP’s report includes a dozen state case studies with maps, including Texas, Arizona, Colorado, Georgia, Indiana, Minnesota, Missouri, Montana, Ohio, Tennessee, Washington, and Wyoming.

CAP’s analysis has significant implications for state and federal transportation policy, demonstrating that objective measures of need and return on investment should drive expenditure decisions without regard for the money source. For states, CAP recommends removing statutory or constitutional prohibitions on the use of user fee revenues, and at the federal level, CAP recommends providing greater programmatic flexibility and establishing a multimodal fund. Without greater modal balance, the CAP report states that the United States will face only greater congestion and economic loss.

Click here to read “Advancing a Multimodal Transportation System by Eliminating Funding Restrictions” by Kevin DeGood and Andrew Schwartz.

For more information or to speak with an expert, contact Allison Preiss at apreiss@americanprogress.org or 202.478.6331.