America’s transportation needs are huge. Too bad the way we fund them is broken.: Most big transportation projects -- bridge repairs, new highways, intercity rail -- are paid for with a stack of local, state, and federal funds. The federal contribution ranges between 35 percent and 95 percent of a state's total transportation budget, and is mostly supplied by the Highway Trust Fund. The Highway Trust Fund is mostly supplied by the federal gas tax, which is a robust stream of money that can't be used for anything other than transportation.
The problem for funding is that Americans are actually using less gas than they used to -- both because they aren't driving as much, and cars are getting more efficient. Meanwhile, Congress hasn't raised the gas tax from 18.4 cents per gallon since 1994, which is now far behind what it was then when you take inflation into account. Consequently, revenues have started to sputter in recent years: