Title: Federal Highway Policies | Downsizing the Federal Government
Headings: Federal Highway Policies
Federal Highway Policies
Privately Built Roads in the 19th Century
The Rise in Federal Intervention
Fuel Taxes and the User Pays Approach
Five Disadvantages of Federal Highway Aid
Public-Private Partnerships
New Directions for Infrastructure Policy
Conclusions

Content: Today, 2.86 cents of the 18.4 cents per gallon federal gas tax is redirected to transit. 20 Ironically, in signing the 1982 bill, President Ronald Reagan said, "Our country's outstanding highway system was built on the user fee principle — that those who benefit from a use should share in its cost." 21
Another development that is undermining the user pays approach is that since 1998 the federal government has pumped tens of billions of dollars of general revenues into the HTF. HTF spending has soared above HTF fuel-tax revenues, and Congress has filled the gap with other revenues. The 2015 highway bill provided $70 billion of general revenues to the HTF over five years. 22
Despite the use of general revenues and the diversion of fuel taxes to transit, the HTF is still mainly based on the user-pays approach. The system has worked, but it is imperfect. One problem is that fuel taxes only roughly relate to the costs imposed on highways by different kinds of vehicles. For example, electric-powered cars impose costs on highways but do not help fund them. Another issue is that taxes on fuel do not closely relate to the varying costs of providing different types of roads — urban highways tend to cost more than rural ones,