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: Congress passed the Federal-Aid Highway Act of 1956 to complete a 41,250-mile highway system by 1969. The law authorized $25 billion to finance 90 percent of the cost, with grants disbursed to the states from a new Highway Trust Fund. People often assume that America would not have an extensive interstate highway system without the 1956 law. But, even before 1956, a state highway boom was underway based partly on toll funding. The Congressional Research Service notes, "During the late 1940s and early 1950s, the prospect of toll revenues allowed states to build thousands of miles of limited-access highways without federal aid and much sooner than would have been the case with traditional funding." 14 Unfortunately, the 1956 law banned states from tolling highways that received federal funding, and since that time federal aid has played a major role in highway development. The federal powers under the 1956 law were supposed to expire in 1972, but the sun never set on federal highway spending. The highway program has been repeatedly renewed and the length of the interstate highway system increased. 15 Interstate construction was formally completed in the 1990s, but today federal spending has broadened to cover the one million mile "federal-aid highway system," as well as urban transit and other nonhighway activities. 16
Fuel Taxes and the User Pays Approach
State governments became the dominant players in highways during the 20th century, and they initially retained the user pays approach that was central to 19th century private toll roads.