State, local, and federal governments in the United States collect a mix of motor fuel taxes, vehicle-related fees, and other highway revenues to pay for road construction and upkeep. On paper, this collection system functions as a user-funded model, since those who use the roads generally bear most of the cost. In practice, however, the fit between who pays and who benefits is fraying, and the latest national figures for fiscal 2022 show stark variation across states in how much road spending is covered by road-use taxes.
What the numbers show
Across the United States, about 73 percent of state and local highway spending is covered by taxes and fees tied to road use, according to federal and Census data compiled for 2022. That aggregate share masks wide differences. Only three states—Delaware, Montana, and New Jersey—report road-use revenues sufficient to fully cover their state and local highway expenditures. At the other end of the scale, Alaska raises only 19.4 percent of its highway spending from motor fuel taxes, vehicle licenses, and similar levies, while the District of Columbia covers just 18.9 percent.
Several other states also fall well below the national average. North Dakota covers roughly 35.1 percent, while a handful of states including Nebraska, Minnesota, Utah, and South Dakota cover between the low forties and mid-fifties. Conversely, many larger states place heavy reliance on road-use revenue: California, New York, Maryland, and Illinois all cover well over 85 percent of their highway spending from transportation-related sources.
These proportions are calculated after accounting for federal aid to states, and they encompass motor fuel taxes, motor vehicle license fees, and other highway receipts reported by state and local governments. Where state totals fall short, the difference is made up by transfers from general funds or other revenue sources not tied to road use.
Why shortfalls matter
When road-use fees do not fully cover highway spending, the gap is filled by broader tax sources. That means people who rarely or never drive still help pay for roads through general taxation. Economists and transportation planners flag two main consequences. First, when road use is underpriced, it can encourage higher levels of driving than would occur under a stricter user-pays regime, contributing to congestion and greater vehicle miles travelled. Second, subsidised road costs can distort modal choices and freight decisions, favoring road transport over alternatives like rail or inland waterway shipping.
